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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-K
               [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2000
                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the transition period from    to

                         Commission file number 1-8974

                          HONEYWELL INTERNATIONAL INC.

             (Exact name of registrant as specified in its charter)

                                                          
               DELAWARE                                                   22-2640650
- ---------------------------------------                      ------------------------------------
    (State or other jurisdiction of                                    (I.R.S. Employer
    incorporation or organization)                                   Identification No.)

           101 Columbia Road
             P.O. Box 4000
        Morristown, New Jersey                                            07962-2497
- -----------------------------------------                    ------------------------------------
(Address of principal executive offices)                                  (Zip Code)

Registrant's telephone number, including area code (973)455-2000
Securities registered pursuant to Section 12(b) of the Act:

                                                          
                                                                    Name of Each Exchange
          Title of Each Class                                        on Which Registered
- ---------------------------------------                      ------------------------------------
Common Stock, par value $1 per share*                              New York Stock Exchange
                                                                    Chicago Stock Exchange
                                                                       Pacific Exchange
9 7/8% Debentures due June 1, 2002                                 New York Stock Exchange
9.20% Debentures due February 15, 2003                             New York Stock Exchange
Zero Coupon Serial Bonds due 2009                                  New York Stock Exchange
9 1/2% Debentures due June 1, 2016                                 New York Stock Exchange

- ---------
*  The common stock is also listed for trading on the London stock exchange.

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ]

The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $38.2 billion at December 31, 2000.

There were 807,291,445 shares of Common Stock outstanding at December 31, 2000.

________________________________________________________________________________
________________________________________________________________________________

                               TABLE OF CONTENTS

          ITEM                                                                                             PAGE
          ----                                                                                             ----
                                                                                                     
Part I.   1  Business....................................................................................    1
          2  Properties..................................................................................   10
          3  Legal Proceedings...........................................................................   10
          4  Submission of Matters to a Vote of Security Holders.........................................   10

Part II.  5  Market for Registrant's Common Equity and Related Stockholder Matters.......................   11
          6  Selected Financial Data.....................................................................   11
          7  Management's Discussion and Analysis of Financial Condition and Results of Operations.......   12
          7A  Quantitative and Qualitative Disclosure About Market Risk..................................   22
          8  Financial Statements and Supplementary Data.................................................   22
          9  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........   55

Part III. 10  Directors and Executive Officers of the Registrant.........................................   55
          11  Executive Compensation.....................................................................   58
          12  Security Ownership of Certain Beneficial Owners and Management.............................   61
          13  Certain Relationships and Related Transactions.............................................   62

Part IV.  14  Exhibits, Financial Statement Schedules, and Reports on Form 8-K...........................   63

Signatures...............................................................................................   64

- ---------

    This report contains certain statements that may be deemed 'forward-looking
statements' within the meaning of Section 21E of the Securities Exchange Act of
1934. All statements, other than statements of historical fact, that address
activities, events or developments that we or our management intends, expects,
projects, believes or anticipates will or may occur in the future are
forward-looking statements. Such statements are based upon certain assumptions
and assessments made by our management in light of their experience and their
perception of historical trends, current conditions, expected future
developments and other factors they believe to be appropriate. The
forward-looking statements included in this report are also subject to a number
of material risks and uncertainties, including but not limited to economic,
competitive, governmental and technological factors affecting our operations,
markets, products, services and prices. Such forward-looking statements are not
guarantees of future performance and actual results, developments and business
decisions may differ from those envisaged by such forward-looking statements.

                                      i

                                    PART I.

ITEM 1. BUSINESS

    On October 22, 2000, Honeywell entered into a merger agreement with General
Electric Company (GE). Under the terms of the merger agreement, each share of
Honeywell common stock will be exchangeable for 1.055 shares of GE common stock
at the effective time of the merger, with fractional shares paid in cash, and
Honeywell will become a wholly owned subsidiary of GE. The transaction was
approved by Honeywell's shareowners on January 10, 2001, and it remains subject
to regulatory reviews. GE and Honeywell are working with regulatory agencies to
complete the required reviews so that the transaction can close as early as
possible in 2001.

MAJOR BUSINESSES

    Honeywell is a diversified technology and manufacturing company, serving
customers worldwide with aerospace products and services, control technologies
for buildings, homes and industry, automotive products, power generation
systems, specialty chemicals, fibers, plastics and electronic and advanced
materials. Our operations are conducted by strategic business units, which have
been aggregated under four reportable segments: Aerospace Solutions, Automation
& Control, Performance Materials and Power & Transportation Products. Financial
information related to our reportable segments is included in 'Item 8. Financial
Statements and Supplementary Data' in Note 24 of Notes to Financial Statements.

    Following is a description of our strategic business units:

STRATEGIC
BUSINESS UNITS       PRODUCT CLASSES             MAJOR PRODUCTS/SERVICES    MAJOR CUSTOMERS/USES            KEY COMPETITORS
- --------------       ---------------             -----------------------    --------------------            ---------------
                                                                                                
AEROSPACE SOLUTIONS
Engines &            Turbine propulsion          TFE731 turbofan            Business, regional              Pratt & Whitney
Systems              engines                     TPE331 turboprop            and military trainer aircraft   Canada
                                                 TFE1042 turbofan           Commercial and military         Rolls Royce/
                                                 F124 turbofan               helicopters                     Allison
                                                 LF502 turbofan             Military vehicles               Turbomeca
                                                 LF507 turbofan             Commercial and military         Williams
                                                 CFE738 turbofan             marine craft
                                                 AS907 turbofan
                                                 T53, T55 turboshaft
                                                 LT101 turboshaft
                                                 T800 turboshaft
                                                 TF40 turboshaft
                                                 TF50 turboshaft
                                                 AGT1500 turboshaft
                                                 Retrofits
                                                 Repair, overhaul and
                                                  spare parts
                     ----------------------------------------------------------------------------------------------------------
                     Auxiliary power units       Airborne auxiliary         Commercial, regional,           Pratt & Whitney
                     (APUs)                       power units                business and                    Canada
                                                 Jet fuel starters           military aircraft              Sundstrand Power
                                                 Secondary power            Ground power                     Systems
                                                  systems
                                                 Ground power units
                                                 Repair, overhaul and
                                                  spare parts
                     ----------------------------------------------------------------------------------------------------------
                     Industrial power            ASE 8 turboshaft           Ground based                    European Gas
                                                 ASE 40/50                   utilities, industrial           Turbines
                                                  turboshaft                 or mechanical                  Rolls Royce/
                                                                             drives                          Allison
                                                                                                            Solar
                     ----------------------------------------------------------------------------------------------------------

                                       1

STRATEGIC
BUSINESS UNITS       PRODUCT CLASSES             MAJOR PRODUCTS/SERVICES    MAJOR CUSTOMERS/USES            KEY COMPETITORS
- --------------       ---------------             -----------------------    --------------------            ---------------
                                                                                                
                     Environmental control       Air management systems:    Commercial, regional            Auxilec
                     systems                      Air conditioning           and general                    Barber Colman
                                                  Bleed air systems          aviation aircraft              Dukes
                                                  Cabin pressure control    Military aircraft               Eaton-Vickers
                                                    systems                 Ground vehicles                 Hamilton Sundstrand
                                                  Air purification and      Spacecraft                      Liebherr
                                                    treatment                                               Litton Breathing
                                                  De-icing systems                                           Systems
                                                 Electrical power systems:                                  Lucas
                                                  Power distribution and                                    Pacific Scientific
                                                    control                                                 Parker Hannifin
                                                  Emergency power                                           Smiths
                                                    generation                                              TAT
                                                  Fuel cells
                                                 Repair, overhaul and
                                                  spare parts
                     ----------------------------------------------------------------------------------------------------------
                     Engine systems and          Electronic and             Commercial air transport,       BAE Controls
                     accessories                  hydromechanical            regional and general aviation  Goodrich
                                                  fuel controls             Military aircraft                (Chandler-Evans)
                                                 Engine start systems                                       Parker Hannifin
                                                 Electronic engine                                          TRW (Lucas
                                                  controls                                                   Aerospace)
                                                 Sensors                                                    UTC (Hamilton
                                                 Electric and pneumatic                                      Sundstrand)
                                                  power generation systems
                                                 Thrust reverser
                                                  actuation, pneumatic and
                                                  electric
- -------------------------------------------------------------------------------------------------------------------------------
Aerospace            Avionics systems            Flight safety systems:     Commercial, business            Century
Electronic                                        Enhanced Ground            and general aviation aircraft  Garmin
Systems                                             Proximity Warning       Government aviation             Goodrich
                                                    Systems (EGPWS)                                         Kaiser
                                                  Traffic Alert and                                         Litton
                                                    Collision Avoidance                                     Lockheed Martin
                                                    Systems (TCAS)                                          Narco
                                                  Windshear detection                                       Rockwell Collins
                                                    systems                                                 Smiths
                                                  Flight data and cockpit                                   S-tec
                                                    voice recorders                                         Thales Sextant
                                                 Communication, navigation                                  Trimble/Terra
                                                  and surveillance                                          Universal
                                                  systems:
                                                  Air-to-ground telephones
                                                  Global positioning
                                                    systems
                                                  Automatic flight control
                                                    systems
                                                  Surveillance systems
                                                 Integrated systems
                                                 Flight management systems
                                                 Cockpit display systems
                                                 Data management and
                                                  aircraft performance
                                                  monitoring systems
                                                 Vehicle management
                                                  systems
                                                 Inertial sensor systems
                                                  for guidance,
                                                  stabilization,
                                                  navigation
                                                  and control
                     ----------------------------------------------------------------------------------------------------------
                     Automatic test systems      Computer-controlled        U.S. Government and             GDE Systems
                                                  automatic test systems     international logistics        Litton
                                                 Functional testers and      centers                        Lockheed Martin
                                                  ancillaries               Military aviation               Northrop Grumman
                                                 Portable test and
                                                  diagnostic systems
                                                 Advanced battery
                                                  analyzer/charger
                     ----------------------------------------------------------------------------------------------------------
                     Inertial sensor             Gyroscopes,                Military and                    Astronautics-
                                                  accelerometers, inertial   commercial vehicles             Kearfott
                                                  measurement units and     Commercial spacecraft           Ball
                                                  thermal switches           and launch vehicles            BEI
                                                                            Energy utility boring           GEC
                                                                            Transportation                  Litton
                                                                            Missiles                        Rockwell Collins
                                                                            Munitions
                     ----------------------------------------------------------------------------------------------------------

                                       2

STRATEGIC
BUSINESS UNITS       PRODUCT CLASSES             MAJOR PRODUCTS/SERVICES    MAJOR CUSTOMERS/USES            KEY COMPETITORS
- --------------       ---------------             -----------------------    --------------------            ---------------
                                                                                                
                     Radar systems               Aircraft precision         Global and U.S. airspace        Hughes
                                                  landing                    agencies                       Motorola
                                                 Ground surveillance        Military aviation               Raytheon
                                                 Target detection devices   Military missiles               Rockwell Collins
                                                                                                            Thales
- -------------------------------------------------------------------------------------------------------------------------------
Aerospace            Management and technical    Maintenance/operation      U.S. and foreign government     Boeing
Services             services                     and provision of space     space communications,          Computer Sciences
                                                  systems, services          logistics and information      Dyncorp
                                                  and facilities             services                       ITT
                                                 Systems engineering        Commercial space ground         Lockheed Martin
                                                  and integration            segment systems and services   SAIC
                                                 Information technology                                     United Space
                                                  services                                                   Alliance
                                                 Logistics and sustainment
                     ----------------------------------------------------------------------------------------------------------
                     Aircraft hardware           Consumable hardware,       Commercial and military         Arrow Pemco
                     distribution                 including fasteners,       aviation and space programs    Avnet
                                                  bearings, bolts and                                       Dixie
                                                  o-rings                                                   Fairchild Direct
                                                 Adhesives, sealants,                                       Jamaica Bearings
                                                  lubricants, cleaners                                      M&M Aerospace
                                                  and paints                                                Pentacon
                                                 Electrical connectors,                                     Wesco Aircraft
                                                  switches, relays and
                                                  circuit breakers
                                                 Value-added services,
                                                  repair and overhaul
                                                  kitting and point-of-use
                                                  replenishment
- -------------------------------------------------------------------------------------------------------------------------------
Aircraft Landing     Landing systems             Wheels and brakes          Commercial and                  Aircraft Braking
Systems                                          Friction products           military aircraft               Systems
                                                 Brake control systems                                      Dunlop
                                                 Wheel and brake                                            Goodrich
                                                  overhaul services                                         Messier-Bugatti
                                                 Aircraft landing                                           Messier-Dowty
                                                  systems integration
- -------------------------------------------------------------------------------------------------------------------------------
Federal              Management services         Maintenance/               U.S. government                 Bechtel
Manufacturing &                                   operation of facilities                                   Lockheed Martin
Technologies                                                                                                The Washington
                                                                                                             Group
- -------------------------------------------------------------------------------------------------------------------------------

AUTOMATION & CONTROL
Home and Building    Products                    Heating, ventilating and   Original equipment              Danfoss
Control                                           air conditioning           manufacturers (OEMs)           DSC
                                                  controls and components   Distributors                    Emerson
                                                  for homes and buildings   Contractors                     EST
                                                 Indoor air quality         Retailers                       Holmes
                                                  products including        System integrators              Interlogix
                                                  zoning, air cleaners,     Commercial customers            Invensys
                                                  humidification, heat and   and homeowners served          Johnson Controls
                                                  energy recovery            by the distributor,            Siemens
                                                  ventilators                wholesaler, contractor,
                                                 Controls plus integrated    retail and utility channels
                                                  electronic systems for
                                                  burners, boilers and
                                                  furnaces
                                                 Security products and
                                                  systems
                                                 Consumer household
                                                  products including
                                                  heaters, fans,
                                                  humidifiers, air
                                                  cleaners and thermostats
                                                 Water controls
                                                 Fire products & systems
                     ----------------------------------------------------------------------------------------------------------

                                       3

STRATEGIC
BUSINESS UNITS       PRODUCT CLASSES             MAJOR PRODUCTS/SERVICES    MAJOR CUSTOMERS/USES            KEY COMPETITORS
- --------------       ---------------             -----------------------    --------------------            ---------------
                                                                                                
                     Solutions and services      HVAC and building control  Building managers and owners    Carrier
                                                  solutions and services    Contractors, architects and     GroupMac
                                                 Energy management           developers                     Invensys
                                                  solutions and services    Consulting engineers            Johnson Controls
                                                 Security and asset         Security directors              Local contractors
                                                  management solutions and  Plant managers                   and utilities
                                                  services                  Utilities                       Simplex
                                                 Enterprise building        Large, global corporations      Trane
                                                  integration solutions     Public school systems
                                                 Building information       Universities
                                                  services                  Local governments
                                                 Critical environment
                                                  control solutions and
                                                  services
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Control   Industrial automation       Advanced control software  Refining and petrochemical      Allen-Bradley
                     solutions                    and industrial             companies                      Asea Brown Boveri
                                                  automation systems for    Chemical manufacturers          Aspentech
                                                  control and monitoring    Oil and gas producers           Banner
                                                  of continuous, batch and  Food and beverage processors    Fisher-Rosemount
                                                  hybrid operations         Pharmaceutical companies        Invensys
                                                 Process control            Utilities                       Siemens
                                                  instrumentation           Film and coated producers       Yokogawa
                                                 Field instrumentation      Pulp and paper industry
                                                 Production management      Continuous web producers in
                                                  software                   the paper, plastics, metals,
                                                 Communications systems      rubber, non- wovens and
                                                  for Industrial Control     printing industries
                                                  equipment and systems
                                                 Consulting, networking
                                                  engineering and
                                                  installation
                     ----------------------------------------------------------------------------------------------------------
                     Sensors, electromechanical  Sensors, measurement,      Package and materials handling  Cherry
                     switches, control            control and industrial     operations                     Eaton
                     components                   components                Appliance manufacturers         Omron
                                                 Analytical                 Automotive companies            Optek
                                                  instrumentation           Aviation companies              Phillips
                                                 Recorders                  Food and beverage processors    Telemecanique
                                                 Controllers                Medical equipment               Turck
                                                 Datacom components         Heat treat processors           Yokogawa
                                                 Flame safeguard equipment  Flame safeguard equipment
                                                                            Computer and business
                                                                             equipment manufacturers
                                                                            Data acquisition companies
- -------------------------------------------------------------------------------------------------------------------------------

PERFORMANCE MATERIALS
Performance          Nylon products and          Nylon filament and         Commercial, residential and     BASF
 Polymers &          services                     staple yarns               specialty carpet markets       DSM
 Chemicals                                       Bulk continuous            Nylon for fibers,               DuPont
                                                  filament                   engineered resins and film     Enichem
                                                 Nylon polymer              Fertilizer ingredients          Rhodia
                                                 Caprolactam                Specialty chemicals             Solutia
                                                 Ammonium sulfate           Vitamins                        UBE
                                                 Hydroxylamine
                                                 Cyclohexanol
                                                 Cyclohexanone
                     ----------------------------------------------------------------------------------------------------------
                     Performance fibers          Industrial nylon and       Passenger car and truck tires   Acordis
                                                  polyester yarns           Passenger car and light truck   Akra
                                                 Extended-chain              seatbelts and airbags          DSM
                                                  polyethylene composites   Broad woven fabrics             DuPont
                                                                            Ropes and mechanical            Hyosung
                                                                             rubber goods                   Kolon
                                                                            Luggage                         Kosa
                                                                            Sports gear                     Solutia
                                                                            Bullet resistant vests,
                                                                             helmets and heavy armor
                                                                            Cut-resistant industrial
                                                                             upholstery and workwear
                                                                            Sailcloth
                     ----------------------------------------------------------------------------------------------------------

                                       4

STRATEGIC
BUSINESS UNITS       PRODUCT CLASSES          MAJOR PRODUCTS/SERVICES       MAJOR CUSTOMERS/USES            KEY COMPETITORS
- --------------       ---------------          -----------------------       --------------------            ---------------
                                                                                                
                     Engineered applications  Thermoplastic nylon           Food and pharmaceutical         BASF
                     and solutions            Thermoplastic alloys           packaging                      Bayer
                                               and blends                   Housings (e.g., electric hand   DuPont
                                              Post-consumer                  tools, chain saws)             Hoechst
                                               recycled PET resins          Industrial applications         Kolon
                                              Recycled nylon resins         Automotive components           Monsanto
                                              Cast nylon                    Office furniture                Rexam Custom
                                              Biaxially oriented nylon      Electrical and electronics      Toyobo
                                               film
                                              Fluoropolymer film
                     ----------------------------------------------------------------------------------------------------------
                     Fluorocarbons            Genetron'r' refrigerants,     Refrigeration                   Atochem
                                               aerosol and                  Air conditioning                DuPont
                                               insulation foam blowing      Polyurethane foam               ICI
                                               agents                       Precision cleaning
                                              Genesolv'r' solvents          Optical
                                              Oxyfume sterilant gases       Metalworking
                                                                            Hospitals
                                                                            Medical equipment
                                                                             manufacturers
                     ----------------------------------------------------------------------------------------------------------
                     Hydrofluoric acid (HF)   Anhydrous and aqueous         Fluorocarbons                   Ashland
                                               hydrofluoric acid            Steel                           Atochem
                                                                            Oil refining                    DuPont
                                                                            Chemical intermediates          Hashimoto
                                                                                                            Merck
                                                                                                            Norfluor
                                                                                                            Quimica Fluor
                     ----------------------------------------------------------------------------------------------------------
                     Fluorine specialties     Sulfur hexafluoride (SF[u]6)  Electric utilities              Air Products
                                              Iodine pentafluoride          Magnesium                       Asahi Glass
                                               (IF[u]5)                     Gear manufacturers              Atochem
                                              Antimony pentafluoride                                        Ausimont
                                               (SbF[u]5)                                                    Kanto Denko Kogyo
                                                                                                            Solvay Fluor
                     ----------------------------------------------------------------------------------------------------------
                     Nuclear services         UF[u]6 conversion services    Nuclear fuel                    British Nuclear
                                                                            Electric utilities               Fuels
                                                                                                            Cameco
                                                                                                            Cogema
                                                                                                            Tennex
                     ----------------------------------------------------------------------------------------------------------
                     Pharmaceutical and       Active pharmaceutical         Agrichemicals                   Cambrex
                     agricultural chemicals    ingredients                  Pharmaceuticals                 DSM
                                              Oxime-based fine                                              Lonza
                                               chemicals                                                    Zeneca
                                              Fluoroaromatics
                                              Bromoaromatics
                     ----------------------------------------------------------------------------------------------------------
                     High purity chemicals    Ultra high purity HF          Semiconductors                  LaPorte
                                              Solvents                                                      Merck
                                              Inorganic acids                                               Olin
                                              High purity solvents
                     ----------------------------------------------------------------------------------------------------------
                     Industrial specialties   HF derivatives                Diverse by product type         Varies by product
                      Imaging                 Fluoroaromatics                                                line
                      Luminescence and        Photodyes
                        plastic additives     Phosphors
                      Chemical processing     Catalysts
                      Materials and           Oxime silanes
                        surface treatment
                      Sealants
                     ----------------------------------------------------------------------------------------------------------
                     Specialty waxes          Polyethylene waxes            Coatings                        BASF
                                              Petroleum waxes and           Inks                            Clariant
                                               blends                       Candles                         Eastman
                                                                            Tire/Rubber                     Exxon
                                                                            Personal care                   IGI
                                                                            Packaging                       Leuna
                                                                                                            Schumann-Sasol
                     ----------------------------------------------------------------------------------------------------------
                     Specialty additives      Polyethylene waxes            PVC                             Eastman
                                              Petroleum waxes and           Plastics                        Geon
                                               blends                                                       Henkel
                                              PVC lubricant systems
                                              Plastic additives
                     ----------------------------------------------------------------------------------------------------------

                                       5

STRATEGIC
BUSINESS UNITS       PRODUCT CLASSES             MAJOR PRODUCTS/SERVICES    MAJOR CUSTOMERS/USES            KEY COMPETITORS
- --------------       ---------------             -----------------------    --------------------            ---------------
                                                                                                
                     UOP (joint venture)         Processes                  Petroleum,                      ABB Lummus
                                                 Catalysts                   petrochemical, gas             Criterion
                                                 Molecular sieves            processing and                 IFP
                                                 Adsorbents                  chemical industries            Mobil
                                                 Design of process                                          Procatalyse
                                                  plants and equipment                                      Stone & Webster
                                                 Customer catalyst                                          Zeochem
                                                  manufacturing
- -------------------------------------------------------------------------------------------------------------------------------
Electronic           Wafer                       Interconnect-              Semiconductors                  Applied Materials
 Materials           fabrication                  dielectrics               Microelectronics                Dow Chemical
                     materials and               Interconnect-metals        Telecommunications              Dow Corning
                     services                    Semiconductor packaging                                    Japan Energy
                                                  materials                                                 JSR
                                                 Advanced polymers                                          Material Research
                                                 Global services                                            Tokyo-Ohka
                                                                                                            Tosoh SMD
                                                                                                            VMC/Ulvac
                     ----------------------------------------------------------------------------------------------------------
                     Specialty                   Amorphous metal ribbons    Electrical distribution         ARMCO/Allegheny
                     electronic                   and components             transformers                   CF Lux
                     materials                                              High frequency                  Gould
                                                                             electronics                    Morgan/VAC
                                                                            Metal joining
                                                                            Theft deterrent
                                                                             systems
                                                                            Printed circuit
                                                                             boards
                     ----------------------------------------------------------------------------------------------------------
                     Advanced                    Printed circuit boards     Computers                       JVC
                     circuits                     (PCBs); high density      Telecommunications              Merix
                                                  interconnect solutions,    Handsets & infrastructure      Sanmina
                                                  complex rigid PCBs,       Networking equipment            TTM
                                                  high-layer                                                Unicap
                                                  count/multilayer PCBs                                     ViaSystems
- -------------------------------------------------------------------------------------------------------------------------------
POWER & TRANSPORTATION PRODUCTS
Transportation and   Charge-air systems          Turbochargers              Passenger car, truck            Aisin Seiki
Power Systems                                    Superchargers               and off-highway                Borg-Warner
                                                 Remanufactured components   OEMs                           Hitachi
                                                                            Engine manufacturers            Holset
                                                                            Aftermarket distributors        IHI
                                                                             and dealers                    KKK
                                                                                                            MHI
                                                                                                            Schwitzer
                     ----------------------------------------------------------------------------------------------------------
                     Thermal systems             Charge-air coolers         Passenger car, truck            Behr/McCord
                                                 Aluminum radiators          and off-highway OEMs           Modine
                                                 Aluminum cooling           Engine manufacturers            Valeo
                                                   modules                  Aftermarket distributors
                                                                             and dealers
                     ----------------------------------------------------------------------------------------------------------
                     Power generation            Microturbine generators    Users of electricity            Bowman
                                                                                                            Capstone
                                                                                                            Elliot
                                                                                                            GenSet OEMs
                                                                                                            Ebarra
                                                                                                            Electric Utilities
                                                                                                            Mitsubishi
                                                                                                            Toyota
                                                                                                            Turbec
                     ----------------------------------------------------------------------------------------------------------
                     Air brake systems           Anti-lock brake            On-highway medium and           Arvin Meritor
                     (joint venture)              systems (ABS)              heavy truck,                   Eaton
                                                 Air disc brakes             bus and trailer OEMs           Midland-Haldex
                                                 Air compressors            Off-highway equipment           WABCO
                                                 Air valves                  OEMs
                                                 Air dryers                 Aftermarket distributors
                                                 Actuators                   and dealers/original
                                                 Truck electronics           equipment service (OES)
                                                 Competitive
                                                  remanufactured
                                                  products
- -------------------------------------------------------------------------------------------------------------------------------

                                       6

STRATEGIC
BUSINESS UNITS       PRODUCT CLASSES             MAJOR PRODUCTS/SERVICES    MAJOR CUSTOMERS/USES            KEY COMPETITORS
- --------------       ---------------             -----------------------    --------------------            ---------------
                                                                                                
Consumer Products    Aftermarket                 Oil, air, fuel,            Automotive and heavy            AC Delco
Group                filters, spark plugs,        transmission and coolant   vehicle aftermarket channels,  Bosch
                     electronic components and    filters                    OEMs and OES                   Champion
                     car care products           PCV valves                 Auto supply retailers           Champ Labs
                                                 Spark plugs                Specialty installers            Havoline/Texaco
                                                 Wire and cable             Mass merchandisers              Mann & Hummel
                                                 Antifreeze/coolant                                         NGK
                                                 Ice-fighter products                                       Peak/Old World
                                                 Windshield washer fluids                                    Industries
                                                 Waxes, washes and                                          Pennzoil-Quaker
                                                  specialty cleaners                                         State
                                                                                                            Purolator/Arvin Ind
                                                                                                            STP/ArmorAll/
                                                                                                             Clorox
                                                                                                            Turtle Wax
                                                                                                            Various Private
                                                                                                             Label
                                                                                                            Wix/Dana
                                                                                                            Zerex/Valvoline
- -------------------------------------------------------------------------------------------------------------------------------
Friction Materials   Friction materials          Disc brake pads            Automotive and heavy vehicle    Akebono
                     Aftermarket brake hard      Drum brake linings          OEMs, OES, brake               Dana
                     parts                       Brake blocks                manufacturers and aftermarket  Delphi
                                                 Disc and drum brake         channels                       Federal-Mogul
                                                  components                Mass merchandisers              ITT Automotive
                                                 Brake hydraulic            Installers                       Italy S.r.l.
                                                  components                Railway and commercial/         JBI
                                                 Brake fluid                 military aircraft OEMs         Nisshinbo
                                                 Aircraft brake linings      and brake manufacturers        Pagid
                                                 Railway linings                                            Sumitomo
                                                                                                            TMD
- -------------------------------------------------------------------------------------------------------------------------------

AEROSPACE SALES

    Our sales to aerospace customers were 40, 42 and 42 percent of our total
sales in 2000, 1999 and 1998, respectively. Our sales to aerospace original
equipment manufacturers were 14, 15 and 16 percent of our total sales in 2000,
1999 and 1998, respectively. If there were a large decline in sales of aircraft
that use our components, operating results could be negatively impacted. In
addition, our sales to aftermarket customers of aerospace products and services
were 19, 19 and 18 percent of our total sales in 2000, 1999 and 1998,
respectively. If there were a large decline in the number of flight hours for
aircraft that use our components or services, operating results could be
negatively impacted.

U.S. GOVERNMENT SALES

    Sales to the U.S. Government (principally by our Aerospace Solutions
segment), acting through its various departments and agencies and through prime
contractors, amounted to $2,219, $2,383 and $2,693 million in 2000, 1999 and
1998, respectively, which includes sales to the U.S. Department of Defense of
$1,548, $1,415 and $1,658 million in 2000, 1999 and 1998, respectively. We are
affected by U.S. Government budget constraints for defense and space programs.
U.S. defense spending increased slightly in 2000 and is also expected to
increase slightly in 2001.

    In addition to normal business risks, companies engaged in supplying
military and other equipment to the U.S. Government are subject to unusual
risks, including dependence on Congressional appropriations and administrative
allotment of funds, changes in governmental procurement legislation and
regulations and other policies that may reflect military and political
developments, significant changes in contract scheduling, complexity of designs
and the rapidity with which they become obsolete, necessity for constant design
improvements, intense competition for U.S. Government business necessitating
increases in time and investment for design and development, difficulty of
forecasting costs and schedules when bidding on developmental and highly
sophisticated technical work and other factors characteristic of the industry.
Changes are customary over the life of U.S. Government contracts, particularly
development contracts, and generally result in adjustments of contract prices.

    We, like other government contractors, are subject to government
investigations of business practices and compliance with government procurement
regulations. Although such regulations provide that a contractor may be
suspended or barred from government contracts under certain circumstances, and
the outcome of pending government investigations cannot be predicted with
certainty, we are not

                                       7

currently aware of any such investigations that we expect, individually or in
the aggregate, will have a material adverse effect on us. In addition, we have a
proactive business compliance program designed to ensure compliance and sound
business practices.

BACKLOG

    Our total backlog at year-end 2000 and 1999 was $8,094 and $8,736 million,
respectively. We anticipate that approximately $5,090 million of the 2000
backlog will be filled in 2001. We believe that backlog is not necessarily a
reliable indicator of our future sales because a substantial portion of the
orders constituting this backlog may be canceled at the customer's option.

COMPETITION

    We are subject to active competition in substantially all product and
service areas. Such competition is expected to continue in all geographic
regions. Competitive conditions vary widely among the thousands of products and
services provided by us, and vary country by country. Depending on the
particular customer or market involved, our businesses compete on a variety of
factors, such as price, quality, reliability, delivery, customer service,
performance, applied technology, product innovation and product recognition.
Brand identity, service to customers and quality are generally important
competitive factors for our products and services, and there is considerable
price competition. Other competitive factors for certain products include
breadth of product line, research and development efforts and technical and
managerial capability. While our competitive position varies among our products
and services, we believe we are a significant factor in each of our major
product and service classes. However, certain of our products and services are
sold in competition with those of a large number of other companies, some of
which have substantial financial resources and significant technological
capabilities. In addition, some of our products compete with the captive
component divisions of original equipment manufacturers.

INTERNATIONAL OPERATIONS

    We are engaged in manufacturing, sales and/or research and development
mainly in the U.S., Europe, Canada, Asia and Latin America. U.S. exports and
foreign manufactured products are significant to our operations.

    Our international operations, including U.S. exports, are potentially
subject to a number of unique risks and limitations, including: fluctuations in
currency value; exchange control regulations; wage and price controls;
employment regulations; foreign investment laws; import and trade restrictions,
including embargoes; and governmental instability. However, we have limited
exposure in high risk countries and have taken action to mitigate such risks.

    Financial information related to geographic areas is included in 'Item 8.
Financial Statements and Supplementary Data' in Note 25 of Notes to Financial
Statements.

RAW MATERIALS

    The principal raw materials used in our operations are generally readily
available. We experienced no significant or unusual problems in the purchase of
key raw materials and commodities in 2000. We are not dependent on any one
supplier for a material amount of our raw materials. However, we are highly
dependent on our suppliers and subcontractors in order to meet commitments to
our customers. In addition, many major components and product equipment items
are procured or subcontracted on a sole-source basis with a number of domestic
and foreign companies. We maintain a qualification and performance surveillance
process to control risk associated with such reliance on third parties. While we
believe that sources of supply for raw materials and components are generally
adequate, it is difficult to predict what effects shortages or price increases
may have in the future. However, at present, we have no reason to believe a
shortage of raw materials will cause any material adverse impact during 2001.

PATENTS, TRADEMARKS, LICENSES AND DISTRIBUTION RIGHTS

    Our business as a whole, and that of our strategic business units, are not
dependent upon any single patent or related group of patents, or any licenses or
distribution rights. We own, or are licensed under, a large number of patents,
patent applications and trademarks acquired over a period of many

                                       8

years, which relate to many of our products or improvements thereon and are of
importance to our business. From time to time, new patents and trademarks are
obtained, and patent and trademark licenses and rights are acquired from others.
We also have distribution rights of varying terms for a number of products and
services produced by other companies. In the judgment of management, such rights
are adequate for the conduct of the business being done by us. We believe that,
in the aggregate, the rights under such patents, trademarks and licenses are
generally important to our operations, but we do not consider that any patent,
trademark or related group of patents, or any licensing or distribution rights
related to a specific process or product are of material importance in relation
to our total business. See Item 3 at page 10 of this Form 10-K for information
concerning litigation relating to patents in which we are involved.

    We have registered trademarks for a number of our products, including such
consumer brands as Honeywell, Prestone, FRAM, Anso and Autolite.

RESEARCH AND DEVELOPMENT

    Our research activities are directed toward the discovery and development of
new products and processes, improvements in existing products and processes, and
the development of new uses of existing products.

    Research and development expense totaled $818, $909 and $876 million in
2000, 1999 and 1998, respectively. Customer-sponsored (principally the U.S.
Government) research and development activities amounted to an additional $560,
$682 and $718 million in 2000, 1999 and 1998, respectively.

ENVIRONMENT

    We are subject to various federal, state and local requirements regulating
the discharge of materials into the environment or otherwise relating to the
protection of the environment. It is our policy to comply with these
requirements and we believe that, as a general matter, our policies, practices
and procedures are properly designed to prevent unreasonable risk of
environmental damage, and of resulting financial liability, in connection with
our business. Some risk of environmental damage is, however, inherent in certain
of our operations and products, as it is with other companies engaged in similar
businesses.

    We are and have been engaged in the handling, manufacture, use or disposal
of many substances classified as hazardous or toxic by one or more regulatory
agencies. We believe that, as a general matter, our handling, manufacture, use
and disposal of such substances are in accord with environmental laws and
regulations. It is possible, however, that future knowledge or other
developments, such as improved capability to detect substances in the
environment or increasingly strict environmental laws and standards and
enforcement policies thereunder, could bring into question our handling,
manufacture, use or disposal of such substances.

    Among other environmental requirements, we are subject to the federal
superfund law, and similar state laws, under which we have been designated as a
potentially responsible party that may be liable for cleanup costs associated
with various hazardous waste sites, some of which are on the U.S. Environmental
Protection Agency's superfund priority list. Although, under some court
interpretations of these laws, there is a possibility that a responsible party
might have to bear more than its proportional share of the cleanup costs if it
is unable to obtain appropriate contribution from other responsible parties, we
have not had to bear significantly more than our proportional share in multi-
party situations taken as a whole.

    Further information regarding environmental matters is included in 'Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.'

EMPLOYEES

    We have approximately 125,000 employees at December 31, 2000. Approximately
86,000 were located in the United States, and, of these employees, about 17%
were unionized employees represented by various local or national unions.

                                       9

ITEM 2.  PROPERTIES

    We have over 1,000 locations consisting of plants, research laboratories,
sales offices and other facilities. The plants are generally located to serve
large marketing areas and to provide accessibility to raw materials and labor
pools. The properties are generally maintained in good operating condition.
Utilization of these plants may vary with sales to customers and other
business conditions; however, no major operating facility is significantly
idle. The facilities, together with planned expansions, are expected to meet
our needs for the foreseeable future. We own or lease warehouses, railroad
cars, barges, automobiles, trucks, airplanes and materials handling and data
processing equipment. We also lease space for administrative and sales staffs.
Our headquarters and administrative complex is located at Morristown, New
Jersey.

    Our principal plants, which are owned in fee unless otherwise indicated, are
as follows:

                                                                        
                                            AEROSPACE SOLUTIONS
                                            -------------------
  Glendale, AZ (partially leased)             South Bend, IN                  Rocky Mount, NC
  Phoenix, AZ                               Olathe, KS (leased)               Redmond, WA
  Tempe, AZ                                   Coon Rapids, MN (leased)        Yeovil, Somerset
  Tucson, AZ                                  Minneapolis, MN                   United Kingdom
  Torrance, CA                                 Teterboro, NJ
  (partially leased)                          Albuquerque, NM
  Clearwater, FL

                                           AUTOMATION & CONTROL
                                           --------------------
  Phoenix, AZ                                  Freeport, IL                   Syosset, NY
  San Diego, CA                              Golden Valley, MN                El Paso, TX (leased)
  Northford, CT                                Plymouth, MN                   Offenbach, Germany

                                           PERFORMANCE MATERIALS
                                           ---------------------
  Baton Rouge, LA                             Pottsville, PA                  Hopewell, VA
  Geismar, LA                                  Columbia, SC                   Seelze, Germany
  Roseville, MN                                 Orange, TX
  Moncure, NC                                Chesterfield, VA

                                      POWER & TRANSPORTATION PRODUCTS
                                      -------------------------------
  Torrance, CA                           Thaon-Les-Vosges, France             Atessa, Italy
  Huntington, IN                              Glinde, Germany                 Skelmersdale, United
                                                                                Kingdom

ITEM 3.  LEGAL PROCEEDINGS

    Details of Legal Proceedings are included in 'Item 8. Financial Statements
and Supplementary Data' under the headings 'Litton Litigation', 'Shareowner
Litigation' and 'Other Matters' in Note 22 of Notes to Financial Statements.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    At the Special Meeting of Shareowners of Honeywell held on January 10, 2001,
the proposed merger to be implemented pursuant to the Agreement and Plan of
Merger, dated as of October 22, 2000, between General Electric Company and
Honeywell International Inc. as set forth in Honeywell's proxy statement dated
December 4, 2000, which was filed with the Securities and Exchange Commission
pursuant to Regulation 14A under the Securities Exchange Act of 1934, was
approved with 592,168,926 votes cast FOR, 8,187,890 votes cast AGAINST,
6,826,897 abstentions and no broker non-votes.

                                       10

                                    PART II.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    Market and dividend information for Honeywell's common stock is included in
'Item 8. Financial Statements and Supplementary Data' in Note 26 of Notes to
Financial Statements.

    The number of record holders of our common stock at December 31, 2000 was
92,313.

ITEM 6.  SELECTED FINANCIAL DATA

                          HONEYWELL INTERNATIONAL INC.

                                                         YEARS ENDED DECEMBER 31,
                                         ---------------------------------------------------------
                                          2000      1999      1998      1997      1996      1995
                                          ----      ----      ----      ----      ----      ----
                                         (DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS)
                                                                         
RESULTS OF OPERATIONS
    Net sales..........................  $25,023   $23,735   $23,555   $22,499   $21,283   $21,077
    Net income(1)......................    1,659     1,541     1,903     1,641     1,423     1,209
EARNINGS PER COMMON SHARE
    Net earnings:
      Basic............................     2.07      1.95      2.38      2.04      1.77      1.50
      Assuming dilution................     2.05      1.90      2.34      2.00      1.73      1.48
    Dividends..........................     0.75      0.68      0.60      0.52      0.45      0.39
FINANCIAL POSITION AT YEAR-END
    Property, plant and
      equipment - net..................    5,230     5,630     5,600     5,380     5,353     5,841
    Total assets.......................   25,175    23,527    22,738    20,118    18,322    17,525
    Short-term debt....................    1,682     2,609     2,190     1,238       867       956
    Long-term debt.....................    3,941     2,457     2,776     2,394     2,034     1,848
    Total debt.........................    5,623     5,066     4,966     3,632     2,901     2,804
    Shareowners' equity................    9,707     8,599     8,083     6,775     6,385     5,632

- ---------

(1) In 2000, includes a net provision for asset impairments, repositioning,
    environmental and other charges and a gain on the sale of the TCAS product
    line of Honeywell Inc. resulting in a net after-tax charge of $634 million,
    or $0.78 per share. In 1999, includes merger, repositioning and other
    charges and gains on the sales of our Laminate Systems business and our
    investment in AMP common stock resulting in a net after-tax charge of $624
    million, or $0.78 per share. In 1998, includes repositioning charges, a gain
    on settlement of litigation claims and a tax benefit resulting from the
    favorable resolution of certain prior-year research and development tax
    claims resulting in a net after-tax charge of $4 million, with no impact on
    the per share amount. In 1997, includes repositioning and other charges,
    gains on the sales of our automotive Safety Restraints and certain
    Industrial Control businesses and a charge related to the 1996 sale of our
    automotive Braking Systems business resulting in a net after-tax charge of
    $5 million, with no impact on the per share amount. In 1996, includes
    repositioning and other charges and a gain on the sale of our automotive
    Braking Systems business resulting in a net after-tax gain of $9 million, or
    $0.01 per share.

                                       11

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

                                                  2000      1999      1998
                                                  ----      ----      ----
                                                    (DOLLARS IN MILLIONS)
                                                            
NET SALES
Aerospace Solutions............................  $ 9,988   $ 9,908   $ 9,890
Automation & Control...........................    7,384     6,115     5,957
Performance Materials..........................    4,055     4,007     4,169
Power & Transportation Products................    3,527     3,581     3,387
Corporate......................................       69       124       152
                                                 -------   -------   -------
                                                 $25,023   $23,735   $23,555
                                                 -------   -------   -------
                                                 -------   -------   -------
SEGMENT PROFIT
Aerospace Solutions............................  $ 2,195   $ 1,918   $ 1,587
Automation & Control...........................      986       767       705
Performance Materials..........................      334       439       634
Power & Transportation Products................      274       322       234
Corporate......................................     (160)     (175)     (248)
                                                 -------   -------   -------
                                                 $ 3,629   $ 3,271   $ 2,912
                                                 -------   -------   -------
                                                 -------   -------   -------

See 'Item 8. Financial Statements and Supplementary Data' in Note 24 of Notes to
Financial Statements for further information on our reportable segments.

    Net sales in 2000 were $25,023 million, an increase of $1,288 million, or
5 percent compared with 1999. Net sales in 1999 were $23,735 million, an
increase of $180 million, or 1 percent compared with 1998. The increase in sales
in both 2000 and 1999 is attributable to the following:

                                                               2000     1999
                                                              VERSUS   VERSUS
                                                               1999     1998
                                                               ----     ----
                                                                 
Acquisitions/Divestitures...................................     6%       1%
Foreign Exchange............................................    (2)      (1)
Volume/Price................................................     1        1
                                                                --       --
                                                                 5%       1%
                                                                --       --
                                                                --       --

    Total segment profit in 2000 was $3,629 million, an increase of $358
million, or 11 percent compared with 1999. Segment profit margin for 2000 was
14.5 percent compared with 13.8 percent in 1999. The increase in segment profit
in 2000 was led by a significant improvement by the Aerospace Solutions and
Automation & Control segments and lower Corporate expenses. The increase was
partially offset by lower segment profit by the Performance Materials and Power
& Transportation Products segments. Total segment profit in 1999 was
$3,271 million, an increase of $359 million, or 12 percent compared with 1998.
Segment profit margin for 1999 was 13.8 percent compared with 12.4 percent in
1998. The increase in segment profit in 1999 was led by a substantial
improvement by the Aerospace Solutions segment with the Power & Transportation
Products and Automation & Control segments also contributing solid gains. Lower
Corporate expenses also contributed to the increase. The increase was partially
offset by a substantial decrease in segment profit by the Performance Materials
segment.

    Postretirement benefit plans contributed cost reductions of $282 and $61
million in 2000 and 1999, respectively, principally due to workforce reductions
and the funding status of our pension plans (described in 'Item 8. Financial
Statements and Supplementary Data' in Note 23 of Notes to Financial Statements).
Future effects on operating results depend on economic conditions and investment
performance.

                                       12

    A discussion of net sales and segment profit by reportable segment can be
found in the Review of Business Segments section below.

    (Gain) on sale of non-strategic businesses of $112 million in 2000
represents the pretax gain on the government-mandated divestiture of the TCAS
product line of Honeywell Inc. (the former Honeywell) following the merger of
AlliedSignal Inc. and Honeywell Inc. in December 1999. (Gain) on sale of
non-strategic businesses of $106 million in 1999 represents the pretax gain on
the sale of our Laminate Systems business. Refer to 'Item 8. Financial
Statements and Supplementary Data' in Note 6 of Notes to Financial Statements
for further information.

    Equity in (income) loss of affiliated companies was a loss of $89 million in
2000 compared with income of $76 million in 1999. The decrease of $165 million
in equity income reflects that the current year includes a charge of
$136 million for costs associated with closing an affiliate's chemical
manufacturing operations and for an equity investee's customer claims. The prior
year also included a charge of $40 million related to the writedown of an equity
investment and an equity investee's severance actions. Refer to 'Item 8.
Financial Statements and Supplementary Data' in Note 5 of Notes to Financial
Statements for further discussion of the charges in both 2000 and 1999.
Excluding these charges in both periods, equity in (income) loss of affiliated
companies was income of $47 million in 2000, a decrease of $69 million compared
with 1999. This decrease was due mainly to lower earnings from our UOP process
technology (UOP) joint venture partially offset by the gain on the sale of our
interest in an automotive aftermarket joint venture. Equity in (income) loss of
affiliated companies was income of $76 million in 1999 compared with income of
$162 million in 1998. The decrease of $86 million resulted from the charge of
$40 million relating to the writedown of an equity investment and an equity
investee's severance actions as well as lower earnings from UOP.

    Other (income) expense, $57 million of income in 2000, decreased by
$250 million compared with 1999. The decrease principally reflects the 1999 net
gain of $268 million on our disposition of our investment in AMP Incorporated
(AMP) common stock. Refer to 'Item 8. Financial Statements and Supplementary
Data' in Note 7 of Notes to Financial Statements for further information.
Excluding this net gain, other (income) expense was $57 million of income in
2000, compared with $39 million of income in 1999. This increase in other income
of $18 million in 2000 was due principally to lower minority interest expense
and increased benefits from foreign exchange hedging. Other (income) expense,
$307 million of income in 1999, increased by $280 million compared with 1998.
The increase principally reflects the net gain of $268 million on our
disposition of our investment in AMP common stock.

    Interest and other financial charges of $481 million in 2000 increased by
$216 million, or 82 percent compared with 1999. The increase results from higher
average levels of debt during the current year due principally to the Pittway
acquisition and our share repurchase program, higher average interest rates and
the impact of tax interest expense. Interest and other financial charges of
$265 million in 1999 decreased by $10 million, or 4 percent compared with 1998.
The decrease resulted from lower interest rates and tax interest expense
somewhat offset by the effects of higher average debt outstanding during 1999.

    The effective tax rate was 30.8, 31.5 and 31.3 percent in
2000, 1999 and 1998, respectively. Refer to 'Item 8. Financial Statements and
Supplementary Data' in Note 9 of Notes to Financial Statements for further
information.

    Net income in 2000 of $1,659 million, or $2.05 per share, was 8 percent
higher than 1999 net income of $1,541 million, or $1.90 per share. Net income in
2000 included the gain on the disposition of the TCAS product line of the former
Honeywell and asset impairments, repositioning, environmental and other charges.
Adjusted for these items, net income in 2000 was $634 million, or $0.78 per
share, higher than reported. Net income in 1999 included the gains on our
dispositions of our Laminate Systems business and our investment in AMP and
merger, repositioning and other charges. Adjusted for these items, net income in
1999 was $624 million, or $0.78 per share, higher than reported. Net income in
2000 increased by 6 percent compared with 1999 if both years are adjusted for
these items. Net income in 1999 of $1,541 million, or $1.90 per share, was
19 percent lower than 1998 net income of $1,903 million, or $2.34 per share. Net
income in 1998 included repositioning charges, litigation

                                       13

settlements and a tax settlement. Net income in 1999 increased by 14 percent
compared with 1998 if both years are adjusted for these items.

REVIEW OF BUSINESS SEGMENTS

    Aerospace Solutions sales in 2000 were $9,988 million, an increase of $80
million, or 1 percent compared with 1999. Higher sales to the aftermarket,
particularly repair and overhaul and the military, and increased original
equipment sales to business, regional and general aviation customers were
partially offset by lower original equipment sales to air transport
manufacturers and a decline in engineering services revenues. Sales also
decreased due to the effects of government-mandated divestitures in connection
with the merger of AlliedSignal and the former Honeywell. Aerospace Solutions
sales in 1999 were $9,908 million or basically flat compared with 1998. Sales of
avionics products were higher due principally to continued strong demand for
flight safety products. Sales to the aftermarket, particularly repair and
overhaul and the military, were also higher. The acquisition in 1998 of a
controlling interest in the Normalair-Garrett Ltd. environmental controls joint
venture also increased sales. This increase was offset by lower sales to air
transport and military original equipment manufacturers, and the effects of
divestitures and a restructuring of a government technical services contract.

    Aerospace Solutions segment profit in 2000 was $2,195 million, an increase
of $277 million, or 14 percent compared with 1999 due principally to cost
structure improvements, primarily from workforce and benefit cost reductions,
and merger-related savings. Increased sales of higher-margin aftermarket
products and services also contributed to the improvement in segment profit.
Aerospace Solutions segment profit in 1999 was $1,918 million, an increase of
$331 million, or 21 percent compared with 1998 due principally to increased
sales of higher-margin aftermarket and avionics products and cost structure
improvements primarily from workforce and benefit cost reductions.

    Automation & Control sales in 2000 were $7,384 million, an increase of
$1,269 million, or 21 percent compared with 1999. Sales for our Home and
Building Control business were substantially higher as increased sales in our
security products business, due to the acquisition of Pittway, were partially
offset by lower sales in our solutions and services business. Sales for our
Industrial Control business declined moderately as growth in our sensing and
control business was more than offset by lower sales in our industrial
automation and control business. Our industrial automation and control business
continues to be adversely affected by weakness in the hydrocarbon processing
industry. Sales for the segment were also adversely impacted by foreign currency
fluctuations due to the strong dollar. Automation & Control sales in 1999 were
$6,115 million, an increase of $158 million, or 3 percent compared with 1998.
Sales increased for our Home and Building Control business driven by growth in
our control products and building services, and security businesses.
Acquisitions also contributed to the increase partially offset by lower sales
from our energy retrofit and installed systems businesses. Sales for our
Industrial Control business were basically flat compared with 1998. Higher sales
due to acquisitions and growth in our sensing and control business were offset
by the effects of continued weakness in our industrial automation and control
business.

    Automation & Control segment profit in 2000 was $986 million, an increase of
$219 million, or 29 percent compared with 1999. Segment profit for both our Home
and Building Control and Industrial Control businesses improved primarily as a
result of lower costs due to workforce and benefit cost reductions and
merger-related savings. The acquisition of Pittway and other portfolio changes
also contributed to the improvement in segment profit. Automation & Control
segment profit in 1999 was $767 million, an increase of $62 million, or 9
percent compared with 1998. Segment profit for our Home and Building Control
business increased significantly due to improvement in our control products
business and the contraction of our lower-margin energy retrofit and installed
systems businesses. Cost savings from workforce reductions also contributed to
the improvement. This increase was offset somewhat by lower segment profit for
our Industrial Control business as growth in our higher-margin sensing and
control business and cost structure improvements were more than offset by the
effects of continued weakness in certain key end markets in our industrial
automation and control business.

    Performance Materials sales in 2000 were $4,055 million, an increase of $48
million, or 1 percent compared with 1999. Higher sales of advanced circuitry and
wafer-fabrication products by our

                                       14

Electronic Materials business were largely offset by the effect of divestitures,
principally our Laminate Systems business. Performance Materials sales in 1999
were $4,007 million, a decrease of $162 million, or 4 percent compared with 1998
due principally to divestitures including our environmental catalyst, Laminate
Systems and phenol businesses. Lower sales for our carpet fibers business also
contributed to the decrease. This decrease was partially offset by higher sales
for our specialty films, engineering plastics and waxes businesses and increased
sales from the acquisitions of Johnson Matthey Electronics and Pharmaceutical
Fine Chemicals.

    Performance Materials segment profit in 2000 was $334 million, a decrease of
$105 million, or 24 percent compared with 1999. The decrease principally
reflects higher raw material costs in certain Performance Polymers and Chemicals
businesses and higher operating losses in our chip packaging and pharmaceutical
chemicals businesses. The decrease was partially offset by cost structure
improvements and price increases in certain Performance Polymers and Chemicals
businesses. Performance Materials segment profit in 1999 was $439 million, a
decrease of $195 million, or 31 percent compared with 1998. The decrease
principally reflects the effects of pricing pressures in our Performance
Polymers and Electronic Materials businesses and higher raw material costs in
certain Performance Polymers businesses. The impact of 1998 divestitures also
contributed to the decrease. The effect of improved sales volume for our
specialty films, engineering plastics and waxes businesses was a partial offset.

    Power & Transportation Products sales in 2000 were $3,527 million, a
decrease of $54 million, or 2 percent compared with 1999 due mainly to lower
sales for our Commercial Vehicle Systems and Friction Materials businesses.
Sales for our Commercial Vehicles Systems business were negatively impacted by
decreased heavy-duty truck builds. Sales for our Friction Materials business
were lower mainly due to foreign currency fluctuations. This decrease was
partially offset by higher sales for our Turbocharging Systems business as
continued strong world-wide demand more than offset the adverse impact of
foreign currency fluctuations. Power & Transportation Products sales in 1999
were $3,581 million, an increase of $194 million, or 6 percent compared with
1998. Sales for our Turbocharging Systems business increased significantly due
primarily to continued strong sales in Europe reflecting the turbodiesel's
increased penetration of the passenger car market. Sales for our Commercial
Vehicle Systems business also increased due principally to increased North
American truck builds. Sales for our Consumer Products Group business also
increased, led by higher sales of Prestone'r' products and FRAM'r' filters.
Lower sales for our Friction Materials business due to pricing pressures,
weakness in the European market and foreign currency fluctuations were a partial
offset.

    Power & Transportation Products segment profit in 2000 was $274 million, a
decrease of $48 million, or 15 percent compared with 1999. The decrease
primarily reflects costs associated with a product recall and lower sales in our
Commercial Vehicle Systems business, costs related to the ramp-up of our
Turbogenerator product line and costs associated with a supplier issue in our
Turbocharging Systems business. The decrease was partially offset by the effects
of cost structure improvements in our Friction Materials and Consumer Products
Group businesses and higher sales in our Turbocharging Systems business. Power &
Transportation Products segment profit in 1999 was $322 million, an increase of
$88 million, or 38 percent compared with 1998. The increase reflects higher
sales for our Turbocharging Systems, Commercial Vehicle Systems and Consumer
Products Group businesses. Cost structure improvements in these businesses,
materials procurement savings and workforce reductions also contributed to the
increase.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

    Total assets at December 31, 2000 were $25,175 million, an increase of
$1,648 million, or 7 percent from December 31, 1999. The increase relates
principally to our acquisition of Pittway. Total assets at December 31, 1999
were $23,527 million, an increase of $789 million, or 3 percent from
December 31, 1998.

    Cash provided by operating activities of $1,989 million during 2000
decreased by $385 million compared with 1999 due principally to spending related
to merger and repositioning actions, a decrease in working capital and higher
non-cash pension income. This decrease was partially offset by higher net
income, excluding one-time items as previously described, and lower taxes paid
on sales of

                                       15

businesses and investments. Cash provided by operating activities of
$2,374 million during 1999 increased by $400 million compared with 1998 due
principally to higher net income, excluding one-time items as previously
described.

    Cash used for investing activities of $2,714 million during 2000 increased
by $2,423 million compared with 1999. The acquisition of Pittway, the fact that
the prior year included the net proceeds from our disposition of our investment
in AMP and lower proceeds from sales of businesses were principally responsible
for the increase. This increase was partially offset by lower capital spending.
Cash used for investing activities of $291 million during 1999 decreased by
$1,302 million compared with 1998. The decrease relates principally to the
proceeds from our disposition of our investment in AMP and an increase in
proceeds from sales of businesses, primarily Laminate Systems. This decrease was
partially offset by higher spending for acquisitions, mainly Johnson Matthey
Electronics, and the liquidation in 1998 of short-term investments.

    We continuously assess the relative strength of each business in our
portfolio as to strategic fit, market position and profit contribution in order
to upgrade our combined portfolio and identify operating units that will most
benefit from increased investment. We identify acquisition candidates that will
further our strategic plan and strengthen our existing core businesses. We also
identify operating units that do not fit into our long-term strategic plan based
on their market position, relative profitability or growth potential. These
operating units are considered for potential divestiture, restructuring or other
repositioning action subject to regulatory constraints.

    Capital expenditures were $853, $986 and $1,037 million in 2000, 1999 and
1998, respectively. Spending by the reportable segments and Corporate since 1998
is shown in 'Item 8. Financial Statements and Supplementary Data' in Note 24 of
Notes to Financial Statements. Our total capital expenditures in 2001 are
currently projected at approximately $1 billion. These expenditures are expected
to be financed principally by internally generated funds and are primarily
planned for expansion and cost reduction.

    Cash used for financing activities of $70 million during 2000 decreased by
$1,040 million compared with 1999 led principally by a decrease in stock
repurchases and higher net issuances of debt. During 2000, we repurchased 4.3
million shares of our common stock for $166 million in connection with our share
repurchase program. As a result of the pending merger with General Electric (see
Item 8. 'Financial Statements and Supplementary Data' in Note 4 of Notes to
Financial Statements), Honeywell rescinded its share repurchase program
effective October 21, 2000. Total debt of $5,623 million at December 31, 2000
was $557 million, or 11 percent higher than at December 31, 1999 due to the
acquisition of Pittway. Cash used for financing activities of $1,110 million
during 1999 increased by $1,002 million compared with 1998. The increase relates
principally to lower net issuances of debt partially offset by lower net stock
repurchases. Total debt of $5,066 million at year-end 1999 was $100 million, or
2 percent higher than at December 31, 1998.

    We maintain a $2 billion bank revolving credit facility which is comprised
of (a) a $1 billion Five-Year Credit Agreement; and, (b) a $1 billion 364-Day
Credit Agreement. The credit agreements were established for general corporate
purposes including support for the issuance of commercial paper. There was
$1,192 and $2,023 million of commercial paper outstanding at year-end 2000 and
1999, respectively. See 'Item 8. Financial Statements and Supplementary Data' in
Note 16 of Notes to Financial Statements for details of long-term debt and a
discussion of the Credit Agreements.

    We believe that our available cash, committed credit lines, and access to
the public debt markets using debt securities and commercial paper, provide
adequate short-term and long-term liquidity.

MERGER AND REPOSITIONING CHARGES

    In 2000, we recognized a charge of $239 million related to announced global
workforce reductions in each of our reportable segments, costs to close a chip
package manufacturing plant and related workforce reductions in our Electronic
Materials business, and other asset impairments principally associated with the
completion of previously announced plant shut-downs in our Performance Polymers
and Chemicals business. The components of the charge included severance costs of
$151 million and asset impairments of $88 million. The workforce reductions
consisted of approximately 2,800 manufacturing and administrative positions and
are expected to be substantially completed by

                                       16

the end of the second quarter of 2001. Asset impairments were principally
related to manufacturing plant and equipment held for sale and capable of being
taken out of service and actively marketed in the period of impairment. Also,
$46 million of accruals established in 1999, principally for severance, were
returned to income in 2000 due to higher than expected voluntary employee
attrition (approximately 650 positions) resulting in reduced severance
liabilities principally in our Automation & Control and Aerospace Solutions
reportable segments. We also recognized a charge of $99 million in equity in
(income) loss of affiliated companies for costs to close an affiliate's chemical
manufacturing operations. The components of the charge included severance costs
of $6 million, asset impairments of $53 million, and other environmental exit
costs and period expenses of $40 million.

    In 1999, upon completion of the merger between AlliedSignal and the former
Honeywell, we recognized a charge of $642 million for the cost of actions
designed to improve our combined competitiveness, productivity and future
profitability. The merger-related actions included the elimination of redundant
corporate offices and functional administrative overhead; elimination of
redundant and excess facilities and workforce in our combined aerospace
businesses; adoption of six sigma productivity initiatives at the former
Honeywell businesses; and, the transition to a global shared services model. The
components of the charge included severance costs of $342 million, asset
impairments of $108 million, other exit costs of $57 million and merger-related
transaction and period expenses of $135 million. Planned global workforce
reductions consisted of approximately 6,500 administrative and manufacturing
positions and are substantially complete. Asset impairments were principally
related to the elimination of redundant or excess corporate and aerospace
facilities and equipment. Other exit costs were related to lease terminations
and contract cancellation losses negotiated or subject to reasonable estimation
at year-end. Merger-related transaction and period expenses consisted of
investment banking and legal fees, former Honeywell deferred compensation vested
upon change in control and other direct merger-related expenses incurred in the
period the merger was completed. All merger-related actions are substantially
complete.

    In 1999, we also recognized a pretax charge of $321 million for the costs of
actions designed to reposition principally the AlliedSignal businesses for
improved productivity and future profitability. These repositioning actions
included the organizational realignment of our aerospace businesses to
strengthen market focus and simplify business structure; elimination of an
unprofitable product line, closing of a wax refinery and carbon materials plant
and rationalization of manufacturing capacity and infrastructure in our
Performance Polymers and Chemicals business; a reduction in the infrastructure
in our Turbocharging Systems business; elimination of two manufacturing
facilities in our Electronic Materials business; a plant closure and outsourcing
activity in our automotive Consumer Products Group business; and related and
general workforce reductions in all AlliedSignal businesses and our Industrial
Control business. The components of the charge included severance costs of
$140 million, asset impairments of $149 million, and other exit costs of
$32 million. Global workforce reductions consisted of approximately 5,100
manufacturing, administrative, and sales positions and are substantially
complete. Asset impairments were principally related to manufacturing plant and
equipment held for sale and capable of being taken out of service and actively
marketed in the period of impairment. Other exit costs principally consisted of
environmental exit costs associated with chemical plant shutdowns. All
repositioning actions, excluding environmental remediation, are substantially
complete.

    The merger and repositioning actions committed to in 2000 and 1999 generated
pretax savings of over $270 million in 2000 principally from planned workforce
reductions and facility consolidations. We expect these actions to generate
pretax savings of over $600 million in 2001 and $780 million in 2002. Cash
expenditures for severance, other exit costs, and future period expenses
necessary to execute these actions will exceed $500 million and were
principally incurred in 2000. Such expenditures have been funded through
operating cash flows, proceeds from government required divestitures resulting
from the merger of AlliedSignal and the former Honeywell and sale of merger-
related, excess or duplicate facilities and equipment.

    We are currently formulating a detailed plan to effect further actions
designed to improve our competitiveness, productivity and future profitability.
The cost of these actions will result in a charge against earnings in the first
quarter of 2001.

                                       17

    In 1998, we recognized a charge of $54 million related to productivity
initiatives which included workforce reductions of 1,200 employees and facility
consolidations principally in our Home and Building Control and Industrial
Control businesses. These actions were completed by December 31, 1999, with
substantially all reserve spending occurring in 1999.

ENVIRONMENTAL MATTERS

    We are subject to various federal, state and local government requirements
relating to the protection of the environment. We believe that, as a general
matter, our policies, practices and procedures are properly designed to prevent
unreasonable risk of environmental damage and that our handling, manufacture,
use and disposal of hazardous or toxic substances are in accord with
environmental laws and regulations. However, mainly because of past operations
and operations of predecessor companies, we, like other companies engaged in
similar businesses, are a party to lawsuits and claims and have incurred
remedial response and voluntary cleanup costs associated with environmental
matters. Additional lawsuits, claims and costs involving environmental matters
are likely to continue to arise in the future. We continually conduct studies,
individually at our owned sites, and jointly as a member of industry groups at
non-owned sites, to determine the feasibility of various remedial techniques to
address environmental matters. It is our policy to record appropriate
liabilities for such matters when environmental assessments are made or remedial
efforts are probable and the costs can be reasonably estimated. The timing of
these accruals is generally no later than the completion of feasibility studies.

    Remedial response and voluntary cleanup expenditures were $75, $78 and $77
million in 2000, 1999 and 1998, respectively, and are currently estimated to be
approximately $69 million in 2001. We expect that we will be able to fund such
expenditures from operating cash flow. The timing of expenditures depends on a
number of factors, including regulatory approval of cleanup projects, remedial
techniques to be utilized and agreements with other parties.

    In 2000 we charged $110 million against pretax income for remedial response
and voluntary cleanup costs. At December 31, 2000 and 1999, the recorded
liability for environmental matters was $386 and $349 million, respectively.
In addition, in 2000 and 1999 we incurred operating costs for ongoing
businesses of approximately $80 and $89 million, respectively, relating
to compliance with environmental regulations.

    Although we do not currently possess sufficient information to reasonably
estimate the amounts of liabilities to be recorded upon future completion of
studies or settlements, and neither the timing nor the amount of the ultimate
costs associated with environmental matters can be determined, they may be
significant to our consolidated results of operations. We do not expect that
environmental matters will have a material adverse effect on our consolidated
financial position.

    See 'Item 8. Financial Statements and Supplementary Data' in Note 22 of
Notes to Financial Statements for a discussion of our commitments and
contingencies, including those related to environmental matters.

FINANCIAL INSTRUMENTS

    As a result of our global operating and financing activities, we are exposed
to market risks from changes in interest and foreign currency exchange rates,
which may adversely affect our operating results and financial position. We
minimize our risks from interest and foreign currency exchange rate fluctuations
through our normal operating and financing activities and, when deemed
appropriate, through the use of derivative financial instruments. We do not use
derivative financial instruments for trading or other speculative purposes and
do not use leveraged derivative financial instruments. A summary of our
accounting policies for derivative financial instruments is included in 'Item 8.
Financial Statements and Supplementary Data' in Note 1 of Notes to Financial
Statements.

    Our exposure to market risk from changes in interest rates relates primarily
to our debt obligations. As described in 'Item 8. Financial Statements and
Supplementary Data' in Notes 16 and 18 of Notes

                                       18

to Financial Statements, we issue both fixed and variable rate debt and use
interest rate swaps to manage our exposure to interest rate movements and reduce
borrowing costs.

    Our exposure to market risk for changes in foreign currency exchange rates
arises from international financing activities between subsidiaries and foreign
currency denominated receivables, payables, and firm commitments arising from
international transactions. We attempt to have such transaction exposures hedged
with internal natural offsets to the fullest extent possible and, once these
opportunities have been exhausted, through foreign currency forward and option
agreements with third parties. We also use derivative financial instruments to
hedge the impact of exchange rate movements on the translated U.S. dollar value
of the net income for a number of foreign subsidiaries. Foreign currency forward
and option agreements used to hedge net income are marked-to-market, with gains
or losses recognized immediately in income. Our principal foreign currency
exposures relate to the Belgian franc, the French franc, the German mark
(collectively the Euro countries), the British pound, the Canadian dollar, and
the U.S. dollar. At December 31, 2000, we held or had written foreign currency
forward and option agreements maturing through 2001.

    Derivative financial instruments expose us to counterparty credit risk for
nonperformance and to market risk related to changes in interest or currency
exchange rates. We manage exposure to counterparty credit risk through specific
minimum credit standards, diversification of counterparties, and procedures to
monitor concentrations of credit risk. Our counterparties are substantial
investment and commercial banks with significant experience using such
derivative instruments. We monitor the impact of market risk on the fair value
and cash flows of our derivative and other financial instruments considering
reasonably possible changes in interest and currency exchange rates and restrict
the use of derivative financial instruments to hedging activities.

    The following table illustrates the potential change in fair value for
interest rate sensitive instruments based on a hypothetical immediate
one-percentage-point increase in interest rates across all maturities and the
potential change in fair value for foreign exchange rate sensitive instruments
based on a 10 percent increase in U.S. dollar per local currency exchange rates
across all maturities at December 31, 2000 and 1999.

                                                                                         ESTIMATED
                                                      FACE OR                            INCREASE
                                                      NOTIONAL   CARRYING     FAIR      (DECREASE)
                                                       AMOUNT    VALUE(1)   VALUE(1)   IN FAIR VALUE
                                                       ------    --------   --------   -------------
                                                                  (DOLLARS IN MILLIONS)
                                                                           
DECEMBER 31, 2000
INTEREST RATE SENSITIVE INSTRUMENTS
Long-term debt (including current maturities)(2)....  $(4,295)   $(4,291)   $(4,517)       $(183)
Interest rate swaps.................................    1,600         16         68          (67)

FOREIGN EXCHANGE RATE SENSITIVE INSTRUMENTS
Foreign currency exchange contracts(3)..............    1,542         --          3           (3)

DECEMBER 31, 1999
INTEREST RATE SENSITIVE INSTRUMENTS
Long-term debt (including current maturities)(2)....   (2,712)    (2,705)    (2,702)        (120)
Interest rate swaps.................................    1,100         (4)       (36)         (22)

FOREIGN EXCHANGE RATE SENSITIVE INSTRUMENTS
Foreign currency exchange contracts(3)..............    1,445          4          6           25

(1) Asset or (liability).

(2) Excludes capitalized leases.

(3) Increases in the fair value of foreign currency exchange contracts are
    substantially offset by changes in the fair value of net underlying hedged
    foreign currency transactions.

The above discussion of our procedures to monitor market risk and the estimated
changes in fair value resulting from our sensitivity analyses are
forward-looking statements of market risk assuming certain adverse market
conditions occur. Actual results in the future may differ materially from these
estimated results due to actual developments in the global financial markets.
The methods used by us to assess and mitigate risk discussed above should not be
considered projections of future events.

                                       19

OTHER MATTERS

LITIGATION

    Litton Litigation -- On March 13, 1990, Litton Systems, Inc. filed a legal
action against the former Honeywell in U.S. District Court, Central District of
California, Los Angeles, with claims that were subsequently split into two
separate cases. One alleges patent infringement under federal law for using an
ion-beam process to coat mirrors incorporated in the former Honeywell's ring
laser gyroscopes, and tortious interference under state law for interfering with
Litton's prospective advantage with customers and contractual relationships with
an inventor and his company, Ojai Research, Inc. The other case alleges
monopolization and attempted monopolization under federal antitrust laws by the
former Honeywell in the sale of inertial reference systems containing ring laser
gyroscopes into the commercial aircraft market. The former Honeywell generally
denied Litton's allegations in both cases. In the patent/tort case, the former
Honeywell also contested the validity as well as the infringement of the patent,
alleging, among other things, that the patent had been obtained by Litton's
inequitable conduct before the United States Patent and Trademark Office.

    In 1993 and 1995, trials were held in each case and juries initially awarded
Litton significant monetary damages. However, those verdicts were set aside by
the trial court judge who ordered, at a minimum, new trials on the issue of
damages in each case.

    Following cross-appeals by the parties of various issues to the Federal
Circuit and the U.S. Supreme Court in the patent/tort case, it was remanded to
the trial court for further legal and perhaps factual review with respect to
both liability and damages. On September 23, 1999, the trial court issued
dispositive rulings in the case, granting the former Honeywell's Motion for
Judgment as a Matter of Law and Summary Judgment on the Patent claims on various
grounds; granting the former Honeywell's Motion for Judgment as a Matter of Law
on the state law claims on the grounds of insufficient evidence; and denying
Litton's Motion for Partial Summary Judgment. The trial court entered a final
judgment in Honeywell's favor on January 31, 2000, and Litton appealed that
judgment to the U.S. Court of Appeals for the Federal Circuit. On February 5,
2001, a three judge panel of the Federal Circuit court affirmed the trial
court's rulings granting the former Honeywell's Motion for Judgment as a Matter
of Law and Summary Judgment on the patent claims, agreeing that the former
Honeywell did not infringe. On the state law claims, the panel vacated the
jury's verdict in favor of Litton, reversed the trial court's grant of judgment
as a matter of law for the former Honeywell, and remanded the case to the trial
court for further proceedings under state law to resolve certain factual issues
that it held should have been submitted to the jury. Litton may now seek review
of this decision by the U.S. Supreme Court.

    A retrial of damages in the antitrust case commenced October 29, 1998, and
on December 9, 1998, a jury returned a verdict against Honeywell for actual
damages in the amount of $250 million. Following post trial motions, on
September 24, 1999, the trial court issued rulings denying the former
Honeywell's Motion for Judgment as a Matter of Law and Motion for New Trial and
Remittitur as they related to Litton Systems, Inc., but granting the former
Honeywell's Motion for Judgment as a Matter of Law as it relates to Litton
Systems, Canada, Limited. The net effect of these rulings was to reduce the
existing judgment against the former Honeywell of $750 million to $660 million,
plus attorney fees and costs of approximately $35 million. We believe that there
is no factual or legal basis for the magnitude of the jury's award and believe
that it should be overturned. We also believe we have very strong arguments that
the liability portion of the jury verdict in the first antitrust trial was
erroneous. Both parties have appealed this judgment, as to both liability and
damages, to the U.S. Court of Appeals for the Ninth Circuit. Execution of the
trial court's judgment is stayed pending resolution of the former Honeywell's
post-judgment motions and disposition of any appeals filed by the parties.

    Although it is not possible at this time to predict the result of any
further appeals in this case, potential does remain for an adverse outcome which
could be material to our financial position or results of operations. As a
result of the uncertainty regarding the outcome of this matter, no provision has
been made in the financial statements with respect to this contingent liability.

    For a detailed discussion of this litigation, see 'Item 8. Financial
Statements and Supplementary Data' in Note 22 of Notes to the Financial
Statements.

    Shareowner Litigation -- Honeywell and seven of its officers were named as
defendants in several purported class action lawsuits filed in the United States
District Court for the District of New Jersey

                                       20

(the Securities Law Complaints). The Securities Law Complaints principally
allege that the defendants violated federal securities laws by purportedly
making false and misleading statements and by failing to disclose material
information concerning Honeywell's financial performance, thereby allegedly
causing the value of Honeywell's stock to be artificially inflated. The
purported class period for which damages are sought is December 20, 1999 to
June 19, 2000.

    In addition, Honeywell, seven of its officers and its Board of Directors
have been named as defendants in a purported shareowner derivative action which
was filed on November 27, 2000 in the United States District Court for the
District of New Jersey (the Derivative Complaint). The Derivative Compliant
alleges a single claim for breach of fiduciary duty based on nearly identical
allegations to those set forth in the Securities Law Complaints.

    We believe that there is no factual or legal basis for the allegations in
the Securities Law Complaints and the Derivative Complaint. Although it is not
possible at this time to predict the result of these cases, we expect to
prevail. However, an adverse outcome could be material to our financial position
or results of operations. No provision has been made in our financial statements
with respect to this contingent liability.

EURO CONVERSION

    On January 1, 1999, certain member countries of the European Union
established fixed conversion rates between their existing currencies and the
European Union's common currency (Euro). The transition period for the
introduction of the Euro is between January 1, 1999 and January 1, 2002. We have
identified and are ensuring that all Euro conversion compliance issues are
addressed and do not expect any adverse consequences.

SALES TO THE U.S. GOVERNMENT

    Sales to the U.S. Government, acting through its various departments and
agencies and through prime contractors, amounted to $2,219, $2,383 and
$2,693 million in 2000, 1999 and 1998, respectively. This included sales to the
Department of Defense (DoD), as a prime contractor and subcontractor, of $1,548,
$1,415 and $1,658 million in 2000, 1999 and 1998, respectively. Sales to the DoD
accounted for 6.2, 6.0 and 7.0 percent of our total sales in 2000, 1999 and
1998, respectively. We are affected by U.S. Government budget constraints for
defense and space programs. U.S. defense spending increased slightly in 2000 and
is also expected to increase slightly in 2001.

BACKLOG

    Our total backlog at year-end 2000 and 1999 was $8,094 and $8,736 million,
respectively. We anticipate that approximately $5,090 million of the 2000
backlog will be filled in 2001. We believe that backlog is not necessarily a
reliable indicator of our future sales because a substantial portion of the
orders constituting this backlog may be canceled at the customer's option.

INFLATION

    Highly competitive market conditions have minimized inflation's impact on
the selling prices of our products and the cost of our purchased materials. Cost
increases for materials and labor have generally been low, and productivity
enhancement programs, including Six Sigma initiatives, have largely offset any
impact.

NEW ACCOUNTING PRONOUNCEMENT

    Statement of Financial Accounting Standards No. 133, 'Accounting for
Derivative Instruments and Hedging Activities', as amended (SFAS No. 133), is
effective for Honeywell as of January 1, 2001. SFAS No. 133 requires all
derivatives to be recorded on the balance sheet as assets or liabilities,
measured at fair value. The accounting for gains or losses resulting from
changes in values of such derivatives depends on the use of the derivative and
whether it qualifies for hedge accounting. We estimate that, at January 1, 2001,
the effect on our consolidated financial statements of adopting SFAS No. 133
will not be material.

                                       21

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

    Information relating to market risk is included in 'Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations' under
the caption 'Financial Instruments.'

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          HONEYWELL INTERNATIONAL INC.
                        CONSOLIDATED STATEMENT OF INCOME

                                                               YEARS ENDED DECEMBER 31,
                                                              ---------------------------
                                                               2000      1999      1998
                                                               ----      ----      ----
                                                                 (DOLLARS IN MILLIONS,
                                                               EXCEPT PER SHARE AMOUNTS)
                                                                         
Net sales...................................................  $25,023   $23,735   $23,555
                                                              -------   -------   -------
Costs, expenses and other
    Cost of goods sold......................................   19,090    18,495    17,689
    Selling, general and administrative expenses............    3,134     3,216     3,008
    (Gain) on sale of non-strategic businesses..............     (112)     (106)       --
    Equity in (income) loss of affiliated companies.........       89       (76)     (162)
    Other (income) expense..................................      (57)     (307)      (27)
    Interest and other financial charges....................      481       265       275
                                                              -------   -------   -------
                                                               22,625    21,487    20,783
                                                              -------   -------   -------
Income before taxes on income...............................    2,398     2,248     2,772
Taxes on income.............................................      739       707       869
                                                              -------   -------   -------
Net income..................................................  $ 1,659   $ 1,541   $ 1,903
                                                              -------   -------   -------
                                                              -------   -------   -------
Earnings per share of common stock -- basic.................  $  2.07   $  1.95   $  2.38
                                                              -------   -------   -------
                                                              -------   -------   -------
Earnings per share of common stock -- assuming dilution.....  $  2.05   $  1.90   $  2.34
                                                              -------   -------   -------
                                                              -------   -------   -------

   The Notes to Financial Statements are an integral part of this statement.

                                       22

                          HONEYWELL INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEET

                                                                    DECEMBER 31,
                                                              ------------------------
                                                                 2000         1999
                                                              ----------   -----------
                                                               (DOLLARS IN MILLIONS)
                                                                     
ASSETS
Current assets:
    Cash and cash equivalents...............................   $ 1,196       $ 1,991
    Accounts and notes receivable...........................     4,623         3,896
    Inventories.............................................     3,734         3,436
    Other current assets....................................     1,108         1,099
                                                               -------       -------
            Total current assets............................    10,661        10,422
Investments and long-term receivables.......................       748           782
Property, plant and equipment -- net........................     5,230         5,630
Goodwill and other intangible assets -- net.................     5,898         4,660
Other assets................................................     2,638         2,033
                                                               -------       -------
            Total assets....................................   $25,175       $23,527
                                                               -------       -------
                                                               -------       -------
LIABILITIES
Current liabilities:
    Accounts payable........................................   $ 2,364       $ 2,129
    Short-term borrowings...................................       110           302
    Commercial paper........................................     1,192         2,023
    Current maturities of long-term debt....................       380           284
    Accrued liabilities.....................................     3,168         3,534
                                                               -------       -------
            Total current liabilities.......................     7,214         8,272
Long-term debt..............................................     3,941         2,457
Deferred income taxes.......................................     1,173           864
Postretirement benefit obligations other than pensions......     1,887         1,968
Other liabilities...........................................     1,253         1,367

CONTINGENCIES
SHAREOWNERS' EQUITY
Capital -- common stock -- Authorized 2,000,000,000 shares
  (par value $1 per share):
         -- issued 957,599,900 shares.......................       958           958
         -- additional paid-in capital......................     2,782         2,318
Common stock held in treasury, at cost:
    2000 -- 150,308,455 shares; 1999 -- 162,466,000
      shares................................................    (4,296)       (4,254)
Accumulated other nonowner changes..........................      (729)         (355)
Retained earnings...........................................    10,992         9,932
                                                               -------       -------
            Total shareowners' equity.......................     9,707         8,599
                                                               -------       -------
            Total liabilities and shareowners' equity.......   $25,175       $23,527
                                                               -------       -------
                                                               -------       -------

   The Notes to Financial Statements are an integral part of this statement.

                                       23

                          HONEYWELL INTERNATIONAL INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                                               YEARS ENDED DECEMBER 31,
                                                              ---------------------------
                                                               2000      1999      1998
                                                               ----      ----      ----
                                                                 (DOLLARS IN MILLIONS)
                                                                         
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income..............................................  $ 1,659   $ 1,541   $ 1,903
    Adjustments to reconcile net income to net cash provided
      by operating activities:
        (Gain) on sale of non-strategic businesses..........     (112)     (106)       --
        (Gain) on disposition of investment in AMP
          Incorporated......................................       --      (268)       --
        Merger, repositioning and other charges.............      966     1,287        54
        Depreciation and amortization.......................      995       881       897
        Undistributed earnings of equity affiliates.........       (4)      (39)      (24)
        Deferred income taxes...............................      414       (11)      221
        Net taxes paid on sales of businesses and
          investments.......................................      (97)     (246)     (300)
        Retirement benefit plans............................     (509)     (313)     (239)
        Other...............................................     (199)      148        63
        Changes in assets and liabilities, net of the
          effects of acquisitions and divestitures:
            Accounts and notes receivable...................     (560)      (54)     (154)
            Inventories.....................................      (45)       90       (96)
            Other current assets............................      (73)      (39)        3
            Accounts payable................................      186       121        35
            Accrued liabilities.............................     (632)     (618)     (389)
                                                              -------   -------   -------
              Net cash provided by operating activities.....    1,989     2,374     1,974
                                                              -------   -------   -------
CASH FLOWS FROM INVESTING ACTIVITIES
    Expenditures for property, plant and equipment..........     (853)     (986)   (1,037)
    Proceeds from disposals of property, plant and
      equipment.............................................      127        67       150
    Decrease in investments.................................       88        --        --
    (Increase) in investments...............................       (3)      (20)       (1)
    Disposition (purchase) of investment in AMP
      Incorporated..........................................       --     1,164      (890)
    Cash paid for acquisitions..............................   (2,523)   (1,311)     (581)
    Proceeds from sales of businesses.......................      467       784       335
    (Increase) decrease in short-term investments...........      (17)       11       431
                                                              -------   -------   -------
              Net cash (used for) investing activities......   (2,714)     (291)   (1,593)
                                                              -------   -------   -------
CASH FLOWS FROM FINANCING ACTIVITIES
    Net (decrease) increase in commercial paper.............     (831)      250       909
    Net (decrease) increase in short-term borrowings........     (191)      156        16
    Proceeds from issuance of common stock..................      296       419       216
    Proceeds from issuance of long-term debt................    1,810        25       687
    Payments of long-term debt..............................     (389)     (375)     (366)
    Repurchases of common stock.............................     (166)   (1,058)   (1,089)
    Cash dividends on common stock..........................     (599)     (527)     (481)
                                                              -------   -------   -------
              Net cash (used for) financing activities......      (70)   (1,110)     (108)
                                                              -------   -------   -------
Net (decrease) increase in cash and cash equivalents........     (795)      973       273
Cash and cash equivalents at beginning of year..............    1,991     1,018       745
                                                              -------   -------   -------
Cash and cash equivalents at end of year....................  $ 1,196   $ 1,991   $ 1,018
                                                              -------   -------   -------
                                                              -------   -------   -------

   The Notes to Financial Statements are an integral part of this statement.

                                       24

                          HONEYWELL INTERNATIONAL INC.
                 CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY

                                           COMMON                       COMMON STOCK      ACCUMULATED
                                        STOCK ISSUED     ADDITIONAL   HELD IN TREASURY    OTHER NON-                 TOTAL
                                       ---------------    PAID-IN     ----------------       OWNER     RETAINED   SHAREOWNERS'
                                       SHARES   AMOUNT    CAPITAL     SHARES   AMOUNT       CHANGES    EARNINGS      EQUITY
                                       ------   ------    -------     ------   ------       -------    --------      ------
                                                                (IN MILLIONS EXCEPT PER SHARE AMOUNTS)
                                                                                          
BALANCE AT DECEMBER 31, 1997.........  953.1     $953      $1,199     (158.1)  $(2,665)      $(208)    $ 7,496      $ 6,775
Net income...........................                                                                    1,903        1,903
Foreign exchange translation
 adjustments.........................                                                           34                       34
Minimum pension liability
 adjustment..........................                                                          (10)                     (10)
Unrealized holding gain on marketable
 securities..........................                                                           90                       90
                                                                                                                    -------
Nonowner changes in shareowners'
 equity..............................                                                                                 2,017
Common stock issued for
 acquisitions........................                         322       11.1        98                                  420
Common stock issued for employee
 benefit plans (including related tax
 benefits of $91)....................    3.8        4         348       11.0        96                                  448
Repurchases of common stock..........   (3.9)      (4)       (156)     (22.0)     (942)                              (1,102)
Cash dividends on common stock ($.60
 per share)..........................                                                                     (481)        (481)
Other................................    0.3                    6                                                         6
                                       -----     ----      ------     ------   -------       -----     -------      -------
BALANCE AT DECEMBER 31, 1998.........  953.3      953       1,719     (158.0)   (3,413)        (94)      8,918        8,083
Net income...........................                                                                    1,541        1,541
Foreign exchange translation
 adjustments.........................                                                         (126)                    (126)
Minimum pension liability
 adjustment..........................                                                          (43)                     (43)
Unrealized holding loss on marketable
 securities..........................                                                          (92)                     (92)
                                                                                                                    -------
Nonowner changes in shareowners'
 equity..............................                                                                                 1,280
Common stock issued for employee
 benefit plans (including related tax
 benefits of $237)...................    4.7        5         602       14.5       125                                  732
Repurchases of common stock..........                                  (18.9)     (966)                                (966)
Cash dividends on common stock ($.68
 per share)..........................                                                                     (527)        (527)
Other................................   (0.4)                  (3)                                                       (3)
                                       -----     ----      ------     ------   -------       -----     -------      -------
BALANCE AT DECEMBER 31, 1999.........  957.6      958       2,318     (162.4)   (4,254)       (355)      9,932        8,599
Net income...........................                                                                    1,659        1,659
Foreign exchange translation
 adjustments.........................                                                         (377)                    (377)
Unrealized holding gain on marketable
 securities..........................                                                            3                        3
                                                                                                                    -------
Nonowner changes in shareowners'
 equity..............................                                                                                 1,285
Common stock issued for employee
 benefit plans (including related tax
 benefits of $139)...................                         464       16.0       120                                  584
Repurchases of common stock..........                                   (4.3)     (166)                                (166)
Cash dividends on common stock ($.75
 per share)..........................                                                                     (599)        (599)
Other................................                                    0.4         4                                    4
                                       -----     ----      ------     ------   -------       -----     -------      -------
BALANCE AT DECEMBER 31, 2000.........  957.6     $958      $2,782     (150.3)  $(4,296)      $(729)    $10,992      $ 9,707
                                       -----     ----      ------     ------   -------       -----     -------      -------
                                       -----     ----      ------     ------   -------       -----     -------      -------

   The Notes to Financial Statements are an integral part of this statement.

                                       25

                          HONEYWELL INTERNATIONAL INC.
                         NOTES TO FINANCIAL STATEMENTS
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    HONEYWELL INTERNATIONAL INC. is a diversified technology and manufacturing
company, serving customers worldwide with aerospace products and services,
control technologies for buildings, homes and industry, automotive products,
power generation systems, specialty chemicals, fibers, plastics and electronic
and advanced materials. As described in Note 2, Honeywell International Inc. was
formed upon the merger of AlliedSignal Inc. and Honeywell Inc. The following is
a description of the significant accounting policies of Honeywell International
Inc.

    PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include
the accounts of Honeywell International Inc. and all of its subsidiaries in
which a controlling interest is maintained. All intercompany transactions and
balances are eliminated in consolidation.

    INVENTORIES -- Inventories are valued at the lower of cost or market using
the first-in, first-out or the average cost method and the last-in, first-out
(LIFO) method for certain qualifying domestic inventories.

    INVESTMENTS -- Investments in affiliates over which we have a significant
influence, but not a controlling interest, are accounted for using the equity
method of accounting. Other investments are carried at market value, if readily
determinable, or cost.

    PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment are recorded
at cost less accumulated depreciation. For financial reporting, the
straight-line method of depreciation is used over the estimated useful lives of
10 to 40 years for buildings and improvements and 3 to 15 years for machinery
and equipment.

    GOODWILL AND OTHER INTANGIBLE ASSETS -- Goodwill represents the excess of
acquisition costs over the fair value of net assets of businesses acquired and
is amortized on a straight-line basis over appropriate periods up to 40 years.
Goodwill, net, was $5,600 and $4,282 million at December 31, 2000 and 1999,
respectively. Accumulated amortization was $974 and $804 million at
December 31, 2000 and 1999, respectively.

    Other intangible assets includes patents, trademarks, customer lists and
other items amortized on a straight-line basis over appropriate periods up to
24 years. Other intangible assets, net, were $298 and $378 million at
December 31, 2000 and 1999, respectively. Accumulated amortization was $437 and
$398 million at December 31, 2000 and 1999, respectively.

    LONG-LIVED ASSETS -- We periodically evaluate the recoverability of the
carrying amount of long-lived assets (including property, plant, and equipment,
goodwill and other intangible assets) whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be fully
recoverable. An impairment is assessed when the undiscounted expected future
cash flows derived from an asset are less than its carrying amount. Impairment
losses are measured as the amount by which the carrying value of an asset
exceeds its fair value and are recognized in operating results. We also
continually evaluate the estimated useful lives of all long-lived assets and
periodically revise such estimates based on current events.

    SALES RECOGNITION -- Product and service sales are recognized when an
agreement of sale exists, product delivery has occurred or services have been
rendered, pricing is fixed or determinable, and collection is reasonably
assured. Sales under long-term contracts in the Aerospace Solutions and
Automation & Control segments are recorded on a percentage-of-completion method
measured on the cost-to-cost basis for engineering-type contracts and the
units-of-delivery basis for production-type contracts. Provisions for
anticipated losses on long-term contracts are recorded in full when such losses
become evident.

    ENVIRONMENTAL EXPENDITURES -- Environmental expenditures that relate to
current operations are expensed or capitalized as appropriate. Expenditures that
relate to an existing condition caused by past operations, and that do not
provide future benefits, are expensed as incurred. Liabilities are recorded when
environmental assessments are made or remedial efforts are probable and the
costs

                                       26

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

can be reasonably estimated. The timing of these accruals is generally no later
than the completion of feasibility studies.

    FOREIGN CURRENCY TRANSLATION -- Assets and liabilities of subsidiaries
operating outside the United States with a functional currency other than U.S.
dollars are translated into U.S. dollars using year-end exchange rates. Sales,
costs and expenses are translated at the average exchange rates effective during
the year. Foreign currency translation gains and losses are included as a
component of Accumulated Other Nonowner Changes in shareowners' equity. For
subsidiaries operating in highly inflationary environments, inventories and
property, plant and equipment, including related expenses, are remeasured at the
exchange rate in effect on the date the assets were acquired, while monetary
assets and liabilities are remeasured at year-end exchange rates. Remeasurement
adjustments for these operations are included in net income.

    FINANCIAL INSTRUMENTS -- Interest rate swap, foreign currency forward and
option agreements are accounted for as a hedge of the related asset, liability,
firm commitment or anticipated transaction when designated and effective as a
hedge of such items. Agreements qualifying for hedge accounting are accounted
for as follows:

     Changes in the amount to be received or paid under interest rate swap
     agreements are recognized in Interest and Other Financial Charges.

     Gains and losses on foreign currency exchange contracts used to hedge
     assets, liabilities and net income are recognized in Other (Income)
     Expense.

     Gains and losses on foreign currency exchange contracts to hedge net
     investments in foreign subsidiaries are recognized in the Cumulative
     Foreign Exchange Translation Adjustment.

     Gains and losses on foreign currency exchange contracts used to hedge firm
     foreign currency commitments, and purchased foreign currency options used
     to hedge anticipated foreign currency transactions, are recognized in the
     measurement of the hedged transaction when the transaction occurs.

    Changes in the fair value of agreements not qualifying for hedge accounting
are recognized in Other (Income) Expense. Gains and losses on terminated
interest rate swap agreements are amortized over the shorter of the remaining
term of the agreement or the hedged liability.

    The carrying value of each agreement is reported in Accounts and Notes
Receivable, Other Current Assets, Accounts Payable or Accrued Liabilities, as
appropriate.

    INCOME TAXES -- Deferred tax liabilities or assets reflect temporary
differences between amounts of assets and liabilities for financial and tax
reporting. Such amounts are adjusted, as appropriate, to reflect changes in tax
rates expected to be in effect when the temporary differences reverse. A
valuation allowance is established for any deferred tax asset for which
realization is not likely.

    RESEARCH AND DEVELOPMENT -- Research and development costs for
company-sponsored research and development projects are expensed as incurred.
Such costs are classified as part of Cost of Goods Sold and were $818, $909 and
$876 million in 2000, 1999 and 1998, respectively.

    EARNINGS PER SHARE -- Basic earnings per share is based on the weighted
average number of common shares outstanding. Diluted earnings per share is based
on the weighted average number of common shares outstanding and all dilutive
potential common shares outstanding. All earnings per share data in this report
reflect earnings per share -- assuming dilution, unless otherwise indicated.

    CASH AND CASH EQUIVALENTS -- Cash and cash equivalents includes cash on hand
and on deposit and highly liquid, temporary cash investments with an original
maturity of three months or less.

    USE OF ESTIMATES -- The preparation of consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions

                                       27

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

that affect the reported amounts in the financial statements and related
disclosures in the accompanying notes. Actual results could differ from those
estimates.

    NEW ACCOUNTING PRONOUNCEMENT -- Statement of Financial Accounting Standards
No. 133, 'Accounting for Derivative Instruments and Hedging Activities', as
amended (SFAS No. 133), is effective for Honeywell as of January 1, 2001. SFAS
No. 133 requires all derivatives to be recorded on the balance sheet as assets
or liabilities, measured at fair value. The accounting for gains or losses
resulting from changes in values of such derivatives depends on the use of the
derivative and whether it qualifies for hedge accounting. We estimate that, at
January 1, 2001, the effect on our consolidated financial statements of adopting
SFAS No. 133 will not be material.

NOTE 2 -- ALLIEDSIGNAL - HONEYWELL MERGER

    On December 1, 1999, AlliedSignal Inc. (AlliedSignal) and Honeywell Inc.
(former Honeywell) completed a merger under an Agreement and Plan of Merger
(Merger Agreement) dated as of June 4, 1999. Under the Merger Agreement, a
wholly-owned subsidiary of AlliedSignal merged with and into the former
Honeywell. As a result of the merger, the former Honeywell has become a
wholly-owned subsidiary of AlliedSignal. At the effective time of the merger
AlliedSignal was renamed Honeywell International Inc. (Honeywell).

    The former Honeywell shareowners received 1.875 shares of Honeywell common
stock for each share of the former Honeywell common stock with cash paid in lieu
of any fractional shares. As a result, former Honeywell shareowners received
approximately 241 million shares of Honeywell common stock valued at
approximately $15 billion at the merger date. In addition, outstanding former
Honeywell employee stock options were converted at the same exchange factor into
options to purchase approximately 10 million shares of Honeywell common stock.

    The merger qualified as a tax-free reorganization and was accounted for
under the pooling-of-interests accounting method. Accordingly, Honeywell's
consolidated financial statements have been restated for all periods prior to
the merger to include the results of operations, financial position and cash
flows of the former Honeywell as though it had always been a part of Honeywell.

    There were no material transactions between AlliedSignal and the former
Honeywell prior to the merger and there were no material adjustments to conform
the accounting policies of the combining companies.

    The net sales and net income previously reported by the separate companies
and the combined amounts presented in the accompanying Consolidated Statement of
Income are as follows:

                                                            NINE MONTHS
                                                               ENDED        YEAR ENDED
                                                           SEPTEMBER 30,   DECEMBER 31,
                                                               1999            1998
                                                           -------------   ------------
                                                            (UNAUDITED)
                                                                     
Net sales
    AlliedSignal.........................................     $11,252        $15,128
    Former Honeywell.....................................       6,324          8,427
                                                              -------        -------
Combined.................................................     $17,576        $23,555
                                                              -------        -------
                                                              -------        -------
Net income
    AlliedSignal.........................................     $ 1,121        $ 1,331
    Former Honeywell.....................................         413            572
                                                              -------        -------
Combined.................................................     $ 1,534        $ 1,903
                                                              -------        -------
                                                              -------        -------

    As described in Note 5, fees and expenses related to the merger and costs to
integrate the combined companies were expensed in the fourth quarter of 1999.

                                       28

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

NOTE 3 -- ACQUISITIONS

    In addition to the pooling-of-interests transaction discussed in Note 2, we
acquired businesses for an aggregate cost of $2,646, $1,314 and $1,191 million
in 2000, 1999 and 1998, respectively. The following table presents information
about the more significant acquisitions:

                                             ACQUISITION   AGGREGATE               ANNUAL
                                                DATE         COST      GOODWILL   NET SALES
                                                ----         ----      --------   ---------
                                                                      
2000
Pittway Corporation(1).....................      2/00       $2,200      $1,500     $1,600
1999
Johnson Matthey Electronics(2).............      8/99          655         331        670
TriStar Aerospace Co.(3)...................     12/99          300         147        200
1998
Banner Aerospace(4)........................      1/98          350         175        250
Pharmaceutical Fine Chemicals(5)...........      6/98          390         297        110

- ---------

(1) Pittway Corporation designs, manufactures and distributes security and fire
    systems for homes and buildings.

(2) Johnson Matthey Electronics supplies wafer fabrication materials and
    interconnect products to the electronics and telecommunications industries.

(3) TriStar Aerospace Co. distributes fasteners, fastening systems and related
    hardware and provides customized inventory management services to original
    equipment manufacturers of aircraft and aircraft components, commercial
    airlines and aircraft maintenance, repair and overhaul facilities.

(4) Banner Aerospace distributes FAA-certified aircraft hardware principally to
    the commercial air transport and general aviation markets.

(5) Pharmaceutical Fine Chemicals manufactures and distributes active and
    intermediate pharmaceutical chemicals.

    All the acquisitions were accounted for under the purchase method of
accounting, and accordingly, the assets and liabilities of the acquired
businesses were recorded at their estimated fair values at the dates of
acquisition. The excess of purchase price over the estimated fair values of the
net assets acquired, of $1,678, $678 and $883 million in 2000, 1999 and 1998,
respectively, was recorded as goodwill and is amortized over estimated useful
lives. In connection with these acquisitions the amounts recorded for
transaction costs and the costs of integrating the acquired businesses into
Honeywell were not material. The results of operations of the acquired
businesses have been included in the consolidated results of Honeywell from
their respective acquisition dates. The pro forma results for 2000, 1999 and
1998, assuming these acquisitions had been made at the beginning of the year,
would not be materially different from reported results.

NOTE 4 -- HONEYWELL-GENERAL ELECTRIC MERGER

    On October 22, 2000, Honeywell and General Electric Company (GE) entered
into an Agreement and Plan of Merger (Merger Agreement) providing for a business
combination between Honeywell and GE. When the merger is effective, a
wholly-owned subsidiary of GE will be merged with and into Honeywell, and
Honeywell will become a wholly-owned subsidiary of GE and each issued and
outstanding share of common stock of Honeywell will be converted into the right
to receive 1.055 shares of common stock of GE, with fractional shares paid in
cash. The merger, which was approved by Honeywell shareowners on January 10,
2001, is subject to certain remaining conditions, which include review or
approval of the transaction by various governmental authorities. GE and
Honeywell are working with regulatory agencies to complete the required reviews
or obtain required approvals so that the transaction can close as early as
possible in 2001. The Merger Agreement provides for payment of a $1.35 billion
termination fee by Honeywell under certain circumstances. In connection with the
execution of the Merger Agreement, Honeywell and GE entered into a stock option
agreement

                                       29

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

pursuant to which Honeywell granted to GE an option to purchase up to 19.9
percent of Honeywell's outstanding shares of common stock. The option is
exercisable in the same circumstances under which Honeywell is required to pay
to GE the $1.35 billion termination fee.

NOTE 5 -- MERGER, REPOSITIONING AND OTHER CHARGES

    In 2000, we recognized a charge of $239 million related to announced global
workforce reductions in each of our reportable segments, costs to close a chip
package manufacturing plant and related workforce reductions in our Electronic
Materials business, and other asset impairments principally associated with the
completion of previously announced plant shut-downs in our Performance Polymers
and Chemicals business. The components of the charge included severance costs of
$151 million and asset impairments of $88 million. The workforce reductions
consisted of approximately 2,800 manufacturing and administrative positions and
are expected to be substantially completed by the end of the second quarter of
2001. Asset impairments were principally related to manufacturing plant and
equipment held for sale and capable of being taken out of service and actively
marketed in the period of impairment. Also, $46 million of accruals established
in 1999, principally for severance, were returned to income in 2000 due to
higher than expected voluntary employee attrition (approximately 650 positions)
resulting in reduced severance liabilities principally in our Automation &
Control and Aerospace Solutions reportable segments. We also recognized a charge
of $99 million in equity in (income) loss of affiliated companies for costs to
close an affiliate's chemical manufacturing operations. The components of the
charge included severance costs of $6 million, asset impairments of $53 million,
and other environmental exit costs and period expenses of $40 million.

    In 1999, upon completion of the merger between AlliedSignal and the former
Honeywell, we recognized a charge of $642 million for the cost of actions
designed to improve our combined competitiveness, productivity and future
profitability. The merger-related actions included the elimination of redundant
corporate offices and functional administrative overhead; elimination of
redundant and excess facilities and workforce in our combined aerospace
businesses; adoption of six sigma productivity initiatives at the former
Honeywell businesses; and, the transition to a global shared services model. The
components of the charge included severance costs of $342 million, asset
impairments of $108 million, other exit costs of $57 million and merger-related
transaction and period expenses of $135 million. Planned global workforce
reductions consisted of approximately 6,500 administrative and manufacturing
positions and are substantially complete. Asset impairments were principally
related to the elimination of redundant or excess corporate and aerospace
facilities and equipment. Other exit costs were related to lease terminations
and contract cancellation losses negotiated or subject to reasonable estimation
at year-end. Merger-related transaction and period expenses consisted of
investment banking and legal fees, former Honeywell deferred compensation vested
upon change in control and other direct merger-related expenses incurred in the
period the merger was completed. All merger-related actions are substantially
complete.

    In 1999, we also recognized a charge of $321 million for the cost of actions
designed to reposition principally the AlliedSignal businesses for improved
productivity and future profitability. These repositioning actions included the
organizational realignment of our aerospace businesses to strengthen market
focus and simplify business structure; elimination of an unprofitable product
line, closing of a wax refinery and carbon materials plant and rationalization
of manufacturing capacity and infrastructure in our Performance Polymers and
Chemicals business; a reduction in the infrastructure in our Turbocharging
Systems business; elimination of two manufacturing facilities in our Electronic
Materials business; a plant closure and outsourcing activity in our automotive
Consumer Products Group business; and related and general workforce reductions
in all AlliedSignal businesses and our Industrial Control business. The
components of the charge included severance costs of $140 million, asset
impairments of $149 million, and other exit costs of $32 million. Global
workforce reductions consisted of approximately 5,100 manufacturing,
administrative, and sales positions and are substantially complete. Asset
impairments were principally related to manufacturing plant and

                                       30

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

equipment held for sale and capable of being taken out of service and actively
marketed in the period of impairment. Other exit costs principally consisted of
environmental exit costs associated with chemical plant shutdowns. All
repositioning actions, excluding environmental remediation, are substantially
complete.

    The following table summarizes the status of our total merger and
repositioning costs.

                                    SEVERANCE      ASSET      EXIT    MERGER FEES
                                      COSTS     IMPAIRMENTS   COSTS   AND EXPENSES   TOTAL
                                      -----     -----------   -----   ------------   -----
                                                                      
1999 charges......................    $ 482        $ 257      $ 89        $135       $ 963
1999 usage........................      (58)        (257)       (4)        (77)       (396)
                                      -----        -----      ----        ----       -----
Balance at December 31, 1999......      424           --        85          58         567
                                      -----        -----      ----        ----       -----
2000 charges......................      157          141        40          --         338
2000 usage........................     (303)        (141)      (41)        (58)       (543)
Adjustments.......................      (42)          --        (4)         --         (46)
                                      -----        -----      ----        ----       -----
Balance at December 31, 2000......    $ 236        $  --      $ 80        $ --       $ 316
                                      -----        -----      ----        ----       -----
                                      -----        -----      ----        ----       -----

    In 2000, we identified certain business units and manufacturing facilities
as non-core to our business strategy. As a result of this assessment, we
implemented cost reduction initiatives and conducted discussions with potential
acquirers of these businesses and assets. As part of this process, we evaluated
the businesses and assets for possible impairment. As a result of our analysis,
we recognized impairment charges of $245 and $165 million principally related to
the write-down of property, plant and equipment, goodwill and other identifiable
intangible assets of our Friction Materials business and a chemical
manufacturing facility, respectively. We recognized other charges consisting of
probable and reasonably estimable environmental liabilities of $87 million, and
contract claims, merger related period expenses, other contingencies, and
write-offs of tangible assets removed from service, including inventory,
totaling $140 million. In addition, we recognized a charge of $37 million in
equity in (income) loss of affiliated companies for costs principally related to
an equity investee's customer claims.

    In 1999, we recognized other charges consisting of losses on aerospace
engine maintenance contracts and a contract cancellation penalty totaling $45
million, customer and employee claims of $69 million, contract settlements and
contingent liabilities of $18 million, and other write-offs principally related
to tangible and intangible assets removed from service, including inventory, of
$152 million. We also recognized a $36 million charge resulting from an other
than temporary decline in value of an equity investment due to a significant
deterioration in market conditions and a $4 million charge related to an equity
investee's severance action involving approximately 220 employees. The
investee's severance action was completed by December 31, 1999.

    In 1998, we recognized a charge of $54 million related to productivity
initiatives which included workforce reductions and facility consolidations
principally in our Home and Building Control and Industrial Control businesses.
The components of the charge included severance costs of $46 million and other
exit costs of $8 million. Global workforce reductions included approximately
1,200 sales, marketing, manufacturing and other administrative positions. Other
exit costs consisted of lease termination penalties to consolidate field office
locations and other period costs incurred to rationalize product lines. These
actions were completed by December 31, 1999, with substantially all reserve
spending occurring in 1999.

                                       31

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

    The following table summarizes the pretax impact of total merger,
repositioning and other charges by reportable business segment.

                                                              2000    1999    1998
                                                              ----    ----    ----
                                                                     
Aerospace Solutions.........................................  $ 91   $  315   $ 1
Automation & Control........................................   108      215    52
Performance Materials.......................................   399      251    --
Power & Transportation Products.............................   263      129    --
Corporate...................................................   105      377     1
                                                              ----   ------   ---
                                                              $966   $1,287   $54
                                                              ----   ------   ---
                                                              ----   ------   ---

    The following table summarizes the pretax distribution of total merger,
repositioning and other charges by income statement classification.

                                                              2000    1999    1998
                                                              ----    ----    ----
                                                                     
Cost of goods sold..........................................  $830   $  947   $54
Selling, general and administrative expenses................    --      300    --
Equity in (income) loss of affiliated companies.............   136       40    --
                                                              ----   ------   ---
                                                              $966   $1,287   $54
                                                              ----   ------   ---
                                                              ----   ------   ---

NOTE 6 -- GAIN ON SALE OF NON-STRATEGIC BUSINESSES

    In 2000, as a result of a government mandate in connection with the merger
of AlliedSignal and the former Honeywell, we sold the TCAS product line of the
former Honeywell. We received approximately $215 million in cash resulting in a
pretax gain of $112 million. The TCAS product line had annual sales of
approximately $100 million.

    In 1999, we sold our Laminate Systems business for approximately $425
million in cash resulting in a pretax gain of $106 million. The Laminate Systems
business had annual sales of about $400 million.

NOTE 7 -- OTHER (INCOME) EXPENSE

                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                               2000        1999        1998
                                                               ----        ----        ----
                                                                             
Interest income and other...............................       $(79)      $ (76)       $(57)
Minority interests......................................         34          46          37
Foreign exchange (gain) loss............................        (12)         (9)         17
Gain on disposition of investment in AMP Incorporated...         --        (268)         --
Litigation settlements..................................         --          --         (24)
                                                               ----       -----        ----
                                                               $(57)      $(307)       $(27)
                                                               ----       -----        ----
                                                               ----       -----        ----

    In April 1999, we reached an agreement with Tyco International Ltd. (Tyco)
and AMP Incorporated (AMP), settling AMP's claim to the gain we would realize on
the disposition of our investment in AMP common stock. We made a payment to AMP
of $50 million, and the parties released all claims that they had against each
other relating to AMP. Subsequently, we converted our investment in AMP common
stock into Tyco common stock and sold the Tyco common stock for net cash
proceeds of $1.2 billion resulting in a pretax gain of $268 million, net of the
settlement payment.

                                       32

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

NOTE 8 -- INTEREST AND OTHER FINANCIAL CHARGES

                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                               2000        1999        1998
                                                               ----        ----        ----
                                                                             
Total interest and other financial charges..............       $497        $287        $300
Less -- Capitalized interest............................        (16)        (22)        (25)
                                                               ----        ----        ----
                                                               $481        $265        $275
                                                               ----        ----        ----
                                                               ----        ----        ----

    Cash payments of interest during the years 2000, 1999 and 1998 were $573,
$328 and $426 million, respectively.

    The weighted average interest rate on short-term borrowings and commercial
paper outstanding at December 31, 2000 and 1999 was 6.60 and 5.97 percent,
respectively.

NOTE 9 -- TAXES ON INCOME

INCOME BEFORE TAXES ON INCOME

                                                            YEARS ENDED DECEMBER 31,
                                                            ------------------------
                                                             2000     1999     1998
                                                             ----     ----     ----
                                                                     
United States.............................................  $1,842   $1,742   $2,085
Foreign...................................................     556      506      687
                                                            ------   ------   ------
                                                            $2,398   $2,248   $2,772
                                                            ------   ------   ------
                                                            ------   ------   ------

TAXES ON INCOME

                                                            YEARS ENDED DECEMBER 31,
                                                            ------------------------
                                                             2000     1999     1998
                                                             ----     ----     ----
                                                                     
United States.............................................  $  508   $  531   $  616
Foreign...................................................     231      176      253
                                                            ------   ------   ------
                                                            $  739   $  707   $  869
                                                            ------   ------   ------
                                                            ------   ------   ------

                                                            YEARS ENDED DECEMBER 31,
                                                            ------------------------
                                                             2000     1999     1998
                                                             ----     ----     ----
                                                                     
Taxes on income consist of:
Current:
    United States.........................................  $  126   $  416   $  424
    State.................................................       2      113       49
    Foreign...............................................     197      189      175
                                                            ------   ------   ------
                                                               325      718      648
                                                            ------   ------   ------
Deferred:
    United States.........................................     325       37       81
    State.................................................      55      (35)      62
    Foreign...............................................      34      (13)      78
                                                            ------   ------   ------
                                                               414      (11)     221
                                                            ------   ------   ------
                                                            $  739   $  707   $  869
                                                            ------   ------   ------
                                                            ------   ------   ------

                                       33

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

                                                            YEARS ENDED DECEMBER 31,
                                                            ------------------------
                                                             2000     1999     1998
                                                             ----     ----     ----
                                                                     
The U.S. statutory federal income tax rate is reconciled
  to our effective income tax rate as follows:
    Statutory U.S. federal income tax rate................    35.0%    35.0%    35.0%
    Taxes on foreign earnings over (under) U.S. tax
      rate................................................     (.7)    (1.2)     1.0
    Asset basis differences...............................     2.5     (1.6)    (1.5)
    Nondeductible amortization............................     2.8      3.3      1.3
    State income taxes....................................     1.3      2.2      2.5
    Tax benefits of Foreign Sales Corporation.............    (5.0)    (4.4)    (2.2)
    ESOP dividend tax benefit.............................     (.7)     (.7)     (.6)
    Tax credits...........................................    (3.5)    (1.2)    (1.1)
    All other items -- net................................     (.9)      .1     (3.1)
                                                            ------   ------   ------
                                                              30.8%    31.5%    31.3%
                                                            ------   ------   ------
                                                            ------   ------   ------

DEFERRED INCOME TAXES

                                                               DECEMBER 31,
                                                              ---------------
                                                               2000     1999
                                                               ----     ----
                                                                  
Included in the following balance sheet accounts:
    Other current assets....................................  $   734   $ 789
    Other assets............................................      151     143
    Accrued liabilities.....................................       (5)    (13)
    Deferred income taxes...................................   (1,173)   (864)
                                                              -------   -----
                                                              $  (293)  $  55
                                                              -------   -----
                                                              -------   -----

DEFERRED TAX ASSETS (LIABILITIES)

                                                              DECEMBER 31,
                                                              -------------
                                                              2000    1999
                                                              ----    ----
                                                                
The principal components of deferred tax assets and
  (liabilities) are as follows:
    Property, plant and equipment basis differences.........  $(934)  $(648)
    Postretirement benefits other than pensions and
      postemployment benefits...............................    847     869
    Investment and other asset basis differences............   (375)   (328)
    Other accrued items.....................................    377     552
    Net operating losses....................................    207     184
    Deferred foreign gain...................................    (17)    (27)
    Undistributed earnings of subsidiaries..................    (35)    (33)
    All other items -- net..................................   (319)   (491)
                                                              -----   -----
                                                               (249)     78
    Valuation allowance.....................................    (44)    (23)
                                                              -----   -----
                                                              $(293)  $  55
                                                              -----   -----
                                                              -----   -----

    The amount of federal tax net operating loss carryforwards available at
December 31, 2000 was $111 million. The majority of these loss carryforwards
were generated by certain subsidiaries prior to their acquisition in 1997 and
have expiration dates through the year 2011. The use of pre-acquisition
operating losses is subject to limitations imposed by the Internal Revenue Code.
We do not anticipate that these limitations will affect utilization of the
carryforwards prior to their expiration. We also have foreign net operating
losses of $595 million which are available to reduce future income tax payments
in several countries, subject to varying expiration rules.

                                       34

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

    Deferred income taxes have not been provided on approximately $2.1 billion
of undistributed earnings of foreign affiliated companies, which are considered
to be permanently reinvested. It is not practicable to estimate the amount of
tax that might be payable on the eventual remittance of such earnings.

    Cash payments of income taxes during the years 2000, 1999 and 1998 were
$442, $625 and $729 million, respectively.

NOTE 10 -- EARNINGS PER SHARE

    The following table sets forth the computations of basic and diluted
earnings per share:

                                                                 AVERAGE     PER SHARE
                                                      INCOME     SHARES       AMOUNT
                                                      ------     ------       ------
                                                                    
    2000
    Earnings per share of common stock -- basic.....  $1,659   800,317,543     $2.07
    Dilutive securities issuable in connection with
      stock plans...................................             9,149,959
                                                               -----------
    Earnings per share of common stock -- assuming
      dilution......................................  $1,659   809,467,502     $2.05
                                                      ------   -----------     -----
                                                      ------   -----------     -----
    1999
    Earnings per share of common stock -- basic.....  $1,541   792,010,145     $1.95
    Dilutive securities issuable in connection with
      stock plans...................................            16,979,863
                                                               -----------
    Earnings per share of common stock -- assuming
      dilution......................................  $1,541   808,990,008     $1.90
                                                      ------   -----------     -----
                                                      ------   -----------     -----
    1998
    Earnings per share of common stock -- basic.....  $1,903   798,390,836     $2.38
    Dilutive securities issuable in connection with
      stock plans...................................            15,608,334
                                                               -----------
    Earnings per share of common stock -- assuming
      dilution......................................  $1,903   813,999,170     $2.34
                                                      ------   -----------     -----
                                                      ------   -----------     -----

    The diluted earnings per share calculation excludes the effect of stock
options when the options' exercise prices exceed the average market price of the
common shares during the period. In 2000, 1999 and 1998, the number of stock
options not included in the computations was 14,563,673, 868,631 and 3,688,074,
respectively. These stock options were outstanding at the end of each of the
respective years.

NOTE 11 -- ACCOUNTS AND NOTES RECEIVABLE

                                                               DECEMBER 31,
                                                              ---------------
                                                               2000     1999
                                                               ----     ----
                                                                 
Trade.......................................................  $3,967   $3,545
Other.......................................................     755      435
                                                              ------   ------
                                                               4,722    3,980
Less -- Allowance for doubtful accounts and refunds.........     (99)     (84)
                                                              ------   ------
                                                              $4,623   $3,896
                                                              ------   ------
                                                              ------   ------

    Unbilled receivables related to long-term contracts were $423 and $359
million at December 31, 2000 and 1999, respectively, and are generally billable
and collectible within one year.

    We are a party to agreements under which we can sell undivided interests in
designated pools of trade accounts receivable. At both December 31, 2000 and
1999, trade accounts receivable on the

                                       35

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

Consolidated Balance Sheet have been reduced by approximately $500 million
reflecting such sales. We act as an agent for the purchasers in the collection
and administration of the receivables.

NOTE 12 -- INVENTORIES

                                                               DECEMBER 31,
                                                              ---------------
                                                               2000     1999
                                                               ----     ----
                                                                 
Raw materials...............................................  $1,262   $1,027
Work in process.............................................     809      973
Finished products...........................................   1,797    1,589
                                                              ------   ------
                                                               3,868    3,589
Less --
Progress payments...........................................      (5)     (44)
Reduction to LIFO cost basis................................    (129)    (109)
                                                              ------   ------
                                                              $3,734   $3,436
                                                              ------   ------
                                                              ------   ------

    Inventories valued at LIFO amounted to $167 million at both December 31,
2000 and 1999. Had such LIFO inventories been valued at current costs, their
carrying values would have been approximately $129 and $109 million higher at
December 31, 2000 and 1999, respectively.

    Inventories related to long-term contracts, net of progress payments and
customer advances, were $220 and $271 million at December 31, 2000 and 1999,
respectively.

NOTE 13 -- INVESTMENTS AND LONG-TERM RECEIVABLES

                                                              DECEMBER 31,
                                                              -------------
                                                              2000    1999
                                                              ----    ----
                                                                
Investments.................................................  $548    $664
Long-term receivables.......................................   200     118
                                                              ----    ----
                                                              $748    $782
                                                              ----    ----
                                                              ----    ----

NOTE 14 -- PROPERTY, PLANT AND EQUIPMENT

                                                                DECEMBER 31,
                                                              ----------------
                                                               2000      1999
                                                               ----      ----
                                                                  
Land and improvements.......................................  $   337   $  371
Machinery and equipment.....................................    9,484    9,574
Buildings and improvements..................................    2,134    2,192
Construction in progress....................................      505      566
                                                              -------   ------
                                                               12,460   12,703
Less -- Accumulated depreciation and amortization...........   (7,230)  (7,073)
                                                              -------   ------
                                                              $ 5,230   $5,630
                                                              -------   ------
                                                              -------   ------

NOTE 15 -- ACCRUED LIABILITIES

                                                               DECEMBER 31,
                                                              ---------------
                                                               2000     1999
                                                               ----     ----
                                                                 
Compensation and benefit costs..............................  $  728   $  828
Customer advances...........................................     453      511
Income taxes................................................      92      186
Environmental costs.........................................     171      104
Other.......................................................   1,724    1,905
                                                              ------   ------
                                                              $3,168   $3,534
                                                              ------   ------
                                                              ------   ------

                                       36

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

NOTE 16 -- LONG-TERM DEBT AND CREDIT AGREEMENTS

                                                               DECEMBER 31,
                                                              ---------------
                                                               2000     1999
                                                               ----     ----
                                                                 
6.60% notes due 2001........................................  $   --   $  100
5 3/4% dealer remarketable securities due 2001..............      --      200
6.75% notes due 2002........................................     200      200
9 7/8% debentures due 2002..................................     171      171
6.875% notes due 2005.......................................     750       --
8 5/8% debentures due 2006..................................     100      100
7.0% notes due 2007.........................................     350      350
7 1/8% notes due 2008.......................................     200      200
6.20% notes due 2008........................................     200      200
Zero coupon bonds and money multiplier notes,
  13.0% - 14.26%, due 2009..................................     100      100
7.50% notes due 2010........................................   1,000       --
Industrial development bond obligations, 4.40% - 6.75%,
  maturing at various dates through 2027....................      92      107
6 5/8% debentures due 2028..................................     216      216
9.065% debentures due 2033..................................      51       51
Other (including capitalized leases),
  1.54% - 12.50%, maturing at various dates through 2033....     511      462
                                                              ------   ------
                                                              $3,941   $2,457
                                                              ------   ------
                                                              ------   ------

    The schedule of principal payments on long-term debt is as follows:

                                                              AT DECEMBER 31,
                                                                   2000
                                                              ---------------
                                                           
2001........................................................      $  380
2002........................................................         465
2003........................................................          77
2004........................................................          63
2005........................................................         921
Thereafter..................................................       2,415
                                                                  ------
                                                                   4,321
Less -- Current portion.....................................        (380)
                                                                  ------
                                                                  $3,941
                                                                  ------
                                                                  ------

    We maintain $2 billion of bank revolving credit facilities with a group of
banks which are comprised of: (a) a $1 billion Five-Year Credit Agreement and
(b) a $1 billion 364-Day Credit Agreement. The credit agreements are maintained
for general corporate purposes including support for the issuance of commercial
paper. We had no balance outstanding under either agreement at December 31,
2000.

    Neither of the credit agreements restrict our ability to pay dividends and
neither contain financial covenants. The failure to comply with customary
conditions or the occurrence of customary events of default contained in the
credit agreements would prevent any further borrowings and would generally
require the repayment of any outstanding borrowings under such credit
agreements. Such events of default include (a) non-payment of credit agreement
debt and interest thereon, (b) non-compliance with the terms of the credit
agreement covenants, (c) cross-default with other debt in certain circumstances,
(d) bankruptcy and (e) defaults upon obligations under the Employee Retirement
Income Security Act. Additionally, each of the banks has the right to terminate
its commitment to lend under the credit agreements if any person or group
acquires beneficial ownership of 30 percent or more of our voting stock or,
during any 12-month period, individuals who were directors of Honeywell at the
beginning of the period cease to constitute a majority of the Board of Directors
(the Board).

                                       37

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

    Loans under the Five-Year Credit Agreement are required to be repaid no
later than December 2, 2004. We have agreed to pay a facility fee of 0.065
percent per annum on the aggregate commitment for the Five-Year Credit
Agreement, subject to increase or decrease in the event of changes in our
long-term debt ratings.

    Interest on borrowings under the Five-Year Credit Agreement would be
determined, at our option, by (a) an auction bidding procedure; (b) the highest
of the floating base rate of the agent bank, 0.5 percent above the average CD
rate, or 0.5 percent above the Federal funds rate or (c) the average
Eurocurrency rate of three reference banks plus 0.135 percent (applicable
margin). The applicable margin over the Eurocurrency rate on the Five-Year
Credit Agreement is subject to increase or decrease if our long-term debt
ratings change.

    The commitments under the 364-Day Credit Agreement terminate on November 29,
2001. Annually, prior to the Agreement's anniversary date, we may request that
the termination date of the 364-Day Credit Agreement be extended by 364 days. We
have agreed to pay a facility fee of 0.055 percent per annum on the aggregate
commitment for the 364-Day Credit Agreement.

    Interest on borrowings under the 364-Day Credit Agreement would be
determined, at our option, by (a) an auction bidding procedure; (b) the highest
of the floating base rate of the agent bank, 0.5 percent above the average CD
rate, or 0.5 percent above the Federal funds rate or (c) the average
Eurocurrency rate of three reference banks plus 0.145 percent (applicable
margin).

NOTE 17 -- LEASE COMMITMENTS

    Future minimum lease payments under operating leases having initial or
remaining noncancellable lease terms in excess of one year are as follows:

                                                              AT DECEMBER 31,
                                                                   2000
                                                              ---------------
                                                           
2001........................................................      $  233
2002........................................................         191
2003........................................................         147
2004........................................................         108
2005........................................................          92
Thereafter..................................................         313
                                                                  ------
                                                                  $1,084
                                                                  ------
                                                                  ------

Rent expense was $306, $291 and $262 million in 2000, 1999 and 1998,
respectively.

NOTE 18 -- FINANCIAL INSTRUMENTS

    As a result of our global operating and financing activities, we are exposed
to market risks from changes in interest and foreign currency exchange rates,
which may adversely affect our operating results and financial position. We
minimize our risks from interest and foreign currency exchange rate fluctuations
through our normal operating and financing activities and, when deemed
appropriate, through the use of derivative financial instruments. We do not use
derivative financial instruments for trading or other speculative purposes and
do not use leveraged derivative financial instruments.

    Interest rate swap agreements are used to manage interest rate risk by
adjusting our ratio of fixed to floating interest rates payable on our
outstanding debt. At December 31, 2000 and 1999, interest rate swap agreements
effectively changed $1,600 and $850 million, respectively, of fixed rate debt at
an average rate of 7.1 and 6.6 percent, respectively, to LIBOR and commercial
paper based floating rate debt. Other interest rate swaps at December 31, 1999
effectively changed $250 million of LIBOR and commercial paper based floating
rate swaps and debt to fixed rate swaps and debt with an average fixed rate of
6.3 percent. Our interest rate swaps mature through the year 2007.

                                       38

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

    Our exposure to market risk for changes in foreign currency exchange rates
arises from international financing activities between subsidiaries, and foreign
currency denominated receivables, payables, and firm commitments arising from
international transactions. We attempt to have such transaction exposure hedged
with internal natural offsets to the fullest extent possible and, once these
opportunities have been exhausted, through foreign currency forward and option
agreements with third parties. We also use derivative financial instruments to
hedge the impact of exchange rate movements on the translated U.S. dollar value
of the net income for a number of foreign subsidiaries. Foreign currency forward
and option agreements used to hedge net income are marked-to-market, with gains
or losses recognized immediately in income. Our principal foreign currency
exposures relate to the Belgian franc, the French franc, the German mark
(collectively the Euro countries), the British pound, the Canadian dollar, and
the U.S. dollar. At December 31, 2000, we held or had written foreign currency
forward and option agreements maturing through 2001.

    Derivative financial instruments expose us to counterparty credit risk for
nonperformance and to market risk related to changes in interest or currency
exchange rates. We manage our exposure to counterparty credit risk through
specific minimum credit standards, diversification of counterparties, and
procedures to monitor concentrations of credit risk. Our counterparties are
substantial investment and commercial banks with significant experience using
such derivative instruments. We monitor the impact of market risk on the fair
value and cash flows of our derivative and other financial instruments
considering reasonably possible changes in interest and currency exchange rates
and restrict the use of derivative financial instruments to hedging activities.

    The values of our outstanding derivative financial instruments at
December 31, 2000 and 1999 follows:

                                                           NOTIONAL
                                                           PRINCIPAL   CARRYING     FAIR
                                                            AMOUNT      VALUE     VALUE(1)
                                                            ------      -----     --------
                                                                         
DECEMBER 31, 2000
Interest rate swap agreements............................   $1,600       $ 16      $  68
Foreign currency exchange contracts......................    1,542         --          3

DECEMBER 31, 1999
Interest rate swap agreements............................   $1,100       $ (4)     $ (36)
Foreign currency exchange contracts......................    1,445          4          6

- ---------

(1) The fair value of financial instruments is based on quoted market prices or
    other valuation techniques, as appropriate.

    Other financial instruments that are not carried on the Consolidated Balance
Sheet at amounts, which approximate fair values, are certain debt instruments.
The carrying value of long-term debt and related current maturities (excluding
capitalized leases of $30 and $36 million at December 31, 2000 and 1999,
respectively) were $4,291 and $2,705 million and the fair values were $4,517 and
$2,702 million at December 31, 2000 and 1999, respectively. The fair values are
estimated based on the quoted market price for the issues (if traded) or based
on current rates offered to us for debt of the same remaining maturity and
characteristics.

NOTE 19 -- CAPITAL STOCK

    We are authorized to issue up to 2,000,000,000 shares of common stock, with
a par value of one dollar. Common shareowners are entitled to receive such
dividends as may be declared by the Board, are entitled to one vote per share,
and are entitled, in the event of liquidation, to share ratably in all the
assets of Honeywell which are available for distribution to the common
shareowners. Common shareowners do not have preemptive or conversion rights.
Shares of common stock issued and

                                       39

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

outstanding or held in the treasury are not liable to further calls or
assessments. There are no restrictions on us relative to dividends or the
repurchase or redemption of common stock.

    On July 21, 2000, our Board authorized a share repurchase program to
purchase up to 40 million shares of our common stock in the open market or in
privately negotiated transactions, depending on market conditions and other
factors. During 2000, we repurchased 4.3 million shares of our common stock for
$166 million in connection with our share repurchase program. As a result of the
pending merger with General Electric Company (See Note 4), Honeywell rescinded
its share repurchase program effective October 21, 2000.

    We are authorized to issue up to 40,000,000 shares of preferred stock,
without par value, and can determine the number of shares of each series, and
the rights, preferences and limitations of each series. As of December 31, 2000,
there was no preferred stock outstanding.

NOTE 20 -- OTHER NONOWNER CHANGES IN SHAREOWNERS' EQUITY

    Total nonowner changes in shareowners' equity are included in the
Consolidated Statement of Shareowners' Equity. The components of Accumulated
Other Nonowner Changes are as follows:

                                                                               AFTER-
                                                              PRETAX    TAX     TAX
                                                              ------    ---     ---
                                                                      
YEAR ENDED DECEMBER 31, 2000
Unrealized gains on securities available for sale...........  $   4    $  (1)  $   3
Reclassification adjustment for gains on securities
  available for sale included in net income.................     --       --      --
                                                              -----    -----   -----
Net unrealized gains arising during the year................      4       (1)      3
Foreign exchange translation adjustments....................   (377)      --    (377)
                                                              -----    -----   -----
                                                              $(373)   $  (1)  $(374)
                                                              -----    -----   -----
                                                              -----    -----   -----
YEAR ENDED DECEMBER 31, 1999
Unrealized gains on securities available for sale...........  $  --    $  --   $  --
Reclassification adjustment for gains on securities
  available for sale included in net income.................   (152)      60     (92)
                                                              -----    -----   -----
Net unrealized losses arising during the year...............   (152)      60     (92)
Foreign exchange translation adjustments....................   (126)      --    (126)
Minimum pension liability adjustment........................    (70)      27     (43)
                                                              -----    -----   -----
                                                              $(348)   $  87   $(261)
                                                              -----    -----   -----
                                                              -----    -----   -----
YEAR ENDED DECEMBER 31, 1998
Unrealized gains on securities available for sale...........  $ 149    $ (59)  $  90
Reclassification adjustment for gains on securities
  available for sale included in net income.................     --       --      --
                                                              -----    -----   -----
Net unrealized gains arising during the year................    149      (59)     90
Foreign exchange translation adjustments....................     34       --      34
Minimum pension liability adjustment........................    (16)       6     (10)
                                                              -----    -----   -----
                                                              $ 167    $ (53)  $ 114
                                                              -----    -----   -----
                                                              -----    -----   -----

                                       40

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

    The components of Accumulated Other Nonowner Changes are as follows:

                                                                  DECEMBER 31,
                                                              ---------------------
                                                              2000    1999    1998
                                                              ----    ----    ----
                                                                     
Cumulative foreign exchange translation adjustment..........  $(672)  $(295)  $(169)
Unrealized holding gains on securities available for sale...      3      --      92
Minimum pension liability...................................    (60)    (60)    (17)
                                                              -----   -----   -----
                                                              $(729)  $(355)  $ (94)
                                                              -----   -----   -----
                                                              -----   -----   -----

NOTE 21 -- STOCK-BASED COMPENSATION PLANS

    We have stock plans available to grant incentive stock options,
non-qualified stock options and stock appreciation rights to officers and
employees.

    FIXED STOCK OPTIONS -- The exercise price, term and other conditions
applicable to each option granted under the stock plans are generally determined
by the Management Development and Compensation Committee of the Board. The
options are granted at a price equal to the stock's fair market value on the
date of grant. The options generally become exercisable over a three-year period
and expire after ten years.

    The following table summarizes information about stock option activity for
the three years ended December 31, 2000:

                                                                            WEIGHTED
                                                                            AVERAGE
                                                               NUMBER OF    EXERCISE
                                                                OPTIONS      PRICE
                                                                -------      -----
                                                                      
Outstanding at December 31, 1997............................   59,962,780    $22.47
    Granted.................................................    9,819,362     34.33
    Exercised...............................................  (10,708,194)    20.28
    Lapsed or canceled......................................   (4,352,142)    26.33
                                                              -----------
Outstanding at December 31, 1998............................   54,721,806     25.66
    Granted.................................................   20,580,611     54.93
    Exercised...............................................  (16,956,945)    23.04
    Lapsed or canceled......................................   (2,304,969)    35.38
                                                              -----------
Outstanding at December 31, 1999............................   56,040,503     36.81
    Granted.................................................    4,506,804     45.68
    Exercised...............................................  (12,115,659)    23.22
    Lapsed or canceled......................................   (2,431,324)    52.87
                                                              -----------
Outstanding at December 31, 2000............................   46,000,324     40.36
                                                              -----------
                                                              -----------

    The following table summarizes information about stock options outstanding
at December 31, 2000:

                                       OPTIONS OUTSTANDING           OPTIONS EXERCISABLE
                                ---------------------------------   ----------------------
                                                         WEIGHTED                 WEIGHTED
                                              WEIGHTED   AVERAGE                  AVERAGE
                                  NUMBER      AVERAGE    EXERCISE     NUMBER      EXERCISE
RANGE OF EXERCISE PRICES        OUTSTANDING   LIFE(1)     PRICE     EXERCISABLE    PRICE
- ------------------------        -----------   -------     -----     -----------    -----
                                                                   
$ 7.18 - $29.98...............  12,808,606      3.5       $19.64    11,513,126     $19.52
$30.41 - $39.93...............   9,591,295      7.1        36.64     7,970,175      36.71
$40.02 - $49.97...............  11,659,185      8.0        43.39     5,801,237      41.84
$50.13 - $66.73...............  11,941,238      8.9        62.63     1,713,808      61.62
                                ----------                          ----------
                                46,000,324      6.8        40.36    26,998,346      32.06
                                ----------                          ----------
                                ----------                          ----------

- ---------

(1) Average remaining contractual life in years.

                                       41

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

There were 30,927,704 and 33,530,799 options exercisable at weighted average
exercise prices of $27.21 and $20.38 at December 31, 1999 and 1998,
respectively. There were 3,627,101 shares available for future grants under the
terms of our stock option plans at December 31, 2000.

    Statement of Financial Accounting Standards No. 123, 'Accounting for
Stock-Based Compensation,' (SFAS No. 123) requires that the cost of stock-based
compensation be measured using a fair value based method. As permitted by SFAS
No. 123, we elected to continue to account for stock-based compensation using
the intrinsic value based method under Accounting Principles Board Opinion
No. 25, 'Accounting for Stock Issued to Employees.' Accordingly, no compensation
cost has been recognized for our fixed stock option plans. The following table
sets forth pro forma information, including related assumptions, as if
compensation cost had been determined consistent with the requirements of SFAS
No. 123.

                                                              2000     1999    1998
                                                              ----     ----    ----
                                                                      
Weighted average fair value per share of options granted
  during the year(1).......................................  $18.21   $12.70   $9.24
Reduction of:
    Net income.............................................  $   75   $   65   $  48
    Earnings per share of common stock -- basic............  $  .09   $  .08   $ .06
    Earnings per share of common stock -- assuming
      dilution.............................................  $  .09   $  .08   $ .06
Assumptions:
    Historical dividend yield..............................     1.4%     1.3%    1.6%
    Historical volatility..................................    27.8%    24.6%   20.7%
    Risk-free rate of return...............................     6.4%     5.2%    5.3%
    Expected life (years)..................................     5.0      5.0     5.0

- ---------

(1) Estimated on date of grant using Black-Scholes option-pricing model.

    RESTRICTED STOCK UNITS -- Restricted stock unit (RSU) awards entitle the
holder to receive one share of common stock for each unit when the units vest.
RSU's are issued to certain key employees as compensation and as incentives tied
directly to the achievement of certain performance objectives.

    RSU's issued were 1,374,640, 1,175,127 and 942,143 in 2000, 1999 and 1998,
respectively. There were 2,449,749, 2,657,561 and 3,117,736 RSU's outstanding,
with a weighted average grant date fair value per share of $47.33, $37.81 and
$28.84 at December 31, 2000, 1999 and 1998, respectively.

    NON-EMPLOYEE DIRECTORS' PLAN -- We also have a Stock Plan for Non-Employee
Directors (Directors' Plan) under which restricted shares and options are
granted. Each new director receives a one-time grant of 3,000 shares of common
stock, subject to certain restrictions. In addition, each director will be
granted an option to purchase 2,000 shares of common stock each year on the date
of the annual meeting of shareowners. We have set aside 450,000 shares for
issuance under the Directors' Plan. Options generally become exercisable over a
three-year period and expire after ten years.

    EMPLOYEE STOCK MATCH PLANS -- We sponsor employee savings plans under which
we match, in the form of our common stock, certain eligible U.S. employee
savings plan contributions. Shares issued under the stock match plans were 3.9,
2.6 and 3.4 million in 2000, 1999 and 1998, respectively, at a cost of $161,
$142 and $139 million, respectively.

NOTE 22 -- COMMITMENTS AND CONTINGENCIES

    LITTON LITIGATION -- On March 13, 1990, Litton Systems, Inc. (Litton) filed
a legal action against the former Honeywell in U.S. District Court, Central
District of California, Los Angeles (the trial court) with claims that were
subsequently split into two separate cases. One alleges patent infringement
under

                                       42

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

federal law for using an ion-beam process to coat mirrors incorporated in the
former Honeywell's ring laser gyroscopes, and tortious interference under state
law for interfering with Litton's prospective advantage with customers and
contractual relationships with an inventor and his company, Ojai Research, Inc.
The other case alleges monopolization and attempted monopolization under federal
antitrust laws by the former Honeywell in the sale of inertial reference systems
containing ring laser gyroscopes into the commercial aircraft market. The former
Honeywell generally denied Litton's allegations in both cases. In the
patent/tort case, the former Honeywell also contested the validity as well as
the infringement of the patent, alleging, among other things, that the patent
had been obtained by Litton's inequitable conduct before the United States
Patent and Trademark Office.

    Patent/Tort Case -- U.S. District Court Judge Mariana Pfaelzer presided over
a three-month patent infringement and tortious interference trial in 1993. On
August 31, 1993, a jury returned a verdict in favor of Litton, awarding damages
against the former Honeywell in the amount of $1.2 billion on three claims. The
former Honeywell filed post-trial motions contesting the verdict and damage
award. On January 9, 1995, the trial court set them all aside, ruling, among
other things, that the Litton patent was invalid due to obviousness,
unenforceable because of Litton's inequitable conduct before the Patent and
Trademark Office, and in any case, not infringed by the former Honeywell's
current process. It further ruled that Litton's state tort claims were not
supported by sufficient evidence. The trial court also held that if its rulings
concerning liability were vacated or reversed on appeal, the former Honeywell
should at least be granted a new trial on the issue of damages because the
jury's award was inconsistent with the clear weight of the evidence and based
upon a speculative damage study.

    The trial court's rulings were appealed to the U.S. Court of Appeals for the
Federal Circuit, and on July 3, 1996, in a two to one split decision, a three
judge panel of that court reversed the trial court's rulings of patent
invalidity, unenforceability and non-infringement, and also found the former
Honeywell to have violated California law by intentionally interfering with
Litton's consultant contracts and customer prospects. However, the panel upheld
two trial court rulings favorable to the former Honeywell, namely that the
former Honeywell was entitled to a new trial for damages on all claims, and also
to a grant of intervening patent rights which are to be defined and quantified
by the trial court. After unsuccessfully requesting a rehearing of the panel's
decision by the full Federal Circuit appellate court, the former Honeywell filed
a petition with the U.S. Supreme Court on November 26, 1996, seeking review of
the panel's decision. In the interim, Litton filed a motion and briefs with the
trial court seeking injunctive relief against the former Honeywell's commercial
ring laser gyroscope sales. After the former Honeywell and certain aircraft
manufacturers filed briefs and made oral arguments opposing the injunction, the
trial court denied Litton's motion on public interest grounds on December 23,
1996, and then scheduled the patent/tort damages retrial for May 6, 1997.

    On March 17, 1997, the U.S. Supreme Court granted the former Honeywell's
petition for review and vacated the July 3, 1996 Federal Circuit panel decision.
The case was remanded to the Federal Circuit panel for reconsideration in light
of a recent decision by the U.S. Supreme Court in the Warner-Jenkinson vs.
Hilton Davis case, which refined the law concerning patent infringement under
the doctrine of equivalents. On March 21, 1997, Litton filed a notice of appeal
to the Federal Circuit of the trial court's December 23, 1996 decision to deny
injunctive relief, but the Federal Circuit stayed any briefing or consideration
of that matter until such time as it completed its reconsideration of liability
issues ordered by the U.S. Supreme Court.

    The liability issues were argued before the same three judge Federal Circuit
panel on September 30, 1997. On April 7, 1998, the panel issued its decision:

    (i)  affirming the trial court's ruling that the former Honeywell's hollow
         cathode and RF ion-beam processes do not literally infringe the
         asserted claims of Litton's '849 reissue patent (Litton's patent);

   (ii)  vacating the trial court's ruling that the former Honeywell's RF
         ion-beam process does not infringe the asserted claims of Litton's
         patent under the doctrine of equivalents, but also

                                       43

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

         vacating the jury's verdict on that issue and remanding that issue to
         the trial court for further proceedings in accordance with the
         Warner-Jenkinson decision;

  (iii)  vacating the jury's verdict that the former Honeywell's hollow
         cathode process infringes the asserted claims of Litton's patent
         under the doctrine of equivalents and remanding that issue to the
         trial court for further proceedings;

    (iv) reversing the trial court's ruling with respect to the torts of
         intentional interference with contractual relations and intentional
         interference with prospective economic advantage, but also vacating the
         jury's verdict on that issue, and remanding the issue to the trial
         court for further proceedings in accordance with California state law;

    (v)  affirming the trial court's grant of a new trial to the former
         Honeywell on damages for all claims, if necessary;

    (vi) affirming the trial court's order granting intervening rights to the
         former Honeywell in the patent claim;

   (vii) reversing the trial court's ruling that the asserted claims of
         Litton's patent were invalid due to obviousness and reinstating the
         jury's verdict on that issue; and

  (viii) reversing the trial court's determination that Litton had obtained
         Litton's patent through inequitable conduct.

    Litton's request for a rehearing of the panel's decision by the full Federal
Circuit court was denied and its appeal of the denial of an injunction was
dismissed. The case was remanded to the trial court for further legal and
perhaps factual review. The parties filed motions with the trial court to
dispose of the remanded issues as matters of law, which were argued before the
trial court on July 26, 1999. On September 23, 1999, the trial court issued
dispositive rulings in the case, granting the former Honeywell's Motion for
Judgment as a Matter of Law and Summary Judgment on the patent claims on various
grounds; granting the former Honeywell's Motion for Judgment as a Matter of Law
on the state law claims on the grounds of insufficient evidence; and denying
Litton's Motion for Partial Summary Judgment. The trial court entered a final
judgment in Honeywell's favor on January 31, 2000, and Litton appealed that
judgment to the U.S. Court of Appeals for the Federal Circuit.

    On February 5, 2001, a three judge panel of the Federal Circuit court
affirmed the trial court's rulings granting the former Honeywell's Motion for
Judgment as a Matter of Law and Summary Judgment on the patent claims, agreeing
that the former Honeywell did not infringe. On the state law claims, the panel
vacated the jury's verdict in favor of Litton, reversed the trial court's grant
of judgment as a matter of law for the former Honeywell, and remanded the case
to the trial court for further proceedings under state law to resolve certain
factual issues that it held should have been submitted to the jury. Litton may
now attempt to seek review of this decision by the U.S. Supreme Court.

    When preparing for the patent/tort damages retrial that was scheduled for
May 1997, Litton had submitted a revised damage study to the trial court,
seeking damages as high as $1.9 billion. We do not expect that if Litton files
an appeal to the U.S. Supreme Court it will ultimately succeed. We do not expect
that in the absence of any patent infringement Litton will be able to prove any
tortious conduct by the former Honeywell under state law that interfered with
Litton's contracts or business prospects. We believe that it is reasonably
possible that no damages will ultimately be awarded to Litton.

    Although it is not possible at this time to predict whether Litton will seek
review by the U.S. Supreme Court and whether such an appeal would succeed,
potential does remain for an adverse outcome which could be material to our
financial position or results of operations. We believe however, that any
potential award of damages for an adverse judgment of infringement or
interference should be based upon a reasonable royalty reflecting the value of
the ion-beam coating process, and further that such an award would not be
material to our financial position or results of operations. As a result of the
uncertainty regarding the outcome of this matter, no provision has been made in
the financial statements with respect to this contingent liability.

                                       44

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

    Antitrust Case -- Preparations for, and conduct of, the trial in the
antitrust case have generally followed the completion of comparable proceedings
in the patent/tort case. The antitrust trial did not begin until November 20,
1995. Judge Pfaelzer also presided over the trial, but it was held before a
different jury. At the close of evidence and before jury deliberations began,
the trial court dismissed, for failure of proof, Litton's contentions that the
former Honeywell had illegally monopolized and attempted to monopolize by:

    (i) engaging in below-cost predatory pricing;

   (ii) tying and bundling product offerings under packaged pricing;

  (iii) misrepresenting its products and disparaging Litton products; and

   (iv) acquiring the Sperry Avionics business in 1986.

    On February 2, 1996, the case was submitted to the jury on the remaining
allegations that the former Honeywell had illegally monopolized and attempted to
monopolize by:

    (i) entering into certain long-term exclusive dealing and penalty
        arrangements with aircraft manufacturers and airlines to exclude Litton
        from the commercial aircraft market, and

   (ii) failing to provide Litton with access to proprietary software used in
        the cockpits of certain business jets.

    On February 29, 1996, the jury returned a $234 million single damages
verdict against the former Honeywell for illegal monopolization, which verdict
would have been automatically trebled. On March 1, 1996, the jury indicated that
it was unable to reach a verdict on damages for the attempt to monopolize claim,
and a mistrial was declared as to that claim.

    The former Honeywell subsequently filed a motion for judgment as a matter of
law and a motion for a new trial, contending, among other things, that the
jury's partial verdict should be overturned because the former Honeywell was
prejudiced at trial, and Litton failed to prove essential elements of liability
or submit competent evidence to support its speculative, all-or-nothing
$298.5 million damage claim. Litton filed motions for entry of judgment and
injunctive relief. On July 24, 1996, the trial court denied the former
Honeywell's alternative motions for judgment as a matter of law or a complete
new trial, but concluded that Litton's damage study was seriously flawed and
granted the former Honeywell a retrial on damages only. The court also denied
Litton's two motions. At that time, Judge Pfaelzer was expected to conduct the
retrial of antitrust damages sometime following the retrial of patent/tort
damages. However, after the U.S. Supreme Court remanded the patent/tort case to
the Federal Circuit in March 1997, Litton moved to have the trial court
expeditiously schedule the antitrust damages retrial. In September 1997, the
trial court rejected that motion, indicating that it wished to know the outcome
of the current patent/tort appeal before scheduling retrials of any type.

    Following the April 7, 1998 Federal Circuit panel decision in the
patent/tort case, Litton again petitioned the trial court to schedule the
retrial of antitrust damages. The trial court tentatively scheduled the trial to
commence in the fourth quarter of 1998, and reopened limited discovery and other
pretrial preparations. Litton then filed another antitrust damage claim of
nearly $300 million.

    The damages only retrial began October 29, 1998 before Judge Pfaelzer and a
new jury. On December 9, 1998, the jury returned verdicts against the former
Honeywell totaling $250 million, $220 million of which is in favor of Litton and
$30 million of which is in favor of its sister corporation, Litton Systems,
Canada, Limited.

    On January 27, 1999, the court vacated its prior mistrial ruling with
respect to the attempt to monopolize claim and entered a treble damages judgment
in the total amount of $750 million for actual and attempted monopolization. The
former Honeywell filed appropriate post-judgment motions with the trial court
and Litton filed motions seeking to add substantial attorney's fees and costs to
the judgment. A hearing on the post-judgment motions was held before the trial
court on May 20, 1999. On September 24, 1999, the trial court issued rulings
denying the former Honeywell's Motion for Judgment as a Matter of Law and Motion
for New Trial and Remittitur as they related to Litton Systems Inc., but

                                       45

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

granting the former Honeywell's Motion for Judgment as a Matter of Law as it
relates to Litton Systems, Canada, Limited. The net effect of these rulings was
to reduce the existing judgment against the former Honeywell of $750 million to
$660 million, plus attorney fees and costs of approximately $35 million. Both
parties have appealed the judgment, as to both liability and damages, to the
U.S. Court of Appeals for the Ninth Circuit. Execution of the trial court's
judgment is stayed pending resolution of the former Honeywell's post-judgment
motions and the disposition of any appeals filed by the parties.

    We expect to obtain substantial relief from the current adverse judgment in
the antitrust case by an appeal to the Ninth Circuit, based upon sound
substantive and procedural legal grounds. We believe that there was no factual
or legal basis for the magnitude of the jury's award in the damages retrial and
that, as was the case in the first trial, the jury's award should be overturned.
We also believe there are serious questions concerning the identity and nature
of the business arrangements and conduct which were found by the first antitrust
jury in 1996 to be anti-competitive and damaging to Litton, and the verdict of
liability should be overturned as a matter of law.

    Although it is not possible at this time to predict the result of the
appeals, potential remains for an adverse outcome which could be material to our
financial position or results of operations. As a result of the uncertainty
regarding the outcome of this matter, no provision has been made in the
financial statements with respect to this contingent liability. We also believe
that it would be inappropriate for Litton to obtain recovery of the same
damages, e.g. losses it suffered due to the former Honeywell's sales of ring
laser gyroscope-based inertial systems to OEMs and airline customers, under
multiple legal theories, claims, and cases, and that eventually any duplicative
recovery would be eliminated from the antitrust and patent/tort cases.

    SHAREOWNER LITIGATION -- Honeywell and seven of its officers were named as
defendants in several purported class action lawsuits filed in the United States
District Court for the District of New Jersey (the Securities Law Complaints).
The Securities Law Complaints principally allege that the defendants violated
federal securities laws by purportedly making false and misleading statements
and by failing to disclose material information concerning Honeywell's financial
performance, thereby allegedly causing the value of Honeywell's stock to be
artifically inflated. The purported class period for which damages are sought is
December 20, 1999 to June 19, 2000.

    In addition, Honeywell, seven of its officers and its Board have been named
as defendants in a purported shareowner derivative action which was filed on
November 27, 2000 in the United States District Court for the District of New
Jersey (the Derivative Complaint). The Derivative Complaint alleges a single
claim for breach of fiduciary duty based on nearly identical allegations to
those set forth in the Securities Law Complaints.

    We believe that there is no factual or legal basis for the allegations in
the Securities Law Complaints and the Derivative Complaint. Although it is not
possible at this time to predict the result of these cases, we expect to
prevail. However, an adverse outcome could be material to our financial position
or results of operations. No provision has been made in our financial statements
with respect to this contingent liability.

    ENVIRONMENTAL MATTERS -- In accordance with our accounting policy (see
Note 1), liabilities are recorded for environmental matters generally no later
than the completion of feasibility studies. Although we do not currently possess
sufficient information to reasonably estimate the amounts of the liabilities to
be recorded upon future completion of studies, they may be significant to the
consolidated results of operations, but we do not expect that they will have a
material adverse effect on our consolidated financial position. The liabilities
for environmental costs recorded in Accrued Liabilities and Other Liabilities at
December 31, 2000 were $171 and $215 million, respectively, and at December 31,
1999 were $104 and $245 million, respectively.

    OTHER MATTERS -- We are subject to a number of other lawsuits,
investigations and claims (some of which involve substantial amounts) arising
out of the conduct of our business. With respect to all these other matters,
including those relating to commercial transactions, government contracts,
product

                                       46

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

liability and non-environmental health and safety matters, while the ultimate
results of these lawsuits, investigations and claims cannot be determined, we do
not expect that these matters will have a material adverse effect on our
consolidated results of operations or financial position.

    We have issued or are a party to various direct and indirect guarantees,
bank letters of credit and customer guarantees. We do not expect that these
guarantees will have a material adverse effect on our consolidated results of
operations or financial position.

NOTE 23 -- PENSION AND OTHER POSTRETIREMENT BENEFITS

    We maintain pension plans covering the majority of our employees and
retirees, and postretirement benefit plans for retirees that include health care
benefits and life insurance coverage. Pension benefits for substantially all
U.S. employees are provided through non-contributory, defined benefit pension
plans. Employees in foreign countries, who are not U.S. citizens, are covered by
various retirement benefit arrangements, some of which are considered to be
defined benefit pension plans for accounting purposes. Our retiree medical plans
cover U.S. and Canadian employees who retire with pension eligibility for
hospital, professional and other medical services. Most of the U.S. retiree
medical plans require deductibles and copayments and virtually all are
integrated with Medicare. Retiree contributions are generally required based on
coverage type, plan and Medicare eligibility. The retiree medical and life
insurance plans are not funded. Claims and expenses are paid from our general
assets.

    Net periodic pension and other postretirement benefit costs (income) include
the following components:

                                                                 OTHER POSTRETIREMENT
                                         PENSION BENEFITS              BENEFITS
                                     -------------------------   ---------------------
                                      2000     1999      1998     2000    1999    1998
                                      ----     ----      ----     ----    ----    ----
                                                                
Service cost.......................  $  193   $   229   $  233   $   23   $  32   $ 30
Interest cost......................     702       710      721      131     125    121
Assumed return on plan assets......  (1,151)   (1,062)    (951)      --      --     --
Amortization of transition asset...     (13)      (13)     (14)      --      --     --
Amortization of prior service
  cost (credit)....................      53        50       45      (18)    (18)   (18)
Recognition of actuarial (gains)
  losses...........................    (114)       10        3       (4)     (4)    (8)
Settlements and curtailments.......     (50)      (45)     (29)     (34)    (75)   (44)
                                     ------   -------   ------   ------   -----   ----
Benefit cost (income)..............  $ (380)  $  (121)  $    8   $   98   $  60   $ 81
                                     ------   -------   ------   ------   -----   ----
                                     ------   -------   ------   ------   -----   ----

                                       47

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

    The following table summarizes the balance sheet impact, including the
benefit obligations, assets, funded status and actuarial assumptions associated
with our significant pension and other postretirement benefit plans.

                                                                   OTHER POSTRETIREMENT
                                               PENSION BENEFITS          BENEFITS
                                               -----------------   ---------------------
                                                2000      1999       2000        1999
                                                ----      ----       ----        ----
                                                                   
Change in benefit obligation:
    Benefit obligation at beginning of
      year...................................  $ 9,938   $11,101    $ 1,708     $ 1,867
    Service cost.............................      193       229         23          32
    Interest cost............................      702       710        131         125
    Plan amendments..........................       41        29        (69)        (16)
    Actuarial (gains) losses.................      409    (1,223)       333        (114)
    Acquisitions.............................       72        95         --          --
    Benefits paid............................     (786)     (794)      (165)       (144)
    Settlements and curtailments.............      (77)     (128)        (9)        (42)
    Other....................................     (360)      (81)        --          --
                                               -------   -------    -------     -------
    Benefit obligation at end of year........   10,132     9,938      1,952       1,708
                                               -------   -------    -------     -------
Change in plan assets:
    Fair value of plan assets at beginning of
      year...................................   13,022    11,560         --          --
    Actual return on plan assets.............      233     2,232         --          --
    Company contributions....................       62       108         --          --
    Acquisitions.............................      102        57         --          --
    Settlements..............................       --       (80)        --          --
    Benefits paid............................     (786)     (794)        --          --
    Other....................................     (369)      (61)        --          --
                                               -------   -------    -------     -------
    Fair value of plan assets at end of
      year...................................   12,264    13,022         --          --
                                               -------   -------    -------     -------
Funded status of plans.......................    2,132     3,084     (1,952)     (1,708)
Unrecognized transition (asset)..............      (21)      (27)        --          --
Unrecognized net (gain) loss.................   (1,276)   (2,742)        89        (257)
Unrecognized prior service cost (credit).....      258       305       (170)       (145)
                                               -------   -------    -------     -------
Prepaid (accrued) benefit cost...............  $ 1,093   $   620    $(2,033)    $(2,110)
                                               -------   -------    -------     -------
                                               -------   -------    -------     -------
Actuarial assumptions at December 31:
    Discount rate............................     7.75%     8.00%      7.75%       8.00%
    Assumed rate of return on plan assets....    10.00%    10.00%        --          --
    Assumed annual rate of compensation
      increase...............................     4.00%     4.00%        --          --

    The projected benefit obligation, accumulated benefit obligation and fair
value of plan assets for our pension plans with accumulated benefit obligations
in excess of plan assets were $350, $310 and $44 million, respectively, as of
December 31, 2000 and $608, $534 and $210 million, respectively, as of December
31, 1999.

    For measurement purposes, we assumed an annual health-care cost trend rate
of 6 percent for 2001 and beyond. Assumed health-care cost trend rates have a
significant effect on the amounts reported for our retiree health-care plan. A
one-percentage-point change in assumed health care cost trend rates would have
the following effects:

                                                             ONE-             ONE-
                                                         PERCENTAGE-      PERCENTAGE-
                                                        POINT INCREASE   POINT DECREASE
                                                        --------------   --------------
                                                                   
Effect on total of service and interest cost
  components..........................................      $   11           $  (10)
Effect on postretirement benefit obligation...........      $  130           $ (119)

                                       48

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

NOTE 24 -- SEGMENT FINANCIAL DATA

    Statement of Financial Accounting Standards No. 131, 'Disclosures about
Segments of an Enterprise and Related Information' (SFAS No. 131), establishes
standards for reporting information about operating segments. The following
information is provided in accordance with the requirements of SFAS No. 131 and
is consistent with how business results are reported internally to management.

    We globally manage our business operations through strategic business units
(SBUs) offering products and services to the aerospace, automation and control,
chemicals, and automotive industries. Based on similar economic and operational
characteristics, our SBUs are aggregated into the following four reportable
segments:

     Aerospace Solutions includes Engines & Systems (auxiliary power units;
     propulsion engines; environmental control systems; engine controls; and
     power generation systems); Aerospace Electronic Systems (flight safety
     communications, navigation, radar and surveillance systems; aircraft and
     airfield lighting; and advanced systems and instruments); Aerospace
     Services (repair and overhaul services; hardware; logistics; and management
     and technical services); and Aircraft Landing Systems (aircraft wheels and
     brakes).

     Automation & Control includes Home and Building Control (controls for
     heating, ventilating, humidification and air-conditioning equipment;
     energy-efficient lighting controls; home consumer products; security and
     fire alarm systems; home automation systems; and building management
     systems and services); and Industrial Control (systems for the automation
     and control of process operations; solid-state sensors for position,
     pressure, air flow, temperature and current; precision electromechanical
     switches; control products; advanced vision-based sensors; and fiber-optic
     components).

     Performance Materials includes Performance Polymers and Chemicals (fibers;
     plastic resins; specialty films; intermediate chemicals; fluorine-based
     products; pharmaceutical and agricultural chemicals; specialty waxes,
     adhesives and sealants; and process technology); and Electronic Materials
     (wafer fabrication materials and services; advanced circuits; and amorphous
     metals).

     Power & Transportation Products includes Transportation and Power Systems
     (turbochargers; charge-air coolers; portable power systems; air brake and
     anti-lock braking systems); the Consumer Products Group (car care products
     including anti-freeze, filters, spark plugs, cleaners, waxes and
     additives); and Friction Materials (friction material and related brake
     system components).

    The accounting policies of the segments are the same as those described in
Note 1. We evaluate segment performance based on segment profit, which excludes
general corporate unallocated expenses, gains on sales of non-strategic
businesses, equity income, other (income) expense, interest and other financial
charges, merger, repositioning and other charges and other. We do not
disaggregate assets on a products and services basis for internal management
reporting and, therefore, such information is not presented. Intersegment sales
approximate market and are not significant. Reportable segment data were as
follows:

                                       49

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

                                                          2000      1999      1998
                                                          ----      ----      ----
                                                                    
Net sales
    Aerospace Solutions................................  $ 9,988   $ 9,908   $ 9,890
    Automation & Control...............................    7,384     6,115     5,957
    Performance Materials..............................    4,055     4,007     4,169
    Power & Transportation Products....................    3,527     3,581     3,387
    Corporate..........................................       69       124       152
                                                         -------   -------   -------
                                                         $25,023   $23,735   $23,555
                                                         -------   -------   -------
                                                         -------   -------   -------
Depreciation and amortization
    Aerospace Solutions................................  $   328   $   291   $   304
    Automation & Control...............................      264       192       194
    Performance Materials..............................      244       214       212
    Power & Transportation Products....................      107       106       111
    Corporate..........................................       52        78        76
                                                         -------   -------   -------
                                                         $   995   $   881   $   897
                                                         -------   -------   -------
                                                         -------   -------   -------
Segment profit
    Aerospace Solutions................................  $ 2,195   $ 1,918   $ 1,587
    Automation & Control...............................      986       767       705
    Performance Materials..............................      334       439       634
    Power & Transportation Products....................      274       322       234
    Corporate..........................................     (160)     (175)     (248)
                                                         -------   -------   -------
                                                         $ 3,629   $ 3,271   $ 2,912
                                                         -------   -------   -------
                                                         -------   -------   -------
Capital expenditures
    Aerospace Solutions................................  $   225   $   270   $   287
    Automation & Control...............................      193       212       212
    Performance Materials..............................      261       282       308
    Power & Transportation Products....................      145       143       149
    Corporate..........................................       29        79        81
                                                         -------   -------   -------
                                                         $   853   $   986   $ 1,037
                                                         -------   -------   -------
                                                         -------   -------   -------

    A reconciliation of segment profit to consolidated income before taxes on
income is as follows:

                                                          2000      1999      1998
                                                          ----      ----      ----
                                                                    
Segment profit.........................................  $ 3,629   $ 3,271   $ 2,912
Gain on sale of non-strategic businesses...............      112       106        --
Equity in income of affiliated companies...............       47       116       162
Other income...........................................       57        39         3
Interest and other financial charges...................     (481)     (265)     (275)
Merger, repositioning and other charges................     (966)   (1,287)      (54)
Other(1)...............................................       --       268        24
                                                         -------   -------   -------
Income before taxes on income..........................  $ 2,398   $ 2,248   $ 2,772
                                                         -------   -------   -------
                                                         -------   -------   -------

- ---------

(1) Other represents the gain on our disposition of our investment in AMP common
    stock in 1999 and litigation settlements in 1998.

                                       50

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

NOTE 25 -- GEOGRAPHIC AREAS -- FINANCIAL DATA

                                              UNITED                 OTHER
                                              STATES    EUROPE   INTERNATIONAL    TOTAL
                                              ------    ------   -------------    -----
                                                                  
Net sales(1).........................  2000   $18,007   $4,313      $2,703       $25,023
                                       1999    16,913    4,608       2,214        23,735
                                       1998    17,082    4,510       1,963        23,555
Long-lived assets(2).................  2000     8,994    1,617         517        11,128
                                       1999     7,837    1,840         613        10,290
                                       1998     7,346    1,944         675         9,965

- ---------

(1) Sales between geographic areas approximate market and are not significant.
    Net sales are classified according to their country of origin. Included in
    United States net sales are export sales of $3,194, $3,715 and $3,824
    million in 2000, 1999 and 1998, respectively. Our sales are not materially
    dependent on a single customer or a small group of customers.

(2) Long-lived assets are comprised of property, plant and equipment, goodwill
    and other intangible assets.

NOTE 26 -- UNAUDITED QUARTERLY FINANCIAL INFORMATION

                                              2000                                            1999
                    ---------------------------------------------------------   --------------------------------
                    MAR. 31   JUNE 30       SEPT. 30       DEC. 31     YEAR     MAR. 31   JUNE 30       SEPT. 30
                    -------   -------       --------       -------     ----     -------   -------       --------
                                                                                
Net sales.........  $6,044    $6,309         $6,216        $6,454     $25,023   $5,582    $5,958         $6,036
Gross profit......   1,594     1,638(1)       1,371(3)(4)   1,330(5)    5,933    1,390     1,333(6)       1,462(8)
Net income........     506       617(1)(2)      282(3)(4)     254(5)    1,659      440       540(6)(7)      554(8)(9)
Earnings per
 share -- basic...     .64       .77            .35           .32        2.07      .55       .68            .70
Earnings per
 share -- assuming
 dilution.........     .63       .76(1)(2)      .35(3)(4)     .31(5)     2.05      .55       .67(6)(7)      .68(8)(9)
Dividends
 paid(12).........   .1875     .1875          .1875         .1875         .75      .17       .17            .17
Market price(13)..
   High...........   60.50     59.13          41.75         55.69       60.50    50.94     68.63          67.56
   Low............   40.31     32.13          33.25         33.38       32.13    37.81     49.25          57.50

                              1999
                    ------------------------
                     DEC. 31          YEAR
                     -------          ----
                               
Net sales.........   $6,159          $23,735
Gross profit......    1,055(10)        5,240
Net income........        7(10)(11)    1,541
Earnings per
 share -- basic...      .01             1.95
Earnings per
 share -- assuming
 dilution.........      .01(10)(11)     1.90
Dividends
 paid(12).........      .17              .68
Market price(13)..
   High...........    63.75            68.63
   Low............    52.38            37.81

- ---------

 (1) Includes $96 million, after-tax $59 million, or $0.08 per share for
     repositioning charges. See Note 5 of Notes to Financial Statements for
     further information.

 (2) Includes an after-tax gain of $71 million, or $0.09 per share on the sale
     of the TCAS product line of the former Honeywell. See Note 6 of Notes to
     Financial Statements for further information.

 (3) Gross profit includes a $116 million charge for repositioning and other
     charges. Gross profit does not include an equity charge of $99 million for
     closing an affiliate's operations. The total charge is $215 million,
     after-tax $133 million, or $0.16 per share. See Note 5 of Notes to
     Financial Statements for further information.

 (4) Includes an impairment charge of $245 million, after-tax $198 million,
     $0.25 per share related to long-lived assets of our Friction Materials
     business. See Note 5 of Notes to Financial Statements for further
     information.

 (5) Gross profit includes a $373 million charge for asset impairment,
     environmental and other charges. Gross profit does not include an equity
     charge of $37 million related to an equity investee's customer claims. The
     total charge is $410 million, after-tax $315 million, or $0.39 per share.
     See Note 5 of Notes to Financial Statements for further information.

                                              (footnotes continued on next page)

                                       51

                          HONEYWELL INTERNATIONAL INC.
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                 (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

(footnotes continued from previous page)

 (6) Gross profit includes a $222 million charge for repositioning and other
     charges. Gross profit does not include an equity charge of $36 million
     related to the writedown of an equity investment. The total charge is $258
     million, after-tax $156 million, or $0.19 per share. See Note 5 of Notes to
     Financial Statements for further information.

 (7) Includes an after-tax gain of $161 million, or $0.20 per share on the
     disposition of our investment in AMP common stock. See Note 7 of Notes to
     Financial Statements for further information.

 (8) Gross profit includes a $103 million charge for repositioning and other
     charges. Gross profit does not include an equity charge of $4 million
     related to an equity investee's severance actions. The total charge is
     $107 million, after-tax $65 million, or $0.08 per share. See Note 5 of
     Notes to Financial Statements for further information.

 (9) Includes an after-tax gain of $59 million, or $0.07 per share on the sale
     of our Laminate Systems business. See Note 6 of Notes to Financial
     Statements for further information.

(10) Includes $622 million, after-tax $395 million, or $0.49 per share for
     repositioning and other charges. See Note 5 of Notes to Financial
     Statements for further information.

(11) Includes $300 million, after-tax $228 million, or $0.28 per share for
     repositioning and other charges. See Note 5 of Notes to Financial
     Statements for further information.

(12) Represents the historical dividends of AlliedSignal up to December 1, 1999
     and of Honeywell subsequent to that date.

(13) Represents the historical market price of AlliedSignal up to December 1,
     1999, and of Honeywell subsequent to that date. From composite tape-stock
     is primarily traded on the New York Stock Exchange.

                                       52

                       REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND SHAREOWNERS OF
HONEYWELL INTERNATIONAL INC.

    In our opinion, based on our audits and the report of other auditors, the
consolidated financial statements listed in the index appearing under
Item 14(a)(1) on page 63 present fairly, in all material respects, the financial
position of Honeywell International Inc. and its subsidiaries at December 31,
2000 and 1999, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Honeywell Inc., a
wholly-owned subsidiary, which statements reflect total sales of $8,426.7
million for the year ended December 31, 1998. Those statements were audited by
other auditors whose report thereon has been furnished to us, and our opinion
expressed herein, insofar as it related to the amounts included for Honeywell
Inc., is based solely on the report of the other auditors. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits and the report of other auditors provide a reasonable
basis for our opinion.

/s/ PRICEWATERHOUSECOOPERS LLP

PricewaterhouseCoopers LLP
Florham Park, New Jersey
February 9, 2001

                                       53

                          INDEPENDENT AUDITORS' REPORT

To the Shareowners of Honeywell Inc.:

    We have audited the statements of financial position of Honeywell Inc. and
subsidiaries as of December 31, 1998, and the related statements of income,
shareowners' equity, and cash flows for the year then ended (not separately
included herein). These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

    We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

    In our opinion, such financial statements present fairly, in all material
respects, the financial position of Honeywell Inc. and subsidiaries at December
31, 1998 and the results of their operations and their cash flows for the year
then ended in conformity with accounting principles generally accepted in the
United States of America.

/s/ Deloitte & Touche LLP

Minneapolis, Minnesota
February 10, 1999

                                       54

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

                                   Not Applicable

                                   PART III.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    Information with respect to the directors and executive officers of
Honeywell International Inc. is set forth below:

          NAME, AGE,
          DATE FIRST
  ELECTED A DIRECTOR/OFFICER                        BUSINESS EXPERIENCE
  --------------------------    ------------------------------------------------------------
                             
DIRECTORS:
Michael R. Bonsignore (a), 59   Chairman of the Board and Chief Executive Officer since
             1999                 April 2000. Chief Executive Officer from December 1999
                                  through March 2000. Chairman of the Board and Chief
                                  Executive Officer of Honeywell Inc. from April 1993
                                  through November 1999. Mr. Bonsignore is also a director
                                  of Medtronic, Inc. He was a director of Honeywell Inc.
                                  from November 1990 to December 1999.

Hans W. Becherer, 65            Formerly Chairman and Chief Executive Officer of Deere &
             1991                 Company (manufacturer of mobile power machinery and
                                  supplier of financial services) from 1990 to 2000.
                                  Mr. Becherer is also a director of J.P. Morgan Chase & Co.
                                  and Schering-Plough Corporation.

Gordon M. Bethune, 59           Chairman of the Board and Chief Executive Officer of
             1999                 Continental Airlines, Inc. (international commercial
                                  airline company) since 1996. President and Chief Executive
                                  Officer of Continental Airlines, Inc. from November 1994
                                  to 1996. He was a director of Honeywell Inc. from
                                  April 1999 to December 1999.

Marshall N. Carter, 60          Senior Fellow at the Center for Business and Government,
             1999                 John F. Kennedy School of Government, Harvard University,
                                  since January 2001. Chairman and Chief Executive Officer
                                  of State Street Corporation (provider of services to
                                  institutional investors worldwide) from 1993 to 2000.

Jaime Chico Pardo, 51           Vice Chairman and Chief Executive Officer of Telefonos
             1999                 de Mexico, S.A. de C.V. (TELMEX) (a telecommunications
                                  company based in Mexico City) since 1995. Mr. Chico Pardo
                                  is also Vice-Chairman of Carso Global Telecom and a
                                  director of America Movil, Grupo Carso, Grupo Financiero
                                  Inbursa and Prodigy Communications Corp. He was a director
                                  of Honeywell Inc. from September 1998 to December 1999.

Ann M. Fudge, 49                President, Kraft's Beverages, Desserts & Post Divisions and
             1993                 Group Vice President, Kraft Foods, Inc. (packaged foods)
                                  from 2000 to February 2001. President of Kraft General
                                  Foods' Maxwell House Coffee Company from 1994 to 2000.
                                  Ms. Fudge is a director of General Electric Company and
                                  the Federal Reserve Bank of New York.

- --------------
(a) Also an officer.

                                       55

          NAME, AGE,
          DATE FIRST
  ELECTED A DIRECTOR/OFFICER                        BUSINESS EXPERIENCE
  --------------------------    ------------------------------------------------------------
                             
James J. Howard, 65             Chairman of the Board of Xcel Energy Inc. (formerly known as
             1999                 Northern States Power Company, an energy company) since
                                  August 2000. Chairman of the Board, President and Chief
                                  Executive Officer of Northern States Power Company from
                                  1994 to 2000. Mr. Howard is also a director of Ecolab,
                                  Inc., the Federal Reserve Bank of Minneapolis and Walgreen
                                  Company. He was a director of Honeywell Inc. from
                                  July 1990 to December 1999.

Bruce Karatz, 55                Chairman of the Board, President and Chief Executive Officer
             1999                 of KB Home (an international residential and commercial
                                  builder) since 1993. Mr. Karatz is also a director of the
                                  Kroger Co. and National Golf Properties, Inc. He was a
                                  director of Honeywell Inc. from July 1992 to
                                  December 1999.

Robert P. Luciano, 67           Chairman Emeritus of Schering-Plough Corporation (a
             1989                 manufacturer and marketer of pharmaceuticals and consumer
                                  products) since October 1999. Chairman of the Board of
                                  Schering-Plough Corporation from 1984 to October 1998.
                                  Mr. Luciano is a director of C.R. Bard, Inc., Merrill
                                  Lynch & Co. and Schering-Plough Corporation.

Russell E. Palmer, 66           Chairman and Chief Executive Officer of the Palmer Group (a
             1987                 private investment firm) since 1990. Mr. Palmer is a
                                  director of Federal Home Loan Mortgage Corporation, The
                                  May Department Stores Company, Safeguard Scientifics, Inc.
                                  and Verizon Communications.

Ivan G. Seidenberg, 54          President and Co-Chief Executive Officer of Verizon
             1995                 Communications (telecommunications and information
                                  services provider) since June 2000 when Bell Atlantic
                                  Corporation and GTE Corporation merged and Verizon
                                  Communications was created. Chairman and Chief Executive
                                  Officer of Bell Atlantic Corporation from 1999 to June
                                  2000. 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. Chairman and Chief
                                  Executive Officer of NYNEX Corporation from 1995 to 1997.
                                  Mr. Seidenberg is also a director of American Home
                                  Products Corporation, Boston Properties, Inc., CVS
                                  Corporation and Viacom Inc.

John R. Stafford, 63            Chairman, President and Chief Executive Officer of American
             1993                 Home Products Corporation (a manufacturer of
                                  pharmaceutical, health care, animal health and
                                  agricultural products) since 1986. Mr. Stafford is also a
                                  director of Deere & Company, J.P. Morgan Chase & Co. and
                                  Verizon Communications.

Michael W. Wright, 62           Chairman of the Board, President and Chief Executive
             1999                 Officer, SUPERVALUE Inc. (a major food distributor and
                                  retailer) since 1982. Mr. Wright is also a director of
                                  Cargill, Inc. and Wells Fargo and Company. He was a
                                  director of Honeywell Inc. from April 1987 to
                                  December 1999.

                                       56

          NAME, AGE,
          DATE FIRST
  ELECTED A DIRECTOR/OFFICER                        BUSINESS EXPERIENCE
  --------------------------    ------------------------------------------------------------
                             
EXECUTIVE OFFICERS:
Giannantonio Ferrari, 61        Chief Operating Officer and Executive Vice President,
             1999                 Performance Products and Solutions, since December 1999.
                                  President and Chief Operating Officer of Honeywell Inc.
                                  from April 1997 to November 1999. President, Honeywell
                                  Europe S.A. from January 1992 to March 1997. Mr. Ferrari
                                  is a citizen of Italy.

Robert D. Johnson, 53           Chief Operating Officer and Executive Vice President,
             1998                 Aerospace Businesses, since December 1999. President and
                                  Chief Executive Officer of AlliedSignal Aerospace from
                                  April 1999 to November 1999. President -- Aerospace
                                  Marketing, Sales and Service from January 1999 to March
                                  1999. President -- Electronic & Avionics Systems from
                                  October 1997 to December 1998. Vice President and General
                                  Manager, Aerospace Services from 1994 to 1997.

Barry C. Johnson, 57            Senior Vice President, Chief Technology Officer since
             2000                 July 2000. Corporate Vice President of Motorola Inc. and
                                  Chief Technology Officer of Motorola's Semiconductor
                                  Product Sector from September 1998 to June 2000. Vice
                                  President and Director, Global New Product and Technology
                                  Operations of Motorola Inc. from May 1997 to August 1998.
                                  Vice President and Director, Manufacturing Technology
                                  Development of Motorola Inc. from July 1994 to
                                  April 1997.

Peter M. Kreindler, 55          Senior Vice President and General Counsel since March 1992.
             1992                 Secretary from December 1994 through November 1999.

James T. Porter, 49             Senior Vice President and Chief Administrative Officer since
             1999                 October 2000. Senior Vice President -- Information and
                                  Business Services from December 1999 to September 2000.
                                  Vice President and Chief Administrative Officer of
                                  Honeywell Inc. from January 1998 through November 1999.
                                  Corporate Vice President, Human Resources of Honeywell
                                  Inc. from May 1993 to December 1997.

Richard F. Wallman, 49          Senior Vice President and Chief Financial Officer since
             1995                 March 1995. Vice President and Controller of International
                                  Business Machines Corp. from April 1994 to February 1995.

    The executive officers of Honeywell, listed above, are elected annually.
There are no family relationships among them.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

    The rules of the Securities and Exchange Commission require that we disclose
late filings of reports of stock ownership (and changes in stock ownership) by
our directors and executive officers. To the best of Honeywell's knowledge, all
of the filings for our executive officers and directors were made on a timely
basis in 2000 except that the sale of 33,422 shares by Donald Redlinger, a
former executive officer, was reported two weeks after the filing deadline.

                                       57

ITEM 11.  EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

    The following table provides a summary of cash and non-cash compensation
with respect to Honeywell's Chief Executive Officer and the other four most
highly compensated officers of Honeywell.

                                      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)
          --------            ----  ---------     --------    -----------------    --------    ----------    ---------------
                                                                                       
Michael R. Bonsignore(3)      2000  $1,500,000   $  975,000         --                --           --           $  356,551
 Chairman of the Board        1999   1,087,817    2,000,000      $22,781,250       1,781,249   $2,565,000        1,039,122
 and Chief Executive Officer

Giannantonio Ferrari(4)       2000     628,387      325,000         --                --           --              338,669
 Chief Operating Officer and  1999     536,896      775,000        2,039,375         612,251    1,282,500          272,915
 Executive Vice President

Robert D. Johnson             2000     550,000      400,000         --                --        1,187,840(5)        58,913
 Chief Operating Officer and  1999     370,833      625,000        1,882,500         400,000       --               36,469
 Executive Vice President     1998     267,917      300,000         --               190,000       --               31,505

Peter M. Kreindler            2000     480,000      275,000         --               250,000       --              209,625
 Sr. Vice President and       1999     462,500      640,000        1,098,125         333,000       --              386,986
 General Counsel              1998     445,000      550,000         --                --           --              105,705

Richard F. Wallman            2000     480,000      235,000         --               437,500       --              211,042
 Sr. Vice President and       1999     455,833      590,000        1,098,125         333,000       --              352,478
 Chief Financial Officer      1998     410,000      500,000         --                --           --               79,136

- ---------

(1) The total number of units held and their value as of December 31, 2000 were
    as follows: Mr. Bonsignore, 375,000 ($17,742,188); Mr. Ferrari, 32,500
    ($1,537,656); Mr. Johnson, 30,000 ($1,419,375); Mr. Kreindler, 17,500
    ($827,969); Mr. Wallman, 17,500 ($827,969). Common stock dividend
    equivalents are payable on each unit. Restricted units will vest in
    increments of one-third each on April 1, 2001, 2002 and 2003 if Honeywell
    achieves specified operating margin targets.

(2) Amounts shown for 2000 consists of matching contributions made by Honeywell
    under the Savings Plan and Supplemental Savings Plan: for Mr. Bonsignore,
    $171,705; Mr. Johnson, $30,475; Mr. Kreindler, $38,269; and Mr. Wallman,
    $19,195; the value of life insurance premiums: for Mr. Bonsignore, $98,447;
    Mr. Johnson, $28,200; Mr. Kreindler, $21,300; above-market interest earned
    on deferred compensation: for Mr. Bonsignore, $22,589; Mr. Johnson, $238;
    Mr. Kreindler, $150,056; and Mr. Wallman, $191,847; the value of perquisites
    for Mr. Bonsignore, $63,810 which includes a $38,000 cash flexible
    perquisite payment and $22,730 for the value of personal use of company
    provided aircraft; and relocation allowances in connection with foreign
    assignments for Mr. Ferrari, $338,669.

(3) Mr. Bonsignore became an executive officer on December 1, 1999.

(4) Mr. Ferrari became an executive officer on December 1, 1999.

(5) Payment made in 2000 from the Long Term Performance Plan for Key
    Executives for the 1998 and 1999 performance period. The plan was
    discontinued at the time of the merger of AlliedSignal and the
    former Honeywell.

                                       58

OPTION GRANTS IN LAST FISCAL YEAR

    The stock options included in the following table were all granted with an
exercise price equal to 100 percent of the fair market value of the common stock
on the date of grant.

                                       NUMBER OF     % OF TOTAL
                                       SECURITIES     OPTIONS
                                       UNDERLYING    GRANTED TO     EXERCISE                  GRANT DATE
                                        OPTIONS     EMPLOYEES IN      PRICE      EXPIRATION    PRESENT
                NAME                   GRANTED(#)   FISCAL YEAR      ($/SH)         DATE       VALUE(1)
                ----                   ----------   -----------      ------         ----       --------
                                                                               
M. R. Bonsignore.....................     --          --              --            --            --
G. Ferrari...........................     --          --              --            --            --
R. D. Johnson........................     --          --              --            --            --
P. M. Kreindler......................    250,000(2)      6%         $47.8500      03/23/10    $4,510,335
R. F. Wallman........................    437,500(2)     10%          47.8500      03/23/10     7,893,086

- ---------

(1) Options are valued using a Black-Scholes option pricing model which assumes
    a historic five-year average volatility of 32.25 percent, the average
    dividend yield for the three years ended December 31, 2000 (1.43 percent), a
    6.5 percent 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 $14.6 billion, and the value of the granted options reflected
    in the table will be less than 0.09 percent of the total shareowner
    appreciation.

(2) Vests 40 percent on January 1, 2001 and 30 percent on each of January 1,
    2002 and 2003.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

                                                          NUMBER OF SECURITIES          VALUE OF UNEXERCISED
                                                         UNDERLYING UNEXERCISED         IN-THE-MONEY OPTIONS
                             SHARES                      OPTIONS AT YEAR-END(#)            AT YEAR-END($)
                           ACQUIRED ON      VALUE      ---------------------------   ---------------------------
          NAME             EXERCISE(#)   REALIZED($)   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
          ----             -----------   -----------   -----------   -------------   -----------   -------------
                                                                                 
M. R. Bonsignore.........    286,326     $10,445,920    1,490,986      1,100,000     $11,075,709       --
G. Ferrari...............    253,834       3,836,353       38,626        433,000         --            --
R. D. Johnson............    100,000       1,722,335       --            502,000         --         $  973,635
P. M. Kreindler..........    540,000      15,244,247       40,000        723,000         236,100     4,312,800
R. F. Wallman............    550,000      15,657,340       89,000        895,500       1,313,733     3,982,913

EMPLOYMENT AND TERMINATION ARRANGEMENTS

    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 will have an annual target bonus equal to 100 percent of base
salary. 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 that 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 Honeywell. 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.

    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

                                       59

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 36 months if their employment is terminated other than for 'gross
cause' (which includes fraud and criminal conduct). The payments would be made
in a lump sum following a change in control. The Severance 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 Honeywell.

RETIREMENT BENEFITS

    The following table illustrates the estimated annual pension benefits which
would be provided on retirement at age 65 under Honeywell's retirement program
and an unfunded supplemental retirement plan, after applicable deductions for
Social Security benefits, to salaried employees having specified average annual
remuneration and years of service.

                                                  PENSION TABLE
                                                  -------------
  AVERAGE                                   YEARS OF CREDITED SERVICE
   ANNUAL      ------------------------------------------------------------------------------------
REMUNERATION      5          10          15           20        25 - 30         35           40
- ------------      -          --          --           --        -------         --           --
                                                                    
 $  600,000    $ 48,995   $108,995   $  168,995   $  228,995   $  288,995   $  310,372   $  354,710
    800,000      68,995    148,995      228,995      308,995      388,995      415,372      474,710
  1,000,000      88,995    188,995      288,995      388,995      488,995      520,372      594,710
  1,200,000     108,995    228,995      348,995      468,995      588,995      625,372      714,710
  2,000,000     188,995    388,995      588,995      788,995      988,995    1,045,372    1,194,710
  3,000,000     288,995    588,995      888,995    1,188,995    1,488,995    1,570,372    1,794,710
  4,000,000     388,995    788,995    1,188,995    1,588,995    1,988,995    2,095,372    2,394,710

    The benefit amounts shown in the Pension Table are computed on a straight
life annuity basis. At January 1, 2001, the following individuals had the
indicated number of years of credited service for pension purposes: Mr.
Bonsignore, 31; Mr. Johnson, 6; Mr. Kreindler, 9; and Mr. Wallman, 5. Mr.
Ferrari has 40 years of service, but is covered under a separate Belgian pension
arrangement described below.

    The amounts in the Salary and Bonus columns of the Summary Compensation
Table would be included in computing remuneration for pension purposes as well
as any payroll based reward and recognition awards. 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 his employment agreement, Mr. Bonsignore is entitled to receive during
his lifetime, commencing on retirement, Honeywell facilities and services
comparable to those provided prior to his retirement, and a retirement benefit
equivalent to 60 percent of final average compensation (based on his highest
three years of salary and bonus) payable annually for life. Benefits under his
agreement will be reduced by any retirement benefits payable under Honeywell's
retirement and supplemental retirement plans.

    Mr. Ferrari is covered by the Belgian pension arrangement, which provides a
benefit of 55 percent 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
percent of final average compensation which is funded by contributions from Mr.
Ferrari.

DIRECTOR COMPENSATION

    Directors who are employees of Honeywell receive no compensation for service
on the Board. Each non-employee director receives an annual Board retainer of
$65,000, of which $20,000 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 $2,000 for Board meetings attended on any day (ten
during 2000), an annual retainer of $7,000 for each Board Committee served, and
an additional Committee Chair retainer of $5,000 for the Audit and Management
Development and Compensation Committees and $3,000 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

                                       60

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 percent for 2001) or are valued as if invested in common stock
equivalents or one of the other funds available to participants in our 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
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 65. During 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 percent
of the fair market value on the date of grant. Option grants vest in cumulative
installments of 40 percent on April 1 of the year following the grant date and
an additional 30 percent on April 1 of each of the next two years.

MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE

    The primary functions of the Management Development and Compensation
Committee of the Board of Directors 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 Honeywell and its subsidiaries. The members of the
Committee are: Robert P. Luciano (Chair), Hans W. Becherer, Gordon M. Bethune,
Bruce Karatz, Ivan G. Seidenberg and John R. Stafford.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

    As of December 31, 2000, State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts, 02101 held 69,227,941 shares or approximately 8.6
percent of the outstanding common stock as trustee of certain of Honeywell'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 15,430,034 shares, or approximately 1.9 percent of
the outstanding common stock in various other fiduciary capacities.

    As of December 31, 2000, AXA or its affiliates, including the Mutuelles AXA,
AXA Financial, Inc., Alliance Capital Management L.P. and The Equitable Life
Assurance Society of the United States beneficially owned 42,369,312 shares of
common stock (including 379,000 shares of common stock issuable upon exercise of
options), representing approximately 5.2 percent of the outstanding common
stock. The address of AXA is 25, Avenue Matignon, 75008 Paris, France, and the
address of AXA Financial, Inc. is 1290 Avenue of the Americas, New York, New
York 10104.

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 December 31, 2000, the directors and
executive officers of Honeywell beneficially owned, in the aggregate, 2,968,499
shares of common stock which are included in the table below. Directors and
executive officers also have interests in stock-based units under Honeywell's
plans. While these units

                                       61

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 Honeywell stock.

                                                           NUMBER OF
                         NAME                           SHARES(1)(2)(3)
                         ----                           ---------------
                                                     
Hans W. Becherer......................................        30,276
Gordon M. Bethune.....................................         3,436
Michael R. Bonsignore.................................     1,696,942
Marshall N. Carter....................................        22,247
Jaime Chico Pardo.....................................         5,279
Giannantonio Ferrari..................................       234,379
Ann M. Fudge..........................................        18,021
James J. Howard.......................................         9,174
Robert D. Johnson.....................................       131,199
Bruce Karatz..........................................        11,680
Peter M. Kreindler....................................       263,569
Robert M. Luciano.....................................        23,161
Russell E. Palmer.....................................        17,904
Ivan G. Seidenberg....................................        19,486
John R. Stafford......................................        25,894
Richard F. Wallman....................................       437,892
Michael W. Wright.....................................         7,696

- ---------

(1) The total beneficial ownership for any individual is less than 0.5 percent,
    and the total for the group is less than 0.9 percent, 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,
    14,076; Mr. Bethune, 436; Mr. Bonsignore, 2,476; Mr. Carter, 3,447;
    Mr. Chico Pardo, 2,279; Ms. Fudge, 1,821; Mr. Howard, 1,338; Mr. Johnson,
    515; Mr. Karatz, 2,289; Mr. Kreindler, 21,449; Mr. Luciano, 4,961;
    Mr. Palmer, 4,704; Mr. Seidenberg, 8,286; Mr. Stafford, 9,694; Mr. Wallman,
    71,445; Mr. Wright, 2,446; and all directors and executive officers as a
    group, 152,175.

(3) Includes shares which the following have the right to acquire within 60 days
    through the exercise of vested stock options: Mr. Becherer, 10,200;
    Mr. Bonsignore, 1,490,986; Mr. Carter, 800; Mr. Ferrari, 168,626;
    Ms. Fudge, 10,200; Mr. Johnson, 120,000; Mr. Kreindler, 240,000;
    Mr. Luciano, 10,200; Mr. Palmer, 6,200; Mr. Seidenberg, 8,200;
    Mr. Stafford, 10,200; Mr. Wallman, 364,000; and all directors and executive
    officers as a group, 2,599,612.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    In connection with certain tax planning, we secured supplemental retirement
payments for three executives by funding them through an escrow arrangement.
The amounts funded through an escrow arrangement in 2000 were $4,000,000 for
Mr. Bonsignore, $2,100,000 for Mr. Wallman, and $1,400,000 for Dr. Barry C.
Johnson. By securing the payments, the executive's tax liability was
accelerated. We loaned each executive an amount equal to the related
withholding tax obligation. We will also loan each executive additional amounts
as necessary to cover the balance of taxes related to securing the payments.

    The loans bear interest at 5.53 percent compounded semiannually and are due
December 31, 2004. On December 31, 2000, the amount of loans outstanding totaled
$2,977,590, of which $1,635,200 was loaned to Mr. Bonsignore, $765,450 to
Mr. Wallman and $576,940 to Dr. Johnson.

                                       62

                                    PART IV.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

                                                           
(a)(1.) All Financial Statements:
        The following items are included in 'Item 8.
          Financial Statements and Supplementary Data' in
          Part II of this report:
            Consolidated Statement of Income for the years
              ended December 31, 2000, 1999 and 1998
            Consolidated Balance Sheet at December 31, 2000
              and 1999
            Consolidated Statement of Cash Flows for the
              years ended December 31, 2000, 1999 and 1998
            Consolidated Statement of Shareowners' Equity
              for the years ended December 31, 2000, 1999
              and 1998
            Notes to Financial Statements
            Report of Independent Accountants

(a)(2.) Consolidated Financial Statement Schedules
    The two financial statement schedules applicable to us have been omitted
because of the absence of the conditions under which they are required.

(a)(3.) Exhibits
    See the Exhibit Index to this Form 10-K Annual Report. The following
exhibits listed on the Exhibit Index are filed with this Form 10-K Annual
Report:

EXHIBIT NO.                                        DESCRIPTION
- -----------                                        -----------
                        
   10.6                    Supplemental Non-Qualified Savings Plan for Highly
                             Compensated Employees of Honeywell International Inc. and
                             its Subsidiaries, as amended and restated
   10.7                    AlliedSignal Inc. Severance Plan for Senior Executives, as
                             amended and restated
   10.8                    Salary Deferral Plan for Selected Employees of Honeywell
                             International Inc. and its Affiliates, as amended and
                             restated
   10.10                   Amended and Restated 364-Day Credit Agreement dated as of
                             November 30, 2000 among Honeywell, the initial lenders
                             named therein, Citibank, N.A., as administrative agent,
                             The Chase Manhattan Bank, Deutsche Bank AG and Bank of
                             America, N.A., as syndication agents, and Salomon Smith
                             Barney Inc., as lead arranger and book manager, which
                             amends the agreement set forth in Exhibit 10.11 which was
                             previously filed
   10.13                   Honeywell International Inc. Supplemental Pension Plan, as
                             amended and restated
   10.16                   Honeywell International Inc. Supplemental Executive
                             Retirement Plan for Executives in Career Band 6 and Above
   10.17                   Honeywell Supplemental Defined Benefit Retirement Plan, as
                             amended and restated
   10.18                   Form of Escrow Agreement used to secure certain supplemental
                             retirement benefits for certain executive officers of
                             Honeywell
   10.19                   Form of Promissory Note representing loans to certain
                             executive officers of Honeywell of required withholding
                             taxes relating to the securing of certain supplemental
                             retirement benefits
   10.20                   Honeywell International Inc. Severance Plan for Corporate
                             Staff Employees (Involuntary Termination Following a
                             Change in Control), as amended and restated
   21                      Subsidiaries of the Registrant
   23.1                    Consent of PricewaterhouseCoopers LLP
   23.2                    Consent of Deloitte & Touche LLP
   24                      Powers of Attorney

(b) Reports on Form 8-K

    During the three months ended December 31, 2000, Current Report on Form 8-K
was filed on October 25 reporting that Honeywell and General Electric Company
entered into an Agreement and Plan of Merger.

                                       63

                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                            HONEYWELL INTERNATIONAL INC.

March 30, 2001                              By:      /s/ PHILIP M. PALAZZARI
                                           -------------------------------------
                                                    Philip M. Palazzari
                                               Vice President and Controller

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
annual report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated:

                       NAME                                                   NAME
                       ----                                                   ----
                                                      
                         *                                                     *
- ----------------------------------------------------       -------------------------------------------
               Michael R. Bonsignore                                      Bruce Karatz
              Chairman of the Board,                                        Director
       Chief Executive Officer and Director
                                                                                *
                         *                                 -------------------------------------------
    -------------------------------------------                         Robert P. Luciano
                 Hans W. Becherer                                           Director
                     Director
                                                                                *
                         *                                 -------------------------------------------
    -------------------------------------------                         Russell E. Palmer
                 Gordon M. Bethune                                          Director
                     Director
                                                                                *
                         *                                 -------------------------------------------
    -------------------------------------------                        Ivan G. Seidenberg
                Marshall N. Carter                                          Director
                     Director
                                                                                *
                         *                                 -------------------------------------------
    -------------------------------------------                         John R. Stafford
                 Jaime Chico Pardo                                          Director
                     Director
                                                                                *
                         *                                 -------------------------------------------
    -------------------------------------------                         Michael W. Wright
                   Ann M. Fudge                                             Director
                     Director
                                                                    /s/ PHILIP M. PALAZZARI
                         *                                  -------------------------------------------
    -------------------------------------------                         Philip M. Palazzari
                  James J. Howard                                  Vice President and Controller
                     Director                                      (Principal Accounting Officer)

               /s/ RICHARD F. WALLMAN
     -------------------------------------------
                  Richard F. Wallman
               Senior Vice President and
                Chief Financial Officer
             (Principal Financial Officer)

*By:        /s/ RICHARD F. WALLMAN
   ------------------------------------------
              (Richard F. Wallman
               Attorney-in-fact)

March 30, 2001

                                       64

                                 EXHIBIT INDEX

EXHIBIT NO.                                   DESCRIPTION
- -----------                                   -----------
                   
 2.1                  Agreement and Plan of Merger, dated as of October 22, 2000,
                        between Honeywell and General Electric Company
                        (incorporated by reference to Annex A to Honeywell's Proxy
                        Statement, dated December 4, 2000, filed pursuant to Rule
                        14a-6 of the Securities Exchange Act of 1934)

 2.2                  Stock Option Agreement, dated as of October 22, 2000,
                        between General Electric Company and Honeywell
                        (incorporated by reference to Annex B to Honeywell's
                        Proxy Statement, dated December 4, 2000, filed pursuant to
                        Rule 14a-6 of the Securities Exchange Act of 1934)

   3(i)               Restated Certificate of Incorporation of Honeywell
                        (incorporated by reference to Exhibit 3(i) to Honeywell's
                        Form 8-K filed December 3, 1999)

   3(ii)              By-laws of Honeywell, as amended (incorporated by reference
                        to Exhibit 3(ii) to Honeywell's Form 10-Q for the quarter
                        ended June 30, 2000)

   4                  Honeywell is a party to several long-term debt instruments
                        under which, in each case, the total amount of securities
                        authorized does not exceed 10% of the total assets of
                        Honeywell and its subsidiaries on a consolidated basis.
                        Pursuant to paragraph 4(iii)(A) of Item 601(b) of
                        Regulation S-K, Honeywell agrees to furnish a copy of such
                        instruments to the Securities and Exchange Commission upon
                        request.

   9                  Omitted (Inapplicable)

  10.1                Master Support Agreement, dated February 26, 1986, as
                        amended and restated January 27, 1987, as further amended
                        July 1, 1987 and as again amended and restated
                        December 7, 1988, by and among Honeywell, Wheelabrator
                        Technologies Inc., certain subsidiaries of Wheelabrator
                        Technologies Inc., The Henley Group, Inc. and Henley Newco
                        Inc. (incorporated by reference to Exhibit 10.1 to
                        Honeywell's Form 10-K for the year ended December 31,
                        1988)

  10.2*               Deferred Compensation Plan for Non-Employee Directors of
                        AlliedSignal Inc., as amended (incorporated by reference
                        to Exhibit 10.2 to Honeywell's Form 10-K for the year
                        ended December 31, 1996)

  10.3*               Stock Plan for Non-Employee Directors of AlliedSignal Inc.,
                        as amended (incorporated by reference to Exhibit C to
                        Honeywell's Proxy Statement, dated March 10, 1994, filed
                        pursuant to Rule 14a-6 of the Securities Exchange Act of
                        1934)

  10.4*               1985 Stock Plan for Employees of Allied-Signal Inc. and its
                        Subsidiaries, as amended (incorporated by reference to
                        Exhibit 19.3 to Honeywell's Form 10-Q for the quarter
                        ended September 30, 1991)

  10.5*               AlliedSignal Inc. Incentive Compensation Plan for Executive
                        Employees, as amended (incorporated by reference to
                        Exhibit B to Honeywell's Proxy Statement, dated March 10,
                        1994, filed pursuant to Rule 14a-6 of the Securities
                        Exchange Act of 1934, and to Exhibit 10.5 to Honeywell's
                        Form 10-Q for the quarter ended June 30, 1999)

  10.6*               Supplemental Non-Qualified Savings Plan for Highly
                        Compensated Employees of Honeywell International Inc. and
                        its Subsidiaries, as amended and restated (filed herewith)

  10.7*               AlliedSignal Inc. Severance Plan for Senior Executives, as
                        amended and restated (filed herewith)

  10.8*               Salary Deferral Plan for Selected Employees of Honeywell
                        International Inc. and its Affiliates, as amended and
                        restated (filed herewith)

EXHIBIT NO.                                   DESCRIPTION
- -----------                                   -----------
                   
  10.9*               1993 Stock Plan for Employees of Honeywell International
                        Inc. and its Affiliates (incorporated by reference to
                        Exhibit A to Honeywell's Proxy Statement, dated March 10,
                        1994, filed pursuant to Rule 14a-6 of the Securities
                        Exchange Act of 1934)

  10.10               Amended and Restated 364-Day Credit Agreement dated as of
                        November 30, 2000 among Honeywell, the initial lenders
                        named therein, Citibank, N.A., as administrative agent,
                        The Chase Manhattan Bank, Deutsche Bank AG and Bank of
                        America, N.A., as syndication agents, and Salomon Smith
                        Barney Inc., as lead arranger and book manager, which
                        amends the agreement set forth in Exhibit 10.11 hereto
                        (filed herewith)

  10.11               364-Day Credit Agreement dated as of December 2, 1999 among
                        Honeywell, the initial lenders named therein, Citibank,
                        N.A., as administrative agent, Morgan Guaranty Trust
                        Company of New York, as syndication agent, and Salomon
                        Smith Barney Inc. and J.P. Morgan Securities Inc., as
                        arrangers (incorporated by reference to Exhibit 10.11 to
                        Honeywell's Form 10-K for the year ended December 31,
                        1999)

  10.12               Five-Year Credit Agreement dated as of December 2, 1999
                        among Honeywell, the initial lenders named therein,
                        Citibank, N.A., as administrative agent, The Chase
                        Manhattan Bank, Deutsche Bank AG and Bank of America,
                        N.A., as syndication agents, and Salomon Smith Barney
                        Inc., as lead arranger and book manager (incorporated by
                        reference to Exhibit 10.12 to Honeywell's Form 10-K for
                        the year ended December 31, 1999)

  10.13*              Honeywell International Inc. Supplemental Pension Plan, as
                        amended and restated (filed herewith)

  10.14*              Employment Agreement dated as of December 1, 1999 between
                        Honeywell and Michael R. Bonsignore (incorporated by
                        reference to Exhibit 10.14 to Honeywell's Form 8-K filed
                        December 3, 1999)

  10.15*              Long Term Performance Plan for Key Executives of Honeywell
                        International Inc. (incorporated by reference to Exhibit
                        10.16 to Honeywell's Form 10-Q for the quarter ended
                        March 31, 2000)

  10.16*              Honeywell International Inc. Supplemental Executive
                        Retirement Plan for Executives in Career Band 6 and Above
                        (filed herewith)

  10.17*              Honeywell Supplemental Defined Benefit Retirement Plan, as
                        amended and restated (filed herewith)

  10.18*              Form of Escrow Agreement used to secure certain supplemental
                        retirement benefits for certain executive officers of
                        Honeywell (filed herewith)

  10.19*              Form of Promissory Note representing loans to certain
                        executive officers of Honeywell of required withholding
                        taxes relating to the securing of certain supplemental
                        retirement benefits (filed herewith)

  10.20*              Honeywell International Inc. Severance Plan for Corporate
                        Staff Employees (Involuntary Termination Following a
                        Change in Control), as amended and restated (filed
                        herewith)

  11                  Omitted (Inapplicable)

  12                  Omitted (Inapplicable)

  16                  Omitted (Inapplicable)

  18                  Omitted (Inapplicable)

EXHIBIT NO.                                   DESCRIPTION
- -----------                                   -----------
                   
  21                  Subsidiaries of the Registrant (filed herewith)

  22                  Omitted (Inapplicable)

  23.1                Consent of PricewaterhouseCoopers LLP (filed herewith)

  23.2                Consent of Deloitte & Touche LLP (filed herewith)

  24                  Powers of Attorney (filed herewith)

  28                  Omitted (Inapplicable)

  99                  Omitted (Inapplicable)

- ---------

    The Exhibits identified above with an asterisk(*) are management contracts
or compensatory plans or arrangements.

                          STATEMENT OF DIFFERENCES
                          ------------------------

The registered trademark symbol shall be expressed as ................ 'r'
Characters normally expressed as subscript shall be preceded by ...... [u]

                                                                    EXHIBIT 10.6

         SUPPLEMENTAL NON-QUALIFIED SAVINGS PLAN FOR HIGHLY COMPENSATED
         EMPLOYEES OF HONEYWELL INTERNATIONAL INC. AND ITS SUBSIDIARIES
                           (Career Band 6 and above)
                (As Amended and Restated as of December 1, 2000)

1. Eligibility

         Those highly compensated employees ("HCEs") of Honeywell International
Inc. (the "Corporation") and its subsidiaries within the meaning of Section
414(q) of the Internal Revenue Code of 1986 (the "Code") in Career Band 6 and
above who are eligible to participate in any of the qualified (as determined
under Code Section 401(a)) savings plans maintained by the Corporation or its
subsidiaries, other than any such plan maintained by Honeywell Inc. prior to
April 1, 2000, (the "Qualified Savings Plans") are eligible to participate in
the Supplemental Non-Qualified Savings Plan for Highly Compensated Employees of
Honeywell International Inc. and its Subsidiaries (Career Band 6 and above) (the
"Plan").

2. Definitions

         Capitalized terms not otherwise defined in the Plan have the respective
meanings set forth in the applicable Qualified Savings Plans.

3. Participation

         (a) Time and Form of Election. Any eligible employee may become a
participant in the Plan (a "Participant") as of the beginning of the next
available pay period, by executing a written or electronic notice of election to
participate and filing such notice with the Plan Administrator (as defined in
Section 10(a)) prior to the beginning of such pay period. Such notice may direct
that a portion (determined in accordance with paragraph 4(a)) of the base annual
salary exclusive of shift differentials, overtime or other premium pay, bonus,
incentive or other extra compensation, but inclusive of severance pay (unless
otherwise specifically excluded by the severance pay plan) or salary deferred
under this Plan or otherwise ("Base Annual Salary"), which would have been
payable to such Participant during such pay period and succeeding pay periods,
in lieu of such payment, be credited to a deferred compensation account
maintained under the Plan as an unfunded book entry stated as a cash balance
(the "Participant's Account"). Amounts so credited to the Participant's Account
shall constitute "Participant Deferred Contributions." A Participant's election
to direct that a portion of his or her Base Annual Salary be credited to the
Participant's Account shall continue in effect until the Participant terminates
such election, the Participant is no longer an HCE or the Participant is no
longer eligible to contribute to the Qualified Savings Plans. Any such
termination shall be effective only with respect to the Participant's Base
Annual Salary payable after the end of the pay period in which one of the events
in the preceding sentence occurs. Amounts credited to the Participant's Account
prior to the effective date of the termination of the election shall not be
affected and shall be distributed only in accordance with the terms of the Plan
and Participant's distribution election thereunder.

         (b) Change or Resumption of Amount Deferred. A Participant may elect at
any time to modify the amount of Base Annual Salary to be credited to the
Participant's Account under the Plan, which modification shall be effective for
the next available pay period following his or her election. Amounts credited to
the Participant's Account prior to the effective date of such change shall not
be affected by such change and shall be distributed only in accordance with the
terms of the Plan.

4. Contributions to Participants' Accounts

         (a) Participant Deferred Contributions. Unless the Plan Administrator
shall have established a lesser amount, a Participant may elect to defer an
aggregate amount equal to the difference between (i) a full percentage of such
Participant's Base Annual Salary from 1% to the maximum percentage permitted
under the Qualified Savings Plans and Code Section 415(c)(1)(B) for Before-Tax
Contributions by an individual who is not an HCE and who is eligible to
participate in the Qualified Savings Plans, without regard to any other
limitations which may apply under the Code and without regard to any After-Tax
Contributions which might be made under the Qualified Savings Plans, and (ii)
the full amount of Before-Tax Contributions made by such Participant under the
Qualified Savings Plans; provided, however, that a Participant who elects to
defer any amount hereunder shall be required to make the maximum Before-Tax
Contributions permissible under the Qualified Savings Plans for the applicable
Plan Year (after giving effect to deferrals under the Plan or otherwise).

         (b) Plan Employer Contributions. There shall be credited to the
Participant's Account employer contributions under the Plan ("Plan Employer
Contributions") in an aggregate amount equal to (i) minus (ii), where (i) is
50% (for participants entitled to a 50% Employer Contribution in the Qualified
Savings Plans) or 100% (for participants entitled to a 100% Employer
Contribution in the Qualified Savings Plans) of the lesser of (x) 8% of the
Participant's Base Annual Salary, or (y) the sum of the Participant's
Participant Contributions under the Qualified Savings Plans and Participant
Deferred Contributions under the Plan, expressed as a percentage of Base
Annual Salary, and (ii) is the total amount of Employer Contributions made
with respect to the Participant under the Qualified Savings Plans; provided,
however, that in no event shall the combined Plan Employer Contributions and
Employer Contributions made with respect to the Participant exceed 8% of
the Participant's Base Annual Salary, and provided, further, that Plan Employer
Contributions shall not be made with respect to a Participant during any
period of suspension of Employer Contributions with respect to such Participant
under the terms of the Qualified Savings Plans, whether or not such
Participant continues to make Participant Contributions under the Qualified
Savings Plans during the period of such suspension. Notwithstanding the
preceding sentence, there shall be credited to the Participant's Account an
amount equal to the product of (i) the number of whole shares of common stock
of Honeywell International Inc. ("Common Stock") credited to such Participant's
Account under Section 5(b) on December 29, 2000, and (ii) $0.08 (such product
rounded to the nearest full dollar). The amount determined under the preceding
sentence shall be credited to the Participant's Account as Plan Employer
Contributions in accordance with Section 5(a) and shall be credited to such
Account no later than December 31, 2000.

         (c) Vesting. Participant Deferred Contributions, Plan Employer
Contributions (collectively "Total Contribution Amounts") and all amounts
accrued with respect to Total Contribution Amounts in accordance with Section 5,
shall be vested at the time such amounts are credited to the Participant's
Account.

                                      -2-

         (d) All Contributions Prorated. Total Contribution Amounts shall be
credited to a Participant's Account each pay period.

5. The Participant's Account

         (a) Crediting of Participant's Accounts. Participant Deferred
Contributions shall be credited to the Participant's Account under the Plan as
unfunded book entries stated as cash balances. Participant Deferred
Contributions credited to the Participant's Account prior to January 1, 1994 or
after the Participant has terminated employment shall accrue amounts (to be
posted each Valuation Date) equivalent to interest, compounded daily, at a rate
based upon the cost to the Corporation of borrowing at a fixed rate for a
15-year term. Such rate shall be determined annually by the Chief Financial
Officer of the Corporation in consultation with the Treasurer of the
Corporation. Participant Deferred Contributions credited to the Participant's
Account on or after January 1, 1994, but before a Participant terminates
employment, shall accrue amounts (to be posted each Valuation Date) equivalent
to interest, compounded daily, at a rate determined annually by the Management
Development and Compensation Committee (the "Committee") of the Board of
Directors (the "Board") of the Corporation. The rate established in the
preceding sentence shall not exceed the greater of (i) 10%, or (ii) 200% of the
10-year U.S. Treasury Bond rate at the time of determination and, once
established for a calendar year, shall remain in effect with respect to all
Participant Deferred Contributions credited to the Participant's Account during
such calendar year until such amounts are distributed. Plan Employer
Contributions shall be credited to the Participant's Account under the Plan as
unfunded book entries stated as shares of Common Stock (including fractional
shares). The number of shares of Common Stock credited to a Participant's
Account shall be determined by dividing the equivalent cash amount (as
determined under Section 4(b)) by the closing price of Common Stock on the day
that such Plan Employer Contributions are credited to the Participant's Account.
Amounts equivalent to the dividends that would have been payable in respect of
the Common Stock shall be credited to the Participant's Account as if reinvested
in Common Stock, with the number of shares credited determined by dividing the
equivalent cash dividend amount by the closing price of Common Stock on the date
the dividends would have been payable. Amounts credited to the Participant's
Account shall accrue amounts equivalent to interest and dividends, as the case
may be, until distributed in accordance with the Plan.

         (b) Transition Rule for Plan Employer Contributions. The balance of
each Participant's Account attributable to Plan Employer Contributions,
determined as of the close of business on the day prior to the effective date of
the amendment and restatement of the Plan and adjusted to reflect all gains,
losses and dividends that have been credited to such Participant's Account
through the day prior to such effective date, shall be converted into the
equivalent number of shares of Common Stock by dividing such balance by the
closing price of Common Stock on the trading date next preceding such effective
date. Such amount shall be an unfunded book entry only and shall (i) thereafter
be credited with equivalent dividend amounts in accordance with Section 5(a),
and (ii) be distributed in accordance with Section 6(a)(ii).

6. Distribution from Accounts

         (a) Form of Election.

         (i) Participant Deferred Contributions. At the time a Participant makes
an election pursuant to Section 3(a), the Participant shall also make an
election with respect to the

                                      -3-

distribution of the aggregate amount of the Participant Deferred Contributions,
plus earnings credited thereon pursuant to Section 5 (collectively the
"Participant Deferred Contribution Amounts"), credited to the Participant's
Account pursuant to such election. A Participant may elect to receive such
amount in one lump-sum payment or in a number of annual installments (up to
fifteen installments). The lump-sum payment or the first installment shall be
paid in cash as soon as practicable during the month of January of such future
calendar year as the Participant may designate or, if the Participant so elects,
as soon as practicable during the month of January of the calendar year
immediately following the later of the year in which the Participant last
contributed to the Plan or the year in which the Participant terminates
employment with the Corporation or any of its subsidiaries (whether by reason of
Retirement or otherwise). Except as otherwise provided in Section 8, subsequent
installments shall be paid in cash as soon as practicable during the month of
January of each succeeding calendar year until the entire amount of the
Participant Deferred Contribution Amounts shall have been paid. The amount of
each installment shall be determined by multiplying the balance of the
Participant Deferred Contribution Amounts each year by a fraction, the numerator
of which is one and the denominator of which is (A) the number of installments
elected, reduced by (B) one for each annual installment previously received.

         (ii) Plan Employer Contributions. The distribution election made
pursuant to subsection (i) above shall also apply to the timing of the
distribution of the aggregate number of shares of Common Stock representing the
Plan Employer Contributions plus reinvested dividends pursuant to Section 5
(collectively the "Plan Employer Contribution Amounts") credited to the
Participant's Account pursuant to Section 5. Except to the extent otherwise
provided with respect to fractional shares, all distributions of Plan Employer
Contribution Amounts shall be made in Common Stock. A Participant may elect to
receive such Plan Employer Contribution Amounts in one lump-sum payment or in a
number of annual installments (up to fifteen installments). The lump-sum payment
or the first installment shall be paid as soon as practicable during the month
of January of such future calendar year as the Participant may designate, or, if
the Participant so elects, as soon as practicable during the month of January of
the calendar year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the Participant
terminates employment with the Corporation or any of its subsidiaries (whether
by reason of Retirement or otherwise). Except as otherwise provided in Section
8, subsequent installments shall be paid as soon as practicable during the month
of January of each succeeding calendar year until the entire amount of the Plan
Employer Contribution Amounts shall have been paid. The amount of each
installment shall be determined by (A) multiplying the balance of the Plan
Employer Contribution Amounts on the last Valuation Date of each year by a
fraction, the numerator of which is one and the denominator of which is (x) the
number of installments elected, reduced by (y) one for each annual installment
previously received, and (B) rounding the result down to the next whole share of
Common Stock; provided, however, the amount of the last installment shall be
determined without regard to the rounding requirement of the preceding portion
of this sentence. Any fractional shares of Common Stock shall be paid in an
equivalent cash amount, as determined using the closing price of Common Stock on
the trading date next preceding the distribution date.

         (b) Adjustment of Method of Distribution. Prior to the beginning of any
calendar year, a Participant may elect to change the timing and method of
distribution of the Participant Deferred Contribution Amounts and Plan Employer
Contribution Amounts credited to the Participant's Account commencing with such
calendar year. Participant Deferred Contribution Amounts and Plan Employer
Contribution Amounts credited to the Participant's Account prior to the
effective date of such change (the "Prior Balance"), and all amounts thereafter
accrued with

                                      -4-

respect to the Prior Balance, shall not be affected by such change and, except
as otherwise determined by the Plan Administrator pursuant to Section 8, shall
be distributed only in accordance with the election in effect at the time such
Prior Balance was credited to the Participant's Account.

         (c)(i) Distribution Default for Participant Deferred Contribution
Amounts. Any Participant Deferred Contribution Amounts credited to a
Participant's Account which are not covered by a timely distribution election
under subsections (a) and (b) above shall be distributed to the Participant in
one lump-sum cash payment as soon as practicable during the month of January of
the calendar year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the Participant
terminates his employment with the Corporation or any of its subsidiaries
(whether by reason of Retirement or otherwise); provided, however, if the
Participant has made an election pursuant to Sections 9(a)(i) or 9(a)(ii), the
lump sum payment shall be made within the 90-day period following a Change in
Control, as defined in Section 9(c).

         (c)(ii) Distribution Default for Plan Employer Contribution Amounts.
Any Plan Employer Contribution Amounts credited to a Participant's Account which
are not covered by a timely distribution election under subsections (a) and (b)
above shall be distributed to the Participant in Common Stock as soon as
practicable during the month of January of the calendar year immediately
following the later of the year in which the Participant last contributed to the
Plan or the year in which the Participant terminates his employment with the
Corporation or any of it subsidiaries (whether by reason of Retirement or
otherwise); provided, however, if the Participant has made an election pursuant
to Sections 9(a)(i) or (ii), the distribution shall be made within the 90-day
period following a Change in Control, as defined in Section 9(c). Any fractional
shares of Common Stock shall be paid in an equivalent cash amount, as determined
using the closing price of Common Stock on the trading date next preceding the
distribution date.

         (d) One-Time Election. Notwithstanding any provision of this Plan to
the contrary, a Participant shall be given a one-time opportunity prior to
January 1, 2001 to make a new election with respect to the distribution of his
Participant Deferred Contribution Amounts, including a new election with respect
to the Participant's Prior Balance attributable to such Participant Deferred
Contribution Amounts (other than the portion of such Prior Balance payable, or
part of a series of payments payable, in January 2001), provided, however, that
any such election shall only be authorized by the Committee if it results in a
further deferral of the distribution of the Participant Deferred Contribution
Amounts or Prior Balance attributable to such Participant Deferred Contribution
Amounts from that previously elected. Such election shall be effective upon a
"Merger" of the Corporation and General Electric Company (as defined in the
Agreement and Plan of Merger between Honeywell International Inc. and General
Electric Company dated October 22, 2000) and acceptance of the election by the
Corporation. Any such election shall be subject to such restrictions and
limitations as the Corporation shall determine in its sole discretion.

                                      -5-

7. Distribution on Death

         (a) Participant Deferred Contribution Amounts. If a Participant should
die before all Participant Deferred Contribution Amounts credited to the
Participant's Account have been paid in accordance with the election referred to
in Sections 6(a) or 6(b), the balance of the Participant Deferred Contribution
Amounts in such Participant's Account shall be paid in cash as soon as
practicable following the Participant's death to the beneficiary designated in
writing by the Participant and filed with the Plan Administrator; provided,
however, if the Participant has made an election pursuant to Sections 9(a)(i) or
9(a)(ii), such amount shall be paid within the 90-day period following a Change
in Control, as defined in Section 9(c). If (i) no beneficiary designation has
been made, or (ii) the designated beneficiary shall have predeceased the
Participant and no further designation has been made, then such balance shall be
paid to the estate of the Participant. A Participant may change the designated
beneficiary at any time during the Participant's lifetime by filing a subsequent
designation in writing with the Plan Administrator.

         (b) Plan Employer Contribution Amounts. If a Participant should die
before all Plan Employer Contribution Amounts credited to the Participant's
Account have been paid in accordance with the election referred to in Sections
6(a) or 6(b), the balance of the Plan Employer Contribution Amounts in such
Participant's Account shall be paid in Common Stock as soon as practicable
following the Participant's death to the beneficiary designated in writing by
the Participant and filed with the Plan Administrator; provided, however, if the
Participant has made an election pursuant to Sections 9(a)(i) or 9(a)(ii), such
amount shall be paid within the 90-day period following a Change in Control, as
defined in Section 9(c). If (i) no such beneficiary designation has been made,
or (ii) the designated beneficiary shall have predeceased the Participant and no
further designation has been made, then such balance shall be paid to the estate
of the Participant. A Participant may change the designated beneficiary at any
time during the Participant's lifetime by filing a subsequent designation in
writing with the Plan Administrator. Any fractional shares of Common Stock shall
be paid in an equivalent cash amount, as determined using the closing price of
Common Stock on the trading date next preceding the distribution date.

8. Payment in the Event of Hardship

         Upon receipt of a request from a Participant, delivered in writing to
the Plan Administrator along with a Certificate of Unavailability of Resources
form, the Plan Administrator, or his designee, may cause the Corporation to
accelerate (or require the subsidiary of the Corporation which employs or
employed the Participant to accelerate) payment of all or any part of the amount
credited to the Participant's Account, including accrued amounts, if it finds in
its sole discretion that payment of such amounts in accordance with the
Participant's prior election under Sections 6(a) or 6(b) would result in severe
financial hardship to the Participant, and such hardship is the result of an
unforeseeable emergency caused by circumstances beyond the control of the
Participant. Acceleration of payment may not be made under this Section 8 to the
extent that such hardship is or may be relieved (a) through reimbursement or
compensation by insurance or otherwise, (b) by liquidation of the Participant's
assets, to the extent the liquidation of assets would not itself cause severe
financial hardship, or (c) by cessation of deferrals under this Plan or any
tax-qualified savings plan of the Corporation or its subsidiaries. Any
distribution of Participant Deferred Contribution Amounts pursuant to this
Section 8 shall be made in cash, while any distribution of Plan Employer
Contribution Amounts pursuant to this Section 8 shall be made in Common Stock.
Any fractional shares of

                                      -6-

Common Stock shall be paid in an equivalent cash amount, as determined using the
closing price of Common Stock on the trading date next preceding the
distribution date.

9. Change in Control

         (a)(i) Initial Lump-Sum Payment Election. Notwithstanding any election
made pursuant to Section 6, any person who becomes eligible to participate in
the Plan may file a written election with the Plan Administrator at the time the
individual makes an election to participate pursuant to Section 3(a) to have the
aggregate amount credited to the Participant's Account (commencing with the date
on which such written election is filed) paid in one-lump sum payment as soon as
practicable following a Change in Control, but in no event later than 90 days
after such Change in Control. Any distribution of Participant Deferred
Contribution Amounts pursuant to this Section 9 shall be made in cash, while any
distribution of Plan Employer Contribution Amounts pursuant to this Section 9
shall be made in Common Stock (or the common stock of any successor corporation
issued in exchange for, or with respect to, Common Stock incident to the Change
in Control). Any fractional shares of Common Stock (or the common stock of any
successor corporation issued in exchange for, or with respect to, Common Stock
incident to the Change in Control) shall be paid in an equivalent cash amount.

         (a)(ii) Subsequent Lump-Sum Payment Election. A Participant who did not
make an election pursuant to Section 9(a)(i) or who has revoked, pursuant to
Section 9(a)(iii), an election previously made under Section 9(a)(i) or this
Section 9(a)(ii) may, prior to the earlier of a Change in Control or the
beginning of the calendar year in which the election is to take effect, elect to
have the aggregate amount credited to the Participant's Account for all calendar
years commencing with the first calendar year beginning after the date the
election is made, paid in one lump-sum payment as soon as practicable following
a Change in Control, but in no event later than 90 days after such Change in
Control. Amounts credited to the Participant's Account prior to the effective
date of the election made pursuant to this Section 9(a)(ii) shall not be
affected by such election and shall be distributed following a Change in Control
in accordance with any prior election in effect under Sections 9(a)(i) or
9(a)(ii).

         (a)(iii) Revocation of Lump-Sum Payment Elections. A Participant may,
prior to the earlier of a Change in Control or the beginning of any calendar
year, file an election revoking any election made pursuant to Sections 9(a)(i)
or 9(a)(ii), with respect to amounts credited to the Participant's Account
commencing with the first calendar year beginning after the election is made.
Amounts credited to the Participant's Account prior to the effective date of the
election made pursuant to this Section 9(a)(iii) shall not be affected by such
election and shall be distributed following a Change in Control in accordance
with any prior election in effect under Sections 9(a)(i) or 9(a)(ii).
Notwithstanding the preceding provisions of this paragraph 9, a Participant
shall be given a one-time opportunity prior to January 1, 2001 to revoke any
election made pursuant to paragraph 9(a)(i) or 9(a)(ii) to receive a lump sum
payment of Participant Deferred Contribution Amounts as soon as practicable
following a Change in Control. Any such revocation shall be applicable to the
Participant Deferred Contribution Amounts, including the Participant's Prior
Balance attributable to Participant Deferred Contribution Amounts. Any
revocation election shall be effective upon a "Merger" of the Corporation and
General Electric Company (as defined in the Agreement and Plan of Merger between
Honeywell International Inc. and General Electric Company dated October 22,
2000) and acceptance by the Corporation. Any such election shall be subject to
such restrictions and limitations as the Corporation shall determine in its sole
discretion.

                                      -7-

         (b) Interest Equivalents. Notwithstanding anything to the contrary in
the Plan, after a Change in Control, the Plan may not provide, or be amended to
provide, interest accruals with respect to Participant Deferred Contributions at
rates lower than the rates in effect under Section 5 immediately prior to the
Change in Control.

         (c) Definition of Change in Control. For purposes of the Plan, a Change
in Control is deemed to occur at the time (i) when any entity, person or group
(other than the Corporation, any subsidiary or any savings, pension or other
benefit plan for the benefit of employees of the Corporation or its
subsidiaries) which therefore beneficially owned less than 30% of the common
stock then outstanding acquires shares of Common Stock in a transaction or
series of transactions that results in such entity, person or group directly or
indirectly owning beneficially 30% or more of the outstanding Common Stock, (ii)
of the purchase of shares of Common Stock pursuant to a tender offer or exchange
offer (other than an offer by the Corporation) for all, or any part of, the
Common Stock, (iii) of a merger in which the Corporation will not survive as an
independent, publicly owned corporation, a consolidation, or a sale, exchange or
other disposition of all or substantially all of the Corporation's assets, (iv)
of a substantial change in the composition of the Board during any period of two
consecutive years such that individuals who at the beginning of such period were
members of the Board cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the stockholders
of the Corporation, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period, or (v) of any transaction or other event which the
Corporate Governance Committee of the Board, in its discretion, determines to be
a Change in Control for purposes of the Plan.

10. Administration

         (a) Plan Administrator. The Plan Administrator and "named fiduciary"
for purposes of ERISA shall be the Senior Vice President-Human Resources and
Communications of the Corporation (or the person acting in such capacity in the
event such position is abolished, restructured or renamed). The Plan
Administrator shall have the authority to appoint one or more other named
fiduciaries of the Plan and to designate persons, other than named fiduciaries,
to carry out fiduciary responsibilities under the Plan, pursuant to Section
405(c)(1)(B) of ERISA. Any person acting on behalf of the Plan Administrator
shall serve without additional compensation. The Plan Administrator shall keep
or cause to be kept such records and shall prepare or cause to be prepared such
returns or reports as may be required by law or necessary for the proper
administration of the Plan.

         (b) Powers and Duties of Plan Administrator. The Plan Administrator
shall have the full discretionary power and authority to construe and interpret
the Plan (including, without limitation, supplying omissions from, correcting
deficiencies in, or resolving inconsistencies or ambiguities in, the language of
the Plan); to determine all questions of fact arising under the Plan, including
questions as to eligibility for and the amount of benefits; to establish such
rules and regulations (consistent with the terms of the Plan) as it deems
necessary or appropriate for administration of the Plan; to delegate
responsibilities to others to assist it in administering the Plan; to retain
attorneys, consultants, accountants or other persons (who may be employees of
the Corporation and its subsidiaries) to render advice and assistance as it
shall determine to be necessary to effect the proper discharge of any duty for
which it is responsible; and to perform all other acts it believes reasonable
and proper in connection with the administration of the Plan. The Plan
Administrator shall be entitled to rely on the records of the Corporation and
its subsidiaries in determining any Participant's entitlement to and the amount
of benefits payable

                                      -8-

under the Plan. Any determination of the Plan Administrator, including
interpretations of the Plan and determinations of questions of fact, shall be
final and binding on all parties.

         (c) Indemnification. To the extent permitted by law, the Corporation
shall indemnify the Plan Administrator from all claims for liability, loss, or
damage (including payment of expenses in connection with defense against such
claims) arising from any act or failure to act in connection with the Plan.

11. Claims Procedures and Appeals

         (a) Any request or claim for Plan benefits must be made in writing and
shall be deemed to be filed by a Participant when a written request is made by
the claimant or the claimant's authorized representative which is reasonably
calculated to bring the claim to the attention of the Plan Administrator.

         (b) The Plan Administrator shall provide notice in writing to any
Participant when a claim for benefits under the Plan has been denied in whole or
in part. Such notice shall be provided within 90 days of the receipt by the Plan
Administrator of the Participant's claim or, if special circumstances require,
and the Participant is so notified in writing, within 180 days of the receipt by
the Plan Administrator of the Participant's claim. The notice shall be written
in a manner calculated to be understood by the claimant and shall:

             (i) set forth the specific reasons for the denial of benefits;

            (ii) contain specific references to Plan provisions relative to the
denial;

           (iii) describe any material and information, if any, necessary for
the claim for benefits to be allowed, that had been requested, but not received
by the Plan Administrator; and

            (iv) advise the Participant that any appeal of the Plan
Administrator's adverse determination must be made in writing to the Plan
Administrator within 60 days after receipt of the initial denial notification,
and must set forth the facts upon which the appeal is based.

         (c) If notice of the denial of a claim is not furnished within the time
periods set forth above, the claim shall be deemed denied and the claimant shall
be permitted to proceed to the review procedures set forth below. If the
Participant fails to appeal the Plan Administrator's denial of benefits in
writing and within 60 days after receipt by the claimant of written notification
of denial of the claim (or within 60 days after a deemed denial of the claim),
the Plan Administrator's determination shall become final and conclusive.

         (d) If the Participant appeals the Plan Administrator's denial of
benefits in a timely fashion, the Plan Administrator shall re-examine all issues
relevant to the original denial of benefits. Any such claimant, or his or her
duly authorized representative, may review any pertinent documents, as
determined by the Plan Administrator, and submit in writing any issues or
comments to be addressed on appeal.

         (e) The Plan Administrator shall advise the Participant and such
individual's representative of its decision, which shall be written in a manner
calculated to be understood by the claimant, and include specific references to
the pertinent Plan provisions on which the decision is based. Such response
shall be made within 60 days of receipt of the written appeal,

                                      -9-

unless special circumstances require an extension of such 60-day period for not
more than an additional 60 days. Where such extension is necessary, the claimant
shall be given written notice of the delay. If the decision on review is not
furnished within the time set forth above, the claim shall be deemed denied on
review.

         (f) Any dispute, controversy, or claim arising out of or relating to
any Plan benefit, including, without limitation, any dispute, controversy or
claim as to whether the decision of the Plan Administrator respecting the
benefits under this Plan or interpretation of this Plan is arbitrary and
capricious, that is not settled in accordance with the procedures outlined in
this Section 11, shall be settled by final and binding arbitration in accordance
with the American Arbitration Association Employment Dispute Resolution or other
applicable Rules. Before resorting to arbitration, an aggrieved Participant must
first follow the review procedure outlined in this Section of the Plan. If there
is still a dispute after the procedures in this Section have been exhausted, the
Participant must request arbitration in writing within six (6) months after the
Plan Administrator issues, or is deemed to have issued, its determination under
subparagraph (e) above.

                  The arbitrator shall be selected by mutual agreement of the
parties, if possible. If the parties fail to reach agreement upon appointment of
an arbitrator within 30 days following receipt by one party of the other party's
notice of desire to arbitrate, the arbitrator shall be selected from a panel or
panels of persons submitted by the American Arbitration Association (the "AAA").
The selection process shall be that which is set forth in the AAA Employment
Dispute Resolution Rules, except that, if the parties fail to select an
arbitrator from one or more panels, AAA shall not have the power to make an
appointment but shall continue to submit additional panels until an arbitrator
has been selected.

                  All fees and expenses of the arbitration, including a
transcript if requested, will be borne by the Corporation. The arbitrator shall
have no power to amend, add to or subtract from this Plan. The award shall be
admissible in any court or agency action seeking to enforce or render
unenforceable this Plan or any portion thereof. Any action to enforce or vacate
the arbitrator's award shall be governed by the Federal Arbitration Act if
applicable.

12. Miscellaneous

         (a) Anti-Alienation. The right of a Participant to receive any amount
credited to the Participant's Account shall not be transferable or assignable by
the Participant, except by will or by the laws of descent and distribution. To
the extent that any person acquires a right to receive any amount credited to a
Participant's Account hereunder, such right shall be no greater than that of an
unsecured general creditor of the Corporation. Except as expressly provided
herein, any person having an interest in any amount credited to a Participant's
Account under the Plan shall not be entitled to payment until the date the
amount is due and payable. No person shall be entitled to anticipate any payment
by assignment, pledge or transfer in any form or manner prior to actual or
constructive receipt thereof.

         (b) Unsecured General Creditor. Neither the Corporation nor any of its
subsidiaries shall be required to reserve or otherwise set aside funds, Common
Stock or other assets for the payment of its obligations hereunder. However, the
Corporation or any subsidiary may, in its sole discretion, establish funds for
payment of its obligations hereunder. Any such funds shall remain assets of the
Corporation or such subsidiary, as the case may be, and subject to the claims of
its general creditors. Such funds, if any, shall not be deemed to be assets of
the Plan.

                                      -10-

The Plan is intended to be unfunded for tax purposes and for purposes of Title I
of the Employee Retirement Income Security Act of 1974, as amended.

         (c) Withholding. The Corporation shall withhold from any distribution
made from Participant Deferred Contribution Amounts the amount necessary to
satisfy applicable federal, state and local tax withholding requirements. With
respect to distributions of Plan Employer Contribution Amounts, the delivery of
the shares of Common Stock shall be delayed until the Participant makes
arrangements, pursuant to procedures to be adopted by the Plan Administrator, to
satisfy the applicable federal, state and local tax withholding requirements.

         (d) Termination and Amendment. The Corporation may at any time amend or
terminate the Plan. No amendment or termination shall impair the rights of a
Participant with respect to amounts then credited to the Participant's Account.

         (e) Benefit Statements. Each Participant will receive periodic
statements (not less frequently than annually) regarding the Participant's
Account. Each such statement shall indicate the amount of the balances credited
to the Participant's Account as of the end of the period covered by such
statement.

         (f) Legal Interpretation. This Plan and its provisions shall be
construed in accordance with the laws of the State of Delaware to the extent
such Delaware law is not inconsistent with the provisions of ERISA. The text of
this Plan shall, to the extent permitted by law, govern the determination of the
rights and obligations created or referred to herein. Headings to the Sections,
paragraphs and subparagraphs are for reference purposes only and do not limit or
extend the meaning of any of the Plan's provisions.

         (g) Employment. The adoption and maintenance of this Plan shall not be
deemed to constitute a contract between the Corporation or its subsidiaries and
any employee or to be a consideration for or condition of employment of any
person. No provision of the Plan shall be deemed to give any employee the right
to continue in the employ of the Corporation or its subsidiaries or to interfere
with the right of the Corporation or its subsidiaries to discharge any employee
at any time without regard to the effect which such discharge might have upon
the employee's participation in the Plan or benefits under it.

         (h) Fiduciary Capacities. Any person or group of persons may serve in
more than one fiduciary capacity with respect to the Plan. For purposes of this
Section 12(h), the term "fiduciary" shall have the same meaning as in ERISA.

         (i) Participants Subject to Section 16. Notwithstanding anything herein
to the contrary, if any request, election or other action under the Plan
affecting a Participant subject to Section 16 of the Securities Exchange Act of
1934 should require the approval of the Committee to exempt such request,
election or other action from potential liability under Section 16, then the
approval of the Committee shall be obtained in lieu of the approval of the Plan
Administrator.

                                      -11-

                                                                    EXHIBIT 10.7

                        ALLIEDSIGNAL INC. SEVERANCE PLAN
                              FOR SENIOR EXECUTIVES

                              Amended and Restated
                                 Effective as of
                                   May 1, 1999

                                     PART I
                               GENERAL PROVISIONS

1.       Purpose.

         The purpose of the AlliedSignal Inc. Severance Plan for Senior
         Executives (the "Plan") is to provide severance related benefits to
         selected eligible employees of an AlliedSignal Employer (as defined in
         Part II) who are employed in a position in Career Band 6 or above and
         whose employment relationship is involuntarily terminated at the
         initiative of the Employer for reasons other than Gross Cause (as
         defined below). This Plan is intended to be an unfunded plan for a
         select group of management or highly compensated employees for purposes
         of ERISA (as defined below).

         This Plan is comprised of Part I--general provisions relating to the
         operation of the Plan, and Part II--special provisions that become
         effective only upon a Change in Control (as defined below). As set
         forth herein, this Plan constitutes the amendment and restatement, as
         of May 1, 1999, of the Severance Plan for Senior Executives established
         by Allied Corporation on March 31, 1983 and amended and restated by
         AlliedSignal Inc. as of April 25, 1988, January 1, 1990, April 29,
         1991, and January 1, 1994.

         As used throughout the Plan unless otherwise clearly or necessarily
         indicated by context:

         (a)   "Annual Base Salary" means an amount equal to the product of Base
               Salary and twelve.

         (b)   "Annual Incentive Compensation" means, except as provided in
               Section 18(b), the product of (i) times (ii) where (i) is the
               target percentage that would be utilized in determining the
               Incentive Award for the Participant in the calendar year in which
               Participant's Covered Termination occurs and (ii) is Annual Base
               Salary.

         (c)   "Base Salary" means the monthly base salary payable to a
               Participant at the highest rate in effect during any of the
               thirty-six months preceding a Covered Termination.

         (d)   "Board" means the Board of Directors of the Company.

         (e)   "Career Band" means the salary and position classification system
               adopted by the Company for use after January 1, 1994.

         (f)   "Change in Control" is deemed to occur at the time (i) when any
               entity, person or group (other than the Company, any subsidiary
               or any savings, pension or other benefit plan for the benefit of
               employees of the Company or its subsidiaries) which theretofore
               beneficially owned less than 30% of the Common Stock then
               outstanding acquires shares of Common Stock in a transaction or
               series of transactions that results in such entity, person or
               group directly or indirectly

                                      -1-

               owning beneficially 30% or more of the outstanding Common Stock,
               (ii) of the purchase of shares of Common Stock pursuant to a
               tender offer or exchange offer (other than an offer by the
               Company) for all, or any part of, the Common Stock, (iii) of a
               merger in which the Company will not survive as an independent,
               publicly owned corporation, (iv) of a consolidation, or a sale,
               exchange or other disposition of all or substantially all of the
               Company's assets, (v) of a substantial change in the composition
               of the Board during any period of two consecutive years such that
               individuals who at the beginning of such period were members of
               the Board cease for any reason to constitute at least a majority
               thereof, unless the election, or the nomination for election by
               the shareowners of the Company, of each new director was approved
               by a vote of at least two-thirds of the directors then still in
               office who were directors at the beginning of the period, or (vi)
               of any transaction or other event which the Management
               Development and Compensation Committee of the Board, in its
               discretion, determines to be a change in control for purposes of
               this Plan.

         (g)   "Code" means the Internal Revenue Code of 1986, as amended from
               time to time.

         (h)   "Common Stock" means the common stock of the Company or such
               other stock into which the common stock may be changed as a
               result of split-ups, recapitalizations, reclassifications and any
               similar transaction.

         (i)   "Company" means AlliedSignal Inc., a Delaware corporation.

         (j)   "Covered Termination" means, except as provided in Section 18(c),
               a Participant's Discharge. Notwithstanding the preceding
               sentence, in the event of a sale or transfer of a facility or
               line of business that causes a severance of the employment
               relationship with the Employer, a Covered Termination shall be
               deemed to have occurred only if the Participant is not offered
               substantially comparable employment with the new employer, as
               determined by the Plan Administrator, in its sole discretion.

         (k)   "Discharge" means an involuntary termination of a Participant's
               employment relationship by the Employer for reasons other than
               death or Gross Cause.

         (l)   "Determination Year" means a calendar year within which
               performance is measured for purposes of determining the amount of
               Incentive Awards payable for that year.

         (m)   "Effective Date" means March 31, 1983.

         (n)   "Employer" means the Company and its participating divisions,
               subsidiaries, strategic business units and their respective
               successors.

         (o)   "ERISA" means the Employee Retirement Income Security Act of
               1974, as amended from time to time, together with applicable
               final regulations thereunder.

                                      -2-

         (p)   "Gross Cause" means, except as provided in Section 18(f), conduct
               by a Participant which is a fraud, misappropriation of Employer
               property or intentional misconduct damaging to such property or
               business of an Employer, or the commission of a crime. Gross
               Cause shall be determined by the Plan Administrator in its sole
               and absolute discretion.

         (q)   "Incentive Award" means an incentive compensation award or any
               other annual incentive award determined under the Incentive
               Compensation Plan for Executive Employees of AlliedSignal and its
               Affiliates, and any predecessor or successor plan, but shall not
               include any performance improvement award or any other long-term
               incentive award under any such plan.

         (r)   "Named Fiduciary" means the Plan Administrator and/or such other
               committee, entity or person as the Company or the Plan
               Administrator may designate to administer the terms and
               conditions of the Plan, as the case may be.

         (s)   "Participant" means an Existing Participant, an Officer
               Participant or a New Participant.

               (i)    "Existing Participant" means, except as further defined in
                      Part II an individual who, on July 1, 1993, was an
                      employee of an Employer in Salary Grade 20 or above or in
                      a position comparable to a position of Salary Grade 20 or
                      above.

               (ii)   "Officer Participant" means, except as further defined in
                      Part II, an individual (other than an Existing
                      Participant) who is an officer of an Employer as
                      determined by the Plan Administrator in his or her sole
                      discretion.

               (iii)  "New Participant" means, except as further defined in Part
                      II, an individual (other than an Existing Participant and
                      an Officer Participant) who is employed by an Employer in
                      a position evaluated in Career Band 6 or above or in a
                      position comparable to a position in Career Band 6 or
                      above, all as determined by the Plan Administrator in his
                      or her sole discretion.

         (t)   "Pay Continuation" means the component of the severance benefit
               described in Section 3(a)(i):

         (u)   "Plan Administrator" means the person defined in Section 7 and
               Section 21(a).

         (v)   "Pro Rata Factor" means (I) for the Determination Year in which a
               Covered Termination occurs, a fraction the numerator of which is
               equal to the number of

                                      -3-

               calendar months which have elapsed from the first day of the
               calendar month following the Covered Termination through December
               31st of the Determination Year, and the denominator of which is
               twelve, and (ii) for any subsequent Determination Year shall mean
               a fraction, the numerator of which is equal to the Severance Pay
               Factor, reduced by the number of calendar months which have
               elapsed from the first day of the calendar month following the
               Covered Termination through December 31st of the year preceding
               the Determination Year, and the denominator of which is twelve;
               provided, however, that the Pro Rata Factor shall never be
               greater than 1.0.

         (w)   "Prorated Annual Incentive Compensation" means the component of
               the severance benefit described in Section 3(a)(ii).

         (x)   "Salary Grade" means the salary and position classification used
               by the Company prior to January 1, 1994, or any comparable salary
               and position classification used by any other Employer.

         (y)   "Severance Pay Factor" means, with respect to any Participant,
               the relevant factor specified in Section 3(a)(i)(A).

         (z)   "Severance Period" means the period, commencing on the first day
               of the first month following a Covered Termination, which is
               comprised of the number of consecutive months equal to the lesser
               of (i) the Severance Pay Factor, or (ii) the number of months
               occurring before the first day of the month following the
               Participant's attainment of age 65 or, if later, eligibility to
               receive an unreduced retirement benefit under a qualified defined
               benefit pension plan maintained by an Employer.

2.       Participation.

         (a)   An employee of an Employer who is at any time a Participant shall
               continue to be a Participant in the Plan until the earlier of (i)
               the date the employment relationship with the Employer is severed
               for reasons other than a Covered Termination, or (ii) the date
               the employee ceases to be employed in a position equivalent to
               Career Band 6 or above; provided, however, any employee who
               ceases to be employed in a position equivalent to Career Band 6
               or above on or after a Change in Control shall nevertheless
               continue to be a Participant in the Plan.

         (b)   A Participant in the Plan who is at any time the subject of a
               Covered Termination shall continue to be a Participant until all
               of the benefits for which he or she is entitled under Section 3,
               if any, have been paid.

3.       Severance Benefits.

                                      -4-

         (a)      Eligibility for Benefits. Subject to subparagraph (b) below, a
                  Participant who is the subject of a Covered Termination shall
                  receive the benefits described in this Section 3.

                  (i)   Pay Continuation.

                        (A) An Existing Participant shall receive a benefit in
                            an amount equal to his or her Base Salary multiplied
                            by the relevant Severance Pay Factor determined as
                            follows (a detailed schedule of each Existing
                            Participant's Severance Pay Factor is attached
                            hereto as Exhibit A):

                                    Salary Grade as of July 1, 1993       Severance Pay Factor
                                    -------------------------------       --------------------
                                                                        
                                          20 and 21                                  18
                                          22 and 23                                  24
                                          24 and above                               36

                            Provided, however, that the Severance Pay Factor of
                            an Existing Participant, whose Salary Grade is
                            reduced after a Change in Control, shall not be
                            reduced.

                        (B) An Officer Participant shall receive a benefit in an
                            amount equal to his or her Base Salary multiplied by
                            a Severance Pay Factor of 18.

                        (C) A New Participant shall receive a benefit in an
                            amount equal to his or her Base Salary multiplied by
                            a Severance Pay Factor of 12.

                  (ii)  Annual Incentive Compensation. An Existing Participant
                        or an Officer Participant shall receive a benefit in an
                        amount equal to his or her Annual Incentive Compensation
                        multiplied by the applicable Pro Rata Factor. The Pro
                        Rata Factor shall be determined for the calendar year in
                        which a Covered Termination occurs and each calendar
                        year thereafter through the end of the calendar year in
                        which the Severance Period ends.

                  (iii) Benefit Continuation. For the duration of the Severance
                        Period, the Employer will continue the Participant's
                        employee benefits including, without limitation,
                        continuation of the Participant's savings plan
                        participation (to the extent permissible under Section
                        401(a) of the Code) and basic and contributory life and
                        medical insurance (including qualified dependents), at
                        the active employee coverage level and prevailing
                        employee contribution rate, if any; provided, however,
                        (A) that such level of continued benefits shall not
                        exceed the level of benefits in effect on the date of
                        the Participant's Covered Termination, (B) that such
                        continuation of benefits will cease on the date similar
                        benefits are provided the Participant by a subsequent
                        employer, (C) executive perquisites, such as

                                      -5-

                        automobiles or memberships, will be governed by the
                        terms of the particular programs, and (D) that no
                        employee benefit shall be continued for a longer period
                        of time than that provided by the terms of the
                        controlling employee benefit plan applicable to the
                        Participant on the date of such Participant's Covered
                        Termination.

                  (iv)  Pension Service Continuation. Except as otherwise
                        provided by an applicable pension plan and, subject to
                        the requirements for qualification of Section 401(a) of
                        the Code, only the first twelve (12) months of the
                        Severance Period, Pay Continuation and Prorated Annual
                        Incentive Compensation will be recognized for purposes
                        of the vesting and pension calculation provisions of the
                        AlliedSignal Inc. Retirement Program or any other
                        pension plan sponsored by an Employer in which the
                        Participant participates. The normal policy for
                        qualifying leaves remains applicable thereafter.

         (b)      Benefits Conditioned on Release. Notwithstanding anything in
                  this Section 3 to the contrary, all benefits under this Plan
                  except benefits provided pursuant to Part II, shall be
                  provided in consideration for, and conditioned upon, execution
                  of the release by the Participant of all current or future
                  claims, known or unknown, arising on or before the date of the
                  release against the Employer, its affiliates or their
                  respective officers substantially in the form attached hereto
                  as Exhibit B. Additionally, no severance benefits shall be
                  payable under this Section 3 unless the Participant has
                  returned to the Employer all property of the Employer and any
                  information of a proprietary nature in his or her possession.

         (c)      Benefit Limitations.

                  (i)   Except as provided in subparagraph (ii) below, any
                        benefit determined to be payable to a Participant under
                        any other severance plan sponsored or funded by an
                        Employer shall be reduced by the amount of any similar
                        benefit payable to the Participant under this Plan
                        (excluding any benefit payable under Section 19(a))
                        regardless of whether the benefit determined under the
                        Plan is payable at an earlier or a later date than
                        payments under such other severance plan.

                  (ii)  Any benefit determined to be payable under this Plan
                        (excluding any benefit payable under Section 19(a)) to a
                        Participant who was not eligible to participate in this
                        Plan prior to April 25, 1988 will be reduced to the
                        extent of any duplication of benefits between the Plan
                        and any benefits that may be payable to the Participant
                        under arrangements existing prior to April 25, 1988.

4.       Form and Timing of Payment.

                                      -6-

         Except as provided in Sections 20(a) and 20(b), any Pay Continuation
         shall be paid in equal monthly installments during the Severance
         Period, and any Prorated Annual Incentive Compensation shall be paid
         annually as soon after the end of the Determination Year as is
         practicable. No Prorated Annual Incentive Compensation shall be payable
         for any Determination Year with respect to which the Pro Rata Factor is
         less than or equal to zero.

5.       Forfeiture of Benefits.

         Notwithstanding anything to the contrary in the Plan and except as
         provided in Section 20(c), a Participant receiving benefits or
         otherwise entitled to receive benefits under this Plan shall cease to
         receive such benefits under the Plan and the right to receive any
         benefits in the future under the Plan shall be forfeited, in the event
         the Participant, either before or after termination of employment, as
         determined by the Named Fiduciary, in its sole discretion (a) is
         convicted of a felony, (b) commits any fraud or misappropriates
         property, proprietary information, intellectual property or trade
         secrets of the Employer for personal gain or for the benefit of another
         party, (c) actively recruits and offers employment to any management
         employee of the Employer, or (d) engages in intentional misconduct
         substantially damaging to the property or business of any Employer, or
         (e) makes false or misleading statements about the Employer or its
         products, officers or employees to competitors or customers or
         potential customers of the Employer, or to current of former employees
         of the Employer.

6.       Payment of Benefits Upon Incompetence or Death.

         In the event the Named Fiduciary is presented with evidence
         satisfactory to it that a Participant receiving benefits or entitled to
         receive benefits is adjudged to be legally incompetent, the remainder
         of such Participant's unpaid benefits shall be paid to the
         Participant's conservator, legal representative or any other person
         deemed by the Named Fiduciary to have assumed responsibility for the
         maintenance of such person receiving or entitled to receive benefits.
         In the event a Participant receiving benefits or entitled to receive
         benefits dies, the remainder of such Participant's unpaid benefits
         shall be paid to the Participant's designated beneficiary. A
         Participant may designate a beneficiary in the form and manner
         prescribed by the Named Fiduciary. Any designation of a beneficiary may
         be revoked by filing a later designation or revocation. In the absence
         of an effective designation of a beneficiary by a Participant or upon
         the death of all beneficiaries on or before a Participant's death, the
         remainder of the Participant's unpaid benefits shall be paid to the
         Participant's spouse or, if none, to the Participant's estate. Any
         payment made pursuant to this Section 6 shall be a discharge of any
         liability under the Plan therefor.

7.       Administration.

         (a)      Plan Administration. Except as provided in Section 21(a), the
                  Plan shall be administered by the Plan Administrator, who may
                  act through one or more Named Fiduciaries under this Plan who
                  shall have the powers and authorities as described in this
                  Section 7. The Plan Administrator shall be the Senior Vice
                  President,

                                      -7-

                  Human Resources and Communications, or such other person as
                  the Board may appoint. The Plan Administrator shall have the
                  authority to appoint and remove any other Named Fiduciary at
                  his or her discretion.

                  Any person acting on behalf of the Named Fiduciary shall serve
                  without additional compensation. The Named Fiduciary shall
                  keep or cause to be kept such records and shall prepare or
                  cause to be prepared such returns or reports as may be
                  required by law or necessary for the proper administration of
                  the Plan.

         (b)      Powers and Duties of Named Fiduciary. The Named Fiduciary
                  shall have the full discretionary power and authority to
                  construe and interpret the Plan (including, without
                  limitation, supplying omissions from, correcting deficiencies
                  in, or resolving inconsistencies or ambiguities in, the
                  language of the Plan); to determine all questions of fact
                  arising under the Plan, including questions as to eligibility
                  for and the amount of benefits; to establish such rules and
                  regulations (consistent with the terms of the Plan) as it
                  deems necessary or appropriate for administration of the Plan;
                  to delegate responsibilities to others to assist it in
                  administering the Plan; and to perform all other acts it
                  believes reasonable and proper in connection with the
                  administration of the Plan. The Named Fiduciary shall be
                  entitled to rely on the records of the Employer in determining
                  any Participant's entitlement to and the amount of benefits
                  payable under the Plan. Any determination of the Named
                  Fiduciary, including interpretations of the Plan and
                  determinations of questions of fact, shall be final and
                  binding on all parties.

                  The Named Fiduciary may retain attorneys, consultants,
                  accountants or other persons (who may be employees of the
                  Employer) to render advice and assistance and may delegate any
                  of the authorities conferred on him under this Plan to such
                  persons as he shall determine to be necessary to effect the
                  discharge of his duties hereunder. The Plan Administrator, or
                  other Named Fiduciary, the Employer, the Company and its
                  officers and directors shall be entitled to rely upon the
                  advice, opinions and determinations of any such persons. Any
                  exercise of the authorities set forth in this Section 7,
                  whether by the Plan Administrator, or other Named Fiduciary or
                  his delegee, shall be final and binding upon the Employer and
                  all Participants.

         (c)      Plan Year.  The plan year shall be the calendar year.

         (d)      Indemnification. To the extent permitted by law, the Employer
                  shall indemnify any Named Fiduciary from all claims for
                  liability, loss, or damage (including payment of expenses in
                  connection with defense against such claims) arising from any
                  act or failure to act in connection with the Plan.

8.       Claims and Appeals Procedures.

         Except as provided in Sections 21(c)-(f), the Plan's benefit claims and
         appeals procedures shall be as follows:

                                      -8-

         (a)      Any request or claim for Plan benefits must be made in writing
                  and shall be deemed to be filed by a Participant when a
                  written request is made by the claimant or the claimant's
                  authorized representative which is reasonably calculated to
                  bring the claim to the attention of the Named Fiduciary.

         (b)      The Named Fiduciary shall provide notice in writing to any
                  Participant when a claim for benefits under the Plan has been
                  denied in whole or in part. Such notice shall be provided
                  within 60 days of the receipt by the Named Fiduciary of the
                  Participant's claim or, if special circumstances require, and
                  the Participant is so notified in writing, within 120 days of
                  the receipt by the Named Fiduciary of the Participant's claim.
                  The notice shall be written in a manner calculated to be
                  understood by the claimant and shall:

                  (i)    set forth the specific reasons for the denial of
                         benefits;

                  (ii)   contain specific references to Plan provisions relative
                         to the denial;

                  (iii)  describe any material and information, if any,
                         necessary for the claim for benefits to be allowed,
                         that had been requested, but not received by the Named
                         Fiduciary; and

                  (iv)   advise the Participant that any appeal of the Named
                         Fiduciary's adverse determination must be made in
                         writing to the Named Fiduciary within 60 days after
                         receipt of the initial denial notification, and must
                         set forth the facts upon which the appeal is based.

         (c)      If notice of the denial of a claim is not furnished within the
                  time periods set forth above, the claim shall be deemed denied
                  and the claimant shall be permitted to proceed to the review
                  procedures set forth below. If the Participant fails to appeal
                  the Named Fiduciary's denial of benefits in writing and within
                  60 days after receipt by the claimant of written notification
                  of denial of the claim (or within 60 days after a deemed
                  denial of the claim), the Named Fiduciary's determination
                  shall become final and conclusive.

         (d)      If the Participant appeals the Named Fiduciary's denial of
                  benefits in a timely fashion, the Plan Administrator shall
                  re-examine all issues relevant to the original denial of
                  benefits. Any such claimant, or his or her duly authorized
                  representative may review any pertinent documents, as
                  determined by the Plan Administrator, and submit in writing
                  any issues or comments to be addressed on appeal.

         (e)      The Plan Administrator shall advise the Participant and such
                  individual's representative of its decision which shall be
                  written in a manner calculated to be understood by the
                  claimant, and include specific references to the pertinent
                  Plan provisions on which the decision is based. Such response
                  shall be made within 60 days of receipt of the written appeal,
                  unless special circumstances require an

                                      -9-

                  extension of such 60-day period for not more than an
                  additional 60 days. Where such extension is necessary, the
                  claimant shall be given written notice of the delay. Any
                  decision of the Plan Administrator shall be binding on all
                  persons affected thereby.

         (f)      Any dispute, controversy, or claim arising out of or relating
                  to any Plan benefit, including, without limitation, any
                  dispute, controversy or claim as to whether the decision of
                  the Named Fiduciary respecting the benefits under this Plan or
                  interpretation of this Plan is arbitrary and capricious, that
                  is not settled in accordance with the procedures outlined in
                  Section 8, shall be settled by final and binding arbitration
                  in accordance with the American Arbitration Association
                  Employment Dispute Resolution or other applicable rules.
                  Before resorting to arbitration, an aggrieved Participant must
                  first follow the review procedure outlined in this Section of
                  the Plan. If there is still a dispute after the procedures in
                  this Section have been exhausted, the Participant must request
                  arbitration in writing within six (6) months after the issues,
                  or is deemed to have issued, its determination under
                  subparagraph (e) above.

                  The arbitrator shall be selected by mutual agreement of the
                  parties, if possible. If the parties fail to reach agreement
                  upon appointment of an arbitrator within 30 days following
                  receipt by one party of the other party's notice of desire to
                  arbitrate, the arbitrator shall be selected from a panel or
                  panels of persons submitted by the American Arbitration
                  Association (the "AAA"). The selection process shall be that
                  which is set forth in the AAA Employment Dispute Resolution
                  Rules, except that, if the parties fail to select an
                  arbitrator from one or more panels, AAA shall not have the
                  power to make an appointment but shall continue to submit
                  additional panels until an arbitrator has been selected.

                  All fees and expenses of the arbitration, including a
                  transcript if requested, will be borne by the Company. The
                  arbitrator shall have no power to amend, add to or subtract
                  from this Plan. The award shall be admissible in any court or
                  agency seeking to enforce or render unenforceable this Plan or
                  any portion thereof. Any action to enforce or vacate the
                  arbitrator's award shall be governed by the Federal
                  Arbitration Act if applicable.

9.       Unfunded Obligation.

         All benefits payable under this Plan shall constitute an unfunded
         obligation of the Employer. Payments shall be made, as due, from the
         general funds of the Employer. This Plan shall constitute solely an
         unsecured promise by the Employer to pay severance benefits to
         employees to the extent provided herein.

10.      Inalienability of Benefits.

         No Participant shall have the power to transfer, assign, anticipate,
         mortgage or otherwise encumber any rights or any amounts payable under
         this Plan; nor shall any such rights or

                                      -10-

         amounts payable under this Plan be subject to seizure, attachment,
         execution, garnishment or other legal or equitable process, or for the
         payment of any debts, judgments, alimony, or separate maintenance, or
         be transferable by operation of law in the event of bankruptcy,
         insolvency, or otherwise. In the event a person who is receiving or is
         entitled to receive benefits under the Plan attempts to assign,
         transfer or dispose of such right, or if an attempt is made to subject
         such right to such process, such assignment, transfer or disposition
         shall be null and void.

11.      Withholding.

         The Employer shall have the right to withhold any taxes required to be
         withheld with respect to any payments due under this Plan.

12.      Amendment or Termination.

         Except to the extent otherwise provided in Section 21(i), the Company
         reserves the right to amend or terminate the Plan at any time without
         prior notice to or the consent of any employee. No amendment or
         termination shall adversely affect the rights of any Participant whose
         employment terminated prior to such amendment or termination. However,
         except as provided in Section 21(i), any Participant whose employment
         continues after amendment of the Plan shall be governed by the terms of
         the Plan as so amended. Any Participant whose employment continues
         after termination of the Plan shall have no right to a benefit under
         the Plan.

13.      Plan Not a Contract of Employment; Employer's Policies Control.

         Nothing contained in this Plan shall give an employee the right to be
         retained in the employment of an Employer. This Plan is not a contract
         of employment between the Employer and any employee.

         Any dispute involving issues of employment other than claims for
         benefits under this Plan shall be governed by the appropriate
         employment dispute resolution policies and procedures of the Employer.

14.      Action by an Employer.

         Unless expressly indicated to the contrary herein, any action required
         to be taken by the Company may be taken by action of its Board or by
         any appropriate officer or officers traditionally responsible for such
         determination or actions, or such other individual or individuals as
         may be designated by the Board or any such officer.

15.      Governing Law.

         The Plan is an employee welfare benefit plan within the meaning of
         Section 3(1) of ERISA, and will be construed in accordance with the
         provisions of ERISA.

                                      -11-

16.      Severability.

         If any provision of this Plan shall be held illegal or invalid for any
         reason, said illegality or invalidity shall not affect the remaining
         parts of this Plan, but this Plan shall be construed and enforced as if
         said illegal or invalid provision had never been included herein.

                                      -12-

                                     PART II
                    SPECIAL PROVISIONS THAT BECOME EFFECTIVE
                           ONLY UPON CHANGE IN CONTROL

17.      Change in Control.

         (a)      The provisions of this Part II become effective upon a Change
                  in Control and, in addition to the provisions of Part I that
                  are not superseded by provisions of this Part II, shall
                  control (i) the determination of eligibility for, the amount
                  of, and the time of payment of benefits under the Plan to any
                  Existing Participant or Officer Participant who is the subject
                  of a Covered Termination which occurs within the two-year
                  period following the Change in Control, (ii) the terms of
                  payment for any Existing Participant or Officer Participant
                  whose Severance Period extends beyond the Change in Control,
                  and (iii) the determination of eligibility for, the amount of,
                  and the time of payment of benefits under Section 20 of the
                  Plan to any Existing Participant or Officer Participant.

         (b)      Without derogation to the effect the provisions of this Part
                  II may have on the determination of any Participant's
                  eligibility for benefits under the Plan or the amount of such
                  benefits, it is intended that this Part II will assure that
                  the purposes of this Plan, as they may affect Existing
                  Participants or Officer Participants, will not be adversely
                  affected by the unique circumstances which may exist following
                  a Change in Control. The provisions of this Part II will have
                  no effect whatsoever prior to a Change in Control.

 18.    Definitions.

        (a)       "Allied & Signal Employer" means the Employer and any other
                  person, organization or entity that agrees in writing to be
                  bound by the terms of the Plan for a period of time that
                  extends at least through the two-year period following a
                  Change in Control.

         (b)      "Annual Incentive Compensation" means, notwithstanding the
                  provisions of Section 1(b); the product of Annual Base Salary
                  and the greater of (i) the target percentage utilized in
                  determining Incentive Awards as in effect for the most recent
                  Determination Year ended prior to the Change in Control, or
                  (ii) the average of the target percentages applied in
                  determining the Participant's Incentive Award in the last
                  three Determination Years prior to the date of Covered
                  Termination (or such lesser period as the Participant may have
                  been employed).

         (c)      "Covered Termination" means, notwithstanding the provisions of
                  Section 1(j), severance of the employment relationship (i) at
                  the initiative of the Participant for Good Reason, or (ii) at
                  an AlliedSignal Employer's initiative for reasons other

                                      -13-

                  than death or Gross Cause. Notwithstanding the preceding
                  sentence, in the event of a sale or transfer of a facility or
                  line of business that causes a severance of the employment
                  relationship, a Covered Termination shall be deemed to have
                  occurred only if the new employer has not agreed in writing to
                  be an AlliedSignal Employer with respect to the Participant or
                  the Participant is not employed by the new employer.

         (d)      "Existing Participant" for purposes of this Part II means (i)
                  an individual who, on July 1, 1993, was an employee of an
                  Employer in Salary Grade 20 or above or in a position
                  comparable to Salary Grade 20 or above, or (ii) an individual
                  who, as of April 1, 1999, is determined by the Senior Vice
                  President, Human Resources and Communications to be in a
                  position comparable to Salary Grade 20, and is or reports
                  directly to a functional Senior Vice President of the Company.

         (e)      "Good Reason" means any one or more of the following:

                  (i)    A material change in the Participant's position, duties
                         and/or responsibilities as they existed in the period
                         immediately preceding the Change in Control.

                  (ii)   Any significant reduction in Base Salary or Annual
                         Incentive Compensation.

                  (iii)  Any significant reduction in benefit coverages
                         available to the Participant under the Company's
                         medical benefit plans for active employees or
                         comparable medical benefit plans of any other
                         AlliedSignal Employer or any significant increase in
                         premiums to be paid by the Participant for such
                         benefits.

                  (iv)   Any reduction in the economic value of awards granted
                         under the Company's long-term incentive plan or
                         comparable long-term incentive plan of any other
                         AlliedSignal Employer in which the Participant
                         participates.

                  (v)    Any significant reduction in the rate of the Company's
                         contribution to its savings plan or of any other
                         AlliedSignal Employer's contribution to a savings plan
                         comparable to the Company's savings plans or any
                         significant reduction in the rate of benefit accrual
                         under the AlliedSignal Inc. Retirement Program or any
                         other comparable pension plan sponsored by an
                         AlliedSignal Employer in which the Participant
                         participates.

                  (vi)   Any significant reduction in the benefit coverages
                         available to the Participant under the long-term
                         disability plan of the Company or any comparable
                         long-term disability plan of any other AlliedSignal
                         Employer

                                      -14-

                         or any significant increase in premiums to be paid by
                         the Participant for such benefits.

                  (vii)  Any significant reduction in the life insurance
                         benefits available to the Participant, including any
                         change affecting the Company's Executive Life Insurance
                         Program or comparable program of any other AlliedSignal
                         Employer, or any significant increase in premiums to be
                         paid by the Participant for such benefits.

                  (viii) Any geographic relocation of the Participant's position
                         to a new location which is more than seventy-five (75)
                         miles from the location of the Participant's position
                         immediately prior to a Change in Control.

                  (ix)   Any action by an AlliedSignal Employer that under
                         applicable law constitutes constructive discharge.

                  (x)    Any failure to pay the benefit determined under Section
                         19(b) within the time required under Sections 20(a) or
                         20(b).

                  (xi)   The failure of any AlliedSignal Employer that is a
                         successor to the Company or any of its affiliates
                         (whether direct or indirect, by purchase, merger,
                         consolidation or otherwise) to expressly assume and
                         agree to honor this Plan, if such assumption is legally
                         required to make this Plan enforceable against the
                         successor.

                  For purposes of this Section 18, the term "significant
                  reduction" shall mean a reduction or series of reductions with
                  respect to the same form of benefit or remuneration which are
                  greater than 10% or which do not affect all persons covered by
                  the plan or program in question. For purposes of this Section
                  18, the term "significant increase" shall mean an increase or
                  a series of increases in the Participant's percentage of total
                  premiums for a benefit which are greater than 10% or which do
                  not affect all persons covered by the plan or program in
                  question.

         (f)      "Gross Cause" means, notwithstanding the provisions of Section
                  1(p), any act or acts constituting a felony committed against
                  an AlliedSignal Employer, its property or business.

         (g)      "New Plan Administrator" shall mean such person or persons
                  appointed pursuant to Section 21 to administer the Plan upon
                  the occurrence of a Change in Control.

                                      -15-

19.      Enhancement Benefit.

         (a)      If, following a Change in Control, any payment to a
                  Participant from an AlliedSignal Employer or from any benefit
                  or compensation plan or program sponsored or funded by an
                  AlliedSignal Employer is determined to be an "excess parachute
                  payment" within the meaning of Section 280G or any successor
                  or substitute provision of the Code, with the effect that
                  either the Participant is liable for the payment of the tax
                  described in Section 4999 or any successor or substitute
                  provision of the Code (hereafter the "Section 4999 tax") or
                  the AlliedSignal Employer has withheld the amount of the
                  Section 4999 tax, an additional benefit (hereafter the
                  "Enhancement Benefit") shall be paid from this Plan to such
                  affected Participant.

         (b)      The Enhancement Benefit payable shall be an amount, which when
                  added to all payments constituting "parachute payments" for
                  purposes of Section 280G or any successor or substitute
                  provision of the Code, is sufficient to cause the remainder of
                  (i) the sum of the "parachute payments", including any
                  Enhancement Benefit, less (ii) the amount of all state, local
                  and federal income taxes and the Section 4999 tax attributable
                  to such payments and penalties and interest on any amount of
                  Section 4999 tax, other than penalties and interest on any
                  amount of Section 4999 tax with respect to which an
                  Enhancement Benefit was paid to the Participant on or before
                  the due date of the Participant's federal income tax return on
                  which such Section 4999 tax should have been paid, to be equal
                  to the remainder of (iii) sum of the "parachute payments",
                  excluding any Enhancement Benefit, less (iv) the amount of all
                  state, local and federal income taxes attributable to such
                  payments determined as though the Section 4999 tax and
                  penalties and interest on any amount of Section 4999 tax,
                  other than penalties and interest on any amount of Section
                  4999 tax with respect to which an Enhancement Benefit was paid
                  to the Participant on or before the due date of the
                  Participant's federal income tax return on which such Section
                  4999 tax should have been paid, did not apply.

20.      Benefit Payments and Forfeitures.

         (a)      Benefit Payments. Notwithstanding the provisions of Section 4,
                  benefits that are determined to be payable to a Participant
                  under Sections 3(a)(i) and 3(a)(ii) on or after a Change in
                  Control shall be paid within thirty days following the later
                  of the Change in Control or the Covered Termination, in a
                  single payment equal to the sum of (i) the total amount of the
                  benefit remaining payable under Section 3(a)(i), and (ii) the
                  amount of the benefit remaining payable under Section 3(a)(ii)
                  for all Determination Years which are coextensive, in whole or
                  part, with the Severance Period. The requirements of Section
                  3(b) shall have no application to benefits payable after a
                  Change in Control. Benefits which are determined to be payable
                  to a Participant under Section 19(a) shall be paid within
                  thirty days following the later of a Change in Control or the
                  date the "parachute payments" referred to in Section 19 are
                  made, in a single payment equal to the amount of the benefit

                                      -16-

                  determined under Section 19(b). If any benefit is paid later
                  than the time provided in this Section 20(a), such late
                  payment shall be credited with interest for the period from
                  the date payment should have been made to the date actually
                  made at a rate equal to the average quoted rate for
                  three-month U.S. Treasury Bills for the week preceding the
                  date of payment, as determined by the New Plan Administrator,
                  plus six percentage points.

         (b)      Subsequent Benefit Payments. Notwithstanding the provisions of
                  Section 4, in the event the Internal Revenue Service assesses
                  a Section 4999 tax due which is in excess of the amount
                  determined by the AlliedSignal Employer under Section 19(b), a
                  Participant shall be paid within thirty days following the
                  date the Participant gives notice to the New Plan
                  Administrator of proof of payment of the Section 4999 tax in a
                  single payment equal to the amount of the additional benefit
                  determined under Section 19(b), based upon the amount of the
                  Section 4999 tax paid in excess of any Section 4999 tax with
                  respect to which any Enhancement Benefit was previously paid.
                  If any benefit is paid later than the time provided in this
                  Section 20(b), such late payment shall be credited with
                  interest for the period from the date payment should have been
                  made to the date actually made at a rate equal to the average
                  quoted rate for three-month U.S. Treasury Bills for the week
                  preceding the date of payment, as determined by the New Plan
                  Administrator, plus six percentage points.

         (c)      Forfeiture of Benefits. Notwithstanding the provisions of
                  Section 5, a Participant receiving benefits or entitled to
                  receive benefits under the Plan shall cease to receive such
                  benefits under the Plan and the right to receive any benefits
                  in the future under the Plan shall be forfeited, in the event
                  the Participant, as determined by the New Plan Administrator,
                  (i) is convicted of a felony committed against an AlliedSignal
                  Employer, its property or business, (ii) commits any fraud or
                  misappropriates property, proprietary information,
                  intellectual property or trade secrets of an AlliedSignal
                  Employer for personal gain or for the benefit of another
                  party, or (iii) actively recruits and offers employment to any
                  management employee of an AlliedSignal Employer.

                                      -17-

21.      Administration.

         (a)      New Plan Administrator. On or before a Change in Control, the
                  Company, its successors, or persons operating under its
                  control or on its behalf (hereafter the "Corporation") shall
                  appoint a person independent of the Corporation to be the New
                  Plan Administrator upon the occurrence of a Change in Control
                  and the Plan Administrator shall immediately provide to the
                  New Plan Administrator such information with respect to each
                  Participant in the Plan as shall be necessary to enable the
                  New Plan Administrator to determine the amount of any benefit
                  which is then or may thereafter become payable to such
                  Participants.

         (b)      Authority. Upon the occurrence of a Change in Control, the New
                  Plan Administrator shall have exclusive authority to make
                  initial determinations of eligibility for the benefits under
                  the Plan, subject to the requirements of Section 21(f). The
                  New Plan Administrator may, in reviewing any recommendation
                  for benefit eligibility pursuant to this Section 21, rely on
                  representations made by the Corporation or an AlliedSignal
                  Employer pursuant to Section 21(c). However, in the event that
                  none of the recommendations are agreed to by the Participant,
                  the New Plan Administrator shall refer the disputed claim for
                  benefits under this Plan for resolution as provided in Section
                  21(f). Any recommendation by the New Plan Administrator under
                  this Section 21, any determination by the New Plan
                  Administrator as to the eligibility for or the amount of
                  benefits which are not in dispute and any judicial
                  determination pursuant to Section 21(f) shall be final and
                  binding on the Corporation and the AlliedSignal Employer. The
                  Corporation and the responsible AlliedSignal Employer shall
                  make payments to Participants as directed by the New Plan
                  Administrator or pursuant to judicial determination pursuant
                  to Section 21(f).

         (c)      Corporation or AlliedSignal Employer Recommendations. Upon the
                  occurrence of a Change in Control, the Corporation and any
                  AlliedSignal Employer may make recommendations to the New Plan
                  Administrator with respect to benefit determinations for
                  affected Participants under the Plan and the New Plan
                  Administrator shall immediately forward any such
                  recommendation to the affected Participant. If the
                  recommendation is agreed to in writing by the Participant, the
                  New Plan Administrator shall advise the Corporation and any
                  responsible AlliedSignal Employer, and the Corporation or
                  AlliedSignal Employer, whichever is responsible, shall
                  immediately make payment.

         (d)      Independent Recommendations. In the case of a recommendation
                  which is not agreed to by the affected Participant, the New
                  Plan Administrator shall immediately review the recommendation
                  of the Corporation or responsible AlliedSignal Employer and
                  within 15 days of notice of the dispute from the Participant,
                  determine whether it is in accordance with the terms of the
                  Plan and notify the Corporation or responsible AlliedSignal
                  Employer and the Participant of its findings. If the New Plan
                  Administrator determines that the recommendation is not in
                  accordance with the terms of the Plan and that an

                                      -18-

                  adjustment is necessary and the Participant agrees in writing
                  to such adjustment, the New Plan Administrator shall advise
                  the Corporation or responsible AlliedSignal Employer, and the
                  Corporation or responsible AlliedSignal Employer shall
                  immediately make payment. Any such adjustment determined by
                  the New Plan Administrator, whether agreed to by the
                  Participant or not, shall be final and binding upon the
                  Corporation or responsible AlliedSignal Employer and may not
                  be challenged by either of them.

         (e)      Direct Application. Upon notice to the New Plan Administrator
                  by an affected Participant, as to whom the Corporation or
                  responsible AlliedSignal Employer has made no recommendation,
                  that a Covered Termination has occurred, the Corporation or
                  responsible AlliedSignal Employer shall be notified by the New
                  Plan Administrator and given 15 days from the date the
                  Participant gave notice to the new Plan Administrator within
                  which to make a recommendation as to benefit determination.
                  The New Plan Administrator shall also make its own independent
                  determination as to the benefit payable under the terms of the
                  Plan. Within 21 days of receipt of the notice from the
                  affected Participant, the New Plan Administrator shall
                  transmit to the Participant its own recommendation and that of
                  the Corporation or responsible AlliedSignal Employer if such
                  is available. If either recommendation is accepted in writing
                  by the affected Participant, the New Plan Administrator shall
                  advise the Corporation or responsible AlliedSignal Employer,
                  and the Corporation or responsible AlliedSignal Employer shall
                  immediately make payment. Any recommendation by the New Plan
                  Administrator shall be final and binding upon the Corporation
                  or responsible AlliedSignal Employer and may not be challenged
                  by either of them.

         (f)      Disputed Recommendation. If an affected Participant does not
                  agree in writing within 30 days of transmittal to accept any
                  of the recommendations made pursuant to Sections 21(c), 21(d)
                  or 21(e), the New Plan Administrator shall consider the amount
                  in excess of the highest recommendation to be a claim for
                  benefits which is in dispute and shall, with respect to such
                  amount, initiate an action in interpleader pursuant to Rule 22
                  of the Federal Rules of Civil Procedure or analogous rules,
                  before a court of competent jurisdiction. The New Plan
                  Administrator shall not assert any claim or take any position
                  in this proceeding based on its interpretation of the terms of
                  the Plan, other than the provisions of this Section 21.

         (g)      Attorneys Fees and Costs. If a Participant is paid or is
                  determined to be entitled to receive benefits (i) in excess of
                  any recommendation made by the Corporation or responsible
                  AlliedSignal Employer pursuant to Sections 21(c) or 21(e), or
                  (ii) in a case where the Corporation or responsible
                  AlliedSignal Employer have made no recommendation pursuant to
                  Sections 21(c) or 21(e), the New Plan Administrator shall
                  advise the Corporation or responsible AlliedSignal Employer,
                  and the Corporation or responsible AlliedSignal Employer shall
                  immediately pay or reimburse the affected Participant for the
                  full amount of any attorneys' fees and other expenses the
                  affected Participant incurred in pursuing his or her claim for

                                      -19-

                  benefits. The payment or reimbursement shall include the
                  standard hourly rates charged by each such attorney, any and
                  all other expenses related to the action incurred by or on
                  behalf of the affected Participant, the costs and expenses of
                  any experts utilized to prepare the claim, and any court costs
                  assessed against the affected Participant.

         (h)      Undisputed Benefits. Prior to the resolution of amounts in
                  dispute under Section 21(f), the Participant shall be paid
                  immediately by the Corporation or responsible AlliedSignal
                  Employer in accordance with the terms of the Plan, the higher
                  of (i) the amount recommended, if any, by the Corporation or
                  the responsible AlliedSignal Employer, or (ii) the amount
                  recommended by the New Plan Administrator.

         (i)      Amendment or Termination. This Plan may not be amended or
                  terminated after a Change in Control; provided, however, the
                  Plan may be amended if the purpose of the amendment is to
                  increase benefits hereunder.

                                      -20-

                                                                    EXHIBIT 10.8

                              Salary Deferral Plan
                                       for
      Selected Employees of Honeywell International Inc. and its Affiliates
 (Career Band 6 and Above or Employees Who Occupy Positions Equivalent Thereto)

                                                            Amended and Restated
                                                           as of January 1, 2000

                                      -2-

1. Eligibility

         Those employees of Honeywell International Inc. (the "Corporation") and
its affiliates whose positions are evaluated in Career Band 6 and above or who
occupy positions equivalent thereto and who are designated by the Management
Development and Compensation Committee (the "Committee") shall be eligible to
participate in this supplemental non-qualified Salary Deferral Plan for Selected
Employees of Honeywell International Inc. and its Affiliates (Career Band 6 and
Above or Employees Who Occupy Positions Equivalent Thereto) (the "Plan").

2. Participation

         An eligible employee may become a participant in the Plan (a
"Participant") by filing a timely written deferral election with the
Corporation. Such notice shall direct that a portion of the compensation
elements described in paragraph 3(a) and paragraph 3(b) be credited to an
unfunded deferred compensation account maintained for the Participant under the
Plan (the "Participant Account" or "Account"). A Participant's direction shall
become effective for the pay period or payment date in the next succeeding
calendar year (or for a newly eligible Participant, for the next succeeding pay
period or payment date after the receipt of the direction by the Corporation),
and shall continue in effect until the Participant terminates such direction,
effective as of the end of the calendar year, or is no longer eligible to be a
Participant. Any modification of Participant's direction shall be effective only
with respect to compensation payable with respect to pay periods in the calendar
year next following the date such direction is received by the Corporation.

3. Contributions to Participant Accounts

         (a) Base Annual Salary. A Participant may, prior to the beginning of
any calendar year (and with respect to a newly eligible Participant, within
thirty days after first becoming so eligible) elect to defer an aggregate amount
of base annual salary otherwise payable in such subsequent calendar year (or
with respect to a newly eligible Participant, in the remainder of the calendar
year), exclusive of any bonus or any other compensation or allowance paid or
payable by the Corporation or its affiliates (the "Base Annual Salary"). The
amount deferred under this paragraph 3(a) shall not be greater than fifty
percent (50%) of the Participant's Base Annual Salary for such pay period.

         (b) Incentive Awards. A Participant may, to the extent that the
AlliedSignal Inc. Incentive Compensation Plan For Executive Employees (the
"Incentive Plan") (or any successor plan) permits deferrals of an incentive
award (the "Incentive Award") payable thereunder, elect to defer an amount not
greater than one hundred percent of such Incentive Award. Any amount so deferred
shall be deemed to be deferred under this Plan but shall, to the extent the
provisions of the Incentive Plan are not inconsistent with this Plan, otherwise
be subject to the terms of the Incentive Plan. Any deferral of an Incentive
Award shall be made by filing an appropriate deferral election with the
Corporation not later than the date established by the Corporation from time to
time.

         (c) Deferral Amounts. All amounts determined under this paragraph 3
which are the subject of a written deferral election (the "Deferral Amounts")
shall, in

                                      -3-

accordance with the relevant Participant direction, be credited to a Participant
Account maintained under the Plan on the same day the Base Annual Salary or
Incentive Award would otherwise have been payable.

4. Deferral Requirements

         Amounts may be deferred under this Plan for a minimum period of three
years or such shorter period as may be approved by the Committee. Except as
otherwise provided in paragraphs 9 or 10 or as approved by Committee, no amount
shall be withdrawn from a Participant Account prior to the earlier of: three
years following the last day of the calendar year in which the amount is
credited to the Participant Account; the date the Participant reaches normal
retirement age and is eligible to receive a benefit under a pension plan of the
Corporation or one of its affiliates; the date of Participant's death; or the
date the Participant ceases to be employed by the Corporation or any of its
affiliates.

5. Interest Equivalents

         Deferral Amounts shall accrue additional amounts equivalent to interest
("Interest Equivalents"), compounded daily, from the date the Deferral Amount is
credited to the Account to the date of distribution. A single rate for
calculating Interest Equivalents shall be established by the Committee, in its
sole discretion, for all Deferral Amounts credited to Participant Accounts in
each calendar year. The rate established by the Committee shall not exceed the
greater of (i) 10% or (ii) 200% of the 10-year U.S. Treasury Bond rate at the
time of determination. Such Interest Equivalents, once established for a
calendar year, shall remain in effect with respect to Deferral Amounts credited
to Participant Accounts during the calendar year until the Deferral Amounts are
distributed.

         The rate of notional interest established by the Committee shall be set
forth on Schedule A attached hereto and made a part hereof. Any portion of such
rate designated as "Vested Rate" on such Schedule A shall be nonforfeitable at
all times. Any portion of such rate designated as "Contingent Rate" shall become
nonforfeitable only if the Employee is still employed by the Company at the end
of the third full calendar year following the calendar year in which the Award
relates, provided, however, in the event a Participant terminates employment
with the Corporation or an affiliate prior to such date for reasons other than
gross cause, the Committee shall treat such portion as nonforfeitable in the
event the Participant's employment with the Company is involuntarily terminated
(including a termination for "good reason" under any applicable severance plan
of the Company) or is terminated for such reasons as the Committee may determine
from time to time in its sole discretion. The rate established by the Committee
and set forth on Schedule A shall remain in effect until superceded by action of
the Committee and amendment of such Schedule A.

                                      -4-

6. Participant Accounts

         All amounts credited to a Participant's Account pursuant to paragraphs
3 and 4 shall be unfunded general obligations of the Corporation, and no
Participant shall have any claim to or security interest in any asset of the
Corporation on account thereof.

7. Distribution from Accounts

         At the time a Participant makes an election pursuant to paragraph 3,
the Participant shall also make an election with respect to the distribution of
the Deferral Amounts and Interest Equivalents accrued thereon which are credited
to the Participant's Account pursuant to such election. A Participant may elect
to receive such distribution in one lump-sum payment or in a number of
approximately equal annual payments (provided the payment period may not include
more than fifteen such installments). The lump-sum or the first installment
shall be paid as soon as practicable during the month of January of the calendar
year designated by the Participant. Except as otherwise provided in paragraphs
8, 9 and 10, all installment payments following the initial installment payment
shall be paid in cash as soon as practicable during the month of January of each
succeeding calendar year until the entire amount in the Account shall have been
paid. Notwithstanding the foregoing, in the event an Employee's employment with
the Company is terminated either voluntarily (other than on account of
retirement as defined in the qualified pension plan in which the Participant
participates or for "good reason" under any applicable severance plan of the
Company) or for "gross cause" (as defined in the AlliedSignal Inc. Severance
Plan for Senior Executives), the nonforfeitable portion of such Employee's
Deferred Awards for performance years beginning after 1997 (including the vested
portion of any applicable notional interest credited thereto) shall be
distributed in a lump sum as soon as practicable in January of the calendar year
following such termination of employment.

         Notwithstanding any provision of this Plan to the contrary, a
Participant shall be given a one-time opportunity prior to January 1, 2001 to
make a new election with respect to the distribution of all Deferral Amounts and
Interest Equivalents accrued thereon which are credited to such Participant
under the Plan (other than any such amounts otherwise payable, or part of a
series of payments payable, in January 2001), including a new election with
respect to any payments to be made in connection with a Change in Control as
described in paragraph 10, provided, however, that any such election shall only
be authorized by the Corporation if it results in a further deferral of the
distribution of the Participant's Deferral Amounts and Interest Equivalents from
that previously elected. Such election shall be effective upon a "Merger" of the
Corporation and General Electric Company (as defined in the Agreement and Plan
of Merger between Honeywell International Inc. and General Electric Company
dated October 22, 2000) and acceptance of such election by the Corporation. Any
such election shall be subject to such restrictions and limitations as the
Corporation shall determine in its sole discretion.

                                      -5-

8. Distribution on Death

         If a Participant should die before all amounts credited to the
Participant's Account have been distributed, the balance in the Account shall be
paid as soon as practical thereafter to the beneficiary designated in writing by
the Participant. Payments to a beneficiary pursuant to a designation by a
Participant shall be in such form as the Participant shall elect, including
periodic payments as described in paragraph 7, but in the absence of any such
election, the payment shall be made in one lump sum to the designated
beneficiary as soon as practicable following the death of the Participant. Such
beneficiary designations shall be effective when received by the Corporation,
and shall remain in effect until rescinded or modified by the Participant by an
appropriate written direction. If no beneficiary is properly designed by the
Participant or if the designated beneficiary shall have predeceased the
Participant, such balance in the Account shall be paid to the estate of the
Participant.

9. Payment in the Event of Hardship

         Upon receipt of a request from a Participant or a Participant's
designated beneficiary, delivered in writing to the Corporation along with a
Certificate of Unavailability of Other Resources form, the Committee, the Senior
Vice President - Human Resources and Communications, or his designee, may cause
the Corporation to accelerate (or require the subsidiary of the Corporation
which employs or employed the Participant to accelerate) payment of all or any
part of the Deferral Amount and Interest Equivalents credited to the
Participant's Account, if it finds in its sole discretion that payment of such
amounts in accordance with the Participant's prior election under paragraph 3
would result in severe financial hardship to the Participant or beneficiary and
such hardship is the result of an unforeseeable emergency caused by
circumstances beyond the control of the Participant or the Participant's
beneficiary. Acceleration of payment may not be made under this paragraph 9 to
the extent that such hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of the Participant's
assets, to the extent the liquidation of assets would not itself cause severe
financial hardship or (iii) by cessation of deferrals under this Plan or any
tax-qualified savings plan of the Corporation.

10. Change in Control

         (a) Initial Lump Sum Election. Notwithstanding any election made
pursuant to paragraph 7, a Participant may file a written election with the
Corporation to have the Deferral Amounts and Interest Equivalents accrued
thereon which are credited thereafter to the Participant's Account paid in one
lump-sum payment as soon as practicable following a Change in Control, but in no
event later than 90 days after such Change in Control. The Interest Equivalents
on any Deferred Amount payable pursuant to this paragraph 10(a) shall include
the "Contingent Rate" credited to such Deferred Amount without regard to whether
such amount has become nonforfeitable as provided in paragraph 5 at the time
payment is made under this paragraph 10(a).

         (b) Revocation of Lump-Sum Election. A Participant may revoke an
election made pursuant to paragraph 10(a) by filing an appropriate written
notice with the Corporation. A revocation notice filed pursuant to this
paragraph 10(b) shall be subject

                                      -6-

to such terms and conditions as the Corporation shall establish and shall be
effective with respect to any or all of the Participant's Deferral Amounts and
Interest Equivalents accrued thereon which are credited to such Participant
under the Plan. Any revocation notice made before January 1, 2001 shall be
effective upon a "Merger" of the Corporation and General Electric Company (as
defined in the Agreement and Plan of Merger between Honeywell International Inc.
and General Electric Company dated October 22, 2000) and acceptance of such
election by the Corporation. Any such election shall be subject to such
restrictions and limitations as the Corporation shall determine in its sole
discretion.

         (c) Limitation on Elections. Any election made pursuant to paragraph
10(a) or 10(b) shall not be effective unless filed with the Corporation at least
90 days prior to a Change in Control.

         (d) Definition of Change in Control. For purposes of the Plan, a Change
in Control is deemed to occur at the time (i) when an entity, person or group
(other than the Corporation, any subsidiary or savings, pension or other benefit
plan for the benefit of employees of the Corporation or its subsidiaries) which
theretofore beneficially owned less than 30% of the Corporation's common stock
(the "Common Stock") then outstanding, acquires shares of Common Stock in a
transaction or a series of transactions that results in such entity, person or
group directly or indirectly owning beneficially 30% or more of the outstanding
Common Stock, (ii) of the purchase of Common Stock pursuant to a tender offer or
exchange offer (other than an offer by the Corporation) for all, or any part of,
the Common Stock (iii) of a merger in which the Corporation will not survive as
an independent, publicly owned corporation, a consolidation, a sale, exchange or
other disposition of all or substantially all of the Corporation's assets, (iv)
of a substantial change in the composition of the Board during any period of two
consecutive years such that individuals who at the beginning of such period were
members of the Board cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the shareowners
of the Corporation, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period, or (v) of any transaction or other event which the
Committee, in its sole discretion, determines to be a Change in Control for
purposes of the Plan.

11. Miscellaneous

         (a) No Alienation of Benefits. Except insofar as may otherwise be
required by law, no amount payable at any time under the Plan shall be subject
in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge, or encumbrance of any kind nor in any
manner be subject to the debts or liabilities of any person and any attempt to
so alienate or subject any such amount, whether presently or thereafter payable,
shall be void. If any person shall attempt to, or shall alienate, sell,
transfer, assign, pledge, attach, charge, or otherwise encumber any amount
payable under the Plan, or any part thereof, or if by reason of such person's
bankruptcy or other event happening at any such time such amount would be made
subject to the person's debts or liabilities or would otherwise not be enjoyed
by that person, then the Corporation, if it so elects, may direct that such
amount be withheld and that same or any part thereof be paid or applied to or
for the benefit of such person,

                                      -7-

the person's spouse, children or other dependents, or any of them, in such
manner and proportion as the Corporation may deem proper.

         (b) No Right or Interest in Corporation's Assets. Neither the
Corporation nor any of its Affiliates shall be required to reserve or otherwise
set aside funds for the payment of obligations arising under this Plan. The
Corporation may, in its sole discretion, establish funds, segregate assets or
take such other action as it shall determine necessary or appropriate to secure
the payment of its obligations arising under this Plan. This Plan is intended to
be unfunded for tax purposes and for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended. Nothing contained herein,
and no action taken pursuant to the provisions of this Plan shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Corporation and any Participant or any other person. To the extent that any
person acquires a right to receive payments under this Plan, such right shall be
no greater than the right of an unsecured creditor of the Corporation.

         (c) Administration. The Corporation shall have sole discretion and
authority to administer the Plan, including the authority to interpret its
terms, promulgate regulations thereunder, determine eligibility to participate
in the Plan and make any finding of fact which may be necessary to determine the
obligation of the Plan with respect to the payment of benefits.

         (d) Amendment. The Corporation may amend, modify or terminate the Plan
at any time, or from time to time; provided, however, that no change to the Plan
shall impair the right of any Participant with respect to amounts then credited
to an Account.

         (e) Accounting. Each Participant shall receive periodic statements (not
less frequently than annually) setting forth the cumulative Deferral Amounts and
Interest Equivalents credited to, and any distributions from, the Participant's
Account.

         (f) Facility of Payments. If the Corporation shall find that any person
to whom any amount is payable under the plan is unable to care for his or her
affairs because of illness or accident, or is a minor, or has died, then any
payment due the person or the person's estate (unless a prior claim therefore
has been made by a duly appointed legal representative), may, if the Corporation
so elects in its sole discretion, be paid to the person's spouse, a child, a
relative, an institution having custody of such person, or any other person
deemed by the Corporation to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall be a complete discharge of
the liability of the Corporation and the Plan therefore.

         (g) Governing Law. The Plan is intended to constitute an unfunded
deferred compensation arrangement for a select group of management or highly
compensated personnel and all rights thereunder shall be governed by and
construed in accordance with the laws of New York.

                                      -8-

                                   SCHEDULE A
                             Notional Interest Rate

Award Year                     Vested Rate          Contingent Rate         Total Rate
- ----------                     -----------          ---------------         ----------

1975-1992                    Treasury bills +             N/A              Treasury bills +
                                    3%*                                          3%*

1993-1997                          10%                    N/A                   10%

1998+                               8%                     3%                   11%

*/Three-month Treasury bill average rate for the immediately preceding calendar
quarter as reported by the Federal Reserve Bank; rate changes each calendar
quarter.

                                                                   EXHIBIT 10.10

                               U.S. $1,000,000,000

                  AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT

                          Dated as of November 30, 2000

                                      Among

                          HONEYWELL INTERNATIONAL INC.,

                                  as Borrower,

                                       and

                        THE INITIAL LENDERS NAMED HEREIN,

                               as Initial Lenders,

                                       and

                                 CITIBANK, N.A.,

                             as Administrative Agent

                                       and

                            THE CHASE MANHATTAN BANK
                        DEUTSCHE BANK AG, NEW YORK BRANCH
                              BANK OF AMERICA, N.A.

                              as Syndication Agents

                                       and

                            SALOMON SMITH BARNEY INC.

                        as Lead Arranger and Book Manager

                  AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT

                          Dated as of November 30, 2000

                  HONEYWELL INTERNATIONAL INC., a Delaware corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
(collectively, the "Initial Lenders") party hereto, CITIBANK, N.A., as
administrative agent (together with any successor thereto appointed pursuant to
Article VII of the Existing Credit Agreement referred to below, the "Agent") for
the Lenders (as defined in the Existing Credit Agreement referred to below) THE
CHASE MANHATTAN BANK, DEUTSCHE BANK AG, NEW YORK BRANCH and BANK OF AMERICA,
N.A., as syndication agents, and SALOMON SMITH BARNEY INC., as lead arranger
book manager, hereby agree as follows:

                             PRELIMINARY STATEMENTS

                  (1) The Borrower is party to a 364-Day Credit Agreement dated
as of December 2, 1999 (the "Existing Credit Agreement") with the banks,
financial institutions and other institutional lenders party thereto and
Citibank, N.A., as Agent for the Lenders and such other lenders. Capitalized
terms not otherwise defined in this Amendment and Restatement shall have the
same meanings as specified in the Existing Credit Agreement.

                  (2) The parties to this Amendment and Restatement desire to
amend the Existing Credit Agreement as set forth herein and to restate the
Existing Credit Agreement in its entirety to read as set forth in the Existing
Credit Agreement with the following amendments.

                  (3) The Borrower has requested that the Lenders agree to
extend credit to it from time to time in an aggregate principal amount of up to
$1,000,000,000 for general corporate purposes of the Borrower and its
Subsidiaries not otherwise prohibited under the terms of this Agreement. The
Lenders have indicated their willingness to agree to extend credit to the
Borrower from time to time in such amount on the terms and conditions of this
Amendment and Restatement.

                  SECTION 1. Amendments to the Existing Credit Agreement. (a)
Section 1.01 of the Existing Credit Agreement is, effective as of the date of
this Amendment and Restatement and subject to the satisfaction of the conditions
precedent set forth in Section 2, hereby amended by deleting the definitions of
"Commitment", "Lenders" and "Termination Date" set forth therein and replacing
them, respectively, with the following new definitions thereof:

                  "Commitment" means as to any Lender, (i) the Dollar amount set
         forth opposite its name on Schedule I hereto, (ii) if such Lender has
         become a Lender hereunder pursuant to an Assumption Agreement, the
         Dollar amount set forth as its Commitment in such Assumption Agreement
         or (iii) if such Lender has entered into any Assignment and Acceptance,
         the Dollar amount set forth for such Lender in the Register maintained
         by the Agent pursuant to Section 9.07(d), in each case as the same may
         be terminated or reduced, as the case may be, pursuant to Section 2.05.

                  "Lenders" means, collectively, each Initial Lender and each
         other Person that shall become a party hereto pursuant to Sections
         9.07(a), (b) and (c).

                  "Termination Date" means the earliest of (i) November 29,
         2001, (ii) the date that is 90 days after the consummation of a merger
         of the Borrower with General Electric Co. or any subsidiary of General
         Electric Co. and (iii) the date of termination in whole of the
         Commitments pursuant to Section 2.05 or 6.01.

                                       2

                  (b) Schedule I to the Existing Credit Agreement is, effective
as of the date of this Amendment and Restatement and subject to the satisfaction
of the conditions precedent set forth in Section 2, deleted in its entirety and
replaced with Schedule I to this Amendment and Restatement.

                  (c) Schedule 3.01(b) to the Existing Credit Agreement is,
effective as of the date of this Amendment and Restatement and subject to the
satisfaction of the conditions precedent set forth in Section 2, deleted in its
entirety and replaced with Schedule 3.01(b) to this Amendment and Restatement

                  SECTION 2. Conditions of Effectiveness of this Amendment and
Restatement. This Amendment and Restatement shall become effective as of the
date first above written (the "Restatement Effective Date") when and only if:

                  (a) The Administrative Agent shall have received counterparts
         of this Amendment and Restatement executed by the Borrower and all of
         the Initial Lenders or, as to any of the Initial Lenders, advice
         satisfactory to the Administrative Agent that such Initial Lender has
         executed this Amendment and Restatement.

                  (b) The Administrative Agent shall have received on or before
         the Restatement Effective Date the following, each dated such date and
         (unless otherwise specified below) in form and substance satisfactory
         to the Administrative Agent and in sufficient copies for each Initial
         Lender:

                           (i) The Revolving Credit Notes payable to the order
                  of the Lenders, to the extent requested by any Lender pursuant
                  to Section 2.17.

                           (ii) A certificate of the Secretary or an Assistant
                  Secretary of the Borrower certifying (A) that there are no
                  amendments to the resolutions of the Borrower since the date
                  of the certificate delivered pursuant to Section 3.01(e)(ii)
                  of the Existing Credit Agreement and (B) the names and true
                  signatures of the officers of the Borrower authorized to sign
                  this Amendment and Restatement and the Notes, if any, and the
                  other documents to be delivered hereunder by the Borrower.

                           (iii) A favorable opinion of the General Counsel,
                  Deputy General Counsel or Assistant General Counsel of the
                  Borrower, in substantially the form of Exhibit G to the
                  Existing Credit Agreement but with such modifications as are
                  required to address the Existing Credit Agreement, as amended
                  by this Amendment and Restatement.

                           (iv) A favorable opinion of Shearman & Sterling,
                  counsel for the Agent, in form and substance reasonably
                  satisfactory to the Agent.

                  (c) The representations and warranties contained in Section
         4.01 of the Existing Credit Agreement shall be correct on and as of the
         Restatement Effective Date, before and after giving effect to the
         Restatement Effective Date, as though made on and as of such date.

                  (d) No event shall have occurred and be continuing, or shall
         occur as a result of the occurrence of the Restatement Effective Date,
         that constitutes a Default.

                  SECTION 3. Reference to and Effect on the Existing Credit
Agreement and the Notes. (a) On and after the effectiveness of this Amendment
and Restatement, each reference in the Existing Credit Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to the
Existing Credit Agreement, and each reference in the Notes to "the Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Existing Credit Agreement, shall mean and be a reference to the Existing Credit
Agreement, as amended by this Amendment and Restatement.

                                       3

                  (b) The Existing Credit Agreement and the Notes, as
specifically amended by this Amendment and Restatement, are and shall continue
to be in full force and effect and are hereby in all respects ratified and
confirmed.

                  (c) Without limiting any of the other provisions of the
Existing Credit Agreement, as amended by this Amendment and Restatement, any
references in the Existing Credit Agreement to the phrases "on the date hereof",
"on the date of this Agreement" or words of similar import shall mean and be a
reference to the date of the Existing Credit Agreement (which is December 2,
1999).

                  SECTION 4. Costs and Expenses. The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the Agent in
connection with the preparation, execution, delivery and administration,
modification and amendment of this Amendment and Restatement, the Notes and the
other documents to be delivered hereunder (including, without limitation, the
reasonable and documented fees and expenses of counsel for the Agent with
respect hereto and thereto) in accordance with the terms of Section 9.04 of the
Existing Credit Agreement.

                  SECTION 5. Execution in Counterparts. This Amendment and
Restatement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Amendment and Restatement by telecopier shall be effective as delivery
of a manually executed counterpart of this Amendment and Restatement.

                  SECTION 6. Governing Law. This Amendment and Restatement shall
be governed by, and construed in accordance with, the laws of the State of New
York.

                                       4

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment and Restatement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.

                                  THE BORROWER

                                HONEYWELL INTERNATIONAL INC.

                                By  /s/ James V. Gelly
                                    -------------------------------------
                                      Name: James V. Gelly
                                      Title: Vice President and Treasurer

                                    THE AGENT

                                CITIBANK, N.A.,
                                     as Agent

                                By  /s/ Carolyn A. Kee
                                    ------------------------------------
                                      Name: Carolyn A. Kee
                                      Title: Vice President

                                THE INITIAL LENDERS

                                ADMINISTRATIVE AGENT

                                CITIBANK, N.A.

                                By: /s/ Carolyn A. Kee
                                    -------------------------------------
                                      Name: Carolyn A. Kee
                                      Title: Vice President

                                CO-SYNDICATION AGENTS

                                BANK OF AMERICA, N.A.

                                By: /s/ John Pocalyko
                                    -------------------------------------
                                      Name: John Pocalyko
                                      Title: Managing Director

                                THE CHASE MANHATTAN BANK

                                By: /s/ Tina Ruyter
                                   --------------------------------------
                                      Name: Tina Ruyter
                                      Title: Vice President

                                5

                                DEUTSCHE BANK AG, NEW YORK AND/OR
                                CAYMAN ISLANDS BRANCH

                                By: /s/ Jean Hannigan
                                   --------------------------------------
                                      Name: Jean Hannigan
                                      Title: Director

                                By: /s/ Stephanie Strohe
                                   --------------------------------------
                                      Name: Stephanie Strohe
                                      Title: Associate

                                AGENT

                                BARCLAYS BANK PLC

                                By: /s/ Douglas Bernegger
                                   --------------------------------------
                                      Name: Douglas Bernegger
                                      Title: Director

                                SENIOR MANAGING AGENTS

                                BANCA NAZIONALE DE LAVORO S.p.A.-NEW
                                YORK BRANCH

                                By: /s/ Giulio Giovine  /s/ Leonardo Valentini
                                   -------------------------------------------
                                     Name: Giulio Giovine   Leonardo Valentini
                                     Title: Vice President  First Vice President

                                THE BANK OF NEW YORK

                                By: /s/ Ernest Fung
                                    -------------------------------------------
                                     Name: Ernest Fung
                                     Title: Vice President

                                     BANK OF TOKYO-MITSUBISHI TRUST COMPANY

                                By: /s/ Jeffrey K. Stanton
                                    --------------------------------------------
                                     Name: Jeffrey K. Stanton
                                     Title: Vice President

                                     BANK ONE, NA (Main Office Chicago)

                                By: /s/ Tatiana Ross
                                    --------------------------------------------
                                     Name: Tatiana Ross
                                     Title: Commercial Banking Officer

                                HSBC BANK USA

                                       6

                                By:  /s/ Monisha Khadse
                                    --------------------------------------------
                                     Name:  Monisha Khadse
                                     Title: Vice President

                                MELLON BANK, N.A.

                                By: /s/ Kristen M. Denning
                                    --------------------------------------------
                                     Name: Kristen M. Denning
                                     Title: Assistant Vice President

                                MORGAN GUARANTY TRUST COMPANY OF
                                NEW YORK

                                By: /s/ Dennis Wilczek
                                    --------------------------------------------
                                     Name: Dennis Wilczek
                                     Title: Associate

                                CO-AGENTS

                                ABN AMRO BANK N.V.

                                By: /s/ Andre Kel
                                    --------------------------------------------
                                     Name: Andre Kel
                                     Title: Senior Vice President

                                By: /s/ Juliette Mound
                                    --------------------------------------------
                                     Name: Juliette Mound
                                     Title: Assistant Vice President

                                BANCA DI ROMA

                                By: /s/ Steven Paley
                                    --------------------------------------------
                                     Name: Steven Paley
                                     Title: First V.P.

                                By: /s/ William J.Fontana
                                    --------------------------------------------
                                     Name: William J. Fontana
                                     Title: V.P.

                                       7

                                BNP PARIBAS

                                By: /s/ Christopher Criswell
                                    --------------------------------------------
                                     Name: Christopher Criswell
                                     Title: Director

                                By:/s/ William Van Nostrand
                                    --------------------------------------------
                                     Name: William Van Nostrand
                                     Title: Director

                                NORTHERN TRUST COMPANY

                                By: /s/ Ashish S. Bhagwat
                                    --------------------------------------------
                                     Name: Ashish S. Bhagwat
                                     Title: Second Vice President

                                THE SUMITOMO BANK, LIMITED

                                By: /s/ Edward D. Henderson, Jr.
                                    --------------------------------------------
                                     Name: Edward D. Henderson, Jr.
                                     Title: Senior Vice President

                                WELLS FARGO BANK, NATIONAL ASSOCIATION

                                By: /s/ Bradley A. Hardy   /s/ Peter M. Angelico
                                    --------------------------------------------
                                     Name: Bradley A. Hardy    Peter M. Angelico
                                     Title: Vice President     Vice President

                                LENDERS

                                BANCO BILBAO VIZCAYA

                                By: /s/ Manuel Sanchez         John Martini
                                    --------------------------------------------
                                     Name: Manuel Sanchez      John Martini
                                     Title: Global Re. Manager Vice President
                                            Corporate Banking  Corporate Banking

                                THE FUJI BANK, LIMITED

                                By: /s/ Raymond Ventura
                                    --------------------------------------------
                                     Name: Raymond Ventura
                                     Title: Vice President & Manager

                                       8

                                ROYAL BANK OF CANADA

                                By: /s/ Lori A. Ross
                                    --------------------------------------------
                                     Name: Lori Ross
                                     Title: Manager

                                STANDARD CHARTERED BANK

                      By: /s/ Shafiq Ur Rahman        /s/ Peter G.R. Dodds
                          ------------------------------------------------------
                            Name:  Shafiq Ur. Rahman       Peter G.R. Dodds
                            Title: Senior Vice President   Senior Credit Officer
                            Standard Chartered Bank Coin 98/62

                                UNICREDITO ITALIANO SPA

                      By: /s/ Christopher J. Eldin    /s/ Saiyed A. Abbas
                         -------------------------------------------------------
                            Name:Christopher J. Eldin     Saiyed A. Abbas
                            Title: FVP & Deputy Manager   Vice President

                                   SCHEDULE I
                   COMMITMENTS AND APPLICABLE LENDING OFFICES

- ---------------------------------------------------------------------------------------------------------------------------
NAME OF INITIAL LENDER             COMMITMENT       DOMESTIC LENDING OFFICE           EURODOLLAR LENDING OFFICE
- ---------------------------------------------------------------------------------------------------------------------------
                                                                             
Citibank, N.A.                     $112,000,001     399 Park Avenue                   399 Park Avenue
                                                    New York, NY  10043               New York, NY  10043
                                                    Attn: Carolyn Sheridan            Attn: Carolyn Sheridan
                                                    Phone:  (212)                     Phone:  (212) 559-3245
                                                    Fax:  (212) 826-2371              Phone:  (212)
                                                                                      Fax:  (212) 826-2371
- ---------------------------------------------------------------------------------------------------------------------------
Bank of America, N.A.              $85,333,333      101 N. Tryon Street               101 N. Tryon Street
                                                    Charlotte, NC 28255               Charlotte, NC 28255
                                                    Attn: Carrie Cunder               Attn: Carrie Cunder
                                                    Phone: (704) 386-8382             Phone: (704) 386-8382
                                                    Fax: (704) 409-0064               Fax: (704) 409-0064
- ---------------------------------------------------------------------------------------------------------------------------
The Chase Manhattan Bank           $85,333,333      One Chase Manhattan Plaza         One Chase Manhattan Plaza
                                                    New York, NY 10081                New York, NY 10081
                                                    Attn: Lenora Kiernan              Attn: Lenora Kiernan
                                                    Phone: (212) 552-7309             Phone: (212) 552-7309
                                                    Fax: (212) 552-5650               Fax: (212) 552-5650
- ---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, New York and/or  $85,333,333      31 West 52nd Street               31 West 52nd Street
Cayman Islands Branch                               New York, NY  10019               New York, NY  10019
                                                    Attn:  Colin T. Taylor            Attn:  Colin T. Taylor
                                                    Phone:  (212) 474-7904            Phone:  (212) 474-7904
                                                    Fax:  (212) 474-8212              Fax:  (212) 474-8212
- ---------------------------------------------------------------------------------------------------------------------------
Barclays Bank PLC                  $85,333,333      222 Broadway                      222 Broadway
                                                    New York, NY 10038                New York, NY 10038
                                                    Attn: Paul Kavanagh               Attn: Paul Kavanagh
                                                    Phone: (212) 412-1547             Phone: (212) 412-1547
                                                    Fax: (212) 412-7585               Fax: (212) 412-7585
- ---------------------------------------------------------------------------------------------------------------------------
Banca Nazionale De Lavoro          $50,000,000      25 West 51st Street               25 West 51st Street
                                                    New York, NY 10019                New York, NY 10019
                                                    Attn: Giulio Giovine              Attn: Giulio Giovine
                                                    Phone: (212) 314-0239             Phone: (212) 314-0239
                                                    Fax: (212) 765-2978               Fax: (212) 765-2978
- ---------------------------------------------------------------------------------------------------------------------------
The Bank of New York               $50,000,000      One Wall Street                   One Wall Street
                                                    New York, NY 10286                New York, NY 10286
                                                    Attn: Ernest Fung                 Attn: Ernest Fung
                                                    Phone: (212) 635-6805             Phone: (212) 635-6805
                                                    Fax: (212) 635-7978               Fax: (212) 635-7978
- ---------------------------------------------------------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi       $50,000,000      1251 Avenue of the Americas       1251 Avenue of the Americas
                                                    12th Floor                        12th Floor
                                                    New York, NY 10020                New York, NY 10020
                                                    Attn: William Derasmo             Attn: William Derasmo
                                                    Phone: (212) 782-4359             Phone: (212) 782-4359
                                                    Fax: (212) 782-6445               Fax: (212) 782-6445
- ---------------------------------------------------------------------------------------------------------------------------
Bank One, NA                       $50,000,000      One Bank One Plaza                One Bank One Plaza
                                                    Chicago, IL 60670                 Chicago, IL 60670
                                                    Attn: Claudia Kech                Attn: Claudia Kech
                                                    Phone: (312) 732-1031             Phone: (312) 732-1031
                                                    Fax: (312) 732-4840               Fax: (312) 732-4840
- ---------------------------------------------------------------------------------------------------------------------------

                                       2

                                                                             
- ---------------------------------------------------------------------------------------------------------------------------
HSBC Bank USA                      $50,000,000      140 Broadway, 4th Floor           140 Broadway, 4th Floor
                                                    New York, NY 10005                New York, NY 10005
                                                    Attn: Monisha Khadse              Attn: Monisha Khadse
                                                    Phone: (212) 658-5572             Phone: (212) 658-5572
                                                    Fax: (212) 658-5109               Fax: (212) 658-5109
- ---------------------------------------------------------------------------------------------------------------------------
Mellon Bank                        $50,000,000      3 Mellon Bank Center, 12th Floor  3 Mellon Bank Center, 12th Floor
                                                    Pittsburgh, PA 15259              Pittsburgh, PA 15259
                                                    Attn: Sannford Richards           Attn: Sannford Richards
                                                    Phone: (412) 234-8285             Phone: (412) 234-8285
                                                    Fax: (412) 209-6118               Fax: (412) 209-6118
- ---------------------------------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Company      $50,000,000      Morgan Guaranty Trust Company of  Morgan Guaranty Trust Company -
                                                    New York                          Nassau Bahamas Branch
                                                    60 Wall Street                    c/o JP Morgan Services Inc.
                                                    New York, NY 10260-0060           500 Stanton Christiana Road
                                                    Attn: Andrew Lipsett              Newark, DE 19713
                                                    Phone: (302) 634-1872             Attn: Andrew Lipsett
                                                    Fax: (302) 634-8177               Phone: (302) 634-1872
                                                                                      Fax: (302) 634-8177
- ---------------------------------------------------------------------------------------------------------------------------
ABN AMRO Bank N.V.                 $21,666,667      208 South LaSalle Street          208 South LaSalle Street
                                                    Suite 1500                        Suite 1500
                                                    Chicago, IL 60604                 Chicago, IL 60604
                                                    Attn: Credit Administration       Attn: Credit Administration
                                                    Phone: (312) 992-5110             Phone: (312) 992-5110
                                                    Fax: (312) 992-5111               Fax: (312) 992-5111
- ---------------------------------------------------------------------------------------------------------------------------
Banca di Roma                      $21,666,667      34 East 51st Street               34 East 51st Street
                                                    New York, NY 10022                New York, NY 10022
                                                    Attn: Lino Caldera                Attn: Lino Caldera
                                                    Phone: (212) 407-1613             Phone: (212) 407-1613
                                                    Fax: (212) 407-1684               Fax: (212) 407-1684
- ---------------------------------------------------------------------------------------------------------------------------
BNP Paribas                        $21,666,667      499 Park Avenue                   499 Park Avenue
                                                    New York, NY  10022               New York, NY  10022
                                                    Attn: Andree Mitton/Robin         Attn: Andree Mitton/Robin
                                                    Jackson-Bogner                    Jackson-Bogner
                                                    Phone:  (212) 415-9617/9616       Phone:  (212) 415-9617/9616
                                                    Fax:  (212) 415-9606              Fax:  (212) 415-9606
- ---------------------------------------------------------------------------------------------------------------------------
Northern Trust Company             $21,666,667      50 S. LaSalle Street              50 S. LaSalle Street
                                                    Chicago, IL 60675                 Chicago, IL 60675
                                                    Attn: Linda Honda                 Attn: Linda Honda
                                                    Phone: (312) 444-3532             Phone: (312) 444-3532
                                                    Fax: (312) 630-1566               Fax: (312) 630-1566
- ---------------------------------------------------------------------------------------------------------------------------
The Sumitomo Bank, Limited         $21,666,667      277 Park Avenue                   277 Park Avenue
                                                    New York, NY 10172                New York, NY 10172
                                                    Attn: Edward McColly              Attn: Edward McColly
                                                    Phone: (212) 224-4139             Phone: (212) 224-4139
                                                    Fax: (212) 224-4384               Fax: (212) 224-4384
- ---------------------------------------------------------------------------------------------------------------------------
Wells Fargo (Norwest)              $21,666,667      Sixth & Marquette                 Sixth & Marquette
                                                    3rd Floor                         3rd Floor
                                                    Minneapolis, MN 55479             Minneapolis, MN 55479
                                                    Attn: Molly S. Van Metre          Attn: Molly S. Van Metre
                                                    Phone: (612) 667-9147             Phone: (612) 667-9147
                                                    Fax: (612) 667-2276               Fax: (612) 667-2276
- ---------------------------------------------------------------------------------------------------------------------------

                                       3

                                                                             
- ---------------------------------------------------------------------------------------------------------------------------
Banco Bilbao Vizcaya               $13,333,333      1345 Avenue of the Americas       1345 Avenue of the Americas
                                                    45th Floor                        45th Floor
                                                    New York, NY 10105                New York, NY 10105
                                                    Attn: Anne-Maureen Sarfati        Attn: Anne-Maureen Sarfati
                                                    Phone: (212) 728-1654             Phone: (212) 728-1654
                                                    Fax: (212) 333-2904               Fax: (212) 333-2904
- ---------------------------------------------------------------------------------------------------------------------------
Fuji Bank                          $13,333,333      Two World Trade Center            Two World Trade Center
                                                    New York, NY 10048                New York, NY 10048
                                                    Attn: Tina Catapano               Attn: Tina Catapano
                                                    Phone: (212) 898-2099             Phone: (212) 898-2099
                                                    Fax: (212) 488-8216               Fax: (212) 488-8216
- ---------------------------------------------------------------------------------------------------------------------------
Royal Bank of Canada               $13,333,333      One Liberty Plaza, 4th Floor      One Liberty Plaza, 4th Floor
                                                    New York, NY 10006                New York, NY 10006
                                                    Attn: Aurora Lanteigne            Attn: Aurora Lanteigne
                                                    Phone: (212) 428-6338             Phone: (212) 428-6338
                                                    Fax: (212) 428-2372               Fax: (212) 428-2372
- ---------------------------------------------------------------------------------------------------------------------------
Standard Chartered                 $13,333,333      7 World Trade Center              7 World Trade Center
                                                    New York, NY 10048                New York, NY 10048
                                                    Attn: Kevin Fax                   Attn: Kevin Fax
                                                    Phone:  (212) 667-0341            Phone:  (212) 667-0341
                                                    Fax: (212) 667-0568               Fax: (212) 667-0568
- ---------------------------------------------------------------------------------------------------------------------------
Unicredito Italiano                $13,333,333      375 Park Avenue                   Grand Cayman Branch
                                                    New York, NY 10152                c/o Unicredito Italiano, NY Branch
                                                    Attn: Christopher Eldin           375 Park Avenue
                                                    Phone:  (212) 546-9611            New York, NY 10152
                                                    Fax: (212) 546-9665               Attn: Christopher Eldin
                                                                                      Phone:  (212) 546-9611
                                                                                      Fax: (212) 546-9665
- ---------------------------------------------------------------------------------------------------------------------------

                                                                   EXHIBIT 10.13

                          Honeywell International Inc.
                            Supplemental Pension Plan

                                                            Amended and Restated
                                                           as of January 1, 2000

                                      -2-

Article I - Purpose

                Effective November 20, 1975, Allied Corporation adopted the
Allied Corporation Supplemental Retirement Plan for Executives and Key
Employees. Such plan is amended and restated effective January 1, 2000 as the
Honeywell International Inc. Supplemental Pension Plan (the "Plan").

                The purpose of the Plan is to provide retired participants and
their joint annuitants and beneficiaries under the Pension Plan with the amount
of retirement income that is not provided under the Pension Plan because the
participant deferred compensation under one or more nonqualified deferred
compensation plans of Honeywell International Inc., including the Incentive
Plan, the Supplemental Savings Plans and the Salary Deferral Plan or, by reason
of the limits imposed by Section 415 and 401(a)(17) of the Code. The Plan is
also intended to cover any contractual obligation Allied has to pay pension
benefits which cannot be provided under the provisions of the Pension Plan.

                Except to the extent otherwise indicated, and to the extent
otherwise inappropriate, the Pension Plan and the provisions thereof are hereby
incorporated by reference.

Article II - Definitions

2.1          Accrued Pension Benefit - means the amount of retirement income
             payable under the Pension Plan to or with respect to a participant
             at or after termination of employment, or such earlier date
             requiring payment under this Plan.

2.2          Board of Directors - means the Board of Directors of Honeywell.

2.3          Code - means the Internal Revenue Code of 1986, as amended from
             time to time.

2.4          Committee - means the Management Development and Compensation
             Committee of Honeywell.

2.5          Incentive Plan - means the AlliedSignal Inc. Incentive Compensation
             Plan for Executive Employees, and all predecessor and successor
             plans.

2.6          Honeywell - means Honeywell International Inc., a Delaware
             corporation and its subsidiaries.

2.7          Pension Plan - means the AlliedSignal Inc. Retirement Program (or
             any successor defined benefit pension plan) and any other defined
             benefit pension plan covering salaried employees of Honeywell
             International Inc. other than (i) this Plan, (ii) the portion of
             any defined benefit pension plan providing benefits to employees
             under the Honeywell Retirement Benefit Plan formula and provisions
             of such pension plan, and (iii) the AlliedSignal Pension Plan for
             Contractual Obligations. Notwithstanding the foregoing, any Plan
             participant who is a participant in a plan described in subclause
             (ii) above and who has waived his or her right to the

                                      -3-

             change in control benefit to which he or she was previously
             entitled under the terms of a severance agreement or plan
             maintained by Honeywell Inc. and is a Participant in the Honeywell
             International Inc. Supplemental Executive Retirement Plan for
             Executives in Career Band 6 and Above shall have this definition
             apply without regard to subclause (ii) above.

2.8          Plan - means the Honeywell International Inc. Supplemental Pension
             Plan.

2.9          Salary Deferral Plan - means the Salary Deferral Plan for Selected
             Employees of Honeywell International Inc. and its Affiliates
             (Career Band 6 and above or employees who occupy positions
             equivalent thereto), as the same may be amended from time to time.

2.10         Supplemental Benefit - means the excess, if any, of (i) the
             retirement income payable to or with respect to a participant under
             the Pension Plan which would have been accrued by the participant
             (1) had the amount of deferred compensation awards under the
             Incentive Plan been compensation included for calculating benefits
             under the Pension Plan in the year the award would otherwise have
             been earned or payable as recognized by the Pension Plan, (2) had
             Participant Deferred Contributions, as that term is defined in the
             Supplemental Savings Plans, been compensation included for
             calculating benefits under the Pension Plan in the year the
             compensation would otherwise have been earned or payable as
             recognized by the Pension Plan, (3) had the portion of Base Annual
             Salary and Incentive Awards deferred by a participant under the
             terms of the Salary Deferral Plan, been compensation included for
             calculating benefits under the Pension Plan in the year the
             compensation would otherwise have been earned or payable as
             recognized by the Pension Plan, (4) had the limits of Code Section
             415 and 401(a)(17) not been incorporated in the Pension Plan, and
             (5) had the participant met all the requirements for a benefit from
             the Pension Plan with respect to all other pension benefits which
             Honeywell has become contractually obligated to pay to the
             participant, over (ii) the participant's Accrued Pension Benefit.

2.11         Supplemental Savings Plans - means the Supplemental Non-Qualified
             Savings Plans for Highly Compensated Employees of Honeywell
             International Inc. and its Subsidiaries, as the same may be amended
             from time to time.

                                      -4-

Article III - Participation

Participation in the Plan shall be limited to:

              (a)     those participants in the Pension Plan (and their joint
                      annuitants and beneficiaries) who as a result of having
                      deferred an award under the Incentive Plan or having
                      deferred compensation under the Supplemental Savings Plans
                      or the Salary Deferral Plan, receive or shall receive a
                      lesser amount under the Pension Plan than would otherwise
                      be paid or payable in the absence of such deferral;

              (b)     those participants in the Pension Plan (and their joint
                      annuitants and beneficiaries) who as a result of the
                      limitations contained in Code Sections 415 or 401(a)(17)
                      receive or will receive a lesser amount under the Pension
                      Plan than would otherwise be paid or payable in the
                      absence of such limitations, and

              (c)     any employee who has entered into a contractual agreement
                      with Honeywell under which Honeywell shall, after the
                      termination of employment of the employee, provide a
                      benefit in the form of a life annuity for the employee
                      (and the employee's joint annuitant or beneficiary) as
                      provided under the terms of the contractual agreement.

Article IV - Supplemental Benefit

4.01          Payment of Supplemental Benefit

              (a)     Supplemental Benefits shall be payable directly to such
                      participant, or such participant's joint annuitant or
                      beneficiary, as applicable, from the general assets of
                      Honeywell and Honeywell shall not be under any obligation
                      to set aside any funds or other assets for the payment of
                      the Supplemental Benefits under this Plan. Honeywell may,
                      in its sole discretion, establish funds for payment of
                      these Supplemental Benefits. However, any and all such
                      funds shall remain assets of Honeywell and subject to the
                      claims of creditors of such corporation. Such funds, if
                      any, shall not be deemed to be assets of this Plan.

                      Notwithstanding the preceding paragraph, the Committee is
                      authorized (but not required) to cause AlliedSignal (or
                      any successor thereto) to fund all or a part of the
                      Supplemental Benefits for such participant or participants
                      as it may select in its sole discretion from time to time.
                      The amount of such funded Supplemental Benefits shall not
                      be assets of Honeywell and shall not be subject to the
                      claims of creditors of Honeywell. Such participants, if
                      any, and the amount of any funded Supplemental Benefits
                      shall be designated in Appendix A and the

                                      -5-

                      Supplemental Benefits of any participant not designated in
                      Appendix A or the portion of any Supplemental Benefit not
                      funded as designated in Appendix A shall not be so funded
                      and shall remain subject to the provisions of the
                      preceding paragraph of this Section 4.01(a). A participant
                      designated on Appendix A who is married on the date any
                      funded Supplemental Benefits commence under Section
                      4.01(b) must obtain the written consent of the
                      participant's spouse in the form and manner prescribed by
                      the Committee to the election of any form of payment of
                      such funded Supplemental Benefits other than a 50% joint
                      and survivor annuity with the participant's spouse
                      designated as the joint annuitant. The Committee is
                      authorized to select, appoint and remove trustees or other
                      entities or individuals, to enter into, amend and
                      terminate trust or other agreements, to create trust or
                      other secured funds, to cause Honeywell to make
                      contributions to such funds in such amounts as the
                      Committee may determine from time to time and to take all
                      other actions that it may determine to be necessary or
                      helpful in implementing the funding, including providing
                      for the payment of Supplemental Benefits in accordance
                      with applicable law.

              (b)     Any person entitled to a Supplemental Benefit shall be
                      entitled to payment of such benefit only from the date on
                      which such Supplemental Benefit becomes due and payable
                      and only in such installments or other manner of payment
                      as is provided under the relevant Pension Plan or
                      agreement, provided, however, that if a Participant so
                      elects, by giving written notice to the Plan
                      Administrator, and if the Committee approves such
                      election, payment of such Supplemental Benefit shall be in
                      a lump sum equal to the present value of such
                      Participant's Supplemental Benefit accrued to the date of
                      such Participant's retirement under the relevant Pension
                      Plan or agreement (or the lump sum value of the
                      Supplemental Benefit calculated with reference to the
                      Retirement Earnings Plan provisions of any Pension Plan).
                      For the purpose of determining the present value of a
                      Participant's accrued Supplemental Benefit, the
                      "Applicable Mortality Table" and the "Applicable Interest
                      Rate" shall be used, as defined below. Except as may be
                      permitted pursuant to the proviso to the first sentence of
                      this Paragraph (b), no person shall have a right to
                      acceleration of any such payment. No person shall be
                      entitled to anticipate such benefit by assignment, pledge
                      or transfer in any form or manner prior to actual or
                      constructive receipt of payment.

                           (1)   The "Applicable Mortality Table" means the
                                 mortality table prescribed by the Secretary of
                                 the Treasury pursuant to Code Section 417(e).
                                 Such table shall be based on the prevailing
                                 commissioners' standard table (described in
                                 Code Section 807(d)(5)(A)) used to determine
                                 reserves for group annuity contracts issued on
                                 the date as of which the

                                      -6-

                                 present value is being determined (without
                                 regard to any other subparagraph of Code
                                 Section 807(d)(5)).

                           (2)   The "Applicable Interest Rate" means the
                                 average annual rate of interest on 30-year
                                 Treasury securities determined as of the third
                                 calendar month preceding the month during which
                                 the benefit commencement occurs.

              (c)     In the event that a Supplemental Benefit becomes payable
                      in accordance with this Article IV, Section 4.01,
                      Paragraph (b) and in the event the relevant Pension Plan
                      or agreement is terminated in accordance with its terms,
                      then the Participant shall have a right to only the
                      Supplemental Benefit accrued to the date of termination of
                      the relevant Pension Plan or agreement. In such event,
                      Honeywell shall remain liable for the payment of the
                      Supplemental Benefit and payment shall be made at such
                      times and in such manner as the Plan Administrator shall
                      determine, unless the Participant shall have made the
                      election referred to in Paragraph (b) of this Section
                      4.01, in which event payment shall be made pursuant to
                      such election, if approved by the Committee as therein
                      required. Such accrued Supplemental Benefit shall remain
                      subject to Paragraphs (a) and (b) of this Section 4.01.

              (d)     Except to the extent that a participant's Supplemental
                      Benefits are funded as described in Section 4.01(a), the
                      rights and interest of any participant, joint annuitant,
                      or beneficiary to a Supplemental Benefit under this Plan
                      shall be the same as any other unsecured creditor of
                      Honeywell (or any successor thereto). In the event of any
                      bankruptcy proceeding by or against Honeywell, a
                      participant, joint annuitant or beneficiary shall be
                      entitled to prove a claim for any unpaid portion of the
                      benefit provided by the Plan.

Article V - Administration

5.01          Plan Administrator - The Board of Directors shall name a Plan
              Administrator. Such Plan Administrator shall serve at the
              convenience of the Board of Directors and shall serve without
              compensation. The Plan Administrator shall keep such records as
              necessary for the proper administration of the Plan and shall
              report to the Board of Directors at such time or times as the
              Board of Directors shall designate.

5.02          Benefit Determination - The Plan Administrator shall determine the
              amount and timing of any benefit paid under the Plan. The Plan
              Administrator shall rely on the records of Honeywell in
              determining any participant's eligibility for and amount of
              benefit under the Plan. In the event that the Plan Administrator's
              reliance on the records of Honeywell causes a benefit to be over
              or under paid, the Plan Administrator shall adjust future payments
              to be increased or decreased as required. If such future payments
              are insufficient to recover any overpayment to a

                                      -7-

              participant, the Plan Administrator shall withhold any payments
              then due a participant and take any action deemed appropriate to
              recover the balance of the overpayment.

5.03          Benefit Appeals - The Plan Administrator shall establish an
              appeals procedure as defined by U.S. Department of Labor
              regulations. Such procedures will provide that the participant has
              sixty (60) days upon receipt of any benefits or denial of benefits
              to file an appeal with the Plan Administrator. The Plan
              Administrator must respond within sixty (60) days of receiving the
              appeal, in writing, specifically identifying those Plan provisions
              on which the benefit denial was based and indicating what
              information the participant must supply in order to perfect a
              claim for benefits.

5.04          Nonduplication of Benefits - To avoid the duplication of benefits,
              the amount of any similar benefits under this Plan shall be offset
              and reduced by the amount of any similar benefit provided the
              participant under other supplemental pension plans sponsored by
              Honeywell International Inc. (other than the Honeywell
              International Inc. Supplemental Executive Retirement Plan for
              Executives in Career Band 6 and Above) for which the participant
              may be eligible, regardless of whether the payments under this
              Plan are made at an earlier or a later date than payments under a
              similar plan would have been made.

Article VI - Amendment and Termination

6.01          Plan Amendments - Honeywell reserves the right to amend the plan
              from time to time. The Plan may be amended by the Committee;
              provided however, that no amendment shall reduce any benefit being
              paid or then payable to a participant. Further, no amendment shall
              reduce the benefits provided by the Plan to participants or alter
              in any manner the rights of the participants to benefits provided
              under this Plan.

6.02          Plan Termination - Honeywell reserves the right to terminate the
              Plan. However, such termination shall not adversely affect the
              rights of participants.

                                      -8-

                                   APPENDIX A
                                 FUNDED BENEFITS
                           FOR DESIGNATED PARTICIPANTS

         The following Participants shall have the designated portion of their
         Plan benefits funded as permitted in Section 4.01(a):

                                            Lump Sum Value
         Name                               of Funded Benefit            Date Benefit Funded
         ----                               -----------------            -------------------
                                                                        
         Richard F. Wallman                 $  2,100,000                 December 28, 2000

         Barry C. Johnson                   $  1,400,000                 December 28, 2000

         The Committee (or its delegate) may determine that the portion of the
         Plan providing funded Supplemental Benefits to Participants designated
         on this Appendix shall be separated from the remaining portion of this
         Plan as of December 20, 2000 (or such later date as may be established
         by the Committee) and shall thereafter constitute a separate plan,
         program or arrangement with terms and provisions identical to this
         Plan. Supplemental Benefits under such separate plan, program or
         arrangement and this Plan shall be calculated to avoid duplication or
         omission of benefits.

                    HONEYWELL INTERNATIONAL INC. SUPPLEMENTAL
                  EXECUTIVE RETIREMENT PLAN FOR EXECUTIVES IN
                            CAREER BAND 6 AND ABOVE

                                                  Effective as of August 1, 1998

                                    ARTICLE I

                                     PURPOSE

     The purpose of the Honeywell International Inc. Supplemental Executive
Retirement Plan for Executives in Career Band 6 and Above is to provide certain
Executives and their Beneficiaries with monthly retirement income benefits under
all defined benefit deferred compensation plans maintained by the Company that
are at least equal to the benefits that would have been payable had such
Executives been covered by the Retirement Program and the Supplemental Pension
Plan (as defined herein) throughout their Credited Service (as defined herein)
with the Company.

     To the extent required to determine benefits under this Plan, the terms and
provisions of the Pension Plans and the Supplemental Pension Plan shall be
deemed to be incorporated by reference.

                                   ARTICLE II

                                   DEFINITIONS

2.1  "Beneficiary" or "Beneficiaries" means the person or persons designated as
     a Participant's joint or contingent annuitant and/or beneficiary, if any,
     under the applicable Pension Plan(s).

2.2  "Board" means the Board of Directors of Honeywell International Inc.

2.3  "Code" means the Internal Revenue Code of 1986, as amended from time to
     time.

2.4  "Committee" means the Management Development and Compensation Committee of
     the Company's Board of Directors.

2.5  "Common Stock" means the common stock of Honeywell International Inc. or
     such other stock for which such common stock may be exchanged as a result
     of a split-up, recapitalization, reclassification or other corporate
     restructuring.

2.6  "Company" means Honeywell International Inc. and its subsidiaries and
     successors.

2.7  "Credited Service" means years of service with the Company for which credit
     would be given under the terms of Pension Plans for benefit accrual
     purposes.

2.8  "ERISA" means the Employee Retirement Income Security Act of 1974, as
     amended from time to time.

2.9  "Executive" means an individual employed by the Company in Career Band 6 or
     above as of the individual's termination of employment or retirement date,
     as applicable.

2.10 "Participant" means an individual eligible for benefits under this Plan in
     accordance with Article III.

2.11 "Plan" means the Honeywell International Inc. Supplemental Executive
     Retirement Plan for Executives in Career Band 6 and Above.

2.12 "Pension Plan" means any defined benefit plan (within the meaning of Code
     Section 414(j)) that is subject to the provisions of Code Section 401(a)
     and that covers salaried employees of the Company, including, without
     limitation, the Retirement Program.

2.13 "Retirement Program" means the portion of the Honeywell International Inc.
     Retirement Earnings Plan applicable to participants in Allied Signal Inc.
     Retirement Program (Provisions Relating to Allied Salaried Employees), as
     the same may be amended or referred to from time to time, and any successor
     provisions of such plan.

2.14 "Supplemental Benefit" means the benefit described in Section 4.1 of the
     Plan.

2.15 "Supplemental Pension Plan" means the Honeywell International Inc.
     Supplemental Pension Plan, as the same may be amended from time to time,
     and any successor plan.

                                   ARTICLE III

                                  PARTICIPATION

3.1  Eligibility - In General. Participation in the Plan shall be limited to
     those Executives who have earned Credited Service under a Pension Plan
     other than the Retirement Program. Notwithstanding the previous sentence,
     no Executive who has entered into any individual agreement or arrangement
     with the Company concerning retirement benefits shall be entitled to any
     benefit under Article IV except to the extent otherwise expressly provided
     in such agreement or arrangement.

3.2  Status at Termination/Retirement Date. No benefits shall be payable under
     the Plan if on the date of such individual's termination of employment or
     retirement date, as applicable, the Executive (a) is not employed by the
     Company in a Career Band 6 or above position, (b) is entitled to any
     severance benefits payable under the Honeywell Key Employee Severance Plan
     or under any other contract, agreement or arrangement between the Executive
     and Honeywell Inc. (or its successors or affiliates) that are attributable
     to any "change in control" of Honeywell Inc. in 1999 as defined in such
     Plan or other contracts, agreements or arrangements, or (c) is a
     participant in the Retirement Earnings Plan portion of the Honeywell
     International Inc. Retirement Earnings Plan.

                                   ARTICLE IV

                                    BENEFITS

4.1  Amount of Benefit. Subject to the terms of this Article IV, a Participant
     shall receive a monthly Supplemental Benefit. The monthly Supplemental
     Benefit shall be determined by comparing (a) the sum of the monthly
     retirement benefits (normal or early) actually payable to the Participant
     under the Pension Plan(s) and the Supplemental Pension Plan (as applied to
     the applicable Pension Plan(s)) in accordance with the distribution method
     selected by the Participant, and (b) the sum of the monthly retirement
     benefits (normal or early) that would be payable to the Participant under
     the Retirement Program and the Supplemental Pension Plan (as applied to the
     Retirement Program) if all of the Participant's Credited Service had been
     earned solely under the Retirement Program and if such Participant had made
     the same distribution method election as under (a) above. The monthly
     Supplemental Benefit shall equal the amount, if any, by which (b) exceeds
     (a) for the applicable monthly period.

4.2  Payment of Benefit. Except as otherwise provided in Section 4.3, the
     Supplemental Benefit shall generally be paid at the same time benefits are
     paid to the Participant under the applicable Pension Plan(s). The
     Supplemental Benefit shall be paid directly to the Participant or, in the
     event of the Participant's death, to the Participant's Beneficiary.

4.3  Form of Payment. The Supplemental Benefit shall generally be paid in the
     same form as the retirement benefit payable to the Participant under the
     applicable Pension Plan(s). Notwithstanding the previous sentence, however,
     a Participant may request that payment of his or her Supplemental Benefit
     be made in a single lump sum payment. Any such request shall be made in
     writing to the Plan Administrator, whose decision with respect thereto
     shall be final, conclusive and binding upon all persons having or claiming
     to have any right or interest under this Plan. Any lump sum payment
     approved under this Section 4.3 shall be actuarially equivalent to the
     Participant's Supplemental Benefit. For this purpose, actuarial equivalence
     shall be determined by using the "applicable mortality table" and the
     "applicable interest rate" described in Section 417(e) of the Code,
     provided that the applicable interest rate shall be determined as of the
     third calendar month preceding the month during which the benefit
     commencement date occurs.

4.4  Death and Disability Benefits. As more fully described in Section 4.1, this
     Plan provides benefits only for Executives who are receiving early or
     normal retirement benefits under a Pension Plan. The Plan does not provide
     pre-retirement death benefits, disability benefits or any other type of
     ancillary benefits that may be available under the Retirement Program or
     the applicable Pension Plan.

                                    ARTICLE V

                                 ADMINISTRATION

5.1  Plan Administrator. The Plan Administrator and "named fiduciary" for
     purposes of ERISA shall be the Senior Vice President-Human Resources and
     Communications of the Company (or any senior officer of the Company
     succeeding to the principal responsibilities of such officer). The Plan
     Administrator shall have the authority to appoint one or more other named
     fiduciaries of the Plan and to designate persons, other than named
     fiduciaries, to carry out fiduciary responsibilities under the Plan,
     pursuant to Section 405(c)(1)(B) of ERISA.

5.2  Powers and Duties of Plan Administrator. The Plan Administrator shall have
     the full discretionary power and authority to construe and interpret the
     Plan (including, without limitation, supplying omissions from, correcting
     deficiencies in, or resolving inconsistencies or ambiguities in, the
     language of the Plan); to determine all questions of fact arising under the
     Plan, including questions as to eligibility for and the amount of benefits;
     to establish such rules and regulations (consistent with the terms of the
     Plan) as it deems necessary or appropriate for administration of the Plan;
     to delegate responsibilities to others to assist it in administering the
     Plan; to retain attorneys, consultants, accountants, actuaries or other
     persons (who may be employees of the Company) to render advice and
     assistance as it shall determine to be necessary to effect the proper
     discharge of any duty for which it is responsible; to prepare and
     distribute to Participants information explaining the Plan; to prescribe
     procedures to be followed by Participants and Beneficiaries filing
     applications for benefits; and to perform all other acts it believes
     reasonable and proper in connection with the administration of the Plan.
     The Plan Administrator shall be entitled to rely on the records of the
     Company in determining any Participant's entitlement to and the amount of
     benefits payable under the Plan. Any determination of the Plan
     Administrator, including interpretations of the Plan and determinations of
     questions of fact, shall be final and binding on all parties.

5.3  Indemnification. To the extent permitted by law, the Company shall
     indemnify the Plan Administrator and his delegates from all claims for
     liability, loss, or damage (including payment of expenses in connection
     with defense against such claims) arising from any act or failure to act in
     connection with the Plan.

5.4  Records. The Plan Administrator shall keep or cause to be kept such records
     and shall prepare or cause to be prepared such returns or reports as may be
     required by law or necessary for the proper administration of the Plan. All
     resolutions, proceedings, acts and determinations of the Plan Administrator
     shall be recorded by the Plan Administrator and such records, together with
     any documents and instruments as may be necessary for the administration of
     the Plan, shall be preserved in the custody of the Plan Administrator.

5.5  Information from Participants. Each Participant shall be required to
     furnish to the Plan Administrator, in the form prescribed by it, such
     personal data, affidavits, authorizations to obtain information, and other
     information as the Plan Administrator may deem appropriate for the proper
     administration of the Plan.

5.6  Reliance. The Plan Administrator and its delegates shall be entitled to
     rely upon all valuations, certificates and reports furnished by any actuary
     or accountant selected by the Plan Administrator or any delegate and upon
     all opinions given by any legal counsel selected by the Plan Administrator
     or any delegate. The Plan

     Administrator and its delegates shall be fully protected with respect to
     any action taken or suffered by their having relied in good faith upon such
     actuary, accountant or counsel and all action so taken or suffered shall be
     conclusive upon each of them and upon all Participants and their
     Beneficiaries.

5.7  Compensation and Expenses. Unless authorized by the Board, neither the Plan
     Administrator nor its delegates shall be compensated for service in such
     capacity, but shall be reimbursed for reasonable expenses incident to the
     performance of such duties.

5.8  Claims Procedures and Appeals. Any claim or appeal under this Plan shall be
     subject to the following rules:

     (a)  Any request or claim for Plan benefits must be made in writing and
          shall be deemed to be filed by a Participant when a written request is
          made by the claimant or the claimant's authorized representative which
          is reasonably calculated to bring the claim to the attention of the
          Plan Administrator.

     (b)  The Plan Administrator shall provide notice in writing to any
          Participant when a claim for benefits under the Plan has been denied
          in whole or in part. Such notice shall be provided within 90 days of
          the receipt by the Plan Administrator of the Participant's claim or,
          if special circumstances require, and the Participant is so notified
          in writing, within 180 days of the receipt by the Plan Administrator
          of the Participant's claim. The notice shall be written in a manner
          calculated to be understood by the claimant and shall:

          (i)  set forth the specific reasons for the denial of benefits;

          (ii) contain specific references to Plan provisions relative to the
               denial;

         (iii) describe any material and information, if any, necessary for the
               claim for benefits to be allowed, that had been requested, but
               not received by the Plan Administrator; and

          (iv) advise the Participant that any appeal of the Plan
               Administrator's adverse determination must be made in writing to
               the Plan Administrator within 60 days after receipt of the
               initial denial notification, and must set forth the facts upon
               which the appeal is based.

     (c)  If notice of the denial of a claim is not furnished within the time
          periods set forth above, the claim shall be deemed denied and the
          claimant shall be permitted to proceed to the review procedures set
          forth below. If the Participant fails to appeal the Plan
          Administrator's denial of benefits in writing and within 60 days after
          receipt by the claimant of written notification of denial of the claim
          (or within 60 days after a deemed denial of the claim), the Plan
          Administrator's determination shall become final and conclusive.

     (d)  If the Participant appeals the Plan Administrator's denial of benefits
          in a timely fashion, the Plan Administrator shall re-examine all
          issues relevant to the original denial of benefits. Any such claimant,
          or his or her duly authorized representative, may review any pertinent
          documents, as determined by the Plan Administrator, and submit in
          writing any issues or comments to be addressed on appeal.

     (e)  The Plan Administrator shall advise the Participant and such
          individual's representative of its decision, which shall be written in
          a manner calculated to be understood by the claimant, and include
          specific references to the pertinent Plan provisions on which the
          decision is based. Such response shall be made within 60 days of
          receipt of the written appeal, unless special circumstances require an
          extension of such 60-day period for not more than an additional 60
          days. Where such extension is necessary, the claimant shall be given
          written notice of the delay. If the decision on review is not
          furnished within the time set forth above, the claim shall be deemed
          denied on review.

     (f)  Any dispute, controversy, or claim arising out of or relating to any
          Plan benefit, including, without limitation, any dispute controversy
          or claim as to whether the decision of the Plan Administrator
          respecting the benefits under this Plan or interpretation of this Plan
          is arbitrary and capricious, that is not settled in accordance with
          the procedures outlined in this Section 5.8, shall be settled by final
          and binding arbitration in accordance with the American Arbitration
          Association Employment Dispute Resolution or other applicable Rules.
          Before resorting to arbitration, an aggrieved Participant must first
          follow the review procedure outlined in this Section of the Plan. If
          there is still a dispute after the procedures in this Section have
          been exhausted, the Participant must request arbitration in writing
          within six (6) months after the Plan Administrator issues, or is
          deemed to have issued, its determination under subparagraph (e) above.

          The arbitrator shall be selected by mutual agreement of the parties,
          if possible. If the parties fail to reach agreement upon appointment
          of an arbitrator within 30 days following receipt by one party of the
          other party's notice of desire to arbitrate, the arbitrator shall be
          selected from a panel or panels of persons submitted by the American
          Arbitration Association (the "AAA"). The selection process shall be
          that which is set forth in the AAA Employment Dispute Resolution
          Rules, except that, if the parties fail to select an arbitrator from
          one or more panels, AAA shall not have the power to make an
          appointment but shall continue to submit additional panels until an
          arbitrator has been selected.

          All fees and expenses of the arbitration, including a transcript if
          requested, will be borne by the Company. The arbitrator shall have no
          power to amend, add to or subtract from this Plan. The award shall be
          admissible in any court or agency action seeking to enforce or render
          unenforceable this Plan or any portion thereof. Any action to enforce
          or vacate the arbitrator's award shall be governed by the Federal
          Arbitration Act if applicable.

                                   ARTICLE VI

                          PLAN AMENDMENT OR TERMINATION

6.1  Right to Amend. The Company shall have the right at any time to amend the
     Plan. No such amendment shall have the effect specified in Section 6.3.

6.2  Right of the Company to Terminate Plan. The Company intends and expects
     that from year to year it will be able to and will deem it advisable to
     continue this Plan in effect. Subject to the provisions of Section 6.3, the
     Company reserves the right to terminate the Plan at any time.

6.3  Restrictions on Amendment or Termination. No amendment or termination of
     the Plan shall be made which would adversely affect any Participant's
     benefit under this Plan (determined in accordance with the terms of the
     applicable Pension Plans and Supplemental Pension Plans in effect on the
     day immediately preceding such amendment or termination) or that would
     adversely affect the benefit that is being paid to any person at the time
     of such amendment or termination. The prohibitions of this Section 6.3
     shall apply notwithstanding any legal right or ability of the Company to
     amend or terminate this Plan.

                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS

7.1  No Assignment of Benefit. No benefit under the Plan, nor any other interest
     hereunder of any Participant or Beneficiary shall be assignable,
     transferable or subject to sale, mortgage, pledge, hypothecation,
     commutation, anticipation, garnishment, attachment, execution, or levy of
     any kind, and the Plan Administrator shall not recognize any attempt to
     assign, transfer, sell, mortgage, pledge, hypothecate, commute or
     anticipate the same, except to the extent required by law and except that
     no amount shall be payable hereunder until and unless any and all amounts
     representing debts or other obligations owed to the Company by the
     Participant with respect to whom such amount would otherwise be payable
     shall have been fully paid and satisfied.

7.2  No Implied Rights to Employment. The adoption and maintenance of this Plan
     shall not be deemed to constitute a contract between the Company and any
     employee or to be a consideration for or condition of employment of any
     person. No provision of the Plan shall be deemed to give any employee the
     right to continue in the employ of the Company or to interfere with the
     right of the Company to discharge any employee at any time without regard
     to the effect which such discharge might have upon the employee's
     participation in the Plan or benefits under it.

7.3  Unsecured General Creditor. Benefits payable under this Plan shall be
     general, unsecured obligations of the Company. The Company shall not be
     required to set aside funds for the payment of its obligations hereunder.
     However, the Company

     may, in its sole discretion, establish funds for the payment of its
     obligations hereunder. In such case, however, no Participant or Beneficiary
     shall have any title to or beneficial ownership in any assets which the
     Company may earmark to pay benefits hereunder. Any such funds shall remain
     assets of the Company and subject to the claims of its general creditors.
     The Plan is intended to be unfunded for tax purposes and for purposes of
     Title I of ERISA.

7.4  Employment with More than One Company. If any Participant shall be entitled
     to benefits under a Pension Plan on account of service with more than one
     business of the Company, the obligations under this Plan shall be
     apportioned among such Company businesses on the basis of service with
     each.

7.5  Effect of Adverse Determination. Notwithstanding any provision set forth
     herein, if the Internal Revenue Service determines, for any reason, that
     all or any portion of the amounts credited under this Plan is currently
     includible in the taxable income of any Participant, then the amounts so
     determined to be includible in income shall be distributed in a lump sum to
     such Participant as soon as practicable.

7.6  Payment of Benefits. If the Plan Administrator determines that a person
     entitled to receive any benefit payment is under a legal disability or is
     incapacitated in any way so as to be unable to manage his financial
     affairs, the Plan Administrator may direct the Company to make payments to
     the Participant's legal representative or to a relative or other person for
     the Participant's benefit, or to apply the payment for the benefit of such
     person in such manner as the Plan Administrator considers advisable. Any
     payment of a benefit in accordance with the provisions of this Section 7.6
     shall be complete discharge of any liability to make such payment.

7.7  Effectuation of Intent. In the event it should become impossible for the
     Company or the Plan Administrator to perform any act required by the Plan,
     the Company or Plan Administrator may perform such other act as it in good
     faith determines will most nearly carry out the intent and purposes of the
     Plan.

7.8  Headings. The headings of Articles and Sections of this Plan are for
     convenience of reference only, and in case of conflict between any such
     headings and the text of this Plan, the text shall govern.

7.9  Copy of Plan. An executed copy of the Plan shall be available for
     inspection by any Executive or other person entitled to benefits under the
     Plan at reasonable times at the offices of the Company.

7.10 Rules of Construction. Masculine pronouns used herein shall refer to men or
     women or both and nouns and pronouns when stated in the singular shall
     include the plural and when stated in the plural shall include the
     singular, wherever appropriate.

7.11 Governing Law. This Plan and its provisions shall be construed in
     accordance with the laws of the State of Delaware to the extent such
     Delaware law is not inconsistent with the provisions of ERISA.

7.12 Severability. If any provision of this Plan is held invalid, the invalidity
     shall not affect other provisions of the Plan which can be given effect
     without the invalid provision, and to this end the provisions of this Plan
     shall be severable.

7.13 Expense of Administration. The reasonable expenses incident to the
     operation of the Plan shall be paid by the Company.

7.14 Successors. This Plan shall be binding upon and inure to the benefit of the
     Company, its successors and assigns and each Participant and his heirs,
     executors, administrators and legal representatives.

                                                                   EXHIBIT 10.17

                             HONEYWELL SUPPLEMENTAL
                         DEFINED BENEFIT RETIREMENT PLAN

                         (December 31, 2000 Restatement)

                                    HONEYWELL
                  SUPPLEMENTAL DEFINED BENEFIT RETIREMENT PLAN

                         (December 31, 2000 Restatement)

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
                                                                     
SECTION 1   INTRODUCTION

    1.1     Preambles                                                         1
    1.2     Definitions                                                       2

            1.2.1  Base Plan                                                  2
            1.2.2  Benefit Starting Date                                      2
            1.2.3  Committee                                                  2
            1.2.4  Effective Date                                             2
            1.2.5  Employer                                                   2
            1.2.6  Participant                                                2
            1.2.7  Plan                                                       2
            1.2.8  Plan Statement                                             2
            1.2.9  Plan Year                                                  2
            1.2.10 Prior Plan Statements                                      3
            1.2.11 Supplemental Savings Plan                                  3

    1.3     Rules of Interpretation                                           3

SECTION 2   ELIGIBILITY AND PARTICIPATION                                     4

    2.1     Participation                                                     4

            2.1.1  General Participation Requirements                         4
            2.1.2  Minimum Benefit Participation Requirements                 4

    2.2     Exclusions                                                        4

            2.2.1  Non-Members of Select Group of Management or               4
                   Highly Compensated Employees

            2.2.2  Participants in the Honeywell International Inc.           5
                   Supplemental Pension Plan

    2.3     Duration                                                          5

SECTION 3   BENEFITS                                                          6

    3.1     Participant Benefit                                               6

            3.1.1  Basic Benefit                                              6
            3.1.2  Minimum Benefit                                            6
            3.1.3  Limitation on Benefits                                     6

                                       (i)

                                                                     
    3.2     Survivor Benefit                                                  7

            3.2.1  Death Before Benefits Commence                             7
            3.2.2  Death After Benefits Commence                              7

    3.3     Special 1993 Vesting                                              7

SECTION 4   DISTRIBUTIONS                                                     8

    4.1     Forms of Payment                                                  8
    4.2     Lump Sum Payment                                                  8

            4.2.1  Election and Amount                                        8
            4.2.2  Death Within 13 Month Period                               8
            4.2.3  Acceleration of Benefits with Forfeiture                   8

    4.3     Timing                                                            8
    4.4     Change in Control                                                 9

            4.4.1  Immediate Vesting                                          9
            4.4.2  Definition                                                 9

    4.5     Taxes                                                             10
    4.6     Incompetency                                                      10

SECTION 5   GENERAL MATTERS                                                   11

    5.1     Funding                                                           11
    5.2     Status of Participant                                             11
    5.3     Spendthrift Provisions                                            11
    5.4     No Employment Contract                                            11

SECTION 6   AMENDMENT AND TERMINATION                                         12

    6.1     Amendment                                                         12
    6.2     Change in Control                                                 12
    6.3     Amendments to Base Plan                                           12

SECTION 7   DETERMINATION AND CLAIMS                                          13

    7.1     Determination                                                     13
    7.2     Claims Procedure                                                  13

            7.2.1  Original Claim                                             13
            7.2.2  Claims Review Procedure                                    13
            7.2.3  General Rules                                              14

                                      (ii)

                                                                     
SECTION 8   PLAN ADMINISTRATION                                               15

    8.1     Employer                                                          15
    8.2     Committee                                                         15
    8.3     Method of Executing Instruments                                   15
    8.4     Conflict of Interest                                              15
    8.5     Plan Administrator                                                15
    8.6     Construction                                                      15

TABLE I     ACTUARIAL ASSUMPTIONS FOR LUMP SUM PAYMENTS                       17

TABLE II    VESTED ACCRUED BENEFITS                                           18

TABLE III   FUNDED BENEFITS                                                   19

                                     (iii)

                                    HONEYWELL
                  SUPPLEMENTAL DEFINED BENEFIT RETIREMENT PLAN

                         (December 31, 2000 Restatement)

                                    SECTION 1
                                  INTRODUCTION

1.1. Preambles. Honeywell International Inc., a Delaware corporation, maintains
a tax qualified defined benefit plan known as the Honeywell International Inc.
Retirement Earnings Plan (the "Retirement Earnings Plan"), a successor to the
Honeywell Retirement Benefit Plan. Benefits in the Retirement Earnings Plan are
restricted by sections 415 and 401(a)(17) of the Internal Revenue Code, as
amended (the "Code"), and by the non-recognition of certain types of
compensation.

Section 3(36) and section 4(b)(5) of the Employee Retirement Income Security Act
of 1974, as amended, ("ERISA") recognize and authorize the establishment of an
unfunded, nonqualified plan of deferred compensation maintained by an employer
solely for the purpose of providing benefits for employees in excess of the
limitations on benefits imposed under section 415 of the Code. Sections 201, 301
and 401 of ERISA also recognize the creation of an unfunded, nonqualified plan
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees.

On April 20, 1976, Honeywell Inc. ("Honeywell") established the Honeywell
Supplementary Retirement Plan for the Purpose of providing the full benefits
promised to employees under the Honeywell Retirement Benefit Plan without regard
to the limitation on benefits imposed by section 415 of the Code. On July 1,
1989, Honeywell established the Honeywell Supplementary Executive Retirement
Plan For Compensation In Excess Of $200,000 for the purpose of providing the
full benefits promised to employees under the Honeywell Retirement Benefit Plan
without regard to the limitation on compensation imposed by section 401(a)(17)
of the Code. On January 1, 1985, Honeywell established the Honeywell
Supplementary Retirement Plan For CECP Participants for the purpose of providing
the full benefits promised to employees under the Honeywell Retirement Benefit
Plan without regard to the exclusion from earnings of deferred incentive awards
paid under the Honeywell Corporate Executive Compensation Plan (collectively,
"the SERPs").

Each of the SERPs was amended and restated effective September 20, 1994. The
SERPs were amended, completely restated and consolidated into one plan and
completely superseded each Prior Plan Statement effective for persons retiring
on or after January 1, 1998. The consolidated plan was designated as the
Honeywell Supplemental Defined Benefit Retirement Plan (the "Plan"). Honeywell
Inc. became a wholly owned subsidiary of Honeywell International Inc. on
December 4, 1999. Effective April 1, 2000, the Plan has been amended principally
to recognize employee deferrals under the Honeywell International Inc.
Supplemental Savings Plans as "earnings" under the Plan. The Plan is intended to
be, in part, an unfunded excess benefit plan within the meaning of section 3(36)
ERISA and, in part, an unfunded plan maintained primarily for

                                       1

the purpose of providing deferred compensation for a select group of management
or highly compensated employees as provided in sections 201(2), 301(3) and
401(a)(1) of ERISA (except as otherwise provided in Table III).

1.2. Definitions. When used herein with initial capital letters, the following
words have the following meanings:

     1.2.1. Base Plan - the portion of the tax-qualified Honeywell International
     Inc. Retirement Earnings Plan providing pension benefits to employees under
     the Honeywell Retirement Benefit Plan formula and provisions set forth in
     the applicable Appendix to the Honeywell International Inc. Retirement
     Earnings Plan as the same is existing and amended from time to time.

     1.2.2. Benefit Starting Date - the date as of which a benefit is commenced
     in the Base Plan.

     1.2.3. Committee - the Management Development and Compensation Committee of
     the Board of Directors of Honeywell International Inc. If no such committee
     exists at any relevant time, the duties allocated to such committee under
     this Plan shall be discharged by the Board of Directors of Honeywell or a
     person or committee to whom such duties may be delegated by the Board of
     Directors.

     1.2.4. Effective Date - December 4, 1999 (except that provisions of the
     Plan relating to the funding of benefits as provided in Table III shall be
     effective December 20, 2000).

     1.2.5. Employer - Honeywell Inc., any successor to Honeywell Inc., and any
     business entity that, with the approval of Honeywell adopts the Plan.

     1.2.6. Participant - an employee of the Employer who becomes a Participant
     in the Plan in accordance with the provisions of Section 2 (or any
     comparable provision of the Prior Plan Statements).

     1.2.7. Plan - this excess benefit and nonqualified deferred compensation
     plan of the Employer established for the benefit of employees eligible to
     participate therein, as first set forth in the Prior Plan Statements and as
     amended and restated in this Plan Statement. (As used herein, "Plan" refers
     to the legal entity established by the Employer and not to the documents
     pursuant to which the Plan is maintained. Those documents are referred to
     herein as the "Prior Plan Statement" and the "Plan Statement.") The Plan
     shall be referred to as the Honeywell Supplemental Defined Benefit
     Retirement Plan.

     1.2.8. Plan Statement - this document entitled "Honeywell Supplemental
     Defined Benefit Retirement Plan (December 31, 2000 Restatement)," as
     adopted by Honeywell effective as of December 4, 1999, as the same may be
     amended from time to time thereafter.

     1.2.9. Plan Year - the twelve-(12) month period ending on December 31.

     1.2.10 Prior Plan Statements - the series of documents pursuant to which
     components of this Plan were established and operated thereafter until

                                       2

     December 4, 1999.

     1.2.11 Supplemental Savings Plan - the Supplemental Non-Qualified Savings
     Plan for Highly Compensated Employees of Honeywell International Inc. and
     its Subsidiaries.

1.3. Rules of Interpretation. Whenever appropriate, words used herein in the
singular may be read in the plural, or words used herein in the plural may be
read in the singular; the masculine may include the feminine; and the words
"hereof," "herein" or "hereunder" or other similar compounds of the word "here"
shall mean and refer to the entire Plan Statement and not to any particular
paragraph or Section of this Plan Statement unless the context clearly indicates
to the contrary. The titles given to the various Sections of this Plan Statement
are inserted for convenience of reference only and are not part of this Plan
Statement, and they shall not be considered in determining the purpose, meaning
or intent of any provision hereof. Any reference in this Plan Statement to a
statute or regulation shall be considered also to mean and refer to any
subsequent amendment or replacement of that statute or regulation. This
instrument has been executed and delivered in the State of New Jersey and has
been drawn in conformity to the laws of that State and shall, except to the
extent that federal law is controlling and except for its law respecting choice
of law, be construed and enforced in accordance with the laws of the State of
New Jersey.

                                       3

                                    SECTION 2
                          ELIGIBILITY AND PARTICIPATION

2.1. Participation. An employee is eligible to participate in and receive
benefits under this Plan if the employee satisfies the requirements of either
Section 2.1.1 or Section 2.1.2:

     2.1.1. General Participation Requirements. The employee (a) (i) is eligible
     to commence a normal or early retirement benefit under the Base Plan when
     employment terminates, (ii) dies while still actively employed by Honeywell
     with a vested benefit in the Base Plan, (iii) has been granted a vested
     benefit in this Plan, or (iv) has been specifically selected by the
     Committee to participate in this Plan; and

          (b) has a benefit in the Base Plan that is reduced on account of (i)
     the benefit limitation under section 415 of the Code or (ii) the
     compensation limitation under section 401(a)(17) of the Code or (iii) the
     provision in the Base Plan excluding from earnings (A) any deferred
     incentive awards paid under the Honeywell Corporate Executive Compensation
     Plan or the AlliedSignal Inc. Incentive Compensation Plan for Executive
     Employees (or any successor plans), or (B) any deferrals by the employee
     under the Supplemental Savings Plan.

     2.1.2. Minimum Benefit Participation Requirements. The employee fails to
     satisfy the general participation requirements of Section 2.1.1 and has a
     benefit in the Base Plan that, after excluding from earnings any deferred
     incentive awards paid under the Honeywell Corporate Executive Compensation
     Plan, the AlliedSignal Inc. Incentive Compensation Plan for Executive
     Employees (or any successor plans) and application of the benefit
     limitation under section 415 of the Code and the compensation limitation of
     section 401(a)(17) of the Code, is reduced solely on account of the
     exclusion under the Base Plan of any deferrals by the employee under the
     Supplemental Savings Plan.

2.2. Exclusions. The following employees shall be excluded from participation in
the Plan:

     2.2.1 Non-Members of a Select Group of Management or Highly Compensated
     Employees. Notwithstanding anything to the contrary in this Plan or in any
     written communication, summary, resolution or document or oral
     communication, unless an individual is a member of a select group of
     management or highly compensated employees (as that expression is used in
     ERISA), the individual shall not be a Participant in this Plan, develop
     benefits under this Plan or be entitled to receive benefits under this Plan
     (either for the Participant or the Participant's survivors) except to the
     extent that the individual's benefits in Base Plan are reduced on account
     of Code section 415 limits.

     If a court of competent jurisdiction, any representative of the U.S.
     Department of Labor or any other governmental, regulatory or similar body
     makes any direct or indirect, formal or informal, determination that an
     individual is not a member of a select group of management or highly
     compensated employees (as that expression is used in ERISA), such
     individual shall not be (and shall not have ever been) a Participant in
     this Plan at any time except to the extent that the individual's benefits

                                       4

     in Base Plan are reduced on account of Code section 415 limits. If any
     person not so defined has been erroneously treated as a Participant in this
     Plan, upon discovery of such error such person's erroneous participation
     shall immediately terminate ab initio and upon demand such person shall be
     obligated to reimburse Honeywell for all amounts erroneously paid to him or
     her.

     2.2.2 Participants in the Honeywell International Inc. Supplemental Pension
     Plan. An employee entitled to a supplemental benefit under the Honeywell
     International Inc. Supplemental Pension Plan shall not be a Participant in
     this Plan and shall not be entitled to any benefit under this Plan.

2.3. Duration. Any employee who has become a Participant in this Plan shall
continue as a Participant until all benefits due under this Plan have been paid
(or forfeited) without regard to whether he or she continues as a participant in
the Base Plan.

                                       5

                                    SECTlON 3
                                    BENEFITS

3.1. Participant Benefits.

     3.1.1 Basic Benefit. Commencing as of the Benefit Starting Date a
     Participant satisfying the participation requirements of Section 2.1.1
     shall receive a benefit in this Plan which shall be the excess, if any, of:

          (a)  the amount that would be payable under the formula and rules of
               the Base Plan (as the Base Plan exists on the date as of which
               such amount is determined) if determined:

               (i)   without regard to the benefit limitation under section 415
                     of the of the Code, and

               (ii)  without regard to the compensation limitation under section
                     401(a)(17) of the Code, and

               (iii) without regard to the exclusion from the definition of
                     Earnings under the Base Plan of deferred incentive payments
                     under Honeywell Corporate Executive Compensation Plan, the
                     AlliedSignal Inc. Incentive Compensation Plan for Executive
                     Employees (or any successor plans) or employee deferrals
                     under the Supplemental Savings Plan, over

          (b)  the amount actually paid from the Base Plan.

     3.1.2 Minimum Benefit. A Participant who only satisfies the participation
     requirements of Section 2.1.2 shall receive a benefit in this Plan
     commencing as of the Benefit Commencement Date which shall be the excess,
     if any, of:

          (a) the amount that would be payable under the formula and rules of
          the Base Plan (as the Base Plan exists on the date as of which such
          amount is determined, including, without limitation, the provisions
          excluding from earnings any deferred incentive awards paid under the
          Honeywell Corporate Executive Compensation Plan, the AlliedSignal Inc.
          Incentive Compensation Plan for Executive Employees (or any successor
          plans), and the application of the benefit limitation under section
          415 of the Code and the compensation limitation of section 401(a)(17)
          of the Code) if determined without regard to the exclusion from the
          definition of Earnings under the Base Plan of any deferrals by the
          Participant under the Supplemental Savings Plan, over

          (b) the amount actually paid from the Base Plan.

     3.1.3 Limitation on Benefits. A Participant's benefit in this Plan may be
     limited in the manner and to the extent to which the Participant has agreed
     in

                                       6

     writing. A Participant satisfying the eligibility requirements of the
     Honeywell International Inc. Supplemental Pension Plan shall not be
     eligible for any benefits under this Plan.

3.2. Survivor Benefit

     3.2.1. Death Before Benefits Commence. If a Participant dies before the
     commencement of benefit payments from this Plan, satisfies the eligibility
     requirements of Section 2.1.1 or 2.1.2 on the date of death, and is
     eligible for a pre-retirement survivor benefit in the Base Plan, a benefit
     shall be payable to the Participant's survivor commencing as of the last
     day of the month of the Participant's death or, if later, the last day of
     the month of the Participant's earliest Benefit Starting Date. The survivor
     shall be the individual, if any, that is entitled to the preretirement
     survivor benefit in the Base Plan. The benefit shall be the amount the
     survivor would have received under this Plan if the Participant had
     terminated employment on the day before death, had commenced benefit
     payments on the last day of the month of death or, if later, the last day
     of the month of the Participant's earliest Benefit Starting Date in the
     same form as the preretirement survivor benefit that is payable under the
     Base Plan, and had died immediately thereafter.

     3.2.2. Death After Benefits Commence. If a Participant dies after the
     commencement of benefit payments from this Plan, the benefit payable shall
     be unpaid installments of annuity, if any, which are to be continued for a
     joint annuitant or beneficiary under the form of payment elected by the
     Participant under Section 4.

3.3. Special 1993 Vesting. As specified in the Prior Plan Statement, accrued
benefits were determined and vested for certain employees as of specified dates
in 1993 and, to the extent a vested benefit was attributable to service after
December 31, 1983, but before January 1, 1994, the present value of that benefit
was treated as "wages" for such employee for purposes of the Federal Insurance
Contribution Act (FICA) and the Federal Unemployment Act (FUTA). The amount of
the vested benefit of individuals who were named in the Prior Plan Statement and
have not commenced benefits in the Plan as of the Effective Date are specified
on Table II.

                                       7

                                    SECTION 4
                                  DISTRIBUTIONS

4.1. Forms of Payment. Except as provided in Section 4.2 below, the payment
forms available to a Participant shall be a 100% Joint and Survivor Annuity, a
50% Joint and Survivor Annuity, a Single Life Annuity, and a 10 Year Period
Certain and Life Annuity, as those payment forms are defined in the Base Plan,
with the designation of joint annuitant or beneficiary that is effective for the
Participant in the Base Plan. The Participant's election of a payment form and
designation of a joint annuitant or beneficiary shall be made in the form and
manner prescribed by the Committee and may be revoked by the Participant at any
time prior to the Benefit Starting Date. A Participant who is married on the
Benefit Starting Date must obtain the written consent of the Participant's
spouse in the form and manner prescribed by the Committee to the election of any
form other than a 100% Joint and Survivor Annuity with the Participant's spouse
designated as the joint annuitant.

4.2. Lump Sum Payment.

     4.2.1. Election and Amount. A Participant may receive payment of benefits
     in the form of a single lump sum if the Participant makes an irrevocable
     election in the form and manner prescribed by the Committee. If the
     Participant is married when the election is made, the Participant's spouse
     must consent to the election in writing and acknowledge the effect of such
     election. An election shall not be considered made until it is actually
     received by the Committee and unless such actual receipt occurs prior to
     the Participant's death. The amount of the lump sum payment shall be the
     present value of the Participant's benefit determined under Section 3.1
     using the interest rate and mortality assumptions set forth in Table I and
     if the election is made less than thirteen (13) months before the
     Participant's termination of employment for reasons other than death, the
     lump sum payment shall be reduced by 10% which shall be forfeited.

     4.2.2. Death Within 13 Month Period. If a Participant dies less than
     thirteen (13) months after making an election to receive a lump sum
     payment, payment to the Participant's survivor shall be made in the form of
     a single lump sum. The amount of the lump sum payment shall be the present
     value of the survivor's benefit determined under Section 3.2.1 using the
     interest rate and mortality assumptions set forth in Table I.

     4.2.3. Acceleration of Benefits with Forfeiture. A Participant, survivor,
     joint annuitant or beneficiary who is receiving benefit payments under this
     Plan may at any time eject to receive the remaining benefit in a lump sum
     payment. The amount of the lump sum shall be the present value of the
     remaining benefit determined as of the last day of the month in which the
     election is received by the Committee using the interest rate and mortality
     assumptions set forth on Table I less 10% which shall be forfeited.

4.3. Timing. Actual distribution of benefits from the Plan shall begin on or as
soon as administratively feasible after the last day of the month in which the
Benefit Starting Date occurs; provided however that lump sum payments pursuant
to an election under

                                       8

Section 4.2.3 shall be made on or as soon as administratively feasible after the
last day of the month following the month in which the request to accelerate
benefits is received by the Committee, and lump sum payments pursuant to Section
6.1 shall be made as soon as administratively feasible after the Plan
termination.

4.4. Change in Control.

     4.4.1. Immediate Vesting. In the event of a Change in Control as defined in
     this Section, each employee who satisfies the eligibility requirements of
     Section 2.1.1 on the day before the Change in Control shall be immediately
     and fully vested in the benefit that would have been payable if the
     employee had terminated employment on the day before the Change in Control
     and in any additional benefit the employee accrues in this Plan following
     the Change in Control.

     4.4.2. Definition. For all purposes of this Plan, a "Change in Control"
     shall have occurred if:

          (a) any "person" as such term is used in section 13(d) and 14(d) of
          the Securities Exchange Act of 1934, as amended (the "Exchange Act")
          (other than Honeywell Inc., any subsidiary of Honeywell Inc., any
          "person" (as herein defined) acting on behalf of Honeywell Inc. as
          underwriter pursuant to an offering who is temporarily holding
          securities in connection with such offering, any trustee or other
          fiduciary holding securities under an employee benefit plan of
          Honeywell Inc. or any corporation owned, directly or indirectly, by
          the stockholders of Honeywell Inc. in substantially the same
          proportions as their ownership of stock of Honeywell Inc.), is or
          becomes the "beneficial owner" (as defined in Rule 13d-3 under the
          Exchange Act), directly or indirectly, or securities of Honeywell Inc.
          representing thirty percent (30%) or more of the combined voting power
          of Honeywell Inc.'s then outstanding securities;

          (b) during any period of not more than two consecutive years (not
          including any period prior to the Effective Date), individuals who at
          the beginning of such period constitute the Board of Directors of
          Honeywell Inc., and any new director (other than a director designated
          by a "person" who has entered into an agreement with Honeywell Inc. to
          effect a transaction described in Section 4.4.2 (a), (c) or (d)) whose
          election by the Board of Directors of Honeywell Inc. or nomination for
          election by Honeywell Inc.'s stockholders was approved by a vote of at
          least two-thirds of the directors then still in office who either were
          directors at the beginning of the period or whose election or
          nomination for election was previously so approved, cease for any
          reason to constitute at least a majority thereof;

          (c) the stockholders of Honeywell Inc. approve a merger or
          consolidation of Honeywell Inc. with any other corporation, other than
          (i) a merger or consolidate which would result in the voting
          securities of Honeywell Inc. outstanding immediately prior thereto
          continuing to represent (either by remaining outstanding or by being
          converted into

                                       9

          voting securities of the surviving entity) more than fifty percent
          (50%) of the combined voting power of the voting securities of
          Honeywell Inc. or such surviving entity outstanding immediately after
          such merger or consolidation; or (ii) a merger or consolidation
          effected to implement a capitalization of Honeywell Inc. (or similar
          transaction) in which no "person" (as hereinabove defined) acquires
          more than thirty percent (30%) of the combined voting power of
          Honeywell Inc.'s then outstanding securities; or

          (d) the stockholders of Honeywell Inc. approve a plan of complete
          liquidation of Honeywell Inc. or an agreement for the sale or
          disposition of Honeywell International Inc. of all or substantially
          all of Honeywell Inc.'s assets (or any transaction having a similar
          effect).

4.5. Taxes. AIl taxes which may be due with respect to any payments or benefits
under this Plan are the obligation of the Participant and not the obligation of
the Employer. Notwithstanding any provision in this Plan to the contrary, if all
or a portion of a benefit in this Plan is determined to be includable in an
individuaI's gross income and subject to income tax at any time prior to the
time such benefit would otherwise be paid, that benefit or that portion of a
benefit shall be distributed to the individual. For this purpose, an amount is
determined to be includable in an individual's gross income upon the earliest
of: (a) a final determination by the Internal Revenue Service addressed to the
individual which is not appealed, (b) a final determination of by the United
States Tax Court or any other federal court affirming an IRS determination, or
(c) an opinion addressed to Honeywell International Inc. by the tax counsel for
Honeywell that, by reason of the Code, Treasury Regulations, published IRS
rulings, court decisions or other substantial precedent, the amount is subject
to federal income tax prior to payment. Notwithstanding the preceding provisions
of this Section 4.5, in the event that the Employer funds all or part of the
benefits of any Participant as permitted in Section 5.1, (x) that benefit or
portion of the benefit so funded shall not be distributed to that Participant if
such Participant and the amount of such Participant's benefit so funded is set
forth in Table III, and (y) the Committee shall provide for the distribution of
benefits in accordance with Section 4 and applicable law.

4.6. Incompetency. When the Committee determines that an individual to whom
benefits are payable is unable to manage his or her financial affairs, the
Committee may pay such individual's benefits to a duly appointed conservator or
other legal representative of such individual or, if no prior claim has been
made by such a conservator or legal representative, to a person or institution
entrusted with the care or maintenance of the incompetent or disabled individual
if the Committee is satisfied that the payments will be used for the best
interest of such individual. Any payment made in accordance with this Section
shall constitute a complete discharge or any liability or obligation of the
Employer and Plan.

                                       10

                                    SECTION 5
                                 GENERAL MATTERS

5.1. Funding. All benefits under this Plan shall be paid exclusively from the
general assets of Honeywell. No fund or trust shall be established apart from
the general assets of Honeywell for the purpose of this Plan and no assets or
property shall be segregated, pledged or set apart from the general assets of
Honeywell for the purposes of funding this Plan. Any person entitled to benefits
under this Plan shall be a general, unsecured creditor of Honeywell. The
foregoing shall not preclude the establishment by Honeywell of a "rabbi trust".

Notwithstanding the preceding paragraph, the Committee is authorized (but not
required) to cause Honeywell to fund all or a part of the benefits for such
Participant or Participants as it may select in its sole discretion from time to
time. The Committee is authorized to select, appoint and remove trustees, to
enter into, amend and terminate trust agreements, to create trust funds, to
cause Honeywell to make contributions to such trust funds in such amounts as the
Committee may determine from time to time and to take all other actions that it
may determine to be necessary or helpful in implementing the funding.

5.2. Status of Participant. A Participant shall have no right, title, or
interest in or to any investments which Honeywell may make to aid it in meeting
the obligations of this Plan. Nothing contained in this Plan, and no action
taken pursuant to its provisions shall create or be construed to create a trust
of any kind, or a fiduciary relationship between Honeywell and a Participant or
any beneficiary. Except to the extent benefits are funded for any Participant as
set forth in Table III, to the extent that any person acquires a right to
receive payments from Honeywell, such right shall be no greater than the right
of an unsecured creditor. The assets of any benefits funded for any Participant
as set forth in Section 5.1 and Table III shall not be assets of Honeywell or
any Employer and shall not be subject to the claims of any creditor of Honeywell
or any Employer.

5.3. Spendthrift Provision. No Participant, surviving spouse, joint annuitant or
beneficiary shall have the power to transmit, assign, alienate, dispose of,
pledge or encumber any benefit payable under this Plan before its actual payment
to such person. Honeywell shall not recognize any such effort to convey any
interest under this Plan. No benefit payable under this Plan shall be subject to
attachment, garnishment, execution following judgment or other legal process
before actual payment to such person.

5.4. No Employment Contract. This Plan shall not give any employee the right to
be retained in the employment of the Employer, shall not enlarge or diminish any
person's employment rights or rights or obligations under the Base Plan, and
shall not affect the right of the Employer to deal with any employees or
participants in employment respects, including, without limitation, their
hiring, discharge, compensation, and conditions of employment.

                                       11

                                    SECTION 6
                            AMENDMENT AND TERMINATION

6.1. Amendment. The Committee (or its delegate) shall have the right to amend or
terminate the PIan at any time, for any reason and without notice to any
affected person; provided, however, that, except with respect to automatic lump
sum payments and interest rate assumptions or as otherwise agreed to by the
Participant, the Plan may not be amended in any manner that would adversely
affect the benefit which would have been payable to an employee if the employee
had terminated employment on the day before the amendment or that would reduce
the benefit that is being paid to any person at the time of the amendment. If
this Plan is terminated, each employee who satisfies the eligibility
requirements of Section 2 on the date the Plan is terminated and each
Participant, joint annuitant or beneficiary who is receiving benefits under this
Plan shall receive a lump sum payment of the accrued benefit or remaining
benefit, as applicable, in this Plan as soon as administratively feasible after
such Plan termination. The lump sum shall be the present value of the person's
accrued benefit or remaining benefit as of the date the Plan is terminated using
the interest rate and mortality assumptions set forth in Table I.

6.2. Change in Control. Notwithstanding Section 6.1, for a period that begins on
the date of a Change in Control (as defined in Section 4) and ends on the last
day of the thirty-sixth month that begins after the month in which the Change in
Control occurs, the Plan may not be terminated or amended in any manner
whatsoever that would adversely affect the amount and form of benefits payable
under this Plan to an employee without the employee's consent.

6.3. Amendments to Base Plan. It is specifically contemplated that the Base Plan
will, from time to time, be amended and possibly terminated. All such amendments
and termination shall be given effect under this Plan as it is expressly
intended that this Plan shall not be restricted by the provisions of the Base
Plan as they exist on the Effective Date but shall be controlled by the
provisions of the Base Plan as of the date a benefit is determined under this
Plan.

                                       12

                                    SECTION 7
                            DETERMINATIONS AND CLAIMS

7.1. Determinations. The Committee or any person to whom such authority has been
delegated pursuant to Section 8 shall interpret and administer the terms and
conditions of the Plan, decide all questions concerning the eligibility of any
persons to participate in the Plan, grant or deny benefits under the Plan,
construe any ambiguous provision of the Plan, correct any defect, supply any
omission, or reconcile any inconsistency as the Personnel Committee or its
delegatee, in its sole discretion, may determine. The determinations of the
Personnel Committee or any authorized person shall, subject only to the Plan's
claims procedures, be final and binding on all persons.

7.2. Claims Procedure.

     7.2.1. Original Claim. Any employee, former employee, joint or contingent
     annuitant or beneficiary of the Participant may file with the Committee a
     written claim for benefits under this Plan. Within sixty (60) days after
     the filing of such a claim, the Committee shall notify the claimant in
     writing whether his claim is upheld or denied in whole or in part or shall
     furnish the claimant a written notice describing specific special
     circumstances requiring a specified amount of additional time (but not more
     than one hundred twenty days from the date the claim was filed) to reach a
     decision on the claim. If the claim is denied in whole or in part, the
     Committee shall state in writing:

          (a)  the specific reasons for the denial;

          (b)  the specific references to the pertinent provisions of this Plan
               on which the denial is based;

          (c)  a description of any additional material or information necessary
               for the claimant to perfect the claim and an explanation of why
               such material or information is necessary; and

          (d)  an explanation of the claims review procedure set forth in this
               section.

     7.2.2. Claims Review Procedure. Within sixty (60) days after receipt of
     notice that his or her claim has been denied in whole or in part, the
     claimant may file with the Committee a written request for a review and
     may, in conjunction therewith, submit written issues and comments. Within
     sixty (60) days after the filing of such a request for review, the
     Committee shall notify the claimant in writing whether, upon review, the
     claim was upheld or denied in whole or in part or shall furnish the
     claimant a written notice describing specific special circumstances
     requiring a specified amount of additional time (but not more than one
     hundred twenty days from the date the request for review was filed) to
     reach a decision on the request for review.

                                       13

     7.2.3. General Rules.

            (a) No inquiry or question shall be deemed to be a claim or a
            request for a review of a denied claim unless made in accordance
            with the claims procedure. The Committee may require that any
            claim for benefits and any request for a review of a denied claim
            be filed on forms to be furnished by the Committee upon request.

            (b) All decision on claims and on requests for a review of denied
            claims shall be made by the Committee.

            (c) The Committee may, in its discretion, hold one or more
            hearings on a claim or a request for a review of a denied claim.

            (d) Claimants may be represented by a lawyer or other
            representative (at their own expense), but the Committee reserves
            the right to require the claimant to furnish written
            authorization. A claimant's representative shall be entitled to
            receive copies of notices sent to the claimant.

            (e) The decision of the Committee on a claim and on a request for
            a review of a denied claim shall be served on the claimant in
            writing. If a decision or notice is not received by a claimant
            within the time specified, the claim or request for a review of a
            denied claim shall be deemed to have been denied.

            (f) Prior to filing a claim or a request for a review of a denied
            claim, the claimant or his representative shall have a reasonable
            opportunity to review a copy of this Plan statement and all other
            pertinent documents in the possession of Honeywell and the
            Committee.

                                       14

                                    SECTION 8
                               PLAN ADMINISTRATION

8.1. Employer. Functions generally assigned to the Employer shall be discharged
by the officers of Honeywell or delegated and allocated as provided herein.
Honeywell may by action of the Committee, delegate or re-delegate and allocate
and reallocate to one or more persons or to a committee of persons jointly or
severally, and whether or not such persons are directors, officers or employees,
such functions assigned to the Employer hereunder as it may from time to time
deem advisable.

8.2. Committee. The general administration and operation of this Plan shall be
by the Committee, which shall consist of such members as may be determined and
appointed from time to time by the Honeywell's Board of Directors, and who shall
serve at the pleasure of the Board of Directors. The Committee may delegate or
re-delegate to one or more persons, jointly or severally, and whether or not
such persons are members of the Committee or employees of Honeywell, such
functions assigned to the Committee hereunder as it may from time to time deem
advisable.

8.3. Method of Executing Instruments. Information to be supplied or written
notices to be made or consents to be given by the Employer or the Committee, as
applicable, pursuant to any provision of this Plan may be signed in the name of
the Employer or the Committee by any officer or by any employee or any member of
any committee who has been authorized to make such certification and to give
such notices or consents.

8.4. Conflict of Interest. If any officer or employee of Honeywell, any member
of the Board of Directors of Honeywell or any member of the Committee to whom
authority has been delegated or re-delegated hereunder shall also be a
Participant in this Plan, he or she shall have no authority as such officer,
employee or member with respect to any matter specially affecting his or her
individual interest hereunder (as distinguished from the interests of all
Participants and or a broad class of Participants), all such authority being
reserved exclusively to the other officers, employees or members, as the case
may be, to the exclusion of such Participant, and such Participant shall act
only in his or her individual capacity in connection with any such matter.

8.5. Plan Administrator. The Committee shall be the administrator for purposes
of section 3(16)(A) of ERISA.

8.6. Construction. This Plan is intended to be a nonqualified deferred
compensation arrangement. The rules of section 401(a) et. seq. of the Code shall
not apply to this Plan. This plan is adopted with the understanding that except
as set forth in Table III it is in part an unfunded excess benefit plan within
the meaning of section 3(36) ERISA and is in part an unfunded plan maintained
primarily for the purpose of providing deferred compensation for a select group
of

                                       15

management or highly compensated employees as provided in sections 201(2),
301(3) and 401(a)(1) of ERISA. Each provision hereof shall be interpreted and
administered accordingly. This Plan shall not provide any benefits with respect
to any defined contribution plan. This Plan shall be construed to prevent the
duplication of benefits provided under any other plan or arrangement, whether
qualified or nonqualified, funded or unfunded, to the extent that such other
benefits are provided directly or indirectly by Honeywell.

                                       16

                                     TABLE I

                   ACTUARIAL ASSUMPTIONS FOR LUMP SUM PAYMENTS

         Interest:   8 1/2 % per annum discount rate

         Mortality: 1983 Group Annuity Mortality Table for Healthy Males

                                       17

                                    TABLE II

                             VESTED ACCRUED BENEFITS

For purposes of Section 3.3, the accrued benefits of the following individuals
are vested to the extent shown below:

NAME                                LIFE ANNUITY
- ----                                ------------
                                 
Bonsignore, Michael R.              $12,338.72 per month payable at age 66

_________________.                  $  _______ per month payable at age 66

                                       18

                                    TABLE III
                                 FUNDED BENEFITS
                           FOR DESIGNATED PARTICIPANTS

The following Participants shall have the designated portion of their Plan
benefits funded and exempt from the claims of creditors of Honeywell and any
Employer as permitted in Section 5.1 and Section 5.2:

                             Lump Sum Value
Name                         of Funded Benefit               Date Benefit Funded
- ----                         -----------------               -------------------
                                                      
Michael R. Bonsignore          $ 4,000,000                   December 28, 2000

The Committee (or its delegate) may determine that the portion of the Plan
providing funded benefits to Participants designated on this Table III shall be
separated from the remaining portion of this Plan as of December 20, 2000 (or
such later date as may be established by the Committee) and shall thereafter
constitute a separate plan, program or arrangement with terms and provisions
identical to this Plan. Benefits under such separate plan, program or
arrangement and this Plan shall be calculated to avoid duplication or omission
of benefits.

                                       19

                                                                  EXHIBIT 10.18

                FORM OF ESCROW AGREEMENT USED TO SECURE CERTAIN
             SUPPLEMENTAL RETIREMENT BENEFITS FOR CERTAIN OFFICERS
                                 OF THE COMPANY

                                ESCROW AGREEMENT

          ESCROW AGREEMENT, dated as of December 21, 2000 (the "Agreement"), by
and between HONEYWELL INTERNATIONAL INC., a Delaware corporation (the
"Company"), [NAME] ("Beneficiary") and Victor P. Patrick (as escrow agent
hereunder, the "Escrow Agent").

                              W I T N E S S E T H :

          WHEREAS, the Beneficiary is entitled to receive certain specific
payments pursuant to the AlliedSignal Inc. Supplemental Pension Plan (the
"SERP");

          WHEREAS, the Company and the Beneficiary desire to have a certain
amount (the "Escrow Amount"), deposited in escrow as a source for payment of
amounts due to the Beneficiary pursuant to the SERP, and to have the Escrow
Amount and Earnings held in escrow until portions of it are disbursed in
accordance with the instructions of the Vice President of Human Resources of the
Company (the "VPHR") or his designee, which instructions will be solely in
accordance with the terms of the SERP, except as provided in section 4(d)
herein;

          WHEREAS, the Company intends to discharge its obligations under the
SERP first with the Escrow Amount and Earnings and only then from Company
assets;

          WHEREAS, the Company desires that the Escrow Agent assist the Company
in effecting the payment of the Escrow Amount and Earnings by holding, as agent
for the Beneficiary, the Escrow Fund;

          WHEREAS, the Escrow Amount and Earnings will be held for the sole
benefit of the Beneficiary, and will be considered an asset of the Beneficiary,
and shall not be deemed to be an asset of the Company and shall not be subject
to claims of the Company's creditors;

          WHEREAS, the distribution of all or any part of the Escrow Amount and
Earnings will reduce the amount the Company owes the Beneficiary pursuant to the
SERP; and

          WHEREAS, the Escrow Agent is willing to act as escrow agent in respect
of the Escrow Fund upon the terms and conditions hereinafter set forth;

          NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged by each of the parties hereto, the
parties hereto, intending to be legally bound, do hereby agree as follows:

          1. Appointment of Escrow Agent. The Company hereby appoints the Escrow
Agent as escrow agent in accordance with the terms and conditions set forth
herein, and the Escrow Agent hereby accepts such appointment.

          2. Deposit into the Escrow Fund. On or about December 21, 2000, the
Company will deposit, or cause to be deposited, with the Escrow Agent the Escrow
Amount, the receipt of which will be acknowledged by the Escrow Agent
substantially in the form of Exhibit C attached hereto, and which Escrow Amount
shall be held by the Escrow Agent upon the terms and conditions hereinafter set
forth.

          3. Custody of the Escrow Fund. (a) During the term of this Agreement,
the Escrow Agent shall hold in custody the Escrow Amount and any interest paid
thereon ("Earnings"), less any distributions pursuant to Section 4 hereof (the
"Escrow Fund"). Notwithstanding the foregoing, the Escrow Agent shall have the
power to release all or any portion of the Escrow Fund, when required to,
pursuant to Section 4 hereof.

          (b) The Escrow Fund shall be held for the account of the Beneficiary
     as a source for payments of amounts due to him under the SERP, and will be
     considered an asset of the Beneficiary, and shall not be deemed to be an
     asset of the Company and shall not be subject of claims of the Company's
     creditors.

          (c) If instructed by the VPHR prior to 1:00 p.m. on any Business Day,
     the Escrow Agent shall invest the Escrow Fund in a money market mutual fund
     or other similar investment as selected by the VPHR. The Escrow Agent shall
     maintain records showing amounts deposited hereunder, earnings on said
     amounts, and amounts disbursed from the Escrow Fund in accordance with this
     Agreement.

          (d) Any Earnings on the Escrow Fund shall be treated as an asset of
     the Beneficiary, and shall be distributed to the Beneficiary in the manner
     provided hereinafter.

          4. Distribution of Escrow Fund. The Escrow Agent shall hold the Escrow
Fund in its possession until instructed hereunder to deliver the Escrow Fund or
any specified portion thereof as follows:

          (a) Notwithstanding anything else in this Section 4, no portion of the
     Escrow Fund shall be disbursed except in accordance with the instructions
     of the VPHR.

                                       2

          (b) The instructions of the VPHR shall carry out the parties' intent
     to discharge the Company's obligation under the SERP first with the Escrow
     Amount and Earnings.

          (c) If the VPHR delivers a written release notice substantially in the
     form of Exhibit A attached hereto, to the Escrow Agent, the Escrow Agent
     shall release the Escrow Fund (or any portion thereof) to the parties
     referenced in such notice within one (1) Business Day. It is anticipated
     that such notice shall be delivered by the VPHR in order to insure timely
     delivery of the amounts due to be paid to the Beneficiary pursuant to the
     terms of the SERP.

          (d) Earnings on the Escrow Amount shall constitute income of the
     Beneficiary and shall be released to the Beneficiary annually pursuant to
     specific instructions contained in the above described release notice.

For purposes of this Agreement, "Business Day" shall mean any day that is not a
Saturday or Sunday or a day on which banks are required or permitted by law or
executive order to be closed in the City of New York.

          5. Final Distribution of Escrow Fund. After disbursing all amounts due
to the Beneficiary pursuant to the SERP, the Escrow Agent shall distribute the
remaining balance, if any, of the Escrow Fund as directed by the VPHR in the
manner described in Section 4 above.

          6. Resignation or Removal of Escrow Agent. The Escrow Agent may resign
and be discharged from its duties hereunder at any time by giving written notice
of such resignation to the Company specifying a date when such resignation shall
take effect and upon delivery of the Escrow Fund to the successor escrow agent
designated by the Company in writing. Such successor Escrow Agent shall become
the Escrow Agent hereunder upon the resignation date specified in such notice.
If the Company fails to designate a successor Escrow Agent within thirty (30)
days after such notice, the Escrow Agent shall be entitled to apply to a court
of competent jurisdiction for the appointment of a successor. The Escrow Agent
shall continue to serve until its successor accepts the escrow and receives the
Escrow Fund. The Company shall have the right at any time to remove the Escrow
Agent and substitute a new escrow agent by giving notice thereof to the Escrow
Agent then acting. Upon its resignation and delivery of the Escrow Fund as set
forth in this Section 6, the Escrow Agent shall be discharged of and from any
and all further obligations arising in connection with the escrow contemplated
by this Agreement.

          7. Indemnification of Escrow Agent. (a) The Escrow Agent shall have no
duties or responsibilities whatsoever with respect to the Escrow Fund except as
are specifically set forth herein. The Escrow Agent shall neither be responsible
for or liable under, nor chargeable with knowledge of the terms and conditions
of, any other agreement, instrument or document in connection herewith. The
Escrow Agent may

                                       3

conclusively rely upon, and shall be fully protected from all liability, loss,
cost, damage or expense in acting or omitting to act pursuant to any written
notice, instrument, request, consent, certificate, document, letter, telegram,
opinion, order, resolution or other writing hereunder without being required to
determine the authenticity of such document, the correctness of any fact stated
therein, the propriety of the service thereof or the capacity, identity or
authority of any party purporting to sign or deliver such document. The Escrow
Agent shall have no responsibility for the contents of any such writing
contemplated herein and may rely without any liability upon the contents
thereof.

          (b) The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be authorized
hereby or with the rights or powers conferred upon it hereunder, nor for action
taken or omitted by it in good faith, and in accordance with advice of counsel
(which counsel may be of the Escrow Agent's own choosing), and shall not be
liable for any mistake of fact or error of judgment or for any acts or omissions
of any kind except for its own willful misconduct or gross negligence.

          (c) The Company agrees to indemnify the Escrow Agent and its
employees, directors, officers and agents and hold each harmless against any and
all liabilities incurred by it hereunder as a consequence of such party's
action, and to indemnify the Escrow Agent and hold it harmless against any
claims, costs, payments, and expenses (including the fees and expenses of
counsel) and all liabilities incurred by it in connection with the performance
of its duties hereunder and them hereunder, except in either case for claims,
costs, payments, and expenses (including the fees and expenses of counsel) and
liabilities incurred by the Escrow Agent resulting from its own willful
misconduct or gross negligence. The provisions of this Section 7 shall survive
the termination of this Agreement or resignation or removal of the Escrow Agent.

          8. Compensation of Escrow Agent. The Escrow Agent shall be entitled to
payment from the Company for reasonable and customary fees and expenses for all
services rendered by it hereunder in accordance with Schedule B attached hereto
(as such schedule may be amended from time to time). The Escrow Agent shall also
be entitled to reimbursement on demand for all loss, liability, damage or
expenses paid or incurred by it in the administration of its duties hereunder,
including, but not limited to, all reasonable counsel, advisors' and agents'
fees and disbursements and all taxes or other governmental charges. At all
times, the Escrow Agent will have a right of set off and first lien on funds in
the Escrow Fund for payment of customary fees and expenses and all such
reasonable loss, liability, damage or expenses.

          9. Termination of Agreement. This Agreement shall terminate on the
final disposition of the Escrow Fund pursuant to Section 5, provided that the
rights of the Escrow Agent and the obligations of the other parties hereto under
Sections 7 and 8 shall survive the termination hereof and the resignation or
removal of the Escrow Agent.

                                       4

          10. Consents to Service Process. Each of the parties hereto hereby
irrevocably consents to the jurisdiction of the courts of the State of New York
and of any Federal Court located in the Borough of Manhattan in such State in
connection with any action, suit or other proceeding arising out of or relating
to this Agreement or any action taken or omitted hereunder, and waives any claim
of forum non conveniens and any objections as to laying of venue. Each party
further waives personal service of any summons, complaint or other process and
agree that the service thereof may be made by certified or registered mail
directed to such person at such person's address for purposes of notices
hereunder.

          11. Tax Withholding & Reporting. (a) On or prior to the date of this
Agreement, the Beneficiary, for purposes of United States backup withholding tax
and information reporting requirements, will provide the Escrow Agent with an
executed copy of Internal Revenue Service form W-9 or any successor form.

          12. Miscellaneous. (a) This Agreement embodies the entire agreement
and understanding among the parties relating to the subject matter hereof, and
may not be changed orally, but only by an instrument in writing signed by the
parties hereto.

          (b) All notices and other communications under this Agreement shall be
in writing and shall be deemed given when delivered personally, on the next
Business Day after delivery to a recognized overnight courier or mailed first
class (postage prepaid) or when sent by facsimile to the parties (which
facsimile copy shall be followed, in the case of notices or other communications
sent to the Escrow Agent, by delivery of the original) at the following
addresses (or to such other address as a party may have specified by notice
given to the other parties pursuant to this provision):

          If to the Company, to:

                          Honeywell International Inc.
                          101 Columbia Road
                          Morris Township, NJ  07962-2497
                          Telephone: (973) 455-2000
                          Attention: Peter M. Kreindler, Esq.

          If to the Escrow Agent, to:

                          Victor P. Patrick
                          101 Columbia Road
                          Morris Township, NJ  07962-2497
                          Telephone: (973) 455-2000

                                       5

          (c) This Agreement and the rights and obligations hereunder of parties
hereto may not be assigned except with the prior written consent of the other
parties hereto. This Agreement shall be binding upon and inure to the benefit of
each party's respective successors and permitted assigns. Except as expressly
provided herein, no other person shall acquire or have any rights under or by
virtue of this Agreement.

          (d) This Agreement may not be amended, supplemented or otherwise
modified without the prior written consent of the parties hereto.

          (e) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without reference to the principles of
conflict of laws.

          (f) This Agreement may be executed in two or more counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same instrument.

                                       6

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                             HONEYWELL INTERNATIONAL INC.
                                             Tax ID :

                                             By
                                               --------------------------
                                                Name:
                                                Title:

                                             ----------------------------
                                             Beneficiary

                                             Victor P. Patrick
                                               as Escrow Agent

                                             By
                                               --------------------------
                                               Victor P. Patrick

                                       7

                                                                   EXHIBIT 10.19

              FORM OF PROMISSORY NOTE REPRESENTING LOANS TO CERTAIN
              OFFICERS OF THE COMPANY OF REQUIRED WITHOLDING TAXES
                RELATING TO THE SECURING OF CERTAIN SUPPLEMENTAL
                              RETIREMENT BENEFITS

                                 PROMISSORY NOTE

$__________                                               Morristown, New Jersey
                                                          [DATE]

[NAME], of [ADDRESS] ("Borrower"), for value received, hereby promises to pay to
the order of Honeywell International Inc., a Delaware corporation ("Lender"), at
its office located at 101 Columbia Road, Morristown, New Jersey, 07962, or at
any other place the holder hereafter designates, the principal sum of
$____________, in lawful money of the United States on demand of Lender at any
time on or after December 31, 2004, and to pay interest in like money at said
office from the date hereof on the unpaid principal balance hereof at a rate of
5.53 percent per annum, compounded semiannually on June 30 and December 31. Such
interest shall be calculated on the basis of a 360-day year and actual days.
This Promissory Note may be prepaid in full or in part at any time, without
penalty

         Borrower and all guarantors and endorsers of this Promissory Note,
severally, waive diligence, demand, presentment, notice of nonpayment, and
protest, and assent to extensions of the time of payment, or forbearance, or
other indulgence, without notice.

                                                     [NAME]

                                                     ---------------------

                                                                   EXHIBIT 10.20

                          HONEYWELL INTERNATIONAL INC.
                  Severance Plan for Corporate Staff Employees
             (Involuntary Termination Following a Change in Control)
                           Effective February 6, 1988

                                     Amended and Restated as of October 24, 2000

                          HONEYWELL INTERNATIONAL INC.

                  Severance Plan for Corporate Staff Employees
             (Involuntary Termination following a Change in Control)

Article I     Purpose

1.1           The purpose of this Plan is to provide severance benefits to
              Corporate Staff Employees of Honeywell International Inc. in the
              event of the Involuntary Termination of their employment following
              a Change in Control. This Plan constitutes the amendment and
              restatement, as of October 24, 2000, of the Severance Plan for
              Corporate Staff Employees (Involuntary Termination following a
              Change in Control) established by Honeywell International Inc.
              (formerly AlliedSignal Inc.) as of February 6, 1988, and amended
              and restated effective October 21, 1988 and April 1, 1999.

Article II    Definitions

2.1           Affiliated Company - means (a) any member of a controlled group of
              corporations as defined in Section 414(b) of the Code of which
              Honeywell International Inc. or a predecessor of Honeywell
              International Inc. is or was a member, (b) any unincorporated
              trade or business which is under common control with Honeywell
              International Inc. as determined under Section 414(c) of the Code,
              or (c) any organization, employment with which is counted as
              employment with Honeywell International Inc. or a predecessor of
              Honeywell International Inc. under the provisions of Section
              414(m), (n), or (o) of the Code.

2.2           Honeywell International Inc. - means Honeywell International Inc.,
              a Delaware corporation, and its subsidiaries, and any successors
              thereto.

2.3           Annual Incentive Compensation - means the product of (a) times (b)
              where (a) is such employee's target award level under the
              Incentive Compensation Plan for Executive Employees of Honeywell
              International Inc. and its Subsidiaries, or any successor plan,
              for the most recent incentive period ended prior to the Change in
              Control, and (b) is Base Salary. Long-term performance incentive
              awards shall not be considered in determining Annual Incentive
              Compensation.

2.4           Base Salary - means the annual base salary, exclusive of bonus,
              incentive or other extra compensation but inclusive of overtime
              (in the case of non-exempt Participants), being paid to a
              Participant at the time of Involuntary Termination of employment.

2.5           Board of Directors - means the Board of Directors of Honeywell
              International Inc.

2.6           Change in Control - is deemed to occur at the time (a) when any
              entity, person or group (other than Honeywell International Inc.,
              any subsidiary or any savings,

                                       2

              pension or other benefit plan for the benefit of employees of
              Honeywell International Inc.) which theretofore beneficially owned
              less than 30% of the Common Stock then outstanding acquires shares
              of Common Stock in a transaction or series of transactions that
              results in such entity, person or group directly or indirectly
              owning beneficially 30% or more of the outstanding Common Stock,
              (b) of the purchase of shares of Common Stock pursuant to a tender
              offer or exchange offer (other than any offer by Honeywell
              International Inc.) for all, or any part of, the Common Stock, (c)
              of a merger in which Honeywell International Inc. will not survive
              as an independent, publicly owned corporation, a consolidation, or
              a sale, exchange or other disposition of all or substantially all
              of Honeywell International Inc.'s assets, (d) of a substantial
              change in the composition of the Board of Directors during any
              period of two consecutive years such that individuals who at the
              beginning of such period were members of the Board of Directors
              cease for any reason to constitute at least a majority thereof,
              unless the election, or the nomination for election by the
              stockholders of Honeywell International Inc., of each new director
              was approved by a vote of at least two-thirds of the directors
              then still in office who were directors at the beginning of the
              period, or (e) of any transaction or other event which the
              Compensation Committee of the Board of Directors, in its
              discretion, determines to be a change in control for purposes of
              this Plan.

2.7           Code - means the Internal Revenue Code of 1986, as amended from
              time to time.

2.8           Common Stock - means the Common Stock of Honeywell International
              Inc. or such other stock into which the Common Stock may be
              changed as a result of split-ups, recapitalizations,
              reclassifications and the like.

2.9           Corporate Staff Employee - means a salaried or non-union hourly
              employee of Honeywell International Inc. employed in Career Bands
              1 through 7 who (a) is not associated with a strategic business
              unit of Honeywell International Inc. (including Business
              Services), and (b) who (i) has a reporting relationship, prior to
              a Change in Control, either direct or through one or more other
              employees, to one of the then Senior Vice Presidents of Honeywell
              International Inc., (ii) prior to a Change in Control, held a
              position similar to a position which on April 1, 1999 had a
              reporting relationship, either direct or indirect or through one
              or more other employees, to one of the then Senior Vice Presidents
              of Honeywell International Inc., or (iii) reported prior or
              subsequent to a Change in Control directly to the Chairman and
              Chief Executive Officer of Honeywell International Inc. or the
              President and COO of Honeywell International Inc. Corporate Staff
              Employee shall not include any 1988 Plan Employee.

2.10          ERISA - means the Employee Retirement Income Security Act of 1974,
              as amended from time to time.

                                       3

2.11          Gross Cause - means fraud, misappropriation of Honeywell
              International Inc. property or intentional misconduct damaging to
              such property or business of Honeywell International Inc., or the
              commission of a crime.

2.12          Hour of Service - means each hour for which a Participant is
              directly or indirectly paid by Honeywell International Inc., a
              predecessor of Honeywell International Inc. or an Affiliated
              Company for performance of duties and for reasons other than
              performance of duties and includes regular time, overtime,
              vacations, holidays, sickness, disability, paid layoff, and
              similar paid periods. Hours of Service shall be computed and
              credited in accordance with Department of Labor Regulation Section
              2530.200b-2(b) and (c), as amended from time to time.

2.13          Involuntary Termination - means (a) termination by Honeywell
              International Inc. of the Participant's employment during the
              Protected Period, other than upon mandatory retirement in
              compliance with applicable law, death or for Gross Cause, or (b)
              termination of employment by a Participant during the Protected
              Period following (i) a reduction in the Participant's Pay or
              employee benefits other than a reduction which is generally
              applicable to all salaried and non-union hourly employees of
              Honeywell International Inc., (ii) permanent elimination of the
              Participant's position, not including transfer pursuant to the
              sale of a facility or line of business in which the Participant is
              offered substantially comparable employment with the new employer,
              (iii) a material change in the position, function,
              responsibilities or reporting level or in the standard of
              performance required of the Participant, (iv) any geographic
              relocation of a Participant's position (as determined immediately
              prior to a Change in Control) to a new location, or (v) an action
              by Honeywell International Inc. that under applicable law
              constitutes constructive discharge.

2.14          1988 Plan Employee - means an individual who (i) met the
              definition of Corporate Staff Employee under the Plan immediately
              prior to its amendment and restatement on April 1, 1999 (the "1988
              Plan Definition"), (ii) who ceased to meet the Plan's definition
              of Corporate Staff Employee solely by reason of the April 1, 1999
              amendment of such definition, and (iii) satisfies the 1988 Plan
              Definition as of the Change in Control. 1988 Plan Employees shall
              have their benefits, if any, determined solely with reference to
              the Plan as amended and restated effective October 21, 1988, a
              copy of which is attached hereto as Exhibit A.

2.15          Participant - means a Corporate Staff Employee.

2.16          Pay - means Base Salary and, as to a Participant employed in Band
              5 or above, Annual Incentive Compensation.

2.17          Plan - means the Honeywell International Inc. Severance Plan for
              Corporate Staff Employees (Involuntary Termination Following a
              Change in Control).

                                       4

2.18          Plan Administrator - means the person or entity identified in
              Section 5.01 to administer the terms and conditions of the Plan.

2.19          Plan Sponsor - means Honeywell International Inc. Any successor to
              Honeywell International Inc. (or a principal subsidiary) shall be
              deemed a Plan Sponsor.

2.20          Protected Period - means, with respect to each Participant, the
              period beginning on the date of a Change in Control that occurs
              after he or she becomes a Participant and ending at the expiration
              of twenty-four (24) months following such Change in Control.

2.21          Year of Service - means any consecutive 12-month period commencing
              on a Participant's date of hire or rehire with Honeywell
              International Inc., any predecessor of Honeywell International
              Inc. or an Affiliated Company, and anniversaries thereof during
              which the Participant has completed at least 1,000 Hours of
              Service.

Article III   Participation

3.1           The benefits provided under the Plan are limited solely to
              Participants.

Article IV    Eligibility for and Continuation of Pay, Benefits and Pension
              Service

4.1           Eligibility for Pay, Benefit and Pension Service Continuation

              In the event of the Involuntary Termination of a Participant's
              employment during the Protected Period, Pay, benefit and pension
              service continuation shall be provided to the Participant by
              Honeywell International Inc. (or any successor to Honeywell
              International Inc.) in accordance with this Article IV.

4.2           Pay, Benefit and Pension Service Continuation

              A)    Pay Continuation - A Participant shall receive Base Salary,
                    paid in accordance with his or her normal payroll period,
                    and, as to Participants employed in Career Band 5 or above,
                    Annual Incentive Compensation, paid annually, for the period
                    specified in Schedule A attached hereto.

              B)    Benefit Continuation - For the period of Pay continuation,
                    Honeywell International Inc. will continue the Participant's
                    employee benefits, including, without limitation, vacation
                    accruals, continuation of the Participant's savings plan
                    participation (to the extent permissible under Section
                    401(a) of the Code), basic and contributory life and medical
                    insurance (including qualified dependents) at the active
                    employee coverage level and prevailing employee contribution
                    rate, if any; provided, however, that (a) such level of
                    continued benefits shall not exceed the level of benefits in
                    effect on the date of the Participant's Involuntary

                                       5

                    Termination, prior to any reduction thereto, (b) such
                    continuation of life and medical benefits will cease on the
                    date similar benefits are provided the Participant by a
                    subsequent employer, and (c) the executive flex-perk
                    allowance will be continued during the entire severance pay
                    period, subject to 4.2(D).

              C)    Pension Service Continuation - Participants entitled to
                    benefits under the Plan shall become 100% vested in their
                    defined benefit pension plan benefits (all defined benefit
                    plans in which a Participant has accrued a benefit are
                    collectively referred to as the "DB Plans"). During their
                    Pay continuation period, Participants shall continue to be
                    credited with additional age and service credit for purposes
                    of benefit accrual (up to a maximum of twelve (12) months of
                    a Participant's Pay continuation period), vesting and
                    eligibility under the DB Plans in which they participate. At
                    the end of a Participant's Pay continuation period,
                    Participants shall immediately be credited with three (3)
                    years of age and service, respectively, for purposes of
                    benefit accruals, vesting and eligibility under the DB
                    Plans; provided, however, that such three (3) years of
                    additional age shall be credited only if such additional age
                    credits would (either alone or in conjunction with a bridge
                    leave of absence) enable a Participant to be eligible for
                    immediate payment of an early or normal retirement benefit
                    under the applicable defined benefit pension plan in which
                    the Participant participates. The normal policy for
                    qualifying bridge leaves of absence, as reflected in the
                    applicable defined benefit pension plan in which the
                    Participant participates, shall remain applicable
                    thereafter. Notwithstanding the foregoing, a Participant
                    shall be eligible for the additional three (3) years of age
                    and service credit under the DB Plans only if such
                    Participant executes a general release of claims against
                    Honeywell International Inc., its subsidiaries and
                    affiliates in a form and manner prescribed by the Plan
                    Administrator.

              D)    If any payment to a Participant made pursuant to the terms
                    of this Plan (including payments from any benefit or
                    compensation plan or program sponsored or funded by
                    Honeywell International Inc. but excluding payments and
                    benefits provided upon a change in control under the
                    AlliedSignal Severance Plan for Senior Executives, Honeywell
                    Inc. Tier 1A and Tier 1B agreements, and any similar plan or
                    arrangement under which participants have their benefits
                    increased because of taxes under Section 4999 of the Code)
                    is determined to be an "excess parachute payment" within the
                    meaning of Section 280G or any successor or substitute
                    provision of the Code, with the effect that either the
                    Participant is liable for the payment of the tax described
                    in Section 4999 or any successor or substitute provision of
                    the Code (hereafter the "Section 4999 tax") or Honeywell
                    International Inc. has withheld the amount of the Section
                    4999 tax, an additional benefit shall be paid pursuant to
                    this Plan

                                       6

                    to such affected Participant, in an amount, which when added
                    to all payments constituting "parachute payments" for
                    purposes of Section 280G or any successor or substitute
                    provision of the Code, is sufficient to cause the remainder
                    of (i) the sum of the "parachute payments", including any
                    payments made pursuant to this subparagraph D), less (ii)
                    the amount of all state, local and federal income taxes and
                    the Section 4999 tax attributable to such payments and
                    penalties and interest on any amount of Section 4999 tax,
                    other than penalties and interest on any amount of Section
                    4999 tax with respect to which such payment was paid to the
                    Participant on or before the due date of the Participant's
                    federal income tax return on which such Section 4999 tax
                    should have been paid, to be equal to the remainder of (iii)
                    sum of the "parachute payments", excluding any payments made
                    pursuant to this subparagraph D), less (iv) the amount of
                    all state, local and federal income taxes attributable to
                    such payments determined as though the Section 4999 tax and
                    penalties and interest on any amount of Section 4999 tax,
                    other than penalties and interest on any amount of Section
                    4999 tax with respect to which a payment made pursuant to
                    this subparagraph D) was paid to the Participant on or
                    before the due date of the Participant's federal income tax
                    return on which such Section 4999 tax should have been paid,
                    did not apply. Notwithstanding the foregoing, payments to be
                    made pursuant to this subparagraph D), when added to
                    benefits provided under Section 4.2.B)(c), shall not in the
                    aggregate exceed three million dollars ($3,000,000) or such
                    greater amount as approved by Honeywell International Inc.
                    or its successor. In the event such payments exceed the
                    limitation described above, the designation of the type and
                    order of such payments to be reduced hereunder shall be made
                    by the Plan Administrator in his sole discretion. In such
                    case, a Participant shall, to the extent otherwise allowable
                    by law, be entitled to waive all or any portion of his or
                    her right to any benefit triggered by a Change in Control in
                    order to avoid the imposition of any tax under Section 4999
                    of the Code or any successor or substitute provision of the
                    Code.

4.3          Benefit Limitations

              To avoid duplication of benefits, the amount of any similar
              benefits under this Plan shall be offset and reduced by the amount
              of any similar benefit provided the Participant under other
              severance plans sponsored by Honeywell International Inc. for
              which the Participant may be eligible, regardless of whether the
              payments under this Plan are made at an earlier or a later date
              than payments under a similar plan would have been made. In
              addition, notwithstanding any plan provisions to the contrary, to
              the extent a Participant who was a former employee of Honeywell
              Inc. would be eligible for benefits under both this Plan and
              another severance plan sponsored by Honeywell Inc., such
              Participant shall only be entitled to benefits

                                       7

              under this Plan to the extent such Participant waives his or her
              rights to benefits under such other severance plan.

Article V     Administration

5.1           Plan Administrator

              Prior to the occurrence of a Change in Control, Honeywell
              International Inc.'s Vice President-Worldwide Human Resources
              shall be the Plan Administrator within the meaning of ERISA
              Section 3(16)(A), and the named fiduciary within the meaning of
              ERISA Section 402. In the event of an impending Change in Control,
              Honeywell International Inc.'s Vice President-Worldwide Human
              Resources shall appoint a person independent of Honeywell
              International Inc. or persons operating under its control or on
              its behalf (hereafter, the "Corporation") to be the new Plan
              Administrator effective upon the occurrence of a Change in Control
              and the Vice President-Worldwide Human Resources shall immediately
              provide to the new Plan Administrator such information with
              respect to each Participant as shall be necessary to enable the
              new Plan Administrator to determine the amount of any benefit
              which is then or may thereafter become payable to such
              Participant.

5.2           Powers and Duties of Plan Administrator.

              Except as otherwise provided in this Section, the Plan
              Administrator shall have the full discretionary power and
              authority to (i) determine the amount and timing of any benefit
              payable under the Plan, (ii) construe and interpret the Plan
              (including, without limitation, supplying omissions from,
              correcting deficiencies in, or resolving inconsistencies or
              ambiguities in, the language of the Plan), (iii) determine all
              questions of fact arising under the Plan, including questions as
              to eligibility for and the amount of benefits, (iv) establish such
              rules and regulations (consistent with the terms of the Plan) as
              it deems necessary or appropriate for administration of the Plan,
              (v) delegate responsibilities to others to assist it in
              administering the Plan, and (vi) perform all other acts it
              believes reasonable and proper in connection with the
              administration of the Plan. The Plan Administrator shall be
              entitled to rely on the records of the Corporation in determining
              any Participant's entitlement to and the amount of benefits
              payable under the Plan.

5.3           Benefit Claims and Appeals.

              Any request or claim for Plan benefits shall be deemed to be filed
              when a written request is made by the claimant or the claimant's
              authorized representative which is reasonably calculated to bring
              the claim to the attention of the Plan Administrator.

                                       8

                  The Plan Administrator shall provide notice in writing to any
                  claimant when a claim for benefits under the Plan has been
                  denied in whole or in part. Such notice shall be provided
                  within 90 days of the receipt by the Plan Administrator of the
                  claimant's claim or, if special circumstances require, and the
                  claimant is so notified in writing, within 180 days of the
                  receipt by the Plan Administrator of the claimant's claim. The
                  notice shall be written in a manner calculated to be
                  understood by the claimant and shall:

                         (i)     set forth the specific reasons for the denial
                                 of benefits;

                         (ii)    contain specific references to Plan provisions
                                 relative to the denial;

                         (iii)   describe any material and information, if any,
                                 necessary for the claim for benefits to be
                                 allowed, that had been requested, but not
                                 received by the Plan Administrator; and

                         (iv)    advise the claimant that any appeal of the Plan
                                 Administrator's adverse determination must be
                                 made in writing to the Plan Administrator
                                 within 60 days after receipt of the initial
                                 denial notification, and must set forth the
                                 facts upon which the appeal is based.

              If notice of the denial of a claim is not furnished within the
              time periods set forth above, the claim shall be deemed denied and
              the claimant shall be permitted to proceed to the review
              procedures set forth below. If the claimant fails to appeal the
              Plan Administrator's denial of benefits in writing and within 60
              days after receipt by the claimant of written notification of
              denial of the claim (or within 60 days after a deemed denial of
              the claim), the Plan Administrator's determination shall become
              final and conclusive.

              If the claimant appeals the Plan Administrator's denial of
              benefits in a timely fashion, the Plan Administrator shall
              re-examine all issues relevant to the original denial of benefits.
              Any such claimant or his or her duly authorized representative may
              review any pertinent documents, as determined by the Plan
              Administrator, and submit in writing any issues or comments to be
              addressed on appeal.

              The Plan Administrator shall advise the claimant and such
              individual's representative of its decision, which shall be
              written in a manner calculated to be understood by the claimant,
              and include specific references to the pertinent Plan provisions
              on which the decision is based. Such response shall be made within
              60 days of receipt of the written appeal, unless special
              circumstances require an extension of such 60-day period for not
              more than an additional 60 days. Where such extension is
              necessary, the claimant shall be given written notice of the
              delay. If the decision on review is not furnished within the time
              set forth above, the claim shall be deemed denied on review.

                                       9

5.4           Plan Year

              The plan year shall be the calendar year.

5.5           Indemnification.

              To the extent permitted by law, the Corporation shall indemnify
              the Plan Administrator from all claims for liability, loss, or
              damage (including payment of expenses in connection with defense
              against such claims) arising from any act or failure to act in
              connection with the Plan.

Article VI    Unfunded Obligation.

6.1           All benefits payable under this Plan shall constitute an unfunded
              obligation of the Corporation. Payments shall be made, as due,
              from the general funds of Corporation. This Plan shall constitute
              solely an unsecured promise by the Corporation to pay severance
              benefits to participants to the extent provided herein.

Article VII   Inalienability of Benefits.

7.1           No Participant shall have the power to transfer, assign,
              anticipate, mortgage or otherwise encumber any rights or any
              amounts payable under this Plan; nor shall any such rights or
              amounts payable under this Plan be subject to seizure, attachment,
              execution, garnishment or other legal or equitable process, or for
              the payment of any debts, judgments, alimony, or separate
              maintenance, or be transferable by operation of law in the event
              of bankruptcy, insolvency, or otherwise. In the event a person who
              is receiving or is entitled to receive benefits under the Plan
              attempts to assign, transfer or dispose of such right, or if an
              attempt is made to subject such right to such process, such
              assignment, transfer or disposition shall be null and void.
              Nothing in this Section 7.1 shall prevent a Participant from
              waiving all or any portion of any benefit triggered by a Change in
              Control in accordance with Section 4.2.D).

Article VIII  Withholding

8.1           The Corporation shall have the right to withhold any taxes
              required to be withheld with respect to any payments due under
              this Plan.

Article       IX Amendment or Termination.

9.1           Plan Amendments - The Board of Directors reserves the right to
              amend the Plan from time to time prior to a Change in Control.
              However, no amendment shall

                                       10

              reduce any benefit being paid or then payable to a Participant.
              Further, no amendment shall reduce the benefits provided by the
              Plan to persons who were Participants as of the date of such
              amendment or adversely affect in any manner the rights of persons
              who were Participants as of the date of such amendment to benefits
              provided under this Plan. This Plan may not be amended or
              terminated after a Change in Control; provided, however, the Plan
              may be amended if the purpose of the amendment is to increase
              benefits hereunder.

              Notwithstanding anything in this Plan to the contrary, the Vice
              President-Worldwide Human Resources shall be permitted to amend
              the Plan to reflect changes in Honeywell International Inc.'s
              organization; provided, however, that no such amendment (i) shall
              increase or decrease benefits under the Plan, or (ii) increase the
              total number of Participants by more than five percent (5%) during
              any twelve month period.

9.2           Plan Termination - The Board of Directors reserves the right to
              terminate the Plan. However, such termination shall not adversely
              affect the rights of persons who were Participants as of the date
              of such termination.

Article X.    Plan Not a Contract of Employment; Honeywell International Inc.'s
              Policies Control.

10.1          Nothing contained in this Plan shall give an employee the right to
              be retained in the employment of Honeywell International Inc..
              This Plan is not a contract of employment between Honeywell
              International Inc. and any employee. Any dispute involving issues
              of employment, other than claims for benefits under this Plan,
              shall be governed by the appropriate employment dispute resolution
              policies and procedures of Honeywell International Inc..

Article XI        Action by the Honeywell International Inc.

11.1          Unless expressly indicated to the contrary herein, any action
              required to be taken by Honeywell International Inc. may be taken
              by action of its Board of Directors or by any appropriate officer
              or officers traditionally responsible for such determination or
              actions, or such other individual or individuals as may be
              designated by the board of directors or any such officer.

Article XII   Governing Law

12.1          The Plan is an employee welfare benefit plan within the meaning of
              Section 3(1) of ERISA, and will be construed in accordance to
              ERISA's requirements.

Article XIII  Severability

                                       11

13.1          If any provision of this Plan shall be held illegal or invalid for
              any reason, said illegality or invalidity shall not affect the
              remaining parts of this Plan, but this Plan shall be construed and
              enforced as if said illegal or invalid provision had never been
              included herein.

                                       12

                                   SCHEDULE A

                       
Bands                     Severance Pay Period

5 and 6                   18 months Base Salary and Annual Incentive Compensation

4                         One month notice, plus:

                          Years of Service           Base Salary
                          ----------------           -----------

                          0-4                        6 months
                          5-9                        9 months
                          10-19                      12 months
                          20+                        15 months

3                         One month notice, plus:

                          Years of Service           Base Salary
                          ----------------           -----------

                          0-9                        3 months
                          10-25                      6 months
                          26+                        9 months

Non-exempt                One month notice, plus:

                          Years of Service           Base Salary
                          ----------------           -----------

                          0-12                       3 months
                          13-25                      6 months
                          26+                        9 months

                                       13

                                                                      EXHIBIT 21

                         SUBSIDIARIES OF THE REGISTRANT

                                                                          SECURITIES OWNED
                                                       COUNTRY OR     ------------------------
                                                        STATE OF                      PERCENT
                        NAME                          INCORPORATION      CLASS       OWNERSHIP
                        ----                          -------------      -----       ---------
                                                                            
Honeywell Inc.......................................  Delaware        Common Stock     100
Honeywell International Finance Corporation.........  Delaware        Common Stock     100
Honeywell Technology Solutions Inc..................  Delaware        Common Stock     100
Honeywell Intellectual Properties Inc...............  Arizona         Common Stock     100
Honeywell Specialty Wax & Additives Inc.............  Delaware        Common Stock     100
ASI Specialty Chemicals, L.L.C......................  Delaware        Common Stock     100
Grimes Holdings Inc.................................  Delaware        Common Stock     100
Pittway Corporation.................................  Delaware        Common Stock     100
Prestone Holdings Inc...............................  Delaware        Common Stock     100

                              -------------------

    The names of Honeywell's other consolidated subsidiaries, which are
primarily totally-held by Honeywell, are not listed because all such
subsidiaries, considered in the aggregate as a single subsidiary, would not
constitute a significant subsidiary.

                                                                    EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS

    We hereby consent to the incorporation by reference in the Registration
Statements on Forms S-8 (Nos. 33-09896, 33-51455, 33-55410, 33-58347, 333-57509,
333-57515, 333-57517, 333-57519, 333-83511, 333-88141, 333-31370, 333-34764,
333-49280, 333-57866, 333-57868 and 333-57870), on Forms S-3 (Nos. 33-14071,
33-55425, 333-22355, 333-49455, 333-68847, 333-74075, 333-34760 and 333-45466)
and on Form S-4 (No. 333-82049) of Honeywell International Inc. and in General
Electric Company's Registration Statement on Form S-4, dated December 4, 2000,
of our report dated February 9, 2001 relating to the financial statements,
which appears in this Form 10-K.

/s/ PRICEWATERHOUSECOOPERS LLP

PricewaterhouseCoopers LLP
Florham Park, New Jersey
March 30, 2001

                                                                   EXHIBIT 23.2

                         INDEPENDENT AUDITORS' CONSENT

    We consent to the incorporation by reference in Registration Statement Nos.
33-09896, 33-51455, 33-55410, 33-58347, 333-57509, 333-57515, 333-57517,
333-57519, 333-83511, 333-88141, 333-31370, 333-34764, 333-49280, 333-57868,
333-57866 and 333-57870 of Honeywell International Inc. on Form S-8 and
Registration Statement Nos. 33-14071, 33-55425, 333-22355, 333-49455, 333-68847,
333-74075, 333-34760 and 333-45466 of Honeywell International Inc. on Form S-3
and Registration Statement Nos. 333-82049 of Honeywell International Inc. and
in General Electric Company's Registration Statement on Form S-4, dated
December 4, 2000, of our report dated February 10, 1999, appearing in this
Annual Report on Form 10-K of Honeywell International Inc. for the year ended
December 31, 2000.

/s/ Deloitte & Touche LLP

Parsippany, New Jersey
March 30, 2001

                                                                     EXHIBIT 24

                                POWER OF ATTORNEY

     I, Michael R. Bonsignore, a director of Honeywell International Inc., a
Delaware corporation (the "Company"), hereby appoint Peter M. Kreindler, Richard
F. Wallman, Kathleen M. Gibson, Philip M. Palazzari and James V. Gelly, each
with power to act without the other and with power of substitution and
resubstitution, as my attorney-in-fact and agent for me and in my name, place
and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Michael R. Bonsignore
                                                 --------------------------
                                                 Michael R. Bonsignore

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Hans W. Becherer, a director of Honeywell International Inc., a Delaware
corporation (the "Company"), hereby appoint Michael R. Bonsignore, Peter M.
Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari and James
V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Hans W. Becherer
                                                 --------------------------
                                                 Hans W. Becherer

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Gordon M. Bethune, a director of Honeywell International Inc., a
Delaware corporation (the "Company"), hereby appoint Michael R. Bonsignore,
Peter M. Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari
and James V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Gordon M. Bethune
                                                 --------------------------
                                                 Gordon M. Bethune

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Marshall N. Carter, a director of Honeywell International Inc., a
Delaware corporation (the "Company"), hereby appoint Michael R. Bonsignore,
Peter M. Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari
and James V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Marshall N. Carter
                                                 --------------------------
                                                 Marshall N. Carter

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Jaime Chico Pardo, a director of Honeywell International Inc., a
Delaware corporation (the "Company"), hereby appoint Michael R. Bonsignore,
Peter M. Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari
and James V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Jaime Chico Pardo
                                                 --------------------------
                                                 Jaime Chico Pardo

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Ann M. Fudge, a director of Honeywell International Inc., a Delaware
corporation (the "Company"), hereby appoint Michael R. Bonsignore, Peter M.
Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari and James
V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Ann M. Fudge
                                                 --------------------------
                                                 Ann M. Fudge

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, James J. Howard, a director of Honeywell International Inc., a Delaware
corporation (the "Company"), hereby appoint Michael R. Bonsignore, Peter M.
Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari and James
V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ James J. Howard
                                                 --------------------------
                                                 James J. Howard

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Bruce Karatz, a director of Honeywell International Inc., a Delaware
corporation (the "Company"), hereby appoint Michael R. Bonsignore, Peter M.
Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari and James
V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Bruce Karatz
                                                 --------------------------
                                                 Bruce Karatz

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Robert P. Luciano, a director of Honeywell International Inc., a
Delaware corporation (the "Company"), hereby appoint Michael R. Bonsignore,
Peter M. Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari
and James V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Robert P. Luciano
                                                 --------------------------
                                                 Robert P. Luciano

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Russell E. Palmer, a director of Honeywell International Inc., a
Delaware corporation (the "Company"), hereby appoint Michael R. Bonsignore,
Peter M. Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari
and James V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Russell E. Palmer
                                                 --------------------------
                                                 Russell E. Palmer

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Ivan G. Seidenberg, a director of Honeywell International Inc., a
Delaware corporation (the "Company"), hereby appoint Michael R. Bonsignore,
Peter M. Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari
and James V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Ivan G. Seidenberg
                                                 --------------------------
                                                 Ivan G. Seidenberg

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, John R. Stafford, a director of Honeywell International Inc., a Delaware
corporation (the "Company"), hereby appoint Michael R. Bonsignore, Peter M.
Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari and James
V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ John R. Stafford
                                                 --------------------------
                                                 John R. Stafford

Dated: January 25, 2001

                                POWER OF ATTORNEY

     I, Michael W. Wright, a director of Honeywell International Inc., a
Delaware corporation (the "Company"), hereby appoint Michael R. Bonsignore,
Peter M. Kreindler, Richard F. Wallman, Kathleen M. Gibson, Philip M. Palazzari
and James V. Gelly, each with power to act without the other and with power of
substitution and resubstitution, as my attorney-in-fact and agent for me and in
my name, place and stead, in any and all capacities,

          (i) to sign the Company's Annual Report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended December 31, 2000,

          (ii) to sign any amendment to the Annual Report referred to in (i)
above, and

          (iii) to file the documents described in (i) and (ii) above and all
exhibits thereto and any and all other documents in connection therewith,

granting unto each said attorney and agent full power and authority to do and
perform every act and thing requisite, necessary or desirable to be done in
connection therewith, as fully to all intents and purposes as I might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.

                                                 /s/ Michael W. Wright
                                                 --------------------------
                                                 Michael W. Wright

Dated: January 25, 2001