Delaware
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001-39221
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83-3789412
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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One Carrier Place
Farmington, Connecticut
(Address of Principal Executive Offices)
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06032
(Zip Code)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act: |
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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OTIS
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The New York Stock Exchange
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Item 1.01. |
Entry Into a Material Definitive Agreement.
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• |
Separation and Distribution Agreement;
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• |
Transition Services Agreement;
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• |
Tax Matters Agreement;
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• |
Employee Matters Agreement; and
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• |
Intellectual Property Agreement.
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Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Judith F. Marks
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President and Chief Executive Officer
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Rahul Ghai
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Vice President and Chief Financial Officer
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Michael P. Ryan
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Vice President and Chief Accounting Officer (Controller)
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• |
Each of Jeffrey H. Black, Kathy Hopinkah Hannan, Shailesh G. Jejurikar and Shelley Stewart, Jr. were appointed to serve as members of the Audit Committee of the Board and effective as of the Effective Time, Jeffrey H. Black was
appointed Chair of the Audit Committee;
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|
• |
Each of John H. Walker, Shailesh G. Jejurikar, Harold W. McGraw III and Margaret M. Preston were appointed to serve as members of the Compensation Committee of the Board and John H. Walker was appointed Chair of the Compensation
Committee;
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• |
Each of Margaret M. Preston, Kathy Hopinkah Hannan, Harold W. McGraw III and Shelley Stewart, Jr. were appointed to serve as members of the Nominations & Governance Committee of the Board and Margaret M. Preston was appointed
Chair of the Nominations & Governance Committee; and
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• |
Christopher J. Kearney was appointed Executive Chairman of the Board.
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• |
Otis Worldwide Corporation 2020 Long-Term Incentive Plan;
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• |
Otis Worldwide Corporation Change in Control Severance Plan;
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• |
Otis Worldwide Corporation Executive Annual Bonus Plan;
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• |
Otis Worldwide Corporation Pension Preservation Plan;
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• |
Otis Worldwide Corporation Retirement Plan for Third Country National Employees; and
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• |
French Sub-Plan for Restricted Stock Units Granted Under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan.
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Item 5.03 |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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Item 5.05 |
Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.
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Item 7.01 |
Regulation FD Disclosure.
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Item 9.01 |
Financial Statements and Exhibits.
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(d)
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Exhibits
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Exhibit No.
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Exhibit
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Separation and Distribution Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation
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Amendment to Certificate of Incorporation of Otis Worldwide Corporation
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Amended and Restated Certificate of Incorporation of Otis Worldwide Corporation
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Exhibit No.
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Exhibit
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Amended and Restated Bylaws of Otis Worldwide Corporation
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Transition Services Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation
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Tax Matters Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation
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Employee Matters Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation
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Intellectual Property Agreement, dated as of April 2, 2020, by and among United Technologies Corporation, Otis Worldwide Corporation and Carrier Global Corporation
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Otis Worldwide Corporation 2020 Long-Term Incentive Plan
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Otis Worldwide Corporation Change in Control Severance Plan
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Otis Worldwide Corporation Executive Annual Bonus Plan
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Otis Worldwide Corporation Pension Preservation Plan
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Otis Worldwide Corporation Retirement Plan for Third Country National Employees
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Otis Worldwide Corporation Board of Directors Deferred Stock Unit Plan
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French Sub-Plan for Restricted Stock Units Granted Under the Otis Worldwide Corporation 2020 Long-Term Incentive Plan
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Press Release of Otis Worldwide Corporation, issued April 3, 2020
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104 |
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.
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OTIS WORLDWIDE CORPORATION
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||||
By:
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/s/ Nora E. LaFreniere
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|||
Name:
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Nora E. LaFreniere
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|||
Title:
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Vice President, General Counsel & Secretary
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Page
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ARTICLE I DEFINITIONS
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2
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ARTICLE II THE SEPARATION
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18
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||
2.1
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Transfer of Assets and Assumption of Liabilities
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18
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2.2
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Carrier Assets; Otis Assets; UTC Assets
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21
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2.3
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Carrier Liabilities; Otis Liabilities; UTC Liabilities
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25
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2.4
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Approvals, Notifications and Delays
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29
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2.5
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Novation of Liabilities
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30
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2.6
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Release of Guarantees
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31
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2.7
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Termination of Agreements
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32
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2.8
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Treatment of Shared Contracts
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33
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2.9
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Bank Accounts; Cash Balances
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34
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2.10
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Ancillary Agreements
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35
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2.11
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Disclaimer of Representations and Warranties
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35
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2.12
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Financing Arrangements; Cash Transfers.
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36
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2.13
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Financial Information Certifications
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37
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2.14
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Transition Committee
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38
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ARTICLE III THE DISTRIBUTIONS
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38
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||
3.1
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Sole and Absolute Discretion; Cooperation
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38
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3.2
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Actions Prior to the Distribution
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39
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3.3
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Conditions to Each Distribution
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40
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3.4
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The Distributions
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42
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ARTICLE IV MUTUAL RELEASES; INDEMNIFICATION
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44
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4.1
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Release of Pre-Distribution Claims
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44
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4.2
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Indemnification by Carrier
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47
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4.3
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Indemnification by Otis
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48
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4.4
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Indemnification by UTC
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49
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4.5
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Indemnification Obligations Net of Insurance Proceeds and Other Amounts
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49
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4.6
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Procedures for Indemnification of Third-Party Claims
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50
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4.7
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Additional Matters
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52
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4.8
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Right of Contribution
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53
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4.9
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Covenant Not to Sue
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54
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4.10
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Remedies Cumulative
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54
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4.11
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Survival of Indemnities
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55
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ARTICLE V CERTAIN OTHER MATTERS
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55
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||
5.1
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Insurance Matters
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55
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5.2
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Late Payments
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58
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5.3
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Inducement
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58
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5.4
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Post-Effective Time Conduct
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58
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5.5
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Director and Officer Insurance
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59
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ARTICLE VI EXCHANGE OF INFORMATION; CONFIDENTIALITY
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59
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6.1
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Agreement for Exchange of Information
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59
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6.2
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Ownership of Information
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60
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6.3
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Compensation for Providing Information
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60
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6.4
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Record Retention
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61
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6.5
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Limitations of Liability
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61
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6.6
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Other Agreements Providing for Exchange of Information
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61
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6.7
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Production of Witnesses; Records; Cooperation
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61
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6.8
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Privileged Matters
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62
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6.9
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Confidentiality
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65
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6.10
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Protective Arrangements
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66
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ARTICLE VII DISPUTE RESOLUTION
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67
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||
7.1
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Good Faith Officer Negotiation
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67
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7.2
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Mediation
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67
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7.3
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Arbitration
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68
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7.4
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Litigation and Unilateral Commencement of Arbitration
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68
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7.5
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Conduct During Dispute Resolution Process
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69
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7.6
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Dispute Resolution Coordination
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69
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ARTICLE VIII FURTHER ASSURANCES AND ADDITIONAL COVENANTS
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69
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||
8.1
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Further Assurances
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69
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ARTICLE IX TERMINATION
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70
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||
9.1
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Termination
|
70
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9.2
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Effect of Termination
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71
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ARTICLE X MISCELLANEOUS
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71
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||
10.1
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Counterparts; Entire Agreement; Corporate Power
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71
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10.2
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Governing Law
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72
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10.3
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Assignability
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72
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10.4
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Third-Party Beneficiaries
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72
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10.5
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Notices
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72
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10.6
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Severability
|
74
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|
10.7
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Force Majeure
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74
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10.8
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No Set-Off
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75
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10.9
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Expenses
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75
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10.10
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Headings
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75
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10.11
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Survival of Covenants
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75
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10.12
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Waivers of Default
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75
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10.13
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Specific Performance
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75
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10.14
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Amendments
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76
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10.15
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Interpretation
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76
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10.16
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Limitations of Liability
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77
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10.17
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Performance
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77
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10.18
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Mutual Drafting
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77
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10.19
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Ancillary Agreements
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77
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SCHEDULES
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|
Schedule 1.1
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Carrier Discontinued or Divested Businesses
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Schedule 1.2
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Carrier Contracts
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Schedule 1.3
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Carrier Transferred Entities
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Schedule 1.4
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Otis Discontinued or Divested Businesses
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Schedule 1.5
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Otis Contracts
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Schedule 1.6
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Otis Transferred Entities
|
Schedule 2.1(a)
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Plan of Reorganization
|
Schedule 2.2(a)(ix)(A)
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Carrier Former Captive Assets
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Schedule 2.2(a)(x)
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Carrier Assets
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Schedule 2.2(b)(ix)(A)
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Otis Former Captive Assets
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Schedule 2.2(b)(x)
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Otis Assets
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Schedule 2.2(c)
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UTC Assets
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Schedule 2.3(a)(iii)
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Carrier Liabilities
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Schedule 2.3(a)(iv)
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Carrier Business Liabilities
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Schedule 2.3(a)(viii)
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Carrier Specified Litigation Liabilities
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Schedule 2.3(b)(iii)
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Otis Liabilities
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Schedule 2.3(b)(iv)
|
Otis Business Liabilities
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Schedule 2.3(b)(viii)
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Otis Specified Litigation Liabilities
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Schedule 2.3(c)(i)
|
UTC Liabilities
|
Schedule 2.5(a)
|
Novation of Liabilities
|
Schedule 2.7(b)(ii)
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Intercompany Agreements
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Schedule 2.12(a)
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Carrier Financing Arrangements
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Schedule 2.12(b)
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Otis Financing Arrangements
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Schedule 4.4(e)
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Specified UTC Information
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Schedule 5.1(b)
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Insurance Access Limitations
|
Schedule 10.9
|
Allocation of Certain Costs and Expenses
|
EXHIBITS
|
|
Exhibit A
|
Amended and Restated Certificate of Incorporation of Carrier Global Corporation
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Exhibit B
|
Amended and Restated Bylaws of Carrier Global Corporation
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Exhibit C
|
Amended and Restated Certificate of Incorporation of Otis Worldwide Corporation
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Exhibit D
|
Amended and Restated Bylaws of Otis Worldwide Corporation
|
UNITED TECHNOLOGIES CORPORATION
|
|||
By:
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/s/ Michael R. Dumais
|
||
Name:
|
Michael R. Dumais
|
||
Title:
|
Executive Vice President, Operations & Strategy
|
||
OTIS WORLDWIDE CORPORATION
|
|||
By:
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/s/ Michael P. Ryan
|
||
Name:
|
Michael P. Ryan
|
||
Title:
|
Vice President, Controller
|
||
CARRIER GLOBAL CORPORATION
|
|||
By:
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/s/ Kyle Crockett
|
||
Name:
|
Kyle Crockett
|
||
Title:
|
Vice President, Controller
|
OTIS WORLDWIDE CORPORATION
|
|
/s/ Debra F. Guss
|
|
Name: Debra F. Guss
|
|
Title: Vice President, Treasurer
|
|
1. |
The name of this corporation is: Otis Worldwide Corporation. The original Certificate of Incorporation was filed with the Secretary of the State of Delaware on March 1, 2019. A Certificate of Amendment to the Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware on January 24, 2020 and a Certificate of Amendment to the Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April
1, 2020 (the original Certificate of Incorporation, as amended, the “Certificate of Incorporation”).
|
|
2. |
This Amended and Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL and by the written consent of its sole stockholder in accordance with Section 228 of the
DGCL, and is to become effective as of 11:59 PM, Eastern Time, on April 2, 2020.
|
|
3. |
This Amended and Restated Certificate of Incorporation restates and amends the Certificate of Incorporation to read in its entirety as follows:
|
OTIS WORLDWIDE CORPORATION
|
|
|
By:
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/s/ Debra F. Guss
|
Name:
|
Debra F. Guss
|
|
Title:
|
Vice President, Controller
|
Page
|
|||
ARTICLE I DEFINITIONS
|
1
|
||
Section 1.01.
|
Definitions
|
1
|
|
ARTICLE II SERVICES
|
8
|
||
Section 2.01.
|
Services
|
8
|
|
Section 2.02.
|
Performance of Services
|
9
|
|
Section 2.03.
|
Charges for Services
|
11
|
|
Section 2.04.
|
Reimbursement for Out-of-Pocket Costs and Expenses
|
11
|
|
Section 2.05.
|
Changes in the Performance of Services
|
11
|
|
Section 2.06.
|
Transitional Nature of Services
|
12
|
|
Section 2.07.
|
Subcontracting
|
12
|
|
Section 2.08.
|
Local Agreements
|
12
|
|
ARTICLE III OTHER ARRANGEMENTS
|
13
|
||
Section 3.01.
|
Access
|
13
|
|
Section 3.02.
|
Controls
|
14
|
|
ARTICLE IV BILLING; TAXES
|
15
|
||
Section 4.01.
|
Procedure
|
15
|
|
Section 4.02.
|
Late Payments
|
15
|
|
Section 4.03.
|
Taxes
|
15
|
|
Section 4.04.
|
No Set-Off
|
15
|
|
Section 4.05.
|
Audit Rights
|
15
|
|
ARTICLE V TERM AND TERMINATION
|
16
|
||
Section 5.01.
|
Term
|
16
|
|
Section 5.02.
|
Extension of a Service Period
|
16
|
|
Section 5.03.
|
Early Termination
|
17
|
|
Section 5.04.
|
Interdependencies
|
18
|
|
Section 5.05.
|
Effect of Termination
|
18
|
|
Section 5.06.
|
Information Transmission
|
19
|
|
ARTICLE VI CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS
|
19
|
||
Section 6.01.
|
Obligations of UTC, Carrier and Otis
|
19
|
|
Section 6.02.
|
No Release; Return or Destruction
|
20
|
|
Section 6.03.
|
Privacy and Data Protection Laws
|
20
|
|
Section 6.04.
|
Protective Arrangements
|
20
|
ARTICLE VII LIMITED LIABILITY AND INDEMNIFICATION
|
21
|
||
Section 7.01.
|
Limitations on Liability
|
21
|
|
Section 7.02.
|
Obligation to Re-Perform; Liabilities
|
24
|
|
Section 7.03.
|
Third-Party Claims
|
24
|
|
Section 7.04.
|
Service Provider Indemnity
|
24
|
|
Section 7.05.
|
Indemnification Procedures
|
25
|
|
ARTICLE VIII MISCELLANEOUS
|
25
|
||
Section 8.01.
|
Mutual Cooperation
|
25
|
|
Section 8.02.
|
Further Assurances
|
25
|
|
Section 8.03.
|
Audit Assistance
|
25
|
|
Section 8.04.
|
Title to Intellectual Property
|
26
|
|
Section 8.05.
|
Independent Contractors
|
26
|
|
Section 8.06.
|
Counterparts; Entire Agreement; Corporate Power
|
26
|
|
Section 8.07.
|
Governing Law
|
27
|
|
Section 8.08.
|
Assignability
|
27
|
|
Section 8.09.
|
Third-Party Beneficiaries
|
29
|
|
Section 8.10.
|
Notices
|
29
|
|
Section 8.11.
|
Severability
|
30
|
|
Section 8.12.
|
Force Majeure
|
30
|
|
Section 8.13.
|
Headings
|
30
|
|
Section 8.14.
|
Waivers of Default
|
30
|
|
Section 8.15.
|
Dispute Resolution
|
31
|
|
Section 8.16.
|
Specific Performance
|
32
|
|
Section 8.17.
|
Amendments
|
32
|
|
Section 8.18.
|
Precedence of Schedules
|
32
|
|
Section 8.19.
|
Interpretation
|
32
|
|
Section 8.20.
|
Mutual Drafting
|
33
|
Annex A:
|
TSA Committee |
UNITED TECHNOLOGIES CORPORATION
|
||
By:
|
/s/ Michael R. Dumais
|
|
Name: Michael R. Dumais
|
||
Title: Executive Vice President, Operations & Strategy
|
||
CARRIER GLOBAL CORPORATION
|
||
By:
|
/s/ Kyle Crockett
|
|
Name: Kyle Crockett
|
||
Title: Vice President, Controller
|
||
OTIS WORLDWIDE CORPORATION
|
||
By:
|
/s/ Michael P. Ryan
|
|
Name: Michael P. Ryan
|
||
Title: Vice President, Controller
|
Page
|
|||
Section 1.
|
Definition of Terms
|
2
|
|
Section 2.
|
Allocation of Tax Liabilities
|
15
|
|
Section 2.01
|
General Rule.
|
15
|
|
|
|||
Section 2.02
|
Allocation of United States Federal Income Tax and Federal Other Tax
|
16
|
|
|
|||
Section 2.03
|
Allocation of State Income and State Other Taxes
|
17
|
|
Section 2.04
|
Allocation of Foreign Taxes
|
18
|
|
Section 2.05
|
Certain Transaction and Other Taxes
|
19
|
|
Section 3.
|
Proration of Taxes for Straddle Periods
|
20
|
|
Section 4.
|
Preparation and Filing of Tax Returns.
|
21
|
|
Section 4.01
|
General
|
21
|
|
Section 4.02
|
UTC’s Responsibility
|
21
|
|
Section 4.03
|
Carrier’s Responsibility
|
21
|
|
Section 4.04
|
Otis’s Responsibility
|
22
|
|
Section 4.05
|
Tax Accounting Practices
|
22
|
|
Section 4.06
|
Consolidated or Combined Tax Returns
|
23
|
|
Section 4.07
|
Right to Review Tax Returns
|
23
|
|
Section 4.08
|
SpinCo Carrybacks and Claims for Refund
|
24
|
|
Section 4.09
|
Apportionment of Earnings and Profits and Tax Attributes
|
25 | |
Section 4.10
|
Gain Recognition Agreements
|
25
|
|
Section 4.11
|
Transfer Pricing
|
25
|
|
Section 5.
|
Tax Payments
|
26
|
|
Section 5.01
|
Payment of Taxes with Respect Tax Returns
|
26
|
|
|
|||
Section 5.02
|
Indemnification Payments
|
26
|
Section 6.
|
Tax Benefits
|
27
|
|
Section 6.01
|
Tax Benefits
|
27
|
|
Section 6.02
|
UTC, Carrier, and Otis Income Tax Deductions in Respect of Certain Equity Awards and Incentive Compensation
|
29
|
|
Section 7.
|
Tax-Free Status
|
29
|
|
Section 7.01
|
Representations
|
29
|
|
Section 7.02
|
Restrictions on Carrier and Otis
|
30
|
|
Section 7.03
|
Restrictions on UTC
|
36 | |
Section 7.04
|
Procedures Regarding Opinions and Rulings
|
36
|
|
Section 7.05
|
Liability for Tax-Related Losses and Specified Income Taxes
|
37
|
|
Section 7.06
|
Section 336(e) Election
|
42
|
|
Section 7.07
|
Certain Assumptions
|
43
|
|
Section 8.
|
Assistance and Cooperation
|
43
|
|
Section 8.01
|
Assistance and Cooperation
|
43
|
|
|
|||
Section 8.02
|
Income Tax Return Information
|
44 | |
|
|||
Section 8.03
|
Reliance by UTC
|
44
|
|
|
|||
Section 8.04
|
Reliance by Carrier
|
44
|
|
|
|||
Section 8.05
|
Reliance by Otis
|
44
|
|
|
|||
Section 9.
|
Tax Records
|
45
|
|
Section 9.01
|
Retention of Tax Records
|
45
|
|
|
|||
Section 9.02
|
Access to Tax Records
|
45
|
|
Section 10.
|
Tax Contests
|
45
|
|
Section 10.01
|
Notice
|
45
|
|
|
|||
Section 10.02
|
Control of Tax Contests
|
46
|
Section 11.
|
Effective Date; Termination of Prior Intercompany Tax Allocation Agreements
|
48
|
|
Section 12.
|
Survival of Obligations
|
49
|
|
Section 13.
|
Treatment of Payments; Tax Gross Up
|
49
|
|
Section 13.01
|
Treatment of Tax Indemnity and Tax Benefit Payments
|
49
|
|
|
|||
Section 13.02
|
Tax Gross Up
|
50
|
|
|
|||
Section 13.03
|
Interest
|
50
|
|
Section 14.
|
Disagreements
|
50
|
|
Section 15.
|
Late Payments
|
51 | |
Section 16.
|
Expenses
|
51
|
|
Section 17.
|
General Provisions
|
51
|
|
Section 17.01
|
Addresses and Notices
|
51
|
|
|
|||
Section 17.02
|
Binding Effect
|
52
|
|
|
|||
Section 17.03
|
Waiver
|
52
|
|
|
|||
Section 17.04
|
Severability
|
52
|
|
|
|||
Section 17.05
|
Authority
|
52 | |
|
|||
Section 17.06
|
Further Action
|
52 | |
|
|||
Section 17.07
|
Integration
|
52 | |
|
|||
Section 17.08
|
Construction
|
53
|
|
|
|||
Section 17.09
|
No Double Recovery
|
53
|
|
|
|||
Section 17.10
|
Counterparts
|
53 | |
|
|||
Section 17.11
|
Governing Law
|
53 | |
|
|||
Section 17.13
|
Amendment
|
53 | |
|
|||
Section 17.14
|
SpinCo Subsidiaries
|
54
|
|
|
|||
Section 17.15
|
Successors
|
54 | |
|
|||
Section 17.16
|
Injunctions
|
54 |
If to UTC, to:
United Technologies Corporation
10 Farm Springs Road
Farmington, Connecticut 06032
Attention: Ross Kearney, Corporate VP – Taxes
E-mail: Ross.kearney@utc.com
|
with a copy to:
United Technologies Corporation
10 Farm Springs Road
Farmington, Connecticut 06032
Attention: Sean Moylan, Corporate Vice President and Associate General Counsel
E-mail: Sean.Moylan@utc.com
|
If to Carrier, to:
Carrier Global Corporation
13995 Pasteur Boulevard
Palm Beach Gardens, Florida 33418
Attention: Michael Cenci, VP, Tax
E-mail: Michael.Cenci@carrier.com
|
with a copy to:
Carrier Global Corporation
13995 Pasteur Boulevard
Palm Beach Gardens, Florida 33418
Attention: General Counsel
E-mail: Kevin.OConnor@carrier.com
|
If to Otis, to:
Otis Worldwide Corporation
One Carrier Place
Farmington, Connecticut 06032
Attention: Gregory Marshall, VP, Tax
E-mail: Gregory.Marshall@otis.com
|
with a copy to:
Otis Worldwide Corporation
One Carrier Place
Farmington, Connecticut 06032
Attention: General Counsel
E-mail: Nora.LaFreniere@otis.com
|
UNITED TECHNOLOGIES CORPORATION
|
|||
By:
|
/s/ Michael R. Dumais
|
||
Name: Michael R. Dumais
|
|||
Title: Executive Vice President, Operations & Strategy
|
|||
CARRIER GLOBAL CORPORATION
|
|||
By:
|
/s/ Kyle Crockett
|
||
Name: Kyle Crockett
|
|||
Title: Vice President, Controller
|
|||
OTIS WORLDWIDE CORPORATION
|
|||
By:
|
/s/ Michael P. Ryan
|
||
Name: Michael P. Ryan
|
|||
Title: Vice President, Controller
|
ARTICLE I DEFINITIONS
|
2
|
||
Section 1.01.
|
Definitions
|
2
|
|
Section 1.02.
|
Interpretation
|
11
|
|
ARTICLE II GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES
|
11
|
||
Section 2.01.
|
General Principles
|
11
|
|
Section 2.02.
|
Service Credit
|
13
|
|
Section 2.03.
|
Adoption and Transfer and Assumption of Benefit Plans
|
14
|
|
ARTICLE III ASSIGNMENT OF EMPLOYEES
|
16
|
||
Section 3.01.
|
Active Employees
|
16
|
|
Section 3.02.
|
Individual Agreements
|
17
|
|
Section 3.03.
|
Consultation with Labor Representatives; Labor Agreements
|
18
|
|
Section 3.04.
|
Non-Solicitation
|
19
|
|
ARTICLE IV EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION
|
19
|
||
Section 4.01.
|
General Rules and Adoption of Equity Plans
|
19
|
|
Section 4.02.
|
Equity Incentive Awards
|
20
|
|
Section 4.03.
|
Cash Payment for Fractional Shares
|
31
|
|
Section 4.04.
|
Non-Equity Incentive Plans
|
31
|
|
Section 4.05.
|
Director Compensation
|
31
|
|
ARTICLE V U.S. QUALIFIED RETIREMENT PLANS
|
32
|
||
Section 5.01.
|
UTC Employee Retirement Plan
|
32
|
|
Section 5.02.
|
UTC Savings Plans
|
32
|
|
ARTICLE VI NONQUALIFIED DEFERRED COMPENSATION PLANS
|
34
|
||
Section 6.01.
|
UTC Retained Nonqualified Deferred Compensation Plans
|
34
|
|
Section 6.02.
|
UTC Bifurcated Nonqualified Deferred Compensation Plans
|
35
|
|
ARTICLE VII NON-U.S. RETIREMENT PLANS
|
37
|
||
Section 7.01.
|
Retention of UK Pension Scheme
|
37
|
|
ARTICLE VIII WELFARE BENEFIT PLANS
|
37
|
||
Section 8.01.
|
Welfare Plans
|
37
|
|
Section 8.02.
|
COBRA
|
38
|
|
Section 8.03.
|
Flexible Benefit Plans
|
39
|
|
Section 8.04.
|
Vacation, Holidays and Leaves of Absence
|
39
|
|
Section 8.05.
|
Disability Plans
|
40
|
Section 8.06.
|
Life Insurance
|
40
|
|
Section 8.07.
|
Retiree Medical
|
40
|
|
Section 8.08.
|
Severance, Retention and Unemployment Compensation
|
40
|
|
Section 8.09.
|
Workers’ Compensation
|
41
|
|
Section 8.10.
|
Insurance Contracts
|
41
|
|
Section 8.11.
|
Third-Party Vendors
|
41
|
|
ARTICLE IX MISCELLANEOUS
|
41
|
||
Section 9.01.
|
Information Sharing and Access
|
41
|
|
Section 9.02.
|
Preservation of Rights to Amend
|
42
|
|
Section 9.03.
|
Fiduciary Matters
|
42
|
|
Section 9.04.
|
Reimbursement of Costs and Expenses
|
43
|
|
Section 9.05.
|
Dispute Resolution
|
43
|
|
Section 9.06.
|
No Third-Party Beneficiaries
|
43
|
|
Section 9.07.
|
Incorporation of Separation Agreement Provisions
|
43
|
UNITED TECHNOLOGIES CORPORATION
|
|||
By:
|
/s/ Michael R. Dumais
|
||
Name:
|
Michael R. Dumais
|
||
Title:
|
Executive Vice President,
Operations & Strategy
|
||
OTIS WORLDWIDE CORPORATION
|
|||
By:
|
/s/ Michael P. Ryan
|
||
Name:
|
Michael P. Ryan
|
||
Title:
|
Vice President, Controller
|
||
CARRIER GLOBAL CORPORATION
|
|||
By:
|
/s/ Kyle Crockett
|
||
Name:
|
Kyle Crockett
|
||
Title:
|
Vice President, Controller
|
ARTICLE I DEFINITIONS
|
2
|
||
1.1
|
Defined Terms
|
2
|
|
ARTICLE II ASSIGNMENT OF SOLELY OWNED INTELLECTUAL PROPERTY RIGHTS
|
7
|
||
2.1
|
Assigned Intellectual Property Rights
|
7
|
|
ARTICLE III LICENSING OF INTELLECTUAL PROPERTY RIGHTS
|
8
|
||
3.1
|
Licensed Intellectual Property Rights
|
8
|
|
3.2
|
Reserved Intellectual Property Rights
|
10
|
|
3.3
|
No Rescission
|
10
|
|
ARTICLE IV TRADEMARKS
|
10
|
||
4.1
|
Ownership of United Technologies Trademarks
|
10
|
|
4.2
|
Use of United Technologies Trademarks
|
11
|
|
4.3
|
Special Trademark Provisions.
|
12
|
|
ARTICLE V EXCLUDED AGREEMENTS
|
12
|
||
5.1
|
No Change to Excluded Agreements
|
12
|
|
ARTICLE VI CONFIDENTIALITY
|
12
|
||
6.1
|
Received Information and Materials
|
12
|
|
6.2
|
Confidential Information
|
12
|
|
6.3
|
Obligations
|
13
|
|
6.4
|
Termination of UTC NDA
|
13
|
|
ARTICLE VII LIMITATIONS AND DISCLAIMERS
|
13
|
||
7.1
|
Subsequent Delivery of Intellectual Property Rights
|
13
|
|
7.2
|
No Additional Obligations
|
14
|
|
7.3
|
DISCLAIMER
|
14
|
|
7.4
|
Limitations of Liability
|
14
|
|
ARTICLE VIII GOVERNING LAW AND DISPUTE RESOLUTION
|
15
|
||
8.1
|
Governing Law
|
15
|
|
8.2
|
Alternative Dispute Resolution
|
15
|
|
8.3
|
Confidentiality
|
13
|
|
8.4
|
Equitable Relief
|
13
|
ARTICLE IX GENERAL PROVISIONS
|
16
|
||
9.1
|
Entire Agreement; Conflict Among Agreements
|
16
|
|
9.2
|
Assignment and Change of Control; Successor and Assigns
|
16
|
|
9.3
|
Bankruptcy
|
17
|
|
9.4
|
Amendments and Waivers
|
17
|
|
9.5
|
Notice
|
18
|
|
9.6
|
Severability
|
18
|
|
9.7
|
Counterparts
|
18
|
|
9.8
|
Further Assurances
|
18
|
|
9.9
|
Interpretation
|
19
|
To UTC:
|
||
United Technologies Corporation
|
||
10 Farm Springs
|
||
Farmington, CT 06302
|
||
Attention: Chief Intellectual Property Counsel
|
||
To Otis:
|
||
Otis Worldwide Corporation
|
||
One Carrier Place
|
||
Farmington, CT 06032
|
||
Attention: Chief Intellectual Property Counsel
|
||
To Carrier:
|
||
Carrier Global Corporation
|
||
13995 Pasteur Boulevard
|
||
Palm Beach Gardens, FL 33418
|
||
Attention: Chief Intellectual Property Counsel
|
UNITED TECHNOLOGIES CORPORATION
|
|||
By:
|
/s/ Michael R. Dumais
|
||
Name:
|
Michael R. Dumais
|
||
Title:
|
Executive Vice President, Operations & Strategy
|
||
OTIS WORLDWIDE CORPORATION
|
|||
|
|||
By:
|
/s/ Michael P. Ryan
|
||
Name:
|
Michael P. Ryan
|
||
Title:
|
Vice President, Controller
|
||
CARRIER GLOBAL CORPORATION
|
|||
By:
|
/s/ Kyle Crockett
|
||
Name:
|
Kyle Crockett
|
||
Title:
|
Vice President, Controller
|
|
a. |
“Affiliate” means a company or other entity in which the Corporation has an equity or other financial interest, including joint ventures and partnerships.
|
|
b. |
“Applicable Exchange” means the New York Stock Exchange or such other securities exchange as may at the applicable time be the principal market for the Common Stock.
|
|
c. |
“Assumed Spin-Off Award” means an award granted to certain employees, officers, and directors of the Corporation, United Technologies Corporation, Carrier Global Corporation, and their respective Subsidiaries under a Prior Plan,
which award is assumed by the Corporation and converted into an Award in connection with the Spin-Off, pursuant to the terms of the Employee Matters Agreement.
|
|
d. |
“Award” means a Stock Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Other Stock-Based Award or Cash Award granted pursuant to the terms of this Plan. For the avoidance of doubt, the term
“Award” includes each Assumed Spin-Off Award.
|
|
e. |
“Award Agreement” means a written or electronic document or agreement setting forth the terms and conditions of a specific Award.
|
|
f. |
“Board” means the Board of Directors of the Corporation.
|
|
g. |
“Business Combination” has the meaning set forth in Section 10(e)(iii).
|
|
h. |
“Cash Award” means an award granted to a Participant under Section 9 of this Plan.
|
|
i. |
“Cause” means, unless otherwise provided in an Award Agreement: (i) conduct involving a felony criminal offense under U.S. federal or state law or an equivalent violation of the laws of any other country; (ii) dishonesty, fraud,
self-dealing or material violations of civil law in the course of fulfilling the Participant’s employment duties; (iii) breach of the Participant’s intellectual property agreement or other written agreement with the Corporation; (iv)
willful misconduct injurious to the Corporation or any of its Subsidiaries or Affiliates as shall be determined by the Committee; (v) negligent conduct injurious to the Corporation and any of its Subsidiaries and Affiliates, including
negligent supervision of a subordinate who causes significant harm to the Corporation as determined by the Committee; or (vi) prior to a Change-in-Control, such other events as shall be determined by the Committee. Notwithstanding the
general rule of Section 2(c), following a Change-in-Control, any determination by the Committee as to whether “Cause” exists shall be subject to de novo review. Notwithstanding the foregoing, if a Participant is covered by the
Corporation’s Change in Control Severance Plan, the definition of Cause for such Participant shall be as set forth in such plan.
|
|
j. |
“Change-in-Control” has the meaning set forth in Section 10(e).
|
|
k. |
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto, the Treasury Regulations thereunder and other relevant
|
|
l. |
“Committee” means the Committee referred to in Section 2.
|
|
m. |
“Common Stock” means common stock, par value $1 per share, of the Corporation.
|
|
n. |
“Corporate Transaction” has the meaning set forth in Section 3(d).
|
|
o. |
“Corporation” means Otis Worldwide Corporation, a Delaware corporation, or its successor.
|
|
p. |
“Disability” means permanent and total disability as determined under the Corporation’s long-term disability plan applicable to the Participant, or if there is no such plan applicable to the Participant, “Disability” means a
determination of total disability by the Social Security Administration; provided that, in either case, the Participant’s condition also qualifies as a “disability” for purposes of Section 409A(a)(2)(C) of the Code, with respect to an
Award that constitutes “nonqualified deferred compensation” subject to Section 409A of the Code.
|
|
q. |
“Disaffiliation” means a Subsidiary’s or an Affiliate’s ceasing to be a Subsidiary or Affiliate for any reason (including as a result of a public offering, or a spinoff or sale by the Corporation, of the stock of the Subsidiary or
Affiliate) or a sale of a division of the Corporation and its Affiliates.
|
|
r. |
“Effective Date” has the meaning set forth in Section 12(a).
|
|
s. |
“Eligible Individuals” means directors, officers, and employees of the Corporation or any of its Subsidiaries or Affiliates, and prospective directors, officers and employees who have accepted offers of employment or consultancy from
the Corporation or its Subsidiaries or Affiliates.
|
|
t. |
“Employee Matters Agreement” means the Employee Matters Agreement among the Corporation, United Technologies Corporation, and Carrier Global Corporation, entered into in connection with the Spin-Off.
|
|
u. |
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.
|
|
v. |
“Fair Market Value” means, except as otherwise determined by the Committee, the closing price of a Share on the Applicable Exchange on the date of measurement or, if Shares were not traded on the Applicable Exchange on such
measurement date, then on the next preceding date on which Shares were traded on the Applicable Exchange, as reported by such source as the Committee may select. If there is no regular public trading market for such Common Stock, the
Fair Market Value of the Common Stock shall be determined by the Committee in good faith and, to the extent applicable, such determination shall be made in a manner that satisfies Sections 409A and Sections 422(c)(1) of the Code.
|
|
w. |
“Forfeiture Amount” has the meaning set forth in Section 14(i)(ii).
|
|
x. |
“Full-Value Award” means any Award other than Stock Appreciation Right, Stock Option or Cash Awards.
|
|
y. |
“Good Reason” means, the occurrence of any of the following without a Participant’s consent: (i) a material reduction in the Participant’s annual base salary, annual bonus opportunities, long-term incentive opportunities or other
compensation and benefits in the aggregate from those in effect immediately prior to the Change-in-Control; (ii) a material diminution in the Participant’s title, duties, authority, responsibilities, functions or reporting
|
|
z. |
“Grant Date” means (i) the date on which the Committee by resolution selects an Eligible Individual to receive a grant of an Award and determines the number of Shares, or the formula for earning a number of Shares, to be subject to
such Award or the cash amount subject to such Award and all other material terms applicable to such Award; or (ii) such later date as the Committee shall provide in such resolution.
|
|
aa. |
“Incentive Stock Option” means any Stock Option designated in the applicable Award Agreement as an “incentive stock option” within the meaning of Section 422 of the Code, and that in fact so qualifies.
|
|
bb. |
“Incumbent Board” has the meaning set forth in Section 10(e)(ii).
|
|
cc. |
“Individual Agreement” means, after a Change-in-Control, (i) a change-in-control or severance agreement between a Participant and the Corporation or one of its Affiliates, or (ii) a change-in-control or severance plan covering a
Participant that is sponsored by the Corporation or one of its Affiliates.
|
|
dd. |
“Nonqualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
|
|
ee. |
“Other Stock-Based Award” means an award granted to a Participant under Section 8 of this Plan.
|
|
ff. |
“Outstanding Corporation Common Stock” has the meaning set forth in Section 10(e)(i).
|
|
gg. |
“Outstanding Corporation Voting Securities” has the meaning set forth in Section 10(e)(i).
|
|
hh. |
“Participant” means an Eligible Individual to whom an Award is or has been granted.
|
|
ii. |
“Performance Goals” means the performance goals established by the Committee in connection with the grant of an Award which may be based on attainment of specified levels of one or more of the following measures, or of any other
measures determined by the Committee in its discretion: stock price, total shareholder return, earnings (whether based on earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and
amortization), earnings per share, return on equity, return on sales, return on assets or operating or net assets, market share, objective customer service measures or indices, pre- or after-tax income, net income, cash flow (before or
after dividends or other adjustments), free cash flow, cash flow per share (before or after dividends or other adjustments), gross margin, working capital and gross inventory turnover, risk-based capital, revenues, revenue growth,
return on capital (whether based on return on total capital or return on invested capital), cost control, gross profit, operating profit, unit
|
|
jj. |
“Person” has the meaning set forth in Section 10(e)(i).
|
|
kk. |
“Plan” means the Otis Worldwide Corporation 2020 Long-Term Incentive Plan, as set forth herein and as hereinafter amended from time to time.
|
|
ll. |
“Prior Plans” means the United Technologies Corporation 2018 Long-Term Incentive Plan, the United Technologies Corporation Long-Term Incentive Plan, as amended and restated, and the Rockwell Collins, Inc. 2015 Long-Term Incentives
Plan, as assumed by United Technologies Corporation.
|
|
mm. |
“Replaced Award” has the meaning set forth in Section 10(b).
|
|
nn. |
“Replacement Award” has the meaning set forth in Section 10(b).
|
|
oo. |
“Section 16(b)” has the meaning set forth in Section 11(a).
|
|
pp. |
“Share” means a share of Common Stock.
|
|
qq. |
“Spin-Off” shall mean the distribution of Shares to the shareowners of United Technologies Corporation in 2020 pursuant to the Separation and Distribution Agreement between the Corporation, United Technologies Corporation, and
Carrier Global Corporation, entered into in connection with such distribution.
|
|
rr. |
“Stock Appreciation Right” means an Award granted under Section 5(a).
|
ss.
|
“Stock Option” means an Award granted under Section 5(b).
|
|
tt. |
“Subsidiary” means any corporation, partnership, joint venture, limited company or other entity during any period in which at least a 50% voting or profits interest is owned, directly or indirectly, by the Corporation or any
successor to the Corporation.
|
|
uu. |
“Term” means the maximum period during which a Stock Appreciation Right or Stock Option may remain outstanding, subject to earlier termination upon Termination of Service or otherwise, as specified in the applicable Award Agreement.
|
|
vv. |
“Termination of Service” means the termination of the applicable Participant’s employment with, or performance of services for, the Corporation and any of its Subsidiaries or Affiliates. Unless otherwise determined by the Committee:
(i) if a Participant’s employment with the Corporation and its Affiliates terminates but such Participant continues to provide services to the Corporation and its Affiliates in a non-employee capacity, such change in status shall not be
deemed a Termination of Service, (ii) a Participant employed by, or performing services for, a Subsidiary or an Affiliate or a division of the Corporation and its Affiliates shall also be deemed to incur a Termination of Service if, as
a result of a Disaffiliation, such Subsidiary, Affiliate or division ceases to be a Subsidiary, Affiliate or division, as the case may be, and the Participant does not immediately thereafter become an employee of, or service provider
for, the Corporation or another Subsidiary or Affiliate, and (iii) a Participant shall not be deemed to have incurred a Termination of Service solely by reason of such individual’s incurrence of a Disability. Temporary absences from
employment because of illness, vacation or leave of absence and transfers among the Corporation and its Subsidiaries and Affiliates shall not be considered a Termination of Service. Absences from employment by reason of notice periods,
garden leaves or similar paid leaves implemented in contemplation of a permanent termination of employment shall not be recognized as service under this Plan. Notwithstanding the foregoing provisions of this definition, with
|
a. |
Committee. This Plan shall be administered by the Board directly, or if the Board elects, by the Compensation Committee or such other committee of the Board as the Board may from time to time
designate, which committee shall be composed of not less than two directors, and shall be appointed by and serve at the pleasure of the Board. All references in this Plan to the “Committee” refer to the Board as a whole, unless a
separate committee has been designated or authorized consistent with the foregoing.
|
i.
|
To select the Eligible Individuals to whom Awards may from time to time be granted;
|
|
ii. |
To determine whether and to what extent Stock Appreciation Rights, Incentive Stock Options, Nonqualified Stock Options, Restricted Stock Units, Restricted Stock, Other Stock-Based Awards and Cash Awards or any combination thereof are
to be granted hereunder;
|
|
iii. |
To determine the number of Shares to be covered by each Award granted hereunder;
|
|
iv. |
To approve the form of any Award Agreement and determine the terms and conditions of any Award granted hereunder, including, but not limited to, the exercise price (subject to Section 5(c)), any vesting condition, restriction or
limitation (which may be related to the performance of the Participant, the Corporation or any Subsidiary or Affiliate), treatment on Termination of Service, and any vesting acceleration or forfeiture waiver regarding any Award and the
Shares relating thereto, based on such factors as the Committee shall determine;
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|
v. |
To modify, amend or adjust the terms and conditions (including, but not limited to, Performance Goals and measured results when necessary or appropriate for the purposes of preserving the validity of the goals as originally set by
the Committee) of any Award (subject to Sections 5(d) and 5(e)), from time to time, including, without limitation, in order to comply with tax and securities laws, including laws of countries outside of the United States, and to comply
with changes of law and accounting standards;
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|
vi. |
To determine to what extent and under what circumstances Common Stock or cash payable with respect to an Award shall be deferred either automatically or at the election of a Participant;
|
|
vii. |
To determine under what circumstances an Award may be settled in cash, Shares, other property or a combination of the foregoing;
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|
viii. |
To adopt, alter and repeal such administrative rules, guidelines and practices governing this Plan as it shall, from time to time, deem advisable;
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|
ix. |
To establish any “blackout” period that the Committee in its sole discretion deems necessary or advisable;
|
|
x. |
To interpret the terms and provisions of this Plan and any Award issued under this Plan (and any Award Agreement relating thereto);
|
xi.
|
To decide all other matters that must be determined in connection with an Award; and
|
xii.
|
To otherwise administer this Plan.
|
b.
|
Procedures.
|
|
i. |
The Committee may act only by a majority of its members then in office, except that the Committee may, except to the extent prohibited by applicable law, including Section 157(c) of the Delaware General Corporation Law, or the
listing standards of the Applicable Exchange, allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked by the Committee at any time.
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|
ii. |
Subject to Section 11(a), any authority granted to the Committee may be exercised by the full Board. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall
control.
|
c.
|
Discretion of Committee. Subject to Section 1(i), any determination made by the Committee or pursuant to delegated authority under the provisions of this Plan with respect to any Award
shall be made in the sole discretion of the Committee or such delegate at the time of the grant of the Award or, unless in contravention of any express term of this Plan, at any time thereafter. All decisions made by the Committee
or any appropriately delegated person pursuant to the provisions of this Plan shall be final, binding and conclusive on all persons, including the Corporation, Participants and Eligible Individuals.
|
d. |
Cancellation or Suspension. Subject to Section 5(d), the Committee shall have full power and authority to determine whether, to what extent and under what circumstances any Award shall be
canceled or suspended.
|
e. |
Award Agreements. The terms and conditions of each Award, as determined by the Committee, shall be set forth in a written (or electronic) Award Agreement, which shall be delivered to the
Participant receiving such Award upon, or as promptly as is reasonably practicable following, the grant of such Award. The effectiveness of an Award shall be subject to the Participant’s acceptance of the applicable Award Agreement
within the time period specified in the Award Agreement, unless otherwise provided in the Award Agreement. Award Agreements may be amended only in accordance with Section 12(d) hereof.
|
f. |
Minimum Vesting Period. Except for Awards granted with respect to a maximum of five percent of the Shares authorized in the first sentence of Section 3(a) and Assumed Spin-Off Awards, Award
Agreements shall not provide for a designated vesting period of less than one year.
|
g.
|
Foreign Employees and Foreign Law Considerations. The Committee may grant Awards to Eligible Individuals who are foreign nationals, who are located outside the United
States, who are not compensated from a payroll maintained in the United States, and/or who are otherwise subject to (or could cause the Corporation to be subject to) legal or regulatory provisions of countries or jurisdictions outside the
United States, and, in furtherance of such purposes, the Committee may adopt such procedures or sub-plans as may be necessary or advisable to comply with such legal or regulatory provisions.
|
a. |
Authorized Shares. The maximum number of Shares that may be issued pursuant to Awards granted under this Plan shall be 45,000,000, which includes Shares subject to Assumed Spin-Off Awards.
The maximum number of shares that may be issued pursuant to Incentive Stock Options under this Plan shall be 45,000,000. Shares issued under this Plan may be authorized and unissued Shares, treasury Shares, or Shares purchased in the
open market or otherwise, at the sole discretion of the Committee. Each Share issued pursuant to a Full-
|
b. |
Individual Limits. A Participant who is not a non-employee director may not be granted: (i) Stock Appreciation Rights and Stock Options in excess of 1,250,000 Shares during any calendar year,
(ii) Full-Value Awards in excess of 300,000 Shares during any calendar year, or (iii) Cash Awards in excess of $10,000,000. Compensation payable by the Corporation to any non-employee director of the Corporation, including Awards
granted under this Plan (with Awards valued based on the fair value on the Grant Date for accounting purposes) and cash fees paid or credited, may not exceed $1,500,000 during any single calendar year. None of the foregoing limitations
in this Section 3(b) shall apply to Assumed Spin-Off Awards.
|
c. |
Rules for Calculating Shares Issued. To the extent that any Award is forfeited, terminates, expires or lapses instead of being exercised, or any Award is settled for cash, the Shares subject
to such Awards will not be counted as Shares issued under this Plan. If the exercise price of any Stock Appreciation Right or Stock Option and/or the tax withholding obligations relating to any Award are satisfied by delivering Shares
(either actually or through a signed document affirming the Participant’s ownership and delivery of such Shares) or the Corporation withholding Shares relating to such Award, the gross number of Shares subject to the Award shall
nonetheless be deemed to have been issued under this Plan.
|
d.
|
Adjustment Provisions.
|
|
i. |
In the event of a merger, consolidation, acquisition of property or shares, stock rights offering, liquidation, disposition for consideration of the Corporation’s direct or indirect ownership of a Subsidiary or Affiliate (including
by reason of a Disaffiliation), or similar event affecting the Corporation or any of its Subsidiaries (each, a “Corporate Transaction”), the Committee or the Board may in its discretion make such substitutions or adjustments as it deems
appropriate and equitable to: (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under this Plan; (B) the various maximum limitations set forth in Section 3(b) applicable to the grants to
individuals of certain types of Awards; (C) the number and kind of Shares or other securities subject to outstanding Awards; (D) financial goals or measured results to preserve the validity of the original goals set by the Committee;
and (E) the exercise price of outstanding Awards.
|
|
ii. |
In the event of a stock dividend, stock split, reverse stock split, reorganization, share combination, or recapitalization or similar event affecting the capital structure of the Corporation, or a Disaffiliation, separation or
spinoff, in each case without consideration, or other extraordinary dividend of cash or other property to the Corporation’s shareholders, the Committee or the Board shall make such substitutions or adjustments as it deems appropriate
and equitable to: (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under this Plan; (B) the various maximum limitations set forth in Section 3(b) applicable to the grants to individuals
of certain types of Awards; (C) the number and kind of Shares or other securities subject to outstanding Awards; (D) financial goals or measured results to preserve the validity of the original goals set by the Committee; and (E) the
exercise price of outstanding Awards.
|
|
iii. |
In the case of Corporate Transactions, such adjustments may include: (A) the cancellation of outstanding Awards in exchange for payments of cash, property or a combination thereof having an aggregate value equal to the value of such
Awards, as determined by the Committee or the Board in its sole discretion (it being understood that in the case of a Corporate Transaction with respect to which shareholders of Common Stock receive consideration other than publicly
traded equity securities of the ultimate surviving entity, any such determination by the Committee that the value of a Stock Option or Stock Appreciation Right shall for this purpose be deemed to equal the excess, if any, of the value
of the consideration being paid for each Share pursuant to such Corporate Transaction over the exercise price of such Stock Appreciation Right or Stock Option shall conclusively be deemed valid); (B) the substitution of other property
(including cash or other securities of the Corporation and securities of entities other than the Corporation) for the Shares subject to outstanding Awards; and (C) in connection with any Disaffiliation,
|
|
iv. |
Any adjustments made pursuant to this Section 3(d) to Awards that are considered “nonqualified deferred compensation” subject to Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code;
and any adjustments made pursuant to Section 3(d) to Awards that are not considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustments, either: (A) the
Awards continue not to constitute “deferred compensation” subject to Section 409A of the Code; or (B) there does not result in the imposition of any penalty taxes under Section 409A of the Code in respect of such Awards.
|
|
v. |
Any adjustment under this Section 3(d) need not be applied uniformly to all Participants.
|
a. |
Awards may be granted under this Plan to Eligible Individuals; provided, however, that Incentive Stock Options may be granted only to employees of the Corporation and its subsidiaries or Parent Corporation (within the meaning of
Section 424(f) of the Code). In connection with the Spin-Off and pursuant to the terms of the Employee Matters Agreement, certain employees, officers, and directors of the Corporation, United Technologies Corporation, and Carrier
Global Corporation and their respective Subsidiaries will receive Assumed Spin-Off Awards.
|
a. |
Nature of Stock Appreciation Rights. Upon the exercise of a Stock Appreciation Right, the Participant shall be entitled to receive an amount in cash, or Shares with a Fair Market Value, equal
to the product of (i) the excess of the Fair Market Value of one Share over the exercise price of the applicable Stock Appreciation Right, multiplied by (ii) the number of Shares in respect of which the Stock Appreciation Right has been
exercised. The applicable Award Agreement shall specify whether such payment is to be made in cash or Common Stock, or shall reserve to the Committee or the Participant the right to make that determination prior to or upon the exercise
of the Stock Appreciation Right.
|
b. |
Types of Stock Options. Stock Options may be granted in the form of Incentive Stock Options or Nonqualified Stock Options. The Award Agreement for a Stock Option shall indicate whether the
Stock Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option.
|
c. |
Exercise Price. The exercise price per Share subject to a Stock Appreciation Right or Stock Option shall be determined by the Committee and set forth in the applicable Award Agreement, and
shall not be less than the Fair Market Value of a Share on the applicable Grant Date. In no event may any Stock Appreciation Right or Stock Option granted under this Plan be amended, other than pursuant to Section 3(d), to decrease the
exercise price thereof, be cancelled in exchange for cash or other Awards or in conjunction with the grant of any new Stock Appreciation Right or Stock Option with a lower exercise price, or otherwise be subject to any action that would
be treated, under the Applicable Exchange listing standards or for accounting purposes, as a “repricing” of such Stock Appreciation Right or Stock Option, unless such amendment, cancellation or action is approved by the Corporation’s
shareholders.
|
d. |
Term. The Term of each Stock Appreciation Right and each Stock Option shall be fixed by the Committee, but no Stock Appreciation Right or Stock Option shall be exercisable more than 10 years
after its Grant Date.
|
e. |
Exercisability; Method of Exercise. Except as otherwise provided herein, Stock Appreciation Rights and Stock Options shall be exercisable at such time or times and subject to such terms and
conditions as shall
|
f.
|
Delivery; Rights of Shareowners. A Participant shall not be entitled to delivery of Shares pursuant to the exercise of a Stock Appreciation Right or Stock Option until the exercise price
therefore has been fully paid and applicable taxes have been withheld. Except as otherwise provided in Section 5(j), a Participant shall have all of the rights of a shareowner of the number of Shares deliverable pursuant to such
Stock Appreciation Right or Stock Option (including, if applicable, the right to vote the applicable Shares), when the Participant: (i) has given written notice of exercise; (ii) if requested, has given the representation described
in Section 14(a); and (iii) in the case of a Stock Option, has paid in full for such Shares.
|
g. |
Nontransferability of Stock Appreciation Rights and Stock Options. No Stock Appreciation Right or Stock Option shall be transferable by a Participant other than, for no value or
consideration: (i) by will or by the laws of descent and distribution; or (ii) in the case of a Stock Appreciation Right or Nonqualified Stock Option, as otherwise expressly permitted by the Committee including, if so permitted,
pursuant to a transfer to such Participant’s family members, whether directly or indirectly, or by means of a trust or partnership or otherwise (for purposes of this Plan, unless otherwise determined by the Committee, “family member”
shall have the meaning given to such term in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended, and any successor thereto). Any Stock Appreciation Right or Stock Option shall be exercisable, subject
to the terms of this Plan, only by the Participant, the guardian or legal representative of the Participant, or any person to whom such Stock Option is transferred pursuant to this Section 5(g), it being understood that the term
“holder” and “Participant” include such guardian, legal representative and other transferee; provided, however, that the term “Termination of Service” shall continue to refer to the Termination of Service of the original Participant. No
Participant may enter into any agreement for the purpose of selling, transferring or otherwise engaging in any transaction that has the effect of exchanging his or her economic interest in any Award to another person or entity for a
cash payment or other consideration unless first approved by a majority of the Corporation’s shareowners.
|
h. |
Termination of Service. The effect of a Participant’s Termination of Service on any Stock Appreciation Right or Stock Option then held by the Participant shall be set forth in the applicable
Award Agreement.
|
i. |
Additional Rules for Incentive Stock Options. Notwithstanding any other provision of this Plan to the contrary, no Stock Option that is intended to qualify as an Incentive Stock Option may be
granted to any Eligible Individual who at the time of such grant owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or of any Subsidiary, unless at the time such Stock
Option is granted the exercise price is at least 110% of the Fair Market Value of a Share and such Stock Option by its terms is not exercisable after the expiration of five years from the date such Stock Option is granted. In addition,
the aggregate Fair Market Value of the Common Stock (determined at the time a Stock Option for the Common Stock is granted) for which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year,
under all of the incentive stock option plans of the Corporation and of any Subsidiary, may not exceed $100,000. To the extent a Stock Option that by its terms was intended to be an Incentive Stock Option exceeds this $100,000 limit,
the portion of the Stock Option in excess of such limit shall be treated as a Nonqualified Stock Option.
|
j. |
Dividends and Dividend Equivalents. Dividends (whether paid in cash or Shares) and dividend equivalents may not be paid or accrued on Stock Appreciation Rights or Stock Options; provided that
Stock Appreciation Rights and Stock Options may be adjusted under certain circumstances in accordance with the terms of Section 3(d).
|
a. |
Administration. Shares of Restricted Stock are actual Shares issued to a Participant and may be awarded either alone or in addition to other Awards granted under this Plan. The Committee
shall determine the
|
b. |
Book Entry Registration or Certificated Shares. Shares of Restricted Stock shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or
issuance of one or more stock certificates registered in the name of the Participant and bearing an appropriate legend referring to the terms, conditions and restrictions applicable to such Award.
|
c. |
Terms and Conditions. Shares of Restricted Stock shall be subject to the following terms and conditions and such other terms and conditions as are set forth in the applicable Award Agreement
(including the vesting or forfeiture provisions applicable upon a Termination of Service):
|
|
i. |
The Committee shall, prior to or at the time of grant, condition: (A) the vesting of an Award of Restricted Stock upon the continued service of the applicable Participant, or (B) the grant or vesting of an Award of Restricted Stock
upon the attainment of Performance Goals, or the attainment of Performance Goals and the continued service of the applicable Participant. The conditions for grant or vesting and the other provisions of Restricted Stock Awards (including
any applicable Performance Goals) need not be the same with respect to each recipient.
|
|
ii. |
Subject to the provisions of this Plan and the applicable Award Agreement, during the period, if any, set by the Committee, commencing with the date of such Restricted Stock Award for which such vesting restrictions apply, and until
the expiration of such period, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber Shares of Restricted Stock.
|
d. |
Rights of a Shareowner. Except as provided in this Section 6 and the applicable Award Agreement, the applicable Participant shall have, with respect to the Shares of Restricted Stock, all of
the rights of a shareowner of the Corporation holding the class or series of Common Stock that is the subject of the Restricted Stock, including, if applicable, the right to vote the Shares and the right to receive any dividends
(subject to Section 14(e)).
|
e. |
Termination of Service. The effect of a Participant’s Termination of Service on his or her Restricted Stock shall be set forth in the applicable Award Agreement.
|
a. |
Nature of Awards. Restricted stock units and deferred stock units (together, “Restricted Stock Units”) are Awards denominated in Shares that will be settled, subject to the terms and
conditions of the Restricted Stock Units, in a specified number of Shares or an amount of cash equal to the Fair Market Value of a specified number of Shares.
|
b.
|
Terms and Conditions. Restricted Stock Units shall be subject to the following terms and conditions and such other terms and conditions as are set forth in the
applicable Award Agreement (including the vesting or forfeiture provisions applicable upon a Termination of Service):
|
|
i. |
The Committee shall, prior to or at the time of grant, condition: (A) the vesting of Restricted Stock Units upon the continued service of the applicable Participant, or (B) the grant or vesting of Restricted Stock Units upon the
attainment of Performance Goals, or the attainment of Performance Goals and the continued service of the applicable Participant. The conditions for grant or vesting and the other provisions of Restricted Stock Units (including any
applicable Performance Goals) need not be the same with respect to each recipient. An Award of Restricted Stock Units shall be settled as and when the Restricted Stock Units vest, at a later time specified by the Committee in the
applicable Award Agreement, or, if the Committee so permits, in accordance with an election of the Participant.
|
|
ii. |
The Award Agreement for Restricted Stock Units shall specify whether, to what extent and on what terms and conditions the applicable Participant shall be entitled to receive payments corresponding to the dividends payable on the
Common Stock (subject to Section 14(e)).
|
c.
|
Rights of a Shareowner. A Participant to whom Restricted Stock Units are awarded shall have no rights as a shareowner with respect to the Shares represented by the Restricted Stock Units
unless and until Shares are actually delivered to the Participant in settlement thereof.
|
d. |
Termination of Service. The effect of a Participant’s Termination of Service on his or her Restricted Stock Units shall be set forth in the applicable Award Agreement.
|
a. |
General. The provisions of this Section 10 shall, subject to Section 3(d), apply notwithstanding any other provision of this Plan to the contrary, except to the extent the Committee
specifically provides otherwise in an Award Agreement.
|
b. |
Impact of Change-in-Control. Upon the occurrence of a Change-in-Control: (i) all then-outstanding Stock Appreciation Rights and Stock Options shall become fully vested and exercisable, all
Full-Value Awards (other than performance-based Awards), and all Cash Awards (other than performance-based Awards) shall vest in full, be free of restrictions, and be deemed to be earned and payable in an amount equal to the full value
of such Award, except in each case to the extent that another Award meeting the requirements of Section 10(c) (any award meeting the requirements of Section 10(c), a “Replacement Award”) is provided to the Participant pursuant to
Section 3(d) to replace such Award (any award intended to be replaced by a Replacement Award, a “Replaced Award”), and (ii) any performance-based Award that is not replaced by a Replacement Award shall be deemed to be earned and payable
in an amount equal to the full value of such performance-based Award (with all applicable Performance Goals deemed achieved at the greater of (x) the applicable target level; and (y) the level of achievement as determined by the
Committee not later than the date of the Change-in-Control, taking into account performance through the latest date preceding the Change-in-Control as to which performance can, as a practical matter, be determined (but not later than
the end of the applicable performance period).
|
c. |
Replacement Awards. An Award shall meet the conditions of this Section 10(c) (and hence qualify as a Replacement Award) if: (i) it is of the same type as the Replaced Award (except that for
any Replaced Award
|
d. |
Termination of Service. Notwithstanding any other provision of this Plan to the contrary, and unless otherwise determined by the Committee and set forth in the applicable Award Agreement,
upon a Termination of Service of a Participant by the Corporation other than for Cause or by the Participant for Good Reason within 24 months (or such longer period as is specified in the applicable Award Agreement) following a
Change-in-Control: (i) all Replacement Awards held by such Participant shall vest in full and be free of restrictions, and (ii) unless otherwise provided in the applicable Award Agreement, notwithstanding any other provision of this
Plan to the contrary, any Stock Appreciation Right or Stock Option held by the Participant as of the date of the Change-in-Control that remains outstanding as of the date of such Termination of Service may thereafter be exercised until
the expiration of the stated full Term of such Stock Appreciation Right or Nonqualified Stock Option.
|
e. |
Definition of Change-in-Control. For purposes of this Plan, a “Change-in-Control” shall mean the happening of any of the following events:
|
i. |
An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either: (1) the then outstanding shares of common stock of the Corporation (the “Outstanding Corporation Common Stock”); or (2) the combined voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the “Outstanding Corporation Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change-in-Control:
(1) any acquisition directly from the Corporation, (2) any acquisition by the Corporation, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any entity controlled by the
Corporation, or (4) any acquisition by any entity pursuant to a transaction that complies with clauses (1), (2) and (3) of subsection (iii) of this Section 10(e); or
|
|
ii. |
A change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however,
that, for purposes of this Section 10(e), any individual who becomes a member of the Board subsequent to the Effective Date whose election, or nomination for election by the Corporation’s shareowners, was approved by a vote of at least
two-thirds of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent
Board; provided, further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other
|
|
iii. |
The consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Corporation or any of its subsidiaries or sale or other disposition of all or substantially all of the
assets of the Corporation, or the acquisition of assets or securities of another entity by the Corporation or any of its subsidiaries (a “Business Combination”), in each case, unless, following such Business Combination, (1) all or
substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock (or, for a noncorporate entity, equivalent securities) and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors (or, for a noncorporate entity, equivalent securities), as the case may be, of the entity resulting from such Business Combination (including an entity that, as a result
of such transaction, owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, as the case may be, (2) no Person (excluding any entity resulting from such Business Combination or any employee benefit
plan (or related trust) of the Corporation or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock (or, for a
noncorporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed
prior to the Business Combination, and (3) at least a majority of the members of the Board of Directors (or, for a noncorporate entity, equivalent body or committee) of the entity resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
|
iv.
|
The approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation.
|
f. |
Notwithstanding any other provision of this Plan, any Award Agreement or any Individual Agreement, for any Award that constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code, a Change-in-Control
shall not constitute a settlement or distribution event with respect to such Award, or an event that otherwise changes the timing of settlement or distribution of such Award, unless the Change-in-Control also constitutes an event
described in Section 409A(a)(2)(v) of the Code and the regulations promulgated thereunder (a “Section 409A CIC”); provided, however, that whether or not a Change-in-Control is a Section 409A CIC, such Change-in-Control shall result in
the accelerated vesting of such Award to the extent provided by the Award Agreement, this Plan, any Individual Agreement or otherwise by the Committee.
|
a. |
The provisions of this Plan are intended to ensure that no transaction under this Plan is subject to (and all such transactions will be exempt from) the short-swing profit recovery rules of Section 16(b) of the Exchange Act (“Section
16(b)”). Accordingly, the composition of the Committee shall be subject to such limitations as the Board deems appropriate to permit transactions pursuant to this Plan to be exempt (pursuant to Rule 16b-3 promulgated under the Exchange
Act) from Section 16(b), and no delegation of authority by the Committee shall be permitted if such delegation would cause any such transaction to be subject to (and not exempt from) Section 16(b).
|
b. |
This Plan and the Awards granted hereunder are intended to comply with the requirements of Section 409A of the Code or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A of the Code, it
is intended that this Plan be administered and interpreted in all respects in accordance
|
a. |
Effectiveness. Prior to the Spin-Off, this Plan was approved by the Board and by United Technologies Corporation as the sole shareowner of the Corporation. This Plan will be effective on the
date on which the Spin-Off occurs (the “Effective Date”).
|
b. |
Termination. This Plan will terminate on the tenth anniversary of the Effective Date. Awards outstanding as of such date shall not be affected or impaired by the termination of this Plan.
|
c. |
Amendment of Plan. The Board or the Committee may amend, alter, or discontinue this Plan, but no amendment, alteration or discontinuation shall be made that would materially impair the rights
of the Participant with respect to a previously granted Award without such Participant’s consent, except such an amendment made to comply with applicable law, including Section 409A of the Code, Applicable Exchange listing standards or
accounting rules. In addition, no amendment shall be made without the approval of the Corporation’s shareowners to the extent such approval is required by applicable law or the listing standards of the Applicable Exchange.
|
d. |
Amendment of Awards. Subject to Section 5(c), the Committee may unilaterally amend the terms of any Award theretofore granted, but no such amendment shall, without the Participant’s consent,
materially impair the rights of any Participant with respect to an Award, except such an amendment made to cause this Plan or Award to comply with applicable law, including Section 409A of the Code, Applicable Exchange listing standards
or accounting rules.
|
a. |
Conditions for Issuance. The Committee may require each person purchasing or receiving Shares pursuant to an Award to represent to and agree with the Corporation in writing that such person
is acquiring the Shares without a view to the distribution thereof. The certificates for such Shares may include any legend
|
b. |
Additional Compensation Arrangements. Nothing contained in this Plan shall prevent the Corporation or any Subsidiary or Affiliate from adopting other or additional compensation arrangements
for its employees.
|
c. |
No Contract of Employment. This Plan shall not constitute a contract of employment, and adoption of this Plan shall not confer upon any employee any right to continued employment, nor shall
it interfere in any way with the right of the Corporation or any Subsidiary or Affiliate to terminate the employment of any employee at any time.
|
d. |
Required Taxes. No later than the date as of which an amount first becomes includible in the gross income of a Participant for federal, state, local or foreign income, or employment or other
tax purposes with respect to any Award under this Plan, such Participant shall pay to the Corporation, or make arrangements satisfactory to the Corporation regarding the payment of, any federal, state, local or foreign taxes of any kind
required by law to be withheld with respect to such amount. Unless otherwise determined by the Corporation, withholding obligations may be settled with Common Stock, including Common Stock that is part of the Award that gives rise to
the withholding requirement, having a Fair Market Value on the date of withholding equal to the amount required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes. The obligations of the
Corporation under this Plan shall be conditional on such payment or arrangements, and the Corporation and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to
such Participant. The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for the settlement of withholding obligations with Common Stock.
|
e. |
Dividends and Dividend Equivalents. Any dividends or dividend equivalents credited with respect to any Award will be subject to the same time and/or performance-based vesting conditions
applicable to such Award and shall, if vested, be delivered or paid at the same time as such Award.
|
f. |
Designation of Death Beneficiary. The Committee shall establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable in the event
of such Participant’s death are to be paid or by whom any rights of such Participant, after such Participant’s death, may be exercised.
|
g. |
Governing Law and Interpretation. This Plan and all Awards made and actions taken hereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Plan are not part of the provisions hereof and shall have no force or effect. Whenever the words “include,” “includes” or “including” are used in this Plan, they shall be
deemed to be followed by the words “but not limited to” and the word “or” shall be understood to mean “and/or” where the context so requires.
|
h. |
Non-Transferability. Except as otherwise provided in Section 5(g) or as determined by the Committee, Awards under this Plan are not transferable except by will or by laws of descent and
distribution.
|
i. |
Clawback Policy.
|
i. |
Forfeiture Event. Unless otherwise determined by the Committee, upon the occurrence of any of the following events, the Participant shall forfeit all of the Participant’s outstanding Awards,
whether vested or unvested, and shall pay the Forfeiture Amount (as defined in clause (ii) below) to the Corporation within 30 days following receipt from the Corporation of written notice from the Corporation:
|
|
A. |
Termination of Service for Cause;
|
|
B. |
Within three years following any Termination of Service the Committee determines that the Participant engaged in conduct before the Participant’s termination date that would have constituted the basis for a Termination of Service for
Cause;
|
|
C. |
At any time during the 24-month period immediately following any Termination of Service, a Participant:
|
|
1. |
Solicits for employment or otherwise attempts to retain the professional services of any individual then employed or engaged by the Corporation (other than a person performing secretarial or similar services) or who was so employed
or engaged during the three-month period preceding such solicitation; or
|
|
2. |
Publicly disparages the Corporation or any of its officers, directors or senior executive employees or otherwise makes any public statement that is materially detrimental to the interests of the Corporation or such individuals; or
|
|
D. | At any time during the 12-month period following any Termination of Service, a Participant becomes employed by, consults for or otherwise renders services to any business entity or person engaged in activities that compete with the Corporation or the business unit that employed the Participant, unless the Participant has first obtained the written consent of the Chief Human Resources Officer or her or his delegate. For purposes of applying this provision: (x) Participant shall be deemed to have been employed by each business unit that employed the Participant within the two-year period immediately prior to the date of the Termination of Service, and (y) the status of a business entity or person as a competitor shall be determined by the Chief Human Resources Officer in her or his sole discretion. |
|
ii. |
Forfeiture Amount. The “Forfeiture Amount” means an amount determined by the Committee in its sole and absolute discretion, up to the sum of: (A) the Fair Market Value of any Shares held by
the Participant as of the date that the Committee requires forfeiture that were acquired by the Participant pursuant to an Award during the three-year period preceding such date, (B) the amount of (1) the proceeds from the sale
(including sales to the Corporation) of any Shares acquired by the Participant pursuant to an Award during the three-year period preceding the date that the Committee requires forfeiture, less (2) the amount, if any, paid by the
Participant to purchase such Shares, and (C) any proceeds received by the Participant upon cash settlement of any Award during the three-year period preceding the date that the Committee requires forfeiture.
|
|
iii. |
Committee Determination. Without limiting the generality of Section 2, the Committee shall make all determinations required pursuant to this Section 14(i) in its sole and absolute discretion,
and such determinations shall be conclusive and binding on all Persons. Notwithstanding any provision of Section 14(i)(i) to the contrary, the Committee has sole and absolute discretion not to require a Participant to pay all or any
portion of a Forfeiture Amount, and its determination not to require any Participant to pay all or any portion of a Forfeiture Amount with respect to any particular act by any particular Participant shall not in any way reduce or
eliminate the Committee’s authority to require payment of a Forfeiture Amount with respect to any other act or other Participant.
|
|
iv. |
Effect of Change-in-Control. Notwithstanding the foregoing and notwithstanding anything to the contrary in any Award Agreement or otherwise, this Section 14(i) shall not be applicable to any
Participant following a Change-in-Control.
|
|
v. |
Nonexclusive Remedy. This Section 14(i) shall be a nonexclusive remedy and nothing contained in this Section 14(i) shall preclude the Corporation from pursuing any other applicable remedies
available to it, whether in addition to, or in lieu of, application of this Section 14(i).
|
j. |
Assumed Spin-Off Awards. Notwithstanding anything in this Plan to the contrary, each Assumed Spin-Off Award shall be subject to the terms and conditions of the Prior Plan and award agreement
to which such Award was subject immediately prior to the Spin-Off, subject to the adjustment of such Award by the Compensation Committee of United Technologies Corporation and the terms of the Employee Matters Agreement, provided that
following the date of the Spin-Off, each such Award shall relate solely to Shares and be administered by the Committee in accordance with the administrative procedures in effect under this Plan.
|
By:
|
Title:
|
Date:
|
[Insert Name of Participant]
|
Date:
|
|||
OTIS WORLDWIDE CORPORATION
|
|||
Name:
|
|||
Title:
|
1. |
Purpose
|
2. |
Definitions
|
3. |
Administration
|
4. |
Eligibility
|
5. |
Performance Goals
|
6. |
Amounts Available for Awards
|
7. |
Determination and Payment of Awards
|
8. |
Clawback
|
9. |
Change in Control
|
10. |
Amendment and Termination of the Plan
|
11. |
Personal Data
|
12. |
Miscellaneous
|
12.1 |
Section 409A. Each Award is intended to be excluded from coverage under Section
409A as a short-term deferral unless, and only to the extent that, a deferral election for such Award is made pursuant to a deferred compensation plan sponsored by the Company or an Affiliated Entity. If an Award does not qualify as a
short-term deferral or for another exemption under Section 409A, it is intended that such Award will be paid in a manner that satisfies the requirements of Section 409A, and in the event any Award is payable to a “specified employee”
(as determined in accordance with the methodology established by the Company in accordance with Section 409A) that would be payable during the six-month period following the specified employee’s “separation from service” (as determined
in accordance with the methodology established by the Company in accordance with Section 409A) shall instead by paid on the first business day of the 7th month following the separation from service to the extent necessary to
avoid the imposition of any additional taxes or penalties under Section 409A.
|
12.2 |
Additional Compensation Arrangement. Nothing contained in this Plan shall prevent or limit the Company or any Affiliated Entity from adopting other or additional compensation arrangements for any employee.
|
12.3 |
No Contract of Employment. This Plan shall not constitute a contract of employment, and adoption of this Plan or the payment of Awards shall not confer upon any employee any right to continued employment or payment for
future Awards, nor shall it interfere in any way with the right of the Company or any Affiliated Entity to terminate the employment of any employee at any time. Participation in the Plan is voluntary and at the complete discretion of
the Company. This Plan shall not be deemed to constitute part of an Eligible Employee’s terms and conditions of employment.
|
12.4 |
Plan Expenses. All expenses and costs in connection with the operation of the Plan shall be borne by the Company or an Affiliated Entity and no part thereof shall be charged against Awards or to Eligible Employees.
|
12.5 |
Withholding. The Company or an Affiliated Entity shall have the right to deduct from Awards any applicable taxes, and any other deductions, required to be withheld with respect to such payments. In addition, the
Company or an Affiliated Entity also may withhold such amounts from other amounts payable by the Company or an Affiliated Entity, subject to applicable law.
|
12.6 |
No Limitation on Corporate Actions. Nothing contained in the Plan shall be construed to prevent the Company or an Affiliated Entity from taking or not taking any corporate action, whether or not such action could have an
adverse effect on any Awards made under the Plan. No Eligible Employee, beneficiary or other person shall have any claim as a result of any such action.
|
12.7 |
Unfunded Plan. The Plan is intended to constitute an unfunded plan for incentive compensation. Prior to the payment of any Award, nothing contained herein shall give any rights that are greater than those of a general
creditor of the Company or an Affiliated Entity.
|
12.8 |
Severability. If any provision of this Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any of the other provisions of the Plan, and this Plan shall be construed and enforced as
if such provision had not been included in the Plan.
|
12.9 |
Governing Law. The Plan and all actions taken thereunder shall be governed by and interpreted in accordance with and governed by the laws of the State of Delaware.
|
12.10 |
Nontransferability. A person’s rights and interests under the Plan, including any Award previously made to such person or any amounts payable under the Plan, may not be sold, assigned, pledged, transferred or otherwise
alienated or hypothecated except, in the event of death, to a designated beneficiary as may be provided in the Plan, or in the absence of such designation, by will or the laws of descent and distribution.
|
12.11 |
Beneficiaries. To the extent the Committee permits beneficiary designations, any payment of Awards under the Plan to a deceased Eligible Employee shall be paid to the beneficiary duly designated by the Eligible Employee
in accordance with the Company’s or an Affiliated Entity’s practices. If no such beneficiary has been designated or survives the Eligible Employee, payment shall be made to the Eligible Employee’s estate. A beneficiary designation, if
such are permitted, may be changed or revoked by an Eligible Employee at any time, provided the change or revocation is filed with the Committee prior to the Eligible Employee’s death.
|
12.12 |
Successor. All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.
|
12.13 |
Relationship to Other Benefits. No payment of benefit under the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, termination programs
and/or indemnities or severance payments, welfare or other benefit plan of the Company or any Affiliated Entity, except to the extent otherwise expressly provided in writing in such other plan or arrangement.
|
Otis Worldwide Corporation
|
|
One Carrier Place
|
|
Farmington, CT 06032
|
|
Attn: Otis Employee Benefit Plan Committee
|
|
Telephone: 860-676-6000
|
Preamble
|
1
|
|
Article I
|
Definitions
|
1
|
Article II
|
Credited Service
|
3
|
Article III
|
Participation
|
3
|
Article IV
|
Retirement Dates
|
4
|
Article V
|
Retirement Benefits
|
4
|
Article VI
|
Form and Payment of Benefits
|
7
|
Article VII
|
Termination of Employment
|
9
|
Article VIII
|
Funding
|
9
|
Article IX
|
Administration
|
10
|
Article X
|
Discontinuance of Employer Contributions – Plan Amendments
|
10
|
Article XI
|
Plan Discontinuance Procedures
|
10
|
Article XII
|
Miscellaneous
|
11
|
|
1.
|
Credited Service shall mean the number of full years of Continuous Service with the Employer from the date of inclusion in this Plan (including the UTC TCN prior to Spin-off), and fractions
thereof to the nearest month, completed by the Participant to the earlier of his date of termination of employment and the date he is no longer designated by the Employer as a member of this Plan. Credited Service for purposes of benefits
accrued prior to January 1, 2015 shall be limited to Continuous Service performed prior to January 1, 2015.
|
2.
|
Continuous Service shall mean a period of uninterrupted employment of an Eligible Employee with the Employer, provided, however, that Continuous Service with the Employer shall not be broken
in the event of:
|
|
(a)
|
Absence with the consent of the Administrator during any period not in excess of one year, except that the Administrator may consent to extend the period of leave.
|
(b)
|
Absence from work because of occupational injury or disease, or other disability, whether or not incurred as a result of employment with the Employer.
|
3.
|
In interpreting Section 2 above, the Administrator will apply uniform rules in a like manner to all Participants under similar circumstances.
|
4.
|
A Participant shall not accrue Credited Service for any absence described in Section 2 (a) above, but shall retain Credited Service accrued prior to such absence. Upon return to employment
after an approved absence, the Participant shall again accrue Credited Service.
|
5.
|
A Participant shall continue to accrue Credited Service for any absence described in Section 2 (b) above. For purposes of determining the Participant’s Retirement Benefit, the Participant’s
earnings history shall be frozen as of the last date of employment prior to his absence due to disability. Adjustments to Earnings realized after the Participant returns to active employment status shall be included in the determination
of Final Average Earnings.
|
6.
|
Failure to return to the employ of the Employer by the end of any period specified in Section 2 above shall be considered a termination of employment. Any other absence shall be considered a
termination of employment. Any Participant whose employment has been terminated shall be ineligible for readmission to the Plan.
|
7.
|
Credited Service for purposes of benefits accrued prior to January 1, 2015 shall not accrue on and after January 1, 2015.
|
1.
|
Eligibility
Each Otis Employee who was a participant in the UTC TCN Plan as of the Spin-off date shall be a Participant under this Plan. The Plan is closed to new entrants as of its establishment.
|
2.
|
Employment Classification
|
1.
|
Normal Retirement Age
|
2.
|
Normal Retirement Date
A Participant’s Normal Retirement Date shall be the first day of the month coincident with or next following the 65th anniversary
of his date of birth.
|
3.
|
Early Retirement Date
With the consent of the Administrator, a participant may elect to retire on an Early Retirement Date which shall be the first day of any month as specified by the Participant which shall be the latest of:
|
(a)
|
completion of 10 years of Continuous Service, and
|
(b)
|
attainment of age 55, and
|
(c)
|
termination of employment with the Employer.
|
4.
|
Deferred Retirement Date
With the consent of the Administrator, a Participant may continue his employment beyond his Normal Retirement Date. Such a Participant’s Deferred Retirement Date shall be the first day of
the month coincident with or next following the Participant’s termination of employment.
|
1.
|
Normal Retirement Benefit for Benefits Accrued Prior to January 1, 2015
A Participant who retires from the Employer in accordance with Section 2 of Article IV shall receive a monthly Normal Retirement Benefit in the amount equal to one-twelfth of (a) plus (b), where:
|
(a)
|
is the sum of (i) the product of 1.5% of the Participant’s Final Average Earnings and his years of Credited Service completed before January 1, 1978; ( ii) the product of 2% of the
Participant’s Final Average Earnings and his years of Credited Service completed after December 31, 1977 not in excess of 20 and (iii) the product of 1% of the Participant’s Final Average Earnings and his years of Credited Service
completed after December 31, 1977 in excess of 20; and
|
(b)
|
is the product of (i) 1.5% multiplied by the Participant’s years of Credited Service (maximum of 33 1/3 years), and (ii) the Participant’s Social Security Amount.
|
2.
|
Normal Retirement Benefit for Benefits Accrued On and After January 1, 2015 – Cash Balance Benefit
A Participant who retires from the Employer in accordance with Section 2 of Article IV shall receive a monthly Normal Retirement Benefit in the amount determined by converting the Cash Balance Account as defined below to an actuarially
equivalent life annuity by applying reasonable actuarial factors.
|
(a)
|
As of January 1, 2015, an account will be established for each Participant active in the Plan as of that date (“Cash Balance Account”).
|
(b)
|
Pay Credits
|
(i)
|
In General. For each calendar month during a Plan Year, a credit (“Pay Credit”) will be added to the Participant’s Cash Balance Account in an amount
equal to the Monthly Pay Credit Rate times the Earnings paid to the Participant during the month. The Monthly Pay Credit Rate is determined as follows:
|
Participant’s Age in Full Completed
Years on Last Day of Plan Year
|
Monthly Pay
Credit Rate
|
less than 30
|
3%
|
30-34
|
4%
|
35-39
|
5%
|
40-44
|
6%
|
45-49
|
7%
|
50 and older
|
8%
|
(ii)
|
Disability, Leave, or Layoff. For each calendar month during which a Cash Balance Participant has no Earnings but continues to earn Credited Service
during disability, leave, or layoff, a Pay Credit will be added to his or her Cash Balance Account in an amount equal to the Pay Credit Rate times his or her Base Earnings paid in the calendar month immediately preceding the commencement
of his or her disability, leave, or layoff (but only if the Participant was earning Credited Service immediately before he or she became disabled, commenced the specified leave, or was laid off). Notwithstanding the foregoing, a
Participant who is laid off shall not receive Pay Credits after his or her layoff even if he or she continues to earn Credited Service.
|
(iii)
|
Timing. For purposes of Subsection (a) above, the Pay Credit for a calendar month will be added to the Participant’s Cash Balance Account as of the
last day of the calendar month. For purposes of Subsection (b), above, the Pay Credit for a calendar month will be deemed added to the Participant’s Cash Balance Account as of the last day of the calendar month to which the Pay Credit
relates.
|
(c)
|
Interest Credits
|
(d)
|
Determination of Cash Balance Account
|
3.
|
Offset
In order to preclude duplication of benefits, from the sum of the monthly benefit determined in accordance with Sections 1 and 2 shall be deducted the actuarially equivalent monthly benefit as of Normal Retirement Age from any
Government or Corporation pension, retirement or termination allowance payable to the extent that the Employer or Corporation contributed or could have contributed to such a pension or allowance. The amount of any such deduction shall be
as determined by the Administrator.
|
4.
|
Early Retirement Benefit
|
(a)
|
The monthly amount of Early Retirement Benefit payable to an active Participant retiring on his Early Retirement Date shall be equal to the Normal Retirement Benefit, calculated in
accordance with this Article V, based on Credited Service to Early Retirement Date or December 31, 2014 if earlier, and the Cash Balance Account as of the date of benefit commencement, reduced by 0.2% for each month that the Early
Retirement Date precedes the first of the month coincident with or next following the Participant’s 62nd birthday.
|
(b)
|
The monthly amount of Early Retirement Benefit payable to a prior active Participant who terminated employment after attaining age 55 and 10 years of Continuous Service and who later elects
retirement on his Early Retirement Date shall be equal to the Normal Retirement Benefit, calculated in accordance with this Article V, based on the sum of the Credited Service to date of termination or December 31, 2014 if earlier and the
Cash Balance Account as of the date of benefit commencement, reduced by 0.2% for each month that the Early Retirement Date precedes the first of the month coincident with or next following the Participant’s 62nd birthday.
|
5.
|
Deferred Retirement Benefit
The monthly amount of Deferred Retirement Benefit payable to a Participant retiring on his Deferred Retirement Date shall be equal to the Participant’s Normal Retirement Benefit, calculated in accordance with this Article V, based on
the Participant’s Credited Service and Final Average Earnings as of his Deferred Retirement Date, or December 31, 2014 if earlier, and his Cash Balance Account as of the benefit commencement date.
|
6.
|
Suspension of Retirement Benefits
If a Retired Participant is reemployed by the Employer, his Retirement Benefit payments shall cease with the last payment due prior to his reemployment. Retirement Benefit payments shall again become payable on the first day of the
month following subsequent termination of employment. Reinstatement of Retirement Benefits following subsequent termination shall not constitute readmission to the Plan as prohibited under Section 6 of Article II.
|
7.
|
Death Benefits Prior to Retirement
If a Participant should die while employed by the Employer after attaining age fifty-five (55) and completing ten (10) or more years of
Continuous Service, but prior to his Normal Retirement Date, and if such Participant is married on the date of his death, his Spouse (or his non-spouse beneficiary if elected) shall be entitled to a Death Benefit in the form of a
monthly income, payable for the life of the Spouse or non-spouse beneficiary, beginning on the first day of the month coincident with or immediately following the death of the Participant, computed in accordance with Section 5 of
Article V and with the provisions of Section 2 of Article VI at a percentage equal to 100 percent. The payments will be in an amount equal to 100% of the reduced amount the Participant would have received had he retired on the day of
his death with the 100% Contingent Annuitant Option in effect.
|
8.
|
Forfeitures
No part of any forfeitures resulting from the application of any provision of this Plan shall be applied to increase the benefits any Participant would otherwise receive under this plan.
|
1.
|
Normal Form of Retirement Benefit
|
2.
|
Contingent Annuitant Option
|
(a)
|
In lieu of the Normal Form of Retirement Benefit described in Section 1 above, a Participant may elect a Contingent Annuitant Option which provides for an actuarially adjusted benefit
payable to the Retired Participant during his lifetime and for the continuance of such Retirement Benefit payments in either the same or a percentage of such reduced amount to a Contingent Annuitant, if living, after the Retired
Participant’s death. If the Participant is married, a spousal waiver is required to elect this payment form.
|
(b)
|
The monthly payment to the Contingent Annuitant shall commence on the first day of the month following the month in which the Retired Participant dies, if the Contingent Annuitant is then
living, and shall continue monthly with the last payment due for the month in which the Contingent Annuitant’s death occurs.
|
(c)
|
If a Contingent Annuitant dies before the Participant’s Early or Normal Retirement Date, the Normal Form of Retirement Benefit Payments will automatically become payable as if a Contingent
Annuitant Option had not been elected. If a Contingent Annuitant predeceases the Retired Participant after retirement, the Retirement Benefit payments will cease upon the Retired Participant’s death.
|
(d)
|
If a Participant who has elected this option should die after his Normal Retirement Date and prior to his Deferred Retirement Date, the Contingent Annuitant, if living, shall become a
Survivor Annuitant and shall be entitled to benefits, payable for such Survivor Annuitant’s further lifetime, in a monthly amount equal to the amount which would have been payable to the Contingent Annuitant had the Participant retired on
the date of his death with the 100% Contingent Annuitant Option operative.
|
3.
|
Life Annuity with Guaranteed Number of Monthly Payments Option
|
(a)
|
In lieu of the Normal Form of Retirement Benefit in Section 1 above, a Participant may elect a Life Annuity with 60 or alternatively 120 monthly payments guaranteed. This form would provide
for an actuarially adjusted Retirement Benefit payable to the Participant during his lifetime with the guarantee that not less than a total of 60 or alternatively 120 monthly Retirement Benefit payments will be made to the Retired
Participant and his named Beneficiary.
|
(b)
|
If this form is elected and the Retired Participant dies prior to the receipt of the specified number of monthly payments, the balance of the guaranteed number of monthly payments will be
paid to the Retired Participant’s named Beneficiary until a total of 60 or 120 monthly payments (as elected) has been made to the retired Participant and his named Beneficiary. The first such payment to the Beneficiary shall be due and
payable as of the first day of the month following the Retired Participant’s death.
|
(c)
|
In the event there is no named Beneficiary living at the death of the Retired Participant, the balance of the 60 or 120 guaranteed monthly payments (as elected), which would otherwise have
become payable to the Retired Participant’s Beneficiary, shall be commuted to a single sum and shall be paid to the Executors or Administrators of the Retired Participant’s estate.
|
(d)
|
If the Beneficiary of a deceased Retired Participant should die prior to receiving the balance of the 60 or 120 guaranteed monthly payments (as elected), the balance of the specified number
of guaranteed monthly payments which would otherwise have become payable to the Retired Participant’s Beneficiary shall be commuted to a single sum and shall be paid to the Beneficiary’s executors or administrators of the Beneficiary.
|
(e)
|
No monthly benefit will be payable under this form to a Beneficiary if the Participant dies before his Early or Normal Retirement Date. If a Participant, however, who has elected this form
should die after his Normal Retirement Date and prior to his Deferred Retirement Date, his Beneficiary shall become a Beneficiary Annuitant and shall be entitled to benefits payable for 60 or 120 months (as elected) in an amount equal to
the amount which would have been payable to the Participant had the Participant retired on the date of his death with this form effective.
|
4.
|
Any one option may be elected by the Participant by written notice to the Administrator at least 30 days prior to his actual Retirement Date.
|
5.
|
Once a choice as to a form of Retirement Benefit or a Retirement Date is made and accepted by the Administrator, it cannot be rescinded by the Participant without the written consent of the
Administrator conditioned upon satisfactory evidence of the good health of the Participant and any person entitled to receive payments upon the death of the Participant. In no event may a Participant change the form of Retirement Benefit
once payments have commenced.
|
6.
|
Anything in this Plan to the contrary notwithstanding, the Participant shall not have the right prior to his retirement irrevocably to elect to have all or a part of his interest in this
Plan, which would otherwise become available to him during his lifetime, paid only to his Beneficiary after his death.
|
7.
|
If a Retired Participant is reemployed by the Employer, his Retirement Benefit payments shall cease with the last payment due prior to his reemployment. Retirement Benefit payments shall
again become payable on the first day of the month following subsequent termination of employment.
|
1.
|
A Participant who terminates his employment with the Employer on or after his Normal Retirement Age as set forth in Article IV, shall have a non-forfeitable right to his Normal Retirement
Benefit determined as of the date of his termination of employment.
|
2.
|
A Participant who terminates his employment prior to the termination of this Plan with less than 5 years of Continuous Service with the Employer (including Continuous Service under the UTC
TCN Plan) shall forfeit all rights to benefits under this Plan. A Participant who has completed 5 or more years of Continuous Service and who terminates his employment with the Employer prior to his Normal Retirement Date shall retain a
non-forfeitable right to a Retirement Benefit determined as of his date of termination of employment. The Participant’s non-forfeitable Retirement Benefit shall be payable at either the Participant’s Normal Retirement Date in an amount as
determined in accordance with Article V, and in a form as determined in accordance with Article VI or, with the consent of the Administrator, his Early Retirement Date in an amount which is actuarially reduced by 5/12% for each month that
his Early Retirement Date precedes his Normal Retirement Date for early commencement and in a form as determined in accordance with Article VI.
|
3.
|
Should a Participant’s termination of employment with the Employer be caused by the Participant’s death or should the Participant die subsequent to his date of termination and prior to his
Early or Normal Retirement Date he shall not retain any non-forfeitable rights hereunder, except as provided in Article V, Section 5.
|
1.
|
For the purpose of funding for the Retirement Benefits provided herein, the Corporation will enter into and may, at the Corporation’s discretion, make periodic payments under a Group Annuity
Contract with the Insurer. Any amounts paid under said Contract may, at the direction of the Corporation, be held in a separate account maintained in conjunction therewith by the Insurer. The Corporation expressly reserves the right to
change funding agencies or vehicles at any time at its own election and without the consent of any person or organization.
|
2.
|
No part of the funds held under this Plan shall be used for or diverted to purposes other than for the exclusive benefit of Participants, their spouses or their Beneficiaries covered under
this Plan prior to the satisfaction of all liabilities hereunder with respect to them, provided that any funds under this Plan may be used to pay reasonable Plan administration expenses.
|
3.
|
No person shall have any interest in or right to any of the funds contributed to or held under this Plan except as expressly provided in this Plan and the Group Annuity Contract and then
only to the extent that such funds have been contributed by the Employer to the Insurer.
|
4.
|
No contribution shall be required by any Participant
|
1.
|
This Plan shall be administered by the Administrator in accordance with this Plan and the Group Annuity Contract.
|
2.
|
The Administrator shall determine the benefits payable under this plan, shall have the right to make such rules as may be necessary for the administration of this Plan and may require
Participants to apply in writing to the Administrator for benefits hereunder and to furnish satisfactory evidence of their date of birth and marital status and such other information as may from time to time be deemed necessary.
|
1.
|
The Employer intends to continue its sponsorship of this Plan indefinitely; but continuance of such sponsorship and such contributions is not assumed as a contractual obligation, or other
obligation, of the Employer and the right is reserved by the Employer to cease its sponsorship of this Plan or to reduce, suspend, or discontinue its contributions hereunder at any time.
|
2.
|
The Employer shall have the right to amend this Plan at any time and to any extent that it may deem advisable. No such amendment, however, shall:
|
(a)
|
vest in the Employer any interest in or control over the funds accumulated in accordance with this Plan or the Retirement Benefits provided hereunder, or,
|
(b)
|
deprive any Participant who has retired under this Plan prior to the date of amendment, of any Retirement Benefit under this Plan or change the provisions thereof, provided, however, that
any change or modification for the purpose of conforming this Plan to the requirements of any rule or regulation of any Government may be effective at any time with retroactive effect.
|
1.
|
This Plan shall be discontinued upon written notice by the Employer to the Participants covered hereunder and upon written notice to the Insurer of discontinuance of this Plan. A complete
discontinuance of contributions by the Employer shall be deemed a discontinuance of this Plan.
|
2.
|
In the event this Plan shall be discontinued, no further Employer Contributions shall be made to the Insurer. At the date of discontinuance of the Plan, the Employer funds available for the
purchase of Retirement Benefits for Participants and former Participants retaining a vested interest under this Plan remaining in the hands of the Insurer shall become vested in said Participants covered under this Plan in the manner
hereinafter indicated.
|
(a)
|
Any funds which shall be available for distribution upon discontinuance of this Plan shall be applied to purchase Retirement Benefits, at the date of such discontinuance, for Participants
eligible on that date for Normal Retirement hereunder in amounts to which said Participants shall be entitled under this Plan to the extent that sufficient funds therefor shall be available.
|
(b)
|
Any funds which shall be available for distribution after the purchase of the Retirement Benefits described in (a) above shall be applied to purchase Retirement Benefits, at the date of such
discontinuance, for Participants eligible on that date for Early Retirement hereunder in amounts to which said Participants shall be entitled under this Plan to the extent that sufficient funds therefor shall be available.
|
(c)
|
Any funds which shall be available for distribution after the purchase of the Retirement Benefits described in (a) and (b) above shall be applied to purchase Retirement Benefits, at the date
of such discontinuance, for Participants and former Participants not included in (a) and (b) above but who retain a vested interest in this Plan in amounts to which said Participants shall be entitled under this Plan to the extent that
sufficient funds therefor shall be available.
|
(d)
|
Any funds available for distribution after the purchase of the Retirement Benefits described in (a), (b) and (c) above shall be applied to purchase Retirement Benefits, at the date of such
discontinuance for all other Participants in amounts to which said Participants shall be entitled under this Plan to the extent that sufficient funds therefor shall be available.
|
3.
|
Said available funds shall be used to completely purchase the Retirement Benefits in any one class, as described above, before being used for subsequent classes. In the event the funds
available for a class are insufficient to completely purchase the Retirement Benefits for such class, they shall be applied pro rata within the class to purchase such benefits to the extent that such funds are sufficient.
|
4.
|
Any funds paid by the Employer to the Insurer available for distribution after the purchase in full of all the Retirement Benefits described in Section 2 above shall be deemed to have become
available as a result of actuarial error and shall be paid in cash to the Employer.
|
1.
|
Inclusion in this Plan shall not be construed as giving the Participant any right to be retained in the service of the Employer without the Employer’s consent, nor shall it interfere with
the right of the Employer to discharge the Participant, nor shall it give the Participant any right, claim or interest in any Retirement Benefits herein described, except upon fulfillment of the provisions and requirements of this Plan.
|
2.
|
Retirement Benefit payments shall be paid to a Retired Participant or the person designated by him to receive payments upon his death, if applicable, in a lump sum where the present value of
such monthly benefit does not exceed $5,000. Such lump sum payment is to be the actuarial equivalent of such monthly Retirement Benefit.
|
3.
|
Assignments
|
4.
|
Pronouns
|
5.
|
No Consent Required
|
6.
|
Notice
|
7.
|
Validity
|
8.
|
Successors
|
9.
|
Representations
|
10.
|
Applicable Law
|
11.
|
Claims Procedures
|
12.
|
Section 409A of the US Internal Revenue Code
|
Page
|
|||
|
|||
ARTICLE I INTRODUCTION AND PURPOSE
|
1
|
||
1.01
|
Purpose of Plan
|
1
|
|
1.02
|
Impact of Spin-off from UTC
|
1
|
|
1.03
|
Effective Date of Plan
|
2
|
|
ARTICLE II DEFINITIONS
|
2
|
||
ARTICLE III ELIGIBLE COMPENSATION
|
6
|
||
3.01
|
Annual Retainer
|
6
|
|
3.02
|
Annual Deferred Stock Unit Award
|
6
|
|
3.03
|
Transferred New Director Restricted Stock Unit Award
|
7
|
|
3.04
|
Duplication of Benefits
|
7
|
|
ARTICLE IV ACCOUNTS AND CREDITS
|
8
|
||
4.01
|
Annual Deferred Stock Unit Award
|
8
|
|
4.02
|
Elective Annual Retainer
|
8
|
|
4.03
|
Transferred New Director Restricted Stock Unit Award
|
8
|
|
4.04
|
Accounts
|
9
|
|
4.05
|
Deferred Stock Unit Accounts
|
10
|
|
4.06
|
Hypothetical Nature of Accounts and Investments
|
12
|
|
ARTICLE V ELECTION PROCEDURES AND DISTRIBUTIONS
|
12
|
||
5.01
|
Annual Retainer Deferral Election
|
12
|
|
5.02
|
Annual Retainer Deferral Election Deadline
|
12
|
|
5.03
|
Distribution Commencement Date
|
12
|
|
5.04
|
Election of Form and Amount of Distribution
|
13
|
|
5.05
|
Change in Distribution Election
|
15
|
|
ARTICLE VI ADMINISTRATION
|
15
|
||
6.01
|
In General
|
15
|
|
6.02
|
Plan Amendment and Termination
|
16
|
|
6.03
|
Reports to Participants
|
16
|
|
6.04
|
Delegation of Authority
|
17
|
|
6.05
|
Distribution of Shares
|
17
|
|
ARTICLE VII MISCELLANEOUS
|
17
|
||
7.01
|
Rights Not Assignable
|
17
|
|
7.02
|
Certain Rights Reserved
|
17
|
|
7.03
|
Withholding Taxes
|
18
|
|
7.04
|
Compliance with Section 409A
|
18
|
|
7.05
|
Incompetence
|
18
|
7.06
|
Inability to Locate Participants and Beneficiaries
|
19
|
|
7.07
|
Successors
|
19
|
|
7.08
|
Usage
|
19
|
|
7.09
|
Severability
|
19
|
|
7.10
|
Share Ownership Requirements
|
20
|
|
7.11
|
Governing Law
|
21
|
APPENDIX A
|
Otis Corporation Board of Directors Deferred Stock Unit Prior Plan (the “Prior Otis Plan”)
|
Page | |||
ARTICLE I INTRODUCTION
|
1
|
||
1.01
|
Purpose of Plan
|
1
|
|
1.02
|
Effective Date of Plan
|
1
|
|
ARTICLE II DEFINITIONS
|
1
|
||
ARTICLE III CREDITS
|
2
|
||
3.01
|
Transition Credits
|
2
|
|
3.02
|
Automatic Credits
|
3
|
|
3.03
|
Elective Credits
|
3
|
|
ARTICLE IV ACCOUNTS AND INVESTMENTS
|
3
|
||
4.01
|
Accounts
|
3
|
|
4.02
|
Stock Units
|
3
|
|
4.03
|
Hypothetical Nature of Accounts and Investments
|
5
|
|
ARTICLE V PAYMENTS
|
5
|
||
5.01
|
Entitlement to Payment
|
5
|
|
5.02
|
Payment Commencement Date
|
5
|
|
5.03
|
Form and Amount of Payment
|
6
|
|
ARTICLE VI ADMINISTRATION
|
7
|
||
6.01
|
In General
|
7
|
|
6.02
|
Plan Amendment and Termination
|
7
|
|
6.03
|
Reports to Participants
|
7
|
|
6.04
|
Delegation of Authority
|
7
|
|
ARTICLE VII MISCELLANEOUS
|
8
|
||
7.01
|
Rights Not Assignable
|
8
|
|
7.02
|
Certain Rights Reserved
|
8
|
|
7.03
|
Withholding Taxes
|
8
|
|
7.04
|
Incompetence
|
8
|
|
7.05
|
Inability to Locate Participants and Beneficiaries
|
9
|
|
7.06
|
Successors
|
9
|
|
7.07
|
Usage
|
9
|
|
7.08
|
Severability
|
9
|
|
7.09
|
Governing Law
|
10
|
For Immediate Release | Media Contact: |
Ray Hernandez
860-674-3029
Ray.Hernandez@otis.com
|
|
|
|
|
IR Contact: |
Stacy Laszewski
860-676-6011
investorrelations@otis.com
|
|
• |
Otis completes separation from United Technologies and returns to roots as an independent, publicly traded company
|
|
• |
Otis is well-positioned for sustained, long-term growth, backed by macro growth trends such as urbanization, a growing middle class and digitalization
|
|
• |
Otis’ unparalleled service portfolio generates recurring sales, robust free cash flow and best-in-class margins
|