Honeywell International Inc. (HON), the maker of products including thermostats and flight controls, was sued by an investor who claims some officers and directors wasted corporate assets by awarding excessive stock options in violation of company policy.
An incentive plan for Morris Township, New Jersey-based Honeywell limits equity awards for officers and employees to no more than 2 million shares vesting in less than three years, and directors granted more than 4 million shares from 2006 to 2011, the shareholder, Christine Ruckert, said in a complaint filed today in Delaware Chancery Court in Wilmington.
Authorizing the stock-option grants was “not a good faith exercise of business judgment to protect and promote the company’s corporate interests, but rather lined the pockets” of grantees, Ruckert said.
Ruckert is asking the court to rescind the excess stock options and award damages to the company from those responsible for the allegedly unauthorized grants, according to court papers.
Rob Ferris, a company spokesman, said the claims are without merit and the company will fight the suit.
“The plaintiffs are confusing our standard long-term options grants” with special option grants, he said in an e- mailed statement. “This special 2 million share option pool is used very infrequently and the company has never exhausted the entire allocation.”
The case is Ruckert v. Cote, CA8469, Delaware Chancery Court (Wilmington).
To contact the reporter on this story: Dawn McCarty in Wilmington, Delaware, at email@example.com