<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 10, 1997)
$250,000,000
HONEYWELL INC.
6 5/8% DEBENTURES DUE JUNE 15, 2028
Interest on the 6 5/8% Debentures due June 15, 2028 (the "Debentures") is
payable on June 15 and December 15 of each year, commencing December 15, 1998.
The Debentures are not redeemable prior to maturity and will not be subject to
any sinking fund.
The Debentures will be represented by global securities registered in the
name of a nominee of The Depository Trust Company (the "Depositary"). Beneficial
interests in the Debentures will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary (with respect to
participants' interests) and its participants. The Debentures will be issued
only in denominations of $1,000 and integral multiples thereof. Except as
described herein, Debentures in definitive form will not be issued. See
"Description of Debentures--Book-Entry Procedures."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3)
<S> <C> <C> <C>
Per Debenture................................... 99.831% 0.875% 98.956%
Total........................................... $249,577,500 $2,187,500 $247,390,000
</TABLE>
- ---------
(1) Plus accrued interest, if any, from June 15, 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $100,000 payable by the Company.
------------------------
The Debentures offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that the Debentures will be
delivered in book-entry form through the facilities of The Depository Trust
Company in New York, New York, on or about June 15, 1998, against payment
therefor in immediately available funds.
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JUNE 10, 1998
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, THE DEBENTURES IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
USE OF PROCEEDS
The net proceeds to be received by the Company from the issuance of the
Debentures offered hereby, estimated to be approximately $247.3 million (after
deducting the underwriting discount and estimated offering expenses), are
expected to be used to reduce outstanding commercial paper. On June 9, 1998, the
Company had approximately $465 million of commercial paper outstanding, with a
weighted average maturity of 3 days and having a weighted average interest rate
of approximately 5.52% per annum. Pending such application, all or a portion of
the net proceeds will be invested in short-term money market instruments.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
APRIL 5, ------------------------------------------
1998 1997 1996 1995 1994
----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratios of earnings to fixed charges................................. 4.70 5.60 5.51 4.77 3.96
<CAPTION>
1993
---------
<S> <C>
Ratios of earnings to fixed charges................................. 5.11
</TABLE>
For the purpose of computing the ratios of earnings to fixed charges,
earnings consist of income before income taxes, plus fixed charges, plus a
proportional share of income or loss before income taxes of 50 percent owned
companies, less equity in undistributed earnings of companies owned less than 50
percent. Fixed charges consist of interest on all indebtedness, amortization of
debt expense and that portion of rental expense deemed to be representative of
interest.
S-2
<PAGE>
DESCRIPTION OF DEBENTURES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE DEBENTURES OFFERED
HEREBY (REFERRED TO IN THE ACCOMPANYING PROSPECTUS AS THE "DEBT SECURITIES")
SUPPLEMENTS, AND TO THE EXTENT INCONSISTENT THEREWITH REPLACES, THE DESCRIPTION
OF THE GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES SET FORTH IN THE
ACCOMPANYING PROSPECTUS, TO WHICH DESCRIPTION REFERENCE IS HEREBY MADE.
CAPITALIZED TERMS NOT DEFINED HEREIN HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN
THE PROSPECTUS.
GENERAL
The Debentures offered hereby will be limited to $250,000,000 aggregate
principal amount and will mature on June 15, 2028. The Debentures are not
entitled to a sinking fund. Interest at the applicable annual rate set forth on
the cover page of this Prospectus Supplement will be payable semiannually on
June 15 and December 15, commencing December 15, 1998, to the persons in whose
names the Debentures are registered at the close of business on June 1 or
December 1, as the case may be, preceding such interest payment date. Interest
on the Debentures will accrue from June 15, 1998 or from the most recent
interest payment date to which interest has been paid or provided for to, but
excluding, the next interest payment date. The Debentures constitute a separate
series of Debt Securities under the Indenture described in the Prospectus and
will be issued in denominations of $1,000 and integral multiples thereof.
The Debentures will be unsecured and will rank on a parity with each other
and with all other unsecured and unsubordinated indebtedness of the Company.
The Debentures may not be redeemed prior to maturity.
The provisions described in the Prospectus under "Description of Debt
Securities and Guarantee-- Defeasance Provisions" will be applicable to the
Debentures.
BOOK-ENTRY PROCEDURES
The Debentures will be issued in the form of one or more fully registered
Global Securities (the "Global Securities"), which will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York (the "Depositary")
and registered in the name of the Depositary's nominee. Except as set forth
below, the Global Securities may be transferred, in whole or in part, only to
another nominee of the Depositary or to a successor of the Depositary or its
nominee.
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (the "Participants") and to
facilitate the clearance and settlement of securities transactions between
Participants in such securities through electronic book-entry changes in
accounts of its Participants. Participants include securities brokers and
dealers (including certain of the Underwriters), banks (including the Trustee)
and trust companies, clearing corporations and certain other organizations.
Access to the Depositary's system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("indirect
participants"). Persons who are not Participants may beneficially own securities
held by the Depositary only through Participants or indirect participants.
Pursuant to procedures established by the Depositary, (i) upon issuance of
the Debentures by the Company, the Depositary will credit the accounts of
Participants designated by the Underwriters with the principal amounts of the
Debentures purchased by the Underwriters, and (ii) ownership of beneficial
interests in the Global Securities will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
(with respect to the Participants' interests), the Participants and the indirect
participants. The laws of some states require that certain persons take physical
delivery in definitive form of securities that they own. Consequently, the
ability to transfer beneficial interests in the Global Securities is limited to
such extent.
S-3
<PAGE>
So long as a nominee of the Depositary is the registered owner of the Global
Securities, such nominee for all purposes will be considered the sole owner or
holder of the corresponding Debentures under the Indenture. Except as provided
below, owners of beneficial interests in the Global Securities will not be
entitled to have Debentures registered in their names, will not receive or be
entitled to receive physical delivery of Debentures in definitive form, and will
not be considered the owners or holders thereof under the Indenture.
The Trustee, any Paying Agent and the Security Registrar will not have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Securities, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Principal and interest payments on the Debentures registered in the name of
the Depositary's nominee will be made by the Trustee to the Depositary's nominee
as the registered owner of the Global Securities. Under the terms of the
Indenture, the Company and the Trustee will treat the persons in whose names the
Debentures are registered as the owners of such Debentures for the purpose of
receiving payment of principal and interest on the Debentures and for all other
purposes whatsoever. Therefore, neither the Company, the Trustee nor any Paying
Agent has any direct responsibility or liability for the payment of principal or
interest on the Debentures to owners of beneficial interests in the Global
Securities. The Depositary has advised the Company and the Trustee that its
present practice is, upon receipt of any payment of principal or interest, to
immediately credit the accounts of the Participants with such payment in amounts
proportionate to their respective holdings in principal amount of beneficial
interests in the Global Securities as shown on the records of the Depositary.
Payments by Participants and indirect participants to owners of beneficial
interests in the Global Securities will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name" and will be the
responsibility of the Participants or indirect participants.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Debentures in definitive form in exchange for the
Global Securities. In addition, the Company may at any time determine not to
have the Debentures represented by Global Securities and, in such event, will
issue Debentures in definitive form in exchange for the Global Securities. In
either instance, an owner of a beneficial interest in the Global Securities will
be entitled to have Debentures equal in principal amount to such beneficial
interest registered in its name and will be entitled to physical delivery of
such Debentures in definitive form. Debentures so issued in the definitive form
will be issued in denominations of $1,000 and integral multiples thereof and
will be issued in registered form only, without coupons.
S-4
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the applicable Pricing Agreement, each dated June 10, 1998, the Company has
agreed to sell to each of the Underwriters named below, and each of the
Underwriters has severally agreed to purchase, the principal amount of the
Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER DEBENTURES
- ----------------------------------------------------------------------------- ---------------
<S> <C>
Bear, Stearns & Co. Inc...................................................... $ 62,500,000
Chase Securities Inc......................................................... 62,500,000
Goldman, Sachs & Co.......................................................... 62,500,000
J.P. Morgan Securities Inc................................................... 62,500,000
---------------
Total........................................................................ $ 250,000,000
---------------
---------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the
applicable Pricing Agreement, the Underwriters are obligated to take and pay for
all of the Debentures if any are taken.
The Underwriters propose to offer the Debentures in part directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus Supplement, and in part to certain securities dealers at such price
less a concession of 0.500% of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of 0.250% of the principal amount of the Debentures to certain brokers and
dealers.
After the Debentures are released for sale to the public, the offering price
and other selling terms may from time to time be varied by the Underwriters.
The Debentures are new issues of securities with no established trading
market. The Company has been advised by the Underwriters that they currently
intend to make a market in the Debentures, although the Underwriters are not
obligated to do so and may discontinue such market making at any time without
notice. Accordingly, no assurance can be given as to the liquidity of, or the
trading market for, the Debentures.
In connection with the sale of the Debentures, the Underwriters may engage
in transactions that stabilize, maintain or otherwise affect the price of the
Debentures. Specifically, the Underwriters may overallot the offering, creating
a syndicate short position. In addition, the Underwriters may bid for, and
purchase, the Debentures in the open market to cover syndicate shorts or to
stabilize the price of the Debentures. Finally, the underwriting syndicate may
reclaim selling concessions allowed for distributing the Debentures in the
offering, if the syndicate repurchases previously distributed Debentures in
syndicate covering transactions, in stabilization transactions or otherwise. Any
of these activities may stabilize or maintain the market price of the Debentures
above independent market levels. The Underwriters will not be required to engage
in these activities, and may end any of these activities at any time.
In the ordinary course of their respective businesses, certain of the
Underwriters and their affiliates have provided, and may in the future provide,
investment banking and commercial banking services to the Company and certain of
its affiliates. The Chase Manhattan Bank (formerly The Chase Manhattan Bank
(National Association)) is the Trustee under the Indenture, and is an affiliate
of Chase Securities Inc., one of the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
S-5
<PAGE>
PROSPECTUS
U.S. $500,000,000
HONEYWELL INC.
HONEYWELL FINANCE B.V.
HONEYWELL CANADA LIMITED
DEBT SECURITIES
GUARANTEE OF DEBT SECURITIES
------------------
Honeywell Inc. (the "Company"), Honeywell Finance B.V. (the "Dutch Issuer")
and Honeywell Canada Limited (the "Canadian Issuer") (the Company, the Dutch
Issuer and the Canadian Issuer are sometimes referred to individually as an
"Issuer" or collectively as the "Issuers"), may offer from time to time debt
securities (the "Debt Securities") in one or more series at an aggregate initial
offering price not to exceed U.S. $500,000,000, or its equivalent in one or more
foreign currencies or composite currencies designated by the Issuer thereof at
the time of the offering ("Foreign Currency Securities"), on terms to be
determined at the time of sale. A description of material risks relating to
Foreign Currency Securities will be set forth in the applicable Prospectus
Supplement or Prospectus Supplements. Because the Debt Securities offered hereby
are limited as to aggregate initial offering price, an issuance of the Debt
Securities by one of the Issuers will correspondingly reduce the amount of Debt
Securities available for issuance by the other Issuers. The Issuer or Issuers,
specific designation, aggregate principal amount, purchase price, maturity,
denominations (which may be in United States dollars, in any other currency or
in a composite currency), any interest rate or rates (which may be fixed or
variable) and time of payment of any interest, any redemption or extension
terms, any terms for sinking fund payments and other specific terms of the Debt
Securities will be set forth in one or more supplements to this Prospectus (each
a "Prospectus Supplement").
The Debt Securities may be sold to or through underwriters, dealers or
agents for public offering or directly to other purchasers pursuant to the terms
of an offering fixed at the time of sale. See "Plan of Distribution." Any
underwriters, dealers or agents participating in an offering of Debt Securities
will be named in the accompanying Prospectus Supplement or Prospectus
Supplements. Such underwriters, dealers or agents may be deemed "underwriters"
within the meaning of the Securities Act of 1933.
The Debt Securities offered by the Dutch Issuer and the Canadian Issuer (the
"Guaranteed Debt Securities") will be unconditionally guaranteed by the Company
(the "Guarantee"), and the Guarantee will rank on a parity with all unsecured
and unsubordinated indebtedness of the Company.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is September 10, 1997
<PAGE>
IN CONNECTION WITH THE OFFERING OF THE DEBT SECURITIES, THE UNDERWRITERS MAY
ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE
OF THE DEBT SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN SUCH DEBT SECURITIES AND THE IMPOSITION OF PENALTY BIDS IN
CONNECTION WITH THE OFFERING OF THE DEBT SECURITIES. SEE "PLAN OF DISTRIBUTION."
------------------------
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). The Dutch Issuer and the Canadian Issuer are not
(and will not become as a result of the effectiveness of the Registration
Statement of which this Prospectus is a part) subject to the informational
requirements of the Exchange Act. Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at Seven
World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison
Street, 14th Floor, Chicago, Illinois 60661. Copies of such materials can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site (http:/www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The Company's Common Stock and Preferred
Stock Purchase Rights are listed on the New York Stock Exchange. Reports, proxy
statements and other information concerning the Company can also be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Issuers have filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is hereby made
to the Registration Statement, and exhibits thereto, which may be inspected
without charge at the office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies thereof may be obtained from the Commission
at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company which have been filed with the
Commission are hereby incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the year ended December 31, 1996;
and,
(b) Quarterly Reports on Form 10-Q for the periods ended March 30, 1997
and June 29, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained herein or
in a document all or any portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
2
<PAGE>
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference (other
than certain exhibits to such documents). Requests for such copies should be
directed to Vice President Investor Relations, Honeywell Inc., P.O. Box 524,
Minneapolis, Minnesota 55440, telephone number (612) 951-2122.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("U.S. $," "$" or
"dollars").
THE ISSUERS
HONEYWELL INC.
The Company is an international controls corporation that supplies
automation and control systems, components, software, products and services for
homes and buildings, industry and space and aviation. The Company's strategy is
to develop and supply advanced-technology products, systems and services that
conserve energy and protect the environment, improve productivity, enhance
comfort and increase safety. The Company's products and services are classified
into three primary industry segments: (i) Home and Building Control, (ii)
Industrial Control and (iii) Space and Aviation Control.
The Home and Building Control segment provides building automation, energy
management and fire and security systems, as well as thermostats, air cleaners
and other environmental control products and services for homes and other
buildings. The Company manufactures, markets and installs mechanical, pneumatic,
electrical and electronic control products and systems for heating, ventilating
and air conditioning homes and commercial, industrial and public buildings. The
Company also produces building management systems for commercial buildings,
burner and boiler controls, lighting controls, thermostatic radiator valves,
pressure regulators for water systems, thermostats, actuators, humidistats,
relays, contactors, transformers, air-quality products and gas valves and
ignition controls for homes and commercial buildings. Sales of these products
are made directly to original equipment manufacturers, including manufacturers
of heating and air conditioning equipment, through wholesalers, distributors,
dealers, contractors, hardware stores and home care centers, and also through
the company's nationwide sales and service organization. Services provided
include the following: indoor air-quality services and central-station burglary
and fire protection services for homes and commercial buildings; video
surveillance, access control and entry management services for commercial
buildings; contract maintenance services for mechanical and control systems of
commercial buildings; automated operations management for building complexes;
and energy management and retrofit services.
The Company's Industrial Control segment serves the automation and control
needs of its worldwide industrial customers by providing a wide variety of
products, systems and services designed to help customers improve productivity
and meet increasingly stringent environmental and safety requirements. The
Industrial Control segment supplies process control systems and associated
application software and services to customers in a broad range of markets,
which include process industries such as the refining, petrochemical, bulk and
fine chemical, pulp-and-paper, electric utility, food and consumer goods,
pharmaceutical, metals and transportation industries. Industrial Control has an
extensive customer base worldwide, including most of the leading oil refiners,
pulp and paper manufacturers and chemical companies. The Company also designs
and manufactures process instruments, process controllers, recorders,
programmers, programmable controllers, transmitters and other field instruments
that may be sold as stand-alone products or integrated into control systems.
These products are generally used in indicating, recording and automatically
controlling variables in manufacturing processes.
Under its MICRO SWITCH trademark, the Company manufactures solid-state
sensors (including position, pressure, airflow, temperature and current
sensors), sensor interface devices, manual controls, explosion-proof switches
and precision snap-acting switches, as well as proximity, photoelectric and
3
<PAGE>
mercury switches and lighted/unlighted push buttons. These products are used in
industrial, commercial and business equipment and in consumer, medical,
automotive, aerospace and computer applications.
Other products include solenoid valves, optoelectronic devices, fiber-optic
systems and components, as well as microcircuits, sensors, transducers and
high-accuracy, noncontract measurement and detection products for factory
automation, quality inspection and robotics applications.
The Company also furnishes industrial customers with various services,
including the following: product and component testing services; instrument
maintenance, repair and calibration services; various contract services for
industrial control equipment, including third party maintenance for CAD/CAM and
other industrial control equipment; and training, customized products for
customer applications and a range of other customer support services.
The Company's Space and Aviation Control segment supplies avionics for the
commercial, military and space markets. The Company designs, manufactures,
markets and services a variety of sophisticated electronic control systems and
components for commercial and business aircraft, military aircraft and
spacecraft. Products manufactured for aircraft use include the following: ring
laser gyro-based inertial reference systems; navigation and guidance systems;
flight control systems; flight management systems; inertial sensors; air data
computers; radar altimeters; automatic test equipment; cockpit display systems;
and other communication and flight instrumentation. Products and services
supplied by the Company have been used in every major U.S. space mission since
the mid-1960s. These products and services include guidance systems for launch
and re-entry vehicles, flight and engine control systems for manned spacecraft,
precision components for strategic missiles and on-board data processing
equipment. Other products include spacecraft attitude and positioning systems
and precision pointing and isolation systems. The Company's avionics have been
purchased by leading aircraft manufacturers for use in aircraft throughout the
world, including the Boeing 777, the McDonnell Douglas MD-11 and MD-90, the
GulfStream IV and V, the Cessna Citation X and the Bombardier Global Expressjet.
In the military and space markets, the Company solutions are found on key
platforms, including the F-15 and the F-16 military jets and Space Station
Alpha.
Products and services provided by the Company that are not included in the
Company's primary business segments include systems analysis and applied
research and development on systems and products, including application
software, sensors and advanced electronics. The Company also designs and
manufactures integrated circuits and sensors for internal use, government
customers and selected external customers. Through its operations in Germany,
the Company develops, markets and sells military avionics and electro-optic
devices for flight control and nautical systems, including sonar transducers and
echo sounders.
The Company was incorporated under the laws of the State of Delaware in
1927. The Company's principal executive offices are located at Honeywell Plaza,
Minneapolis, Minnesota 55408 (telephone (612) 951-1000). Unless the context
otherwise requires, the term the "Company" refers to Honeywell Inc. and its
subsidiaries.
HONEYWELL FINANCE B.V.
The Dutch Issuer is a wholly-owned subsidiary of the Company incorporated
under the laws of The Netherlands solely for the purpose of raising capital to
meet the financing needs of affiliated companies. The Dutch Issuer has no
independent operations. The Dutch Issuer's principal executive offices are at
1101 EA, Amsterdam, Z.O.E., The Netherlands, and its telephone number is
31-20-565-6911.
HONEYWELL CANADA LIMITED
The Canadian Issuer is a wholly-owned subsidiary of the Company incorporated
under the laws of Ontario, Canada solely for the purpose of issuing debt
securities to raise capital for the purposes described
4
<PAGE>
below under "Use of Proceeds." The Canadian Issuer has no independent
operations. The Canadian Issuer's principal executive offices are at The
Honeywell Center, 155 Gordon Baker Road, North York, Ontario, Canada M2H 3N7,
and its telephone number is 416-502-5200.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used for general corporate
purposes, including working capital, repayment or repurchase of outstanding
indebtedness and other securities of the Company and its subsidiaries, possible
acquisitions and capital expenditures. Specific allocations of the proceeds to
such purposes may not have been made at the date of the applicable Prospectus
Supplement, although management of the Company will have determined that funds
should be borrowed at that time in anticipation of future funding requirements.
The precise amount and timing of the application of such proceeds will depend
upon the funding requirements of the Company and its subsidiaries and the
availability and cost of other funds. Pending such application, such net
proceeds may be temporarily invested in short-term interest-bearing securities.
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------------
JUNE 29, 1997 1996 1995 1994 1993
------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratios of earnings to fixed charges........................ 4.30 5.51 4.77 3.96 5.11
<CAPTION>
1992
---------
<S> <C>
Ratios of earnings to fixed charges........................ 5.69
</TABLE>
For the purpose of computing the ratios of earnings to fixed charges,
earnings consist of income before income taxes, plus fixed charges, plus a
proportional share of income or loss before income taxes of 50 percent owned
companies, less equity in undistributed earnings of companies owned less than 50
percent. Fixed charges consist of interest on all indebtedness, amortization of
debt expense and that portion of rental expense deemed to be representative of
interest.
DESCRIPTION OF DEBT SECURITIES AND GUARANTEE
Unless otherwise specified in the applicable Prospectus Supplement, the Debt
Securities of the Company will be issued under an Indenture dated as of August
1, 1994 (the "Company Indenture") between the Company and The Chase Manhattan
Bank (successor in interest to The Chase Manhattan Bank (National Association)),
as Trustee, and the Debt Securities of the Dutch Issuer and the Canadian Issuer
will be issued under an Indenture (the "Subsidiary Indenture") between the
Company, as Guarantor, the Dutch Issuer, the Canadian Issuer and The Chase
Manhattan Bank (successor in interest to The Chase Manhattan Bank (National
Association)), as Trustee (the Company Indenture and the Subsidiary Indenture
are hereinafter collectively referred to as the "Indentures"). Copies of the
forms of Indentures have been filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following brief summary of certain
provisions of the Indentures does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, all of the provisions of the
applicable Indenture, and is further qualified by any description contained in
the applicable Prospectus Supplement or Prospectus Supplements. Certain terms
capitalized and not otherwise defined herein are defined in the applicable
Indenture. Wherever particular sections or defined terms of an Indenture are
referred to, such sections or defined terms are incorporated herein by
reference.
The Debt Securities may be issued from time to time in one or more series.
The terms of each series of Debt Securities will be established by or pursuant
to a resolution of the Board of Directors of the applicable Issuer and set forth
or determined in the manner provided in an Officers' Certificate or by a
supplemental indenture. The particular terms of the Debt Securities offered
pursuant to any Prospectus
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Supplement or Prospectus Supplements will be described in such Prospectus
Supplement or Prospectus Supplements.
GENERAL
Neither of the Indentures limits the aggregate principal amount of Debt
Securities which may be issued thereunder nor the amount of other debt which may
be issued by any of the Issuers, the Guarantor, or the Company or any of its
subsidiaries. The Debt Securities will be unsecured obligations of the
applicable Issuer. The Debt Securities issued by the Dutch Issuer and the
Canadian Issuer will be fully and unconditionally guaranteed by the Company as
to payment of principal and any premium, interest and Additional Amounts (as
defined below) (the "Guaranteed Debt Securities"). The Debt Securities will rank
on a parity with all other unsecured and unsubordinated indebtedness of the
applicable Issuer. The Guarantee will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
Unless otherwise indicated in the applicable Prospectus Supplement or
Prospectus Supplements, Debt Securities will be issued only in fully registered
form in denominations of U.S. $1,000 or any amount in excess thereof which is an
integral multiple of U.S. $1,000. (Section 302 of the applicable Indenture) Debt
Securities may be issuable in the form of one or more Global Securities, as
described below under "--Global Securities." The Debt Securities (other than
those issued in the form of a Global Security) are exchangeable or transferable
without charge therefor, but the applicable Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith and require the holders to furnish appropriate endorsements and
transfer documents. (Section 305 of the applicable Indenture)
Debt Securities may be issued as Original Issue Discount Debt Securities to
be sold at a substantial discount below their principal amount. Special federal
income tax and other considerations applicable thereto and special federal tax
and other considerations applicable to any Debt Securities which are denominated
in a currency or currency unit other than United States dollars will be
described in the Prospectus Supplement or Prospectus Supplements relating
thereto.
Unless otherwise indicated in the applicable Prospectus Supplement or
Prospectus Supplements, the principal of and any premium, interest and
Additional Amounts on the Debt Securities will be payable, and the transfer of
the Debt Securities will be registrable, at the principal corporate trust office
of the Trustee. In addition, unless otherwise provided in the applicable
Prospectus Supplement or Prospectus Supplements and except in the case of Global
Securities, payment of interest may be made at the option of the applicable
Issuer by check mailed to the address of the person entitled thereto as it
appears on the Security Register. (Sections 301, 305, 1001 and 1002 of the
applicable Indenture)
The applicable Prospectus Supplement or Prospectus Supplements will describe
the terms of the Debt Securities offered thereby, including the following: (1)
the Issuer and title of the offered Debt Securities; (2) any limit on the
aggregate principal amount of the offered Debt Securities; (3) the Person to
whom any interest on the offered Debt Securities will be payable, if other than
the Person in whose name it is registered on the regular record date for such
interest; (4) the date or dates on which the offered Debt Securities will mature
and any rights of extension; (5) the rate or rates at which the offered Debt
Securities will bear interest, if any, or the formula pursuant to which such
rate or rates shall be determined, the date from which any such interest will
accrue and the dates on which any such interest on the offered Debt Securities
will be payable and the regular record dates therefor; (6) the place or places
where the principal of and any premium, interest and Additional Amounts on the
offered Debt Securities will be payable, if other than the corporate trust
office of the applicable Trustee; (7) the period or periods within which, the
price or prices at which and the terms and conditions upon which the offered
Debt Securities may be redeemed, if applicable, at the option of the applicable
Issuer or the Guarantor; (8) the obligation, if any, of the applicable Issuer to
redeem or purchase the offered Debt Securities pursuant to any sinking fund or
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analogous provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and conditions
upon which Debt Securities shall be redeemed or purchased, in whole or in part,
pursuant to such obligation; (9) the denominations in which any offered Debt
Securities will be issuable, if other than denominations of U.S. $1,000 or any
amount in excess thereof which is an integral multiple of U.S. $1,000; (10) the
currency, currencies or currency units for the payment of principal of and any
premium, interest and Additional Amounts payable on the offered Debt Securities,
if other than United States dollars; (11) any other event or events of default
applicable with respect to the offered Debt Securities in addition to or in lieu
of those described below under "--Events of Default"; (12) if less than the
principal amount thereof, the portion of the principal payable upon acceleration
of such Debt Securities following an Event of Default; (13) whether such Debt
Securities are to be issued in whole or in part in the form of one or more
Global Securities and, if so, the identity of the Depositary for such Global
Security or Securities and the circumstances under which any such Global
Security may be exchanged for Debt Securities registered in the name of, and any
transfer of such Global Security may be registered to, a Person other than such
Depositary or its nominee; (14) if principal of or any premium, interest or
Additional Amounts on the offered Debt Securities is denominated or payable in a
currency, currencies or currency units other than United States dollars, whether
and under what terms and conditions the applicable Issuer may defease the
offered Debt Securities or certain obligations in respect thereof; (15) in the
case of Guaranteed Debt Securities, whether and under what circumstances the
applicable Issuer will not pay Additional Amounts on the offered Debt Securities
and will not have the option to redeem such Debt Securities rather than pay such
Additional Amounts; (16) any other covenants with respect to the offered Debt
Securities; and (17) any other terms of the offered Debt Securities not
inconsistent with the provisions of the applicable Indenture (Section 301 of the
applicable Indenture).
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a Depositary identified in the applicable Prospectus Supplement or
Prospectus Supplements. The specific terms of the depositary arrangement with
respect to a series of Debt Securities will be described in the applicable
Prospectus Supplement or Prospectus Supplements.
GUARANTEE OF DEBT SECURITIES OF DUTCH ISSUER AND CANADIAN ISSUER BY THE COMPANY
All Debt Securities issued by the Dutch Issuer or the Canadian Issuer will
be fully and unconditionally guaranteed pursuant to the Guarantee of the Company
of the payment of principal of and any premium, interest and Additional Amounts
on such Debt Securities when and as the same shall become due and payable,
whether at maturity or otherwise. Under the terms of the Guarantee, holders of
the Guaranteed Debt Securities will not be required to exercise their remedies
against the applicable Issuer prior to proceeding directly against the Company.
(Section 1301 of the Subsidiary Indenture)
PAYMENT OF ADDITIONAL AMOUNTS WITH RESPECT TO GUARANTEED DEBT SECURITIES
Unless otherwise specified in the applicable Prospectus Supplement or
Prospectus Supplements, all amounts of principal of and any premium, and
interest, on any Guaranteed Debt Securities will be paid by the applicable
Issuer without deduction or withholding for any withholding taxes, levies,
imposts and other governmental charges whatsoever imposed by or for the account
of the jurisdiction (or any political subdivision or taxing authority thereof or
therein) in which the Dutch Issuer or the Canadian Issuer (or the successor
thereto) is incorporated or is a resident for tax purposes (the "Issuer
Jurisdiction"), or if deduction or withholding of any such taxes, levies,
imposts, assessments or other governmental charges shall at any time be required
by the Issuer Jurisdiction, the applicable Issuer will, pay as additional
interest such additional amounts ("Additional Amounts") as may be necessary in
order that the net amounts paid to the holders of such Debt Securities, after
such deduction or withholding, shall equal the respective
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amounts of principal of and any premium, and interest, to which the holders of
such Debt Securities are then currently entitled; provided, however, that such
"Additional Amounts" shall not include (i) the amount of any such tax, levy,
impost, assessment or other governmental charge imposed by the United States or
any political subdivision or taxing authority thereof or therein; (ii) the
amount of any such tax, levy, impost, assessment or other governmental charge
which would not be payable or due but for (A) the existence of any present or
former connection between such Holder and the Issuer Jurisdiction, including,
without limitation, such Holder being or having been a citizen, national or
resident thereof, or being or having been engaged in business or present therein
or having or having had a permanent establishment therein, but not including the
mere holding or ownership of a debt security, or the collection of principal of
and interest on, or the enforcement of, a debt security, or (B) the presentation
of the Debt Security for payment more than 30 days after the date on which such
payment became due or was provided for, whichever is later; (iii) the amount of
any estate, inheritance, gift, sale, transfer, personal property or similar tax,
assessment or other governmental charge or any other tax, levy, impost,
assessment or other governmental charge which is payable otherwise than by
withholding from payments of (or in respect of) principal of and any premium, or
interest, on, the Debt Securities; (iv) the amount of any such tax, levy,
impost, assessment or other governmental charge that is imposed or withheld by
reason of the failure to comply by the Holder or the beneficial owner of the
Debt Security with a request of the applicable Issuer or the Company, as
Guarantor, addressed to the Holder (x) to provide information concerning the
nationality, residence or identity of the Holder or such beneficial owner or (y)
to make any declaration or other similar claim to satisfy any information or
reporting requirement, which in the case of (x) or (y), is required or imposed
by a statute, treaty, regulation or administrative practice of the Issuer
Jurisdiction as a precondition to exemption from all or part of such tax, levy,
impost, assessment or other governmental charge; or (v) any combination of items
(i), (ii), (iii) and (iv). (Section 1011 of the Subsidiary Indenture) The
Prospectus Supplement will describe any additional circumstances under which
Additional Amounts will not be paid with respect to Debt Securities. (Section
1011 of the Subsidiary Indenture)
OPTIONAL TAX REDEMPTION
Unless otherwise specified in the applicable Prospectus Supplement or
Prospectus Supplements, each series of Debt Securities of the Dutch Issuer or
the Canadian Issuer may be redeemed at the option of such Issuer, in whole but
not in part at any time (except in the case of Debt Securities that have a
variable rate of interest, which may be redeemed on any Interest Payment Date)
at a Redemption Price equal to the principal amount thereof plus accrued
interest to the date fixed for redemption (except in the case of Outstanding
Original Issue Discount Debt Securities which may be redeemed at the Redemption
Price specified by the terms of such series of Debt Securities) if, (i) the
applicable Issuer is or would be required to pay Additional Amounts as a result
of any change in or amendment to the laws or any regulations or rulings
promulgated thereunder of the Issuer Jurisdiction or any change in the official
application or interpretation of such laws, regulations or rulings, or any
change in the official application or interpretation of, or any execution of or
amendment to, any treaty or treaties affecting taxation to which such Issuer
Jurisdiction is a party, which change, execution or amendment becomes effective
on or after the date of issuance of such series, or (ii) as a result of any
change in the official application or interpretation of, or any execution of or
amendment to, any treaty or treaties affecting taxation to which the Issuer
Jurisdiction is a party, which change, execution or amendment becomes effective
on or after a date on which the Company or any of its subsidiaries (an
"Intercompany Debtor") borrows money from the applicable Issuer, the
Intercompany Debtor is or would be required to deduct or withhold tax on any
payment to the applicable Issuer to enable such Issuer to make any payment of
principal, premium, if any, or interest, and the payment of such Additional
Amounts in the case of clause (i) or such deductions or withholding, in the case
of clause (ii) cannot be avoided by the use of any reasonable measures available
to the applicable Issuer, the Company or the Intercompany Debtor. (Section 1108
of Subsidiary Indenture)
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Such optional tax redemption may apply to individual issuances of Debt
Securities by the Dutch Issuer or the Canadian Issuer, but under no
circumstances may an Issuer redeem only part of an individual issuance.
The applicable Issuer or the Guarantor, as the case may be, will also pay,
or make available for payment, to Holders on the Redemption Date any Additional
Amounts resulting from the payment of such Redemption Price.
REDEMPTION
Reference is made to the applicable Prospectus Supplement or Prospectus
Supplements relating to the offered Debt Securities for provisions relating to
redemption of such Debt Securities.
RESTRICTIVE COVENANTS
LIMITATIONS ON SECURED DEBT. Each Indenture provides that the Company will
not itself, and will not permit any Restricted Subsidiary (defined below) to,
incur, issue, assume or guarantee any notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed (herein called "debt"), secured by
pledge of, or mortgage or other lien on, any Principal Property (defined below),
now owned or hereafter owned by the Company or any Restricted Subsidiary, or any
shares of stock or debt of any Restricted Subsidiary (herein called "liens"),
without effectively providing that the Debt Securities of each series then
Outstanding or the Guarantee thereof (together with, if the Company shall so
determine, any other debt of the Company or such Restricted Subsidiary then
existing or thereafter created which is not subordinate to the Debt Securities
of each series then Outstanding and the Guarantee thereof) shall be secured
equally and ratably with (or prior to) such secured debt, so long as such
secured debt shall be so secured. The foregoing restrictions do not apply,
however, to (a) liens on any Principal Property acquired, constructed or
improved by the Company or any Restricted Subsidiary after the date of the
applicable Indenture which are created or assumed contemporaneously with, or
within 120 days of, such acquisition, construction or improvement, to secure or
provide for the payment of all or any part of the cost of such acquisition,
construction or improvement; (b) liens on property, shares of capital stock or
debt existing at the time of acquisition thereof, whether by merger,
consolidation, purchase, lease or otherwise (including liens on property, shares
of capital stock or debt of a corporation existing at the time such corporation
becomes a Restricted Subsidiary); (c) liens in favor of the Company or any
Restricted Subsidiary; (d) liens in favor of the United States of America or any
State thereof, or any department, agency or instrumentality or political
subdivision thereof, or political entity affiliated therewith, or in favor of
any other country, or any political subdivision thereof, to secure partial,
progress, advance or other payments; (e) certain liens imposed by law, such as
mechanics', workmen's, repairmen's, materialmen's, carriers', warehousemen's,
vendors' or other similar liens arising in the ordinary course of business; (f)
certain pledges or deposits under workmen's compensation or similar legislation
or in certain other circumstances; (g) certain liens in connection with legal
proceedings, including certain liens arising out of judgments or awards; (h)
liens for certain taxes or assessments; (i) certain liens consisting of
restrictions on the use of real property which do not interfere materially with
the property's use; or (j) any extension, renewal or replacement, as a whole or
in part, of any lien referred to in the foregoing clauses (a) to (i), inclusive.
(Section 1007 of the applicable Indenture)
Notwithstanding the restrictions described above, the Company or any
Restricted Subsidiary may incur, issue, assume or guarantee debt secured by
liens without equally and ratably securing the Debt Securities of each series
then Outstanding and the Guarantee thereof, provided, that at the time of such
incurrence, issuance, assumption or guarantee, after giving effect thereto and
to the retirement of any debt which is concurrently being retired, the aggregate
amount of all outstanding debt secured by liens so incurred (other than liens
permitted as described in clauses (a) through (j) above) does not at such time
exceed 10% of Consolidated Net Tangible Assets (defined below) of the Company.
(Section 1007 of the applicable Indenture)
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LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS. Sale and leaseback
transactions by the Company or any Restricted Subsidiary involving a Principal
Property are prohibited unless either (a) the Company or such Restricted
Subsidiary would be entitled, without equally and ratably securing the Debt
Securities of each series then Outstanding or the Guarantee thereof, to incur
debt secured by a lien on such property, pursuant to the provisions described in
clauses (a) through (j) above under "Limitations on Secured Debt,"; or (b) the
Company, within 120 days, applies to the retirement of its Funded Debt (defined
below) (subject to credits for certain voluntary retirements of Funded Debt) an
amount not less than the greater of (i) the net proceeds of the sale of the
Principal Property leased pursuant to such arrangement or (ii) the fair market
value of the Principal Property so leased. This restriction will not apply to a
sale and leaseback transaction between the Company and a Restricted Subsidiary
or between Restricted Subsidiaries or involving the taking back of a lease for a
period of less than three years.
Notwithstanding the restrictions described above, the Company or any
Restricted Subsidiary may enter into a Sale and Leaseback Transaction, provided,
that at the time of such transaction, after giving effect thereto, the aggregate
amount of all Attributable Debt (defined below) in respect of sale and leaseback
transactions existing at such time (other than sale and leaseback transactions
permitted as described above) does not at such time exceed 10% of Consolidated
Net Tangible Assets of the Company. (Section 1008 of the applicable Indenture)
CERTAIN DEFINITIONS. The term "Attributable Debt" means the total net
amount of rent (discounted at the rate of interest implicit in the terms of the
lease) required to be paid during the remaining term of any lease. (Section 101
of the applicable Indenture)
The term "Consolidated Net Tangible Assets" means the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any indebtedness for
money borrowed having a maturity of less than 12 months from the date of the
most recent consolidated balance sheet of the Company but which by its terms is
renewable or extendable beyond 12 months from such date at the option of the
borrower) and (b) all goodwill, trade names, patents, unamortized debt discount
and expense and any other like intangibles, all as set forth on the most recent
consolidated balance sheet of the Company and computed in accordance with
generally accepted accounting principles. (Section 101 of the applicable
Indenture)
The term "Funded Debt" means debt which by its terms matures at or is
extendible or renewable at the option of the obligor to a date more than 12
months after the date of the creation of such debt. (Section 101 of the
applicable Indenture)
The term "Principal Property" means any manufacturing plant located within
the United States of America (other than its territories or possessions) and
owned by the Company or any Subsidiary, the gross book value (without deduction
of any depreciation reserves) of which on the date as of which the determination
is being made exceeds 1% of Consolidated Net Tangible Assets of the Company,
except any such plant (i) which is financed by obligations issued by a State or
local governmental unit pursuant to Section 142(a)(5), 142(a)(6), 142(a)(8) or
144(a) of the Internal Revenue Code of 1986, or any successor provision thereof,
or (ii) which is not of material importance to the business conducted by the
Company and its subsidiaries, taken as a whole. (Section 101 of the applicable
Indenture)
The term "Restricted Subsidiary" means any subsidiary of the Company which
owns or leases a Principal Property. (Section 101 of the applicable Indenture)
Other than as described above and except as may be otherwise specified in
the applicable Prospectus Supplement, neither of the Indentures contain
covenants specifically designed to protect Holders in the event of a highly
leveraged transaction involving the Company.
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EVENTS OF DEFAULT
The following events are defined under each Indenture as "Events of Default"
with respect to the Debt Securities of any series issued pursuant to such
Indenture, unless otherwise provided with respect to such series: (1) failure to
pay any interest on any Debt Security of that series when due and payable,
continued for 30 days; (2) failure to pay principal of or any premium on any
Debt Security of that series when due and payable; (3) failure to deposit any
sinking fund payment, when and as due, in respect of any Debt Security of that
series; (4) failure to perform any other covenant of the applicable Issuer or,
in the case of Guaranteed Debt Securities, the Guarantor, in the applicable
Indenture (other than a covenant included in such Indenture solely for the
benefit of a series of Debt Securities other than that series), continued for 60
days after written notice as provided in such Indenture; (5) the occurrence of
an event of default under any indenture or instrument under which any Issuer, or
any Restricted Subsidiary shall have outstanding at least $10,000,000 aggregate
principal amount of indebtedness for money borrowed whose maturity has been
accelerated and such acceleration has not been annulled within 10 days after
written notice as provided in the applicable Indenture; (6) certain events in
bankruptcy, insolvency or reorganization involving the applicable Issuer or the
Company (if not such Issuer); and (7) any other Event of Default provided with
respect to Debt Securities of that series. (Section 501 of the applicable
Indenture)
If an Event of Default with respect to any series of Debt Securities
Outstanding under an Indenture occurs and is continuing, then either the
applicable Trustee or the Holders of at least 25% in aggregate principal amount
of the Outstanding Debt Securities of that series by notice as provided in such
Indenture may declare the principal amount (or, if any of the Debt Securities of
that series are Original Issue Discount Debt Securities, such lesser portion of
the principal amount of such Debt Securities as may be specified in the terms
thereof) of all of the Debt Securities of that series to be due and payable
immediately. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree for
payment of money has been obtained by the applicable Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration. (Section 502 of the applicable Indenture)
Each Indenture provides that, subject to the duty of the applicable Trustee
during default to act with the required standard of care, the applicable Trustee
will be under no obligation to exercise any of its rights or powers under such
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the applicable Trustee reasonable indemnity. (Sections
601, 603 of the applicable Indenture) Subject to such provisions for the
indemnification of the applicable Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of any series will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the applicable Trustee, or exercising any trust or
power conferred on the applicable Trustee, with respect to the Debt Securities
of that series. (Section 512 of the applicable Indenture)
Each Indenture provides that each of the Issuers and, in the case of
Guaranteed Debt Securities, the Company, as Guarantor, is required to furnish to
the applicable Trustee annually a statement as to the performance by them of
certain of their obligations under the applicable Indenture and as to any
default in such performance. (Section 704 of the applicable Indenture)
MODIFICATION AND WAIVER
Modifications and amendments of each Indenture may be made by the applicable
Issuer, the Company, as Guarantor, and the applicable Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of each series affected by such modification or
amendment; PROVIDED, HOWEVER, that no such modification or amendment may,
without the consent of the Holder of each Outstanding Debt Security affected
thereby, change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Debt Security, reduce the principal
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amount of, or premium or interest on, any Debt Security, or, in the case of
Guaranteed Debt Securities, change any obligation of an Issuer or the Guarantor
to pay Additional Amounts, reduce the amount of principal of an Original Issue
Discount Debt Security due and payable upon acceleration of the Maturity
thereof, change the place of payment where or coin or currency in which the
principal of, or any premium or interest on, any Debt Security is payable,
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security or Guarantee of such series, reduce the percentage
in principal amount of Outstanding Debt Securities of any series, the consent of
the Holders of which is required for modification or amendment of such Indenture
or for waiver of compliance with certain provisions of such Indenture or for
waiver of certain defaults, modify any of the above provisions or modify or
affect in any manner adverse to the interests of the Holders of any the
Guaranteed Debt Securities the terms and conditions of the obligations of the
Guarantor in respect of the due and punctual payment of the principal thereof,
premium, if any, and interest, if any, thereon or any sinking fund payments
provided in respect thereof. (Section 902 of the applicable Indenture)
The Holders of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of the Holders of all
Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the applicable Issuer, or in the case of Guaranteed Debt
Securities, the Guarantor, with certain restrictive provisions of the applicable
Indenture. (Section 1010 of the applicable Indenture) The Holders of not less
than a majority in aggregate principal amount of the Outstanding Debt Securities
of each series may, on behalf of the Holders of all Debt Securities of that
series, waive any past default under the applicable Indenture with respect to
Debt Securities of that series, except a default (1) in the payment of principal
of, or any premium or interest on, any Debt Security of such series, or (2) in
respect of a covenant or provision of such Indenture which cannot be modified or
amended without the consent of the Holder of each Outstanding Debt Security of
such series affected. (Section 513 of the applicable Indenture)
Each Indenture provides that, in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of Holders of Debt Securities, (1)
the principal amount of an Original Issue Discount Debt Security that will be
deemed to be Outstanding will be the amount of the principal thereof that would
be due and payable as of the date of such determination upon acceleration of the
Maturity thereof to such date, and (2) the principal amount of a Debt Security
denominated in a foreign currency or currency unit that will be deemed to be
Outstanding will be the United States dollar equivalent, determined as of the
date of original issuance of such Debt Security, of the principal amount of such
Debt Security (or, in the case of an Original Issue Discount Debt Security, the
United States dollar equivalent, determined as of the date of original issuance
of such Debt Security, of the amount determined as provided in (1) above).
(Section 101 of the applicable Indenture)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Any of the Issuers or the Company, as Guarantor, without the consent of the
Holders of any of the Outstanding Debt Securities under each Indenture, may
consolidate or merge with or into, or convey, transfer or lease its properties
and assets substantially as an entirety to, in the case of the Company, any
Person which is a corporation, partnership or trust organized and validly
existing under the laws of the United States, any State thereof or the District
of Columbia, and, in the case of the Dutch Issuer or the Canadian Issuer, any
corporation, partnership or trust, provided that (1) any successor Person
assumes by supplemental indenture the applicable Issuer's obligations on the
Debt Securities and in the case of Guaranteed Debt Securities, any successor to
the Company assumes the Company's obligations under the Guarantee, (2) after
giving effect to the transaction no Event of Default, and no event which, after
notice or lapse of time, would become an Event of Default, shall have occurred
and be continuing under such Indenture, and (3) in the case of Guaranteed Debt
Securities, the Person formed by such consolidation or into which such Issuer is
merged or to whom such Issuer has conveyed, transferred or leased its properties
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or assets substantially as an entirety (if such Person's Issuer Jurisdiction is
not within the United States) agrees to indemnify the Holder of each Debt
Security against (a) any Additional Amounts imposed on any such Holder as a
consequence of such consolidation, merger, conveyance, transfer or lease; and
(b) any costs or expenses of the act of such consolidation, merger, conveyance,
transfer or lease. (Section 801 of the applicable Indenture)
The Company or any of its subsidiaries may, subject to certain restrictions,
assume the obligations of any of the Issuers of the Guaranteed Debt Securities
without the consent of the Holders of such Debt Securities; PROVIDED that such
assumption shall not result in adverse tax consequences to such Holders and the
person assuming such obligations shall not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
DEFEASANCE PROVISIONS
DEFEASANCE AND DISCHARGE. Each Indenture provides that, if principal of and
any interest on the Debt Securities of any series of any Issuer are denominated
and payable in United States dollars, such Issuer and, in the case of Guaranteed
Debt Securities, the Company, as Guarantor, will be discharged from any and all
obligations in respect of such Debt Securities (except for certain obligations
to pay Additional Amounts, to register the transfer or exchange of such Debt
Securities, to replace stolen, lost or mutilated Debt Securities, to maintain
paying agencies and to hold moneys for payment in trust therefor) upon the
deposit with the applicable Trustee, in trust, of money, U.S. Government
Obligations (as defined) or a combination thereof, which through the payment of
interest and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay any installment of principal of (and any premium)
and interest on and any mandatory sinking fund payments in respect of such Debt
Securities on the Stated Maturity of such payments in accordance with the terms
of the applicable Indenture and such Debt Securities. Such discharge may occur
more than one year before the stated maturity or earlier redemption date for
such Debt Securities only if there has been a change in applicable Federal law
or such Issuer or the Company, as Guarantor, has received from, or there has
been published by, the United States Internal Revenue Service a ruling to the
effect that such a discharge will not be deemed, or result in, a taxable event
with respect to holders of the Debt Securities; and such discharge will not be
applicable to any Debt Securities then listed on the New York Stock Exchange if
the provision would cause such Debt Securities to be de-listed as a result
thereof. (Section 403 of the applicable Indenture) The term "U.S. Government
Obligations" is defined to mean direct obligations of the United States of
America, backed by its full faith and credit. (Section 101 of the applicable
Indenture)
DEFEASANCE OF CERTAIN COVENANTS. Each Issuer and the Company, as Guarantor,
may omit to comply with certain restrictive covenants described in Sections 1005
(Maintenance of Properties), 1006 (Payment of Taxes and Other Claims), 1007
(Restriction on Secured Debt) and 1008 (Restriction on Sale and Leaseback
Transactions) of the applicable Indenture as to any series of Debt Securities.
To exercise such option, such Issuer or the Company must deposit with the
applicable Trustee money, U.S. Government Obligations or a combination thereof,
which through the payment of interest and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay any installment of
principal of and any premium, and interest on and any mandatory sinking fund
payments in respect of such Debt Securities on the Stated Maturity of such
payments in accordance with the terms of such Indenture and such Debt
Securities. Such Issuer or the Company will also be required to deliver to the
applicable Trustee an opinion of counsel to the effect that the deposit and
related covenant defeasance will not cause the holders of such Debt Securities
to recognize income, gain or loss for Federal income tax purposes. (Section 1009
of the applicable Indenture)
DEFEASANCE AND EVENTS OF DEFAULT. In the event an Issuer or the Company
exercises its option to omit compliance with certain covenants of the Indenture
and the Debt Securities are declared due and payable because of the occurrence
of any Event of Default, the amount of money and U.S. Government Obligations on
deposit with the applicable Trustee will be sufficient to pay amounts due on the
Debt
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Securities at the time of their Stated Maturity but may not be sufficient to pay
amounts due on the Debt Securities at the time of the acceleration resulting
from such Event of Default. However, such Issuer or the Company, as Guarantor,
shall remain liable for such payments.
REGARDING THE TRUSTEE
The Chase Manhattan Bank (successor in interest to The Chase Manhattan Bank
(National Association)), the Trustee under each of the Indentures, participates
in a revolving line of credit and term loan agreement with the Company and
provides other banking and advisory services for the Company in the ordinary
course of business.
GOVERNING LAW
The Indentures, the Debt Securities and the Guarantee will be governed by,
and construed in accordance with, the laws of the State of New York.
SERVICE OF PROCESS
The Subsidiary Indenture provides that each of the Dutch Issuer and the
Canadian Issuer appoints the Company as its authorized agent for service of
process in any legal action or proceeding arising out of or relating to the
Subsidiary Indenture, the Guaranteed Debt Securities issued thereunder or the
Guarantee relating thereto brought in any federal or state court in the Borough
of Manhattan, The City of New York, State of New York and irrevocably submits to
the non-exclusive jurisdiction of such courts. (Section 115 of the applicable
Indenture)
PLAN OF DISTRIBUTION
Each Issuer may sell the Debt Securities being offered hereby in any of four
ways: (i) directly to purchasers, (ii) through agents, (iii) through
underwriters and (iv) through dealers. The applicable Prospectus Supplement or
Prospectus Supplements will set forth the terms of the offering of the Debt
Securities, including the name or names of any agents, underwriters or dealers,
the purchase price of the Debt Securities and the proceeds to be received by the
applicable Issuer from such sale, any underwriting discounts and other items
constituting underwriters' compensation and any discounts and commissions
allowed or reallowed or paid to dealers or agents. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
or agents may be changed from time to time.
In connection with the sale of Debt Securities, underwriters or agents may
be deemed to have received compensation from the applicable Issuer in the form
of underwriting discounts or commissions. Underwriters may sell Debt Securities
to or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters. Underwriters,
dealers and agents participating in the distribution of Debt Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Debt Securities may be deemed
to be underwriting discounts and commissions, under the Securities Act of 1933,
as amended. Such underwriters, dealers and agents may be entitled under
agreements which may be entered into by the Issuers to indemnification against
and contribution toward certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
The Debt Securities may be distributed in one or more transactions from time
to time at a fixed price or prices, which may be changed, or from time to time
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Company also may offer and
sell the Debt Securities in exchange for one or more of its outstanding issues
of debt or convertible debt securities.
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If so indicated in the applicable Prospectus Supplement or Prospectus
Supplements, the applicable Issuer will authorize dealers or other persons
acting as such Issuer's agents to solicit offers by certain institutions to
purchase Debt Securities from such Issuer at the public offering price set forth
in the applicable Prospectus Supplement or Prospectus Supplements pursuant to
delayed delivery contracts ("Contracts") providing for payment and delivery on
the date or dates stated in the applicable Prospectus Supplement or Prospectus
Supplements. Each Contract will be for an amount not less than, and the
aggregate amount of Debt Securities sold pursuant to Contracts shall be not less
nor more than, the respective amounts stated in the applicable Prospectus
Supplement or Prospectus Supplements. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions, but will in all cases be subject to the
approval of the applicable Issuer. The obligations of any purchaser under any
Contract will not be subject to any conditions except (1) the purchase by an
institution of the Debt Securities covered by its Contract shall not at the time
of delivery be prohibited under the laws of any jurisdiction to which such
institution is subject and (2) if Debt Securities are being sold to
underwriters, the applicable Issuer shall have sold to such underwriters the
total principal amount of such Debt Securities less the principal amount thereof
covered by Contracts.
In the event that Debt Securities of any series are not listed on a U.S.
national securities exchange, any underwriters or agents to or through whom Debt
Securities are sold by an Issuer for public offering and sale may make a market
in such Debt Securities, but such underwriters and agents will not be obligated
to do so and may discontinue any market-making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any Debt
Securities.
Certain of the underwriters, dealers and/or agents and their associates may
be customers of, engage in transactions with and perform services for the
Company, including its subsidiaries, in the ordinary course of business.
In connection with the offering of the Debt Securities, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Debt Securities during and after the offering. Specifically, the
Underwriters may over-allot or otherwise create a short position in the Debt
Securities for their own account by selling more Debt Securities than have been
sold to them by the Company. The Underwriters may elect to cover any such short
position by purchasing Debt Securities in the open market. In addition, the
Underwriters may stabilize or maintain the price of the Debt Securities by
bidding for or purchasing Debt Securities in the open market and may impose
penalty bids, under which selling concessions allowed to syndicate members or
other broker-dealers participating in the offering are reclaimed if Debt
Securities previously distributed in the offering are repurchased in connection
with stabilization transactions or otherwise. The effect of these transactions
may be to stabilize or maintain the market price of the Debt Securities at a
level above that which might otherwise prevail in the open market. The
imposition of a penalty bid may also affect the price of the Debt Securities to
the extent that it discourages resales thereof. No representation is made as to
the magnitude or effect of any stabilization or other transactions. Such
transactions, if commenced, may be discontinued at any time.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended December 31, 1996 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
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VALIDITY OF DEBT SECURITIES AND GUARANTEE
The validity of the Debt Securities and Guarantee will be passed upon for
the Issuers by Edward D. Grayson, Esq., Vice President and General Counsel of
the Company, and, unless otherwise indicated in the applicable Prospectus
Supplement or Prospectus Supplements, certain matters with respect to the Debt
Securities and Guarantee offered by such Prospectus Supplement or Prospectus
Supplements will be passed upon for any underwriters or agents by Davis Polk &
Wardwell, New York, New York. Certain legal matters related to the Debt
Securities governed by the laws of The Netherlands will be passed upon by Nauta
Dutilh. Certain legal matters related to the Debt Securities governed by the
laws of the province of Ontario, Canada will be passed upon by Baker & McKenzie.
Mr. Grayson and Davis Polk & Wardwell will rely upon Nauta Dutilh and Baker &
McKenzie as to legal matters governed by the laws of The Netherlands and Canada,
respectively.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH
OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF
SUCH INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds........................................................... S-2
Ratio of Earnings to Fixed Charges........................................ S-2
Description of Debentures................................................. S-3
Underwriting.............................................................. S-5
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Issuers............................................................... 3
Use of Proceeds........................................................... 5
Ratios of Earnings to Fixed Charges....................................... 5
Description of Debt Securities and Guarantee.............................. 5
Plan of Distribution...................................................... 14
Experts................................................................... 15
Validity of Debt Securities and Guarantee................................. 16
</TABLE>
$250,000,000
HONEYWELL INC.
6 5/8% DEBENTURES
DUE JUNE 15, 2028
------------------------------
PROSPECTUS AND
PROSPECTUS SUPPLEMENT
------------------------------
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
JUNE 10, 1998
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