Exhibit 10.2

 

2006 Stock Incentive Plan

of Honeywell International Inc. and its Affiliates

 

RESTRICTED UNIT AGREEMENT, FORM 2

 

This RESTRICTED UNIT AGREEMENT made in Morris Township, New Jersey, United
States of America, as of the [DAY] day of [MONTH, YEAR] (“Date of Grant”)
between Honeywell International Inc. (which together with its subsidiaries and
affiliates, when the context so indicates, is hereinafter referred to as the
“Company”) and [EMPLOYEE NAME] (the “Employee”).

 

1.          Grant of Award. The Company has granted to you [NUMBER] Restricted
Units, subject to the terms of this Agreement and the terms of the 2006 Stock
Incentive Plan of Honeywell International Inc. and Its Affiliates (the “Plan”).
Each Restricted Unit [and Dividend Share (as described in Section 4)] represents
one (1) Share of Common Stock. The Company will hold the Restricted Units [and
Dividend Shares] in a bookkeeping account on your behalf until they become
payable or are forfeited or cancelled.

 

2.

Definitions. For purposes of this Agreement, the following definitions apply:

 

 

(a)

“Actual Award” means the product of (i) the Plan Payout Percentage (as
determined under Section 3), and (ii) your Target Award.

 

 

(b)

“Compensation Peer Group” means [INSERT COMPANY NAMES]. If there is any change
in the corporate capitalization of a company in the Compensation Peer Group
during a Measurement Period (such as a stock split, corporate transaction or any
partial or complete liquidation), the Committee, in its sole discretion, may
take such change into account in determining the Total Shareholder Return of
that company. If any company included in the Compensation Peer Group ceases to
exist or to be publicly traded during the Measurement Period, or undergoes any
other similar change, the Committee shall determine the consequences of such
event for purposes of this Agreement, including without limitation, the
replacement of such company in the Compensation Peer Group.

 

 

(c)

“Measurement Period” means [DESCRIBE MEASUREMENT PERIOD].

 

 

(d)

“Performance Cycle” means the period beginning on [DATE] and ending on [DATE].

 

 

(e)

“Target Award” means the number of Restricted Units awarded to you for the
Performance Cycle under Section 1 of this Agreement.

 

 

(f)

“Total Shareholder Return” means the ratio of (A) a company’s share price as of
the last trading day of a Measurement Period (determined using the average
closing share price over the 30 preceding trading days) plus earned dividends
per share during the Measurement Period, over (B) the company’s share price as
of the first trading day of a Measurement Period (determined

 

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using the average closing share price over the 30 preceding trading days).
Dividends are assumed earned and reinvested on the ex-dividend date.

     

 

(g)

[INSERT ADDITIONAL BUSINESS-RELATED DEFINITIONS AS APPLICABLE]

 

3.           Performance Measures. For each Measurement Period, the Company’s
Total Shareholder Return shall be compared to the Total Shareholder Return of
each company in the Compensation Peer Group, and the Total Shareholder Return of
the Compensation Peer Group and the Company shall be ranked. [DESCRIBE OTHER
BUSINESS-RELATED PERFORMANCE MEASURES, AS APPLICABLE]

 

The Plan Payout Percentage shall be determined based on the following for the
Performance Cycle: [DESCRIBE HOW PLAN PAYOUT PERCENTAGE IS DETERMINED].

 

4.          [FOLLOWING INCLUDED AT COMMITTEE’S DISCRETION: Dividend Shares.
Until the vesting date specified in Section 5, your bookkeeping account shall be
credited with dividend Shares in the form of additional restricted units
(“Dividend Shares”) based on your Target Award equal to the value of any cash or
stock dividends paid by the Company upon one Share of Common Stock for each
unvested Restricted Unit or Dividend Share credited to your bookkeeping account
on a dividend record date. At the vesting date specified in Section 5, such
Dividend Shares shall be adjusted up or down, as necessary, based on your Actual
Award. In the case of cash dividends, the Company shall credit your bookkeeping
account, on each dividend payment date, with additional Dividend Shares equal to
(a) divided by (b), where (a) equals the total number of unvested Restricted
Units and Dividend Shares, if any, subject to this Agreement on such date
multiplied by the dollar amount of the cash dividend paid per Share of Common
Stock on such date, and (b) equals the Fair Market Value of a Share on such
date. If a dividend is paid to holders of Common Stock in Shares, the Company
shall credit to your bookkeeping account, on each dividend payment date,
additional Dividend Shares equal to the total number of unvested Restricted
Units and Dividend Shares subject to this Agreement on such date multiplied by
the Share dividend paid per Share of Common Stock on such date. Dividend Shares
are subject to the same restrictions, including but not limited to vesting,
transferability and payment restrictions, that apply to the Restricted Units to
which they relate, with any fractional Shares rounded up to the nearest whole
Share. You shall continue to earn Dividend Shares on unpaid Restricted Units and
Dividend Shares after the end of the Performance Cycle. Dividend Shares shall be
paid in accordance with Section 5, 6, 7 or 8, as applicable.]

 

5.          Timing and Form of Payments. Except as otherwise provided in this
Agreement, the payment of Restricted Units [and related Dividend Shares] is
contingent upon you remaining actively employed by the Company on the applicable
vesting date(s) specified below: [DESCRIBE VESTING DATE(S)]

 

[Subject to the terms of a deferral election made in accordance with Section
10,] payment shall be made as soon as practicable following the vesting date
specified above, but in no event later than 2-1/2 months after the end of the
calendar year in which the vesting date occurs.

 

 

The Actual Award [and related Dividend Shares] shall be paid solely in Shares.

 

 

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6.           Death or Disability. If your Termination of Employment occurs
because of your death or you incur a Disability before the last day of the
Performance Cycle, you or your estate shall receive your Target Award as your
Actual Award for the Performance Cycle. [No Dividend Shares shall be paid in
this case. OR Dividend Shares shall be calculated as provided in Section 4.]

 

If your Termination of Employment occurs because of your death or you incur a
Disability after the last day of the Performance Cycle but before the Actual
Award is fully paid, you or your estate shall receive the remainder of your
Actual Award for the Performance Cycle. [No Dividend Shares shall be paid in
this case. OR Dividend Shares shall be calculated as provided in Section 4.]

 

[Subject to the terms of a deferral election made in accordance with Section
10,] payment under this Section 6 shall be made as soon as practicable following
your death or Disability, but in no event later than 2-1/2 months after the end
of the calendar year in which the event occurs. The Actual Award [and Dividend
Shares] shall be paid solely in Shares.

 

7.          Full Retirement. [If your Termination of Employment occurs solely
because of your Full Retirement before the last day of the Performance Cycle,
you shall receive a pro-rata payment of your Target Award as your Actual Award
equal to the product of (a) times (b), minus (c), where (a) equals the total
number of Restricted Units set forth in Section 1 above [plus the total number
of Dividend Shares credited to you as of your Termination of Employment], (b)
equals the ratio of your complete years of service as an employee of the Company
or its Affiliates between the Date of Grant and your Termination of Employment,
and the number of complete years of service required under this Agreement to be
fully vested in all Restricted Units [and Dividend Shares], and (c) equals the
number of Restricted Units [and Dividend Shares] that vested before your
Termination of Employment.

 

OR

 

If your Termination of Employment occurs solely because of your Full Retirement
before the last day of the Performance Cycle, you shall receive your Target
Award as your Actual Award [plus the total number of Dividend Shares credited to
you as of your Termination of Employment].

 

OR

 

If your Termination of Employment occurs solely because of your Full Retirement
before the last day of the Performance Cycle, all Restricted Units [and Dividend
Shares] shall be forfeited and your rights with respect to any award under this
Agreement shall terminate.]

 

If your Termination of Employment occurs solely because of your Full Retirement
after the last day of the Performance Cycle but before the Actual Award is fully
paid, you or your estate shall receive the remainder of your Actual Award for
the Performance Cycle. [No Dividend Shares shall be paid in this case. OR
Dividend Shares shall be calculated as provided in Section 4.]

 

 

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Subject to the requirements of Internal Revenue Code section 409A [and the terms
of a deferral election made in accordance with Section 10], payment under this
Section 7 (to the extent required) shall be made as soon as practicable
following your Termination of Employment solely because of your Full Retirement,
but in no event later than 2-1/2 months after the end of the calendar year in
which the event occurs. The Actual Award [and Dividend Shares] shall be paid
solely in Shares.

 

8.          Termination of Employment. Except as otherwise provided in Sections
6 and 7, if your Termination of Employment occurs for any reason before the
vesting date(s) specified in Section 5, any unpaid Restricted Units [and
Dividend Shares] shall be forfeited and your rights with respect to any award
under this Agreement shall terminate unless the Committee, or its designee,
determines otherwise in its sole and absolute discretion.

 

9.           Change in Control. If a Change in Control of the Company occurs
before the last day of the Performance Cycle, you shall be deemed to have earned
your Target Award [and Dividend Shares] as your Actual Award. If a Change in
Control of the Company occurs after the last day of the Performance Cycle but
before the Actual Award is fully paid, you shall receive the remainder of your
Actual Award [and Dividend Shares] for the Performance Cycle.

 

[Subject to the terms of a deferral election made in accordance with Section
10,] you shall receive the award due in a single sum payment no later than the
earlier of 90 days after the date of the Change in Control or two and one-half
months after the end of the calendar year in which the Change in Control occurs.
Such single sum payment shall be in cash or Shares, as determined by the
Committee.

 

10.        [FOLLOWING INCLUDED AT COMMITTEE’S DISCRETION: No Deferral. You
cannot defer payment of the Restricted Units [or Dividend Shares].

 

 

OR

 

Deferral of Payment. If you would like to defer payment of the Actual Award, you
may make a request to the Committee in writing in the form and at the time
designated by the Committee. You must submit a suggested payment schedule with
the request for deferral. The Committee may, in its sole discretion, determine
whether to permit deferral of payment in the manner requested. If the Committee
does not accept your proposed payment schedule, then payment shall be made as
otherwise provided in this Agreement.]

 

11.        Change in Status. If your role within the Company changes during the
Performance Cycle such that you would no longer be eligible to receive the
Restricted Units, this Agreement shall remain in full force and effect as if no
such change had occurred.

 

12.        Transfer of Awards. You may not transfer any interest in your
Restricted Units, Actual Award [or Dividend Shares] except by will or the laws
of descent and distribution [FOLLOWING INCLUDED AT COMMITTEE’S DISCRETION: or
except as permitted by the Committee and as specified in the Plan]. Any other
attempt to dispose of all or any portion of your interest under this Agreement
shall be null and void.

 

 

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13.         Withholdings. The Company or your local employer shall have the
power and the right to deduct or withhold, or require you to remit to the
Company or to your local employer, prior to any issuance or delivery of Shares,
an amount sufficient to satisfy taxes imposed under the laws of any country,
state, province, city or other jurisdiction, including but not limited to income
taxes, capital gain taxes, transfer taxes, social security contributions, and
National Insurance Contributions, that are required by law to be withheld as
determined by the Company or your local employer.

 

14.

Forfeiture of Awards.

 

 

(a)

By accepting the Award, you expressly agree and acknowledge that the forfeiture
provisions of subparagraph (b) shall apply if, from the Date of Grant of these
Restricted Units [and Dividend Shares] until the date that is twenty-four (24)
months after your Termination of Employment, for any reason, you enter into an
employment or consultation agreement or arrangement (including any arrangement
for service as an agent, partner, stockholder, consultant, officer or director)
with any entity or person engaged in a business in which the Company or any
Affiliate is engaged if the business is competitive (in the sole judgment of the
Committee) with the Company or an Affiliate and the Committee has not approved
the agreement or arrangement in writing.

 

 

(b)

If the Committee determines, in its sole judgment, that you have engaged in an
act that violates subparagraph (a) prior to the 24-month anniversary of your
Termination of Employment, your outstanding Restricted Units [and Dividend
Shares] shall immediately be rescinded, and you shall forfeit any rights you
have with respect to these Restricted Units [and Dividend Shares] as of the date
of the Committee’s determination. In addition, you hereby agree and promise
immediately to deliver to the Company, Shares equal in value to the Shares you
received for any Restricted Units [and Dividend Shares] during the period
beginning six (6) months prior to your Termination of Employment and ending on
the date of the Committee’s determination.

 

15.        Restrictions on Payment of Shares. Payment of Shares for your
Restricted Units [and Dividend Shares] is subject to the conditions that, to the
extent required at the time of exercise, (a) the Shares underlying the
Restricted Units [and Dividend Shares] shall be duly listed, upon official
notice of redemption, on the New York Stock Exchange, and (b) a Registration
Statement under the Securities Act of 1933 with respect to the Shares shall be
effective. The Company shall not be required to deliver any Common Stock until
all applicable federal and state laws and regulations have been complied with
and all legal matters in connection with the issuance and delivery of the Shares
have been approved by counsel for the Company.

 

16.        Adjustments.   Any adjustments to the Restricted Units [and Dividend
Shares] shall be governed by Section 5.3 of the Plan.

 

17.        Disposition of Securities. By accepting the Award, you acknowledge
that you have read and understand (a) the Company’s policy, and are aware of and
understand your obligations under applicable securities laws in respect of
trading in the Company’s securities and (b) the Company’s stock ownership
guidelines as they apply to this Award. The Company shall have the right to
recover, or receive reimbursement for, any

 

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compensation or profit you realize on the disposition of Shares received for
Restricted Units [and Dividend Shares] to the extent that the Company has a
right of recovery or reimbursement under applicable securities laws.

 

18.        Plan Terms Govern. The vesting and redemption of Restricted Units
[and Dividend Shares], the disposition of any Shares received, the treatment of
gain on the disposition of these Shares, and the treatment of Dividend Shares
are subject to the provisions of the Plan and any rules that the Committee may
prescribe. The Plan document, as may be amended from time to time, is
incorporated into this Agreement. Capitalized terms used in this Agreement have
the meaning set forth in the Plan, unless otherwise stated in this Agreement. In
the event of any conflict between the terms of the Plan and the terms of this
Agreement, the Plan shall control. By accepting the Award, you acknowledge that
the Plan and the Plan prospectus, as in effect on the date of this Agreement,
have been made available to you for your review.

 

19.

Personal Data.

 

 

(a)

By entering into this Agreement, and as a condition of the grant of the
Restricted Units, you expressly consent to the collection, use, and transfer of
personal data as described in this Section to the full extent permitted by and
in full compliance with applicable law.

 

 

(b)

You understand that your local employer holds, by means of an automated data
file, certain personal information about you, including, but not limited to,
name, home address and telephone number, date of birth, social insurance number,
salary, nationality, job title, any shares or directorships held in the Company,
details of all restricted units or other entitlement to shares awarded,
canceled, exercised, vested, unvested, or outstanding in your favor, for the
purpose of managing and administering the Plan (“Data”).

 

 

(c)

You further understand that part or all of your Data may be also held by the
Company or its Affiliates, pursuant to a transfer made in the past with your
consent, in respect of any previous grant of restricted units or awards, which
was made for the same purposes of managing and administering of previous
award/incentive plans, or for other purposes.

 

 

(d)

You further understand that your local employer shall transfer Data to the
Company or its Affiliates among themselves as necessary for the purposes of
implementation, administration, and management of the your participation in the
Plan, and that the Company or its Affiliates may transfer data among themselves,
and/or each, in turn, further transfer Data to any third parties assisting the
Company in the implementation, administration, and management of the Plan (“Data
Recipients”).

 

 

(e)

You understand that the Company or its Affiliates, as well as the Data
Recipients, are or may be located in your country of residence or elsewhere,
such as the United States. You authorize the Company or its Affiliates, as well
as the Data Recipients, to receive, possess, use, retain, and transfer Data in
electronic or other form, for the purposes of implementing, administering, and
managing your participation in the Plan, including any transfer of such Data, as
may be required for the administration of the Plan

 

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and/or the subsequent holding of Shares on your behalf, to a broker or third
party with whom the Shares may be deposited.

 

 

(f)

You understand that you may show your opposition to the processing and transfer
of your Data, and, may at any time, review the Data, request that any necessary
amendments be made to it, or withdraw your consent herein in writing by
contacting the Company. You further understand that withdrawing consent may
affect your ability to participate in the Plan.

 

20.        Discretionary Nature and Acceptance of Award. By accepting this
Award, you agree to be bound by the terms of this Agreement and acknowledge
that:

 

 

(a)

The Company (and not your local employer) is granting your Restricted Units [and
Dividend Shares]. Furthermore, this Agreement is not derived from any
preexisting labor relationship between you and the Company, but rather from a
mercantile relationship.

 

 

(b)

The Company may administer the Plan from outside your country of residence and
United States law shall govern all Restricted Units [and Dividend Shares]
granted under the Plan.

 

 

(c)

Benefits and rights provided under the Plan are wholly discretionary and,
although provided by the Company, do not constitute regular or periodic
payments.

 

 

(d)

The benefits and rights provided under the Plan are not to be considered part of
your salary or compensation under your employment with your local employer for
purposes of calculating any severance, resignation, redundancy or other end of
service payments, vacation, bonuses, long-term service awards, indemnification,
pension or retirement benefits, or any other payments, benefits or rights of any
kind. You waive any and all rights to compensation or damages as a result of the
termination of employment with your local employer for any reason whatsoever
insofar as those rights result, or may result, from the loss or diminution in
value of such rights under the Plan or your ceasing to have any rights under, or
ceasing to be entitled to any rights under, the Plan as a result of such
termination.

 

 

(e)

The grant of Restricted Units [and Dividend Shares] hereunder, and any future
grant of Restricted Units [and Dividend Shares] under the Plan, is entirely
voluntary, and at the complete discretion of the Company. Neither the grant of
the Restricted Units [, Dividend Shares] nor any future grant by the Company
shall be deemed to create any obligation to make any future grants, whether or
not such a reservation is explicitly stated at the time of such a grant. The
Company has the right, at any time and/or on an annual basis, to amend, suspend
or terminate the Plan; provided, however, that no such amendment, suspension, or
termination shall adversely affect your rights hereunder.

 

 

(f)

The Plan shall not be deemed to constitute, and shall not be construed by you to
constitute, part of the terms and conditions of employment. Neither the Company
nor your local employer shall incur any liability of any kind to you as

 

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a result of any change or amendment, or any cancellation, of the Plan at any
time.

 

 

(g)

Participation in the Plan shall not be deemed to constitute, and shall not be
deemed by you to constitute, an employment or labor relationship of any kind
with the Company.

 

21.        Limitations. Nothing in this Agreement or the Plan gives you any
right to continue in the employ of the Company or any of its Affiliates or to
interfere in any way with the right of the Company or any Affiliate to terminate
your employment at any time. Payment of your Restricted Units [and Dividend
Shares] is not secured by a trust, insurance contract or other funding medium,
and you do not have any interest in any fund or specific asset of the Company by
reason of this Award or the account established on your behalf. You have no
rights as a shareowner of the Company pursuant to the Restricted Units [and
Dividend Shares] until Shares are actually delivered to you.

 

22.        Incorporation of Other Agreements. This Agreement and the Plan
constitute the entire understanding between you and the Company regarding the
Restricted Units [and Dividend Shares]. This Agreement supersedes any prior
agreements, commitments or negotiations concerning the Restricted Units [and
Dividend Shares].

 

23.        Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of the other
provisions of the Agreement, which shall remain in full force and effect.
Moreover, if any provision is found to be excessively broad in duration, scope
or covered activity, the provision shall be construed so as to be enforceable to
the maximum extent compatible with applicable law.

 

24.        Agreement Changes. The Company reserves the right to change the terms
of this Agreement and the Plan without your consent to the extent necessary or
desirable to comply with the requirements of Code section 409A, the Treasury
regulations and other guidance thereunder.

 

By accepting this Agreement, you agree to the following: (i) you have carefully
read, fully understand and agree to all of the terms and conditions described in
this Agreement, the Plan, the Plan’s prospectus and all accompanying
documentation; and (ii) you understand and agree that this Agreement and the
Plan constitute the entire understanding between you and the Company regarding
the Restricted Units [and Dividend Shares], and that any prior agreements,
commitments or negotiations concerning the Restricted Units [and Dividend
Shares] are replaced and superseded. You shall be deemed to consent to the
application of the terms and conditions set forth in this Agreement and the Plan
unless you contact Honeywell International Inc., Executive Compensation/AB-1D,
101 Columbia Road, Morristown, NJ 07962 in writing within thirty (30) days of
the date this Agreement.

 

I Accept:

 

_________________________________________

Signature

Date

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