UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                              ---------------------

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

                For the quarterly period ended September 30, 2001

                               ------------------

                                       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)

                                 (973) 455-2000
            ---------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
            ---------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                                                              Outstanding at
Class of Common Stock                                       September 30, 2001
- ---------------------                                      ---------------------
    $1 par value                                             813,188,789 shares

                          Honeywell International Inc.

                                      Index

                                                                                      Page No.
                                                                                      -------
                                                                                  
Part I.  -            Financial Information
                      ---------------------

         Item 1.      Financial Statements:

                      Consolidated Balance Sheet -
                        September 30, 2001 and December 31, 2000                         3

                      Consolidated Statement of Income -
                        Three and Nine Months Ended September 30, 2001
                        and 2000                                                         4

                      Consolidated Statement of Cash Flows -
                        Nine Months Ended September 30, 2001 and 2000                    5

                      Notes to Financial Statements                                      6

                      Report of Independent Accountants                                 17

         Item 2.      Management's Discussion and Analysis
                        of Financial Condition and
                        Results of Operations                                           18

         Item 3.      Quantitative and Qualitative Disclosures About
                        Market Risk                                                     25

Part II. -            Other Information
                      -----------------

         Item 1.      Legal Proceedings                                                 26

         Item 5.      Other Information                                                 26

         Item 6.      Exhibits and Reports on Form 8-K                                  26

Signatures                                                                              27

- -------------------
       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.

                                       2

ITEM 1.                       FINANCIAL STATEMENTS
                              --------------------

                          Honeywell International Inc.
                           Consolidated Balance Sheet
                                   (Unaudited)

                                                                            September 30,            December 31,
                                                                                2001                     2000
                                                                           --------------            -----------
                                                                                    (Dollars in millions)
                                                                                              
ASSETS
Current assets:
  Cash and cash equivalents                                                $ 1,324                  $ 1,196
  Accounts and notes receivable                                              3,981                    4,623
  Inventories                                                                3,812                    3,734
  Other current assets                                                       1,352                    1,108
                                                                           -------                  -------
   Total current assets                                                     10,469                   10,661

Investments and long-term receivables                                          617                      748
Property, plant and equipment - net                                          5,157                    5,230
Goodwill and other intangible
  assets - net                                                               5,831                    5,898
Other assets                                                                 3,258                    2,638
                                                                           -------                  -------

   Total assets                                                            $25,332                  $25,175
                                                                           =======                  =======

LIABILITIES
Current liabilities:
  Accounts payable                                                         $ 2,106                  $ 2,364
  Short-term borrowings                                                        367                      110
  Commercial paper                                                           1,189                    1,192
  Current maturities of long-term debt                                         408                      380
  Accrued liabilities                                                        4,174                    3,168
                                                                           -------                  -------
   Total current liabilities                                                 8,244                    7,214

Long-term debt                                                               3,519                    3,941
Deferred income taxes                                                        1,009                    1,173
Postretirement benefit obligations
  other than pensions                                                        1,883                    1,887
Other liabilities                                                            1,425                    1,253

SHAREOWNERS' EQUITY
Capital - common stock issued                                                  958                      958
        - additional paid-in capital                                         2,969                    2,782
Common stock held in treasury, at cost                                      (4,267)                  (4,296)
Accumulated other nonowner changes                                            (726)                    (729)
Retained earnings                                                           10,318                   10,992
                                                                           -------                  -------
   Total shareowners' equity                                                 9,252                    9,707
                                                                           -------                  -------

   Total liabilities and shareowners' equity                               $25,332                  $25,175
                                                                           =======                  =======

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

                                       3

                          Honeywell International Inc.
                        Consolidated Statement of Income
                                   (Unaudited)

                                                               Three Months Ended              Nine Months Ended
                                                                  September 30,                  September 30,
                                                                ------------------           ----------------------
                                                                2001          2000           2001              2000
                                                                ----          ----           ----              ----
                                                                             (Dollars in millions,
                                                                           except per share amounts)
                                                                                                  
Net sales                                                     $5,789        $6,216         $17,799            $18,569
                                                              ------        ------         -------            -------
Costs, expenses and other
  Cost of goods sold                                           5,368         4,845          15,408             13,966
  Selling, general and administrative
    expenses                                                     803           791           2,408              2,312
  (Gain) on sale of non-strategic
    businesses                                                     -             -               -               (112)
  Equity in (income) loss of affiliated
    companies                                                     17            68             205                 50
  Other (income) expense                                           -           (35)            (18)               (48)
  Interest and other financial charges                            99           125             313                365
                                                              ------        ------         -------            -------
                                                               6,287         5,794          18,316             16,533
                                                              ------        ------         -------            -------

Income (loss) before taxes                                      (498)          422            (517)             2,036
Tax expense (benefit)                                           (190)          140            (300)               631
                                                              ------        ------         -------            -------
Net income (loss)                                             $ (308)       $  282         $  (217)           $ 1,405
                                                              ======        ======         =======            =======

Earnings (loss) per share of common
  stock - basic                                               $(0.38)       $ 0.35         $ (0.27)           $  1.76
                                                              =======       ======         ========           =======

Earnings (loss) per share of common
  stock - assuming dilution                                   $(0.38)       $ 0.35         $ (0.27)           $  1.74
                                                              =======       ======         ========           =======

Cash dividends per share of
  common stock                                                $.1875        $.1875         $ .5625            $ .5625
                                                              ======        ======         =======            =======

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

                                       4

                          Honeywell International Inc.
                      Consolidated Statement of Cash Flows
                                   (Unaudited)

                                                              Nine Months Ended
                                                                 September 30,
                                                             --------------------
                                                               2001        2000
                                                               ----        ----
                                                             (Dollars in millions)

Cash flows from operating activities:
  Net income (loss)                                          $  (217)   $ 1,405
  Adjustments to reconcile net income (loss) to net
   cash provided by operating activities:
    (Gain) on sale of non-strategic businesses                     -       (112)
    Repositioning and other charges                            2,255        556
    Depreciation and amortization                                699        767
    Undistributed earnings of equity affiliates                   11         (7)
    Deferred income taxes                                       (565)       217
    Net taxes paid on sales of businesses                        (12)       (62)
    Other                                                       (433)      (644)
    Changes in assets and liabilities, net of the effects
     of acquisitions and divestitures:
       Accounts and notes receivable                             525        (64)
       Inventories                                              (132)      (133)
       Other current assets                                       13        (87)
       Accounts payable                                         (264)        41
       Accrued liabilities                                      (523)      (524)
                                                             -------    -------
Net cash provided by operating activities                      1,357      1,353
                                                             -------    -------

Cash flows from investing activities:
   Expenditures for property, plant and equipment               (612)      (578)
   Proceeds from disposals of property, plant and
    equipment                                                     45        107
  (Increase) in investments                                        -         (3)
   Cash paid for acquisitions                                   (113)    (2,499)
   Proceeds from sales of businesses                               -        431
  (Increase) in short-term investments                             -        (16)
                                                             -------    -------
Net cash (used for) investing activities                        (680)    (2,558)
                                                             -------    -------

Cash flows from financing activities:
  Net (decrease) increase in commercial paper                     (3)       530
  Net increase (decrease) in short-term borrowings               271       (197)
  Proceeds from issuance of common stock                          71         93
  Proceeds from issuance of long-term debt                         -      1,825
  Payments of long-term debt                                    (401)      (372)
  Repurchases of common stock                                    (30)      (152)
  Cash dividends on common stock                                (457)      (448)
                                                             -------    -------
Net cash (used for) provided by financing activities            (549)     1,279
                                                             -------    -------

Net increase in cash and cash equivalents                        128         74
Cash and cash equivalents at beginning of year                 1,196      1,991
                                                             -------    -------
Cash and cash equivalents at end of period                   $ 1,324    $ 2,065
                                                             =======    =======

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

                                       5

                          Honeywell International Inc.
                          Notes to Financial Statements
                                   (Unaudited)
                 (Dollars in millions except per share amounts)

NOTE 1. In the opinion of management, the accompanying unaudited consolidated
financial statements reflect all adjustments, consisting only of normal
adjustments, necessary to present fairly the financial position of Honeywell
International Inc. and its consolidated subsidiaries at September 30, 2001 and
the results of operations for the three and nine months ended September 30, 2001
and 2000 and cash flows for the nine months ended September 30, 2001 and 2000.
The results of operations for the three- and nine-month periods ended September
30, 2001 should not necessarily be taken as indicative of the results of
operations that may be expected for the entire year 2001.

         The financial information as of September 30, 2001 should be read in
conjunction with the financial statements contained in our Annual Report on Form
10-K for 2000.

NOTE 2.  Accounts and notes receivable consist of the following:

                                                                        September 30,    December 31,
                                                                            2001             2000
                                                                        ------------     ------------
                                                                                   
          Trade                                                             $3,436          $3,967
          Other                                                                657             755
                                                                            ------          ------
                                                                             4,093           4,722
          Less - Allowance for doubtful
                 accounts and refunds                                         (112)            (99)
                                                                            ------          ------

                                                                            $3,981          $4,623
                                                                            ======          ======

NOTE 3. Inventories consist of the following:

                                                                        September 30,    December 31,
                                                                            2001             2000
                                                                        ------------     -----------
                                                                                   
          Raw materials                                                     $1,227          $1,262
          Work in process                                                      951             809
          Finished products                                                  1,796           1,797
                                                                            ------          ------
                                                                             3,974           3,868
          Less - Progress payments                                             (26)             (5)
                 Reduction to LIFO cost basis                                 (136)           (129)
                                                                            ------          ------
                                                                            $3,812          $3,734
                                                                            ======          ======

NOTE 4. Total nonowner changes in shareowners' equity consist of the following:

                                          Three Months Ended         Nine Months Ended
                                             September 30,             September 30,
                                         --------------------      ---------------------
                                           2001         2000         2001         2000
                                           ----         ----         ----         ----
                                                                  
Net income (loss)                         $(308)       $ 282         $(217)      $1,405
Foreign exchange translation
   adjustments                              138         (106)            5         (265)
Derivatives qualifying as
   hedges                                     2           -             (2)           -
Unrealized holding (losses) on
   securities available for sale              -          (34)            -          (32)
                                          -----        -----         -----       ------
                                          $(168)       $ 142         $(214)      $1,108
                                          =====        =====         =====       ======

                                       6

NOTE 5.  Segment financial data follows:

                                          Three Months Ended         Nine Months Ended
                                             September 30,             September 30,
                                         --------------------      ---------------------
                                           2001         2000         2001         2000
                                           ----         ----         ----         ----
                                                                  
Net sales
- ---------
Aerospace                                 $2,372      $2,458       $ 7,315       $ 7,308
Automation and Control Solutions           1,780       1,861         5,309         5,441
Specialty Materials                          775       1,014         2,563         3,100
Transportation and Power
  Systems                                    851         866         2,577         2,665
Corporate                                     11          17            35            55
                                          ------      ------       -------       -------
                                          $5,789      $6,216       $17,799       $18,569
                                          ======      ======       =======       =======

Segment profit
- --------------
Aerospace                                 $  393      $  565       $ 1,348       $ 1,604
Automation and Control Solutions             192         277           566           742
Specialty Materials                          (19)         98            57           300
Transportation and Power
  Systems                                     65          41           178           211
Corporate                                    (32)        (40)         (117)         (109)
                                          ------      ------       -------       -------
  Total Segment Profit                       599         941         2,032         2,748
                                          ------      ------       -------       -------
Gain on sale of non-
  strategic businesses                         -           -             -           112
Equity in income (loss)
  of affiliated companies                     10          31            (5)           49
Other income                                   -          35            23            48
Interest and other
  financial charges                          (99)       (125)         (313)         (365)
Cumulative effect of
  accounting change                            -           -             1             -
Repositioning and other
  charges                                 (1,008)       (460)       (2,255)         (556)
                                          ------      ------       -------       -------

  Income (loss) before taxes              $ (498)     $  422       $  (517)      $ 2,036
                                          ======      ======       =======       =======

In July 2001, the names of our reportable segments were changed. "Aerospace
Solutions" is now "Aerospace", "Automation & Control" is now "Automation and
Control Solutions", "Performance Materials" is now "Specialty Materials", and
"Power & Transportation Products" is now "Transportation and Power Systems."
There were no changes in the strategic business units comprising these segments.

                                       7

NOTE 6. The details of the earnings per share calculations for the three- and
nine-month periods ended September 30, 2001 and 2000 follow:

                                                 Three Months                              Nine Months
                                     ------------------------------------     -----------------------------------
                                                                  Per                                     Per
                                       Income      Average       Share          Income      Average      Share
                                       (Loss)      Shares        Amount         (Loss)      Shares       Amount
                                       ------      ------        ------         ------      ------       ------
                                                                                     
2001
- ----
Earnings (loss) per share of
  common stock - basic                 $(308)       813.3       $(0.38)         $(217)       811.4       $(0.27)
Dilutive securities issuable
  in connection with stock
  plans                                                 -                                        -
                                       -----        -----       ------          -----        -----       ------
Earnings (loss) per share of
  common  stock - assuming
  dilution                             $(308)       813.3       $(0.38)         $(217)       811.4       $(0.27)
                                       =====        =====       ======          =====        =====       ======

                                                 Three Months                              Nine Months
                                     ------------------------------------     -----------------------------------
                                                                  Per                                     Per
                                                   Average       Share                      Average      Share
                                       Income      Shares        Amount         Income      Shares       Amount
                                       ------      ------        ------         ------      ------       ------
                                                                                     
2000
- ----
Earnings per share of
  common stock - basic                  $282        800.7        $0.35          $1,405       799.1        $1.76
Dilutive securities issuable
  in connection with stock
  plans                                               5.7                                      8.9
                                        ----        -----        -----          ------       -----        -----
Earnings per share of common
  stock - assuming dilution             $282        806.4        $0.35          $1,405       808.0        $1.74
                                        ====        =====        =====          ======       =====        =====

As a result of the net loss for the three and nine months ended September 30,
2001, approximately 3.1 and 4.9 million, respectively, of dilutive securities
issuable in connection with stock plans have been excluded from the calculation
of diluted loss per share because their effect would reduce the loss per share.
In addition, 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. For the three- and nine-month periods
ended September 30, 2001, the number of stock options not included in the
computations were 40.8 and 16.9 million, respectively. For the three- and
nine-month periods ended September 30, 2000, the number of stock options not
included in the computations were 30.4 and 15.9 million, respectively. These
stock options were outstanding at the end of each of the respective periods.

NOTE 7. 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. On July 3, 2001, the European Commission
issued its decision prohibiting the proposed merger. Approval by the European
Commission was a condition for completion of the merger. On October 2, 2001,
Honeywell and GE terminated the Merger Agreement by mutual consent and released
each other from claims arising out of the Merger Agreement.

                                       8

NOTE 8. Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities", as amended (SFAS No. 133), was
adopted by 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. For derivatives designated as hedging the value of
assets or liabilities, the changes in the fair values of both the derivatives
and the hedged items are recorded in current earnings. For derivatives
designated as cash flow hedges, the effective portion of the changes in fair
value of the derivatives are recorded in other nonowner changes and subsequently
recognized in earnings when the hedged items impact income. Changes in the fair
value of derivatives not designated as hedges and the ineffective portion of
cash flow hedges are recorded in current earnings.

         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.
As discussed more fully in Note 18 of our 2000 Annual Report on Form 10-K, 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. The January 1,
2001 accounting change described above affected only the pattern and timing of
non-cash accounting recognition.

         The adoption of SFAS No. 133 as of January 1, 2001 resulted in a
cumulative effect adjustment of $1 million of income that is included in other
(income) expense. Additionally, this accounting change did not significantly
impact operating results for the three- and nine-month periods ended September
30, 2001 and is not expected to significantly impact future operating results.

NOTE 9. In the third quarter of 2001, we recognized a repositioning charge of
$568 million related to workforce reductions principally in our Aerospace and
Automation and Control Solutions business segments. The announced workforce
reductions consisted of approximately 11,800 manufacturing and administrative
positions which are expected to be completed by September 30, 2002. The
repositioning charge also included asset impairments and other exit costs
related to the shutdown of our Turbogenerator product line, plant closures and
the rationalization of manufacturing capacity and infrastructure mainly in our
Aerospace, Automation and Control Solutions and Transportation and Power Systems
business segments. The components of the charge included severance costs of $414
million, asset impairments of $86 million and other exit costs of $68 million.
Also, $31 million of accruals established in prior periods, mainly for
severance, were returned to income in the third quarter of 2001, principally due
to higher than expected voluntary attrition in the Aerospace and Automation and
Control Solutions business segments resulting in reduced severance liabilities.

         In the second quarter of 2001, we recognized a repositioning charge of
$151 million for the impairment of three manufacturing facilities and related
workforce reductions in our Specialty Materials business segment. The
repositioning charge also included workforce reductions principally in our
Aerospace Electronic Systems, Home & Building Control and Transportation and
Power Systems businesses. The announced workforce reductions consisted of
approximately 1,700 manufacturing and administrative positions which are
expected to be substantially completed by December 31, 2001. The components of
the charge included severance costs of $54 million, asset impairments of $84
million and other exit costs of $13 million. Also, $28 million of accruals
established in prior periods, principally for severance, were returned to income
in the second quarter of 2001 due to higher than

                                       9

expected voluntary attrition in the Aerospace, Specialty Materials and Corporate
business segments resulting in reduced severance liabilities.

         In the first quarter of 2001, we recognized a repositioning charge of
$297 million for the costs of actions designed to reduce our cost structure and
improve our future profitability. These actions consisted of announced global
workforce reductions of approximately 6,500 manufacturing and administrative
positions across all of our business segments which are expected to be
substantially completed by December 31, 2001. The repositioning charge also
included asset impairments and other exit costs related to plant closures and
the rationalization of manufacturing capacity and infrastructure principally in
our Performance Polymers & Chemicals, Electronic Materials, Transportation and
Power Systems and Automotive Consumer Products Group businesses. The components
of the charge included severance costs of $259 million, asset impairments of $24
million and other exit costs of $14 million.

         As disclosed in our 2000 Annual Report on Form 10-K, we recognized
repositioning charges totaling $338 million in 2000 ($231 and $327 million were
recognized in the three- and nine-month periods ended September 30, 2000,
respectively). The components of the charges included severance costs of $157
million, asset impairments of $141 million and other exit costs of $40 million.
The announced workforce reductions consisted of approximately 2,800
manufacturing and administrative positions and are substantially complete. Also,
$46 million of accruals established in 1999, principally for severance, were
returned to income in the third quarter of 2000 due to higher than expected
voluntary employee attrition resulting in reduced severance liabilities.

         The following table summarizes the status of our total repositioning
costs:

                                     Severance       Asset       Exit
                                       Costs      Impairments    Costs      Total
                                       -----      -----------    -----      -----
                                                             
Balance at December 31, 2000           $236         $  -          $ 80      $  316
2001 charges                            727           194           95       1,016
2001 usage                             (224)         (194)         (38)       (456)
Adjustments                             (56)           -            (3)        (59)
                                       ----         -----         ----      ------

Balance at September 30, 2001          $683         $  -          $134      $  817
                                       ====         =====         ====      ======

         In the third quarter of 2001, we recognized other charges consisting of
probable and reasonably estimable legal and environmental claims of $181
million, an impairment charge of $145 million related to the write-down of
property, plant and equipment, goodwill and other identifiable intangible assets
of our Friction Materials business (designated, in the third quarter, as held
for disposal), $106 million of write-offs principally related to asset
impairments, including receivables and inventories, and loss contracts of $39
million.

          In the second quarter of 2001, we recognized other charges consisting
of $42 million of transaction expenses related to the proposed merger with GE,
customer and employee claims and loss contracts of $140 million, probable and
reasonably estimable legal and environmental claims of $162 million, and $167
million of write-offs principally related to asset impairments, including
receivables and inventories. We also recognized a charge of $17 million related
to an other than temporary decline in value of an equity investment.

          In the first quarter of 2001, we recognized other charges consisting
of customer claims and settlements of contracts and contingent liabilities of
$148 million and write-offs of receivables and inventories of $50 million. We
also

                                       10

recognized charges of $95 million related to an other than temporary decline in
value of an equity investment and an equity investee's loss contract. We also
redeemed our $200 million 5 3/4% dealer remarketable securities due 2011,
resulting in a loss of $6 million.

         In the third quarter of 2000, we recognized other charges consisting of
an impairment charge of $245 million related to the write-down of property,
plant and equipment, goodwill and other identifiable intangible assets of our
Friction Materials business and $30 million of write-offs principally related to
asset impairments, including inventories.

         The following table summarizes the pretax impact of repositioning and
other charges by reportable business segment:

                                                          Periods Ended September 30,
                                                ------------------------------------------------
                                                     Three Months               Nine Months
                                                ----------------------    ----------------------
                                                  2001          2000        2001          2000
                                                  ----          ----        ----          ----
                                                                              
Aerospace                                       $  203          $ 32       $  355         $ 32
Automation and
  Control Solutions                                317            64          785           81
Specialty Materials                                 32           112          242          186
Transportation and
  Power Systems                                    240           243          367          248
Corporate                                          216             9          506            9
                                                ------          ----       ------         ----
                                                $1,008          $460       $2,255         $556
                                                ======          ====       ======         ====

         The following table summarizes the pretax distribution of repositioning
and other charges by income statement classification:

                                                                   Periods Ended September 30,
                                                ----------------------------------------------------------------
                                                     Three Months                            Nine Months
                                                ----------------------                --------------------------
                                                  2001           2000                   2001               2000
                                                  ----           ----                   ----               ----
                                                                                               
Cost of goods sold                              $  916           $361                 $1,898               $457
Selling, general and
   administrative expenses                          65              -                    151                  -
Equity in (income) loss of
   affiliated companies                             27             99                    200                 99
Other (income) expense                               -              -                      6                  -
                                                ------           ----                 ------               ----
                                                $1,008           $460                 $2,255               $556
                                                ======           ====                 ======               ====

NOTE 10. In October 2001, we issued $500 million of 5 1/8% Notes, due 2006, and
$500 million of 6 1/8% Notes, due 2011. Interest on both the 5 1/8% and 6 1/8%
Notes is payable in arrears on May 1 and November 1 of each year, beginning on
May 1, 2002. In October 2001, we also entered into interest rate swap
agreements, which effectively changed $500 million of our 6 7/8% fixed rate
Notes to LIBOR- based floating rate debt.

NOTE 11. LITTON LITIGATION - On March 13, 1990, Litton Systems, Inc. (Litton)
filed a legal action against Honeywell Inc. (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 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

                                       11

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

                                       12

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
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 filed a timely
notice of appeal from that judgment with 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 has
sought 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 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's
appeal to the U.S. Supreme Court will 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

                                       13

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 our financial statements with respect to this contingent liability.

         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.

                                       14

         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
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 our 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 our
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 current and former
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 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 current and former 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 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

                                       15

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. As a result of the uncertainty regarding the outcome of
this matter, no provision has been made in our financial statements with respect
to this contingent liability.

         ENVIRONMENTAL MATTERS - We are subject to various federal, state and
local government requirements relating to the protection of employee health and
safety and 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 personal injury to our employees and employees of our
customers 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, have incurred remedial
response and voluntary cleanup costs for site contamination and are a party to
lawsuits and claims associated with environmental matters, including past
production of products containing asbestos and other toxic substances.
Additional lawsuits, claims and costs involving environmental matters are likely
to continue to arise in the future.

         With respect to environmental matters involving site contamination, 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. With respect to
environmental matters involving the production of products containing asbestos
and other toxic substances, we believe that the costs of defending and resolving
such matters will be largely covered by insurance, subject to deductibles,
exclusions, retentions and policy limits. It is our policy to record appropriate
liabilities for environmental matters when environmental assessments are made or
remedial efforts or damage claim payments are probable and the costs can be
reasonably estimated. With respect to site contamination, the timing of these
accruals is generally no later than the completion of feasibility studies. We
expect that we will be able to fund expenditures for these matters from
operating cash flow. The timing of cash expenditures depends on a number of
factors, including the timing of litigation and settlements of personal injury
and property damage claims, insurance recoveries, regulatory approval of cleanup
projects, remedial techniques to be utilized and agreements with other parties.

         Charges against pretax earnings for legal and environmental claims are
included in the charges for the three- and nine-month periods ended September
30, 2001 described in Note 9 on page 9 of this Form 10-Q. Although we do not
currently possess sufficient information to reasonably estimate the amounts of
liabilities to be recorded upon future completion of studies, litigation or
settlements, and neither the timing nor the amount of the ultimate costs
associated with environmental matters can be determined, they could be material
to our consolidated results of operations. However, considering our past
experience, insurance coverage and reserves, we do not expect that these matters
will have a material adverse effect on our consolidated financial position.

                                       16

                        Report of Independent Accountants

To the Board of Directors and Shareowners
of Honeywell International Inc.

We have reviewed the accompanying consolidated balance sheet of Honeywell
International Inc. and its subsidiaries as of September 30, 2001, and the
related consolidated statements of income for each of the three-month and
nine-month periods ended September 30, 2001 and 2000 and the consolidated
statements of cash flows for the nine-month periods ended September 30, 2001 and
2000. These financial statements are the responsibility of the Company's
management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated interim financial statements for them
to be in conformity with accounting principles generally accepted in the United
States of America.

We previously audited in accordance with auditing standards generally accepted
in the United States of America, the consolidated balance sheet as of December
31, 2000, and the related consolidated statements of income, of shareowners'
equity, and of cash flows for the year then ended (not presented herein), and in
our report dated February 9, 2001, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying consolidated balance sheet information as of December 31, 2000,
is fairly stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.

PricewaterhouseCoopers LLP
Florham Park, NJ
November 2, 2001

                                       17

ITEM 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

A. RESULTS OF OPERATIONS - THIRD QUARTER 2001 COMPARED WITH THIRD QUARTER 2000
   ---------------------------------------------------------------------------

     Net sales in the third quarter of 2001 were $5,789 million, a decrease of
$427 million, or 7 percent compared with the third quarter of 2000. The decrease
in sales is attributable to the following:

                                                    
                  Acquisitions                           - %
                  Divestitures                          (2)
                  Volume/price                          (4)
                  Foreign exchange                      (1)
                                                        ---

                                                        (7)%
                                                        ====

     Segment profit in the third quarter of 2001 was $599 million, a decrease of
$342 million, or 36 percent compared with the third quarter of 2000. Segment
profit margin for the third quarter of 2001 was 10.3 percent compared with 15.1
percent for the third quarter of 2000. The decrease in segment profit in the
third quarter of 2001 was principally the result of a substantial decline in
segment profit for the Aerospace, Automation and Control Solutions and Specialty
Materials segments. The Transportation and Power Systems segment had higher
segment profit. Segment profit is discussed in detail by segment in the Review
of Business Segments section below.

     Equity in (income) loss of affiliated companies was a loss of $17 million
in the third quarter of 2001 compared with a loss of $68 million in the third
quarter of 2000. The third quarters of both 2001 and 2000 included provisions of
$27 and $99 million, respectively, for repositioning and other charges.
Excluding these charges in both periods, equity in (income) loss of affiliated
companies was income of $10 million in the third quarter of 2001 compared with
income of $31 million in the third quarter of 2000. The decrease of $21 million
in equity income was due mainly to a gain from the sale of our interest in an
automotive aftermarket joint venture in the prior year's quarter.

     Other (income) expense was zero in the third quarter of 2001 compared with
$35 million of income in the third quarter of 2000. The decrease of $35 million
in other income was due principally to lower benefits from foreign exchange
hedging and decreased interest income.

     Interest and other financial charges of $99 million in the third quarter of
2001 decreased by $26 million, or 21 percent compared with the third quarter of
2000 due to lower average debt outstanding and lower average interest rates in
the current period.

     The effective tax rate in both the third quarters of 2001 and 2000 included
the impact of repositioning and other charges. Excluding the impact of these
charges in both periods, the effective tax rate was 29.5 percent in the third
quarter of 2001 compared with 30.5 percent in the third quarter of 2000. The
decrease in the effective tax rate related principally to incremental tax
synergies associated with the AlliedSignal and Honeywell Inc. merger in December
1999 and favorable tax audit results.

     Net loss of $308 million, or $(0.38) per share, in the third quarter of
2001 compared with net income of $282 million, or $0.35 per share, in the third
quarter of 2000. Adjusted for repositioning and other charges, net income in the
third quarter of 2001 was $668 million, or $0.82 per share, higher than
reported.

                                       18

Adjusted for repositioning and other charges, net income in the third quarter of
2000 was $331 million, or $0.41 per share, higher than reported. Net income in
the third quarter of 2001 decreased by 41 percent compared with the third
quarter of 2000 if both periods are adjusted to exclude the impact of
repositioning and other charges.

Review of Business Segments
- ---------------------------

         Aerospace sales of $2,372 million in the third quarter of 2001
decreased by $86 million, or 4 percent compared with the third quarter of 2000.
Excluding the effect of divestitures, sales decreased 2 percent. This decrease
principally reflected lower sales to both the commercial air transport and
business and general aviation aftermarket. This decrease was partially offset by
higher sales of original equipment to air transport manufacturers and regional
jet customers. The lower commercial aftermarket sales resulted from the abrupt
downturn in the aviation industry following the terrorists attacks on September
11, 2001 and the already weakened economy. This dramatic downturn in the
commercial air transport industry will continue to negatively impact the
operating results of our aerospace segment in the fourth quarter of 2001 and the
full year 2002. In response, we have accelerated our cost-reduction actions and
further accelerated efforts to improve performance.

         Aerospace segment profit of $393 million in the third quarter of 2001
decreased by $172 million, or 30 percent compared with the third quarter of
2000. This decrease related principally to lower aftermarket sales, engineering
and development costs related to new products, increased sales of lower-margin
original equipment products and the impact of prior year divestitures. This
decrease was partially offset by cost reduction actions, primarily workforce
reductions.

         Automation and Control Solutions sales of $1,780 million in the third
quarter of 2001 decreased by $81 million, or 4 percent compared with the third
quarter of 2000. Excluding the effects of foreign exchange and net divestitures,
sales decreased approximately 2 percent. This decrease resulted primarily from
lower sales for our Control Products business due to a decline in our VCSEL
fiber optic business. Our Enterprise Service and Solutions business also had
lower sales due primarily to weakness in our security monitoring business. This
decrease was partially offset by significantly higher sales for our Industry
Solutions business driven primarily by an increase in our long-term
manageability contracts, our industrial automation offering. Sales were also
slightly higher for our Security and Fire Solutions business.

         Automation and Control Solutions segment profit of $192 million in the
third quarter of 2001 was lower by $85 million, or 31 percent compared with the
third quarter of 2000 due principally to lower volumes in our Control Products
and Enterprise Service and Solutions businesses, higher raw material costs and
pricing pressures across the segment, and the impact of prior year divestitures.
This decrease was partially offset by lower costs due to workforce reductions.

         Specialty Materials sales of $775 million in the third quarter of 2001
decreased by $239 million, or 24 percent compared with the third quarter of
2000. Excluding the effect of net divestitures, sales decreased 19 percent. This
decrease was driven by a substantial decline in sales for our Electronic
Materials business due to weakness in the electronics and telecommunications
markets, including the effects of a broad inventory correction. Sales were also
lower for our Nylon System and Performance Fibers businesses due to weakness in
the carpet and automotive end-markets.

                                       19

         Specialty Materials segment loss of $(19) million in the third quarter
of 2001 compared with segment profit of $98 million in the third quarter of
2000. This decrease resulted primarily from lower volumes and price declines
principally in our Electronic Materials, Nylon System and Performance Fibers
businesses and the impact of prior year divestitures. This decrease was
partially offset by improving raw material costs and the effects of plant
shutdowns and workforce reductions.

         Transportation and Power Systems sales of $851 million in the third
quarter of 2001 decreased by $15 million, or 2 percent compared with the third
quarter of 2000. Excluding the effects of foreign exchange and divestitures,
sales increased 1 percent. Sales were significantly higher for our Turbocharging
Systems business as strong demand continued in the European diesel-powered
passenger car market. This increase was partially offset by lower sales for our
Commercial Vehicle Systems business due to the ongoing decline in heavy-duty
truck builds in North America. Sales for our Friction Materials and Consumer
Products Group businesses also declined due to weakness in automotive
end-markets.

         Transportation and Power Systems segment profit of $65 million in the
third quarter of 2001 increased by $24 million, or 59 percent compared with the
third quarter of 2000 due principally to higher sales in our Turbocharging
Systems business and the fact that the prior year included costs associated with
a product recall in our Commercial Vehicle Systems business.

B. RESULTS OF OPERATIONS - NINE MONTHS 2001 COMPARED WITH NINE MONTHS 2000
   -----------------------------------------------------------------------

     Net sales in the first nine months of 2001 were $17,799 million, a decrease
of $770 million, or 4 percent compared with the first nine months of 2000. The
decrease in sales is attributable to the following:

                                                    
                  Acquisitions                           1 %
                  Divestitures                          (2)
                  Volume/price                          (2)
                  Foreign exchange                      (1)
                                                        ---

                                                        (4)%
                                                        ===

     Segment profit in the first nine months of 2001 was $2,032 million, a
decrease of $716 million, or 26 percent compared with the first nine months of
2000. Segment profit margin for the first nine months of 2001 was 11.4 percent
compared with 14.8 percent for the first nine months of 2000. The decrease in
segment profit in the first nine months of 2001 was principally the result of a
substantial decline in segment profit for the Specialty Materials and Automation
and Control Solutions segments. The Aerospace and Transportation and Power
Systems segments had significantly lower segment profit. Segment profit is
discussed in detail by segment in the Review of Business Segments section below.

     (Gain) on sale of non-strategic businesses of $112 million in the first
nine months of 2000 represented the pretax gain on the government-mandated
divestiture of the former Honeywell's TCAS product line in connection with the
merger of AlliedSignal and Honeywell Inc. in December 1999.

     Equity in (income) loss of affiliated companies was a loss of $205 million
in the first nine months of 2001 compared with a loss of $50 million in the
first nine months of 2000. The first nine months of both 2001 and 2000 included
provisions of $200 and $99 million, respectively, for repositioning and other
charges. Excluding these charges in both periods, equity in (income) loss of
affiliated companies was a loss of $5 million in the first nine months of 2001

                                       20

compared with income of $49 million in the first nine months of 2000. The
decrease of $54 million in equity income was due mainly to a gain from the sale
of our interest in an automotive aftermarket joint venture in the prior year.
Lower earnings from joint ventures principally in our Specialty Materials and
Automation and Control Solutions segments also contributed to the decrease.

     Other (income) expense, $18 million of income in the first nine months of
2001, decreased by $30 million compared with the first nine months of 2000. The
first nine months of 2001 included a net provision of $5 million consisting of a
$6 million charge related to the redemption of our $200 million 5 3/4% dealer
remarketable securities and a $1 million credit recognized upon the adoption of
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended. Excluding this net provision,
other (income) expense was $23 million of income in the first nine months of
2001, a decrease of $25 million compared with the first nine months of 2000 due
to lower benefits from foreign exchange hedging and decreased interest income
partially offset by lower minority interest.

     Interest and other financial charges of $313 million in the first nine
months of 2001 decreased by $52 million, or 14 percent compared with the first
nine months of 2000 due to lower average debt outstanding and lower average
interest rates in the current period.

     The effective tax rate in both the first nine months of 2001 and 2000
included the impact of repositioning and other charges, while the effective tax
rate in the first nine months of 2000 also included the impact of the gain on
the disposition of the TCAS product line of the former Honeywell. Excluding the
impact of these items in both periods, the effective tax rate was 29.5 percent
in the first nine months of 2001 compared with 30.5 percent in the first nine
months of 2000. The decrease in the effective tax rate related principally to
incremental tax synergies associated with the AlliedSignal and Honeywell Inc.
merger in December 1999 and favorable tax audit results.

     Net loss of $217 million, or $(0.27) per share, in the first nine months of
2001 compared with net income of $1,405 million, or $1.74 per share, in the
first nine months of 2000. Adjusted for repositioning and other charges, net
income in the first nine months of 2001 was $1,442 million, or $1.78 per share,
higher than reported. Adjusted for repositioning and other charges and the gain
on the disposition of the TCAS product line of the former Honeywell, net income
in the first nine months of 2000 was $319 million, or $0.40 per share, higher
than reported. Net income in the first nine months of 2001 decreased by 29
percent compared with the first nine months of 2000 if both periods are adjusted
to exclude the impact of repositioning and other charges and the gain on the
disposition of the TCAS product line of the former Honeywell.

Review of Business Segments
- ---------------------------

         Aerospace sales of $7,315 million in the first nine months of 2001 were
basically flat compared with the first nine months of 2000. Sales of original
equipment to air transport manufacturers increased significantly. Sales of
original equipment to business and general aviation customers also increased
slightly. This increase was offset by lower sales to the aftermarket and the
effect of prior year divestitures.

         Aerospace segment profit of $1,348 million in the first nine months of
2001 decreased by $256 million, or 16 percent compared with the first nine
months of 2000. This decrease related principally to higher sales of
lower-margin original equipment products, lower aftermarket volumes, higher
retirement benefit costs,

                                       21

engineering and development costs related to new products, and the impact of
prior year divestitures.

         Automation and Control Solutions sales of $5,309 million in the first
nine months of 2001 decreased by $132 million, or 2 percent compared with the
first nine months of 2000. Excluding the effects of foreign exchange and net
acquisitions, sales decreased approximately 1 percent. Sales for our Industry
Solutions business were higher due principally to an increase in our long-term
manageability contracts. Sales for our Security and Fire Solutions business were
also slightly higher due to our acquisition of Pittway in the prior year. This
increase was more than offset by lower sales for our Control Products and
Enterprise Service and Solutions businesses.

         Automation and Control Solutions segment profit of $566 million in the
first nine months of 2001 was lower by $176 million, or 24 percent compared with
the first nine months of 2000. This decrease resulted principally from lower
sales for our Control Products and Enterprise Service and Solutions businesses,
higher raw material costs and pricing pressures across the segment, higher
retirement benefit costs and the impact of prior year divestitures partially
offset by lower costs due to workforce reductions.

         Specialty Materials sales of $2,563 million in the first nine months of
2001 decreased by $537 million, or 17 percent compared with the first nine
months of 2000. This decrease was driven by a substantial decline in sales for
our Electronic Materials business due to weakness in the electronics and
telecommunications markets and the impact of prior year divestitures. Sales were
also lower in our Nylon System and Performance Fibers businesses.

         Specialty Materials segment profit of $57 million in the first nine
months of 2001 was lower by $243 million, or 81 percent compared with the first
nine months of 2000. This decrease resulted primarily from lower sales in our
Electronic Materials, Nylon System and Performance Fibers businesses, higher
energy and raw material costs and the impact of prior year divestitures.

         Transportation and Power Systems sales of $2,577 million in the first
nine months of 2001 decreased by $88 million, or 3 percent compared with the
first nine months of 2000. Excluding the effects of foreign exchange and net
divestitures, sales were flat. Sales were significantly higher for our
Turbocharging Systems business due to continued strong demand in Europe. This
increase was offset by lower sales for our Commercial Vehicle Systems business
due to decreased heavy-duty truck builds in North America and lower sales for
our Friction Materials and Consumer Products Group businesses due to weakness in
automotive end-markets.

         Transportation and Power Systems segment profit of $178 million in the
first nine months of 2001 decreased by $33 million, or 16 percent compared with
the first nine months of 2000. This decrease principally reflected lower sales
in our Friction Materials and Consumer Products Group businesses and losses
related to our Turbogenerator product line which was shutdown in the third
quarter of 2001.

C. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
   ----------------------------------------------------

         Total assets at September 30, 2001 were $25,332 million, an increase of
$157 million, or 1 percent from December 31, 2000.

                                       22

         Cash provided by operating activities of $1,357 million during the
first nine months of 2001 increased by $4 million compared with the first nine
months of 2000 as improved working capital performance offset the decrease in
earnings.

         Cash used for investing activities of $680 million during the first
nine months of 2001 decreased by $1,878 million compared with the first nine
months of 2000 due principally to the acquisition of Pittway in the prior year.
This decrease was partially offset by the absence of proceeds from sales of
businesses in the current period. We expect our total capital spending in 2001
to be approximately $900 million.

         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.

         Cash used for financing activities of $549 million during the first
nine months of 2001 increased by $1,828 million compared with the first nine
months of 2000 due principally to the issuance of $1 billion of 7.50% Notes and
$750 million of 6.875% Notes in February and September 2000, respectively. Total
debt of $5,483 million at September 30, 2001 was $140 million, or 3 percent
lower than at December 31, 2000. In October 2001, we issued $500 million of 5
1/8% Notes, due 2006, and $500 million of 6 1/8% Notes, due 2011. The net
proceeds of approximately $992 million from this debt offering will be used for
repayment of outstanding debt, including commercial paper, as well as for
general corporate purposes, which may include repurchase of our common stock,
investments in or extensions of credit to our subsidiaries, or the financing of
possible acquisitions or business expansion.

Repositioning Charges
- ---------------------

         In the third quarter of 2001, we recognized a repositioning charge of
$568 million related to workforce reductions principally in our Aerospace and
Automation and Control Solutions business segments. The announced workforce
reductions consisted of approximately 11,800 manufacturing and administrative
positions which are expected to be completed by September 30, 2002. The
repositioning charge also included asset impairments and other exit costs
related to the shutdown of our Turbogenerator product line, plant closures and
the rationalization of manufacturing capacity and infrastructure mainly in our
Aerospace, Automation and Control Solutions and Transportation and Power Systems
business segments. The components of the charge included severance costs of $414
million, asset impairments of $86 million and other exit costs of $68 million.
Also, $31 million of accruals established in prior periods, mainly for
severance, were returned to income in the third quarter of 2001, principally due
to higher than expected voluntary attrition in the Aerospace and Automation and
Control Solutions business segments resulting in reduced severance liabilities.
The net pretax impact of the repositioning charge by business segment was as
follows: Automation and Control Solutions - $180 million; Aerospace - $169
million; Transportation and Power Systems - $93 million; Corporate - $63
million; and Specialty Materials - $32 million.

         In the second quarter of 2001, we recognized a repositioning charge of
$151 million for the impairment of three manufacturing facilities and related
workforce

                                       23

reductions in our Specialty Materials business segment. The repositioning charge
also included workforce reductions principally in our Aerospace Electronic
Systems, Home & Building Control and Transportation and Power Systems
businesses. The announced workforce reductions consisted of approximately 1,700
manufacturing and administrative positions which are expected to be
substantially completed by December 31, 2001. The components of the charge
included severance costs of $54 million, asset impairments of $84 million and
other exit costs of $13 million. Also, $28 million of accruals established in
prior periods, principally for severance, were returned to income in the second
quarter of 2001 due to higher than expected voluntary attrition in the
Aerospace, Specialty Materials and Corporate business segments resulting in
reduced severance liabilities. The net pretax impact of the repositioning charge
by business segment was as follows: Specialty Materials - $96 million;
Corporate - $22 million; Automation and Control Solutions - $8 million;
Transportation and Power Systems - $3 million; and Aerospace - ($6) million.

         In the first quarter of 2001, we recognized a repositioning charge of
$297 million for the costs of actions designed to reduce our cost structure and
improve our future profitability. These actions consisted of announced global
workforce reductions of approximately 6,500 manufacturing and administrative
positions across all of our business segments which are expected to be
substantially completed by December 31, 2001. The repositioning charge also
included asset impairments and other exit costs related to plant closures and
the rationalization of manufacturing capacity and infrastructure principally in
our Performance Polymers & Chemicals, Electronic Materials, Transportation and
Power Systems and Automotive Consumer Products Group businesses. The components
of the charge included severance costs of $259 million, asset impairments of $24
million and other exit costs of $14 million. The pretax impact of the
repositioning charge by business segment was as follows: Automation and Control
Solutions - $132 million; Aerospace - $64 million; Specialty Materials - $44
million; Transportation and Power Systems - $37 million; and Corporate - $20
million.

         As disclosed in our 2000 Annual Report on Form 10-K, we recognized
repositioning charges totaling $338 million in 2000 ($231 and $327 million were
recognized in the three- and nine-month periods ended September 30, 2000,
respectively). The components of the charges included severance costs of $157
million, asset impairments of $141 million and other exit costs of $40 million.
The announced workforce reductions consisted of approximately 2,800
manufacturing and administrative positions and are substantially complete. Also,
$46 million of accruals established in 1999, principally for severance, were
returned to income in the third quarter of 2000 due to higher than expected
voluntary employee attrition resulting in reduced severance liabilities.

         We expect that the repositioning actions committed to in 2001 will
generate pretax savings of approximately $400 million in 2001 and $1.2 billion
in 2002. Cash expenditures for severance and other exit costs necessary to
execute these actions will approximate $800 million. Cash spending for severance
and other exit costs for 2001 and 2000 repositioning actions were $262 million
for the nine months ended September 30, 2001 and were funded through operating
cash flows.

D. OTHER MATTERS
   -------------

     In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" (SFAS No. 144), the provisions of
which are effective for us on January 1, 2002. SFAS No. 144 provides guidance on
the accounting and reporting for the impairment or disposal of long-lived
assets.

                                       24

We are currently evaluating the effect that the adoption of the provisions of
SFAS No. 144 will have on our results of operations and financial position.

     In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, "Accounting for Asset Retirement Obligations" (SFAS No. 143), the
provisions of which are effective for us on January 1, 2003. SFAS No. 143
requires entities to recognize the fair value of a liability for tangible
long-lived asset retirement obligations in the period incurred, if a reasonable
estimate of fair value can be made. We are currently evaluating the effect that
the adoption of the provisions of SFAS No. 143 will have on our results of
operations and financial position.

     In June 2001, the FASB issued Statement of Financial Accounting
Standards No. 141, "Business Combinations" (SFAS No. 141), and Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
(SFAS No. 142). SFAS No. 141 requires that all business combinations initiated
after June 30, 2001 be accounted for using the purchase method only and that
certain acquired intangible assets in a business combination be recognized as
assets apart from goodwill. SFAS No. 142 requires that ratable amortization of
goodwill be replaced with periodic tests of goodwill's impairment and that
intangible assets other than goodwill be amortized over their useful lives. The
amortization provisions of SFAS No. 142 apply to goodwill and intangible assets
acquired after June 30, 2001. With respect to goodwill and intangible assets
acquired prior to July 1, 2001, we are required to adopt SFAS No. 142 effective
January 1, 2002. We are currently evaluating the provisions of SFAS No. 142 and
anticipate net income will increase following adoption as amortization of
recorded goodwill and indefinite-lived intangible assets is discontinued
effective January 1, 2002 under the provisions of this standard.

Report of Independent Accountants
- ---------------------------------

     The "Report of Independent Accountants'" included herein is not a "report"
or "part of a Registration Statement" prepared or certified by an independent
accountant within the meanings of Section 7 and 11 of the Securities Act of
1933, and the accountants' Section 11 liability does not extend to such report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
        ----------------------------------------------------------

     See our 2000 Annual Report on Form 10-K (Item 7A). At September 30, 2001,
there has been no material change in this information. As described in Note 10
on page 11 of this Form 10-Q, in October 2001, we issued $500 million of 5 1/8%
Notes and $500 million of 6 1/8% Notes and also entered into interest rate swap
agreements related to $500 million of our 6 7/8% fixed rate Notes. The following
table illustrates the potential change in fair value as of the date of issuance
for the 5 1/8% and 6 1/8% Notes and the $500 million of interest rate swap
agreements based on a hypothetical immediate one-percentage-point increase in
interest rates.

                              Face or                                   Estimated
                             Notional       Carrying         Fair      (Decrease)
                             Amount(1)      Value(1)       Value(1)   In Fair Value
                             ---------      --------       --------   -------------
                                                              
5 1/8% Notes                  $(500)         $(497)         $(497)       $(22)
6 1/8% Notes                   (500)          (499)          (499)        (37)
Interest Rate Swaps             500            --              --         (16)

(1) Asset or (liability)

                                       25

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
         -----------------

         See Note 11 on page 11 of this Form 10-Q.

ITEM 5.  OTHER INFORMATION
         -----------------

         In order for a shareowner proposal to be considered for inclusion in
         Honeywell's proxy statement for the 2002 Annual Meeting pursuant to
         Rule 14a-8 of the Securities and Exchange Commission (SEC), the
         proposal must be received at our offices a reasonable time before we
         begin to print and mail our proxy materials. Honeywell has set the
         deadline for receipt of such proposals as the close of business on
         February 28, 2002. Proposals submitted thereafter will be opposed as
         not timely filed.

         If a shareowner intends to present a proposal for consideration at the
         2002 Annual Meeting outside the processes of SEC Rule 14a-8, we must
         receive notice of such proposal on or before April 30, 2002. Otherwise
         the proposal will be considered untimely under our By-laws. In
         addition, Honeywell's proxies will have discretionary voting authority
         on any vote with respect to such proposal, if presented at the meeting,
         without including information regarding the proposal in our proxy
         materials.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------

         (a) Exhibits.  The following exhibits are filed with this
             Form 10-Q:

                  3(ii)   By-laws of Honeywell International Inc., as amended

                  10.23   Settlement Agreement between Honeywell International
                          Inc., Honeywell Europe S.A. and their affiliates and
                          Giannantonio Ferrari, dated July 27, 2001.

                  15      Independent Accountants' Acknowledgment Letter as to
                          the incorporation of their report relating to
                          unaudited interim financial statements

         (b) Reports on Form 8-K. The following reports on Form 8-K were filed
             during the three months ended September 30, 2001.

             1.           On July 3, 2001, a report was filed reporting the
                          decision by the European Commission prohibiting the
                          proposed merger of Honeywell and General Electric
                          Company, the retirement of Chairman and CEO Michael R.
                          Bonsignore and the appointment of Lawrence A. Bossidy
                          as Chairman and Chief Executive Officer.
             2.           On July 16, 2001, a report was filed reporting that
                          both Honeywell and General Electric each granted its
                          consent under the Merger Agreement to enable both
                          companies to engage in activities previously
                          prohibited by the Merger Agreement.
             3.           On July 20, 2001, a report was filed reporting the
                          setting of December 7, 2001, as the date for our 2001
                          Annual Shareowners Meeting.

                                       26

                               SIGNATURES

             Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

                                              Honeywell International Inc.

Date: November 14, 2001                   By: /s/ John J. Tus
                                              ----------------------
                                              John J. Tus
                                              Vice President and Controller
                                              (on behalf of the Registrant
                                              and as the Registrant's
                                              Principal Accounting Officer)

                                       27

                                  EXHIBIT INDEX

Exhibit Number                                       Description
- --------------                                       -----------
                                                 
         2                                           Omitted (Inapplicable)

         3(ii)                                       By-laws of Honeywell International Inc., as amended

         4                                           Omitted (Inapplicable)

         10.23*                                      Settlement Agreement between Honeywell
                                                     International Inc., Honeywell Europe
                                                     S.A. and their affiliates and Giannantonio
                                                     Ferrari, dated July 27, 2001

         11                                          Omitted (Inapplicable)

         15                                          Independent Accountants'
                                                     Acknowledgment Letter as to
                                                     the incorporation of their
                                                     report relating to unaudited
                                                     interim financial statements

         18                                          Omitted (Inapplicable)

         19                                          Omitted (Inapplicable)

         22                                          Omitted (Inapplicable)

         23                                          Omitted (Inapplicable)

         24                                          Omitted (Inapplicable)

         99                                          Omitted (Inapplicable)

- ----------

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

                                       28

                                                                   Exhibit 3(ii)

                                     By-laws
                                       of
                          Honeywell International Inc.

Amended as of
July 3, 2001

                                TABLE OF CONTENTS

                                                                                       
ARTICLE I--OFFICES.........................................................................1

   SECTION 1.  Registered Office...........................................................1

   SECTION 2.  Other Offices...............................................................1

ARTICLE II--MEETINGS OF STOCKHOLDERS.......................................................1

   SECTION 1.  Place of Meetings...........................................................1

   SECTION 2.  Annual Meetings.............................................................1

   SECTION 3.  Special Meetings............................................................1

   SECTION 4.  Notice of Meetings..........................................................1

   SECTION 5.  Quorum......................................................................2

   SECTION 6.  Order of Business...........................................................2

   SECTION 7.  Voting......................................................................2

   SECTION 8.  Inspectors..................................................................2

ARTICLE III--DIRECTORS.....................................................................3

   SECTION 1.  Powers......................................................................3

   SECTION 2.  Number, Election and Terms..................................................3

   SECTION 3.  Advance Notice of Stockholder Business and Nominations......................3

   SECTION 4.  Place of Meetings...........................................................6

   SECTION 5.  Regular Meetings............................................................6

   SECTION 6.  Special Meetings............................................................6

   SECTION 7.  Notice of Meetings..........................................................6

                                       i

                                                                                       
   SECTION 8.  Quorum and Manner of Acting..................................................7

   SECTION 9.  Resignation..................................................................7

   SECTION 10.  Removal of Directors........................................................7

   SECTION 11.  Compensation of Directors...................................................7

ARTICLE IV--COMMITTEES OF THE BOARD.........................................................7

   SECTION 1.  Appointment and Powers of Audit Committee....................................7

   SECTION 2.  Other Committees.............................................................8

   SECTION 3.  Action by Consent; Participation by Telephone or Similar Equipment...........8

   SECTION 4.  Changes in Committees; Resignations; Removals................................8

ARTICLE V--OFFICERS.........................................................................9

   SECTION 1.  Number and Qualifications....................................................9

   SECTION 2.  Resignations.................................................................9

   SECTION 3.  Removal......................................................................9

   SECTION 4.  Vacancies....................................................................9

   SECTION 5.  Chairman of the Board........................................................9

   SECTION 6.  Vice Chairman of the Board..................................................10

   SECTION 7.  Chief Executive Officer.....................................................10

   SECTION 8.  President...................................................................10

   SECTION 9.  Vice Presidents.............................................................10

   SECTION 10.  General Counsel............................................................10

   SECTION 11.  Treasurer..................................................................10

   SECTION 12.  Secretary..................................................................10

   SECTION 13.  Controller.................................................................11

   SECTION 14.  Bonds of Officers..........................................................11

                                       ii

                                                                                       
   SECTION 15.  Compensation...............................................................11

   SECTION 16.  Officers of Operating Companies or Divisions...............................11

ARTICLE VI--CONTRACTS, CHECKS, LOANS, DEPOSITS, ETC........................................11

   SECTION 1.  Contracts...................................................................11

   SECTION 2.  Checks, etc.................................................................11

   SECTION 3.  Loans.......................................................................12

   SECTION 4.  Deposits....................................................................12

ARTICLE VII--CAPITAL STOCK.................................................................12

   SECTION 1.  Stock Certificates and Uncertificated Shares................................12

   SECTION 2.  List of Stockholders Entitled to Vote.......................................12

   SECTION 3.  Stock Ledger................................................................12

   SECTION 4.  Transfers of Capital Stock..................................................13

   SECTION 5.  Lost Certificates...........................................................13

   SECTION 6.  Fixing of Record Date.......................................................13

   SECTION 7.  Registered Owners...........................................................13

ARTICLE VIII--FISCAL YEAR..................................................................14

ARTICLE IX--SEAL...........................................................................14

ARTICLE X--WAIVER OF NOTICE................................................................14

ARTICLE XI--AMENDMENTS.....................................................................14

ARTICLE XII--EMERGENCY BY-LAWS.............................................................14

   SECTION 1.  Emergency Board of Directors................................................15

   SECTION 2.  Membership of Emergency Board of Directors..................................15

   SECTION 3.  Powers of the Emergency Board...............................................15

                                      iii

                                                                                       
   SECTION 4.  Stockholders' Meeting.......................................................15

   SECTION 5.  Emergency Corporate Headquarters............................................15

   SECTION 6.  Limitation of Liability.....................................................15

                                      iv

                                     By-laws
                                       of
                          Honeywell International Inc.

                                    ARTICLE I
                                     OFFICES

     SECTION 1. Registered Office. The registered office of Honeywell
International Inc. (hereinafter called the Corporation) within the State of
Delaware shall be in the City of Wilmington, County of New Castle.

     SECTION 2. Other Offices. The Corporation may also have an office or
offices and keep the books and records of the Corporation, except as may
otherwise be required by law, in such other place or places, either within or
without the State of Delaware, as the Board of Directors of the Corporation
(hereinafter called the Board) may from time to time determine or the business
of the Corporation may require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

     SECTION 1. Place of Meetings. All meetings of Stockholders of the
Corporation shall be held at the registered office of the Corporation in the
State of Delaware or at such other place, within or without the State of
Delaware, as may from time to time be fixed by the Board or specified or fixed
in the respective notices or waivers of notice thereof.

     SECTION 2. Annual Meetings. The annual meeting of Stockholders of the
Corporation for the election of directors and for the transaction of any other
proper business shall be held at 10:00 a.m. on the last Monday of April of each
year, or on such other date and at such other time as may be fixed by the Board.
If the annual meeting for the election of directors shall not be held on the day
designated, the Board shall cause the meeting to be held as soon thereafter as
convenient.

     SECTION 3. Special Meetings. Special meetings of Stockholders, unless
otherwise provided by law, may be called at any time by the Board pursuant to a
resolution adopted by a majority of the then authorized number of directors (as
determined in accordance with Section 2 of Article III of these By-laws), or by
the Chief Executive Officer. Any such call must specify the matter or matters to
be acted upon at such meeting and only such matter or matters shall be acted
upon thereat.

     SECTION 4. Notice of Meetings. Notice of each meeting of Stockholders,
annual or special, shall be in writing, shall state the place, date and hour of
the meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the written
notice of any meeting shall be given not less than 10 nor more than 60 days
before the date of the meeting to each Stockholder entitled to vote at the
meeting. If mailed, notice is given when deposited in the United States mail,
postage prepaid, directed to the Stockholder at his address as it appears on the
records of the

Corporation. Unless (i) the adjournment is for more than 30 days, or (ii) the
Board shall fix a new record date for any adjourned meeting after the
adjournment, notice of an adjourned meeting need not be given if the time and
place to which the meeting shall be adjourned were announced at the meeting at
which the adjournment was taken.

     SECTION 5. Quorum. At each meeting of Stockholders of the Corporation, the
holders of a majority of the shares of capital stock of the Corporation entitled
to vote at the meeting, present in person or represented by proxy, shall
constitute a quorum for the transaction of business, except as otherwise
provided by law. In the absence of a quorum, the chairman of the meeting or a
majority in interest of those present in person or represented by proxy and
entitled to vote at the meeting may adjourn the meeting from time to time until
a quorum shall be present.

     SECTION 6. Order of Business. The order of business at all meetings of
Stockholders shall be as determined by the chairman of the meeting.

     SECTION 7. Voting. Except as otherwise provided in the Certificate of
Incorporation, at each meeting of Stockholders, every Stockholder of the
Corporation shall be entitled to one vote for every share of capital stock
standing in his name on the stock record of the Corporation (i) at the time
fixed pursuant to Section 6 of Article VII of these By-laws as the record date
for the determination of Stockholders entitled to vote at such meeting, or (ii)
if no such record date shall have been fixed, then at the close of business on
the day next preceding the day on which notice thereof shall be given. At each
meeting of Stockholders, except as otherwise provided by law or in the
Certificate of Incorporation or these By-laws, in all matters other than the
election of directors, the affirmative vote of the majority of shares present in
person or represented by proxy and entitled to vote on the subject matter shall
be the act of the Stockholders.

     SECTION 8. Inspectors. In advance of any meeting of Stockholders, the Board
shall appoint one or more inspectors to act at the meeting and make a written
report thereof and may designate one or more alternate inspectors to replace any
inspector who fails to act. If no inspector or alternate is able to act at a
meeting, the chairman of the meeting shall appoint one or more inspectors to act
at the meeting. Each inspector shall take and sign such oath and perform such
duties as shall be required by law and may perform such other duties not
inconsistent therewith as may be requested by the Corporation.

                                       2

                                   ARTICLE III
                                    DIRECTORS

     SECTION 1. Powers. The business and affairs of the Corporation shall be
managed by or under the direction of the Board. The Board may exercise all such
authority and powers of the Corporation and do all such lawful acts and things
as are not by law or otherwise directed or required to be exercised or done by
the Stockholders.

     SECTION 2. Number, Election and Terms. The authorized number of directors
may be determined from time to time by vote of a majority of the then authorized
number of directors or by the affirmative vote of the holders of at least 80% of
the voting power of the then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class; provided, however, that such number shall not be
less than 13 nor more than 23, and that such number shall automatically be
increased by two in the event of default in the payment of dividends on the
Preferred Stock under the circumstances described in the Certificate of
Incorporation. The directors, other than those who may be elected by the holders
of the Preferred Stock of the Corporation pursuant to the Certificate of
Incorporation, shall be classified with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as
possible, as determined by the Board, one class to be originally elected for a
term expiring at the annual meeting of Stockholders to be held in 1986, another
class to be originally elected for a term expiring at the annual meeting of
Stockholders to be held in 1987, and another class to be originally elected for
a term expiring at the annual meeting of Stockholders to be held in 1988, with
the members of each class to hold office until their successors have been
elected and qualified. At each annual meeting of Stockholders, the successors of
the class of directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of Stockholders held in
the third year following the year of their election. Except as otherwise
provided in the Certificate of Incorporation, newly created directorships
resulting from any increase in the number of directors and any vacancies on the
Board resulting from death, resignation, disqualification, removal or other
cause shall be filled by the affirmative vote of a majority of the remaining
directors then in office, even if less than a quorum of the Board, or by a sole
remaining director. Any director elected in accordance with the preceding
sentence shall hold office until the annual meeting of Stockholders at which the
term of office of the class to which such director has been elected expires and
until such director's successor shall have been elected and qualified. No
decrease in the number of directors constituting the Board shall shorten the
term of any incumbent director.

     SECTION 3.  Advance Notice of Stockholder Business and Nominations.

          a) Annual Meeting of Stockholders.

               (i) Nominations of persons for election to the Board of Directors
          of the Corporation and the proposal of business to be considered by
          the Stockholders may be made at an annual meeting of Stockholders as
          follows:

                                       3

                    a) pursuant to the Corporation's notice of meeting;
                    b) by or at the direction of the Board of Directors; or
                    c) by any Stockholder of the Corporation who was a
                       Stockholder of record at the time of giving notice
                       provided for in this by-law, who is entitled to vote
                       at the meeting and who complied with the notice
                       procedures set forth in this by-law.

               (ii) For nominations or other business to be properly brought
          before an annual meeting by a Stockholder pursuant to clause c) of
          paragraph (a)(i) of this by-law, the Stockholder must have given
          timely notice thereof in writing to the Secretary, of the Corporation,
          and such other business must be a proper matter for Stockholder
          action. To be timely, a Stockholder's notice shall be delivered to the
          Secretary at the principal executive offices of the Corporation not
          later than the close of business on the 90th day nor earlier than the
          close of business on the 120th day prior to the first anniversary of
          the preceding year's annual meeting; provided, however, that in the
          event that the date of the annual meeting is more than 30 days before
          or more than 60 days after such anniversary date, notice by the
          Stockholder to be timely must be so delivered not earlier than the
          close of business on the 120th day prior to such annual meeting and
          not later than the close of business on the later of the 90th day
          prior to such annual meeting or the 10th day following the day on
          which public announcement of the date of such meeting is first made.
          In no event shall the public announcement of an adjournment of an
          annual meeting commence a new time period for the giving of a
          Stockholder's notice as described above. Such Stockholder's notice
          shall set forth:

                    a) as to each person whom the Stockholder proposes to
               nominate for election or reelection as a director, all
               information relating to such person that is required to be
               disclosed in solicitations of proxies for election of directors
               in an election contest, or is otherwise required, in each case
               pursuant to Regulation 14A under the Securities Exchange Act of
               1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder
               (including such person's written consent to be named in the proxy
               statement as a nominee and to serve as a director if elected);

                    b) as to any other business that the Stockholder proposes to
               bring before the meeting, a brief description of the business
               desired to be brought before the meeting, the reasons for
               conducting such business at the meeting and any material interest
               in such business of such Stockholder and the beneficial owner, if
               any, on whose behalf the proposal is made; and

                    c) as to the Stockholder giving notice and the beneficial
               owner, if any, on whose behalf the nomination or proposal is made
               i) the name and address of such Stockholder, as they appear on
               the Corporation's books, and of such beneficial owner and ii) the
               class and number of shares of the Corporation which are owned
               beneficially and of record by such Stockholder and such
               beneficial owner.

                                       4

          (iii) Notwithstanding anything in the second sentence of paragraph
     (a)(ii) of this by-law to the contrary, in the event that the number of
     directors to be elected to the Board of Directors of the Corporation is
     increased and there is no public announcement naming all of the nominees
     for director or specifying the size of the increased Board of Directors
     made by the Corporation at least 100 days prior to the first anniversary of
     the preceding year's annual meeting, a Stockholder's notice required by
     this by-law shall also be considered timely, but only with respect to
     nominees for any new positions created by such increase, if it shall be
     delivered to the Secretary at the principal executive offices of the
     Corporation not later than the close of business on the 10th day following
     the day on which such public announcement is first made by the Corporation.

               a) Special Meetings of Stockholders. Only such business shall be
          conducted at a special meeting of Stockholders as shall have been
          brought before the meeting pursuant to the Corporation's notice of
          meeting. Nominations of persons for election to the Board of Directors
          may be made at a special meeting of Stockholders at which directors
          are to be elected pursuant to the Corporation's notice of meeting (i)
          by or at the direction of the Board of Directors or (ii) by any
          Stockholder of the Corporation who is a Stockholder of record at the
          time of giving of notice provided for in this by-law, who shall be
          entitled to vote at the meeting and who complies with the notice
          procedures set forth in this by-law. In the event the Corporation
          calls a special meeting of Stockholders for the purpose of electing
          one or more directors to the Board of Directors, any such Stockholder
          may nominate a person or persons (as the case may be), for election to
          such position(s) as specified in the Corporation's notice of meeting,
          if the Stockholder's notice required by paragraph (a)(iii) of this
          by-law shall be delivered to the Secretary at the principal executive
          offices of the Corporation not earlier than the close of business on
          the 120th day prior to such special meeting and not later than the
          close of business on the later of the 90th day prior to such special
          meeting or the 10th day following the day on which public announcement
          is first made of the date of the special meeting and of the nominees
          proposed by the Board of Directors to be elected at such meeting. In
          no event shall the public announcement of an adjournment of a special
          meeting commence a new time period for the giving of a Stockholder's
          notice as described above.

               b) General.

                    (i) Only such persons who are nominated in accordance with
               the procedures set forth in this by-law shall be eligible to
               serve as directors and only such business shall be conducted at a
               meeting of Stockholders as shall have been brought before the
               meeting in accordance with the procedures set forth in this
               by-law. Except as otherwise provided by law or the by-laws of the
               Corporation, the

                                       5

               Chairman of the meeting shall have the power and duty to
               determine whether a nomination or any business proposed to be
               brought before the meeting was made, or proposed, as the case may
               be, in accordance with the procedures set forth in this by-law
               and, if any proposed nomination or business is not in compliance
               with this by-law, to declare that such defective proposal or
               nomination shall be disregarded.

                    (ii) For purposes of this by-law, "public announcement"
               shall mean disclosure in a press release reported by the Dow
               Jones News Service, Associated Press or comparable national news
               service or in a document publicly filed by the corporation with
               the Securities and Exchange commission pursuant to Section 13, 14
               or 15(d) of the Exchange Act.

                    (iii) Notwithstanding the foregoing provisions of this
               by-law, a Stockholder shall also comply with all applicable
               requirements of the Exchange Act and the rules and regulations
               thereunder with respect to the matters set forth in this by-law.
               Nothing in this by-law shall be deemed to affect any rights of a)
               Stockholders to request inclusion in proposals in the
               Corporation's proxy statement pursuant to Rule 14a-8 under the
               Exchange Act or b) the holders of any series of Preferred Stock
               to elect directors under specified circumstances.

     SECTION 4. Place of Meetings. Meetings of the Board shall be held at such
place, within or without the State of Delaware, as the Board may from time to
time determine or as shall be specified or fixed in the notice or waiver of
notice of any such meeting.

     SECTION 5. Regular Meetings. Regular meetings of the Board shall be held in
accordance with a yearly meeting schedule as determined by the Board; or such
meetings may be held on such other days and at such other times as the Board may
from time to time determine. Notice of regular meetings of the Board need not be
given except as otherwise required by these By-laws.

     SECTION 6. Special Meetings. Special meetings of the Board may be called by
the Chief Executive Officer and shall be called by the Secretary at the request
of any two of the other directors.

     SECTION 7. Notice of Meetings. Notice of each special meeting of the Board
(and of each regular meeting for which notice shall be required), stating the
time, place and purposes thereof, shall be mailed to each director, addressed to
him at his residence or usual place of business, or shall be sent to him by
telex, cable or telegram so addressed, or shall be given personally or by
telephone, on 24 hours' notice, or such shorter notice as the person or persons
calling such meeting may deem necessary or appropriate in the circumstances.

                                       6

     SECTION 8. Quorum and Manner of Acting. The presence of at least a majority
of the authorized number of directors shall constitute a quorum for the
transaction of business at any meeting of the Board. If a quorum shall not be
present at any meeting of the Board, a majority of the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present. Except where a
different vote is required by law or the Certificate of Incorporation or these
By-laws, the vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board. Any action required or
permitted to be taken by the Board may be taken without a meeting if all the
directors consent thereto in writing and the writing or writings are filed with
the minutes of proceedings of the Board. Any one or more directors may
participate in any meeting of the Board by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other. Participation by such means shall constitute
presence in person at a meeting of the Board.

     SECTION 9. Resignation. Any director may resign at any time by giving
written notice to the Chairman of the Board, the Chief Executive Officer or the
Secretary, which notice shall be deemed to constitute notice to the Corporation.
Such resignation shall take effect upon receipt of such notice or at any later
time specified therein.

     SECTION 10. Removal of Directors. Subject to the rights of the holders of
Preferred Stock, any director may be removed from office only for cause by the
affirmative vote of the holders of at least 80% of the voting power of all
shares of the Corporation entitled to vote generally in the election of
directors, voting together as a single class.

     SECTION 11. Compensation of Directors. The Board may provide for the
payment to any of the directors, other than officers or employees of the
Corporation, of a specified amount for services as a director or member of a
committee of the Board, or of a specified amount for attendance at each regular
or special Board meeting or committee meeting, or of both, and all directors
shall be reimbursed for expenses of attendance at any such meeting; provided,
however, that nothing herein contained shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.

                                   ARTICLE IV
                             COMMITTEES OF THE BOARD

     SECTION 1. Appointment and Powers of Audit Committee. The Board shall, by
resolution adopted by the affirmative vote of a majority of the authorized
number of directors, designate an Audit Committee of the Board, which shall
consist of such number of directors as the Board may determine and shall be
comprised solely of directors independent of management and free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of independent judgment as a committee member. The Audit Committee
shall (i) make recommendations to the Board as to the independent accountants
to be

                                       7

appointed by the Board; (ii) review with the independent accountants the
scope of their examination; (iii) receive the reports of the independent
accountants and meet with representatives of such accountants for the purpose of
reviewing and considering questions relating to their examination and such
reports; (iv) review, either directly or through the independent accountants,
the internal accounting and auditing procedures of the Corporation and (v)
perform such other functions as may be assigned to it from time to time by the
Board. The Audit Committee may determine its manner of acting and fix the time
and place of its meetings, unless the Board shall otherwise provide. A majority
of the members of the Audit Committee shall constitute a quorum for the
transaction of business by the committee and the vote of a majority of the
members of the committee present at a meeting at which a quorum is present shall
be the act of the committee.

     SECTION 2. Other Committees. The Board may, by the affirmative vote of a
majority of the authorized number of directors, designate members of the Board
to constitute an Executive Committee, a Management Development and Compensation
Committee and other committees of the Board, which shall in each case consist of
such number of directors as the Board may determine, and shall have and may
exercise, to the extent permitted by law, such powers and authority as the Board
may by resolution delegate to them and may authorize the seal of the Corporation
to be affixed to all papers which require it. Each such committee may determine
its manner of acting and fix the time and place of its meetings, unless the
Board shall otherwise provide. A majority of the members of any such committee
shall constitute a quorum for the transaction of business by the committee and
the vote of a majority of the members of such committee present at a meeting at
which a quorum is present shall be the act of the committee.

     SECTION 3. Action by Consent; Participation by Telephone or Similar
Equipment. Unless the Board shall otherwise provide, any action required or
permitted to be taken by any committee may be taken without a meeting if all
members of the committee consent thereto in writing and the writing or writings
are filed with the minutes of proceedings of the committee. Unless the Board
shall otherwise provide, any one or more members of any committee may
participate in any meeting of the committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other. Participation by such means shall constitute
presence in person at a meeting of the committee.

     SECTION 4. Changes in Committees; Resignations; Removals. The Board shall
have power, by the affirmative vote of a majority of the authorized number of
directors, at any time to change the members of, to fill vacancies in, and to
discharge any committee of the Board. Any member of any such committee may
resign at any time by giving written notice to the Chairman of the Board, the
Chief Executive Officer, the Chairman of such committee or the Secretary, which
notice shall be deemed to constitute notice to the Corporation. Such resignation
shall take effect upon receipt of such notice or at any later time specified
therein. Any member of any such committee may be removed at any time, either
with or without cause, by the affirmative vote of a majority of the authorized
number of directors at any

                                       8

meeting of the Board, provided such removal shall have been referred to in the
notice of such meeting.

                                    ARTICLE V
                                    OFFICERS

     SECTION 1. Number and Qualifications. The officers of the Corporation may
include a Chairman of the Board, Vice Chairman of the Board, Chief Executive
Officer, President, one or more Vice Presidents, General Counsel, Treasurer,
Secretary and Controller; provided, however, that any one or more of the
foregoing offices may remain vacant from time to time, except as otherwise
required by law. So far as practicable, the officers shall be elected annually
on the day of the annual meeting of Stockholders. Each officer shall hold office
until the next annual election of officers and until his successor is elected
and qualified, or until his death or retirement, or until he shall have resigned
or been removed in the manner hereinafter provided. The same person may hold
more than one office. The Chairman of the Board, the Vice Chairman of the Board,
the Chief Executive Officer and the President shall be elected from among the
directors. The Board may from time to time elect or appoint such other officers
or agents as may be necessary or desirable for the business of the Corporation.
Such other officers and agents shall have such titles and duties and shall hold
their offices for such terms as may be prescribed by the Board. The Chief
Executive Officer may appoint one or more Deputy, Associate or Assistant
officers, or such other agents as may be necessary or desirable for the business
of the Corporation. In case one or more Deputy, Associate or Assistant officers
shall be appointed, the officer such appointee assists may delegate to him the
authority to perform such of the officer's duties as the officer may determine.

     SECTION 2. Resignations. Any officer may resign at any time by giving
written notice to the Chairman of the Board, the Chief Executive Officer or the
Secretary, which notice shall be deemed to constitute notice to the Corporation.
Such resignation shall take effect upon receipt of such notice or at any later
time specified therein.

     SECTION 3. Removal. Any officer or agent may be removed, either with or
without cause, at any time, by the Board at any meeting, provided such removal
shall have been referred to in the notice of such meeting; provided, further,
that the Chief Executive Officer may remove any agent appointed by the Chief
Executive Officer.

     SECTION 4. Vacancies. Any vacancy among the officers, whether caused by
death, resignation, removal or otherwise, shall be filled in the manner
prescribed for election to such office.

     SECTION 5. Chairman of the Board. The Chairman of the Board shall, if
present, preside at all meetings of the Board and, in the absence of the Chief
Executive Officer, at all meetings of the Stockholders. He shall perform the
duties incident to the office of the Chairman of the Board and all such other
duties as are specified in these By-laws or as shall be assigned to him from
time to time by the Board.

                                       9

     SECTION 6. Vice Chairman of the Board. The Vice Chairman of the Board
shall, if present, preside at all meetings of the Board at which the Chairman of
the Board shall not be present and at all meetings of the Stockholders at which
neither the Chief Executive Officer nor the Chairman of the Board shall be
present. He shall perform such other duties as shall be assigned to him from
time to time by the Board or the Chief Executive Officer.

     SECTION 7. Chief Executive Officer. The Chief Executive Officer shall, if
present, preside at all meetings of the Stockholders. He shall have, under the
control of the Board, general supervision and direction of the business and
affairs of the Corporation. He shall at all times see that all resolutions or
determinations of the Board are carried into effect. He may from time to time
appoint, remove or change members of and discharge one or more advisory
committees, each of which shall consist of such number of persons (who may, but
need not, be directors or officers of the Corporation), and have such advisory
duties, as he shall determine. He shall perform the duties incident to the
office of the Chief Executive Officer and all such other duties as are specified
in these By-laws or as shall be assigned to him from time to time by the Board.

     SECTION 8. President. The President shall be the chief operating officer of
the Corporation and shall perform such duties as shall be assigned to him from
time to time by the Board or the Chief Executive Officer.

     SECTION 9. Vice Presidents. The Board shall, if it so determines, elect one
or more Vice Presidents (with such additional titles as the Board may
prescribe), each of whom shall perform such duties as shall be assigned to him
from time to time by the Chief Executive Officer or such other officer to whom
the Vice President reports.

     SECTION 10. General Counsel. The General Counsel shall be the chief legal
officer of the Corporation and the head of its legal department. He shall, in
general, perform the duties incident to the office of General Counsel and all
such other duties as may be assigned to him from time to time by the Chief
Executive Officer.

     SECTION 11. Treasurer. The Treasurer shall have charge and custody of all
funds and securities of the Corporation, shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Corporation, shall
deposit all funds of the Corporation in such depositaries as may be designated
pursuant to these By-laws, shall receive, and give receipts for, moneys due and
payable to the Corporation from any source whatsoever, shall disburse the funds
of the Corporation and shall render to all regular meetings of the Board, or
whenever the Board may require, an account of all his transactions as Treasurer.
He shall, in general, perform all the duties incident to the office of Treasurer
and all such other duties as may be assigned to him from time to time by the
Chief Executive Officer or such other officer to whom the Treasurer reports.

     SECTION 12. Secretary. The Secretary shall, if present, act as secretary of
all meetings of the Board, the Executive Committee and other committees of the
Board and the Stockholders and shall have the duty to record the proceedings of
such meetings in one or

                                       10

more books provided for that purpose. He shall see that all notices are duly
given in accordance with these By-laws and as required by law, shall be
custodian of the seal of the Corporation and shall affix and attest the seal to
all documents to be executed on behalf of the Corporation under its seal. He
shall, in general, perform all the duties incident to the office of Secretary
and all such other duties as may be assigned to him from time to time by the
Chief Executive Officer or such other officer to whom the Secretary reports.

     SECTION 13. Controller. The Controller shall have control of all the books
of account of the Corporation, shall keep a true and accurate record of all
property owned by it, its debts and of its revenues and expenses, shall keep all
accounting records of the Corporation (other than the accounts of receipts and
disbursements and those relating to the deposit or custody of funds and
securities of the Corporation, which shall be kept by the Treasurer) and shall
render to the Board, whenever the Board may require, an account of the financial
condition of the Corporation. He shall, in general, perform all the duties
incident to the office of Controller and all such other duties as may be
assigned to him from time to time by the Chief Executive Officer or such other
officer to whom the Controller reports.

     SECTION 14. Bonds of Officers. If required by the Board, any officer of the
Corporation shall give a bond for the faithful discharge of his duties in such
amount and with such surety or sureties as the Board may require.

     SECTION 15. Compensation. The salaries of the officers shall be fixed from
time to time by the Board; provided, however, that the Chief Executive Officer
may fix or delegate to others the authority to fix the salaries of any agents
appointed by the Chief Executive Officer.

     SECTION 16. Officers of Operating Companies or Divisions. The Chief
Executive Officer shall have the power to appoint, prescribe the terms of
office, the responsibilities and duties and salaries of, and remove, the
officers of the operating companies or divisions other than those who are
officers of the Corporation.

                                   ARTICLE VI
                    CONTRACTS, CHECKS, LOANS, DEPOSITS, ETC.

     SECTION 1. Contracts. The Board may authorize any officer or officers,
agent or agents, in the name and on behalf of the Corporation, to enter into any
contract or to execute and deliver any instrument, which authorization may be
general or confined to specific instances; and, unless so authorized by the
Board, no officer, agent or employee shall have any power or authority to bind
the Corporation by any contract or engagement or to pledge its credit or to
render it liable pecuniarily for any purpose or for any amount.

     SECTION 2. Checks, etc. All checks, drafts, bills of exchange or other
orders for the payment of money out of the funds of the Corporation, and all
notes or other evidences of indebtedness of the Corporation, shall be signed in
the name and on behalf of the Corporation in such manner as shall from time to
time be authorized by the Board, which authorization may be general or confined
to specific instances.

                                       11

     SECTION 3. Loans. No loan shall be contracted on behalf of the Corporation,
and no negotiable paper shall be issued in its name, unless authorized by the
Board, which authorization may be general or confined to specific instances. All
bonds, debentures, notes and other obligations or evidences of indebtedness of
the Corporation issued for such loans shall be made, executed and delivered as
the Board shall authorize, which authorization may be general or confined to
specific instances.

     SECTION 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositaries as may be selected by or in the
manner designated by the Board. The Board or its designees may make such special
rules and regulations with respect to such bank accounts, not inconsistent with
the provisions of these By-laws, as may be deemed expedient.

                                   ARTICLE VII
                                  CAPITAL STOCK

     SECTION 1. Stock Certificates and Uncertificated Shares. The shares of the
Corporation may be represented by certificates or may be uncertificated. Each
Stockholder shall be entitled to have, in such form as shall be approved by the
Board, a certificate or certificates signed by the Chairman of the Board or the
Vice Chairman of the Board or the President or a Vice President and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
representing the number of shares of capital stock of the Corporation owned by
such Stockholder. Any or all of the signatures on any such certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon any such certificate shall have
ceased to be such before such certificate is issued, such certificate may be
issued by the Corporation with the same effect as if such officer, transfer
agent or registrar had been such at the date of its issue. Absent a specific
request for such a certificate by the registered owner or transferee thereof,
all shares may be uncertificated upon the original issuance thereof by the
Corporation or upon surrender of the certificate representing such shares to the
Corporation or its transfer agent.

     SECTION 2. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
or cause to have prepared, at least 10 days before every meeting of
Stockholders, a complete list of the Stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
Stockholder and the number of shares registered in the name of each Stockholder.
Such list shall be open to the examination of any Stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Stockholder of the
Corporation who is present.

     SECTION 3. Stock Ledger. The stock ledger of the Corporation shall be the
only evidence as to who are the Stockholders entitled to examine the stock
ledger, the list required

                                       12

by Section 2 of this Article VII or the books of the Corporation, or to vote in
person or by proxy at any meeting of Stockholders.

     SECTION 4. Transfers of Capital Stock. Transfers of shares of capital stock
of the Corporation shall be registered on the stock record of the Corporation,
and if requested by the registered owner or transferee thereof, a new
certificate shall be issued to the person entitled thereto, upon presentation
and surrender, with a request to register transfer, of the certificate or
certificates representing the shares properly endorsed by the holder of record
or accompanied by a separate document signed by the holder of record containing
an assignment or transfer of the shares or a power to assign or transfer the
shares or upon presentation of proper transfer instructions from the holder of
record of uncertificated shares. The Board may make such additional rules and
regulations as it may deem expedient concerning the issue and transfer of
certificates representing shares of the capital stock of the Corporation.

     SECTION 5. Lost Certificates. The Corporation may issue uncertificated
shares, or if requested by the registered owner, a new certificate or cause a
new certificate to be issued, in place of any certificate theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming the certificate to be lost,
stolen or destroyed. The Corporation may require the owner of such lost, stolen
or destroyed certificate, or his legal representative, to give the Corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.

     SECTION 6. Fixing of Record Date. In order that the Corporation may
determine the Stockholders entitled to notice of or to vote at any meeting of
Stockholders or any adjournment thereof, the Board may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board and which record date shall not be more than
60 nor less than 10 days before the date of such meeting. A determination of
Stockholders of record entitled to notice of or to vote at a meeting of
Stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board may fix a new record date for the adjourned meeting. In order
that the Corporation may determine the Stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
Stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of capital stock or for the purpose of any other lawful
action, the Board may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted, and which
record date shall be not more than 60 days prior to such action.

     SECTION 7. Registered Owners. Prior to due presentment for registration of
transfer of a certificate representing shares of capital stock of the
Corporation or of proper transfer instructions with respect to uncertificated
shares, the Corporation may treat the registered owner of such shares as the
person exclusively entitled to vote, to receive dividends, to receive
notifications, and otherwise to exercise all the rights and powers of an owner
of such shares, except as otherwise provided by law.

                                       13

                                  ARTICLE VIII
                                   FISCAL YEAR

     The Corporation's fiscal year shall coincide with the calendar year.

                                   ARTICLE IX
                                      SEAL

     The Corporation's seal shall be circular in form and shall include the
words "Honeywell International Inc., Delaware, 1985, Seal."

                                    ARTICLE X
                                WAIVER OF NOTICE

     Whenever any notice is required by law, the Certificate of Incorporation or
these By-laws, to be given to any director, member of a committee or
Stockholder, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.

                                   ARTICLE XI
                                   AMENDMENTS

     These By-laws or any of them may be amended or supplemented in any respect
at any time, either (a) at any meeting of Stockholders, provided that any
amendment or supplement proposed to be acted upon at any such meeting shall have
been described or referred to in the notice of such meeting, or (b) at any
meeting of the Board, provided that any amendment or supplement proposed to be
acted upon at any such meeting shall have been described or referred to in the
notice of such meeting or an announcement with respect thereto shall have been
made at the last previous Board meeting, and provided further that no amendment
or supplement adopted by the Board shall vary or conflict with any amendment or
supplement adopted by the Stockholders. Notwithstanding the preceding sentence,
the affirmative vote of the holders of at least 80% of the voting power of the
then outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to amend or repeal, or adopt any provisions inconsistent with,
Section 3 of Article II of these By-laws, Sections 2 or 10 of Article III of
these By-laws, or this sentence.

                                   ARTICLE XII
                                EMERGENCY BY-LAWS

                                       14

     SECTION 1. Emergency Board of Directors. In case of an attack on the United
States or on a locality in which the Corporation conducts its business or
customarily holds meetings of the Board or the Stockholders, or during any
nuclear or atomic disaster, or during the existence of any catastrophe, or other
similar emergency condition, as a result of which a quorum of the Board or a
committee thereof cannot readily be convened for action in accordance with the
provisions of the By-laws, the business and affairs of the Corporation shall be
managed by or under the direction of an Emergency Board of Directors
(hereinafter called the Emergency Board) established in accordance with Section
2 of this Article XII.

     SECTION 2. Membership of Emergency Board of Directors. The Emergency Board
shall consist of at least three of the following persons present or available at
the Emergency Corporate Headquarters determined according to Section 5 of this
Article XII: (i) those persons who were directors at the time of the attack or
other event mentioned in Section 1 of this Article XII, and (ii) any other
persons appointed by such directors to the extent required to provide a quorum
at any meeting of the Board. If there are no such directors present or available
at the Emergency Corporate Headquarters, the Emergency Board shall consist of
the three highest-ranking officers or employees of the Corporation present or
available and any other persons appointed by them.

     SECTION 3. Powers of the Emergency Board. The Emergency Board will have the
same powers as those granted to the Board in these By-laws, but will not be
bound by any requirement of these By-laws which a majority of the Emergency
Board believes impracticable under the circumstances.

     SECTION 4. Stockholders' Meeting. At such time as it is practicable to do
so the Emergency Board shall call a meeting of Stockholders for the purpose of
electing directors. Such meeting will be held at a time and place to be fixed by
the Emergency Board and pursuant to such notice to Stockholders as it is deemed
practicable to give. The Stockholders entitled to vote at the meeting, present
in person or represented by proxy, shall constitute a quorum.

     SECTION 5. Emergency Corporate Headquarters. Emergency Corporate
Headquarters shall be at such location as the Board or the Chief Executive
Officer shall determine prior to the attack or other event, or if not so
determined, at such place as the Emergency Board may determine.

         SECTION 6. Limitation of Liability. No officer, director or employee
acting in accordance with the provisions of this Article XII shall be liable
except for willful misconduct.

                                       15

                                                                   Exhibit 10.23

                              SETTLEMENT AGREEMENT

This Settlement Agreement and Release is made and entered into this 27th day of
July, 2001 by and between Giannantonio Ferrari (hereinafter "Executive ") on the
one part and Honeywell International, Inc, a Delaware corporation, having its
main offices at 101 Columbia Road, Morristown, New Jersey 07962 and Honeywell
Europe, S.A., a company incorporated in Belgium and having its main offices at
Bourgetlaan 3, 1140 Brussels Belgium and any of their respective present or
future parent corporations, predecessor companies, past, present and future
divisions, subsidiaries, affiliates and related companies and their successors
and assigns (collectively "the Company"), on the other part.

                                   WITNESSETH:

WHEREAS, Executive was hired by the Company on or about March 15, 1960 and he
has since been continuously employed by the Company; and

WHEREAS, Honeywell Europe S.A. and Executive executed an employment contract
dated January 1, 1992 recognizing Executive's appointment as president of
Honeywell Europe S.A. prepared and executed under Belgian law, recognizing prior
seniority with the Company since Executive's date of hire on March 15, 1960; and

WHEREAS, pursuant to a letter dated April 1, 1997, Executive was assigned to the
Company in the United States as President and Chief Operating Officer of
Honeywell Inc., while maintaining Executive's employment relationship with
Honeywell Europe, S.A.; and

WHEREAS, on May 21, 1997, Executive entered into an employment contract with the
Company, replacing and superceding all previous understandings and agreements
and detailing certain of Executive's terms and conditions of employment to be
governed by the laws of the State of Minnesota; and

WHEREAS, on August 17, 1999, Executive entered into a revised employment
contract with the Company, accepting the position of Chief Operating Officer and
Executive Vice President of Honeywell International, Inc., contingent on
completion of the merger of Honeywell Inc. and AlliedSignal Inc.; and

WHEREAS, on January 9, 2001, Executive was notified of his eligibility for
certain benefits under the Corporate Staff Severance Plan of Honeywell
International, Inc. (Benefits Payable on Change of Control), in anticipation of
and contingent on the completion of the contemplated merger of Honeywell
International, Inc. into General Electric Company; and

WHEREAS, following agreement with Executive, the parties now wish to amicably
terminate the employment relationship described above, to avoid any future
disagree-ments by means of this transnational settlement agreement and to
dispose of any other claims whatsoever that either party has or may have against
the other arising out of said termination, including but not limited to, claims
for salaries, indemnities, severance benefits, pension benefits, unemployment
compensation, breach of contract or any other claims, with the exception of
payments and/or benefits described in this agreement; and

WHEREAS, the parties agreed on July 15, 2001 that the employment contract
between Executive and the Company shall be terminated effective August 31, 2001;
and

WHEREAS, Executive will resign effective August 31, 2001 from all positions
within the Honeywell Group; and

NOW, THEREFORE, the parties hereto agree as follows:

This Employment Settlement Agreement and Release ("Settlement Agreement and
Release") confirms the parties' mutual understanding regarding Executive's
rights and benefits under the AlliedSignal Inc. Severance Plan for Senior
Executives ("Senior Severance Plan"), Executive's Change Of Control Severance
Agreement with Honeywell, Inc. dated May 21, 1977, and all other employment
contracts or agreements or other severance indemnities incident to Executive's
termination of employment with the Company. By signing this Settlement Agreement
and Release, Executive hereby acknowledges that the benefits described herein
are in full satisfaction of all rights to termination or severance related
benefits, indemnities, or other payments or benefits for which Executive may
have been eligible or may claim to be eligible under any agreement or promise,
whether written or oral, express or implied, or any Company sponsored severance
plan or program.

Transition Period
- -----------------

Executive will continue to work for the Company from the date hereof until July
31, 2001 ("Last Day Worked"). From August 1, 2001 to August 31, 2001
("Termination Date"), Executive shall take vacation leave so that Executive may
use all of his carry-over and accrued vacation time (the "Vacation Period").
Executive acknowledges and agrees that the Vacation Period represents all of his
accrued, unused vacation entitlements. During the Vacation Period and until such
time as Executive establishes a "Closer Connection" to Italy, but no later than
October 31, 2001, Executive will continue to be eligible for the Cost of Living
and Housing Inpatriate allowances as in effect immediately prior hereto.
Executive's base salary payments will stop on Executive's Termination Date.

2001 Incentive Compensation for Active Employment
- -------------------------------------------------

The Company will pay the Executive, at the same time as annual cash bonuses are
paid to other senior executive officers of the Company in accordance with the
Incentive Compensation Plan for Executive Employees, a prorated annual cash
bonus with respect to Executive's period of active employment during 2001 in an
amount equal to the product of (i) the average annual cash bonus payable to
other senior executives of the Company; (ii) a fraction the numerator of which
is the number of days during 2001 to Executive's Termination Date, and the
denominator of which is 365.

Severance and Bonus Payments
- ----------------------------

Provided that Executive signs and returns this Settlement Agreement and Release
in the form provided to him, the Company will pay Executive at the time
Executive ceases to be a resident of the United States and establishes a "Closer
Connection" to Italy, a severance payment in an amount equal to three times the
sum of (i) Executive's annual base salary (27,540,000 BEF) [US$621,245], as in
effect immediately prior to the date hereof, plus (ii) Executive's target annual
bonus (24,786,000 BEF) [US$559,121] for calendar year 2001 (hereinafter
collectively referred to as "Severance Pay"). In lieu of payment in installments
over a three-year period beginning on the later of Executive's Termination Date
or such time the Executive ceases to be a resident of the United States and
establishes a "Closer Connection" to Italy and ending on August 31, 2004 (the
"Severance Period"), the Company will pay Executive's severance in one lump-sum
payment.

In the event that the IRS determines that Executive is a "disqualified
individual" (as defined in Section 280G of the Internal Revenue Code), and the
Severance Pay provided for in this Section, together with any other payments
which Executive is entitled to receive from the Company, would constitute a
"parachute payment", the Company will reimburse Executive for the excise tax
imposed by Section 4999 of the Internal Revenue Code on the parachute payment
and the income tax on the reimbursement.

All severance payments are subject to applicable taxes and withholdings (i.e.,
Belgian non-resident tax rates as currently utilized). The Company will assist
the Executive to minimize his personal tax obligations provided there are no
additional costs to the Company. In order for the Executive to cease residency
in the United States and establish a "Closer Connection" to Italy he must do the
following:

1.   Lease or buy a residence in Italy;
2.   Vacate his New York City apartment and consign his personal belongings to a
     U.S. Mover for storage and shipment to Italy;
3.   Close bank and securities accounts in the U.S. and open bank and securities
     accounts in Italy;
4.   Physically depart the U.S. with the final destination of Italy; and
5.   Commit not to return to the U.S. for the remainder of 2001 and live
     primarily in Italy.

The Company shall make payment, within twenty days of the Executive furnishing
proof of Points 1 through 4 and a specific written commitment by the Executive
as to point 5.

Stock Options and Restricted Units
- ----------------------------------

o    Vested Options - Executive will have the full term of each grant to
     exercise Executive's vested stock options. The following schedule reflects
     the details of Executive's currently vested stock options:

- ------------------------------------------------------------
    Grant         Vested         Grant        Expiration
     Date         Options        Price           Date
- ------------------------------------------------------------
                                     
   8/19/99          38,626      $61.3166       2/18/07
- ------------------------------------------------------------
   12/3/99         130,000      $63.0000       12/2/09
- ------------------------------------------------------------

o    Unvested Options - except for performance options, all of Executive's
     unvested options will continue to vest in accordance with the terms of
     Executive's stock option grants. The following schedule reflects the
     details of Executive's currently unvested stock options:

- --------------------------------------------------------------------------------------------------------------
    Grant         Unvested         Grant              Vesting                 Vesting            Expiration
     Date          Options         Price            Provisions                 Dates                Date
- --------------------------------------------------------------------------------------------------------------
                                                                                    
    12/3/99         195,000        $63.0000       Vest as Scheduled        97,500 on 1/1/02        12/2/09
                                                                           97,500 on 1/1/03
- --------------------------------------------------------------------------------------------------------------

o    Performance Options - the 108,000 performance options granted to Executive
     on 12/3/99 will terminate and be forfeited on Executive's Termination Date.

o    Performance Restricted Units - the 32,500 performance contingent restricted
     units will be canceled on Executive's Termination Date and Executive shall
     have no right to receive any payment in respect of such restricted units.

Executive shall be responsible for all worldwide income taxes related to the
exercise of stock options and the subsequent sale of stock received. All option
exercises are subject to applicable tax withholdings.

Subject to the terms hereof, Executive's vested options and unvested options
that become exercisable hereby shall be exercisable in accordance with their
terms and the terms of the 1993 Stock Plan for Employees of Honeywell
International Inc. and its Affiliates including without limitation, provisions
related to acceleration upon Change in Control.

Executive may contact the Honeywell Stock Option Service Center at Salomon Smith
Barney at 888-723-3391 to exercise Executive's stock options.

Consideration for the Release
- -----------------------------

The Company offers Executive the Severance Pay and benefits continuation and
Option Vesting ("Consideration") described herein only in exchange and in
consideration for Executive's entering into this Settlement Agreement and
Release in the form provided to Executive. By signing this Settlement Agreement
and Release, Executive agrees that the Consideration described above is (i) in
full payment of all benefits to which Executive may be entitled under any
current or former Company sponsored or Company paid severance pay plans,
policies or indemnities or that may be claimed under applicable laws whether in
the U.S., Belgium, Italy or other European country; and (ii) are in addition to
any other benefit to which Executive may otherwise be entitled under any current
or former Company sponsored or Company paid insurance, employee stock ownership,
vacation, disability, pension or other benefit plans or policies or that may be
claimed under applicable laws whether in the U.S., Belgium, Italy or other
European country. In order to receive the Consideration, Executive must return
this signed Settlement Agreement and Release, in the form in which it is
provided to Executive, to the attention of Donald J. Redlinger, Senior Vice
President, HR and Communications, at Honeywell, 101 Columbia Road, Morristown,
New Jersey 07962, no later than 21 days from the date that Executive receives
this Settlement Agreement and Release. If Executive chooses not to sign this
Settlement Agreement and Release in the form provided to Executive, Executive
will still receive the vacation pay described herein. Executive's group
insurance plan participation will end no later than the month in which
Executive's last day of active employment falls. Other payments and benefits
will end on Executive's last day of active employment.

Pension
- -------

Executive has a vested executive retirement benefit that is described in the
Honeywell Europe Pension Plan a.s.b.l. and as described in Appendix A to this
Settlement Agreement and Release. Executive may arrange for payment of his
pension by contacting John Hacquebard in Brussels at + 32 (2) 728-2356. You will
not be eligible to receive your pension distribution until you cease to be a
resident of the United States and establish a "Closer Connection" to Italy. The
Company shall make payment, within twenty days of the Executive furnishing proof
of a "Closer Connection" to Italy as described on page 4 of this document.

Group Insurance Coverage
- ------------------------

Provided Executive signs and returns the Settlement Agreement and Release in the
form provided to him, Executive may elect to retain his coverage in the
Company's group insurance plans for active employees through the end of the
month in which Executive's Severance ends, August 31, 2004. Since Executive's
severance will be paid as a lump sum, the employee share of any premiums shall
be billed to Executive directly. Failure to make the required premium payments
will result in the cancellation of Executive's group

insurance coverage. However, if Executive becomes re-employed and receives group
insurance coverage with another employer, Executive will cease to be eligible
for group insurance continuation under this Agreement. Notwithstanding the
foregoing, any Long Term Disability coverage and business travel insurance
Executive has will terminate on August 31, 2001. Executive may also elect to
retain any coverage Executive has with CIGNA's Group Universal Life Insurance
Program (GUL) through August 31, 2004. If Executive wishes to continue the GUL
insurance beyond the Severance Period, on a direct pay basis, Executive can
contact CIGNA at 800-243-3264.

Executive's Honeywell Italy group health insurance coverage will expire at the
end of Executive's Severance Period, August 31, 2004. At the end of Executive's
Severance Period, Executive will be eligible for retiree medical benefits
consistent with the terms of the Honeywell Italy Retiree Medical Plan and
Executive's service.

Executive Third Party Liability Insurance Coverage
- --------------------------------------------------

Executive's participation in the Company-sponsored third-party liability
insurance coverage program will expire on August 31, 2001.

Flexible Perquisite Program
- ---------------------------

Participation in this program ends with the payment of Executive's Fourth
Quarter, 2001 payment in the amount of $12,500. The payment will be made in
October and is subject to applicable taxes and withholdings (i.e., Belgian
non-resident tax rates as currently utilized).

Income Tax Equalization for Company-Related Earnings Abroad; Indemnification
- ----------------------------------------------------------------------------

Following termination of Executive's employment, Executive remains eligible for
tax equalization of income taxes relating to Company-related employment earnings
while in the U.S. However, in order to be entitled to post-termination tax
equalization payments, Executive must settle with the Company the full amount of
any existing tax loans or advances, tax equalization calculations (TEQ indicates
Executive will owe the Company) and foreign tax credit carryovers. Deloitte &
Touche will continue (the "Tax Preparer") to prepare Executive's U.S.,
applicable state and non-U.S. income tax returns and will calculate Executive's
tax equalization for the year the Executive's foreign assignment ends and then
one additional calendar year.

Any income tax reimbursement due Executive will first be applied to settle any
outstanding tax loans or advances previously made to Executive; any balance will
be paid to Executive at the conclusion of the tax equalization settlement
process. Likewise, any tax reimbursement due the Company will be added to any
outstanding tax loans or advances previously made to Executive, which Executive
shall repay at the conclusion of the tax equalization settlement process.

Final settlement of 2000 tax equalization issues is expected within 60 days from
the date the tax equalization settlement is prepared by the Tax Preparer. Final
settlement of 2001 tax equalization issues is also expected within 60 days from
the date the tax equalization settlement is prepared by the Tax Preparer.
Executive agrees to cooperate fully with the Tax Preparer in completing the Tax
Preparer's tax organizer forms and filing all income tax returns on a timely
basis. Executive is personally responsible for the payment of any income taxes,
penalties and interest determined to be owing as a result of the tax
equalization settlement process and Executive agrees to make these payments when
due. Executive shall pay to the Company any amounts determined in the Tax
Preparer's final tax equalization settlement report to be owing to the Company
within 30 calendar days of Executive's receipt of the applicable settlement
report. Executive may make repayment by directing the Company to deduct amounts
owed the Company from the next salary continuation payments owing to Executive,
if any. The parties agree that the Company has the right to deduct amounts owed
the Company as a result of the tax equalization settlement process from salary
continuation payments or from any lump sum severance payments to Executive owing
to Executive if, after 30 business days from Executive's receipt of the
settlement report, Executive has not repaid amounts owing and has not directed
the Company to deduct amounts owing from salary continuation.

If any additional income taxes attributable to Executive's Company-related
employment earnings are assessed against Executive after Executive's 2000 and
2001 U.S., applicable state and non-U.S. income tax returns are filed, the
Company shall indemnify Executive for any such additional income taxes owing for
2000 or 2001 that are directly attributable to and resulting from Executive's
assignment inside the U.S., by paying such income taxes, interest and penalties
on Executive's behalf, including a gross-up for any additional income taxes
owing on this payment. The Company's indemnity payments shall be determined and
calculated in a manner consistent with the Company's existing tax equalization
policy as applied by the Tax Preparer.

Repatriation from the United States to Italy
- --------------------------------------------

You are eligible for repatriation based on Honeywell's International Assignment
Policy, which will include the following:

     o    Physical move and insurance of your household goods;
     o    Storage for up to six months (an increase over our policy which is 60
          days);
     o    45 days of temporary living;
     o    Business class airfare for you, your wife and dependant son;
     o    $10,000 for incidental expenses; and
     o    Lease cancellation and apartment closeout expenses, if necessary.

Contingencies
- -------------

In order to receive the benefits under this Settlement Agreement and Release,
Executive must return this signed Settlement Agreement and Release to Donald J.
Redlinger, Senior Vice President, Human Resources and Communications at
Honeywell International Inc., 101 Columbia Road, Morristown, New Jersey 07962,
no later than October 3, 2001.

Provided that Executive has signed and returned this Settlement Agreement and
Release, in the event of Executive's death after Executive's termination date,
payment of any remaining Severance Pay owing under this Settlement Agreement and
Release will be made to Executive's designated beneficiary or, if none, to
Executive's estate. However, employee benefits continuation will generally cease
effective with Executive's death.

In the event that before the end of Executive's Benefit Period, Executive
accepts a position with the Company, all payments and benefits under this
Settlement Agreement and Release will terminate as of the date of Executive's
employment with the Company resumes. In such event, all payments and benefits
paid to Executive before Executive is reinstated or rehired shall be considered
to be valuable legal consideration to which Executive was not otherwise entitled
and the Release of Claims, Confidentiality and Dispute Resolution provisions of
this Settlement Agreement and Release shall remain in effect and fully
enforceable.

Subject to the preceding paragraph, Executive's acceptance of a position with
another company will not affect Executive's eligibility for benefits under this
Settlement Agreement and Release. However, the Company reserves the right to
cancel Executive's benefits in the event that Executive, either before or after
Executive's termination of employment, (a) is convicted of a felony, (b) commits
any fraud or misappropriate property, proprietary information, intellectual
property or trade secrets of the Company for personal gain or for the benefit of
another party, (c) actively recruits and offers employment to any management
employee of the Company, (d) engages in intentional misconduct substantially
damaging to the property or business of the Company, (e) makes false or
misleading statements about the Company or its products, officers or employees
to competitors or customers or potential customers of the Company, or to current
of former employees of the Company, (f) materially breaches any of the terms of
this Settlement Agreement and Release, or (g) engages in any other activity
which the Corporation considers detrimental to its interests, as determined by
the Senior Vice President and General Counsel and the Senior Vice
President-Human Resources and Communications, in their sole discretion.

While receiving Severance Pay, Executive will not be eligible to return to work
at the Company as an employee or as a consultant. While receiving Severance Pay,
and for at least six months after Executive's Severance Pay Period ends,
Executive will not be eligible to return to work at the Company as an employee
of a major Company vendor.

Release Of Claims
- -----------------

In exchange for the Consideration, Executive, Giannantonio Ferrari, hereby
waives and releases, knowingly and willingly, the Company, future parent
corporations, predecessor companies, past, present and future divisions,
subsidiaries, affiliates and related companies and their successors and assigns
and all past, present and future directors, officers, employees and agents of
these entities, personally and as directors, officers, employees and agents
(collectively the "Honeywell Group"):

(1)  from any and all rights and claims of any nature whatsoever Executive has
     or may assert arising out of Executive's employment, Executive's current
     and prior employment contract, written or implied, including, without
     limitation, any and all rights acquired under the Belgian employment
     contract dated January 1, 1992 and Executive's Letter of Assignment dated
     May 21, 1977;

(2)  from any and all rights and claims of any nature that Executive may have or
     may assert arising out of the termination of Executive's employment with
     the Honeywell Group, known or unknown, including but not limited to any
     claims Executive may have under the laws of Belgium, Italy or any other
     European country, and under U.S. federal, state or local employment, labor,
     or anti-discrimination laws, statutes and case law and specifically claims
     arising under the federal Age Discrimination in Employment Act, the Civil
     Rights Acts of 1866 and 1964, as amended, the Americans with Disabilities
     Act, Executive Order 11246, the Employee Retirement Income Security Act,
     the Family and Medical Leave Act, the Rehabilitation Act of 1973, the Fair
     Labor Standards Act, the Labor-Management Relations Act, the Equal Pay Act
     and the Worker Adjustment Retraining and Notification Act, the New Jersey
     Law against Discrimination, as amended, the New Jersey Equal Pay Act, the
     New Jersey Smokers' Rights Law, the New Jersey Family Leave Act, the New
     Jersey Constitution, the New Jersey Conscientious Employee Protection Act,
     New Jersey common law, the Minnesota Human Rights Act, the Minnesota Equal
     Pay Law, the Minnesota Age Discrimination Law, the Minnesota Smokers'
     Rights Law, the Minnesota Parental Leave Act, the Minnesota Constitution,
     Minnesota common law and any and all other applicable national, state,
     county or local statutes, ordinances or regulations and any and all other
     applicable national, state, county or local statutes, ordinances or
     regulations and any other applicable state, county or local law, ordinance
     or statute including claims for attorneys' fees; and

(3)  any right to pursue any of the foregoing through litigation in a court of
     law or administrative agency or tribunal in the United States, Belgium,
     Italy or other European country; provided, however, that this Settlement
     Agreement and Release does not apply to claims for benefits under Honeywell
     Group sponsored benefit plans covered under the Employee Retirement Income
     Security Act (other than claims for severance benefits), does not apply to
     claims arising out of obligations expressly undertaken in this Settlement
     Agreement and Release, and does not apply to claims arising out of any act
     or omission occurring after the date Executive signs this Settlement
     Agreement and Release. Any rights to benefits (other than severance
     benefits), under Honeywell Group sponsored benefit plans are governed
     exclusively by

     the written plan documents. Executive acknowledges and understands that
     Executive has accepted the Consideration referenced in this Settlement
     Agreement and Release in full satisfaction of all claims and obligations of
     the Honeywell Group to Executive regarding any matter or incident up to the
     date Executive executes this Settlement Agreement and Release and Executive
     affirmatively intends to be legally bound thereby.

Executive hereby agrees and acknowledges that Executive is not entitled to
receive any additional payments or benefits from the Honeywell Group related to
Executive's employment or termination of employment other than as expressly
provided herein.

Cooperation and Nondisclosure
- -----------------------------

As further consideration for the benefits Executive receives under this
Settlement Agreement and Release, Executive agrees to cooperate fully with the
Company in any matters as to which Executive is knowledgeable as a result of
Executive's employment with the Company, including, without limitation, matters
that have given or may give rise to a legal claim against the Company. This
requires Executive, without limitation, to (1) make himself available upon
reasonable request to provide information and assistance to the Company on such
matters without additional compensation, except for Executive's out of pocket
costs, (2) maintain the confidentiality of all Company privileged or
confidential information including, without limitation, attorney-client
privileged communications and attorney work product, unless disclosure is
expressly authorized by the Company's law department, and (3) notify the Company
promptly of any requests to Executive for information related to any pending or
potential legal claim or litigation involving the Company, reviewing any such
request with a designated representative of the Company prior to disclosing any
such information, and permitting a representative of the Company to be present
during any communication of such information.

Confidentiality
- ---------------

Executive agrees not to disclose or cause any other person to disclose to third
parties, including employees of the Company, the terms of this Settlement
Agreement and Release; provided, however, that Executive has the right to
disclose the terms of this Settlement Agreement and Release to Executive's
spouse, Executive's financial/tax advisor and Executive's attorney and in
response to a governmental inquiry, including a governmental tax audit or a
judicial subpoena. Executive understands that Executive's breach of this
confidentiality provision shall excuse the Company from performing further under
this Settlement Agreement and Release, and the Company shall be entitled to
repayment of the Consideration provided hereunder upon demand. Executive agrees
that neither this Settlement Agreement and Release nor any version of this
Settlement Agreement and Release shall be admissible in any forum as evidence
against the Company or Executive except in a proceeding to enforce this
Settlement Agreement and

Release. This Settlement Agreement and Release does not constitute an admission
of wrongdoing by either party.

Executive acknowledges and agrees that any agreements signed by Executive
relating to intellectual property and confidential information acquired by
Executive during or as a result of Executive's employment with the Company
remain in full force and effect and place legal obligations upon Executive which
continue beyond Executive's employment with the Company.

Dispute Resolution
- ------------------

In the event of any claim regarding or dispute over the enforceability of this
Settlement Agreement and Release or any part thereof (other than determinations
under ERISA benefit plans), the parties agree to submit such dispute or claim to
binding arbitration; provided, however, that this provision is expressly not
intended to apply to any dispute covered by a claims appeal procedure contained
in any ERISA plan document (other than a severance plan). To be timely filed,
any such claim or dispute must be submitted to the Company for binding
arbitration within the limitations period set by applicable federal or state
law. The arbitrator shall be chosen by mutual agreement between Executive and
the Company from among available arbitrators recommended by the American
Arbitration Association. The arbitration hearing will take place with all due
speed. The costs of arbitration shall be borne equally by Executive and the
Company. The arbitrator shall render an award within 30 days of the arbitration
hearing. The arbitrator shall have no power to amend, add to or subtract from
this Settlement Agreement and Release. The award shall be admissible in any
court or agency action seeking to enforce or render unenforceable this
Settlement Agreement and Release or any portion thereof. Jurisdiction over any
claim or dispute arising with respect to t his Settlement Agreement and Release
shall be governed by U.S. law, in the State of New Jersey; any arbitration or
legal proceeding must take place in Morris County, New Jersey.

Severability; Entire Agreement; No Oral Modifications; No Waivers
- -----------------------------------------------------------------

This Settlement Agreement and Release constitutes a single integrated contract
expressing the entire agreement of the parties with respect to the subject
matter hereof, compromising any and all rights and obligations of the parties,
without exception, and supersedes all prior and contemporaneous oral and written
agreements and discussions with respect to the subject matter hereof. This
Settlement Agreement and Release may be amended or modified only by an agreement
in writing. The failure by the Company to declare a breach or otherwise to
assert its rights under this Settlement Agreement and Release shall not be
construed as a waiver of any right the Company has under this Settlement
Agreement and Release. Should any of the provisions of this Settlement Agreement
and Release (other than the Release and Waiver of Claims) be determined to be
invalid by a court of competent jurisdiction, the parties agree that this shall
not affect the enforceability of the other provisions of the Settlement
Agreement and Release and

the parties shall negotiate the provision or provisions in good faith to
effectuate its or their purpose and to conform the provision or provisions to
law.

Governing Law
- -------------

This Settlement Agreement and Release shall be governed by the laws of the State
of New Jersey, in the United States.

Acknowledgments And Certifications
- ----------------------------------

Executive, Giannantonio Ferrari, acknowledges and certifies that Executive:

(a)      has read and understands all of the terms of this Settlement Agreement
         and Release and does not rely on any representation or statement,
         written or oral, not set forth in this Settlement Agreement and
         Release;

(b)      has had a reasonable period of time to consider this Settlement
         Agreement and Release;

(c)      is signing this Settlement Agreement and Release knowingly and
         voluntarily;

(d)      has been advised to consult with an attorney before signing this
         Settlement Agreement and Release;

(e)      has the right to consider the terms of this Settlement Agreement and
         Release for 21 days and if Executive takes fewer than 21 days to review
         this Settlement Agreement and Release, Executive hereby waives any and
         all rights to the balance of the 21 day review period; and

(f)      has the right to revoke this Settlement Agreement and Release within
         seven days after signing it, by providing written notice of revocation
         to Donald J. Redlinger. If Executive revokes this Settlement Agreement
         and Release during this seven-day period, it becomes null and void in
         its entirety.

THIS IS A LEGALLY ENFORCEABLE DOCUMENT.

IN WITNESS WHEREOF, the parties hereto have hereby executed this Agreement in
duplicate originals on the date first set forth above.

                                           HONEYWELL INTERNATIONAL INC.

Giannantonio Ferrari                            Donald J. Redlinger
_____________________________              By:___________________________
Giannantonio Ferrari                          Donald J. Redlinger
                                              Senior Vice President
                                              Human Resources and Communications

Dated:     September 11, 2001              Dated:      September 17, 2001
      -----------------------                     -----------------------------

                                           HONEYWELL EUROPE S.A.

                                                  R. Peter Mercer
                                           By:___________________________

                                           Dated:     September 20, 2001
                                                  ------------------------------

                                                                      APPENDIX A

                  AGREEMENT ON SUPPLEMENTARY PENSION

BETWEEN:  HONEYWELL EUROPE S.A., having its registered offices at
          Bourgetlaan 3, 1140 Brussels;

          Represented by Mr. Peter Mercer, duly authorised,

          Hereinafter referred to as "The Company",

AND:      Mr. Giannantonio Ferrari, domiciled at 350 East 82nd Street, Apartment
          19C, New-York 10028, USA,

          Hereinafter referred to as "Mr Ferrari",

AFTER HAVING RECITED THAT:

WHEREAS on 6 March 1995 (confirmed on 19 December 1996) the Company undertook to
make the following enhancements to the supplementary pension benefits, which Mr
Ferrari could be entitled to pursuant to his employment within the Company and
Honeywell Group. More specifically, the Company undertook:

1.   to pay out an overall target pension of 70% of the Final Pensionable Salary
     (defined as the average of the Pensionable Salary of the last three years)
2.   after 30 years of service (this enhancement was inserted in the Honeywell
     pension rules under article 1 of the chapter "Special provisions applicable
     to members of the European Policy Committee")
3.   with pension and related benefits calculated on the basis of his full
     career with Honeywell, less those pension and other benefits which will be
     paid from pension or equivalent plans in other countries (In the case at
     hand, the benefits paid under the Italian pension plan are deducted form
     the overall target pension)
4.   without the application of an actuarial reduction after a full career or
     after age 60. (In the case at hand, this enhancement already follows from
     the Honeywell pension rules under articles 1 and 2 of the chapter "Special
     provisions applicable to members

     belonging to pay grade 18 and above and participating in the "Local
     Management Incentive Plan")
5.   and the reduction of the Employee's contributions above the Pension Ceiling
     with 50% on the completion of a full career

WHEREAS the Company also agreed to provide Mr Ferrari the payment of a
supplementary pension benefit by virtue of the supplementary pension promise
agreement of July 24, 1996;

WHEREAS some of these promised enhancements to the pension benefits are not
included in (an enclosure to) the Honeywell pension plan, notwithstanding the
initial intention to do so;

WHEREAS the pension benefits which Mr Ferrari (or, as the case may be, his
surviving spouse and/or son) will be entitled to upon the age of 65 (or,
respectively upon the decease of Mr Ferrari) or upon early retirement as from
age 60, by virtue of the Honeywell pension plan rules, payable by the Honeywell
Pension Fund, can be summarised as follows:

o    Old age/Retirement pension at 62: 307,321.58 euro per year or converted
     into a lump sum pension capital if taken up today upon retirement:
     3,952,548.87 euro;
o    survival spouse pension to the benefit of Mrs Vanda Mazza in the event of
     decease prior to retirement while in service:184,392.95 euro per year;
o    orphan's pension to the benefit of Mr. Luca Angelo Ferrari, until his age
     25 (if full-time studies) /18 (if no full-time studies - see pension rules
     - article 8) in the amount of 61, 464.32 euro per year;
o    if the Old age/Retirement pension is converted into a lump-sum capital, no
     survival spouse pension will be due, since the commutation factor takes
     these benefits into account. The orphan's pension to the benefit of Mr Luca
     Angelo Ferrari will be calculated on the basis of the Old age/Retirement
     pension before commutation.

WHEREAS parties explicitly agree that the Honeywell pension plan rules remain
applicable to Mr Ferrari, it being understood that those enhancements which do
not follow from the Honeywell pension rules are executed by virtue of the
present agreement;

WHEREAS Mr. Ferrari acknowledges and certifies that he has been advised to
consult with an attorney before signing this agreement;

WHEREAS parties have met and have come to the following pension promise
agreement through which they want to execute the promised enhancements which are
not yet inserted in the Honeywell pension plan, but which were agreed upon in
1995-1996 as well as the promised enhancements as laid down in the supplementary
pension promise agreement of July 24, 1996.

IT HAS BEEN AGREED AND ACCEPTED AS FOLLOWS:

Article 1

The present agreement contains a promise by the Company to grant to Mr Ferrari a
supplementary pension ("Old age/ Retirement pension").

Article 2

In recognition of the services which Mr Ferrari performed for the Honeywell
group, the Company agrees to pay to Mr Ferrari an additional Old age/Retirement
pension at the moment of the Normal Retirement Date, or during a period of 5
years preceding the Normal Retirement Date (`Early Retirement'), of which the
amount is determined in article 3 hereunder.

The Normal Retirement Date is the first day of the month following or coinciding
with the 65th birthday of Mr Ferrari.

Article 3

o    If Mr Ferrari retires on the Normal Retirement Date or during 5 years
     preceding said date, the Company will pay him an additional Old
     age/Retirement pension, of which the amount is composed of three
     components: x + y + z,

     whereby x is defined as follows:

x  =     (70% x 1,130,165.25 euro x n/30) - (pension benefit payable/paid by
         the Honeywell Pension Fund by virtue of the Honeywell Plan pension
         rules and/or other Honeywell pension arrangements + pension and other
         benefits payable/paid from pension or equivalent plans in other
         countries), but excluding the amount y and z below.

The difference between the overall target pension (70% x 1,130,165.25 euro x
         n/30) and the pension benefit payable by virtue of other pension or
         equivalent plans and arrangements constitutes x, i.e., the first
         component of the supplementary pension payable to Mr Ferrari by the
         Company in execution of the present individual pension agreement.

         x amounts to 422,448.30 euro per annum. In the event of the death of
         Mr. Ferrari after commencement of the pension, there shall be paid to
         his surviving

         spouse, Mrs. Vanda Mazza, a surviving spouse pension equal to 60% of
         x. The pensions to Mr. Ferrari and to his surviving spouse will be
         paid in monthly instalments, in arrears. The pensions will terminate
         with the monthly instalment immediately preceding or coincident with
         the date of death. On the death of Mr. Ferrari after the commencement
         of the pension, there will be paid an orphan's pension to the benefit
         of Mr. Luca Angelo Ferrari, until his age 25 (if full-time studies)
         /18 (if no full-time studies - see pension rules - article 8) in the
         amount of 84,489.66 euro per year.

         Mr. Ferrari will have the option of converting the above Old
         Age/Retirement and surviving spouse pensions into a capital sum. In
         order to convert the outcome of the above formula into a capital sum,
         the capital sum would amount to 5,433,225.86 euro..

    whereby y is equal to, if expressed as a pension capital, 178,576.41 euro.

    whereby z is equal to, if expressed as a pension capital, 265,457.08 euro,
    or such amount which is equivalent to the proceeds of the Honeywell
    insurance policy with AGF.

Article 4

Mr Ferrari paid, in line with the individual commitment to his benefit, less
personal contributions to the Honeywell Pension Fund, than required by the
Honeywell Pension Plan rules. In order to regularise this situation, Mr Ferrari
agrees to pay a total amount of 139,289.76 euro as arrears of employee
contributions for the period from January 1, 1997 until August 1, 2001.

Article 5

In case of death of Mr Ferrari before commencement of the Old Age pension,
surviving spouse and/or orphan's pensions shall be paid to Mrs. Vanda Mazza
and/or Mr. Luca Angelo Ferrari as described in article 3. In addition the
capital sums equal to y and z mentioned in article 3 will be paid to Mrs. Vanda
Mazza or, in absence to his children.

Article 6

The amounts mentioned in article 3 and 5 are gross amounts from which the
Company shall deduct all applicable social security and tax withholdings.

Article 7

Mr Ferrari, his surviving spouse and/or his children will lose all entitlements
to the benefits provided by the present agreement in the event the employment
contract of Mr Ferrari would be terminated for serious cause.

Article 8

The present agreement shall be governed by Belgian law. Any dispute arising in
connection with it and which cannot be settled on an amicable basis shall be
submitted to the Belgian courts.

Article 9

Without prejudice to the employment contract and its appendix of 6 March 1995
and without prejudice to the Honeywell Pension Plan rules, the present agreement
supersedes any other agreement which may have existed between the Company and Mr
Ferrari, particularly the Interoffice Correspondence note of 6 March 1995, the
"Annex to the rules of the Honeywell Europe Pension Plan a.s.b.l." of 19
December 1996 and the supplementary pension promise agreement of July 24, 1996.
It may only be modified with the written consent of both parties.

Article 10

Parties expressly agree not to disclose any information regarding the content of
this agreement, unless if they are legally obliged to do so.

                                        *
                                       * *

Executed in two original copies and in good faith, each party acknowledging
having received one copy, duly signed by each party.

At Brussels, Belgium on August 16, 2001,

For the Company                                      For the Employee
(read and approved)                                  (read and approved)
- -----------------                                    -------------------
Mr.Peter Mercer                                      Mr Giannantonio Ferrari
Vice President HR Europe

                                                          APPENDIX A (Continued)

                   AGREEMENT CONTAINING AN ENUMERATION OF Mr.
                         FERRARI'S BENEFIT ENTITLEMENTS

BETWEEN: HONEYWELL EUROPE S.A., having its registered offices at
         Bourgetlaan 3, 1140 Brussels;

         Represented by Mr. Peter Mercer, duly authorised,

         Hereinafter referred to as "The Company",

AND:     The HONEYWELL PENSION PLAN A.S.B.L./V.Z.W., having its
         offices at Bourgetlaan 3, 1140 Brussels and registered under the
         number 50.271;

         Represented by Mr. Joseph Hacquebard, duly authorised,

         Hereinafter referred to as "The Honeywell Pension Fund",

AND:     Mr. Giannantonio Ferrari, domiciled at 350 East 82nd Street, Apartment
         19C, New York 10028, USA,

         Hereinafter referred to as "Mr Ferrari",

IT HAS BEEN AGREED AND ACCEPTED AS FOLLOWS:

Article 1

The pension benefits which Mr Ferrari (or, as the case may be, his surviving
spouse and/or orphan) will be entitled to upon the age of 65 (or, respectively
upon the decease of Mr Ferrari) or upon early retirement as from age 60, by
virtue of the Honeywell pension plan rules, payable by the Honeywell Pension
Fund, can be summarised as follows:

o    Old age/Retirement pension at 62: 307,321.58 euro per year or converted
     into a lump sum pension capital if taken up today upon retirement:
     3,952,548.87 euro;
o    survival spouse pension to the benefit of Mrs Vanda Mazza in the event of
     decease prior to retirement while in service:184,392.95 euro per year;

o    orphan's pension to the benefit of Mr. Luca Angelo Ferrari, until his age
     25 (if full-time studies) /18 (if no full-time studies - see pension rules
     - article 8) in the amount of 61, 464.32 euro per year;
o    if the Old age/Retirement pension is converted into a lump-sum capital, no
     survival spouse pension will be due, since the commutation factor takes
     these benefits into account. The orphan's pension to the benefit of Mr Luca
     Angelo Ferrari will be calculated on the basis of the Old age/Retirement
     pension before commutation.

Article 2

In recognition of the services which Mr Ferrari performed for the Honeywell
group, the Company agreed to pay to Mr Ferrari an additional Old age/Retirement
pension (or equivalent lump sum pension capital) at the moment of the Normal
Retirement Date, or during a period of 5 years preceding the Normal Retirement
Date (`Early Retirement'). This additional Old age/Retirement pension (or
equivalent lump sum pension capital) is regulated by the agreement on
supplementary pension, which Mr Ferrari and the Company concluded on August 16,
2001.

Article 3

Mr. Ferrari recognises and agrees that the amounts which will be paid to him in
execution of the Honeywell pension plan rules and the agreement on supplementary
pension of August 16, 2001 will be paid in full and final settlement of any and
all sums generally whatsoever, and more in particular related to all
supplementary pension benefits, that he might have in connection with the
conclusion, the execution or termination of the employment contract or the past
contractual relations with the Company, any company or entity in the Honeywell
group of which the Company is a part or the Honeywell Pension Fund.

The present agreement is limited to determining such rights and obligations and
does on itself not create any new rights and obligations.

Article 4

Through compliance with the obligations mentioned in this agreement, Mr. Ferrari
irrevocably waives his right to bring or commence a lawsuit against the Company,
any company or entity in the Honeywell group of which the Company is a part or
the Honeywell Pension Fund, for whatever reason or on whatever grounds this may
be and more in particular related to his supplementary pension benefits, which
would find its origin in the conclusion, the execution or termination of the
employment contract or in their past contractual relations or relations with any
company or entity in the Honeywell group of which the Company is a part or with
the Honeywell Pension Fund.

More in particular, Mr. Ferrari expressly waives the right to file a subsequent
claim of whatever nature and waives any right he might have or have had towards
the Company, any company or entity in the Honeywell group of which the Company
is a part or the Honeywell Pension Fund by reason of the conclusion, the
execution or termination of his professional activities within the Company or
any company or entity in the Honeywell group of which the Company is a part.

Each party also waives the right to avail itself of any errors as to law or fact
and any omissions relating tot the existence of and/or the extent of its rights.

Article 5

Parties expressly agree not to disclose any information regarding the company,
unless if they are legally obliged to do so.

Executed in two original copies and in good faith, each party acknowledging
having received one copy, duly signed by each party.

At Brussels, Belgium on September 1, 2001,

For the Company
(read and approved)                                  (read and approved)
- -----------------                                    ----------------
Mr. Peter Mercer                                     For Mr. Ferrari
Vice President HR Europe

For the Honeywell Pension Fund
(read and approved)
- ----------------
Mr. Joseph Hacquebard
Secretary of the Honeywell Pension Fund

                                                          APPENDIX A (Continued)

                            DECLARATION - MR. FERRARI

I, the undersigned, Giannantonio Ferrari, domiciled at 350 East 82nd Street,
Apartment 19C, New York 10028, USA;
hereby explicitly declare, after having been duly informed, that I accept and
agree that the commitments of Honeywell Europe SA , as they result from the
Interoffice Correspondence note of 6 March 1995 and the document titled
"Annex to the rules of the Honeywell Europe Pension Plan a.s.b.l." dated 19
December 1996, to enhance my supplementary pension benefits under the Honeywell
pension plan (i.e., (i) defining the pension benefit as 70% of the average of
the Pensionable salary of the last three years of my Pensionable Service and
(ii) reducing the personal contributions above the Pension Ceiling with 50%),
are properly implemented by [through the conclusion of] the individual pension
promise agreement, signed on August 16, 2001 (and not by virtue of an enclosure
to the pension plan rules, as mentioned at the time Honeywell Europe SA
undertook to make these enhancements in the Honeywell pension plan). The
undersigned acknowledge that the pension rules of the Honeywell Pension Fund
have never been amended in order to reflect the above enhancements. The
undersigned accept that the rules will not be amended in this respect and that
they will therefore receive benefits, as the case may be, from (i) the Honeywell
Pension Fund as regards the benefits defined in the attached pension rules
(where the interest rate mentioned in the plan rules annex describing the
technical basis has changed from 7% to 6%, as imposed by the Belgian
legislation), including benefits payable from pension or equivalent plans in
other countries and (ii) by virtue of/in execution of the individual pension
agreement signed on August 16, 2001. I, the undersigned, Giannantonio Ferrari,
acknowledge and accept that the benefit statement, attached to this declaration
is completed in accordance with the pension plan rules of the Honeywell Pension
Fund.

Since the benefits to which I, the undersigned, Giannantonio Ferrari, am
entitled, may, as the case may be, enure to the benefit of my spouse, Mrs Vanda
Mazza, and my son Luca Angelo Ferrari (under the form of a survivor spouse
pension and an orphan's pension, as derivative rights), the latter are
co-signing the present declaration and are thus acknowledging their agreement
with the content thereof.

All the undersigned hereby expressly release Honeywell Europe SA, its
predecessors, successors and all other companies of the Honeywell group as well
as the Honeywell Pension Fund, which will pay the supplementary pension
benefits, from the obligation to draft an enclosure to the Honeywell pension
plan rules for the execution of the promised enhancements to the supplementary
pension benefits.

Moreover, the undersigned expressly acknowledge that the Honeywell Pension Fund
is released from paying any benefits other than those resulting from the pension
rules which are attached to the present (where the interest rate mentioned in
the plan rules annex describing the technical basis has changed from 7% to 6%,
as imposed by the Belgian legislation), as reflected in the attached Benefit
Statement (established per 1/1/2001).

Executed in good faith in four original copies and of which one will be given to
Mr. Joseph Hacquebard for Honeywell Europe SA and the three others to the
undersigned.

At Brussels, Belgium on September 1, 2001,

(read and approved)
- -----------------
Mr. Giannantonio Ferrari

(read and approved)                                  (read and approved)
- ----------------                                     ---------------
Mrs. Vanda Mazza                                     Mr. Luca Angelo Ferrari

Encl.:   1.       Applicable Pension rules
         2.       Benefit statement 2001

                                                                      Exhibit 15

November 14, 2001

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC  20549

Commissioners:

We are aware that our report dated November 2, 2001 on our review of interim
financial information of Honeywell International Inc. (the "Company") as of and
for the period ended September 30, 2001 and included in the Company's quarterly
report on Form 10-Q for the quarter then ended is incorporated by reference in
the Company's 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).

Very truly yours,

PricewaterhouseCoopers LLP