Document:

french.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.1

	
  

 
	
 TENDER OFFER AGREEMENT

 
	
  

 
	
 Between

 
	
  

 
	
 Sperian Protection S.A.

 
	
  

 
	
 AND

 
	
  

 
	
 Honeywell
 International Inc.

 
	
  

 
	
 Honeywell
 Holding France SAS

 
	
  

 
	
 DATED 19 May, 2010

 
	
  

 
	

 

 

1

	
  

 
	
 TENDER OFFER AGREEMENT

 
	

 

 

THIS TENDER OFFER AGREEMENT (the “Agreement”) is made on 19 May
2010,

between:

	
  

 	
  

 
	
 1.

 	
 SPERIAN PROTECTION S.A., a French société anonyme with a share capital of
 EUR 15,315,246 divided into 7,657,623
 shares with a nominal value of EUR 2
 each, having its registered office at Paris Nord II, 33, rue des Vanesses,
 93420 Villepinte (France), represented by Mr Brice de La Morandière, duly authorised for the
 purpose hereof,

 
	
  

 	
  

 
	
  

 	
 hereinafter, the “Company”

 
	
  

 	
  

 
	
 2.

 	
 HONEYWELL
 INTERNATIONAL INC., a company incorporated under the laws of Delaware, whose registered
 office is at 2711 Centerville Road, Suite 400 – City of Wilmington, 19808
 County of New Castle (Delaware - United States of America), represented by
 Mr. Brian S. Cook, duly authorised for the purpose hereof,

 
	
  

 	
  

 
	
  

 	
 hereinafter “Parent”

 
	
  

 	
  

 
	
 and

 	
  

 
	
  

 	
  

 
	
 3.

 	
 HONEYWELL
 HOLDING FRANCE SAS, a société par actions simplifiée incorporated under the laws
 of France, whose registered office is at 2 rue de l’Avenir – 88150
 Thaon-les-Vosges (France), registered with the Registre du Commerce et des Sociétés (Companies
 Registry) of Epinal
 under number 425 137 833, represented by Mr Brian S. Cook, duly
 authorised for the purpose hereof, a wholly-owned subsidiary of Parent,

 
	
  

 	
  

 
	
  

 	
 hereinafter “Purchaser”

 
	
  

 	
  

 
	
  

 	
 Parent and Purchaser are acting jointly and severally under this
 Agreement (“solidairement”).

 
	
  

 	
  

 
	
 WITNESSETH

 
	
  

 	
  

 
	
 WHEREAS:

 
	
  

 	
  

 
	
 (A)

 	
 Purchaser, a
 wholly owned subsidiary of Parent, is seeking to acquire for cash all
 outstanding ordinary shares, nominal value EUR2, of the Company (the “Company
 Shares”),
 including all Company Shares issuable upon exercise of share options or free
 award plans, through a tender offer (the “Offer”) and through the
 purchase of blocks of Company Shares;

 
	
  

 	
  

 
	
 (B)

 	
 Pursuant to
 the terms of the Offer, Purchaser will offer for each Company Share validly
 tendered to the Offer an amount equal to EUR 117 in cash, without interest,
 or should the Company pay any dividend or make any distribution between the
 date of the Agreement and the settlement and delivery of the Offer, an amount
 equal to EUR 117 in cash reduced by the amount per Company Share of such
 dividend or of such distribution (the “Offer Price”), on the terms and subject
 to the conditions set forth in this Agreement; 

 

2

	
  

 	
  

 
	
 (C)

 	
 The
 respective Boards of Directors of Parent and the Company have approved the
 terms and conditions of this Agreement; and

 
	
  

 	
  

 
	
 (D)

 	
 Parent,
 Purchaser and the Company desire to make certain agreements in connection
 with the Offer.

 

	
  

 	
  

 
	
 NOW, THEREFORE, in consideration of
 the foregoing, the parties hereto agree as follows:

 
	
  

 	
  

 
	
 1.

 	
 THE OFFER

 
	
  

 	
  

 
	
 1.1

 	
 Announcement

 
	
  

 	
  

 
	
  

 	
 Promptly
 following the execution of this Agreement, the Company and Parent shall issue
 an agreed upon press release announcing the Offer (the “Public Announcement”),
 including among other items a decision of the Company Board stating expressly
 its intention to recommend the Offer subject to the receipt of a Favorable
 Report (as such term is defined below).

 
	
  

 	
  

 
	
 1.2

 	
 Independent Expert - Board Recommendation

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 If not
 already appointed prior to the date hereof, not later than the day of the
 Public Announcement, the Company shall appoint an independent expert (the “Independent
 Expert”), to prepare a report pursuant to Article 261-1 et seq. of
 the General Regulations of the Autorité des marchés financiers (the “AMF”)
 including a fairness opinion stating whether the Offer Price is fair to the
 Company’s shareholders from a financial point of view (the “Independent
 Expert Report”). 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Upon receipt
 of the Independent Expert Report that includes the opinion of the Independent
 Expert that the Offer Price is fair to the Company’s shareholders from a
 financial point of view (a “Favorable Report”), the Company Board
 shall confirm as soon as possible and in any event within three Business Days
 from the date of the Independent Expert Report that the Offer is in the
 interest of the Company, its shareholders and its employees and recommend
 that all holders of Company Shares tender such shares into the Offer (the “Company
 Board Recommendation”).

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 In the event
 the Company is informed by the Independent Expert that it will issue an
 Independent Expert Report which is not a Favorable Report, the Company shall
 immediately inform Parent, and the Company and Parent shall negotiate in good
 faith with a view towards making such commercially reasonable amendments to
 the terms of the Offer as would permit a Favorable Report to be issued,
 subject to approval of the Board of Directors of Parent and the Board of
 Directors of the Company and provided that in no case shall Purchaser and
 Parent be obligated to increase the Offer Price. If such negotiations are
 unsuccessful after five Business Days and the Company Board Recommendation is
 not issued, then Purchaser shall have the right to terminate this Agreement.

 
	
  

 	
  

 	
  

 
	
 1.3

 	
 The Offer

 
	
  

 	
  

 	
  

 
	
 (a)

 	
 On or prior
 to the filing of the Offer, Parent shall file an application with the French
 Ministry of Economy requesting prior authorization of foreign investment in
 connection with the Offer (the “French Ministry of Economy Authorization”).
 

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 The Offer shall
 be subject to the rules and regulations of the AMF in France. Subject to
 Section 1.4 below, Parent undertakes irrevocably to cause Deutsche Bank and
 Lazard, which are serving as presenting banks of the Offer (with only
 Deutsche Bank guaranteeing the irrevocable content of the Offer), to file the
 Offer with the AMF prior to the opening of the stock exchange in Paris on the
 second Business Day after the date of this Agreement, together with the draft
 tender offer prospectus (projet de note d’information) substantially
 in 

 

3

	
  

 	
  

 	
  

 
	
  

 	
 the form
 attached as Exhibit A; provided however that Purchaser will take into
 consideration any reasonable comments on such draft tender offer prospectus
 from the Company to the extent reasonably practicable and promptly provided..

 
	
  

 	
  

 	
  

 
	
 (c)

 	
 The Company
 shall file the draft target prospectus (projet de note d’information en réponse)
 including the Independent Expert Report on the second Business Day following
 the Company Board Recommendation. 

 
	
  

 	
  

 	
  

 
	
 (d)

 	
 In addition,
 Purchaser shall have the right to amend the terms of the draft tender offer
 prospectus after it is filed with the AMF, (i) to the extent required to
 reflect comments from the AMF, subject to prior notice to the Company, and
 (ii) in other cases, in the event such amendments relate to sections 1.2 and
 2.1, 2.6 and 2.7 of the draft tender offer prospectus, they shall not make
 the Offer materially less favorable to the Company, its employees and its
 shareholders and subject to prior consultation with the Company. Reciprocally,
 the Company will provide a draft of its initial draft target prospectus at
 least three Business Days before filing it with the AMF and will take into
 consideration any reasonable comments from Purchaser to the extent reasonably
 practicable and promptly provided. In addition, the Company shall have the
 right to amend the draft target prospectus after it is filed with the AMF (i)
 to the extent required to reflect comments from the AMF, subject to prior
 notice to Purchaser, and (ii) in other cases, subject to prior consultation
 with Purchaser. 

 
	
  

 	
  

 	
  

 
	
 1.4

 	
 Offer Conditions

 
	
  

 	
  

 	
  

 
	
 (a)

 	
 Notwithstanding
 any other term of the Offer or of this Agreement, Purchaser shall not be
 required to file the Offer if:

 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 the Company Board shall have made an Adverse Recommendation (as defined
 below); or

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 this Agreement shall have been terminated in accordance with its terms.

 

	
  

 	
  

 
	
 (b)

 	
 The opening
 of the Offer is subject to clearance by the AMF and receipt of the approval
 from the French Ministry of Economy in connection with foreign investment in
 France.

 
	
  

 	
  

 
	
 (c)

 	
 The closing
 of the Offer is subject to (i) the number of Company Shares validly tendered
 into the Offer (or that Purchaser may irrevocably acquire) represent at least
 57% of the Company Shares on a Fully Diluted Basis, and (ii) the receipt of
 the “Phase
 I Antitrust Clearance” (i.e., the expiration or termination of the
 waiting period under the United States Hart-Scott-Rodino Antitrust
 Improvements Act of 1976 without the issuance of a second request and the clearance
 of the transaction by the European Commission under Article 6.(1)(b) of the
 Council Regulation n°139/2004). The term Fully Diluted Basis means on a fully
 diluted basis, after giving effect to the exercise of all outstanding options
 and the issuance of Company Shares pursuant to free award plans.

 
	
  

 	
  

 
	
  

 	
 The
 foregoing conditions are for the sole benefit of Purchaser and may, subject
 to applicable Law, be waived by Purchaser in whole or in part at any time, in
 its sole discretion.

 
	
  

 	
  

 
	
 1.5

 	
 Withdrawal of the Offer

 
	
  

 	
  

 
	
  

 	
 Pursuant to
 article 232-11 of the AMF General Regulations, Parent and Purchaser shall be
 entitled to withdraw the Offer: (a) within five Business Days following the
 date of the publication by the AMF of the timetable for a competing offer or for
 an improved offer by a competing bidder, or (b) with the prior approval of
 the AMF if, prior to the publication by the AMF of the definitive results of
 the Offer, the Company adopts measures that modify the Company’s substance (modifiant
 sa consistance) or if the Offer becomes irrelevant (sans objet)
 under French law.

 

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 1.6

 	
 Cooperation

 
	
  

 	
  

 
	
  

 	
 In connection with the Offer, Purchaser and the Company shall cooperate
 with each other to fulfill all applicable requirements of the AMF and the
 French Ministry of Economy and to respond to comments from the AMF and the
 French Ministry of Economy. Purchaser and Parent undertake to accept any
 reasonable undertakings required by the relevant Governmental Entities in
 connection with the authorization of the French Minister of Economy. Should
 it become necessary, Parent and Purchaser undertake to maintain the contracts
 with the French government and to maintain the manufacturing of the specific
 products subject to these contracts in France.

 
	
  

 	
  

 
	
  

 	
 The Company
 shall use its reasonable best efforts to assist and cooperate with Purchaser
 and Parent and provide all necessary information in order for Purchaser and
 Parent to make all necessary registrations, declarations and filings
 (including filings with Governmental Entities, including the European
 Commission, the US Department of Justice or the US Federal Trade Commission
 (as the case may be) and any other local antitrust authority required under
 applicable merger control regulations (the “Competition Authorities”))
 and to make any such filings required to be made by the Company as soon as
 reasonably practicable. Purchaser and Parent agree to make any filings
 required with Competition Authorities as soon as reasonably practicable,
 subject to the Company providing the information reasonably necessary to make
 such filings.

 
	
  

 	
  

 
	
  

 	
 Purchaser
 shall reasonably consider and promptly propose remedies to any competition
 concerns identified by the Competition Authorities within any relevant time
 limit in order to obtain the Phase I Antitrust Clearance.

 
	
  

 	
  

 
	
  

 	
 Purchaser
 and Parent shall inform the Company prior to making any proposal for or
 agreeing to any divestments of assets or activities of the Company and its
 Subsidiaries or make any other kind of commitment in respect of the Company or
 its Subsidiaries in order to obtain the Phase I Antitrust Clearance.

 
	
  

 	
  

 
	
 1.7

 	
 Board of Directors

 
	
  

 	
  

 
	
  

 	
 Promptly after the closing of the Offer, Purchaser shall be entitled to
 designate a number of directors on the Company Board equal to the product of
 : (i) the total number of directors on the Company Board multiplied by
 (ii) the percentage of (A) the number of voting rights attached to
 the Company Shares owned by Purchaser or any other subsidiary of Parent over
 (B) the number of outstanding voting rights on a Fully Diluted Basis as
 at such date, and the Company shall, at such time, cause Purchaser’s
 designees to be so elected or appointed to the Company Board and shall take
 all action requested by Parent necessary to effect any such election or
 appointment. In connection with the foregoing, the Company shall (i) use its
 best efforts to promptly obtain the resignation of such number of its current
 directors and/or (ii) increase the size of the Company Board, as is necessary
 to enable Purchaser’s designees to be elected or appointed to the Company
 Board as provided above. The Company shall consult with Parent regarding any
 board resignations.

 
	
  

 	
  

 
	
 2.

 	
 COVENANTS 

 
	
  

 	
  

 
	
 2.1

 	
 Conduct of business

 
	
  

 	
  

 
	
  

 	
 From the
 date hereof until the earlier of (i) the restructuring of the Company Board
 in accordance with Section 1.7 above and (ii) the termination of this Agreement,
 the Company shall operate its business in the ordinary course consistent with
 past practice and use reasonable efforts to preserve the business. 

 
	
  

 	
  

 
	
  

 	
 In addition, during such period, the
 Company shall not and shall cause its Subsidiaries not to: 

 

5

	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 declare or issue any
 dividends or distribution in respect of any of its capital stock or other
 equity or voting interests (except for ordinary course cash dividends in
 respect of Company Shares and notably, except for the payment of the dividend
 submitted to the Company’s general shareholders’ meeting of May 19, 2010
 or distribution of dividends by wholly-owned
 Subsidiaries in ordinary course), (B) split, combine or reclassify any
 of its capital stock or other equity or voting interests, or issue or
 authorize the issuance of any other securities in respect of, in lieu of or
 in substitution for shares of its capital stock or other equity or voting
 interests, (C) purchase, redeem or otherwise acquire any shares of
 capital stock or any other securities of the Company or any of its
 Subsidiaries or any options, warrants, calls or rights to acquire any such
 shares or other securities (except pursuant to the forfeiture of Equity
 Awards in accordance with their terms as in effect on the date of this
 Agreement) or (D) take any action that would result in any amendment,
 modification or change of any term of any indebtedness of the Company or any
 of its Subsidiaries;

 
	
  

 	
  

 	
  

 
	
  

 	
 b.

 	
 issue, grant, deliver, sell,
 pledge or otherwise encumber any shares of its capital stock, any other
 equity or voting interests or any securities convertible into, or
 exchangeable for, or any options, warrants, calls or rights to acquire, any
 such stock, interests or securities or any stock appreciation rights,
 restricted stock units, stock-based performance units, “phantom” stock awards
 or other rights that are linked to the value of Company Shares or the value
 of the Company or any part thereof; provided, however, that the Company may issue Company Shares pursuant to the exercise of
 Company Stock Options outstanding on the date of this Agreement and only in
 accordance with their terms as in effect on the date of this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 c.

 	
 amend the Company By-laws or
 other comparable charter organizational documents of any of the Company’s
 Subsidiaries;

 
	
  

 	
  

 	
  

 
	
  

 	
 d.

 	
 acquire or agree to acquire (i) by merging or
 consolidating with, or by purchasing all or a substantial portion of the
 assets of, or by purchasing all or a substantial equity or voting interest
 in, or by any other manner, any person or business or division thereof or
 (ii) any other assets other than raw materials or supplies and other
 assets that are not material and are acquired in the ordinary course of
 business consistent with past practice;

 
	
  

 	
  

 	
  

 
	
  

 	
 e.

 	
 sell, lease, license, lease
 back or otherwise subject to any lien or otherwise dispose of or abandon any
 of its business lines, divisions, activities, Subsidiaries provided that the foregoing provisions shall not
 prevent the sale of assets or activities of the Company or its Subsidiaries
 which have generated an aggregate turn-over of less than €15,000,000 during
 the financial year closed on 31 December 2009;

 
	
  

 	
  

 	
  

 
	
  

 	
 f.

 	
 adopt or amend any benefit
 plan or enter into, adopt, extend, renew or amend any collective bargaining
 agreement or other contract with any labor organization, works council, union
 or association, except as required by applicable law;

 
	
  

 	
  

 	
  

 
	
  

 	
 g.

 	
 grant any director, officer
 or employee any increase in compensation or benefits, except in the ordinary
 course of business and consistent with past practice or as may be required
 under existing agreements;

 
	
  

 	
  

 	
  

 
	
  

 	
 h.

 	
 adopt any measure with
 unconditional effect that modifies the Company’s substance (modifiant
 sa consistance) and that may allow Purchaser to withdraw the Offer
 under Article 232-11 of the AMF General Regulation ; 

 
	
  

 	
  

 	
  

 
	
  

 	
 i.

 	
 incur fees and expenses in connection with this Agreement, the Offer
 and any discussion with third parties, including Cinven, regarding proposals
 to acquire Company Shares or assets of the Company or its Subsidiaries
 (including break-up fees to Cinven and break-up costs in connection with 

 

6

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 financing arrangements of the Company or its Subsidiaries) in excess of
 EUR17 million in the aggregate (inclusive of any with such fees and expenses
 incurred prior to the date of this Agreement); or

 
	
  

 	
  

 	
  

 
	
  

 	
 j.

 	
 take or agree to take any action likely to frustrate the Offer.

 

	
  

 	
  

 
	
 2.2

 	
 Change of control

 
	
  

 	
  

 
	
  

 	
 The Company undertakes to, as soon as
 reasonably practicable, and in any event from the date of the filing of the
 Offer until the settlement and delivery of the Offer, use its commercially
 reasonable efforts (not including the payment of additional consideration
 without Parent’s prior consent) to obtain, prior to announcement of the
 results of the Offer by the AMF, consents by third parties under change of
 control clauses in the contracts entered into by the Company or under
 applicable permits or authorizations where it is necessary to avoid
 disruption or prejudice to the business of the Company as a result of the
 change of control of the Company in connection with the Offer.

 
	
  

 	
  

 
	
  

 	
 Parent and Purchaser acknowledge that the financing agreements between
 the Company and various financial institutions contain provisions which would
 allow these institutions to require the Company to immediately reimburse any
 outstanding financing upon a change of control of the Company. Upon
 successful consummation of the Offer, Parent and Purchaser undertake to make
 available or cause to be made available to the Company any funds necessary to
 make such repayment.

 
	
  

 	
  

 
	
 2.3

 	
 No shop

 
	
  

 	
  

 
	
 (a)

 	
 During the
 term of this Agreement, the Company shall not, nor shall it authorize or
 permit any Company Subsidiary to, or authorize or permit any director,
 officer or employee of the Company or any Company Subsidiary or any
 investment banker, advisor, agent or representative (collectively, the “Representatives”)
 of the Company or any Company Subsidiary to, directly or indirectly,
 (i) solicit, encourage or knowingly facilitate the submission of any
 Takeover Proposal, (ii) participate in any discussions regarding or take any
 action to facilitate the making of any proposal that constitutes, or may
 reasonably be expected to lead to, any Takeover Proposal or (iii) make or
 authorize any statement, recommendation or solicitation in respect of any
 Takeover Proposal (except as provided in Section 2.3(b)). 

 
	
  

 	
  

 
	
  

 	
 The Company
 undertakes, and shall cause each of the Company Subsidiaries and each
 Representative of the Company or any Company Subsidiary, to immediately cease
 all discussions with any person conducted heretofore with respect to any
 proposal that constitutes or could reasonably be expected to lead to a
 Takeover Proposal.

 
	
  

 	
  

 
	
  

 	
 Notwithstanding
 the foregoing, the Company may, if the Company has received a Takeover
 Proposal that is or is reasonably likely to lead to a Superior Proposal, and
 that was not solicited by or on behalf of the Company, furnish information,
 substantially similar in scope and timing to what has been provided to Parent
 and Purchaser prior to the date hereof, with respect to the Company to the
 Person making the Takeover Proposal and participate in discussions and
 negotiations with the Person making the Takeover Proposal regarding the
 Takeover Proposal.

 
	
  

 	
  

 
	
 (b)

 	
 Neither the
 Company nor the Company Board shall (i) (x) following the Company
 Board Recommendation withdraw or modify the approval or recommendation by the
 Company Board of this Agreement or the Offer or (y) approve or recommend
 any Takeover Proposal (either (x) or (y) being an “Adverse Recommendation”) or
 (ii) approve, cause or permit the Company or any Company Subsidiary to
 enter into 

 

7

	
  

 	
  

 
	
  

 	
 any letter
 of intent, acquisition agreement or similar agreement (each, an “Acquisition
 Agreement”) relating to any Takeover Proposal.

 
	
  

 	
  

 
	
  

 	
 Notwithstanding
 the foregoing, the Company may, in response to a Superior Proposal that was
 not solicited by or on behalf of the Company or any Company Subsidiary and
 did not otherwise result from a breach of Section 2.3(a): (i) make an
 Adverse Recommendation and (ii) terminate this Agreement pursuant to
 Section 4.1(b); provided, however, unless such Superior Proposal
 is in the form of a formal offer filed and cleared with the AMF, that (x)
 such determination shall not be made until after the third Business Day
 following the receipt by Parent of written notice (a “Notice of Superior Proposal”)
 from the Company advising Parent that the Company Board is prepared to make
 an Adverse Recommendation or accept a Superior Proposal, specifying the terms
 and conditions of such Superior Proposal and identifying the person making
 such Superior Proposal, (it being understood and agreed that any amendment to
 the price or any other material term of such Superior Proposal shall require
 a new Notice of Superior Proposal and a new three Business Day period) and
 (y) Parent does not make, within three Business Days after receipt of the
 Notice of Superior Proposal, a proposal that would, in the good faith
 judgment of the Company Board, cause the events, facts or circumstances
 forming the basis or an Adverse Recommendation to no longer form such basis
 or cause the offer previously constituting a Superior Proposal to no longer
 constitute a Superior Proposal, as the case may be.

 
	
  

 	
  

 
	
 (c)

 	
 The Company
 shall promptly (and in any event no later than 24 hours following receipt or
 knowledge thereof) advise Parent of any Takeover Proposal or any inquiry that
 could reasonably be expected to lead to any Takeover Proposal (including any
 change to the terms of any such Takeover Proposal) and the identity of the
 person making any such Takeover Proposal . The Company shall (i) keep Parent
 fully informed of the status of any such Takeover Proposal and (ii) promptly
 advise Parent of any amendments to the terms of any such Takeover Proposal.
 The Company shall not take any actions whether contractually or otherwise to
 limit its ability to comply with its obligations hereunder and shall, as may
 be necessary, take any action necessary to ensure compliance including by
 terminating any confidentiality agreements entered into prior to the date
 hereof and entering into new confidentiality agreements expressly allowing
 the Company to comply with its obligations hereunder.

 
	
  

 	
  

 
	
 (d)

 	
 For purposes
 of this Agreement:

 
	
  

 	
  

 
	
  

 	
 Takeover Proposal means any inquiry, proposal or offer relating to, or that is
 reasonably likely to lead to, directly or indirectly: (i) a merger,
 consolidation, tender offer, exchange offer, joint venture, dissolution, recapitalization,
 business combination or other similar transaction involving the Company or
 any Company Subsidiary, (ii) the acquisition by any person of a number
 of shares of the Company or any Company Subsidiary equal to or greater than
 10% of the number of such shares outstanding before such acquisition,
 including by means of tender offer, exchange offer or otherwise, or
 (iii) the acquisition by any person in any manner, directly or
 indirectly, of assets that constitute 10% or more of the net revenues, net income,
 EBITDA or assets of the Company and the Company Subsidiaries taken as a
 whole, in each case other than the Offer.

 
	
  

 	
  

 
	
  

 	
 Superior Proposal means any bona fide binding written fully financed offer not
 solicited by or on behalf of the Company or any Company Subsidiary made by a
 third party that if consummated would result in such third party acquiring,
 directly or indirectly, more than 50% of the Company Shares (by merger,
 consolidation, tender offer, exchange offer or otherwise) or all or
 substantially all the assets of the Company and the Company Subsidiaries
 taken as a whole, (A) for consideration that the Company Board
 determines in its good faith judgment to be superior from a financial point
 of view to the holders of Company Shares to the Offer, taking into account
 all the terms and conditions of such proposal, this Agreement and any
 proposal by Parent to amend the terms of this Agreement, and (B) that,
 in the good faith judgment of the

 

8

	
  

 	
  

 	
  

 
	
  

 	
 Company Board, is otherwise reasonably likely to be consummated,
 taking into account all legal, financial, regulatory and other aspects of the
 proposal and the person making the proposal. 

 
	
  

 	
  

 	
  

 
	
 3.

 	
 ADDITIONAL AGREEMENTS 

 
	
  

 	
  

 	
  

 
	
 3.1

 	
 Company Stock Options and Other Incentive
 Awards / Management 

 
	
  

 	
  

 	
  

 
	
  

 	
 The Company has granted options to subscribe for, acquire or receive
 Company Shares under the stock option plans, (the “Company Stock Options”) and Company free shares awards (the
 “Company Free Share Awards”).
 The Company Stock Options and the Company Free Share Awards are altogether
 defined as the “Equity Awards”. 

 
	
  

 	
  

 	
  

 
	
  

 	
 The Company undertakes not to amend the Equity Awards plans that will
 continue to vest in accordance with their existing applicable terms without
 the prior written approval of Parent. 

 
	
  

 	
  

 	
  

 
	
  

 	
 If the Offer is successful, Purchaser and Parent undertake (i) to
 implement (a) certain modifications to the Equity Awards, (b) a retention
 bonus mechanism and (c) an incentive scheme, and (ii) to propose to the
 Equity Awards holders a liquidity agreement the main terms and conditions of
 which are described in Exhibit B to this Agreement.

 
	
  

 	
  

 
	
 3.2

 	
 Treasury Shares 

 
	
  

 	
  

 	
  

 
	
  

 	
 The Company shall not and shall cause its subsidiaries not to tender
 any Company Shares held by it in the Offer. 

 
	
  

 	
  

 	
  

 
	
 3.3

 	
 Fees and Expenses 

 
	
  

 	
  

 	
  

 
	
 (a)

 	
 Except as provided below, all fees and expenses incurred in
 connection with this Agreement and the Offer shall be paid by the party
 incurring such fees or expenses, whether or not the Offer is consummated. 

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 In the event that (i) the Company Board Recommendation has not been
 issued on the earlier of (x) the fifth Business Day after the issuance of the
 Independent Expert Report in accordance with Section 1.2(b) of this Agreement
 and (y) June 30, 2010, except in the case where the Independent Expert Report
 issues an Independent Expert Report which is not a Favorable Report, (ii) a
 Takeover Proposal shall have been made to the Company or its shareholders or
 any person has publicly announced an intention to make, or an interest in
 making, a Takeover Proposal (whether or not conditional and whether or not
 withdrawn) and the Company Board either shall have made an Adverse
 Recommendation or the Company Board shall have approved, caused or permitted
 the Company or any Company Subsidiary to enter into, or the Company or any
 Company Subsidiary shall have entered into an Acquisition Agreement
 (including for the avoidance of doubt in the events provided for in Section
 1.5(a) of this Agreement), or (iii) Purchaser is permitted to withdraw the
 Offer in accordance with Section 1.5 (b), then the Company shall, within five
 Business Days of the date on which the event having triggered it occurred,
 pay Purchaser a fee equal (i) to EUR3 million in the event, Purchaser has
 entered into share purchase agreements prior to the Public Announcement, to
 purchase at least 50,1% of the Company Shares on a Fully Diluted Basis or
 (ii) in all other cases, EUR10 million (the “Termination
 Fee”) by wire transfer of same day funds (to an account designated
 by Purchaser). 

 
	
  

 	
  

 	
  

 
	
 (c)

 	
 The Company acknowledges that the agreements contained in this
 Section 3.3 are an integral part of the Offer, and that, without these
 agreements, Purchaser would not enter into this Agreement. 

 
	
  

 	
  

 	
  

 
	
  

 	
 The payment of any amounts due pursuant to this Section 3.3 shall not
 constitute the exclusive remedy of Purchaser under this Agreement. Without
 limiting the generality of the foregoing, in the event of a breach or 

 

9

	
  

 	
  

 	
  

 
	
  

 	
 deemed breach by the Company of Section 2.3, Purchaser may seek any
 and all other remedies available to which Purchaser is entitled. 

 
	
  

 	
  

 	
  

 
	
  

 	
 The Termination Fee shall not be payable in the event the withdrawal
 or change of the recommendation of the Offer by the Company Board is made in
 connection with the amendment by the Purchaser of the terms of the Offer or
 of its intentions (as described in the tender offer prospectus filed with the
 AMF) in a manner that materially detrimentally affects the Company or its
 Subsidiaries taken as a whole, its shareholders or its employees or with a
 breach of this Agreement by the Purchaser or Parent which has not been cured,
 after 5-days prior written notice, prior to the occurrence of any of the
 events described in Section 3.3(b) giving rise to the Termination Fee. 

 
	
  

 	
  

 	
  

 
	
 3.4

 	
 Public Announcements 

 
	
  

 	
  

 	
  

 
	
  

 	
 Purchaser and the Company shall to the extent reasonably practicable
 consult with each other before issuing, and provide each other a reasonable
 opportunity to review and comment upon, any press release or other public
 statements with respect to the Offer and shall not issue any such press
 release or make any such public statement prior to such consultation, except
 as may be required by applicable Law, by court process or by obligations
 pursuant to any listing agreement with or market rules of any national
 securities exchange on which such party’s shares are traded. 

 
	
  

 	
  

 	
  

 
	
 3.5

 	
 Representations 

 
	
  

 	
  

 	
  

 
	
  

 	
 Each of the Company, Parent and Purchaser represents that it has the
 legal right and full power and authority to enter into and perform this
 Agreement, and any other documents to be executed by it pursuant to or in
 connection with this Agreement. Those documents will, when executed,
 constitute valid and binding obligations on each of the Company, Parent and
 Purchaser as applicable in accordance with their respective terms. 

 
	
  

 	
  

 	
  

 
	
 3.6

 	
 Shareholder Composition 

 
	
  

 	
  

 	
  

 
	
  

 	
 The Company hereby represents and warrants to Parent and Purchaser
 that, to its knowledge, as of the date hereof, U.S. holders (as such term is
 defined in Rule 14d-1 under the US Securities Exchange Act of 1934) hold less
 than 40% of the Company Shares, and shall provide Parent and Purchaser with
 such information as they reasonably require to demonstrate such level of U.S.
 ownership. 

 
	
  

 	
  

 	
  

 
	
 4.

 	
 TERMINATION, AMENDMENT AND WAIVER 

 
	
  

 	
  

 	
  

 
	
 4.1

 	
 Termination

 
	
  

 	
  

 	
  

 
	
  

 	
 This Agreement may only be terminated as follows: 

 
	
  

 	
  

 	
  

 
	
 (a)

 	
 by mutual written consent of Purchaser and the Company; 

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 by either Purchaser or the Company, if: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 the conditions set forth in Section 1.4(b) of this Agreement to
 filing or opening of the Offer are not satisfied prior to September 15, 2010;
 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 the Company Board shall have made an Adverse Recommendation or the
 Company Board shall have approved, caused or permitted the Company or any
 Company Subsidiary to enter, or the 

 

10

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Company or any Company Subsidiary shall have entered into an
 Acquisition Agreement, after the date of this Agreement in accordance with
 Section 2.3(b); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 the Offer lapses or is declared non-compliant (non conforme) by the AMF or is not
 successful due to the failure to satisfy any of the conditions set forth in
 Section 1.4(c) of this Agreement; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 a Governmental Entity of competent jurisdiction enacts, issues,
 promulgates, enforces or adopts any applicable law or regulation which (i)
 makes the sale and purchase of the Company Shares, pursuant to the Offer,
 illegal or otherwise prohibits or prevents consummation of the sale and
 purchase of the Company Shares pursuant to the Offer, and (ii) is final,
 binding, and non-appealable; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 the Purchaser has actually withdrawn the Offer in accordance with
 Section 1.5 

 
	
  

 	
  

 	
  

 
	
 (c)

 	
 by Purchaser if the Company Board Recommendation has not been issued
 on the earlier of (i) the fifth Business Day after the issuance of a
 Favorable Report in accordance with Section 1.2(b) or (ii) June 30, 2010, or
 in accordance with Section 1.2(c) ; or 

 
	
  

 	
  

 	
  

 
	
 (d)

 	
 by the Company, if the Offer is not filed within the timeframe by the
 Purchaser in accordance with Section 1.3(b) or if the Purchaser amends the
 terms of the Offer or of its intentions (as described in the tender offer
 document filed with the AMF) in a way that materially detrimentally affects
 the Company or its Subsidiaries, its shareholders or its employees. 

 
	
  

 	
  

 	
  

 
	
 4.2

 	
 Effect of Termination 

 
	
  

 	
  

 	
  

 
	
  

 	
 In the event of termination of this Agreement by either the Company
 or Purchaser as provided in Section 4.1, this Agreement shall forthwith
 become void and have no effect, without any liability or obligation on the part
 of Purchaser or the Company, other than Section 3.3, this Section 4.2 and
 Article 5; provided, however, that no such termination shall
 relieve any party hereto from any liability or damages resulting from a
 breach by such party of any of its agreements set forth in this Agreement,
 and all existing rights and remedies of such non-breaching party under this
 Agreement in the case of any such breach shall be preserved. The
 Confidentiality Agreement shall survive any termination of this Agreement and
 shall apply to all information and material delivered by any party hereunder,
 in each case in accordance with its terms. 

 
	
  

 	
  

 	
  

 
	
 4.3

 	
 Amendment 

 
	
  

 	
  

 	
  

 
	
  

 	
 This Agreement may be amended by the parties hereto at any time by an
 agreement in writing duly executed and delivered by or on behalf of each of
 the parties hereto. 

 
	
  

 	
  

 	
  

 
	
 5.

 	
 GENERAL PROVISIONS 

 
	
  

 	
  

 	
  

 
	
 5.1

 	
 Notices

 
	
  

 	
  

 	
  

 
	
  

 	
 All notices, requests, claims, demands and other communications under
 this Agreement shall be in writing and shall be deemed given upon receipt (or
 upon the next succeeding Business Day if received after 5 p.m. local time on
 a Business Day or if received on a Saturday, Sunday or holiday) by the
 parties at the following addresses (or at such other address for a party as
 shall be specified by like notice): 

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 if to Parent
 or Purchaser, to:

 
	
  

 	
  

 
	
  

 	
 Honeywell
 International Inc. 

 
	
  

 	
 101 Columbia
 Road

 

11

	
  

 	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 P.O. Box
 4000 

 
	
  

 	
 Morristown,
 New Jersey 07962

 
	
  

 	
 United
 States 

 
	
  

 	
 Fax: +1
 (973) 455-6840

 
	
  

 	
 Attention:
 Katherine L. Adams, Senior Vice President and General Counsel 

 
	
  

 	
  

 
	
  

 	
 with copies
 to: 

 
	
  

 	
  

 
	
  

 	
 Allen &
 Overy 

 
	
  

 	
 Edouard VII

 
	
  

 	
 26,
 boulevard des Capucines -75009 Paris - France 

 Fax: + 33 (0)1 40 06 54 54 

 Attention: Jean-Claude Rivalland 

 
	
  

 	
  

 
	
  

 	
 Bredin Prat 

 130, rue du Faubourg Saint Honoré - 75008 Paris 

 Fax: +33 1 42 89 10 73 

 Attention: Olivier Assant 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 if to the
 Company, to:

 
	
  

 	
  

 	
  

 
	
  

 	
 Sperian
 Protection

 
	
  

 	
 Paris Nord
 II, 33, rue des Vanesses, 93420 Villepinte (France) 

 
	
  

 	
  

 
	
  

 	
 Fax: +33 1 49 90 79 78

 
	
  

 	
  

 
	
  

 	
 Attention: Henri-Dominique Petit, Chairman of the Board of Directors
 and Brice de La Morandière, CEO 

 
	
  

 	
  

 
	
 5.2

 	
 Definitions 

 
	
  

 	
  

 
	
  

 	
 For purposes of this Agreement: 

 
	
  

 	
  

 
	
 (a)

 	
 an Affiliate of any
 person means another person that directly or indirectly, through one or more
 intermediaries, controls, is controlled by, or is under common control with,
 such first person; 

 
	
  

 	
  

 
	
 (b)

 	
 Business Day means
 any day on which securities exchanges in France are open for trading, which
 shall not be a Saturday, a Sunday, a legal holiday or other day on which
 banking institutions are authorized or obligated by Law to close in France;

 
	
  

 	
  

 
	
 (c)

 	
 Governmental Entity means
 any state, local or foreign government or any court of competent
 jurisdiction, administrative commission or other governmental authority; 

 
	
  

 	
  

 
	
 (d)

 	
 Law means a statute,
 law, ordinance, rule, legislation or regulation; 

 
	
  

 	
  

 
	
 (e)

 	
 Person means an
 individual, corporation, partnership, joint venture, association, limited
 liability company, Governmental Entity, unincorporated organization or other
 entity; 

 
	
  

 	
  

 
	
 (f)

 	
 a Subsidiary of any
 person means another person of which 50% or more of any voting securities,
 other voting ownership (or, if there are no such voting interests, 50% or
 more of the equity interests) are owned or controlled, directly or
 indirectly, by such first person. 

 

12

	
  

 	
  

 
	
 5.3

 	
 Severability 

 
	
  

 	
  

 
	
  

 	
 If any term or other provision of this Agreement is invalid, illegal
 or incapable of being enforced by any rule or law, or public policy, all
 other terms and provisions of this Agreement shall nevertheless remain in
 full force and effect so long as the economic and legal substance of the
 Offer is not affected in any manner materially adverse to any party. Upon
 such determination that any term or other provision is invalid, illegal or
 incapable of being enforced, the parties hereto shall negotiate in good faith
 to modify this Agreement so as to effect the original intent of the parties
 as closely as possible in an acceptable manner to the end that the Offer is
 fulfilled to the extent possible. 

 
	
  

 	
  

 
	
 5.4

 	
 Entire Agreement; Third-Party Beneficiaries
 

 
	
  

 	
  

 
	
  

 	
 This Agreement constitutes the entire agreement and supersedes all
 prior agreements and understandings, both written and oral, among the parties
 with respect to the Offer other than the Confidentiality Agreement between
 Parent and the Company. Provisions set forth in Section 3.1 and Exhibit B
 shall be deemed to confer to those persons who are expressly named in such
 Exhibit, as third-parties beneficiaries, the rights herein described. 

 
	
  

 	
  

 
	
 5.5

 	
 Governing Law 

 
	
  

 	
  

 
	
  

 	
 This Agreement is subject to French law, without regard to its
 conflict of laws provisions to the extent they would require application of
 the laws of another jurisdiction. Any dispute relating to its validity,
 interpretation or execution shall be submitted to the exclusive jurisdiction
 of the Tribunal de Commerce de Paris. 

 
	
  

 	
  

 
	
 5.6

 	
 Assignment 

 
	
  

 	
  

 
	
  

 	
 Neither this Agreement nor any of the rights, interests or
 obligations under this Agreement shall be assigned, in whole or in part, by
 operation of Law or otherwise by any of the parties without the prior written
 consent of the other parties, except that Purchaser and/or Parent may assign,
 in its sole discretion, any of or all its rights, interests and obligations
 under this Agreement to any direct or indirect wholly-owned subsidiary of
 Parent (including designating any such entity to act as Purchaser hereunder).
 

 

13

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ON MAY 19, 2010

 
	
  

 	
 IN PARIS

 
	
  

 	
  

 	
  

 
	
  

 	
 SPERIAN PROTECTION S.A.

 
	
  

 	
  

 	
 By: 

 	
 /s/ Brice de
 La Morandière

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name: Brice
 de La Morandière

 
	
  

 	
  

 	
  

 
	
  

 	
 HONEYWELL INTERNATIONAL INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ Brian S.
 Cook

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name: Brian
 S. Cook

 
	
  

 	
  

 	
  

 
	
  

 	
 HONEYWELL HOLDING FRANCE

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ Brian S.
 Cook

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name: Brian
 S. Cook

 

14

EXHIBITS

 

	Exhibit
            A: 
	Draft
          Tender Offer Prospectus (Offre Publique D’Achat)

	Exhibit
    B: 	Management
    Package
				

 

 

 

 

 

 

 

 

Exhibits
    to be supplementally furnished to the Commission upon request.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 
 

 

	 
	 
	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.  
 

 

 

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.] 

 

 

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.

 

 

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 

 

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 
 

 

	
             
 	
             
 	
            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 
 

 

	
             
 	
             
 	
            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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