As Filed Pursuant to Rule 424(b)(5)
Registration No. 333-45466
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 14, 2000)
$1,000,000,000
[LOGO]
HONEYWELL INTERNATIONAL INC.
101 COLUMBIA ROAD
MORRIS TOWNSHIP, NEW JERSEY 07962
(973) 455-2000
$500,000,000 5 1/8% NOTES DUE 2006
$500,000,000 6 1/8% NOTES DUE 2011
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The notes due 2006 will bear interest at the rate of 5 1/8% per year and
will mature on November 1, 2006. The notes due 2011 will bear interest at the
rate of 6 1/8% per year and will mature on November 1, 2011. Interest on the
notes is payable in arrears on May 1 and November 1 of each year, beginning on
May 1, 2002.
Application has been made to list the notes on the Luxembourg Stock
Exchange.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
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PROCEEDS TO US
PUBLIC OFFERING UNDERWRITING (BEFORE
PRICE DISCOUNT EXPENSE)
----- -------- --------
Per Note due 2006........................ 99.460% 0.350% 99.110%
Total................................ $497,300,000 $1,750,000 $495,550,000
Per Note due 2011........................ 99.867% 0.450% 99.417%
Total................................ $499,335,000 $2,250,000 $497,085,000
Interest on the notes will accrue from October 30, 2001 to the date of
delivery.
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The underwriters are offering the notes subject to various conditions. The
underwriters expect to deliver the notes to purchasers in book-entry form only
through the facilities of The Depository Trust Company, Clearstream, Luxembourg
or the Euroclear System, as the case may be, on or about October 30, 2001.
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BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL
SALOMON SMITH BARNEY
--------------
DEUTSCHE BANC ALEX. BROWN
HSBC
JPMORGAN
BNY CAPITAL MARKETS, INC.
TOKYO-MITSUBISHI INTERNATIONAL PLC
October 25, 2001
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION PROVIDED BY THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS ACCURATE AS OF ANY DATE
OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS SUPPLEMENT.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
About Honeywell............................................. S-4
Summary Financial Information............................... S-7
Capitalization.............................................. S-9
Ratio of Earnings to Fixed Charges.......................... S-9
Use of Proceeds............................................. S-10
Directors and Executive Officers............................ S-11
Description of the Notes.................................... S-12
United States Federal Taxation.............................. S-18
Underwriting................................................ S-22
Legal Matters............................................... S-24
Where You Can Find More Information......................... S-24
General Information......................................... S-25
PROSPECTUS
About This Prospectus....................................... 2
Honeywell .................................................. 2
Ratio of Earnings to Fixed Charges.......................... 2
Use of Proceeds............................................. 2
Description of Debt Securities.............................. 3
Description of Preferred Stock.............................. 8
Description of Common Stock................................. 11
Book-Entry Issuance......................................... 12
Plan of Distribution........................................ 13
Experts..................................................... 14
Legal Opinions.............................................. 15
Where You Can Find More Information About Honeywell......... 15
Cautionary Statement Concerning Forward-Looking
Statements................................................ 16
All references to 'we,' 'us,' 'our' and 'Honeywell' in this prospectus
supplement refer to Honeywell International Inc. and its consolidated
subsidiaries, unless the context otherwise requires.
S-2
This prospectus supplement and the accompanying prospectus include
particulars given in compliance with the rules governing the listing of
securities on the Luxembourg Stock Exchange for the purpose of giving
information with regard to Honeywell. Honeywell accepts responsibility for the
information contained in this prospectus supplement and the accompanying
prospectus. The Luxembourg Stock Exchange takes no responsibility for the
contents of this document, makes no representation as to its accuracy or
completeness and expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the contents
of this prospectus supplement and the accompanying prospectus.
We cannot guarantee that listing will be obtained on the Luxembourg Stock
Exchange. Inquiries regarding our listing status on the Luxembourg Stock
Exchange should be directed to our Luxembourg listing agent, Deutsche Bank
Luxembourg S.A., 2 Boulevard Konrad Adenauer, L-1115 Luxembourg.
Copies of this prospectus supplement and the accompanying prospectus and the
documents incorporated herein and therein by reference will be available free of
charge at the office of Deutsche Bank Luxembourg, S.A., 2 Boulevard Konrad
Adenauer, L-1115 Luxembourg.
The notes are offered globally for sale in those jurisdictions in the United
States, Europe, Asia and elsewhere where it is lawful to make such offers. The
distribution of this prospectus supplement and the accompanying prospectus and
the offering of the notes in certain jurisdictions may be restricted by law.
Persons who receive this prospectus supplement and the accompanying prospectus
should inform themselves about and observe any such restrictions. This
prospectus supplement and the accompanying prospectus do not constitute, and may
not be used in connection with, an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation. See
'Underwriting'.
References herein to '$' and 'dollars' are to United States dollars.
S-3
ABOUT HONEYWELL
Honeywell is a diversified technology and manufacturing leader, serving
customers worldwide with aerospace products and services; control technologies
for buildings, homes and industry; specialty chemicals; fibers; plastics;
electronic and advanced materials; and automotive products. We employ
approximately 120,000 people in 95 countries. Honeywell was incorporated in
Delaware in 1985.
OUR BUSINESSES
AEROSPACE. We consider ourselves to be the world's premier supplier of
aircraft engines and systems, avionics and other products and services for
commercial transport, regional and business aviation, military aircraft and
spacecraft.
Our industry-leading technology and customer focus have consistently earned
us high ranking among the world's most-respected aerospace companies. We partner
with the industry's leading customers to produce superior products such as:
Turbofan, turboprop and turboshaft propulsion engines;
Auxilliary power units;
Integrated avionics systems and products;
Environmental control systems; and
Aircraft landing systems.
We also provide services such as:
Repair and overhaul services;
Aerospace spare parts;
Hardware and logistics support; and
Management and technical services for space and communications facilities.
AUTOMATION AND CONTROL SOLUTIONS. More than 100 million households around
the world trust our Automation and Control Solutions businesses to create
efficient, safe, comfortable indoor environments. Managers of commercial
buildings -- from arenas, to office complexes, to restaurants -- turn to us to
reduce operating expenses and improve safety and efficiency. We are also a
global leader in solutions for industrial plants, offering advanced software and
automation systems that integrate, control and monitor complex processes in many
types of industrial settings. Our customers are from such industries as
manufacturing, oil and gas production, food processing and utilities. Products
and services we offer include:
Controls for ventilation, humidification and air-conditioning equipment;
Security and fire alarm systems;
Home automation systems;
Energy-efficient lighting;
Building management systems and services; and
Sensors, switches, control systems and instruments that measure pressure,
airflow, temperature and electrical current.
SPECIALTY MATERIALS. We are a world leader in producing high-performance
specialty materials for use by our customers in industries as diverse as
telecommunications, electronics, carpet-manufacturing and candle-making.
We are a world leader in the production of nylon, polyester, polyethylene,
fluoropolymer, caprolactam and specialty and fine chemicals. Our Anso'r'
carpet-fiber brand is one of the world's best known, and Spectra'r' is the
world's strongest and lightest manmade fiber, used in bullet-proof vests and
boat sails. Our innovative AstorLite'r' additive changes the crystal structure
of wax to make candles stronger, more colorful and longer lasting. Our
Genetron'r' chemicals are among the
S-4
leading environmentally responsible fluorocarbons, used in air-conditioning,
refrigeration and insulation to replace ozone-depleting chemicals.
Our Electronic Materials business is one of the top five providers of
materials and solutions to the electronics industry, as we manufacture a full
line of products for producing advanced integrated circuits.
TRANSPORTATION AND POWER SYSTEMS. Our Transportation and Power Systems
segment is comprised of our Garrett'r' Engine Boosting Systems, Bendix'r'
Commercial Vehicle Systems, Consumer Products Group and Friction Materials
businesses.
Innovative and well-known products from our Transportation and Power Systems
segment improve the performance, safety, efficiency and appearance of cars,
trucks and other vehicles around the world.
Our Garrett'r' Engine Boosting Systems business is the world's leading
provider of turbochargers for passenger cars, light trucks and commercial
vehicles. Our engine boosting expertise saves fuel and reduces emissions without
sacrificing engine performance.
Consumer automotive products from our Consumer Products Group business are
industry leaders. Prestone'r' antifreeze/coolant is the best-selling brand in
North America. Autolite'r' platinum spark plugs are driving new growth by
setting the standard for precision and longevity. FRAM'r' automotive filters
stand as the market leader and prime innovator. Holt Lloyd, the leading European
retail automotive product supplier, has helped us expand our international
market presence. Our Bendix'r' Commercial Vehicle Systems joint venture is a
leading supplier of braking systems for trucks and other commercial vehicles.
Honeywell Friction Materials are used by the world's major car, truck and brake
manufacturers.
RECENT DEVELOPMENTS
On October 22, 2000, Honeywell and General Electric Company (GE) entered
into an Agreement and Plan of Merger 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.
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 reportable 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
reportable 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, principally
for severance, were returned to income in the third quarter of 2001 due to
higher than expected voluntary attrition in the Aerospace and Automation and
Control Solutions reportable segments.
In the third quarter of 2001, we also 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, $106 million of other write-offs principally
related to asset impairments, including receivables and inventory, and loss
contracts of $39 million.
Total net pre-tax repositioning and other charges in the third quarter of
2001 were $1,008 million (after-tax $668 million).
S-5
SEGMENT FINANCIAL DATA
We evaluate segment performance based on segment profit, which excludes
general corporate unallocated expenses, gains on sales of non-strategic
businesses, equity income (loss), other income (expense), interest and other
financial charges, merger, repositioning and other charges, and other.
Intersegment sales approximate market and are not significant. Reportable
segment data were as follows:
NINE MONTHS ENDED YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
----------------- ---------------------------------
2001 2000 2000 1999 1998
---- ---- ---- ---- ----
(UNAUDITED)
(IN MILLIONS)
NET SALES
Aerospace................................. $ 7,315 $ 7,308 $ 9,988 $ 9,908 $ 9,890
Automation and Control Solutions.......... 5,309 5,441 7,384 6,115 5,957
Specialty Materials....................... 2,563 3,100 4,055 4,007 4,169
Transportation and Power Systems.......... 2,577 2,665 3,527 3,581 3,387
Corporate................................. 35 55 69 124 152
------- ------- ------- ------- -------
$17,799 $18,569 $25,023 $23,735 $23,555
------- ------- ------- ------- -------
------- ------- ------- ------- -------
SEGMENT PROFIT
Aerospace................................. $ 1,348 $ 1,604 $ 2,195 $ 1,918 $ 1,587
Automation and Control Solutions.......... 566 742 986 767 705
Specialty Materials....................... 57 300 334 439 634
Transportation and Power Systems.......... 178 211 274 322 234
Corporate................................. (117) (109) (160) (175) (248)
------- ------- ------- ------- -------
$ 2,032 $ 2,748 $ 3,629 $ 3,271 $ 2,912
------- ------- ------- ------- -------
------- ------- ------- ------- -------
A reconciliation of segment profit to consolidated income (loss) before
taxes on income is as follows:
NINE MONTHS ENDED YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
----------------- ---------------------------------
2001 2000 2000 1999 1998
---- ---- ---- ---- ----
(UNAUDITED)
(IN MILLIONS)
Segment profit............................ $ 2,032 $ 2,748 $ 3,629 $ 3,271 $ 2,912
Gain on sale of non-strategic
businesses.............................. -- 112 112 106 --
Equity in income (loss) of affiliated
companies............................... (5) 49 47 116 162
Other income.............................. 23 48 57 39 3
Interest and other financial charges...... (313) (365) (481) (265) (275)
Merger, repositioning and other charges... (2,254) (556) (966) (1,287) (54)
Other(1).................................. -- -- -- 268 24
------- ------- ------- ------- -------
Income (loss) before taxes on income...... $ (517) $ 2,036 $ 2,398 $ 2,248 $ 2,772
------- ------- ------- ------- -------
------- ------- ------- ------- -------
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(1) Other represents the gain on the disposition of our investment in AMP
Incorporated common stock in 1999 and litigation settlements in 1998.
S-6
SUMMARY FINANCIAL INFORMATION
We derived the summary financial information set out below for each of the
nine-month periods ended September 30, 2001 and 2000 from our unaudited interim
consolidated financial statements and each of the years ended December 31, 1998
through 2000 from our audited consolidated financial statements for those years.
This information is only a summary, and you should read it together with our
historical financial statements and related notes contained in the quarterly
reports, annual reports and other information that we have filed with the SEC
and incorporated by reference into this prospectus supplement and the
accompanying prospectus.
NINE MONTHS ENDED YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
----------------- ---------------------------------
2001 2000 2000 1999 1998
---- ---- ---- ---- ----
(UNAUDITED)
(DOLLARS IN MILLIONS)
RESULTS OF OPERATIONS
Net sales................................. $17,799 $18,569 $25,023 $23,735 $23,555
Gross interest expense(1)................. 325 378 497 287 300
Net income (loss)(2)...................... (217) 1,405 1,659 1,541 1,903
FINANCIAL POSITION AT PERIOD-END
Cash and cash equivalents................. $ 1,324 $ 2,065 $ 1,196 $ 1,991 $ 1,018
Total debt(3)............................. 5,483 6,994 5,623 5,066 4,966
Net debt(4)............................... 4,159 4,929 4,427 3,075 3,948
Total shareowners' equity................. 9,252 9,336 9,707 8,599 8,083
CASH FLOW DATA
Net cash provided by operating
activities.............................. $ 1,357 $ 1,353 $ 1,989 $ 2,374 $ 1,974
Net cash (used for) investing
activities.............................. (680) (2,558) (2,714) (291) (1,593)
Net cash provided by (used for) financing
activities.............................. (549) 1,279 (70) (1,110) (108)
OTHER DATA
EBITDA(5)................................. $ 500 $ 3,119 $ 3,827 $ 3,278 $ 3,782
Adjusted EBITDA(5)(6)..................... 2,754 3,563 4,681 4,191 3,812
Book capital(7)........................... 15,508 17,213 16,352 14,386 13,807
SELECTED FINANCIAL MEASURES
Ratio of adjusted EBITDA to gross interest
expense................................. 8.5x 9.4x 9.4x 14.6x 12.7x
Ratio of total debt to adjusted
EBITDA(8)............................... 1.5x 1.5x 1.2x 1.2x 1.3x
Total debt as a percentage of book
capital................................. 35.4% 40.6% 34.4% 35.2% 36.0%
Net debt as a percentage of book
capital................................. 26.8% 28.6% 27.1% 21.4% 28.6%
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(1) We define 'gross interest expense' for this purpose as total interest and
other financial charges.
(2) In nine months 2001, includes a net provision for repositioning and other
charges, asset impairments and legal and environmental claims resulting in a
net after-tax charge of $1,442 million. In nine months 2000, includes a net
provision for repositioning and other charges and asset impairments, and a
gain on the sale of the TCAS product line (TCAS) of Honeywell Inc.,
resulting in a net after-tax charge of $319 million. In year 2000, includes
a net provision for asset impairments, repositioning, environmental and
other charges and a gain on the sale of TCAS resulting in a net after-tax
charge of $634 million. In year 1999, includes merger, repositioning and
other charges, and gains on the sales of our Laminate Systems business and
our investment in AMP Incorporated common stock, resulting in a net
after-tax charge of $624 million. In year 1998, includes repositioning
charges, a gain on settlement of litigation claims and a tax benefit
resulting from the favorable resolution of certain prior-year research and
development tax claims resulting in a net after-tax charge of $4 million.
S-7
(3) We define 'total debt' for this purpose as long-term debt, including current
maturities, plus short-term borrowings and commercial paper.
(4) We define 'net debt' for this purpose as total debt less cash and cash
equivalents.
(5) We define 'EBITDA' for this purpose as earnings before interest and other
financial charges, taxes on income, depreciation, amortization and equity in
income (loss) of affiliated companies without reduction for related other
charges. EBITDA is a measure commonly used to analyze companies on the basis
of operating performance. EBITDA is not a measure of financial performance
under generally accepted accounting principles and should not be considered
as an alternative to net income as a measure of performance, nor as an
alternative to net cash provided by operating activities as a measure of
liquidity. Because all companies do not calculate EBITDA in the same
fashion, EBITDA as calculated by us may differ from EBITDA as calculated by
other companies.
(6) For the periods presented, we recorded charges and gains that have been
excluded for the purpose of calculating 'adjusted EBITDA'. In nine months
2001, excludes a net provision for repositioning and other charges, asset
impairments and legal and environmental claims resulting in a net pre-tax
charge of $2,254 million. In nine months 2000, excludes a net provision for
repositioning and other charges and asset impairments, and a gain on the
sale of TCAS, resulting in a net pre-tax charge of $444 million. In year
2000, excludes a net provision for asset impairments, repositioning,
environmental and other charges and a gain on the sale of TCAS, resulting in
a net pre-tax charge of $854 million. In year 1999, excludes merger,
repositioning and other charges, and gains on the sales of our Laminate
Systems business and our investment in AMP Incorporated common stock,
resulting in a net pre-tax charge of $913 million. In year 1998, excludes
repositioning charges, a gain on settlement of litigation claims and a tax
benefit resulting from the favorable resolution of certain prior-year
research and development tax claims resulting in a net pre-tax charge of $30
million.
(7) We define 'book capital' for this purpose as the sum of total debt,
shareowners' equity, and net long-term deferred tax liabilities, which are
long-term deferred income tax liabilities net of long-term deferred income
tax assets.
(8) In both nine months 2001 and 2000, EBITDA has been 'annualized' to compute
this ratio.
S-8
CAPITALIZATION
The following table shows our capitalization on a consolidated basis as of
September 30, 2001 and pro forma as adjusted for the issuance of the notes
offered hereby and the repayment of existing indebtedness. Except as reflected
herein, as of the date of this prospectus supplement there has been no material
change to our capitalization since September 30, 2001.
AS OF
SEPTEMBER 30, 2001
-------------------
(UNAUDITED)
ACTUAL PRO FORMA
------ ---------
(IN MILLIONS)
Cash and cash equivalents................................... $ 1,324 $ 1,324
------- -------
------- -------
Total assets................................................ $25,332 $25,337
------- -------
------- -------
Short-term borrowings and commercial paper.................. $ 1,556 $ 564
Current maturities of long-term debt........................ 408 408
Long-term debt.............................................. 3,519 4,516
------- -------
Total debt.......................................... 5,483 5,488
------- -------
Shareowners' equity:
Capital -- common stock................................. 958 958
Additional paid-in capital.............................. 2,969 2,969
Common stock held in treasury -- at cost................ (4,267) (4,267)
Accumulated other nonowner changes...................... (726) (726)
Retained earnings....................................... 10,318 10,318
------- -------
Total shareowners' equity........................... 9,252 9,252
------- -------
Total capitalization........................................ $14,735 $14,740
------- -------
------- -------
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of Honeywell for the periods indicated:
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------- ------------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ----
0.26(d) 5.73(c) 5.24(b) 6.74(a) 8.05 7.20 6.65
The ratio of earnings to fixed charges is generally computed by dividing the
sum of net income, income taxes and fixed charges (net of capitalized interest)
less undistributed equity income by fixed charges. Fixed charges represent gross
interest and amortization of debt discount and expense and the interest factor
of all rentals, consisting of an appropriate interest factor on operating
leases.
---------
(a) Included in earnings for 1999 were merger, repositioning and other charges,
a gain on the sale of our Laminate Systems business and a gain on the sale
of our investment in AMP Incorporated common stock resulting in a net
pretax charge of $913 million. Excluding such charge, this ratio of
earnings to fixed charges would have been 9.12.
(b) Included in earnings for 2000 were repositioning, environmental and other
charges and asset impairments, and a gain on the sale of the TCAS product
line of Honeywell Inc. (TCAS) resulting in a net pretax charge of $854
million. Excluding such charge, the ratio of earnings to fixed charges
would have been 6.66.
S-9
(c) Included in earnings for the nine months 2000 were repositioning and other
charges and asset impairments, and a gain on the sale of TCAS resulting in
a net pretax charge of $444 million. Excluding such charge, the ratio of
earnings to fixed charges would have been 6.72.
(d) Included in earnings for the nine months 2001 were repositioning and other
charges, asset impairments and legal and environmental claims resulting in
a net pretax charge of $2,254 million. Excluding such charge, the ratio of
earnings to fixed charges would have been 5.86.
USE OF PROCEEDS
The net proceeds from the offering of the notes, which are expected to be
approximately $991,885,000 after underwriting discounts and payment of expenses
related to the 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. As of September 30, 2001, our commercial paper had a weighted average
interest rate of approximately 3.05% and a weighted average maturity of
approximately 36 days. Pending any specific application, we may initially invest
the net proceeds from the offering in short-term marketable securities or apply
them to reduce short-term indebtedness.
S-10
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name and present principal occupation or
employment of each director and executive officer of Honeywell. The business
address of each such person is Honeywell International Inc., 101 Columbia Road,
Morris Township, New Jersey 07962.
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
---- ------------------------------------------
DIRECTORS
Hans W. Becherer.......................... Former Chairman of the Board and Chief Executive Officer
of Deere & Company
Gordon M. Bethune......................... Chairman of the Board and Chief Executive Officer of
Continental Airlines, Inc.
Lawrence A. Bossidy....................... Chairman and Chief Executive Officer of Honeywell
Marshall N. Carter........................ Senior Fellow at the Center for Business and Government,
John F. Kennedy School of Government, Harvard University
Jaime Chico Pardo......................... Vice Chairman and Chief Executive Officer of Telefonos
de Mexico, S.A. de C.V.
Ann F. Fudge.............................. Former President of Kraft's Beverages, Desserts & Post
Divisions and Group Vice President of Kraft Foods, Inc.
James J. Howard........................... Chairman Emeritus of Xcel Energy Inc.
Bruce Karatz.............................. Chairman and Chief Executive Officer of KB Home
Robert P. Luciano......................... Chairman Emeritus of Schering-Plough Corporation
Russell E. Palmer......................... Chairman and Executive Officer of The Palmer Group
Ivan G. Seidenberg........................ President and Co-Chief Executive Officer of Verizon
Communications Inc.
John R. Stafford.......................... Chairman of the Board of American Home Products
Corporation
Michael W. Wright......................... Chairman of the Board of SUPERVALU INC.
EXECUTIVE OFFICERS
Lawrence A. Bossidy....................... Chairman and Chief Executive Officer
Dean M. Flatt............................. President, Specialty Materials
J. Kevin Gilligan......................... President, Automation and Control Solutions
Robert D. Johnson......................... President, Aerospace
Barry C. Johnson.......................... Senior Vice President and Chief Technology Officer
Larry E. Kittelberger..................... Senior Vice President, Administration and Chief
Information Officer
Peter M. Kreindler........................ Senior Vice President and General Counsel
Donald J. Redlinger....................... Senior Vice President -- Human Resources and
Communications
Richard F. Wallman........................ Senior Vice President and Chief Financial Officer
S-11
DESCRIPTION OF THE NOTES
The following description of the particular terms of the notes offered
hereby supplements the description of the general terms and provisions of debt
securities under the heading 'Description of Debt Securities' in the
accompanying prospectus. Terms used in this prospectus supplement that are
otherwise not defined will have the meanings given to them in the accompanying
prospectus.
GENERAL
The notes due 2006 and the notes due 2011 will each be issued initially in
the aggregate principal amount of $500,000,000. The notes due 2006 will mature
at par on November 1, 2006. The notes due 2011 will mature at par on
November 1, 2011. The notes will constitute part of the senior debt of Honeywell
and will rank equally with all other unsecured and unsubordinated indebtedness
of Honeywell from time to time outstanding. We will issue the notes only in
book-entry form, in denominations of $1,000 and integral multiples of $1,000.
Principal of and interest on the notes will be payable, and the transfer of
notes will be registerable, through the Depositary as described below.
The notes will bear interest at the applicable annual rates shown on the
cover of this prospectus supplement and will accrue interest from October 30,
2001 or from the most recent date to which interest has been paid or provided
for. Interest will be payable twice a year, on May 1 and November 1, beginning
May 1, 2002, to the person in whose name a note is registered at the close of
business on the April 15 or October 15 that precedes the date on which interest
will be paid. Interest payments for the notes will include accrued interest from
and including October 30, 2001 or from and including the last date in respect of
which interest has been paid, as the case may be, to, but excluding, the
interest payment date or the date of maturity, as the case may be. Interest
payable at the maturity of the notes will be payable to the registered holder of
the note to whom principal is payable. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
If any interest payment date falls on a day that is not a business day, the
interest payment will be postponed to the next day that is a business day, and
no interest on such payment will accrue for the period from and after such
interest payment date. If the maturity date of the notes falls on a day that is
not a business day, the payment of interest and principal may be made on the
next succeeding business day, and no interest on such payment will accrue for
the period from and after the maturity date. As used in this prospectus
supplement, 'business day' means any day, other than a Saturday or Sunday, that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close in The City of New York or
in the place of presentation.
The notes, the indenture and the underwriting agreement are governed by, and
will be construed in accordance with, the laws of the State of New York, United
States of America, applicable to agreements made and to be performed wholly
within such jurisdiction.
In some circumstances, we may elect to discharge our obligations on the
notes through defeasance or covenant defeasance. See 'Description of Debt
Securities -- Defeasance Provisions' in the accompanying prospectus for more
information about how we may do this.
We may from time to time, without the consent of the holders of notes, issue
additional notes having the same ranking and the same interest rate, maturity
and other terms as either series of notes being offered hereby. Any additional
notes having such similar terms, together with the respective series of notes
being offered hereby, will constitute a single series of notes under the
indenture. No additional notes of either series may be issued if an event of
default has occurred with respect to that series of notes.
We have appointed Chase Manhattan Bank Luxembourg S.A. as paying agent and
transfer agent in Luxembourg with respect to the notes in definitive form. As
long as the notes are listed on the Luxembourg Stock Exchange, we will maintain
a paying and transfer agent in Luxembourg, and any change in the Luxembourg
paying agent and transfer agent will be published in Luxembourg. See
' -- Notices' below.
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BOOK-ENTRY, DELIVERY AND FORM
The notes will be issued in the form of one or more fully registered global
notes (the 'Global Notes') which will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the 'Depositary' or 'DTC') and
registered in the name of Cede & Co., the Depositary's nominee. Beneficial
interests in the Global Notes will be represented through book-entry accounts of
financial institutions acting on behalf of beneficial owners as direct and
indirect participants in the Depositary. Investors may elect to hold interests
in the Global Notes through the Depositary, Clearstream Banking, Societe anonyme
('Clearstream, Luxembourg') or Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System ('Euroclear') if they are
participants of such systems, or indirectly through organizations which are
participants in such systems. Clearstream, Luxembourg and Euroclear will hold
interests on behalf of their participants through customers' securities accounts
in Clearstream, Luxembourg's and Euroclear's names on the books of their
respective depositories, which in turn will hold such interests in customers'
securities accounts in the depositaries' names on the books of the Depositary.
Citibank, N.A. will act as depository for Clearstream, Luxembourg and The Chase
Manhattan Bank will act as depository for Euroclear (in such capacities, the
'U.S. Depositaries'). Except as set forth below, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
The Depositary has advised us as follows: the Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
'banking organization' within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a 'clearing corporation' within the meaning of
the New York Uniform Commercial Code, and a 'clearing agency' registered
pursuant to the provisions of Section 17A of the Exchange Act. The Depositary
holds securities deposited with it by its participants and facilitates the
settlement of transactions among its participants in such securities through
electronic computerized book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities certificates.
The Depositary's participants include securities brokers and dealers (including
the underwriters), banks, trust companies, clearing corporations and certain
other organizations, some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
Clearstream, Luxembourg advises us that it is incorporated under the laws of
Luxembourg as a bank. Clearstream, Luxembourg holds securities for its customers
('Clearstream, Luxembourg Customers') and facilitates the clearance and
settlement of securities transactions between Clearstream, Luxembourg Customers
through electronic book-entry transfers between their accounts. Clearstream,
Luxembourg provides to Clearstream, Luxembourg Customers, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream, Luxembourg interfaces with domestic securities markets in over 30
countries through established depository and custodial relationships. As a bank,
Clearstream, Luxembourg is subject to regulation by the Luxembourg Commission
for the Supervision of the Financial Sector (Commission de Surveillance du
Secteur Financier). Clearstream, Luxembourg Customers are recognized financial
institutions around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Clearstream, Luxembourg's U.S. customers are limited to
securities brokers and dealers and banks. Indirect access to Clearstream,
Luxembourg is also available to other institutions such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream, Luxembourg Customer.
Distributions with respect to the notes held through Clearstream, Luxembourg
will be credited to cash accounts of Clearstream, Luxembourg Customers in
accordance with its rules and procedures, to the extent received by the U.S.
Depositary for Clearstream, Luxembourg.
Euroclear advises us that it was created in 1968 to hold securities for its
participants ('Euroclear Participants') and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need
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for physical movement of certificates and any risk arising from lack of
simultaneous transfers of securities and cash. Euroclear provides various other
services, including securities lending and borrowing and interfaces with
domestic markets in several countries. Euroclear is operated by the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York (the 'Euroclear
Operator'), under contract with Euroclear Clearance Systems, S.C., a Belgian
cooperative corporation (the 'Cooperative'). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative establishes policy for Euroclear on behalf of
Euroclear Participants. Euroclear Participants include banks (including central
banks), securities brokers and dealers and other professional financial
intermediaries and may include the underwriters. Indirect access to Euroclear is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the 'Terms and Conditions'). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants and has no record of or relationship with persons holding
through Euroclear Participants.
Distributions with respect to the notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions, to the extent received by the U.S. Depositary for
Euroclear.
Euroclear further advises us that investors that acquire, hold and transfer
interests in the notes by book-entry through accounts with the Euroclear
Operator or any other securities intermediary are subject to the laws and
contractual provisions governing their relationship with their intermediary, as
well as the laws and contractual provisions governing the relationship between
such an intermediary and each other intermediary, if any, standing between
themselves and the Global Notes.
The Euroclear Operator advises us that under Belgian law, investors that are
credited with securities on the records of the Euroclear Operator have a
co-property right in the fungible pool of interests in securities on deposit
with the Euroclear Operator in an amount equal to the amount of interests in
securities credited to their accounts. In the event of the insolvency of the
Euroclear Operator, Euroclear Participants would have a right under Belgian law
to the return of the amount and type of interests in securities credited to
their accounts with the Euroclear Operator. If the Euroclear Operator did not
have a sufficient amount of interests in securities on deposit of a particular
type to cover the claims of all Participants credited with such interests in
securities on the Euroclear Operator's records, all Participants having an
amount of interests in securities of such type credited to their accounts with
the Euroclear Operator would have the right under Belgian law to the return of
their pro rata share of the amount of interests in securities actually on
deposit.
Under Belgian law, the Euroclear Operator is required to pass on the
benefits of ownership in any interests in securities on deposit with it (such as
dividends, voting rights and other entitlements) to any person credited with
such interests in securities on its records.
Title to book-entry interests in the notes will pass by book-entry
registration of the transfer within the records of Clearstream, Luxembourg,
Euroclear or DTC, as the case may be, in accordance with their respective
procedures. Book-entry interests in the notes may be transferred
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within Clearstream, Luxembourg and within Euroclear and between Clearstream,
Luxembourg and Euroclear in accordance with procedures established for these
purposes by Clearstream, Luxembourg and Euroclear. Book-entry interests in the
notes may be transferred within DTC in accordance with procedures established
for this purpose by DTC. Transfers of book-entry interests in the notes among
Clearstream, Luxembourg and Euroclear and DTC may be effected in accordance with
procedures established for this purpose by Clearstream, Luxembourg, Euroclear
and DTC.
A further description of the Depositary's procedures with respect to the
Global Notes is set forth in the prospectus under 'Book-Entry Issuance'. The
Depositary has confirmed to us, the underwriters and the trustee that it intends
to follow such procedures.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the notes will be made in immediately available
funds. Secondary market trading between DTC participants will occur in the
ordinary way in accordance with the Depositary's rules and will be settled in
immediately available funds using the Depositary's Same-Day Funds Settlement
System. Secondary market trading between Clearstream, Luxembourg Customers
and/or Euroclear Participants will occur in the ordinary way in accordance with
the applicable rules and operating procedures of Clearstream, Luxembourg and
Euroclear and will be settled using the procedures applicable to conventional
Eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through the Depositary on the one hand, and directly or indirectly through
Clearstream, Luxembourg Customers or Euroclear Participants, on the other, will
be effected through the Depositary in accordance with the Depositary's rules on
behalf of the relevant European international clearing system by its U.S.
Depositary; however, such cross-market transactions will require delivery of
instructions to the relevant European international clearing system by the
counterparty in such system in accordance with its rules and procedures and
within its established deadlines (European time). The relevant European
international clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its U.S. Depositary to take action to
effect final settlement on its behalf by delivering interests in the notes to or
receiving interests in the notes from the Depositary, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to the Depositary. Clearstream, Luxembourg Customers and Euroclear
Participants may not deliver instructions directly to their respective U.S.
Depositaries.
Because of time-zone differences, credits of interests in the notes received
through Clearstream, Luxembourg or Euroclear as a result of a transaction with a
DTC participant will be made during subsequent securities settlement processing
and dated the business day following the Depositary settlement date. Such
credits or any transactions involving interests in such notes settled during
such processing will be reported to the relevant Clearstream, Luxembourg
Customers or Euroclear Participants on such business day. Cash received in
Clearstream, Luxembourg or Euroclear as a result of sales of interests in the
notes by or through a Clearstream, Luxembourg Customer or a Euroclear
Participant to a DTC participant will be received with value on the Depositary
settlement date but will be available in the relevant Clearstream, Luxembourg or
Euroclear cash account only as of the business day following settlement through
the Depositary.
Although the Depositary, Clearstream, Luxembourg and Euroclear have agreed
to the foregoing procedures in order to facilitate transfers of interests in the
notes among participants of the Depositary, Clearstream, Luxembourg and
Euroclear, they are under no obligation to perform or continue to perform such
procedures and such procedures may be changed or discontinued at any time.
DEFINITIVE NOTES
Notes will not be issued in definitive form, except in limited
circumstances. If Euroclear, Clearstream, Luxembourg or DTC notifies us that it
is unwilling or unable to continue as a
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clearing system in connection with the Global Notes or, in the case of DTC only,
DTC ceases to be clearing agency registered under the U.S. Securities Exchange
Act of 1934, and in each case a successor clearing system is not appointed by us
within 90 days after receiving such notice from Euroclear, Clearstream,
Luxembourg or DTC or on becoming aware that DTC is no longer so registered, we
will issue or cause to be issued individual certificates in registered form on
registration of transfer of, or in exchange for, book-entry interests in the
notes represented by such Global Notes upon delivery of such Global Notes for
cancelation. In any such instance the owner of a beneficial interest in the
Global Notes will be entitled to physical delivery in definitive form of notes
represented by the Global Notes equal in principal amount to such beneficial
interest and to have such notes registered in its name. Notes so issued in
definitive form will be issued as registered notes in denominations of $1,000
and integral multiples thereof, unless otherwise specified by us.
PAYMENT AND TRANSFER OF DEFINITIVE NOTES
Payments on any definitive notes will be made by the trustee directly to
holders of such definitive notes in accordance with the procedures set forth
herein and in the indenture. Interest payments and any principal payments on the
definitive notes on each interest payment date will be made to holders in whose
names the definitive notes were registered at the close of business on the
related record date. Payments will be made by check mailed to the address of
such holders as they appear on the note register and, in addition, under the
circumstances provided by the indenture, by wire transfer to a bank or
depository institution located in the United States and having appropriate
facilities thereof. The final payment of principal and interest on any
definitive notes however, will be made only upon presentation and surrender of
such definitive notes at the office of the paying agent for the notes which
shall include the office of the paying agent in Luxembourg if at such date any
notes are listed on the Luxembourg Stock Exchange and the rules of the
Luxembourg Stock Exchange so require.
A definitive note may be transferred in whole or in part upon the surrender
of the definitive note to be transferred, together with the completed and
executed assignment, at the specified office of any transfer agent (which shall
include a transfer agent having its specified office in Luxembourg so long as
any notes are listed on the Luxembourg Stock Exchange and the rules of the
Luxembourg Stock Exchange so require). In the case of a permitted transfer of
only part of a note, a new note in respect of the balance not transferred will
be issued to the transferor. Each new definitive note to be issued upon the
transfer of a definitive note will, upon the effective receipt of such completed
assignment by a transfer agent at its respective specified office, be available
for delivery at such specified office, or at the request of the holder
requesting such transfer, will be mailed at the risk of the transferee entitled
to the new definitive note to such address as may be specified in such completed
assignment. Neither the registrar nor any transfer agent shall be required to
register the transfer of or exchange of any definitive notes within 15 days
before the notes are to be selected for redemption.
Chase Manhattan Bank Luxembourg S.A. has been appointed as paying agent and
transfer agent in Luxembourg in relation to the notes. We will maintain a paying
agent and transfer agent in Luxembourg for so long as any notes are listed on
the Luxembourg Stock Exchange. Payments and transfers of the notes will be made
at the respective offices of the paying and transfer agents in New York City and
in Luxembourg.
REPLACEMENT DEFINITIVE NOTES
In case of mutilation, destruction, loss or theft of any definitive note,
application for replacement is to be made at the office of the trustee. Any such
definitive note will be replaced by the trustee in compliance with such
procedures, and on such terms as to evidence and indemnity, as we and the
trustee may require and subject to applicable laws and regulations. All costs
incurred in connection with the replacement of any definitive note will be borne
by the holder of the note. Mutilated or defaced definitive notes must be
surrendered before new ones will be issued.
S-16
TAX REDEMPTION
The notes may be redeemed as a whole, at our option at any time prior to
maturity, upon the giving of a notice of redemption as described below, if we
determine that, as a result of any change in or amendment to the laws (or any
regulations or rulings promulgated thereunder) of the United States or of any
political subdivision or taxing authority thereof or therein, or any change in
official position regarding the application or interpretation of such laws,
regulations or rulings, which change or amendment becomes effective on or after
the date of this prospectus supplement, we have or will become obligated to pay
additional amounts as described under ' -- Payment of Additional Amounts' below
with respect to such notes for reasons outside our control and after taking
reasonable measures to avoid such obligation. The notes will be redeemed at a
redemption price equal to 100% of the principal amount thereof, together with
accrued interest to the date fixed for redemption. Prior to the giving of any
notice of redemption pursuant to this paragraph, we will deliver to the trustee:
a certificate stating that we are entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to
our right to so redeem have occurred, and
an opinion of independent counsel satisfactory to the trustee to the effect
that we have or will become obligated to pay such additional amounts for
the reasons described above;
provided that no such notice of redemption shall be given earlier than 60 days
prior to the earliest date on which we would be obligated to pay such additional
amounts if a payment in respect of the note were then due.
Notice of redemption will be given not less than 30 nor more than 60 days
prior to the date fixed for redemption, which date and the applicable redemption
price will be specified in the notice. This notice will be given in accordance
with ' -- Notices' below.
PAYMENT OF ADDITIONAL AMOUNTS
We will, subject to certain exceptions and limitations set forth below, pay
such additional amounts to the beneficial owner of any note who is a United
States alien as may be necessary in order that every net payment of principal of
and interest on such note and any other amounts payable on such note, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided for in such note to be then due and
payable. We will not, however, be required to make any such payment of
additional amounts to any beneficial owner for or on account of:
any such tax, assessment or other governmental charge that would not have
been so imposed but for the existence of any present or former connection
between such beneficial owner (or between a fiduciary, settlor,
beneficiary, member or shareholder of such beneficial owner, if such
beneficial owner is an estate, a trust, a partnership or a corporation) and
the United States and its possessions, including, without limitation, such
beneficial owner (or such fiduciary, settlor, beneficiary, member or
shareholder) being or having been a citizen or resident thereof or being or
having been engaged in a trade or business or present therein or having, or
having had, a permanent establishment therein;
any estate, inheritance, gift, sales, transfer or personal property tax or
any similar tax, assessment or governmental charge;
any tax, assessment or other governmental charge imposed by reason of such
beneficial owner's past or present status as a personal holding company or
foreign personal holding company or controlled foreign corporation or
passive foreign investment company with respect to the United States or as
a corporation that accumulates earnings to avoid United States federal
income tax;
any tax, assessment or other governmental charge that is payable otherwise
than by withholding from payments on or in respect of any note;
S-17
any tax, assessment or other governmental charge that would not have been
imposed but for the failure to comply with certification, information or
other reporting requirements concerning the nationality, residence or
identity of the beneficial owner of such note, if such compliance is
required by statute or by regulation of the United States or of any
political subdivision or taxing authority thereof or therein as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
any tax, assessment or other governmental charge imposed by reason of such
beneficial owner's past or present status as the actual or constructive
owner of 10% or more of the total combined voting power of all classes of
our stock entitled to vote or as a controlled foreign corporation that is
related directly or indirectly to us through stock ownership; or
any combination of these factors.
Such additional amounts shall also not be paid with respect to any payment on a
note to a United States alien who is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent such payment would be
required by the laws of the United States (or any political subdivision thereof)
to be included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who would not have been entitled to such additional amounts had such
beneficiary, settlor, member or beneficial owner, as the case may be, held its
interest in the note directly. The term 'United States alien' means any person
that is, for United States federal income tax purposes, a foreign corporation, a
nonresident alien individual, a nonresident alien fiduciary of a foreign estate
or trust, or a foreign partnership to the extent that one or more of its members
is a foreign corporation, a nonresident alien individual or a nonresident alien
fiduciary of a foreign estate or trust.
NOTICES
Notices to holders of the notes will be sent by mail to the registered
holders and will be published, whether the notes are in global or definitive
form, and so long as the notes are listed on the Luxembourg Stock Exchange, in a
daily newspaper of general circulation in Luxembourg. It is expected that
publication will be made in Luxembourg in the Luxemburger Wort. Any such notice
shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication. So long as
the notes are listed on the Luxembourg Stock Exchange, any appointment of or
change in the Luxembourg paying agent and transfer agent will be published in
Luxembourg in the manner set forth above.
UNITED STATES FEDERAL TAXATION
The following summary describes the material United States federal income
and certain estate tax consequences of ownership and disposition of the notes.
This summary provides general information only and is directed solely to
original beneficial owners purchasing notes at the 'issue price,' that is, the
first price at which a substantial amount of notes is sold to the public
(excluding sales to bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters, placement agents or wholesalers). This
summary is based on the Internal Revenue Code of 1986, as amended to the date
hereof (the 'Code'), existing administrative pronouncements and judicial
decisions, existing and proposed Treasury Regulations currently in effect, and
interpretations of the foregoing, changes to any of which subsequent to the date
of this prospectus supplement may affect the tax consequences described herein,
possibly with retroactive effect. This summary deals only with notes held as
capital assets within the meaning of Section 1221 of the Code. This summary does
not discuss all of the tax consequences that may be relevant to a beneficial
owner in light of his particular circumstances or to beneficial owners subject
to special rules, such as certain financial institutions, insurance companies,
dealers in securities, persons holding notes in connection with a hedging
transaction, 'straddle,' conversion transaction or other integrated transaction
or persons who have ceased to be United States citizens or to be taxed as
resident aliens. Persons considering the purchase of
S-18
notes should consult their own tax advisors with regard to the application of
the United States federal income and estate tax laws to their particular
situations, as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
TAX CONSEQUENCES TO UNITED STATES PERSONS
For purposes of the following discussion, a 'United States person' means a
beneficial owner of a note that is, for United States federal income tax
purposes:
an individual citizen or resident of the United States, or
a corporation or other entity treated as a corporation for United States
federal income tax purposes created or organized in or under the laws of
the United States, any State or the District of Columbia, or
an estate or trust the income of which is subject to United States federal
income taxation regardless of its source.
If a partnership holds notes, the tax treatment of a partner will generally
depend upon the status of the partner and upon the activities of the
partnership. Partners of partnerships holding notes should consult their tax
advisors.
PAYMENTS OF INTEREST
Interest on a note will generally be taxable to a United States person as
ordinary interest income at the time it is accrued or is received in accordance
with the United States person's method of accounting for tax purposes.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
Upon the sale, exchange or retirement of a note, a United States person will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement and the United States person's
adjusted tax basis in the note. For these purposes, the amount realized does not
include any amount attributable to accrued interest on the note. Amounts
attributable to accrued interest are treated as interest as described under
' -- Payments of Interest' above. A United States person's adjusted tax basis in
a note generally will equal the cost of the note to the United States person.
Gain or loss realized on the sale, exchange or redemption of a note will be
capital gain or loss. Prospective investors should consult their own tax
advisors regarding the treatment of capital gains (which may be taxed at lower
rates than ordinary income for taxpayers who are individuals, trusts or estates)
and losses (the deductibility of which is subject to limitations).
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal, premium and interest on a note, and to payments
of proceeds of the sale or redemption of a note, to certain non-corporate United
States persons. Honeywell, its agent, a broker, or any paying agent, as the case
may be, will be required to withhold a backup withholding tax from any payment
if:
the United States person fails to furnish or certify its correct taxpayer
identification number to the payor in the manner required,
fails to certify, under penalty of perjury, that such United States person
is not subject to backup withholding, or
otherwise fails to comply with the applicable requirements of the backup
withholding rules.
Any amounts withheld under the backup withholding rules from a payment to a
United States person may be credited against such United States person's United
States federal income tax and
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may entitle such United States person to a refund, provided that the required
information is furnished to the Internal Revenue Service.
TAX CONSEQUENCES TO NON-UNITED STATES PERSONS
As used herein, the term 'non-United States person' means a beneficial owner
of a note that is, for United States federal income tax purposes:
a nonresident alien individual, or
a foreign corporation, or
an estate or trust that is not taxable in the United States on its
world-wide income.
INCOME AND WITHHOLDING TAX FOR NON-UNITED STATES PERSONS
The discussion under this heading is subject to the discussion of backup
withholding below.
Payments of principal and interest on a note that is beneficially owned by a
non-United States person will not be subject to United States federal
withholding tax; provided, that in the case of interest:
(a) each of the following conditions is met:
the beneficial owner does not actually or constructively own 10% or more
of the total combined voting power of all classes of Honeywell stock
entitled to vote, and
the beneficial owner is not a controlled foreign corporation that is
related, directly or indirectly, to us through stock ownership, and
either
-- the beneficial owner of the note provides an IRS Form W-8BEN
certifying to the person otherwise required to withhold United
States federal income tax from such interest that it is not a
United States person and provides its name and address, or
-- a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary
course of its trade or business (a 'financial institution') and
holds an interest in the note certifies to the person otherwise
required to withhold United States federal income tax from such
interest that such statement has been received from the beneficial
owner by it or by a financial institution between it and the
beneficial owner and furnishes the payor with a copy thereof; or
(b) the beneficial owner is entitled to the benefits of an income tax treaty
under which the interest is exempt from United States federal
withholding tax and the beneficial owner of the note or such owner's
agent provides an IRS Form W-8BEN claiming the exemption; or
(c) the beneficial owner conducts a trade or business in the United States
to which the interest is effectively connected and the beneficial owner
of the note or such owner's agent provides an IRS Form W-8ECI;
provided that in each such case, the relevant certification or IRS Form is
delivered pursuant to applicable procedures and is properly transmitted to the
person otherwise required to withhold United States federal income tax, and none
of the persons receiving the relevant certification or IRS Form has actual
knowledge that the certification or any statement on the IRS Form is false.
A non-United States person will not be subject to United States federal
withholding tax on any gain realized on the sale, exchange or other disposition
of a note unless the gain is effectively connected with the beneficial owner's
trade or business in the United States or, in the case of an individual, the
beneficial owner is present in the United States for 183 days or more in the
taxable year in which the sale, exchange or other disposition occurs and certain
other conditions are met.
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If a non-United States person owning a note is engaged in a trade or
business in the United States, and if interest on the note (or gain realized on
its sale, exchange or other disposition) is effectively connected with the
conduct of such trade or business, such owner, although exempt from the
withholding tax discussed in the preceding paragraphs, will generally be subject
to regular United States income tax on such effectively connected income in the
same manner as if it were a United States person. In addition, if such owner is
a foreign corporation, it may be subject to a 30% branch profits tax (unless
reduced or eliminated by an applicable treaty) of its effectively connected
earnings and profits for the taxable year, subject to certain adjustments. For
purposes of the branch profits tax, interest on, and any gain recognized on the
sale, exchange or other disposition of, a note will be included in the
effectively connected earnings and profits of such owner if such interest or
gain, as the case may be, is effectively connected with the conduct by such
owner of a trade or business in the United States.
Each owner of a note should be aware that if it does not properly provide
the required IRS form, or if the IRS form (or, if permissible, a copy of such
form) is not properly transmitted to and received by the United States person
otherwise required to withhold United States federal income tax, interest on the
note may be subject to United States withholding tax at a 30% rate, and the
owner will not be entitled to any additional amounts from us described under the
heading 'Description of Notes -- Payment of Additional Amounts' with respect to
such tax. Such tax, however, may in certain circumstances be allowed as a refund
or as a credit against such owner's United States federal income tax. The
foregoing does not deal with all aspects of federal income tax withholding that
may be relevant to a non-United States person that owns a note. Investors are
advised to consult their own tax advisors for specific advice concerning the
ownership and disposition of notes.
ESTATE TAX FOR NON-UNITED STATES PERSONS
A note owned by an individual who at the time of death is not, for United
States estate tax purposes, a citizen or resident of the United States generally
will not be subject to United States federal estate tax as a result of such
individual's death if the individual does not actually or constructively own 10%
or more of the total combined voting power or all classes of Honeywell stock
entitled to vote and, at the time of such individual's death the income on the
note would not have been effectively connected with a United States trade or
business of the individual.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Except as provided below, backup withholding and information reporting will
generally not apply to payments of interest, principal, premium or the proceeds
of a disposition of a note to a non-United States holder who provides the
requisite certification under penalties of perjury or otherwise establishes that
it qualifies for an exemption from backup withholding. Payments of principal,
premium or the proceeds of a disposition of a note by or through a foreign
office of a United States broker or foreign broker with certain relationships to
the United States will generally be subject to information reporting, but not
backup withholding.
The United States federal income tax discussion set forth above is included
for general information only and may not be applicable depending upon an owner's
particular situation. Owners should consult their own tax advisors with respect
to the tax consequences to them of the ownership and disposition of the notes,
including the tax consequences under state, local, foreign and other tax laws
and the possible effects of changes in federal or other tax laws.
S-21
UNDERWRITING
Subject to the terms and conditions stated in the underwriting agreement
dated the date of this prospectus supplement, each underwriter named below has
severally agreed to purchase, and we have agreed to sell to each underwriter,
the principal amount of notes stated opposite the name of each underwriter.
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
OF NOTES OF NOTES
UNDERWRITER DUE 2006 DUE 2011
----------- ------------ ------------
Banc of America Securities LLC........ $125,000,000 $125,000,000
Barclays Capital Inc.................. 125,000,000 125,000,000
Salomon Smith Barney Inc.............. 125,000,000 125,000,000
Deutsche Banc Alex. Brown Inc......... 33,333,334 33,333,334
HSBC Securities (USA) Inc............. 33,333,333 33,333,333
J.P. Morgan Securities Inc............ 33,333,333 33,333,333
BNY Capital Markets, Inc.............. 12,500,000 12,500,000
Tokyo-Mitsubishi International plc.... 12,500,000 12,500,000
------------ ------------
Total............................. $500,000,000 $500,000,000
------------ ------------
------------ ------------
Banc of America Securities LLC, Barclays Capital Inc. and Salomon Smith
Barney Inc. are joint book-running managers for our offering of notes.
The underwriting agreement provides that the obligations of the several
underwriters to purchase the notes included in this offering are subject to
approval of certain legal matters by counsel and to certain other conditions.
The underwriters are obligated to purchase all the notes of a series if they
purchase any of the notes of that series.
The underwriters propose to offer some of the notes directly to the public
at the applicable public offering prices stated on the cover page of this
prospectus supplement and some of the notes to certain dealers at the applicable
public offering prices less a concession not in excess of 0.20% of the aggregate
principal amount of the notes due 2006 and 0.30% of the aggregate principal
amount of the notes due 2011. The underwriters may allow, and these dealers may
reallow, a concession not in excess of 0.125% of the aggregate principal amount
of the notes due 2006 and the notes due 2011 on sales to certain other dealers.
After the initial offering of the notes to the public, the public offering
prices and these concessions may be changed by the underwriters.
In connection with the offering, the underwriters may purchase and sell
notes in the open market. These transactions may include over-allotment,
syndicate covering transactions and stabilizing transactions. Over-allotment
involves syndicate sales of notes in excess of the principal amount of notes to
be purchased by the underwriters in the offering, which creates a syndicate
short position. Syndicate covering transactions involve purchases of the notes
in the open market after the distribution has been completed in order to cover
syndicate short positions. Stabilizing transactions consist of certain bids or
purchases of notes made for the purpose of preventing or retarding a decline in
the market price of the notes while the offering is in progress.
The underwriters may also impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when they,
in covering syndicate short positions or making stabilizing purchases,
repurchase notes originally sold by that syndicate member.
Any of these activities may cause the price of the notes to be higher than
the price that otherwise would exist in the open market in the absence of such
transactions. These transactions may be effected in the over-the-counter market
or otherwise and, if commenced, may be discontinued at any time.
We estimate that the total expenses of this offering will be approximately
$750,000.
S-22
The underwriters and their affiliates have performed certain investment
banking and advisory and general financing and banking services for us from time
to time for which they have received customary fees and expenses. The
underwriters and their affiliates may, from time to time, be customers of,
engage in transactions with and perform services for us in the ordinary course
of their business.
Hans W. Becherer, Lawrence A. Bossidy and John R. Stafford, directors of
Honeywell, are also directors of J.P. Morgan Chase & Co. and its affiliate, The
Chase Manhattan Bank. The Chase Manhattan Bank is the trustee under the
indenture. Chase Manhattan Bank Luxembourg S.A., an affiliate of J.P. Morgan
Chase & Co. and The Chase Manhattan Bank, is the Luxembourg paying agent and
transfer agent for the notes. In addition, J.P. Morgan Securities Inc., an
affiliate of J.P. Morgan Chase & Co. and The Chase Manhattan Bank, is one of the
underwriters of the notes.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make in respect of any of those
liabilities.
The notes are offered for sale in those jurisdictions in the United States,
Europe, Asia and elsewhere where it is lawful to make such offers.
Each of the underwriters has represented and agreed that it has not and will
not offer, sell or deliver any of the notes directly or indirectly, or
distribute this prospectus supplement or the prospectus or any other offering
material relating to the notes, in or from any jurisdiction except under
circumstances that will result in compliance with the applicable laws and
regulations thereof and that will not impose any obligations on us except as set
forth in the underwriting agreement.
In particular, each underwriter has represented and agreed that:
It has not offered or sold and will not offer or sell any notes to persons
in the United Kingdom prior to the expiry of the period of six months from
the issue date of the notes except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purpose of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995.
It has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of
the notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 (as amended) or is a person to whom such document may otherwise
lawfully be issued or passed on.
It has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation
to any notes in, from or otherwise involving the United Kingdom.
It will not offer or sell any notes directly or indirectly in Japan or to,
or for the benefit of any Japanese person or to others, for re-offering or
re-sale directly or indirectly in Japan or to any Japanese person except
under circumstances which will result in compliance with all applicable
laws, regulations and guidelines promulgated by the relevant governmental
and regulatory authorities in effect at the relevant time. For purposes of
this paragraph, 'Japanese person' means any person resident in Japan,
including any corporation or other entity organized under the laws of
Japan.
Although application has been made to list the notes on the Luxembourg Stock
Exchange, the notes are a new issue of securities with no established trading
market. No assurance can be given as to the liquidity of, or the trading markets
for, the notes. Purchasers of the notes may be required to pay stamp taxes and
other charges in accordance with the laws and practices of the country of
purchase in addition to the issue prices set forth on the cover page hereof. We
have been advised by the underwriters for the notes that they intend to make a
market in the notes,
S-23
but they are not obligated to do so and may discontinue such market-making at
any time without notice.
LEGAL MATTERS
The validity of the notes will be passed upon for us by Victor P. Patrick,
Esq., Vice President, Secretary and Deputy General Counsel of Honeywell.
Mr. Patrick, in his capacity as our Vice President, Secretary and Deputy General
Counsel, is a participant in various employee benefit and incentive plans,
including stock option plans, offered to our employees. Certain legal matters
relating to the offering of the notes will be passed upon for the underwriters
by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. Skadden, Arps,
Slate, Meagher & Flom LLP has from time to time provided and may continue to
provide legal advice and services to us.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in the following locations:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 233 Broadway Citicorp Center
Room 1024 New York, NY 10279 500 West Madison Street
Washington, DC 20549 Suite 1400
Chicago, IL 60661
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public at the SEC's
web site at http://www.sec.gov.
You may also inspect reports, proxy statements and other information about
Honeywell at the offices of the New York Stock Exchange Inc., 20 Broad Street,
New York, NY 10005; the Chicago Stock Exchange, One Financial Place, 440 South
LaSalle Street, Chicago, IL 60605; and the Pacific Exchange, 301 Pine Street,
San Francisco, CA 94104.
The SEC allows us to 'incorporate by reference' into this prospectus
supplement and the accompanying prospectus the information we file with it,
which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to
be a part of this prospectus supplement and the accompanying prospectus, and
information filed with the SEC after the date of this prospectus supplement will
update and supersede information on file with the SEC as of the date of this
prospectus supplement. We incorporate by reference:
HONEYWELL'S SEC FILINGS (FILE NO. 1-8974) DESCRIPTION, PERIOD OR DATE
----------------------------------------- ---------------------------
Annual Report on Form 10-K Year ended December 31, 2000
Quarterly Reports on Form 10-Q Quarters ended March 31 and June 30, 2001
Current Reports on Form 8-K Filed July 5, July 17, July 20, October 10
and October 25, 2001
Registration Statement on Form 8-B Filed on August 16, 1985, containing a
description of the common stock
We incorporate by reference additional documents that we may file with the
SEC after the date of this prospectus supplement. These documents include
periodic reports, which may include Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy
statements.
You can obtain any of the documents incorporated by reference in this
prospectus supplement and the accompanying prospectus through us, or from the
SEC through the SEC's web site at the address provided above. Documents
incorporated by reference are available from
S-24
us without charge, excluding any exhibits to those documents unless the exhibit
is specifically incorporated by reference as an exhibit in this prospectus
supplement and the accompanying prospectus. You can obtain documents
incorporated by reference in this prospectus supplement and the accompanying
prospectus free of charge by requesting them in writing or by telephone from us
at the following address and telephone number:
Honeywell International Inc.
101 Columbia Road
P.O. Box 2245
Morris Township, NJ 07962-2245
Attention: Corporate Publications
Telephone No.: (973) 455-5402
For as long as the notes are listed on the Luxembourg Stock Exchange, the
documents incorporated by reference into this prospectus supplement and the
accompanying prospectus and our periodic reports filed with the SEC will be
available without charge from our transfer and paying agent in Luxembourg, Chase
Manhattan Bank Luxembourg S.A., 5 rue Plaetis, L-2338 Luxembourg.
GENERAL INFORMATION
LISTING
Application has been made to list the notes on the Luxembourg Stock
Exchange. In connection with the listing application, our restated certificate
of incorporation and by-laws and a legal notice relating to the issuance of the
notes have been deposited prior to listing with Greffier en Chef du Tribunal
d'Arrondissement de et a Luxembourg, where copies thereof may be obtained upon
request. Copies of the above documents together with this prospectus supplement,
the accompanying prospectus, the indenture, the underwriting agreement and our
current Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, so long as any of the notes are outstanding, will be made
available for inspection at the main office of our listing agent, Deutsche Bank
Luxembourg S.A., in Luxembourg. In addition, copies of our current and future
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K, so long as any of the notes are outstanding, may be obtained free
of charge at the office of our transfer and paying agent, Chase Manhattan Bank
Luxembourg S.A. at the location set forth under 'Where You Can Find More
Information' in this prospectus supplement. Chase Manhattan Bank Luxembourg S.A.
will act as intermediary for Honeywell and the holders of the notes.
INDEPENDENT ACCOUNTANTS
The Independent Accountants of Honeywell are PricewaterhouseCoopers LLP,
Florham Park, New Jersey.
MATERIAL CHANGE
Other than as disclosed or contemplated herein or in the documents
incorporated herein by reference, there has been no material adverse change in
our financial position since September 30, 2001.
LITIGATION
Other than as disclosed or contemplated in the documents incorporated herein
by reference, neither we nor any of our subsidiaries is involved in litigation,
arbitration, or administrative proceedings relating to claims or amounts that
are material in the context of the issue of the notes and we are not aware of
any such litigation, arbitration, or administrative proceedings pending or
threatened.
S-25
AUTHORIZATION
Resolutions relating to the issue and sale of the notes were adopted on
December 3, 1999 by the Board of Directors of Honeywell and on the date of this
prospectus supplement by the Pricing Committee established by the Board of
Directors of Honeywell.
IDENTIFICATION NUMBERS
The notes have been assigned the following identification numbers:
NOTES DUE 2006 NOTES DUE 2011
-------------- --------------
International Security
Identification Number (ISIN)........................ US438516 AM86 US438516 AN69
CUSIP Number.......................................... 438516 AM8 438516 AN6
S-26
PROSPECTUS
$2,000,000,000
[LOGO]
HONEYWELL INTERNATIONAL INC.
101 COLUMBIA ROAD
MORRIS TOWNSHIP, NEW JERSEY 07962
(973) 455-2000
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
-------------------
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and the applicable supplement
carefully before you invest.
-------------------
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
-------------------
This prospectus may not be used to consummate sales of securities unless
accompanied by a prospectus supplement.
Prospectus dated September 14, 2000
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement (No. 333-45466) that
Honeywell filed with the SEC utilizing a 'shelf' registration process. Under
this shelf process, we may offer from time to time up to $2,000,000,000 (or the
equivalent in foreign or composite currencies) of our debt securities, preferred
stock or common stock. This prospectus provides you with a general description
of the securities we may offer. Each time we offer securities, we will provide
you with a prospectus supplement that will describe the specific amounts, prices
and terms of the securities being offered. The prospectus supplement may also
add, update or change information contained in this prospectus.
To understand the terms of our securities, you should carefully read this
document with the attached prospectus supplement. Together they give the
specific terms of the securities we are offering. You should also read the
documents we have referred you to in 'Where You Can Find More Information About
Honeywell' below for information on our company and our financial statements.
HONEYWELL
Honeywell, a Delaware corporation, is a diversified technology and
manufacturing leader, serving customers worldwide with aerospace products and
services; control technologies for buildings, homes and industry; automotive
products; power generation systems; specialty chemicals; fibers; plastics; and
electronic and advanced materials. We are a leading provider of software and
solutions and Internet e-hubs, including MyPlant.com, MyFacilities.com and
MyAircraft.com, a joint venture with United Technologies and i2 Technologies. We
employ approximately 120,000 people in 95 countries.
Honeywell results from the combination on December 1, 1999 of AlliedSignal
Inc. and Honeywell Inc. In connection with the combination, AlliedSignal Inc.
changed its name to Honeywell International Inc.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of Honeywell for the periods indicated:
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-------------------- ------------------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
6.50 8.79 6.74 8.05 7.20 6.65 5.70
The ratio of earnings to fixed charges is generally computed by dividing the
sum of net income, income taxes and fixed charges (net of capitalized interest)
less undistributed equity income by fixed charges. Fixed charges represent gross
interest and amortization of debt discount and expense and the interest factor
of all rentals, consisting of an appropriate interest factor on operating
leases.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, the net
proceeds we receive from the sale of the securities offered by this prospectus
and the accompanying prospectus supplement will be used for general corporate
purposes. General corporate purposes may include the repayment of outstanding
debt, repurchase of our common stock, investments in or extensions of credit to
our subsidiaries, or the financing of possible acquisitions or business
expansion. The net proceeds may be invested temporarily or applied to repay
short-term debt until they are used for their stated purpose.
2
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the debt securities sets forth
certain general terms that may apply to debt securities offered under this
prospectus. The particular terms of any debt securities will be described in the
related prospectus supplement.
GENERAL
Debt securities will be our unsecured, unsubordinated debt obligations. They
will be issued under an indenture dated as of October 1, 1985, as amended by a
first supplemental indenture dated as of February 1, 1991 and a second
supplemental indenture dated as of November 1, 1997, between us and The Chase
Manhattan Bank, as trustee.
The following summary of certain provisions of the indenture is not
complete. You should refer to the indenture (including the amendments to it)
which are exhibits to our registration statement No. 333-45466. The indenture
has been qualified under the Trust Indenture Act. Section references below are
to the section in the indenture. The referenced sections of the indenture and
the definitions of capitalized terms in the indenture are incorporated by
reference in this prospectus.
The indenture does not limit the amount of debt that we may issue. The
indenture provides that debt securities may be issued thereunder up to the
principal amount authorized by us from time to time. We have issued
$2,609,760,000 principal amount of debt securities under our existing indenture
with The Chase Manhattan Bank as of the date of this prospectus.
The debt securities may be issued in one or more separate series. The
prospectus supplement relating to the particular series of debt securities being
offered will specify the particular amounts, prices and terms of those debt
securities. These terms may include:
the title and type of the debt securities;
any limit on the aggregate principal amount or aggregate initial offering
price of the debt securities and the amount payable upon acceleration;
the purchase price of the debt securities;
the dates on which the principal of the debt securities will be payable;
the interest rates, including any interest rates applicable to overdue
payments, of the debt securities, or the method for determining those
rates, and the interest payment dates for the debt securities;
the places where payments may be made on the debt securities;
any mandatory or optional redemption provisions applicable to the debt
securities;
any sinking fund or analogous provisions applicable to the debt securities;
the authorized denominations of the debt securities, if other than $1,000
and integral multiples of $1,000;
if other than U.S. dollars, the currency, currencies or composite
currencies, in which the purchase price or payments on the debt securities
will be payable. The currencies may be different for principal, premium and
interest payments;
any conversion or exchange provisions applicable to the debt securities;
any additional events of default applicable to the debt securities not set
forth in the indenture;
any securities exchange on which the debt securities may be listed; and
any other specific terms of the debt securities.
Some of the debt securities may be issued as original issue discount debt
securities. Original issue discount debt securities bear no interest or bear
interest at below-market rates and will be sold at a discount below their stated
principal amount. The prospectus supplement will also contain any special tax,
accounting or other information relating to original issue discount debt
3
securities or relating to certain other kinds of debt securities that may be
offered, including debt securities linked to an index or payable in currencies
other than U.S. dollars.
The debt securities will be issued only in fully registered form without
coupons. The indenture also provides that debt securities of a series may be
issued as permanent global debt securities. See ' -- Permanent Global Debt
Securities' and ' -- Book-Entry Issuance' below. No service charge will be made
for any transfer or exchange of debt securities, but we may require payment of
any taxes or other governmental charges.
Principal of and any premium and interest on the debt securities will be
payable at the corporate trust office of the trustee in New York City. Transfers
or exchanges of debt securities may be made at the same location. Payment of
interest on any debt securities may be made at our option by check mailed to the
registered holders of the debt securities at their registered addresses. In
connection with any payment on a debt security, we may require the holder to
certify information to us. In the absence of such certification, we may rely on
any legal presumption to determine whether we must deduct or withhold taxes,
assessments or governmental charges from a payment.
We may at any time repurchase debt securities at any price on the open
market or otherwise. We may in our discretion hold, resell or surrender to the
trustee for cancellation any debt securities that we acquire.
COVENANTS
The indenture does not limit our ability to enter into highly leveraged
transactions, nor does it provide special protection to holders of debt
securities in the event of those transactions. The indenture does not provide
special protection in the event of a sudden and dramatic decline in our credit
quality, including a decline resulting from a takeover, recapitalization or
similar restructuring. In addition, the indenture does not limit the amount of
indebtedness incurred by our subsidiaries. The covenants contained in the
indenture are described below.
Limitation on Liens. In the indenture, we covenant not to issue, assume or
guarantee any indebtedness for borrowed money secured by liens on
any property located in the United States which is
-- in the opinion of our board of directors, a principal manufacturing
property, or
-- an oil, gas or mineral producing property, or
any shares of capital stock or indebtedness of any subsidiary owning such
property,
without equally and ratably securing the debt securities, subject to certain
exceptions specified in the indenture. These exceptions include:
existing liens on our property or liens on property of corporations at the
time such corporations become our subsidiaries or are merged with us;
liens existing on property when acquired, or incurred to finance the
purchase price of that property;
certain liens on property to secure the cost of exploration, drilling or
development of, or improvements on, that property;
certain liens in favor of or required by contracts with governmental
entities; and
indebtedness secured by liens otherwise prohibited by the covenant not
exceeding 10% of the consolidated net tangible assets of Honeywell and our
consolidated subsidiaries (Sections 101 and 1005).
Transfers of oil, gas or other minerals in place for a period of time until the
transferee receives a specified amount of money or of such minerals or any other
transfers commonly referred to as 'production payments,' are outside the scope
of this covenant and are permitted without restriction.
4
Limitation on Sale and Lease-Back Transactions. We also covenant not to
enter into any sale and lease-back transaction covering any property located in
the United States which is
in the opinion of our board of directors, a principal manufacturing
property, or
an oil, gas or mineral producing property,
unless:
we would be entitled under the provisions described under ' -- Limitation
on Liens' to incur debt equal to the value of such sale and lease-back
transaction, secured by liens on the property to be leased, without equally
securing the outstanding debt securities; or
we, during the four months following the effective date of such sale and
lease-back transaction, apply an amount equal to the value of such sale and
lease-back transaction to the voluntary retirement of long-term
indebtedness of Honeywell or our subsidiaries (Sections 101 and 1006).
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may, without the consent of the holders of any debt securities,
consolidate or merge with any other person or transfer or lease all or
substantially all of our assets to another person or permit another corporation
to merge into Honeywell, provided that:
the successor is a person organized under U.S. law;
the successor person, if not Honeywell, assumes our obligations on the debt
securities and under the indenture;
after giving effect to the transaction, no event of default, and no event
which, after notice or lapse of time or both, would become an event of
default, shall have occurred and be continuing; and
certain other conditions are met (Section 801A).
DEFEASANCE PROVISIONS
The indenture contains a provision that, if made applicable to any series of
debt securities, permits us to elect:
(1) to defease and be discharged from all of our obligations (except for
certain obligations to register the transfer or exchange of debt
securities, to replace stolen, lost or mutilated debt securities, to
maintain paying agencies and to hold moneys for payment in trust) with
respect to any series of debt securities denominated and payable in U.S.
dollars then outstanding ('defeasance'); and/or
(2) to be released from our obligations under the covenants set forth in
Sections 1005 (limitation on liens) and 1006 (limitation on sale and
lease-back transactions) and from the consequences of an event of
default resulting from a breach of those covenants ('covenant
defeasance') (Sections 403 and 1008).
To elect defeasance or covenant defeasance, we must deposit in trust with
the trustee money and/or U.S. government obligations (which are direct
obligations of the United States backed by its full faith and credit) which
through the payment of principal and interest in accordance with their terms
will provide sufficient money, without reinvestment, to repay in full those debt
securities, including any sinking fund obligations (Section 101). As a condition
to defeasance or covenant defeasance, we must deliver to the trustee an opinion
of counsel that the holders of the debt securities will not recognize income,
gain or loss for Federal income tax purposes as a result of the defeasance or
covenant defeasance. In the case of defeasance under clause (1) above, that
opinion must refer to and be based upon a ruling received by us from the
Internal Revenue Service or published as a revenue ruling or upon a change in
applicable Federal income tax law, and such defeasance may not result in any
series of debt securities, if it is listed for trading on the New York Stock
Exchange, being delisted.
5
Under Federal income tax law as of the date of this prospectus, defeasance
would likely be treated as a taxable exchange of debt securities for interests
in the defeasance trust. As a result, a holder would recognize gain or loss
equal to the difference between the holder's cost or other tax basis for the
debt securities and the value of the holder's proportionate interest in the
defeasance trust. That holder would thereafter be required to include in income
a proportionate share of the income, gain or loss, as the case may be, of the
defeasance trust. Under Federal income tax law as of the date of this
prospectus, covenant defeasance would ordinarily not be treated as a taxable
exchange of debt securities. Purchasers of debt securities should consult their
own advisors as to the tax consequences to them of defeasance and covenant
defeasance, including the applicability and effect of tax laws other than the
Federal income tax law.
If we exercise our covenant defeasance option with respect to a particular
series of debt securities, then even if there were a default under the related
covenant, payment of those debt securities could not be accelerated. We may
exercise our defeasance option with respect to a particular series of debt
securities even if we previously had exercised our covenant defeasance option.
If we exercise our defeasance option, payment of those debt securities may not
be accelerated because of any event of default. If we exercise our defeasance
option or covenant defeasance option and an acceleration were to occur, the
realizable value at the acceleration date of the money and U.S. government
obligations in the defeasance trust could be less than the principal and
interest then due on those debt securities. This is because the required deposit
of money and/or U.S. government obligations in the defeasance trust is based
upon scheduled cash flows rather than market value, which will vary depending
upon interest rates and other factors.
MODIFICATION
We and the trustee may make modifications and amendments to the indenture
with the consent of the holders of not less than a majority in principal amount
of each series of outstanding debt securities affected by the modification or
amendment. Without the consent of each affected holder, no modification may:
change the stated maturity of any debt securities;
reduce the principal amount of any debt securities;
reduce the rate or extend the time of payment of interest or any premium of
any debt securities;
impair the right to institute suit for the enforcement of any payment on or
after its due date; or
reduce the percentage of the principal amount of debt securities required
to approve any supplemental indenture or any waiver under the indenture
(Section 902).
We and the trustee may amend the indenture without the consent of the
holders of debt securities:
to reflect our merger with another person;
to replace the trustee;
to issue a new series of debt securities;
to effect modifications that do not adversely affect any outstanding series
of debt securities; and
for certain other purposes (Section 901).
Any modification of the indenture subordinating any series of debt
securities issued under it to any other indebtedness of Honeywell will not be
effective without each holder's consent.
EVENTS OF DEFAULT; WAIVER
An event of default with respect to any series of debt securities will occur
under the indenture if:
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we fail to pay principal of or any premium on the series, except for
principal due upon sinking fund redemptions;
we fail to pay any installment of interest on the series for a period of 30
days;
we fail to pay any sinking fund redemption on the series for a period of 30
days;
we fail to perform any other covenant in the indenture for 90 days after
notice;
we or a court take certain actions relating to the bankruptcy, insolvency
or reorganization of Honeywell for the benefit of our creditors; or
any other event of default specified with respect to debt securities of
that series as described in the applicable prospectus supplement occurs
(Section 501).
No event of default with respect to a particular series of debt securities
issued under the indenture necessarily constitutes an event of default with
respect to any other series of debt securities (Section 501).
On the occurrence of an event of default with respect to a series of debt
securities, the trustee or the holders of at least 25% in principal amount at
maturity of such series of debt securities then outstanding may declare the
principal, or in the case of debt securities sold at an original issue discount,
the amount specified in the terms of the debt securities, to be due and payable
immediately (Section 501).
Subject to certain conditions, the declaration described in the preceding
paragraph may be annulled and past defaults, except uncured payment defaults and
certain other specified defaults, may be waived by the holders of not less than
a majority in aggregate principal amount at maturity of outstanding debt
securities of the series affected by any event of default (Sections 501, 502 and
507).
Upon payment of the principal amount in respect of an event of default on
any series of debt securities, together with any premium or interest due
thereon, all of our obligations in respect to payment of indebtedness on such
debt securities will terminate (Section 401).
The indenture requires the trustee to, within 90 days after the occurrence
of a default with respect to any outstanding series of debt securities, give the
holders of that series notice of the default if uncured. The trustee may
withhold this notice of default, except for default in the payment of principal
of or any premium or interest on, or of any sinking fund payment with respect
to, such series of debt securities, if it considers such withholding to be in
the interest of holders of debt securities (Section 508).
We are required annually to file with the trustee a certificate stating that
no default exists under the indenture, or specifying the nature and status of
any default (Section 1004).
Subject to provisions relating to its duties in case of default, the trustee
is under no obligation to exercise any of its rights or powers under the
indenture at the request, order or direction of any holders of debt securities
unless such holders of debt securities shall have offered to the trustee
reasonable security or indemnity (Section 603). Subject to that provision for
security or indemnification, the holders of a majority in principal amount of
the debt securities of any series then outstanding will have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to, or exercising any trust or power conferred on, the trustee with respect to
the debt securities of that series (Section 504).
INFORMATION CONCERNING THE TRUSTEE UNDER THE INDENTURE
We and some of our subsidiaries and affiliates maintain deposits with, and
conduct other banking transactions with, The Chase Manhattan Bank in the
ordinary course of business. These include:
The Chase Manhattan Bank is the trustee under the indenture under which our
Serial Zero Coupon Bonds Due through 2009 are outstanding and under the
indenture under which indebtedness of Honeywell Inc., our wholly owned
subsidiary, is outstanding.
The Chase Manhattan Bank is fiscal agent for our 8% Bonds Due May 15, 2006.
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The Chase Manhattan Bank is a lender under our revolving credit agreements
with a group of banks.
PERMANENT GLOBAL DEBT SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with a depositary
or its nominee identified in the related prospectus supplement (Section 203).
For most debt securities, the depositary will be DTC. A global security may not
be transferred except as a whole to the depositary, a nominee of the depositary
or their successors unless it is exchanged in whole or in part for debt
securities in individually certificated form. For a description of the
depositary arrangements, see 'Book-Entry Issuance'. Any additional terms of the
depositary arrangement with respect to any series of debt securities and the
rights of and limitations on owners of beneficial interests in a global security
representing a series of debt securities may be described in the related
prospectus supplement.
DESCRIPTION OF PREFERRED STOCK
GENERAL
Honeywell's restated certificate of incorporation, or charter, authorizes
the board of directors or a committee of the board of directors to cause
preferred stock to be issued in one or more series, without stockholder action.
They are authorized to issue up to 40,000,000 shares of preferred stock, without
par value, and can determine the number of shares of each series, and the
rights, preferences and limitations of each series. We may amend the charter to
increase the number of authorized shares of preferred stock in a manner
permitted by the charter and Delaware law. As of the date of this prospectus,
there is no preferred stock outstanding.
The particular terms of any series of preferred stock offered by us will be
described in the prospectus supplement relating to that series of preferred
stock. Those terms relating to the series of preferred stock offered may
include:
the number of shares of the preferred stock being offered;
the title and liquidation preference per share of the preferred stock;
the purchase price of the preferred stock;
the dividend rate or method for determining the dividend rate;
the dates on which dividends will be paid;
whether dividends on the preferred stock will be cumulative or
noncumulative and, if cumulative, the dates from which dividends shall
commence to accumulate;
any redemption or sinking fund provisions applicable to the preferred
stock;
any securities exchange on which the preferred stock may be listed; and
any additional dividend, liquidation, redemption, sinking fund and other
rights and restrictions applicable to the preferred stock.
The following summary is not complete. You should refer to the certificate
of designations relating to any series of preferred stock for the complete terms
of that preferred stock. The certificate of designations will be filed with the
Securities and Exchange Commission at the time of the offering of the preferred
stock.
Each share of preferred stock will, when issued, be fully paid and
nonassessable. Unless otherwise specified in the prospectus supplement, if we
liquidate, dissolve or wind-up our business, each series of preferred stock will
have the same rank as to dividends and distributions as each other series of
preferred stock we may issue in the future. Preferred stock will have no
preemptive rights.
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DIVIDENDS RIGHTS
Holders of preferred stock will be entitled to receive, when, as and if
declared by the board of directors, cash dividends at the rates and on the dates
set forth in the prospectus supplement. Dividend rates may be fixed or variable
or both. Different series of preferred stock may be entitled to dividends at
different dividend rates or based upon different methods of determination. Each
dividend will be payable to the holders of record as they appear on our stock
books on record dates determined by the board of directors. Dividends on
preferred stock may be cumulative or noncumulative, as specified in the
prospectus supplement. If the board of directors fails to declare a dividend on
any preferred stock for which dividends are noncumulative, then the right to
receive that dividend will be lost, and we will have no obligation to pay the
dividend for that dividend period, whether or not dividends are declared for any
future dividend period.
No full dividends will be declared or paid on any preferred stock unless
full dividends for the dividend period commencing after the immediately
preceding dividend payment date and any cumulative dividends still owing have
been or contemporaneously are declared and paid on all other series of preferred
stock which have the same rank as, or rank senior to, that series of preferred
stock. When those dividends are not paid in full, dividends will be declared pro
rata, so that the amount of dividends declared per share on that series of
preferred stock and on each other series of preferred stock having the same rank
as that series of preferred stock will bear to each other the same ratio that
accrued dividends per share on that series of preferred stock and the other
series of preferred stock bear to each other. In addition, generally, unless
full dividends including any cumulative dividends still owing on all outstanding
shares of any series of preferred stock have been paid, no dividends will be
declared or paid on the common stock and generally we may not redeem or purchase
any common stock. No interest will be paid in connection with any dividend
payment or payments which may be in arrears.
Unless otherwise set forth in the prospectus supplement, the dividends
payable for each dividend period will be computed by annualizing the applicable
dividend rate and dividing by the number of dividend periods in a year, except
that the amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year consisting of twelve 30-day months and, for any period less than a
full month, the actual number of days elapsed in the period.
RIGHTS UPON LIQUIDATION
If we liquidate, dissolve or wind-up our affairs, either voluntarily or
involuntarily, the holders of each series of preferred stock will be entitled to
receive liquidating distributions in the amount set forth in the prospectus
supplement relating to the series of preferred stock, plus an amount equal to
any accrued and unpaid dividends before any distribution of assets is made to
the holders of common stock. If the amounts payable with respect to preferred
stock of any series and any stock having the same rank as that series of
preferred stock are not paid in full, the holders of the preferred stock will
share ratably in any such distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. After the holders of
each series of preferred stock having the same rank are paid in full, they will
have no right or claim to any of our remaining assets. Neither the sale of all
or substantially all of our property or business nor a merger or consolidation
by us with any other corporation will be considered a dissolution, liquidation
or winding up by us of our business or affairs.
REDEMPTION
Any series of preferred stock may be redeemable in whole or in part at our
option. In addition, any series of preferred stock may be subject to mandatory
redemption pursuant to a sinking fund. The redemption provisions that may apply
to a series of preferred stock, including the redemption dates and the
redemption prices for that series, will be set forth in the related prospectus
supplement.
9
If a series of preferred stock is subject to mandatory redemption, the
prospectus supplement will specify the year we can begin to redeem shares of the
preferred stock, the number of shares of the preferred stock we can redeem each
year, and the redemption price per share. We may pay the redemption price in
cash, stock or other securities of Honeywell or of third parties, as specified
in the prospectus supplement. If the redemption price is to be paid only from
the proceeds of the sale of our capital stock, the terms of the series of
preferred stock may also provide that if no such capital stock is sold or if the
amount of cash received is insufficient to pay in full the redemption price then
due, the series of preferred stock will automatically be converted into shares
of the applicable capital stock pursuant to conversion provisions specified in
the prospectus supplement.
If fewer than all the outstanding shares of any series of preferred stock
are to be redeemed, whether by mandatory or optional redemption, the board of
directors will determine the method for selecting the shares to be redeemed,
which may be by lot or pro rata by any other method determined to be equitable.
From and after the redemption date, dividends will cease to accrue on the shares
of preferred stock called for redemption and all rights of the holders of those
shares other than the right to receive the redemption price will cease.
CONVERSION RIGHTS
The prospectus supplement will state any conversion rights under which
shares of preferred stock are convertible into shares of common stock or another
series of preferred stock or other property. As described under ' -- Redemption'
above, under certain circumstances preferred stock may be mandatorily converted
into common stock or another series of preferred stock.
VOTING RIGHTS
For most series of preferred stock, the holders of preferred stock will not
be entitled to vote. Except as indicated in the prospectus supplement, if we
issue full shares of any series of preferred stock, each share will be entitled
to one vote on matters on which holders of that series of preferred stock are
entitled to vote. Because each full share of any series of preferred stock will
be entitled to one vote, the voting power of that series will depend on the
number of shares in that series, and not on the aggregate liquidation preference
or initial offering price of the shares of that series of preferred stock.
TRANSFER AGENT AND REGISTRAR
We will appoint a transfer agent, registrar and dividend disbursement agent
for the preferred stock. The registrar for the preferred stock will send notices
to the holders of the preferred stock of any meeting at which such holders will
have the right to elect directors or to vote on any other matter.
PERMANENT GLOBAL PREFERRED SECURITIES
A series of preferred stock may be issued in whole or in part in the form of
one or more global securities that will be deposited with a depositary or its
nominee identified in the related prospectus supplement. For most series of
preferred stock, the depositary will be DTC. A global security may not be
transferred except as a whole to the depositary, a nominee of the depositary or
their successors unless it is exchanged in whole or in part for preferred stock
in individually certificated form. For a description of the depositary
arrangements, see 'Book-Entry Issuance'. Any additional terms of the depositary
arrangement with respect to any series of preferred stock and the rights of and
limitations on owners of beneficial interests in a global security representing
a series of preferred stock may be described in the related prospectus
supplement.
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DESCRIPTION OF COMMON STOCK
GENERAL
As of the date of this prospectus, we are authorized to issue up to
2,000,000,000 shares of common stock. As of June 30, 2000, we had approximately
957.6 million shares of common stock issued (including approximately 157.5
million shares held in treasury) and had reserved approximately 88.5 million
shares of common stock for issuance under various employee or director incentive
compensation and option plans.
The Bank of New York is the transfer agent and registrar for the common
stock. Shares of common stock are listed on the New York, Chicago and Pacific
stock exchanges, under the symbol 'HON'. In addition, shares of common stock are
listed on the London stock exchange.
The following summary is not complete. You should refer to the applicable
provision of Honeywell's charter and by-laws and to Delaware corporate law for a
complete statement of the terms and rights of the common stock.
DIVIDENDS
Holders of common stock are entitled to receive dividends when, as and if
declared by the board of directors, out of funds legally available for their
payment, subject to the rights of holders of any preferred stock outstanding.
VOTING RIGHTS
Each holder of common stock is entitled to one vote per share. Subject to
any rights of the holders of any series of preferred stock pursuant to
applicable law or the provision of the certificate of designations creating that
series, all voting rights are vested in the holders of shares of common stock.
Holders of shares of common stock have noncumulative voting rights, which means
that the holders of more than 50% of the shares voting for the election of
directors can elect 100% of the directors, and the holders of the remaining
shares voting for the election of directors will not be able to elect any
directors.
RIGHTS UPON LIQUIDATION
In the event of Honeywell's voluntary or involuntary liquidation,
dissolution or winding up, the holders of common stock will be entitled to share
equally in any of our assets available for distribution after the payment in
full of all debts and distributions and after the holders of any series of
outstanding preferred stock have received their liquidation preferences in full.
OTHER RIGHTS
The issued and outstanding shares of common stock are fully paid and
nonassessable. Holders of shares of common stock are not entitled to preemptive
rights. Shares of common stock are not convertible into shares of any other
class of capital stock. If we merge or consolidate with or into another company
and as a result our common stock is converted into or exchangeable for shares of
stock, other securities or property (including cash), all holders of common
stock will be entitled to receive the same kind and amount of consideration per
share of common stock.
POSSIBLE ANTI-TAKEOVER PROVISIONS
Honeywell's charter and by-laws provide:
for a classified board of directors that is divided into three classes as
nearly equal in number as is possible, with the term of one class expiring
at the annual meeting in each year;
that the board of directors may establish the number of seats on the board,
subject to the right of preferred stockholders to elect directors in
certain circumstances and shareowners' rights to set the number of seats
upon the vote of holders of 80% of the outstanding shares of common stock;
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that vacancies on the board of directors other than at the annual meeting
are filled by a vote of the remaining directors;
that special meetings of shareowners generally may be called only by the
chief executive officer or by a majority of the authorized number of
directors;
that action may be taken by shareowners only at annual or special meetings
and not by written consent;
advance notice must be given to Honeywell for a shareowner to nominate
directors for election at a shareowner meeting;
that the following actions require approval by holders of 80% of the
outstanding shares entitled to vote:
the removal for cause of directors at other than the expiration of
their terms; and
the amendment or repeal of Honeywell's charter and/or by-law provisions
relating to the classified board of directors, the number of seats on
the board of directors, the filling of board vacancies, removal of
directors for cause, calling of special meetings of shareowners,
prohibition of shareowner action by written consent and amendment or
repeal of provisions requiring an 80% vote of shareowners.
Any of these provisions could delay, deter or prevent a tender offer for or
attempted takeover of Honeywell.
Honeywell's charter permits us to issue up to 40,000,000 shares of preferred
stock with terms which may be set by our board of directors or a committee of
the board. Such preferred stock could have terms that could delay, deter or
prevent a tender offer or takeover attempt of Honeywell.
Under Delaware law, an acquirer of 15% or more of our shares of stock must
wait three years before a business combination with us unless one of the
following exceptions is available:
approval by our board of directors prior to the time the acquirer became a
15% shareowner of Honeywell;
acquisition of at least 85% of our voting stock in the transaction in which
the acquirer became a 15% shareowner of Honeywell; or
approval of the business combination by our board of directors and
two-thirds of our disinterested shareowners.
BOOK-ENTRY ISSUANCE
Most series of debt securities and preferred stock will be book-entry
securities. Upon issuance, all book-entry securities of the same issue will be
represented by one or more fully registered global securities. Each global
security will be deposited with, or on behalf of, The Depository Trust Company
or 'DTC', a securities depository, and will be registered in the name of DTC or
a nominee of DTC. DTC will thus be the only registered holder of these
securities and will be considered the sole owner of the securities.
Purchasers may only hold interests in the global securities through DTC if
they are a participant in the DTC system. Purchasers may also hold interests
through a securities intermediary -- a bank, brokerage house or other
institution that maintains securities accounts for customers -- that has an
account with DTC or its nominee. DTC will maintain accounts showing the
securities holdings of its participants, and these participants will in turn
maintain accounts showing the securities holdings of their customers. Some of
these customers may themselves be securities intermediaries holding debt
securities for their customers. Thus, each beneficial owner of a book-entry
security will hold that security indirectly through a hierarchy of
intermediaries, with DTC at the 'top' and the beneficial owner's own securities
intermediary at the 'bottom.'
The securities of each beneficial owner of a book-entry security will be
evidenced solely by entries on the books of the beneficial owner's securities
intermediary. The actual purchaser of the
12
securities will generally not be entitled to have the securities represented by
the global securities registered in its name and will not be considered the
owner. In most cases, a beneficial owner will also not be able to obtain a paper
certificate evidencing the holder's ownership of securities. The book-entry
system for holding securities eliminates the need for physical movement of
certificates. The laws of some jurisdictions require some purchasers of
securities to take physical delivery of their securities in definitive form.
These laws may impair the ability to transfer book-entry securities.
Unless otherwise specified in the prospectus supplement with respect to a
series of debt securities or preferred stock, a beneficial owner of book-entry
securities represented by a global security may exchange the securities for
definitive or paper securities only if:
DTC is unwilling or unable to continue as depositary for such global
security and Honeywell is unable to find a qualified replacement for DTC
within 90 days;
at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934; or
Honeywell in its sole discretion decides to allow some or all book-entry
securities to be exchangeable for definitive securities in registered form.
Any global security that is exchangeable will be exchangeable in whole for
definitive securities in registered form with the same terms, and in the case of
debt securities, in an equal aggregate principal amount in denominations of
$1,000 and whole multiples of $1,000. Definitive securities will be registered
in the name or names of the person or persons specified by DTC in a written
instruction to the registrar of the securities. DTC may base its written
instruction upon directions it receives from its participants.
In this prospectus and the accompanying prospectus supplement, for
book-entry securities, references to actions taken by security holders will mean
actions taken by DTC upon instructions from its participants, and references to
payments and notices of redemption to security holders will mean payments and
notices of redemption to DTC as the registered holder of the securities for
distribution to participants in accordance with DTC's procedures.
DTC is a limited purpose trust company organized under the laws of the State
of New York, a member of the Federal Reserve System, a 'clearing corporation'
within the meaning of the New York Uniform Commercial Code and a 'clearing
agency' registered under section 17A of the Securities Exchange Act. The rules
applicable to DTC and its participants are on file with the SEC.
Honeywell will not have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests in the book-entry securities or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
PLAN OF DISTRIBUTION
We may sell the securities:
through underwriters,
through agents, or
directly to institutional purchasers.
The prospectus supplement will set forth the terms of the offering of the
securities, including the following:
the name or names of any underwriters;
the purchase price and the proceeds we will receive from the sale;
any underwriting discounts and other items constituting underwriters'
compensation; and
any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers.
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If underwriters are used in the sale, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The securities may be
either offered to the public through underwriting syndicates represented by
managing underwriters or by underwriters without a syndicate. The obligations of
the underwriters to purchase securities will be subject to conditions precedent
and the underwriters will be obligated to purchase all the securities of a
series if any are purchased. Any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
Securities may be sold directly by us or through agents designated by us
from time to time. Any agent involved in the offer or sale of the securities in
respect of which this prospectus is delivered will be named, and any commissions
payable by us to that agent will be set forth, in the prospectus supplement.
Unless otherwise indicated in the prospectus supplement, any agent will be
acting on a best efforts basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by certain types
of institutions to purchase securities from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts. These
contracts will provide for payment and delivery on a specified date in the
future. The conditions to these contracts and the commissions payable for
solicitation of such contracts will be set forth in the applicable prospectus
supplement.
Agents and underwriters may be entitled to indemnification by us against
civil liabilities arising out of this prospectus, including liabilities under
the Securities Act of 1933, or to contribution with respect to payments which
the agents or underwriters may be required to make relating to those
liabilities.
Each series of debt securities or preferred stock will be a new issue of
securities with no established trading market. Any underwriter may make a market
in the debt securities, but will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can be given as to
the liquidity of the trading market for any debt securities or preferred stock.
Shares of common stock offered under this prospectus will be listed on the
New York, Chicago, Pacific and London stock exchanges.
Agents and underwriters may be engaged in transactions with, or perform
commercial or investment banking or other services for, us or our subsidiaries
or affiliates, in the ordinary course of business.
We estimate that our expenses associated with this offering will be
approximately $1.2 million, excluding underwriting discounts and commissions.
EXPERTS
The audited financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K of Honeywell International Inc. for
the year ended December 31, 1999, except as they relate to Honeywell Inc. (a
wholly-owned subsidiary of Honeywell International Inc.) as of and for the two
years ended December 31, 1998, have been audited by PricewaterhouseCoopers LLP,
independent accountants, and, insofar as they relate to Honeywell Inc. as of and
for the two years ended December 31, 1998, by Deloitte & Touche LLP, independent
accountants. Such financial statements have been so incorporated in reliance on
the reports of such independent accountants given on the authority of such firms
as experts in auditing and accounting.
With respect to the unaudited consolidated financial information of
Honeywell International Inc. for the three-month periods ended March 31, 2000
and 1999 and the three-month and six-month periods ended June 30, 2000 and 1999
incorporated by reference in this prospectus, PricewaterhouseCoopers LLP
reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
reports dated May 5, 2000 and July 28, 2000 incorporated by reference in this
prospectus, state that they did
14
not audit and did not express an opinion on that unaudited consolidated
financial information. Accordingly, the degree of reliance on their report on
such information should be restricted in light of the limited nature of the
review procedures applied. PricewaterhouseCoopers LLP is not subject to the
liability provisions of Section 11 of the Securities Act for their report on the
unaudited consolidated financial information because that report is not a
'report' or a 'part' of the registration statement prepared or certified by
PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the
Securities Act.
LEGAL OPINIONS
Certain legal matters will be passed upon for Honeywell by J. Edward Smith,
Assistant General Counsel, Corporate and Finance, of Honeywell, and for any
underwriters by Cravath, Swaine & Moore, New York, New York. Mr. Smith
beneficially owns shares of Honeywell common stock and has options to acquire
additional shares of Honeywell common stock granted under option plans of
Honeywell.
In the opinions described above, certain assumptions will be made regarding
future action required to be taken by Honeywell and others in connection with
the issuance and sale of any particular offered securities, the specific terms
of those offered securities and other matters which may affect the validity of
those offered securities but which cannot be ascertained on the date of the
relevant opinion.
WHERE YOU CAN FIND MORE INFORMATION ABOUT HONEYWELL
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in the following locations:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, DC 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public at the SEC's
web site at http://www.sec.gov.
You may also inspect reports, proxy statements and other information about
Honeywell at the offices of the New York Stock Exchange Inc., 20 Broad Street,
New York, NY 10005; the Chicago Stock Exchange, One Financial Place, 440 South
LaSalle Street, Chicago, IL 60605; and the Pacific Exchange, 301 Pine Street,
San Francisco, CA 94104.
The SEC allows us to 'incorporate by reference' into this prospectus the
information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus, and
information filed with the SEC after the date of this prospectus will update and
supersede information on file with the SEC as of the date of this prospectus. We
incorporate by reference:
HONEYWELL'S SEC FILINGS (FILE NO. 1-8974) DESCRIPTION, PERIOD OR DATE
----------------------------------------- ---------------------------
Annual Report on Form 10-K Year ended December 31, 1999, as amended
Quarterly Reports on Form 10-Q Quarters ended March 31 and June 30, 2000
Current Reports on Form 8-K Filed January 21, February 14, February 29
and September 8, 2000
Registration Statement on Form 8-B Filed on August 16, 1985, containing a
description of the common stock
15
We incorporate by reference additional documents that we may file with the
SEC after the date of this prospectus. These documents include periodic reports,
which may include Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K, as well as proxy statements.
You can obtain any of the documents incorporated by reference in this
prospectus through us, or from the SEC through the SEC's web site at the address
provided above. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit in this prospectus. You can
obtain documents incorporated by reference in this prospectus free of charge by
requesting them in writing or by telephone from us at the following address and
telephone number:
Honeywell International Inc.
101 Columbia Road
P.O. Box 2245
Morris Township, NJ 07962-2245
Attention: Corporate Publications
Telephone No.: (973) 455-5402
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this document and in documents
that are incorporated by reference in this document that are subject to risks
and uncertainties. Forward-looking statements include information concerning
possible or assumed future actions, events or results of operations of
Honeywell. Forward-looking statements include the information in this document,
specifically, regarding:
efficiencies business diversification
cost savings future economic performance
sales enhancements future acquisitions
income and margins management's plans
earnings per share business portfolios
free cash flow merger integration related expenses
growth
With respect to all forward-looking statements, we claim the protection of
the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.
You should understand that the following important factors, in addition to
those discussed elsewhere in this document and in the documents which are
incorporated by reference, could affect the future results of Honeywell and
could cause those results or other outcomes to differ materially from those
expressed or implied in our forward-looking statements:
ECONOMIC AND INDUSTRY CONDITIONS
materially adverse changes in economic and industry conditions and customer
demand generally or in the markets served by us
supply and demand for and pricing of supplies and components
changes in demographics and consumer preferences or demands for our goods
and services
fluctuations of foreign currencies
COMPETITIVE FACTORS
the competitiveness of product substitutes
the actions of competitors
16
new technologies
industry consolidation
deregulation
OPERATING FACTORS
supply disruptions
acquisitions or divestitures
changes in operating conditions and costs
risks relating to performance of contracts, including dependence on
performance of third-parties
availability of intellectual property rights for newly developed products
changes in regulatory environment
the challenges inherent in diverting management's focus and resources from
other strategic opportunities and from operational matters during merger
integration
the impact of the loss of employees
17
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PRINCIPAL EXECUTIVE OFFICE OF HONEYWELL INTERNATIONAL INC.
101 Columbia Road
Morris Township, New Jersey 07962
TRUSTEE AND PRINCIPAL PAYING AGENT
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
LUXEMBOURG PAYING AGENT/TRANSFER AGENT
Chase Manhattan Bank Luxembourg S.A.
5 rue Plaetis
L-2338 Luxembourg
LEGAL ADVISORS
To Honeywell To the Underwriters
As to United States Law As to United States Law
Victor P. Patrick, Esq. Skadden, Arps, Slate,
Vice President, Secretary and Meagher & Flom LLP
Deputy General Counsel Four Times Square
Honeywell International Inc. New York, New York 10036
101 Columbia Road
Morris Township, New Jersey 07962
LISTING AGENT
Deutsche Bank Luxembourg S.A.
2 Boulevard Konrad Adenauer
L-1115 Luxembourg
INDEPENDENT ACCOUNTANTS TO HONEYWELL
PricewaterhouseCoopers LLP
400 Campus Drive
Florham Park, New Jersey 07932
________________________________________________________________________________
$1,000,000,000
HONEYWELL INTERNATIONAL INC.
$500,000,000 5 1/8% NOTES DUE 2006
$500,000,000 6 1/8% NOTES DUE 2011
[LOGO]
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PROSPECTUS SUPPLEMENT
OCTOBER 25, 2001
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BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL
SALOMON SMITH BARNEY
DEUTSCHE BANC ALEX. BROWN
HSBC
JPMORGAN
BNY CAPITAL MARKETS, INC.
TOKYO-MITSUBISHI INTERNATIONAL PLC
________________________________________________________________________________
STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as...............'r'