8-KMaterial AgreementsExhibits & Filings

HONEYWELL INTERNATIONAL INC 8-K Report, Material Agreement (Feb 8, 2005)

Filed February 8, 2005For Securities:HONHONIV

Summary

Honeywell International Inc. (HON) filed an 8-K on February 7, 2005, detailing actions taken by its Management Development and Compensation Committee on February 2, 2005, regarding executive compensation for 2005. The committee approved the 2005 financial objectives and their weightings for determining incentive compensation. Key performance metrics for the incentive compensation pool and individual awards include Earnings Per Share (EPS) and free cash flow, with equal weighting for both at the corporate level. The plan also incorporates relative EPS growth performance against a peer group of 36 S&P 500 companies. Further, the report outlines the structure for a long-term, cash-based compensation program (Growth Plan) for the 2005-2006 performance cycle, which will be based on equal weightings of revenue growth and return on investment, with a minimum annual EPS growth threshold required for payout. The filing also discloses stock option grants and Growth Plan Unit awards to executive officers, aligning executive incentives with company performance and shareholder value creation.

Key Highlights

  • 12005 financial objectives and weightings for executive incentive compensation have been approved.
  • 2Key performance metrics for 2005 incentive compensation include Earnings Per Share (EPS) and free cash flow, with equal weighting.
  • 3Executive incentive compensation pool will be adjusted based on Honeywell's relative EPS growth compared to 36 peer companies.
  • 4Executive bonus targets range from 65% to 125% of base salary, with potential awards from 0% to 200% of target.
  • 5Long-term Growth Plan (2005-2006) will be based on equally weighted revenue growth and return on investment, requiring a minimum EPS growth threshold.
  • 6Stock options have been granted to executive officers, with specific amounts disclosed for each.
  • 7Growth Plan Units for the 2005-2006 performance cycle were also awarded to executive officers, equal to 10% of their stock options.

Frequently Asked Questions

The primary financial metrics for determining executive bonuses in 2005 are Earnings Per Share (EPS) and free cash flow, which are equally weighted at the corporate level. For individual business groups, net income and free cash flow are used.

Honeywell's executive compensation is linked to relative performance through its incentive compensation plan. The overall incentive compensation pool is subject to adjustment based on Honeywell's EPS growth performance compared to a pre-established group of 36 peer companies within the Standard & Poor's 500 Index.

The long-term incentive plan, referred to as the 'Growth Plan,' for the 2005-2006 performance cycle is a cash-based program. Payouts will be based on the achievement of specified financial objectives for revenue growth and return on investment, each weighted equally. Additionally, a minimum annual EPS growth over the performance cycle is required for any awards to be payable.

Yes, the filing discloses that stock options have been granted to executive officers, with specific quantities detailed for each. Additionally, executive officers received Growth Plan Units for the 2005-2006 performance cycle, with the number of units being equal to 10% of the stock options awarded to each executive.