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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Honeywell International Inc.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state
how it was determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
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[Logo]
March 13, 2000
To our Shareowners:
You are cordially invited to attend the Annual Meeting of Shareowners of
Honeywell, which will be held at 10:00 a.m. on Monday, May 1, 2000 at the
Company's headquarters, 101 Columbia Road, Morris Township, New Jersey.
The accompanying notice of meeting and proxy statement describe the matters
to be voted on at the meeting. We will also take the opportunity to review 1999
business results and our outlook for the future.
YOUR VOTE IS IMPORTANT. We encourage you to read the proxy statement and
vote your shares as soon as possible. A return envelope for your proxy card is
enclosed for convenience. Shareowners of record and participants in Company
stock plans also have the option of voting via the Internet or by telephone.
Specific Instructions on how to vote via the Internet or by telephone are
included on the proxy card.
A map and directions to the Company's headquarters appear at the end of the
proxy statement. I look forward to seeing you on May 1.
Sincerely,
/s/ MICHAEL R. BONSIGNORE
MICHAEL R. BONSIGNORE
Chief Executive Officer
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Table of Contents Page
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NOTICE OF MEETING........................................... 1
PROXY STATEMENT............................................. 2
MERGER INFORMATION.......................................... 2
VOTING PROCEDURES........................................... 2
ATTENDANCE AT THE ANNUAL MEETING............................ 3
BOARD MEETINGS -- COMMITTEES OF THE BOARD................... 3
ELECTION OF DIRECTORS....................................... 5
DIRECTOR COMPENSATION....................................... 10
APPROVAL OF INDEPENDENT ACCOUNTANTS......................... 11
STOCK OWNERSHIP INFORMATION................................. 12
EXECUTIVE COMPENSATION...................................... 13
SHAREOWNER PROPOSALS........................................ 21
OTHER INFORMATION........................................... 26
Shareowner Proposals for 2001 Annual Meeting............ 26
Director Nominations.................................... 26
Expenses of Solicitation................................ 26
DIRECTIONS TO COMPANY HEADQUARTERS.......................... A-1
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YOUR VOTE IS IMPORTANT
If you are a shareowner of record, you can vote your shares via the Internet
or by telephone by following the instructions on your proxy card. If voting by
mail, please complete, date and sign your proxy card and return it as soon as
possible in the enclosed envelope.
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[Logo]
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
The Annual Meeting of Shareowners of Honeywell International Inc. will be
held on Monday, May 1, 2000 at 10:00 a.m. local time, at the Company's
headquarters, 101 Columbia Road, Morris Township, New Jersey to consider and
vote on the following matters described in the accompanying proxy statement:
1. Election of four directors;
2. Appointment of PricewaterhouseCoopers LLP as independent accountants for
2000;
3. A shareowner proposal regarding CEO compensation;
4. A shareowner proposal regarding the annual election of directors;
5. A shareowner proposal regarding shareowner voting provisions; and
to transact any other business that may properly come before the meeting.
The Board of Directors has determined that shareowners of record at the
close of business on March 3, 2000 are entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors,
/s/ KATHLEEN M. GIBSON
Kathleen M. Gibson
Vice President and Secretary
Honeywell
101 Columbia Road
Morris Township, NJ 07962
March 13, 2000
\
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PROXY STATEMENT
This Proxy Statement is being provided to shareowners in connection with the
solicitation of proxies by the Board of Directors for use at the Annual Meeting
of Shareowners to be held on Monday, May 1, 2000.
MERGER INFORMATION
The AlliedSignal-Honeywell merger was completed on December 1, 1999, at
which time AlliedSignal Inc. changed its name to Honeywell International Inc.
Michael R. Bonsignore, the former Chairman and Chief Executive Officer of
Honeywell Inc. became Chief Executive Officer of Honeywell International on
December 1, 1999. Lawrence A. Bossidy, former Chairman and Chief Executive
Officer of AlliedSignal Inc., will remain as Chairman of the Board of Honeywell
International until his retirement on April 1, 2000. At that time, Mr.
Bonsignore will also become Chairman of the Board of the Company.
Upon completion of the merger, nine directors of AlliedSignal Inc. and six
directors of Honeywell Inc. became directors of Honeywell International. More
information on the Board of Directors is provided below.
VOTING PROCEDURES
YOUR VOTE IS VERY IMPORTANT
Whether or not you plan to attend the meeting, please take the time to vote
your shares as soon as possible. Your prompt voting via the Internet, telephone
or mail may save the Company the expense of a second mailing.
METHODS OF VOTING
All shareowners may vote by mail.
Shareowners of record, as well as shareowners who hold shares in Company
stock plans, can vote via the Internet or by telephone.
Shareowners who hold their shares through a bank or broker can vote via the
Internet or by telephone if the bank or broker offers these options.
Please see your proxy card for specific voting instructions.
REVOKING YOUR PROXY
Whether you vote by mail, telephone or via the Internet, you may later
revoke your proxy by:
sending a written statement to that effect to the Secretary of the Company;
submitting a properly signed proxy with a later date;
voting by telephone or via the Internet at a later time; or
voting in person at the Annual Meeting (except for shares held in the
savings plans as described on the proxy card).
VOTE REQUIRED
The vote of a plurality of the shares of Common Stock present or represented
and entitled to vote at the Annual Meeting is required for election as a
director.
The affirmative vote of a majority of shares present or represented and
entitled to vote on each of Proposals 2 through 5 is required for approval.
ABSTENTIONS AND BROKER NON-VOTES
Abstentions are not counted as votes 'for' or 'against' a proposal, but are
counted in determining the number of shares present or represented on a
proposal. Therefore, since approval of Proposals 2
2
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through 5 requires the affirmative vote of a majority of the shares of Common
Stock present or represented, abstentions have the same effect as a vote
'against' those proposals. New York Stock Exchange rules prohibit brokers from
voting on Proposals 3 through 5 without receiving instructions from the
beneficial owner of the shares. In the absence of instructions, shares subject
to such 'broker non-votes' will not be counted as voted or as present or
represented on those proposals.
OTHER BUSINESS
The Board knows of no other matters to be presented for shareowner action at
the meeting. If other matters are properly brought before the meeting, the
persons named as proxies in the accompanying proxy card intend to vote the
shares represented by them in accordance with their best judgment.
CONFIDENTIAL VOTING POLICY
It is the Company's policy that any proxy, ballot or other voting material
that identifies the particular vote of a shareowner and contains the
shareowner's request for confidential treatment will be kept confidential,
except in the event of a contested proxy solicitation or as may be required by
law. The Company may be informed whether or not a particular shareowner has
voted and will have access to any comment written on a proxy, ballot or other
material and to the identity of the commenting shareowner. Under the policy, the
inspectors of election at any shareowner meeting will be independent parties
unaffiliated with the Company.
SHARES OUTSTANDING
At the close of business on February 25, 2000, there were approximately
796,591,350 shares of Honeywell International common stock outstanding. Each
share outstanding as of the March 3, 2000 record date is entitled to one vote.
ATTENDANCE AT THE ANNUAL MEETING
If you are a shareowner of record who plans to attend the meeting, please
mark the appropriate box on your proxy card or follow the instructions provided
when you vote by telephone or via the Internet. If your shares are held by a
bank, broker or other intermediary and you plan to attend, please send written
notification to Honeywell Shareowner Services, P.O. Box 50000, Morris Township,
New Jersey 07962, and enclose evidence of your ownership (such as a letter from
the bank, broker or intermediary confirming your ownership or a bank or
brokerage firm account statement). The names of all those planning to attend
will be placed on an admission list held at the registration desk at the
entrance to the meeting.
BOARD MEETINGS -- COMMITTEES OF THE BOARD
The Board of Directors held eight regular meetings and one special meeting
during 1999. The average attendance at meetings of the Board and Board
Committees during 1999 was 96%.
The Board currently has the following committees: Audit; Corporate
Governance; Corporate Responsibility; Management Development and Compensation;
Retirement Plans; and Technology. Membership and principal responsibilities of
the Board committees are described below.
AUDIT COMMITTEE
The members of the Audit Committee are:
Russell Palmer (Chair)
Hans W. Becherer
Marshall N. Carter
Ann M. Fudge
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James J. Howard
John R. Stafford
Michael W. Wright
The Audit Committee met five times in 1999. The primary functions of this
Committee are to: recommend the firm to be appointed as independent accountants
to audit the Company's financial statements and to perform services related to
the audit; review the scope and results of the audit with the independent
accountants; review with management and the independent accountants the
Company's interim and year-end operating results; consider the adequacy of the
internal accounting and auditing procedures of the Company; and consider the
accountants' independence. At each meeting Committee members meet privately with
representatives of PricewaterhouseCoopers LLP, the Company's independent
auditors, and with the Director of the Company's Corporate Audit Department.
CORPORATE GOVERNANCE COMMITTEE
The members of the Corporate Governance Committee are:
Bruce Karatz (Chair)
Hans W. Becherer
Jaime Chico Pardo
Robert P. Luciano
Russell E. Palmer
Ivan G. Seidenberg
Michael W. Wright
The Corporate Governance Committee met three times in 1999. The primary
functions of this Committee are to: review policies and make recommendations to
the Board, as appropriate, concerning the size and composition of the Board; the
qualifications and criteria for election to the Board, and procedures for
shareowner nomination of candidates for the Board; retirement from the Board;
compensation and benefits of non-employee directors; and to review periodically
the overall effectiveness of the Board. The Corporate Governance Committee of
the Board of Directors will consider qualified nominees for director recommended
by shareowners. Recommendations should be submitted in writing to the attention
of the Vice President and Secretary, Honeywell, 101 Columbia Road, Morris
Township, New Jersey 07962.
CORPORATE RESPONSIBILITY COMMITTEE
The members of the Corporate Responsibility Committee are:
Ann M. Fudge (Chair)
Gordon M. Bethune
Marshall N. Carter
James J. Howard
Andrew C. Sigler
The Corporate Responsibility Committee met three times in 1999. The primary
functions of this Committee are to review the policies and programs that are
designed to assure the Company's compliance with legal and ethical standards and
that affect its role as a responsible corporate citizen, including those
relating to human resources issues such as equal employment opportunity, to
health, safety and environmental matters and to proper business practices.
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
The members of the Management Development and Compensation Committee are:
Robert P. Luciano (Chair)
Hans W. Becherer
Gordon M. Bethune
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Bruce Karatz
Ivan G. Seidenberg
Andrew C. Sigler
John R. Stafford
The Management Development and Compensation Committee met six times in 1999.
The primary functions of this Committee are to: review and recommend the
compensation arrangements for officers; approve compensation arrangements for
other senior level employees; consider matters related to management development
and succession and recommend individuals for election as officers; and review or
take such other action as may be required in connection with the bonus, stock
and other benefit plans of the Company and its subsidiaries.
RETIREMENT PLANS COMMITTEE
The members of the Retirement Plans Committee are:
Michael W. Wright (Chair)
Jaime Chico Pardo
Ann M. Fudge
Robert P. Luciano
Russell E. Palmer
Andrew C. Sigler
John R. Stafford
The Retirement Plans Committee met three times in 1999. The primary
responsibilities of this Committee are to: appoint the trustees for funds under
the employee pension benefit plans of the Company and certain subsidiaries;
review funding strategies; set investment policy for fund assets; and oversee
and appoint members of other committees investing fund assets.
TECHNOLOGY COMMITTEE
The members of the Technology Committee are:
Ivan G. Seidenberg (Chair)
Gordon M. Bethune
Marshall N. Carter
Jaime Chico Pardo
James J. Howard
Bruce Karatz
The Technology Committee met two times in 1999. The primary functions of
this Committee are to review corporate-wide technology matters, including
research, development and engineering, and advise the Company with respect to
its technology program and budget, proposed changes in corporate strategy where
technology is a significant component, and technologies of importance to the
Company's existing or new business areas.
ITEM 1 -- ELECTION OF DIRECTORS
NOMINEES
The Company's Board of Directors is divided into three classes that serve
staggered three-year terms and are as nearly equal in number as possible. The
Board has nominated four candidates for election as directors for a term ending
at the 2003 Annual Meeting.
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All nominees are currently serving as directors. If prior to the Annual
Meeting any nominee should become unavailable to serve, the shares represented
by a properly signed and returned proxy card or voted by telephone or Internet
will be voted for the election of such other person as may be designated by the
Board of Directors, or the Board may determine to leave the vacancy temporarily
unfilled or reduce the authorized number of directors pursuant to the By-laws.
Lawrence A. Bossidy will retire from the Board on April 1, 2000.
Certain information regarding each nominee and each director continuing in
office after the Annual Meeting is set forth below.
NOMINEES FOR ELECTION FOR TERM EXPIRING IN 2003
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[Photo] HANS W. BECHERER, Chairman and Chief Executive Officer of Deere & Company
Mr. Becherer began his business career with Deere & Company, a manufacturer of
mobile power machinery and a supplier of financial services, in 1962. After serving
in a variety of managerial and executive positions, he became a director of Deere in
1986 and was elected President and Chief Operating Officer in 1987, President and
Chief Executive Officer in 1989 and Chairman and Chief Executive Officer in 1990.
He is also a director of The Chase Manhattan Corporation and Schering-Plough
Corporation.
Director since 1991 Age 64
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[Photo] GORDON M. BETHUNE, Chairman of the Board and Chief Executive Officer of Continental
Airlines, Inc.
Mr. Bethune joined Continental Airlines, an international commercial airline
company, in February 1994 as President and Chief Operating Officer. He was elected
President and Chief Executive Officer in November 1994 and Chairman of the Board and
Chief Executive Officer in 1996. From 1988 to 1994, Mr. Bethune served as vice
president and general manager of various divisions of The Boeing Company, a
manufacturer of commercial jetliners and military aircraft, and he served most
recently as vice president and general manager of the Renton Division of the
Commercial Airplane Group at Boeing. Prior to 1988, Mr. Bethune was senior vice
president of operations for Piedmont Airlines, and he held senior management
positions as vice president of engineering and maintenance at Western Air Lines,
Inc. and at Braniff Airlines. Mr. Bethune is also a director of Sysco Corporation.
He was a director of Honeywell Inc. from April 1999 to December 1999.
Director since 1999 Age 58
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[Photo] JAIME CHICO PARDO, Vice Chairman and Chief Executive Officer of Telefonos de
Mexico, S.A. de C.V. (TELMEX)
Mr. Chico Pardo joined TELMEX, a telecommunications company based in Mexico
City, as its Chief Executive Officer in 1995. From 1993 to 1995, Mr. Chico
Pardo was President and Chief Executive Officer of Grupo Condumex, S.A. de
C.V., a manufacturer of products for the construction, automobile and
telecommunications industries. Prior to 1993, Mr. Chico Pardo was President
and Chief Executive Officer of Euzkadi/General Tire de Mexico, a
manufacturer of automotive and truck tires. Mr. Chico Pardo is also
Vice-Chairman of Carso Global Telecom and a director of Grupo Carso and
Grupo Financiero Inbursa. He was a director of Honeywell Inc. from September
1998 to December 1999.
Director since 1999 Age 50
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[Photo] ANN M. FUDGE, Executive Vice President of Kraft Foods, Inc.
Ms. Fudge joined General Foods USA in 1986 and held several planning and
marketing positions before being appointed Executive Vice President and
General Manager of the Dinners and Enhancers Division in 1991. In 1994, she
was named President of Kraft General Foods' Maxwell House Coffee Company. In
1995, Ms. Fudge assumed her current position, while continuing to head the
Maxwell House Coffee Division as General Manager. She became President of
Kraft's Maxwell House and Post Division in 1997. Kraft is the multinational
food business of Phillip Morris Companies Inc. Ms. Fudge is a director of
General Electric Company and Liz Claiborne, Inc.
Director since 1993 Age 48
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INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR TERM EXPIRING IN 2001
[Photo] JAMES J. HOWARD, Chairman of the Board, President and Chief Executive
Officer of Northern States Power Company
Mr. Howard has been Chairman and Chief Executive Officer of Northern States
Power, an energy company, since 1988, and President since 1994. Prior to
1987, Mr. Howard was President and Chief Operating Officer of Ameritech
Corporation. Mr. Howard is also a director of Ecolab, Inc., the Federal
Reserve Bank of Minneapolis, ReliaStar Financial and Walgreen Company. He
was a director of Honeywell Inc. from July 1990 to December 1999.
Director since 1999 Age 64
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[Photo] BRUCE KARATZ, Chairman of the Board, President and Chief Executive Officer
of Kaufman and Broad Home Corporation
Mr. Karatz was elected President and Chief Executive Officer of Kaufman and
Broad Home Corporation, an international residential and commercial builder,
in 1986, and Chairman of the Board in 1993. Mr. Karatz is also a director of
The Kroger Co. and National Golf Properties, Inc. Chairman, California
Business Roundtable and Trustee of the Rand Corporation. He was a director
of Honeywell Inc. from July 1992 to December 1999.
Director since 1999 Age 54
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[Photo] RUSSELL E. PALMER, Chairman and Chief Executive Officer of the Palmer Group
Mr. Palmer established The Palmer Group, a private investment firm, in 1990,
after serving seven years as Dean of The Wharton School of the University of
Pennsylvania. He previously served as Managing Director and Chief Executive
Officer of Touche Ross International and Managing Partner and Chief
Executive Officer of Touche Ross & Co. (USA) (now Deloitte and Touche). He
is a director of Federal Home Loan Mortgage Corporation, GTE Corporation,
The May Department Stores Company and Safeguard Scientifics, Inc.
Director since 1987 Age 65
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[Photo] IVAN G. SEIDENBERG, Chairman and Chief Executive Officer of Bell Atlantic
Corporation
Mr. Seidenberg assumed his current position with Bell Atlantic Corporation,
a telecommunications and information services provider, in January 1999. He
previously served as Vice Chairman, President and Chief Executive Officer
since June 1998, and Vice Chairman, President and Chief Operating Officer
following the merger of NYNEX Corporation and Bell Atlantic in 1997. He
joined NYNEX in 1983 and served in several senior management positions
before becoming a director and Vice Chairman of the Board in 1991, President
and Chief Operating Officer in 1994, and Chairman and Chief Executive
Officer in 1995. He is also a director of American Home Products
Corporation, Boston Properties, Inc., CVS Corporation and Viacom Inc.
Director since 1995 Age 53
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[Photo] ANDREW C. SIGLER, Retired Chairman and Chief Executive Officer of Champion
International Corporation
Mr. Sigler began his career at Champion International Corporation, a paper
and forest products company, in 1956. He was elected President and Chief
Executive Officer in 1974 and served as Chairman and Chief Executive Officer
from 1979 until his retirement in 1996. He is a director of The Chase
Manhattan Corporation and General Electric Company.
Director since 1994 Age 68
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INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR TERM EXPIRING IN 2002
[Photo] MICHAEL R. BONSIGNORE, Chief Executive Officer. Elected to become Chairman
of the Board on April 1, 2000.
Mr. Bonsignore began his business career at Honeywell Inc. in 1969. He held
various marketing and operations management positions and became Vice
President of Marine Systems in 1981. In 1983, Mr. Bonsignore was appointed
President of Honeywell Europe, based in Brussels, Belgium. In 1987, Mr.
Bonsignore returned to Minneapolis as Executive Vice President,
International, and was elected President of this business in May 1987. In
1990, Mr. Bonsignore was elected Executive Vice President and Chief
Operating Officer for the International and Home & Building Control
businesses, and was also elected to Honeywell Inc.'s Board of Directors. Mr.
Bonsignore was elected Chairman of the Board and Chief Executive Officer of
Honeywell Inc. in 1993. Mr. Bonsignore is also a director of Medtronic, Inc.
He was a director of Honeywell Inc. from November 1990 to December 1999.
Director since 1999 Age 58
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[Photo] MARSHALL N. CARTER, Chairman and Chief Executive Officer of State Street
Corporation
Mr. Carter joined State Street Corporation and its principal subsidiary,
State Street Bank and Trust Company, as President and Chief Operating
Officer in 1991. He became Chief Executive Officer in 1992 and Chairman of
the Board in 1993. State Street is a provider of services to institutional
investors worldwide. Prior to joining State Street, Mr. Carter was with
Chase Manhattan Bank for 15 years, and before that he served as an officer
in the U.S. Marine Corps.
Director since 1999 Age 59
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[Photo] ROBERT P. LUCIANO, Chairman Emeritus of Schering-Plough Corporation
Mr. Luciano joined Schering-Plough Corporation, a manufacturer and marketer
of pharmaceuticals and consumer products, in 1978. He served as President
from 1980 to 1986, Chief Executive Officer from 1982 through 1995, and
Chairman of the Board from 1984 through October 1998. He became Chairman
Emeritus in October 1999. He is a director of C.R. Bard, Inc., Merrill Lynch
& Co. and Schering-Plough Corporation.
Director since 1989 Age 66
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[Photo] JOHN R. STAFFORD, Chairman, President and Chief Executive Officer of
American Home Products Corporation
Mr. Stafford has held a number of positions with American Home Products, a
manufacturer of pharmaceutical, health care, animal health and agricultural
products, since joining that company in 1970. He served as General Counsel,
Vice President, Senior Vice President and Executive Vice President before
becoming President in 1981, an office he held until 1990 and which he
resumed in early 1994. Mr. Stafford was elected Chairman of the Board and
Chief Executive Officer in 1986. He is also a director of Bell Atlantic
Corporation, The Chase Manhattan Corporation and Deere & Company.
Director since 1993 Age 62
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[Photo] MICHAEL W. WRIGHT, Chairman of the Board, President and Chief Executive
Officer, SUPERVALU INC.
Mr. Wright was elected President and Chief Operating Officer of SUPERVALU
INC., a major food distributor and retailer, in 1978, Chief Executive
Officer in 1981, and Chairman of the Board in 1982. He joined SUPERVALU INC.
as Senior Vice President of Administration and as a member of the board of
directors in 1977. Prior to 1977, Mr. Wright was a partner in the law firm
of Dorsey & Whitney. Mr. Wright is also a director of Cargill, Inc.,
Musicland Stores Corporation, and Wells Fargo and Company. He was a director
of Honeywell Inc. from April 1987 to December 1999.
Director since 1999 Age 61
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DIRECTOR COMPENSATION
Directors who are employees of the Company receive no compensation for
service on the Board. Each non-employee director receives an annual Board
retainer of $50,000, of which $15,000 is automatically credited to the
director's account in the Deferred Compensation Plan for Non-Employee Directors
in the form of common stock equivalents (which are only payable after
termination of Board service). They also receive a fee of $1,500 for Board
meetings attended on any day (nine during 1999),
10
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an annual retainer of $5,400 for each Board Committee served, and an additional
Committee Chair retainer of $4,000 for the Audit and Management Development and
Compensation Committees and $2,000 for all other Board Committees. While no fees
are generally paid for attending Committee meetings, a $1,000 fee is paid for
attendance at a Committee meeting, or other extraordinary meeting related to
Board business which occurs apart from a Board meeting. Non-employee directors
are also provided with $350,000 in business travel accident insurance and are
eligible to elect $100,000 in term life insurance and medical and dental
coverage for themselves and their eligible dependents.
Directors may elect to defer, until a specified calendar year or retirement
from the Board, all or any portion of their annual retainers and fees that are
not automatically deferred and to have such compensation credited to their
account in the Deferred Compensation Plan. Amounts credited either accrue
interest (11% for 2000) or are valued as if invested in common stock equivalents
or one of the other funds available to participants in the Company's savings
plan. Amounts deferred in a Common Stock account earn amounts equivalent to
dividends. Upon a change of control, a director will be entitled to a lump-sum
cash payment of all deferred amounts.
Under the Stock Plan for Non-Employee Directors, each new director receives
a one-time grant of 3,000 shares of Common Stock, which are subject to transfer
restrictions until the director's service terminates with the consent of a
majority of the Board, provided termination occurs at or after age 65. During
the restricted period, the director has the right to receive dividends on and
the right to vote the shares. At the end of the restricted period, the director
is entitled to one-fifth of the shares granted for each year of service (up to
five). However, the shares will be forfeited if the director's service
terminates (other than for death or disability) prior to the end of the
restricted period. The Plan also provides for an annual grant to each director
of options to purchase 2,000 shares of Common Stock at 100% of the fair market
value on the date of grant. Option grants vest in cumulative installments of 40%
on April 1 of the year following the grant date and an additional 30% on
April 1 of each of the next two years.
ITEM 2 -- APPROVAL OF INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee, which is composed entirely
of independent directors, the Board of Directors has appointed
PricewaterhouseCoopers LLP ('PwC') as independent accountants for the Company to
audit its consolidated financial statements for 2000 and to perform
audit-related services, including review of the Company's quarterly interim
financial information and periodic reports and registration statements filed
with the Securities and Exchange Commission and consultation in connection with
various accounting and financial reporting matters. PwC also performs non-audit
services for the Company.
The Board has directed that the appointment of PwC be submitted to the
shareowners for approval. If the shareowners do not approve, the Audit Committee
and the Board will reconsider the appointment.
Total fees for services rendered by PwC in 1999 to the Company and its
subsidiaries worldwide were approximately $17.5 million. The Company has been
advised by PwC that it will have a representative present at the Annual Meeting
who will be available to respond to appropriate questions. The representative
will also have the opportunity to make a statement if he desires to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREOWNERS VOTE FOR THE APPROVAL
OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS.
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STOCK OWNERSHIP INFORMATION
COMPLIANCE WITH BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
The rules of the Securities and Exchange Commission require that the Company
disclose late filings of reports of stock ownership (and changes in stock
ownership) by its directors and executive officers. To the best of the Company's
knowledge, all of the filings for the Company's executive officers and directors
were made on a timely basis in 1999.
FIVE PERCENT OWNER OF COMPANY STOCK
As of December 31, 1999, State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts, 02101 held 52,278,309 shares or approximately
6.5% of the outstanding common stock as trustee of certain of the Company's
savings plans. Under the terms of the plans, State Street is required to vote
shares attributable to any participant in accordance with instructions received
from the participant and to vote all shares for which it does not receive
instructions in the same ratio as the shares for which instructions were
received. State Street disclaims beneficial ownership of the shares referred to
above. State Street also held 13,425,224 shares, or approximately 1.76% of the
outstanding Common Stock in various other fiduciary capacities.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
In general, 'beneficial ownership' includes those shares a director or
executive officer has the power to vote or transfer, and stock options that are
exercisable currently or within 60 days. On January 31, 2000, the directors and
executive officers of the Company beneficially owned, in the aggregate,
6,970,373 shares of common stock which are included in the table below.
Directors and executive officers also have interests in stock-based units under
Company plans. While these units may not be voted or transferred, we have
included them in the table below as they represent the total economic interest
of the directors and executive officers in Company stock.
<TABLE>
<CAPTION>
Number of
Name Shares(1)(2)(3)
---- ---------------
<S> <C>
Hans W. Becherer...................................... 26,370
Gordon M. Bethune..................................... 4,517
Michael R. Bonsignore................................. 1,639,986
Lawrence A. Bossidy................................... 3,658,667
Marshall N. Carter.................................... 16,259
Jaime Chico Pardo..................................... 9,429
Giannantonio Ferrari.................................. 372,530
Ann M. Fudge.......................................... 15,841
James J. Howard....................................... 34,507
Robert D. Johnson..................................... 71,090
Bruce Karatz.......................................... 26,348
Peter M. Kreindler.................................... 253,688
Robert M. Luciano..................................... 20,924
Russell E. Palmer..................................... 17,671
Ivan G. Seidenberg.................................... 15,719
Andrew C. Sigler...................................... 27,580
John R. Stafford...................................... 38,790
Richard F. Wallman.................................... 332,471
Michael W. Wright..................................... 39,421
</TABLE>
- ---------
(1) The total beneficial ownership for any individual is less than 0.5%, and the
total for the group is less than 0.9%, of the shares of Common Stock
outstanding.
(2) Includes the following number of shares or share-equivalents in deferred
accounts, as to which no voting or investment power exists: Mr. Becherer,
12,170; Mr. Bethune, 1,517; Mr. Bossidy, 23,505;
(footnotes continued on next page)
12
<PAGE>
(footnotes continued from previous page)
Mr. Bonsignore, 159; Mr. Carter, 1,759; Mr. Chico Pardo, 3,279; Ms. Fudge,
1,641; Mr. Howard, 26,711; Mr. Karatz, 16,957; Mr. Kreindler, 20,834;
Mr. Luciano, 4,724; Mr. Palmer, 4,471; Mr. Seidenberg, 6,519; Mr. Sigler,
9,380; Mr. Stafford, 8,590; Mr. Wallman, 21,134; Mr. Wright, 34,171; and all
directors and executive officers as a group, 218,863.
(3) Includes shares which the following have the right to acquire within 60 days
through the exercise of vested stock options: Mr. Becherer, 8,200;
Mr. Bossidy, 2,520,000; Mr. Bonsignore, 1,377,312; Mr. Ferrari, 292,460;
Ms. Fudge, 8,200; Mr. Johnson, 70,000; Mr. Kreindler, 220,000; Mr. Luciano,
8,200; Mr. Palmer, 6,200; Mr. Seidenberg, 6,200; Mr. Sigler, 8,200;
Mr. Stafford, 8,200; Mr. Wallman, 309,000; and all directors and executive
officers as a group, 5,317,171.
REPORT ON EXECUTIVE COMPENSATION
The Management Development and Compensation Committee of the Board of
Directors, subject to the approval of the Board of Directors, determines the
compensation of the Company's executive officers and oversees the administration
of executive compensation programs. The Committee is composed entirely of
independent directors.
Since AlliedSignal Inc. and Honeywell Inc. merged on December 1, 1999 to
form Honeywell International, this Report will also discuss compensation paid to
executives for 1999 based on the compensation policies and programs of Honeywell
Inc., as appropriate. At the time of the merger, each share of Honeywell Inc.
common stock was converted into a right to receive 1.875 shares of Honeywell
International Inc. common stock. All data regarding common stock in this Report
reflects the conversion.
EXECUTIVE COMPENSATION POLICIES AND PROGRAMS
The Company's executive compensation programs are designed to attract and
retain highly qualified executives and to motivate them to maximize shareowner
returns by achieving aggressive goals. The programs link each executive's
compensation directly to performance. A significant portion of each executive's
compensation is dependent upon stock price appreciation and meeting financial
goals and other individual performance objectives.
Each year, the Committee reviews the executive compensation policies with
respect to the linkage between executive compensation and the creation of
shareowner value, as well as competitiveness of the programs. In 1999, the
Committee re-examined all aspects of the executive compensation strategy and
programs in connection with the merger. The Committee determines what changes,
if any, are appropriate in the compensation programs. With Board authorization,
the Committee approves salary actions and determines the amount of annual bonus
and the number and amount of long-term awards for officers.
The Company intends to the extent practicable, to preserve deductibility
under the Internal Revenue Code of compensation paid to its executive officers
while maintaining compensation programs to attract and retain highly qualified
executives in a competitive environment. Accordingly, compensation paid under
the Company's stock plan and incentive compensation plan is generally deductible
although certain compensation paid to some executives may not be deductible.
COMPONENTS OF COMPENSATION
There are three basic components to the Company's 'pay for performance'
system: base pay; annual incentive bonus; and long-term incentive compensation
(primarily stock options). Each component is addressed in the context of
competitive conditions. In determining competitive compensation levels, the
Company analyzes information from several independent surveys which include
information regarding industrial companies which compete with us for executive
talent.
Base Pay. Base pay is designed to be competitive within 20% above or below
median salary levels at other large industrial companies for equivalent
positions. The executive's actual salary relative to this
13
<PAGE>
competitive framework varies based on individual performance and the
individual's skills, experience and background.
Annual Incentive Bonus. Award levels, like the base salary levels, are set
with reference to competitive conditions and are intended to motivate the
executives by providing substantial bonus payments for the achievement of
aggressive goals. The actual amounts paid for 1999 were determined by
performance based on two factors: first, financial performance, which was
measured against objectives established for cash flow, productivity increases
and revenue growth; and second, the individual executive's performance against
other specific management objectives, such as increasing the use of Six Sigma
processes and improving customer satisfaction. Financial objectives were given
greater weight than other management objectives in determining bonus payments.
The types and relative importance of specific financial and other business
objectives varied among the Company's executives depending on their positions
and the particular operations or functions for which they were responsible.
Long Term Incentive Compensation. The principal purpose of the long-term
incentive compensation program is to encourage the Company's executives to
enhance the value of the Company and, hence, the price of the Common Stock and
the shareowners' return. The long-term incentive component of the compensation
system (through extended vesting) is also designed to create an incentive for
the individual to remain with the Company. The Committee approved the
termination of a previously existing cash-based incentive award program and
replaced it with long-term equity awards as described below.
The long-term, equity-based compensation program consists primarily of stock
option grants that vest over a multi-year period. The Company periodically
grants new awards to provide continuing incentives for future performance. Like
the annual bonus, award levels are set with regard to competitive
considerations, and each individual's actual award is based upon the
individual's performance, potential for increased responsibility and
contributions, leadership ability and commitment to the Company's strategic
efforts.
In addition to stock options, awards of restricted units, each of which
entitles the holder to one share of Common Stock on vesting (or cash in the
Committee's discretion), may be made on a select basis to individual executives
in order to enhance the incentive for them to remain with the Company. These
units vest over an extended period of up to ten years.
Shortly following the closing of the merger in December 1999, the Committee
approved stock option grants to executive officers, a portion of which vest only
upon satisfaction of performance conditions tied to growth in earnings per
share. These performance conditions parallel the vesting conditions for Mr.
Bonsignore's performance options as provided in his employment agreement
described below. The timing of these option grants was designed to link
executive and shareowner interest immediately following the merger. These awards
were intended to replace the annual grant for 2000 that would have typically
been made in the first quarter.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICERS
In determining the compensation of the Chief Executive Officers, the
Committee considers three factors: the absolute and relative performance of the
business (particularly in determining bonus awards); the market for such
positions (in establishing total compensation levels); and the Company's
compensation strategy (in determining the mix of pay components).
In general, the Company's strategy is to emphasize linkage to shareowner
returns through a predominant emphasis on stock options in the total
compensation mix. Both Mr. Bossidy and Mr. Bonsignore receive periodic grants of
stock options with vesting tied to achievement of performance goals.
The primary factors considered in determining bonus payments include
performance vs. plan for financial results (including revenue growth, earnings
and cash flow), performance relative to peer companies and strategic
achievements. For 1999, the significance of the merger as a critical strategic
accomplishment with excellent prospects for shareowner value creation resulted
in special bonus awards of $1,000,000 for each chief executive officer.
14
<PAGE>
Compensation of Lawrence A. Bossidy. Under Mr. Bossidy's employment
agreement, he is entitled to an annual salary of $2,000,000, which has remained
unchanged since 1994. Based on the Company's financial performance in 1999
(which included a 15% increase in ongoing earnings per share, a 21% increase in
free cash flow and a 14% increase in ongoing net income), a 30% increase in the
price of the Common Stock and the results of the Company's Six Sigma program,
the Committee awarded Mr. Bossidy a bonus of $5,000,000.
Compensation of Michael R. Bonsignore. Mr. Bonsignore became Chief Executive
Officer of the Company on December 1, 1999. Prior to that time, he served as
Chairman and Chief Executive Officer of Honeywell Inc. from April of 1993.
Mr. Bonsignore's salary for 1999 was $1,087,817. Effective December 1, 1999,
he will receive an annual salary of $1,500,000 pursuant to the terms of his
employment agreement described below. Based primarily on Honeywell Inc.
financial performance in terms of net income, working capital, total shareowner
return, return on equity and earnings per share growth, Mr. Bonsignore received
an annual incentive payment of $2,000,000 for 1999.
Mr. Bonsignore received a grant of 281,249 stock options under Honeywell
Inc.'s stock option program in February 1999. In accordance with the terms of
his employment agreement, Mr. Bonsignore received a grant in December of 1999 of
1,000,000 stock options. These options become exercisable in increments of 40%,
30% and 30%, respectively, on December 31 of 2000, 2001 and 2002. They also will
become exercisable in the event Mr. Bonsignore's employment is terminated other
than for cause or voluntary resignation without good reason (as defined in the
employment agreement). Mr. Bonsignore also received a grant of 500,000 stock
options which will vest upon the achievement of certain earnings per share
growth targets.
In 1999 Mr. Bonsignore became entitled to receive 82,500 shares under the
performance share program of Honeywell Inc. The amount of the award was based on
Honeywell Inc. objectives for cumulative revenue growth and cumulative economic
value added over a 24-month performance period. While the original performance
period was three years, the period was shortened in accordance with the terms of
the plan following a change of control of Honeywell Inc. Outstanding stock
options and time-based restricted stock awards of Honeywell Inc. executives,
including Mr. Bonsignore, vested upon the change in control of Honeywell Inc. on
September 1, 1999.
In accordance with his employment agreement, Mr. Bonsignore also received a
grant of 375,000 restricted units which will vest in increments of one-third on
each of April 1, 2001, 2002 and 2003, if the Company achieves specified
operating margin targets.
SUBMITTED BY THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS:
Robert P. Luciano (Chair)
Hans W. Becherer
Gordon M. Bethune
Bruce Karatz
Ivan G. Seidenberg
Andrew C. Sigler
John R. Stafford
15
<PAGE>
SUMMARY COMPENSATION TABLE
The following table shows compensation for:
two individuals who served as the Company's chief executive officer in
1999;
the four most highly compensated executive officers (other than the CEOs)
who were employed by the Company on December 31, 1999; and
one former executive officer who would have been one of the four most
highly compensated executive officers had he been employed by the Company
on December 31, 1999.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Name and Principal Restricted Options LTIP All Other
Position Year Salary($) Bonus($) Stock Units($)(1) (Shares) Payouts($) Compensation(2)
-------- ---- --------- -------- ----------------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence A. Bossidy(3) 1999 $2,000,000 $5,000,000 -- -- -- $1,383,697
Chairman of the Board 1998 2,000,000 4,000,000 -- -- -- 451,119
1997 2,000,000 3,150,000 -- 1,500,000 -- 576,969
Michael R. Bonsignore(4) 1999 1,087,817 2,000,000 375,000 1,781,249 2,565,000 1,039,122
Chief Executive Officer
Giannantonio Ferrari(5) 1999 536,896 775,000 32,500 612,251 1,282,500 272,915
Chief Operating Officer and
Executive Vice President
Robert D. Johnson 1999 370,833 625,000 30,000 400,000 -- 36,469
Chief Operating Officer and 1998 267,917 300,000 -- 190,000 -- 31,505
Executive Vice President 1997 232,285 150,000 -- 40,000 -- 9,294
Peter M. Kreindler 1999 462,500 640,000 17,500 333,000 -- 386,986
Sr. Vice President and 1998 445,000 550,000 -- -- -- 105,705
General Counsel 1997 410,000 480,000 -- -- -- 54,301
Richard F. Wallman 1999 455,833 590,000 17,500 333,000 -- 352,478
Sr. Vice President and 1998 410,000 500,000 -- -- -- 79,136
Chief Financial Officer 1997 377,917 420,000 -- -- -- 44,129
Frederic M. Poses 1999 700,000 1,150,000 -- 125,000 -- 341,086
Former President and Chief 1998 600,000 1,000,000 -- 100,000 -- 206,948
Operating Officer 1997 510,000 735,000 -- -- -- 126,282
</TABLE>
- ---------
(1) Restricted unit awards, valued on the date of the award, entitle the holder
to receive one share of Common Stock for each unit when the unit vests. The
Committee has the discretion to pay all or part of such awards in cash. The
total number of units held and their value as of January 31, 2000 were as
follows: Mr. Bossidy, 250,000 ($12,000,000); Mr. Bonsignore, 375,000 units
($18,000,000); Mr. Ferrari, 32,500 units ($1,560,000); Mr. Johnson, 45,000
units ($2,160,000); Mr. Kreindler, 57,500 units ($2,760,000); Mr. Wallman,
67,500 units ($3,240,000); and Mr. Poses, 60,000 units ($2,880,000).
(2) Amounts shown for 1999 consists of matching contributions made by the
Company under the Savings Plan and Supplemental Savings Plan or by Honeywell
Inc. under its savings plans: for Mr. Bossidy, $160,008; Mr. Bonsignore,
$4,800; Mr. Johnson, $7,269; Mr. Kreindler, $37,002; Mr. Wallman, $19,784;
and Mr. Poses, $56,004; the value of life insurance premiums: for
Mr. Bossidy, $17,918; Mr. Bonsignore, $34,322; Mr. Johnson, $29,200;
Mr. Kreindler, $11,500; and Mr. Poses, $42,000; above-market interest earned
on deferred compensation: for Mr. Bossidy, $205,771; Mr. Kreindler, $88,484;
Mr. Wallman, $107,694; and Mr. Poses, $243,082; awards for contributions to
the merger of Honeywell and AlliedSignal: for Mr. Bossidy, $1,000,000;
Mr. Bonsignore, $1,000,000; Mr. Ferrari, $175,000; Mr. Kreindler, $250,000;
and Mr. Wallman, $225.000; $97,915 for relocation allowances in connection
with foreign assignments for Mr. Ferrari.
(3) Mr. Bossidy also served as Chief Executive Officer until December 1, 1999.
(4) Mr. Bonsignore became an executive officer on December 1, 1999.
(5) Mr. Ferrari became an executive officer on December 1, 1999.
16
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The stock options included in the following table were all granted with an
exercise price equal to 100% of the fair market value of the Common Stock on the
date of grant.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present
Name Granted(#) Fiscal Year ($/Sh) Date Value(6)
---- ---------- ----------- ------ ---- --------
<S> <C> <C> <C> <C> <C>
L. Bossidy........................... -- -- -- -- --
M. Bonsignore........................ 281,249(1) 1% $39.1666 02/16/09 $ 4,620,921
M. Bonsignore........................ 1,000,000(2) 5% $61.7800 11/30/09 $16,430,000
M. Bonsignore........................ 500,000(3) 2% $61.7800 11/30/09 $ 8,215,000
G. Ferrari........................... 140,625(1) 1% $39.1666 02/16/09 $ 2,310,469
G. Ferrari........................... 38,626(1) 0% $61.3166 02/18/07 $ 634,625
G. Ferrari........................... 325,000(4) 2% $63.0000 12/02/09 $ 5,339,750
G. Ferrari........................... 108,000(3) 1% $63.0000 12/02/09 $ 1,774,440
R. Johnson........................... 300,000(4) 1% $63.0000 12/02/09 $ 4,929,000
R. Johnson........................... 100,000(3) 0% $63.0000 12/02/09 $ 1,643,000
P. Kreindler......................... 100,000(5) 0% $41.4100 02/04/09 $ 1,643,000
P. Kreindler......................... 175,000(4) 1% $63.0000 12/02/09 $ 2,875,250
P. Kreindler......................... 58,000(3) 0% $63.0000 12/02/09 $ 952,940
R. Wallman........................... 100,000(5) 0% $41.4100 02/04/09 $ 1,643,000
R. Wallman........................... 175,000(4) 1% $63.0000 12/02/09 $ 2,875,250
R. Wallman........................... 58,000(3) 0% $63.0000 12/02/09 $ 952,940
F. Poses............................. 125,000(5) 1% $41.4100 02/04/09 $ 2,053,750
</TABLE>
- ---------
(1) Vested as of the Change of Control (9/1/99).
(2) Vests 40% on 12/31/00 and 30% on each of 12/31/01 and 12/31/02. Options,
excluding those originally granted by Honeywell Inc., are accompanied by
tandem limited stock appreciation rights, which are designed to provide the
executive with an economic benefit comparable to that available to all
shareowners in the event of a tender offer for Company shares, a change of
control or similar event.
(3) Vests 40% on April 1, 2001 if consolidated basic earnings per share of the
company increases at least 20% from 1999 to 2000; 30% on April 1, 2002 if
consolidated basic earnings per share of the company increases at least 17%
from 2000 to 2001; 30% on April 1, 2003 if consolidated basic earnings per
share of the company increases at least 16% from 2001 to 2002; and
notwithstanding the previous schedules, 100% on April 1, 2003 if cumulative
growth in consolidated basic earnings per share of the company is at least
53% for the three-year period ending December 31, 2002 over calendar year
1999.
(4) Vests 40% on 1/1/01 and 30% on each of 1/1/02 and 1/1/03.
(5) Vested 40% on 1/1/00 and will vest 30% on each of 1/1/01 and 1/1/02.
(6) Options are valued using a Black-Scholes option pricing model which assumes
a historic five-year average volatility of 25.23%, the average dividend
yield for the three years ended December 31, 1999 (1.3%), a 5.89% risk-free
rate of return (based on the average zero coupon five-year U.S. Treasury
note yield for the month of grant), and an expected option life of 5.0 years
based on past experience. No adjustments are made for non-transferability or
risk of forfeiture. Options will have no actual value unless, and then only
to the extent that, the Common Stock price appreciates from the grant date
to the exercise date. If the grant date present values are realized, total
shareowner value will have appreciated by approximately $13.0 billion, and
the value of the granted options reflected in the table will be less than
0.46% of the total shareowner appreciation.
17
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at FY-End(#) at FY-End($)
Acquired on Value --------------------------- ----------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
L. A. Bossidy............. 900,000 $39,878,650 2,520,000 1,500,000 $102,053,700 $33,371,250
M. R. Bonsignore.......... 118,010 5,127,778 1,377,312 1,500,000 34,014,017 --
G. Ferrari................ 81,786 2,046,162 292,460 433,000 4,477,421 --
R. D. Johnson............. 40,000 1,192,320 46,000 556,000 931,905 3,141,690
P. M. Kreindler........... 162,000 6,375,634 120,000 933,000 3,884,100 21,048,250
R. F. Wallman............. -- -- 214,000 883,000 7,237,795 19,429,875
F. M. Poses............... 410,000 22,357,554 295,000 1,085,000 10,650,113 39,215,488
</TABLE>
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total return on the
Common Stock to the total returns on the Standard & Poor's 500 Stock Index, the
Standard & Poor's Manufacturing (Diversified Companies) Index and a Composite
index of corporations. In light of the merger, the Company has chosen to replace
the Composite index with the Diversified Company index. The Composite index
combines the total returns on the published Dow Jones indices for the Aerospace
& Defense, Automobile Parts & Equipment Excluding Tire and Rubber Makers, and
Chemical Groups. As required by SEC rules, we are including both the Composite
index and the Diversified Company index in this proxy statement.
CUMULATIVE TOTAL RETURN
Based upon an initial investment of $100 on December 31, 1994
with dividends reinvested
[GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Honeywell 100 142 204 239 277 365
S&P 500'r' 100 138 169 226 290 351
S&P'r' Manufacturing
(Diversified) Index 100 141 194 231 268 329
Composite
Index 100 143 185 217 194 209
</TABLE>
18
<PAGE>
EMPLOYMENT AND TERMINATION ARRANGEMENTS
Mr. Bossidy's employment agreement with the Company provides for his
employment as Chairman of the Board through April 1, 2000 at a salary of
$2,000,000 per year, and a target annual incentive bonus of at least 80% of
salary. His employment agreement also provides for certain post-retirement
benefits which are described under 'Retirement Benefits.' The Company has
assumed obligations for certain life insurance policies and will be reimbursed
from the proceeds of the policies for premiums it pays; the value of these
premiums is reflected in the Summary Compensation Table.
Mr. Bonsignore's employment agreement provides for his employment as
Chairman and Chief Executive Officer through December 31, 2004. During the term
of the agreement, Mr. Bonsignore will have an annual salary of at least
$1,500,000 and, beginning in 2000, will have an annual target bonus equal to
100% of base salary. His agreement also provides for a one-time grant of stock
options and restricted units as described above, as well as certain
post-retirement benefits described under 'Retirement Benefits.' If his
employment is terminated without good cause, he will be entitled to a severance
payment of three times his annual salary and bonus.
When Mr. Ferrari became President of Honeywell Europe in 1992, he entered
into an employment agreement with Honeywell Europe which provided for certain
salary and benefits in accordance with Belgian law. Mr. Ferrari's current
position is considered to be an international assignment under his Belgian
employment contract; therefore, the contract remains in effect until his
retirement from the Company. As an executive of Honeywell Inc., Mr. Ferrari was
also a party to a change of control agreement, which remains in effect until
September 2002. Under this agreement, he is entitled to a lump sum payment of
three times his salary and target incentive bonus if either his employment is
terminated (other than for cause) or his duties are diminished.
When Mr. Poses left the Company in the fourth quarter of 1999 after 30 years
of service, he entered into an agreement with the Company. In general, the
agreement provided for salary and fringe benefits for November and December,
1999, and that his unvested stock options and unvested restricted units would
vest in accordance with their original terms.
Under the Severance Plan for Senior Executives, the current executive
officers named in the Summary Compensation Table (other than Messrs. Bonsignore
and Ferrari) would be entitled to payments equivalent to base salary and annual
incentive bonus (and continuation of certain benefits, such as group life and
medical insurance coverage) for a period of time if their employment is
terminated other than for 'gross cause' (which includes fraud and criminal
conduct). The period would be 36 months (but in no event beyond age 65),
provided that payments would be made in a lump sum following a change in
control. The Plan provides for an additional payment sufficient to eliminate the
effect of any applicable excise tax on severance payments in excess of an amount
determined under Section 280G of the Internal Revenue Code. Payments subject to
the excise tax would not be deductible by the Company.
RETIREMENT BENEFITS
The following table illustrates the estimated annual pension benefits which
would be provided on retirement at age 65 under the Company's Retirement Program
(the 'Pension Plan'), and an unfunded supplemental retirement plan (the
'Supplemental Plan'), after applicable deductions for Social Security benefits,
to salaried employees having specified average annual remuneration and years of
service.
PENSION TABLE
<TABLE>
<CAPTION>
Average Years of Service
Annual ----------------------------------------------------------
Remuneration 5 10 15 20 25 - 30
- ------------ - -- -- -- -------
<S> <C> <C> <C> <C> <C>
$ 600,000 $ 49,455 $109,455 $ 169,455 $ 229,455 $ 289,455
800,000 69,455 149,455 229,455 309,455 389,455
1,000,000 89,455 189,455 289,455 389,455 489,455
2,000,000 189,455 389,455 589,455 789,455 989,455
3,000,000 289,455 589,455 889,455 1,189,455 1,489,455
4,000,000 389,455 789,455 1,189,455 1,589,455 1,989,455
5,000,000 489,455 989,455 1,489,455 1,989,455 2,489,455
</TABLE>
19
<PAGE>
The benefit amounts shown in the Pension Table are computed on a straight
life annuity basis. At January 1, 2000, the following individuals had the
indicated number of years of credited service for pension purposes: Mr. Bossidy,
8; Mr. Bonsignore, 30; Mr. Poses, 30; Mr. Ferrari, 39; Mr. Johnson, 5; Mr.
Kreindler, 8; and Mr. Wallman, 4.
The amounts in the Salary and Bonus columns of the Summary Compensation
Table for 1999 would be included in computing remuneration for pension purposes.
Average annual remuneration under the Pension Plan is calculated based on the
highest paid 60 consecutive months of an employee's last 120 months of
employment.
Under their employment agreements, Messrs. Bossidy and Bonsignore are
entitled to receive during their lifetimes, commencing on retirement, Company
facilities and services comparable to those provided prior to their retirement,
and a retirement benefit equivalent to 60% of final average compensation (based
on their highest three years of salary and bonus) payable annually for life.
Benefits under the agreements will be reduced by any retirement benefits payable
under the Company's retirement and supplemental retirement plans, and under
certain circumstances, benefits payable under retirement plans of former
employers.
Mr. Ferrari is covered by the Belgium pension arrangement, which provides a
benefit of 55% of final average compensation after 30 years of service, through
a combination of the plan and equivalent pension plans in other countries. This
arrangement also provides for an additional benefit of 15% of final average
compensation which is funded by contributions from Mr. Ferrari.
20
<PAGE>
SHAREOWNER PROPOSALS
Shareowners have given the Company notice of their intention to introduce
the following proposals for consideration and action by the shareowners at the
Annual Meeting. The respective proponents have provided the proposed resolutions
and accompanying statements and the Company is not responsible for any
inaccuracies contained therein. For the reasons stated, the Board of Directors
does not support these proposals.
ITEM 3 -- SHAREOWNER PROPOSAL REGARDING CEO COMPENSATION
This proposal has been submitted by the Eleanora Halfman Trust, c/o Trillium
Asset Management Corporation, 711 Atlantic Avenue, Boston, Massachusetts 02111
(the owner of 700 shares of common stock).
-------------------
WHEREAS, during the period 1990-98, corporate profits rose 108%, the S&P 500
rose 224%, and CEO pay rose 481%. During the same period, the average
worker's pay rose 28%, barely more than inflation;
WHEREAS, the average large company CEO made 419 times more than the average
manufacturing worker in 1998 (Business Week). If the pay of the average
manufacturing worker had increased as fast as CEO pay between 1990 and 1998,
it would today be $110,399, rather than $29,267. If the minimum wage rose as
fast as CEO pay it would today be $22.08/hour, not $5.15/hour;
WHEREAS, though U.S. multinational corporations see themselves as global
companies, taking advantage of global labor markets, they continue to pay
their executives at levels far surpassing international standards. CEOs in
Germany, Japan, and the United Kingdom make well less than 50 times the pay
of average manufacturing workers;
WHEREAS, AlliedSignal's CEO made $14.1 million in 1998, 481 times the average
U.S. manufacturing worker and more than 2,800 times the average wage for
Mexican maquiladora workers (about $5,000 a year), a nation where
AlliedSignal continues to expand;
WHEREAS, AlliedSignal's efforts to cut costs have been disproportionately
focused on the factory floor, cutting more than 11,000 jobs since 1995, while
costs in the executive suite and the board room continue to climb.
WHEREAS, a growing body of research suggests that wide wage gaps within
organizations can undermine the firm's mission. A 1992 study by the Haas
School of Business at the University of California at Berkeley found that
firms with the widest pay gaps experienced lower quality. A study published
in the Journal of Organizational Behavior found that high levels of executive
compensation generated cynicism among white-collar workers;
WHEREAS, finance magnate J. P. Morgan espoused the opinion that CEOs should
not make more than 20 times the compensation of the average employee. Modern
management consultant Peter Drucker has similarly argued for CEO pay no
higher than 25 times the average worker;
THEREFORE, BE IT RESOLVED, that shareholders urge the Board of Directors to
address the issue of runaway remuneration of CEOs and the widening gap between
highest and lowest paid workers by:
1) Establishing a cap on CEO compensation expressed as a multiple of pay of
the lowest paid worker at Honeywell International;
2) Preparing a report for shareholders explaining the determinations used in
order to determine the appropriate cap.
SUPPORTING STATEMENT: Last year, this resolution drew the support of 12% of
AlliedSignal's shareholders. With the transition in CEO leadership comes the
opportunity for a fresh start on executive pay policies. Through the
financial discipline of a pay cap, we hope our company can help reverse a
long-standing trend that is neither good for business nor society. Please
vote YES.
BOARD OF DIRECTORS' RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
The determination of the appropriate level of compensation for the Company's
Chief Executive Officer is a key responsibility of the Board of Directors and
its Management Development and
21
<PAGE>
Compensation Committee. As discussed above in the 'Report on Executive
Compensation,' the directors consider a number of factors in establishing CEO
compensation.
To compete in an increasingly complex global marketplace, the Company must
attract and retain the best leadership talent. The Board believes that a cap,
whether internally or externally imposed, would limit its ability to secure the
leadership necessary to continue the Company's preeminent business results.
Therefore, the Board believes it would not be in the best interest of the
shareowners to establish an arbitrary cap on the compensation paid to the Chief
Executive Officer. Doing so could unduly inhibit the Company's flexibility in
providing compensation arrangements needed to reward and retain a current Chief
Executive Officer in a competitive environment or to attract and motivate other
Chief Executive Officers in the future.
FOR THE REASONS STATED ABOVE, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.
ITEM 4 -- SHAREOWNER PROPOSAL REGARDING
ANNUAL ELECTION OF DIRECTORS
This proposal has been submitted by John Chevedden, 2215 Nelson Ave., No.
205, Redondo Beach, California 90278 (the holder of 884 shares of common stock).
-------------------
RESOLVED: ADOPT SHAREHOLDER PROPOSAL THAT WON GREATER THAN 49% APPROVAL IN
BOTH 1999 AND 1998: ANNUAL ELECTION OF ALL DIRECTORS
Elect the entire Board of Directors each year. Honeywell International
shareholders request the Board of Directors take all the required steps.
Reason: Proper oversight of the company's new management.
This resolution includes the requirement that any future change in the
frequency of director election be submitted to a shareholder vote as a
stand-alone resolution.
SUPPORTING STATEMENT: This resolution won greater than 49%* approval by
AlliedSignal shareholders in both 1998 and 1999. Honeywell Inc. had annual
election of all directors.
Annual election of all directors is increasingly important for effective
oversight of the company's new management. Institutional investors
increasingly support annual election of all directors.
A record 17 shareholder proposals for annual election of all directors
won majority vote in 1998. Annual election of directors is a core policy in
the Council of Institutional Investors Shareholder Bill of Rights.
Honeywell International directors are further isolated from performance
accountability by a 80% vote requirement to remove directors. A 57%* majority
of shares voted to end this 80% barrier at the 1998 Allied shareholder
meeting.
Note also the pattern of heavy interlocking board commitments of Honeywell
International directors:
<TABLE>
<CAPTION>
Company Interlocking Allied Directors from 1999 proxy
------- ---------------------------------------------
<S> <C>
Bell Atlantic Seidenberg, J. Stafford
American Home Products Seidenberg and J. Stafford again
(Seidenberg, full-time CEO Sits on 4 outside boards)
Chase Manhattan Sigler, J. Stafford, Becherer
Deere Becherer, J. Stafford (J. Stafford's 4th interlock)
Schering-Plough Becherer, Luciano
</TABLE>
Corporate governance experts say Interlocking directors tend to look out
for each other, rather than shareholders.
Additionally, Mr. Bossidy is a director for J.P. Morgan. This is a
conflict: J.P. Morgan gave 'Independent' approval of the Allied-Honeywell
merger.
* 49% and 57% of shareholder votes cast.
22
<PAGE>
To enhance board oversight of the company's new management, vote for:
ANNUAL ELECTION OF ALL DIRECTORS
YES ON 4
BOARD OF DIRECTORS RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
The Company's current system of electing directors by classes was approved
by the shareowners in 1985. Under this method, as provided in the Company's
Certificate of Incorporation and By-laws, approximately one-third of the
directors are elected annually by the shareowners.
The same proponent has presented a proposal to eliminate the classified
Board in each of the last four years. The Board of Directors has again reviewed
the issues raised in the proposal and, for the reasons indicated below,
continues to believe that the classified Board best serves the Company and its
shareowners.
With the classified Board, the likelihood of continuity and stability in the
Board's business strategies and policies is enhanced since generally two thirds
of the directors at all times will have had prior experience and familiarity
with the business and affairs of the Company. This enables the directors to
build on past experience and plan for a reasonable period into the future.
The classified Board is intended to encourage persons who may seek to
acquire control of the Company to initiate such action through negotiations with
the Board. Otherwise, at least two meetings of shareowners would generally be
required to replace a majority of the Board. By reducing the threat of an abrupt
change in the composition of the entire Board, classification of directors would
provide the Board with an adequate opportunity to fulfill its duties to the
Company's shareowners to review any takeover proposal, study appropriate
alternatives and achieve the best results for all shareowners. The Board
believes that a classified Board enhances the ability to negotiate favorable
terms with the proponent of an unfriendly or unsolicited proposal, but that it
does not preclude takeover offers.
The Board believes that directors elected to a classified Board are no less
accountable to shareowners than they would be if all directors were elected
annually. Since at least four directors must stand for election each year, the
shareowners have the opportunity annually to vote against management. The Board
addresses many important issues during the year and it disagrees with any
suggestion that its attention to these issues is in any way affected by the
timing of elections.
The Board also disagrees with the proponent's suggestion that its oversight
is in question because of directors' service on outside boards; on the contrary,
such service can be beneficial to the Company since it provides perspective and
experience that enhances a director's contributions to the Board's
deliberations. Further, the Board disputes the inference that service by certain
of the Company's directors on common outside boards negatively impacts their
ability to act in the best interest of the Company's shareowners.
Adoption of this proposal would not automatically eliminate the classified
Board. Further action by the shareowners would be required to amend the By-laws
and the Certificate of Incorporation. Under these documents, an 80% vote of the
outstanding shares would be required for approval. Under Delaware law, an
amendment to the Certificate of Incorporation requires a recommendation from the
Board of Directors prior to submission to shareowners. While the Board would
consider such an amendment, it would do so consistent with its fiduciary duty to
act in a manner it believes to be in the best interest of the Company and its
shareowners.
FOR THE REASONS STATED ABOVE, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.
23
<PAGE>
ITEM 5 -- SHAREOWNER PROPOSAL REGARDING
SHAREOWNER VOTING PROVISIONS
This proposal has been submitted by Harold J. Mathis, Jr., P.O. Box 1209,
Richmond, Texas 77406-1209 (owner of 1,292 shares of common stock).
-------------------
RESOLVED: ENACT THE 1998 SHAREHOLDER RESOLUTION ADOPTED BY 57%* VOTE OF
SHAREHOLDERS: RETURN TO SIMPLE MAJORITY VOTE. Shareholders request Honeywell
International delete all requirements for more than a 51%-majority vote. This
includes Honeywell International's monumental 80%-supermajority requirement.
Reinstating simple majority vote is particularly important to hold Honeywell
International's new management accountable. The new management is inexperienced
in the integration of a $45 Billion company.
AlliedSignal was a niche acquisition company. Now the Honeywell merger
switches the company into the megamerger category. This will require greater
scrutiny by shareholders and directors. Scrutiny of megamergers is supported by
the Aviation Week Aug. 10, 1998, p. 45 headline, 'Efficiency Gains Elude Biggest
Merger Survivors.'
'Megamergers among the largest U.S. contractors in the mid-1990s have not
resulted in significantly more competitive companies thus far -- contrary to
what some U.S. executives continue to profess (AW&ST Aug. 10, 1998, p. 45),'
said Aviation Week, May 31, 1999, p. 45.
WHY RETURN TO SIMPLE MAJORITY VOTE?
The bi-partisan National Conference of State Legislatures urged States to
ban super-majority rules.
Major pension funds, including those holding Honeywell International stock,
declare that super-majority rules are not in the best interest of
shareholders.
The Honeywell International super-majority provision means that if the vast
majority of shareholders (but less than an overwhelming 80%) vote to change
certain key rules, management can ignore the majority.
THIS RESOLUTION ACHIEVED AN OUTSTANDING 57%* APPROVAL AT THE 1998
SHAREHOLDER MEETING. Shareholders do not benefit, particularly from the new,
untested management combined with directors entrenched by a 80%-vote required
for DIRECTOR REMOVAL WITH GOOD CAUSE.
These news reports highlight challenges facing the new management:
Honeywell International could face $400 million to $600 million in
severance costs to eliminate facilities and cut jobs. Source: Securities
and Exchange Commission documents.
Mr. Bossidy said AlliedSignal will be responsible for lawsuits against
Honeywell. It will be less than $750 million.
Newark Star Ledger Sept. 2, 1999
A federal jury orders Honeywell to pay $250 million in damages to rival
Litton Industries in antitrust-monopoly case.
Wall Street Journal Dec. 10, 1998
FAA urged to require the earliest replacement of Honeywell terminal parts
used on 747s as a result of TWA flight 800 crash investigation.
Wall Street Journal Apr. 8, 1998
Pentagon audit said AlliedSignal overcharged the military -- up to 200%.
Los Angeles Times June 5, 1999
Mr. Lawrence Bossidy said: 'I declare that this simple majority proposal has
been adopted.' However, Mr. Bossidy has not acted, even after a formal request
by the Council of Institutional Investors (www.ciicentral.com). Honeywell
International is 65% owned by institutional investors.
Vote yes to monitor the company's new management -- untested in megamergers.
*57% of shareholder votes cast.
24
<PAGE>
RETURN TO SIMPLE MAJORITY VOTE
YES ON 5
BOARD OF DIRECTORS' RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
Most proposals submitted to a vote of the Company's shareowners, whether by
management or the shareowners, currently require a vote of a majority of the
shares represented at a meeting, whether in person or by proxy. Consistent with
applicable Delaware law, the Company's shareowners in 1985 approved a
Certificate of Incorporation and By-laws that contained provisions requiring the
vote of 80% of the outstanding shares for certain actions. These limited
provisions relate to the elimination of the classified Board of Directors,
removal of directors, the calling of special meetings of shareowners and the
requirement that shareowner action be taken at a meeting.
These special voting provisions of the Company's Certificate of
Incorporation and By-laws are intended to provide protection for all shareowners
against self-interested actions by one or a few large shareowners. Similar
provisions are included in the governing documents of many public corporations.
Such provisions are intended to encourage a person making an unsolicited bid for
the Company to negotiate with the Board of Directors to reach terms that are
fair and provide the best results for all shareowners. Without such provisions,
it may be possible for the holders of a majority of the shares represented at a
meeting to take actions that would give them effective control of the Company
without negotiating with the Board to achieve the best results for the other
shareowners.
Adoption of this proposal would not in itself effectuate the changes
contemplated by the proposal. Further action by the shareowners would be
required to amend the By-laws and the Certificate of Incorporation. Under these
documents, an 80% vote of the outstanding shares would be required for approval.
Under Delaware law, amendments to the Certificate of Incorporation require a
recommendation from the Board of Directors prior to submission to shareowners.
While the Board would consider such amendments, it would do so consistent with
its fiduciary duty to act in a manner it believes to be in the best interest of
the Company and its shareowners.
FOR THE REASONS STATED ABOVE, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.
25
<PAGE>
OTHER INFORMATION
SHAREOWNER PROPOSALS FOR 2001 ANNUAL MEETING
In order for a shareowner proposal to be considered for inclusion in
Honeywell International's proxy statement for the 2001 Annual Meeting, the
proposal must be received at the Company's offices no later than
November 13, 2000. Securities and Exchange Commission Rule 14a-8 contains
standards as to what shareowner proposals are required to be included in a
proxy statement.
If a shareowner intends to present a proposal for consideration at the 2001
Annual Meeting outside the processes of SEC Rule 14a-8, the Company must
receive notice of such proposal on or before January 27, 2001. Otherwise
the proposal will be considered untimely under SEC rules and the Company's
proxies will have discretionary voting authority with respect to such
proposal, if presented at the meeting, without including information
regarding the proposal in its proxy materials.
Any shareowner who wishes to submit a shareowner proposal, should send it to
the Vice President and Secretary, Honeywell, 101 Columbia Road, Morris Township,
New Jersey 07962.
DIRECTOR NOMINATIONS
The Company's By-laws provide that any shareowner of record entitled to vote
at the Annual Meeting who intends to make a nomination for director, must notify
the Secretary of the Company in writing not more than 60 days and not less than
30 days prior to the meeting. The notice must meet other requirements contained
in the By-laws, a copy of which can be obtained from the Secretary of the
Company at the address set forth above.
EXPENSES OF SOLICITATION
Honeywell pays the cost of preparing, assembling and mailing this
proxy-soliciting material. In addition to the use of the mail, proxies may be
solicited by Honeywell officers and employees by telephone or other means of
communication. Honeywell pays all costs of solicitation, including certain
expenses of brokers and nominees who mail proxy material to their customers or
principals. In addition, Georgeson & Company Inc. has been retained to assist in
the solicitation of proxies for the 2000 Annual Meeting of Shareowners at a fee
of approximately $12,500 plus associated costs and expenses.
By Order of the Board of Directors,
Kathleen M. Gibson
Vice President and Secretary
March 13, 2000
26
<PAGE>
DIRECTIONS TO COMPANY HEADQUARTERS
101 COLUMBIA ROAD, MORRIS TOWNSHIP, N.J.
[MAP OF LOCATION]
FROM RTE. 80 (EAST OR WEST) AND RTE. 287 SOUTH:
Take Rte. 80 to Rte. 287 South to Exit 37 (Rte. 24 East -- Springfield). Follow
Rte. 24 East to Exit 2A (Rte. 510 West -- Morristown), which exits onto Columbia
Road. At second traffic light, make left into Honeywell.
FROM RTE. 287 NORTH:
Take Rte. 287 North to Exit 37 (Rte. 24 East -- Springfield). Follow Rte. 24
East to Exit 2A (Rte. 510 West -- Morristown), which exits onto Columbia Road.
At second traffic light, make left into Honeywell.
FROM NEWARK INTERNATIONAL AIRPORT:
Take Rte. 78 West to Rte. 24 West (Springfield -- Morristown). Follow Rte. 24
West to Exit 2A (Rte. 510 West -- Morristown), which exits onto Columbia Road.
At second traffic light, make left into Honeywell.
A-1
<PAGE>
APPENDIX 1
PROXY CARD
[LOGO]
Annual Meeting of Shareowners
101 Columbia Road
Morris Township, New Jersey
May 1, 2000
10:00 A.M.
You May Vote by
the Internet, by Telephone or by Mail
(see instructions on reverse side)
YOUR VOTE IS IMPORTANT
Detach proxy card here if you are not voting by the Internet or by telephone.
_____________________________________________________________________________
[LOGO] P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
HONEYWELL INTERNATIONAL INC. ANNUAL MEETING OF SHAREOWNERS -- MAY 1, 2000
The undersigned hereby appoints MICHAEL R. BONSIGNORE, PETER M. KREINDLER and
KATHLEEN M. GIBSON as proxies (each with power to act alone and with full
power of substitution) to vote, as designated herein, all shares the
undersigned is entitled to vote at the Annual Meeting of Shareowners of
Honeywell International Inc. to be held on May 1, 2000, and at any and all
adjournments thereof. The proxies are authorized to vote in their discretion
upon such other business as may properly come before the Meeting and any and
all adjournments thereof.
-------------------
Your vote for the election of Directors and the other proposals described
in the accompanying Proxy Statement may be specified on the reverse side. The
nominees for Director are: Hans W. Becherer, Gordon M. Bethune, Jaime Chico
Pardo and Ann M. Fudge.
<TABLE>
<S> <C>
NOTE: After signing, please insert this Proxy in HONEYWELL INTERNATIONAL INC.
the enclosed envelope so that the address at P.O. BOX 11004
right shows through the window. NEW YORK, N.Y. 10203-0004
</TABLE>
IF PROPERLY SIGNED, DATED AND RETURNED, THIS PROXY WILL BE VOTED AS SPECIFIED
ON THE REVERSE SIDE OR, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR, "FOR" PROPOSAL 2 AND "AGAINST"
PROPOSALS 3 THROUGH 5.
(SPECIFY CHOICES AND SIGN ON REVERSE SIDE)
<PAGE>
[LOGO] YOUR VOTE IS IMPORTANT
VOTE BY INTERNET/TELEPHONE
24 HOURS A DAY, 7 DAYS A WEEK
<TABLE>
<S> <C> <C> <C> <C>
INTERNET TELEPHONE MAIL
http://proxy.shareholder.com/hon 1-800-650-0150
GO TO THE WEBSITE ADDRESS LISTED ABOVE. USE ANY TOUCH-TONE TELEPHONE. MARK, SIGN AND DATE YOUR
HAVE YOUR PROXY CARD READY. OR THIS IS A TOLL-FREE NUMBER. OR PROXY CARD.
ENTER YOUR CONTROL NUMBER LOCATED IN HAVE YOUR PROXY CARD READY. DETACH YOUR PROXY CARD.
THE BOX BELOW. ENTER YOUR CONTROL NUMBER LOCATED IN RETURN YOUR PROXY CARD IN
FOLLOW THE SIMPLE INSTRUCTIONS THAT THE BOX BELOW. THE POSTAGE-PAID ENVELOPE
APPEAR ON YOUR COMPUTER SCREEN. FOLLOW THE SIMPLE RECORDED INSTRUCTIONS. PROVIDED.
</TABLE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------- ----------------------------------------------
Your Internet or telephone vote authorizes the named Proxies to vote your shares If you voted by the Internet or by telephone,
in the same manner as if you marked, signed and returned your Proxy Card. do not return your proxy card by mail.
- --------------------------------------------------------------------------------- ----------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
The Honeywell Inc Savings and Stock Ownership Plan requires that the Trustee
receive voting instructions for shares held under the plan by April 26, 2000.
To meet this requirement, either complete this card and mail it to be received
no later than April 26, or vote by Telephone or via the Internet by April 26.
After April 26, your voting instructions for Plan shares cannot be revoked.
Also, you may not vote Plan shares in person at the meeting. The Trustee is
authorized to vote the Plan shares for which instructions have been given on
any other business that may come before the meeting. The Bank of New York will
tally the vote on behalf of the Trustee.
- --------------------------------------------------------------------------------
1-800-650-0150
CALL TOLL-FREE TO VOTE
---------------------------------
CONTROL NUMBER
FOR INTERNET/TELEPHONE VOTING
---------------------------------
THE INTERNET AND TELEPHONE VOTING FACILITIES WILL CLOSE AT 9:00 A.M. E.D.T.
ON MAY 1, 2000.
Please complete (X) in blue or black ink.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
A vote "FOR" Proposals 1 and 2 is recommended by the Board of Directors:
1. Election of Directors (H.W. Becherer, G.M. Bethune, J.C. Pardo and A.M. Fudge)
FOR all [ ] WITHHOLD AUTHORITY [ ] EXCEPTION [ ]
nominees to vote for all nominees (see instruction)
Instruction: To withhold authority to vote for any individual nominee(s), mark
the "Exception" box and write the name(s) on the line below.
______________________________________________________________________________
2. Appointment of Independent Accountants
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- --------------------------------------------------------------------------------
A vote "AGAINST" Proposals 3 through 5 is recommended by the Board of Directors:
3. Shareowner proposal regarding CEO compensation
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Shareowner proposal regarding the annual election of directors
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Shareowner proposal regarding shareowner voting provisions
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- --------------------------------------------------------------------------------
</TABLE>
Please complete (X) if you want your vote kept confidential under
the policy described in the Proxy Statement. [ ]
<TABLE>
<S> <C>
Please sign exactly as name appears on this Proxy. Joint
owners should all sign. Executors, administrators, trustees
and others acting in a representative capacity should indicate
title when signing.
Dated _________________________________, 2000
Signed ______________________________________
______________________________________
Please sign, date and return this Proxy promptly in
the enclosed envelope.
</TABLE>
I have included comments, or a change of address. [ ]
I do not wish to receive future annual reports for this account. [ ]
I plan to attend the annual meeting. [ ]
I agree to access future proxy statements and annual
reports electronically. [ ]
3111
<PAGE>
APPENDIX 2
SAVINGS PLAN INSTRUCTION CARD
YOU MAY VOTE TOLL-FREE BY TELEPHONE
OR BY INTERNET
(OR BY COMPLETING THE VOTING INSTRUCTION FORM BELOW
AND RETURNING IT BY MAIL)
TO VOTE BY TELEPHONE OR INTERNET, USE THE CONTROL NUMBER IN THE BOX BELOW
YOUR VOTE MUST BE RECEIVED ON OR BEFORE 5:00 P.M. E.D.T. ON APRIL 26, 2000
<TABLE>
<S> <C>
Call Toll-Free YOUR CONTROL NUMBER
on a Touch-Tone Telephone To vote by Internet, have this form available
24 hours a day, 7 days a week and follow the simple directions that appear
1-888-216-1304 on your computer screen. Internet voting
site:
Have this form available when you call the WWW.DIRECTVOTE.COM
toll-free number. Then, just enter your
control number and follow the recorded
instructions.
(FOR MAILING, DETACH AT THE PERFORATION BELOW)
</TABLE>
- --------------------------------------------------------------------------------
REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
HONEYWELL INTERNATIONAL INC.
PURSUANT TO THE
ALLIEDSIGNAL SAVINGS PLAN
ALLIEDSIGNAL THRIFT PLAN
VERICOR POWER SYSTEMS SAVINGS PLAN
AND
ALLIEDSIGNAL TRUCK BRAKE SYSTEMS COMPANY SAVINGS PLAN (THE 'PLANS')
YOUR CONTROL NUMBER
--------------
The undersigned hereby instructs State Street Bank and Trust Company,
Trustee under the Plans, to vote, as designated herein, all shares of common
stock with respect to which the undersigned is entitled to instruct the Trustee
as to voting under the Plans at the Annual Meeting of Shareowners of Honeywell
International Inc. to be held on May 1, 2000, and at any and all adjournments
thereof. The Trustee is also authorized to vote such shares in connection with
the transaction of such other business as may properly come before the Meeting
and any and all adjournments thereof.
Your vote for the election of Directors and the other proposals described
in the accompanying Proxy Statement may be specified on the reverse side. The
nominees for Director are: (01) Hans W. Becherer, (02) Gordon M. Bethune,
(03) Jaime Chico Pardo and (04) Ann M. Fudge.
IF THIS CARD IS PROPERLY SIGNED AND RETURNED, THE SHARES WILL BE VOTED AS
SPECIFIED HEREIN OR, IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED 'FOR' THE
ELECTION OF ALL NOMINEES FOR DIRECTOR, 'FOR' PROPOSAL 2 AND 'AGAINST'
PROPOSALS 3 THROUGH 5. THE TRUSTEE WILL VOTE SHARES AS TO WHICH NO
INSTRUCTIONS ARE RECEIVED IN THE SAME RATIO AS SHARES WITH RESPECT TO WHICH
INSTRUCTIONS HAVE BEEN RECEIVED FROM OTHER PARTICIPANTS IN THE PLANS.
<PAGE>
TO VOTE TOLL-FREE BY TELEPHONE OR BY INTERNET, SEE INSTRUCTIONS ON REVERSE SIDE.
OR
COMPLETE, SIGN AND DATE THE FORM BELOW, DETACH AT THE PERFORATION, AND MAIL
PROMPTLY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[X] Please mark votes as in the example in black or blue ink.
- --------------------------------------------------------
A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED
BY THE BOARD OF DIRECTORS:
- --------------------------------------------------------
1. Election of Directors
NOMINEES:
(01) H. W. Becherer, (02) G.M. Bethune, (03) J.C. Pardo, (04) A.M. Fudge
<TABLE>
<S> <C> <C>
FOR WITHHOLD AUTHORITY
ALL NOMINEES To Vote for all Nominees EXCEPTION
[ ] [ ] [ ]
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S),
MARK THE 'EXCEPTION' BOX AND WRITE THE NAMES(S) ON THE LINE BELOW.
--------------------------------------------------------------------
2. Appointment of Independent Accountants.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
</TABLE>
- --------------------------------------------------------
A VOTE 'AGAINST' PROPOSALS 3 TO 5
IS RECOMMENDED BY THE BOARD OF DIRECTORS:
- --------------------------------------------------------
3. Shareowner proposal regarding CEO compensation.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Shareowner proposal regarding the annual
election of directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Shareowner proposal regarding shareowner voting provisions.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
</TABLE>
- ----------------------------------------------
SIGNATURE
(PLEASE SIGN YOUR NAME EXACTLY AS IMPRINTED. DO NOT PRINT.)
DATE: ___________________________, 2000
<PAGE>
APPENDIX 3
[Logo]
- --------------------------------------------------------------------------------
Michael R. Bonsignore
Chief Executive Officer
March 13, 2000
Dear Plan Participant:
I am enclosing with this letter a meeting notice, proxy statement and Annual
Report for the 2000 Annual Meeting of Shareowners. As a savings plan
participant, you are entitled to instruct the Trustee, State Street Bank and
Trust Company, how to vote the Honeywell shares attributable to your plan
account. All votes are important, and I urge you to exercise your right to vote.
The proxy statement includes the proposals to be voted on, as well as the
recommendations of the Board of Directors.
A card requesting your confidential voting instructions is enclosed for your
use. If you prefer, you can also vote via the Internet or by telephone. Simply
follow the instructions on the proxy card. However, if you vote by the Internet
or by telephone, do not return your proxy card by mail.
If you own Honeywell shares other than through the savings plans, you will
receive separate voting instructions for those shares.
Sincerely,
MICHAEL R. BONSIGNORE
Chief Executive Officer
Enclosures
STATEMENT OF DIFFERENCES
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The registered trademark symbol shall be expressed as..................... 'r'
