<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[Amendment No. . . . . . . . . . . . . . . .]
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
UNITED TECHNOLOGIES CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule O-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously by written preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------
2) Form Schedule or Registration Statement No.:
--------------------------
3) Filing Party:
---------------------------------------------------------
4) Date Filed:
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<PAGE>
United Technologies
Corporation
[LOGO OF UNITED TECHNOLOGIES APPEARS HERE] One Financial Plaza
Hartford, CT 06101
March 29, 1999
Dear Fellow Shareowner:
You are cordially invited to attend the 1999 Annual Meeting of Shareowners of
United Technologies Corporation. The meeting will be held on April 30, 1999 at
the Hartford Civic Center, 1 Civic Center Plaza, Hartford, CT. The doors will
open at 10:30 a.m. and the meeting will begin at 11:00 a.m. We look forward to
your attending either in person or by proxy.
. You will find a Notice of Meeting on the following page listing three
matters to be voted upon at the meeting.
. At the meeting, we will present a brief report on the Corporation's 1998
business results and outlook for the future. You will also have an
opportunity to ask questions.
. Our Proxy Statement has a new format this year. We hope you will find it
easier to read.
. This year for the first time we are offering shareowners of record two
additional methods of voting. If your shares are registered in your name
with our stock transfer agent, First Chicago Trust Company of New York, you
can now submit your proxy by telephone or via the Internet, in addition to
the traditional method of mailing in a proxy card.
. Employees who participate in an employee savings plan of the Corporation can
also submit voting instructions by telephone, via the Internet, or by
mailing in their proxy cards.
If your shares are registered directly in your name with our stock transfer
agent or if you are a participant in an employee savings plan of the
Corporation, you can attend the meeting by completing and returning the ticket
Reservation Card enclosed with your proxy statement. If your shares are held
through a bank, broker, or a nominee and you wish to attend the meeting, your
broker, bank or nominee must give written notice to the Corporation that you
are its authorized representative for those shares.
Your vote is important. We encourage you to read the voting instructions
starting at Page 1 of the accompanying Proxy Statement and to vote your shares
as early as possible.
George David
Chairman & Chief Executive Officer
<PAGE>
[LOGO OF UNITED TECHNOLOGIES APPEARS HERE]
March 29, 1999
Notice of Annual Meeting of Shareowners
Date: Friday, April 30, 1999
Time: 11:00 a.m., Eastern Time
Place: Hartford Civic Center
One Civic Center Plaza
Hartford, CT
Agenda: 1. Elect eleven directors
2. Appoint independent public accountants
3. Vote on the shareowner proposals described in the accompanying
Proxy Statement
4. Conduct other business if properly raised
Admission to and Voting at the Meeting:
You may attend and vote at the meeting if you were an owner of record of Common
Stock or Series A ESOP Convertible Preferred Stock of the Corporation at the
close of business on March 10, 1999, the record date for the meeting. You may
also attend and vote at the meeting if you are the authorized representative by
proxy of a shareowner of record on that date.
Shareowner List:
We have prepared a list of shareowners entitled to vote at the meeting. The
list will be available for your inspection for ten days prior to the meeting at
the offices of the Corporation at One Financial Plaza, Hartford, CT 06101. The
list will also be available at the meeting.
William H. Trachsel
Senior Vice President, General Counsel
and Secretary
<PAGE>
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Questions and Answers...................................................... 1
Business Matters to be Voted on............................................ 6
Item No. 1--Election of Directors......................................... 6
Item No. 2--Appointment of Independent Public Accountants................. 6
Item No. 3--Shareowner Proposals.......................................... 7
Item No. 4--Other Business Matters........................................ 7
General Information Concerning the Board of Directors...................... 7
Nominees.................................................................. 7
Committees................................................................ 11
Compensation of Directors................................................. 12
Security Ownership of Directors, Nominees and Executive Officers........... 13
Report of the Committee on Compensation and Executive Development.......... 15
Compensation of Executive Officers......................................... 18
Summary Compensation Table................................................ 18
Option/SAR Grants in Last Fiscal Year..................................... 19
Aggregated Option/SAR Exercises and Values................................ 20
Performance Graph......................................................... 21
Section 16(a) Reporting................................................... 21
Certain Business Relationships............................................ 21
Employment Contracts...................................................... 22
Pension Plan.............................................................. 23
Shareowner Proposals....................................................... 24
Director Term Limits...................................................... 24
Military Contracts........................................................ 24
Northern Ireland.......................................................... 26
</TABLE>
<PAGE>
UNITED TECHNOLOGIES CORPORATION
PROXY STATEMENT
YOUR VOTE IS VERY IMPORTANT
Please submit a proxy as soon as possible so that your shares can be voted at
the meeting in accordance with your instructions, whether or not you plan to
attend the Annual Meeting of Shareowners. This Proxy Statement describes the
matters to be voted on and contains specific instructions to facilitate your
voting.
The Board of Directors is soliciting proxies for the 1999 Annual Meeting of
Shareowners of United Technologies Corporation to be held on April 30, 1999. We
are distributing this Proxy Statement on or about March 29, 1999. The
Corporation's Annual Report, including financial statements for the year 1998,
was mailed to shareowners on or about February 16, 1999.
QUESTIONS AND ANSWERS
What am I being asked to vote on?
You are being asked to vote on (1) the election of eleven directors, (2) the
appointment of independent public accountants and (3) the shareowner proposals
described on pages 24 through 28. Your grant of a proxy also will confer on the
proxy holders authority to vote in their best judgment on any other matter
properly brought before the meeting.
How does the Board of Directors
recommend I vote on the proposals?
The Board recommends a vote FOR each of the Corporation's nominees for election
as directors, FOR the appointment of PricewaterhouseCoopers LLP as independent
public accountants, and AGAINST each of the shareowner proposals described on
page 24 through 28.
Who is entitled to vote?
You are entitled to vote at the Annual Meeting if you were the owner of Common
Stock or Series A ESOP Convertible Preferred Stock of the Corporation at the
close of business on March 10, 1999, the record date for voting. This includes
(1) shares held on that date directly in your name as the shareowner of record,
and (2) shares held on that date through a stockbroker, bank or other nominee,
including any shares held through an employee savings plan of the Corporation,
for you as the beneficial owner.
What is the difference between holding shares as a shareowner of record and as
a beneficial owner?
If your shares are registered directly in your name with the Corporation's
stock transfer agent, First Chicago Trust Company of New York, you are the
shareowner of record for those shares and these proxy materials are being sent
directly to you by the Corporation. As the shareowner of record, you have the
right to vote these shares in person at the meeting or to designate a proxy to
vote for you. The Corporation has enclosed a proxy card to permit you to
instruct the proxy holder how to vote your shares.
If your shares are held in a brokerage account or by a bank or other nominee,
you are considered the beneficial owner of shares held in street name and these
proxy materials are being forwarded to you by your broker, bank or nominee. As
the beneficial owner, you have the right to direct your broker, bank or nominee
on how to vote and you are also invited to attend the meeting. However, since
you are not the shareowner of record, you may not vote these shares in person
at the meeting (unless your broker, bank or nominee has provided written
confirmation that you have been designated as its proxy for those shares). Your
broker, bank or nominee has
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enclosed a voting instruction card so you can give directions as to the voting
of your shares.
How do I vote?
Shares may be voted at the Annual Meeting either in person or by proxy. Since
many shareowners are unable to attend the meeting in person, we send cards to
all shareowners of record permitting them to designate proxies to represent
them at the meeting and to direct the proxy holders on how to vote. Brokers,
banks and nominees also send cards to beneficial owners to permit them to
provide instructions as to how they wish their shares to be voted.
How do I vote by mail?
Shareowners of record and participants in an employee savings plan of the
Corporation who wish to vote by mail should complete the enclosed proxy card
to indicate their voting instructions and then sign, date and mail the proxy
card in the postage-paid envelope provided. Beneficial owners may direct their
vote by mail by completing, signing and returning the voting instruction card
provided by their broker, bank or nominee.
How do I vote by telephone or via the Internet?
. If you live in the United States or Canada and your shares are registered
with First Chicago Trust Company of New York directly in your name or you
are a participant in an employee savings plan of the Corporation, you may
submit your voting instructions by telephone by dialing 1-800-OK2-VOTE or
1-800-652-8683, entering the voter control number found on your proxy card
and following the voice prompts.
. If you are a shareowner of record, you may submit your voting instructions
via the Internet by accessing the following address on the World Wide Web:
http://www.vote-by-net.com, entering the voter control number on your proxy
card and marking the appropriate boxes to enter your voting instructions.
. If your shares are held through a brokerage firm or bank, you will be able
to submit your voting instructions by telephone or via the Internet if the
firm holding your shares offers these voting methods. Please refer to the
voting instruction card provided by your bank, broker or nominee for
further information.
How do I vote at the Annual Meeting?
We will pass out written ballots to any shareowner of record or authorized
representative of a shareowner of record who wants to vote in person at the
Annual Meeting rather than by proxy. If you hold your shares through a bank,
broker or nominee, you must obtain a proxy from your broker, bank or nominee
to vote in person at the meeting.
Who am I designating as my proxy?
You will be designating Antonia Handler Chayes, Charles R. Lee and Harold A.
Wagner, each a director of the Corporation, as a proxy holder to vote your
shares in accordance with your instructions.
How will my proxy vote my shares?
The designated proxy holders will vote according to the instructions you
submit on your proxy card, by telephone or via the Internet. If you sign and
return your card or submit voting instructions by telephone or via the
Internet but do not indicate your voting instructions on one or more of the
business matters listed, the proxy holders will vote all uninstructed shares
for each of the Corporation's nominees for election as a director, for the
appointment of PricewaterhouseCoopers LLP as independent public accountants
and against the
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shareowner proposals. The proxy holders will also be authorized to vote in
accordance with their best judgment on any other business that properly comes
before the meeting.
How many shares can vote?
As of the record date, 225,869,400 shares of Common Stock and 12,477,333 shares
of Series A ESOP Convertible Preferred Stock were issued and outstanding.
Owners of Common Stock are entitled to one vote for each share held and owners
of Series A ESOP Convertible Preferred Stock are entitled to 2.6 votes for each
share held. There were therefore a total of 258,310,466 eligible votes as of
the record date.
What is the quorum requirement?
A majority of the Corporation's outstanding shares entitled to vote as of the
record date must be present or represented at the meeting, either by proxy or
in person, in order to conduct the business of the meeting.
How many votes are needed for matters to be adopted at the meeting?
The eleven director nominees receiving the highest number of votes will be
elected. Other matters will be approved if they receive the affirmative vote of
a majority of the votes present or represented at the Annual Meeting. If a
shareowner abstains from voting on a particular matter, or if a broker is not
allowed under stock exchange rules to vote shares for which a client has not
given voting instructions, the effect will be the same as a vote "against" the
matter.
In the election of directors, each owner of Common Stock is entitled to a
number of votes equal to the number of shares of stock owned multiplied by the
number of directors to be elected. Each owner of Series A ESOP Convertible
Preferred Stock is entitled to a number of votes equal to 2.6 times the number
of shares of Series A ESOP Convertible Preferred Stock owned multiplied by the
number of directors to be elected. Shareowners may give instructions that all
of their votes be cast for a single nominee or may distribute the total number
of votes among two or more nominees. If no written instruction is given, the
votes will be evenly distributed among the Corporation's nominees.
Who can attend the Annual Meeting and how do I get a ticket?
All shareowners of record on March 10, 1999 can attend. Since seating is
limited, we ask that you request a ticket to attend. If your shares are
registered directly in your name on the records of First Chicago Trust Company
of New York, or if you are a participant in an employee savings plan of the
Corporation, you can request a ticket by mailing in the Reservation Card you
received with your proxy materials. If you forget to bring your ticket, you
will be admitted to the meeting only if you are listed as a shareowner of
record or savings plan participant as of March 10, 1999 and bring proof of
identification. If your shares are held through a broker, bank or nominee, and
you would like to attend, please write to the Corporate Secretary, United
Technologies Corporation, One Financial Plaza,
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Hartford, CT 06101, and include a copy of your brokerage account statement or a
legal proxy from your broker or bank, in each case showing your ownership of
shares as of the record date. We will then send you a ticket.
Who will count the vote? Is my vote confidential?
Representatives of First Chicago Trust Company of New York will serve as
Inspectors of Election. They will supervise the voting, decide the validity of
proxies and receive, inspect and tabulate proxies. Proxy cards, ballots and
voting tabulations that identify individual shareowners are mailed or returned
directly to First Chicago Trust Company of New York, and handled in a manner
that protects the confidentiality of your vote. Your vote will not be disclosed
except: (1) as needed to permit First Chicago Trust Company of New York to
tabulate and certify the vote; or (2) as required by law. Any comments written
on the proxy card or other submission will be forwarded to management, but your
identity will be kept confidential unless you ask that your name be disclosed.
Can I revoke my proxy?
Yes. You may revoke your proxy before it is voted by notifying the Corporate
Secretary, United Technologies Corporation, One Financial Plaza, Hartford, CT
06101 that you are revoking your proxy; by following the procedures given for
revoking your proxy when voting by telephone or via the Internet; by submitting
a new proxy with a later date; or by voting in person at the meeting.
How are shares held by the UTC employee savings plans voted?
If you have an investment in the UTC Stock Fund or in the UTC Employee Stock
Ownership Plan, you must instruct Bankers Trust Company, the savings plan
trustee, how to vote your shares by returning a proxy card or by voting by
telephone or via the Internet. If you do not vote your shares or if your
instructions are incomplete or unclear, the trustee will vote all of your
uninstructed shares in proportion to the way the other savings plan
participants voted their savings plan shares. The trustee will vote UTC stock
in the ESOP Fund that has not been allocated to employees' accounts in the same
proportion as uninstructed shares.
How will voting on any other business be conducted?
Although we do not know of any business to be conducted at the 1999 Annual
Meeting other than the matters described in the Proxy Statement, the form of
proxy and the voting instructions you submit by telephone or via the Internet
give authority to the proxy holders to vote on other matters, if they arise, in
accordance with their best judgment.
When are shareowner proposals for the 2000 Annual Meeting due?
A shareowner who wishes to introduce a proposal to be voted on at the
Corporation's Annual Meeting to be held in 2000 must, in accordance with the
Corporation's Bylaws, notify the Corporate Secretary in writing, addressed to
United Technologies Corporation, One Financial Plaza, Hartford, CT 06101. This
notice must be received no earlier than December 30, 1999, and no later than
January 30, 2000, and must provide the information specified by the Bylaws. Any
shareowner who wishes to have a shareowner proposal included in the
Corporation's proxy statement for the 2000 Annual Meeting must submit the
proposal in writing to the Corporate Secretary at the address indicated above.
In order for the proposal to be considered for inclusion in the Corporation's
proxy statement for the 2000 Annual Meeting, it must be received prior to
November 30, 1999, and the shareowner submitting the proposal must comply with
all other applicable rules and regulations established by the Securities and
Exchange Commission.
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The Board of Directors carefully considers all proposals and suggestions from
shareowners. When adoption is clearly in the best interests of the Corporation
and the shareowners as a whole, and can be accomplished without shareowner
approval, the proposal is implemented without inclusion in the proxy material
or presentation at the Annual Meeting. However, the Board of Directors does not
necessarily agree with all shareowner proposals submitted and must oppose those
with which it disagrees to fulfill the Board's obligations to represent and
safeguard the best interests of shareowners as a whole.
How are proxies solicited and how much did this proxy solicitation cost?
The Corporation has hired Georgeson & Company Inc. to assist in the
distribution of proxy materials and the solicitation of proxies for a fee
estimated at $15,500, plus out-of-pocket expenses. Proxies have been solicited
on behalf of the Board of Directors by mail, in person and by telephone. The
Corporation will bear the cost of soliciting proxies. The Corporation also
reimburses brokers and other custodians, nominees and fiduciaries for their
reasonable out-of-pocket expenses for forwarding proxy materials to the persons
for whom they hold shares.
Who are the largest principal shareowners?
Based upon a filing with the Securities and Exchange Commission, the
Corporation is aware that as of December 31, 1998, the entity listed in the
following table was the beneficial owner of more than five percent of the
outstanding Common Stock of the Corporation:
Largest Principal Shareowners
<TABLE>
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<CAPTION>
Shares
Beneficially Percent
Class of Security Name and Address Owned of Class
- ----------------- -------------------------------------- --------------- --------
<S> <C> <C> <C>
Common Stock The Equitable Companies Incorporated 11,613,331(/1/) 5.16%
1290 Avenue of the Americas
New York, NY 10104
</TABLE>
(/1/)The Equitable Companies Incorporated ("Equitable"), a parent holding
company, has advised that Equitable, along with certain entities that
control Equitable, directly or indirectly, held sole voting power as to
6,842,582 shares, shared voting power as to 2,584,030 shares, sole
dispositive power as to 11,581,141 shares and shared dispositive power as
to 8,290 shares.
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Bankers Trust Company, 130 Liberty Street, New York, NY 10006 holds all of the
shares of Series A ESOP Convertible Preferred Stock as trustee for employees of
the Corporation who participate in the Corporation's Employee Stock Ownership
Plan. Bankers Trust Company disclaims beneficial ownership of all of the Series
A ESOP Convertible Preferred Stock.
BUSINESS MATTERS
TO BE VOTED ON
Item 1. Election of Directors.
The entire Board of Directors is elected annually by the shareowners at the
Annual Meeting. The Board has selected nominees based upon the recommendation
of its Nominating Committee, which evaluates candidates based upon their
ability and integrity. The Nominating Committee seeks directors who as a group
are expected to bring to the Board experience in national and international
business, an awareness of the appropriate role of the Corporation in society,
and a diversity of opinion and insight.
The Board is nominating eleven persons for election to the Board at the Annual
Meeting. Each of the nominees currently is serving as a director of the
Corporation and each was elected a director at the 1998 Annual Meeting, with
the exception of Richard D. McCormick, who joined the Board in February 1999.
Charles W. Duncan, Jr., Robert H. Malott, and Jacqueline G. Wexler will be
retiring from the Board in April 1999. They have each made important
contributions and the Board is fortunate to have had the benefit of their
experience and sound advice.
If any of the nominees become unavailable to accept nomination or election as a
director, the proxy holders will, in their discretion, vote the shares they
represent for another person nominated by the Board, unless the Board reduces
the number of directors to be elected.
Biographical information for each of the nominees and other information about
them is presented beginning on page 7.
The Board of Directors recommends that you vote FOR each of the nominees.
Item 2. Appointment of Independent Public Accountants.
The Audit Review Committee has nominated PricewaterhouseCoopers LLP to be
Independent Public Accountants for the Corporation, to act as General Auditor
until the next Annual Meeting in 2000. During 1998, PricewaterhouseCoopers LLP
provided audit and related services to the Corporation, as well as certain non-
auditing services. Fees for audit and related services totaled approximately
$14.5 million and fees for non-auditing services totaled approximately $8.8
million. The Audit Review Committee approves services to be provided by
PricewaterhouseCoopers LLP and reviews services for any possible effect on
their independence as auditors. Whenever practicable, the Corporation seeks the
review and approval by the Audit Review Committee of proposed services prior to
performance of the services. In other cases, the Corporation informs the
Committee as soon as practicable after performance of the services.
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Representatives of PricewaterhouseCoopers LLP will be present at the Annual
Meeting and will have an opportunity to make any statements they desire. They
will also be available to respond to appropriate questions from shareowners.
The Board of Directors recommends that you vote FOR approval of
PricewaterhouseCoopers LLP as Independent Public Accountants for the
Corporation.
Item 3. Shareowner Proposals.
Three shareowner proposals and the responses of the Board of Directors are
included beginning on page 24.
The Board of Directors recommends that you vote AGAINST each of the shareowner
proposals for the reasons given on pages 24 through 28.
Item 4. Other Business Matters.
The Board of Directors is not aware of any other business matters to be
presented for action at the Annual Meeting. However, in the event that any
other matters properly come before the meeting, the shareowners present at the
meeting will vote on the item.
GENERAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
Nominees.
The following are brief biographical sketches for each person nominated for
election to the Board of Directors:
ANTONIA HANDLER CHAYES, Senior Advisor and Board Member of
Conflict Management Group (CMG), a non-profit firm providing
strategic advice on conflict management, and Senior Consultant
to
JAMS\ENDISPUTE, a firm that provides alternatives to traditional litigation.
Ms. Chayes is an Adjunct Lecturer at the Kennedy School of Government and is
Co-Director of the Project on International Compliance and Dispute Settlement
at the Program on Negotiation at Harvard Law School. She served as Assistant
Secretary of the United States Air Force from 1977 to 1979, and as Under
Secretary from 1979 to 1981. Ms. Chayes served as a Commissioner with the
Commission on Roles and Missions of the United States Armed Forces, the DOD-CIA
Joint Security Commission, and the Vice President's White House Aviation Safety
and Security Commission. She is a member of the American Law Institute and the
Council on Foreign Relations. She is 69 and has been a director of the
Corporation since 1981.
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GEORGE DAVID, Chairman and Chief Executive Officer, United
Technologies Corporation. Mr. David was elected UTC's
President in 1992, Chief Executive Officer in 1994, and
Chairman in 1997. He joined UTC's
Otis Elevator subsidiary in 1975, becoming Otis' President in 1986. He was
subsequently responsible for UTC's Commercial/Industrial sector, including
Otis, Carrier and UT Automotive. Mr. David is a member of The Business
Roundtable, and Chairman or President of the Boards of the Graduate School of
Business Administration at the University of Virginia, the National Minority
Supplier Development Council, and the U.S.-ASEAN Business Council. He is 56 and
has been a director of the Corporation since 1992.
JEAN-PIERRE GARNIER, PH.D., is the Chief Operating Officer and
Executive Member of the Board of Directors of SmithKline
Beecham plc, Philadelphia, PA (pharmaceuticals). He joined
SmithKline
Beecham in 1990 as President of its pharmaceutical business in North America
and served as Chairman, Pharmaceuticals from 1994 until his appointment to his
current position in 1995. Mr. Garnier is a director of the Eisenhower Exchange
Fellowships. Mr. Garnier is 51 and has been a director of the Corporation since
1997.
PEHR G. GYLLENHAMMAR, Chairman, CGU plc (insurance) and Senior
Advisor, Lazard Freres & Co., LLC (investment banking). Mr.
Gyllenhammar is the former Executive
Chairman, AB Volvo, Goteborg, Sweden. He served as Managing Director and Chief
Executive Officer of AB Volvo from 1971 to 1983, as Chairman and Chief
Executive Officer until 1990 and as Executive Chairman from 1990 to December
1993. He is Chairman of Actinova Limited, a member of the Supervisory Board of
Lagardere SCA, and a trustee of the Reuters Founders Share Co. Limited. He is
also Chairman of the Board of Cofinec N.V. and Chairman of Swedish Ships'
Mortgage Bank. Mr. Gyllenhammar is 63 and has been a director of the
Corporation since 1981.
KARL J. KRAPEK, Executive Vice President of the Corporation
and President of Pratt & Whitney. Mr. Krapek joined the
Corporation in 1982 as Vice President of Operations for Otis
Elevator Company. He was
named Otis' President in 1989 and served as Chairman, President and Chief
Executive Officer of Carrier Corporation from 1990 to 1992. Mr. Krapek has
served as President, Pratt & Whitney since 1992. He is chairman of the Board of
Directors of the Connecticut Capitol Region Growth Council, Chairman of the
MetroHartford Millennium Management Group, Vice Chairman of the Board of
Trustees of the Connecticut State University System, a member of the Director's
Advisory Board of the Yale Cancer Center, a director of Saint Francis Care,
Inc. and will serve as 1999 General Campaign Chairman for the
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United Way and Combined Health Appeal Community Campaign in the Hartford area.
Mr. Krapek is 50 and has been a director of the Corporation since 1997.
CHARLES R. LEE, Chairman and Chief Executive Officer of GTE
Corporation, Irving, TX (telecommunications). Mr. Lee has
served since 1992 as Chairman and Chief Executive Officer of
GTE. Since joining GTE in 1983,
Mr. Lee served as Senior Vice President of Finance from 1983 to 1986, Senior
Vice President Finance and Planning from 1986 to 1988, and from 1988 to 1992 he
served as President, Chief Operating Officer and a director of GTE. He is a
director of The Procter & Gamble Company and USX Corporation. He is a member of
The Business Roundtable and The Business Council, a Trustee of the Board of
Trustees of Cornell University, a director of the New American Schools
Development Corporation, a member of The Conference Board, Harvard Business
School's Board of Directors of the Associates, and a director of the Stamford
Hospital Foundation. He is 58 and has been a director of the Corporation since
1994.
RICHARD D. MCCORMICK, Chairman, U S WEST, Inc., Denver, CO
(telecommunications). Mr. McCormick has been Chairman of the
Board of U S WEST, Inc. since 1998. Prior to the June 1998
separation of
U S WEST and MediaOne Group into separate entities, Mr. McCormick was Chairman,
President and Chief Executive Officer of their former parent company, also
known as U S WEST,
Inc., from 1992 through 1998. He is also a director of United Airlines, Wells
Fargo and Company and Concept Five Technologies. In addition, he is chairman of
the United States Council for International Business, vice president of the
International Chamber of Commerce, and Chairman of Creighton University. He is
a member of the Business Council, a trustee of the Denver Art Museum and board
member of the American Indian College Fund. Mr. McCormick is 58 and has been a
director of the Corporation since February 1999.
WILLIAM J. PERRY, the Michael and Barbara Berberian Professor
at Stanford University, with a joint appointment in the
Department of Engineering-Economic Systems & Operations
Research and the
Institute for International Studies. He is also a Fellow at the Hoover
Institute and co-director, with Ashton B. Carter, of the Stanford-Harvard
Preventive Defense Project. Dr. Perry was the 19th Secretary of Defense for the
United States, serving from February 1994 to January 1997. His prior government
experience was as Deputy Secretary of Defense (1993-1994) and as Under
Secretary of Defense for Research and Engineering (1977-1981). Dr. Perry is the
chairman of Global Technology Partners. He is a director of Hambrecht & Quist
LLC, The Boeing Company, and Cylink Corporation. In 1992 and 1993, prior to
serving at the Department of Defense, Dr. Perry was a member of the
Corporation's Board of Directors. Dr. Perry is 71 and rejoined the Board as a
director in 1997.
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FRANK P. POPOFF, Chairman, The Dow Chemical Company, Midland,
MI. Mr. Popoff is also a director of American Express Company,
U S WEST, Inc., Chemical Financial Corporation and Michigan
Molecular
Institute. He is a past chairman of the Chemical Manufacturers Association and
a member of the Business Council for Sustainable Development, The Business
Council, the Council for Competitiveness, the American Chemical Society and
director emeritus of the Indiana University Foundation. Mr. Popoff is 63 and
has been a director of the Corporation since 1996.
ANDRE VILLENEUVE, Executive Director of Reuters Holdings PLC,
London, England (worldwide news, information and services
business). Mr. Villeneuve has headed Reuters' three operating
units globally
since 1991, and has been a member of Reuters' board since 1988. He is also
Chairman of Instinet Corp., Reuters' electronic brokerage subsidiary. After
joining Reuters in 1967, Mr. Villeneuve served in various positions in Europe
and North America. He was named manager, Reuters Europe in 1981, managed the
company's business in North America from 1983 to 1991, assumed additional
responsibility for Latin America in 1989 and became president, Reuters Asia in
1991. He is also a director of CGU plc. Mr. Villeneuve is 54 and has been a
director of the Corporation since 1997.
HAROLD A. WAGNER, Chairman and Chief Executive Officer, Air
Products and Chemicals, Inc., Allentown, PA (industrial gases
and chemicals). Mr. Wagner served as Chairman, President and
Chief
Executive Officer, Air Products and Chemicals, Inc. 1992-1998, President, Air
Products and Chemicals, Europe 1988-1990, Executive Vice President, Gases and
Equipment 1990-1991, President and Chief Operating Officer 1991-1992. He is a
director of CIGNA Corporation and Daido-Hoxan, a member of The Business
Council, the Policy Committee of The Business Roundtable, and a member of the
Pennsylvania Business Roundtable. Mr. Wagner also serves on the Board of
Trustees of Lehigh University. Mr. Wagner is 63 and has been a director of the
Corporation since 1994.
-10-
<PAGE>
The Board met seven times during 1998 with an average attendance of 96.7%. All
incumbent directors attended more than 75% of the aggregate number of meetings
of the Board and Committees on which he or she served.
Committees.
The Board has established six permanent committees to assist it in the
discharge of its responsibilities. Their membership and functions during 1998
were as follows:
Board Committee Membership
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
Compensation & Public
Audit Executive Issues
Board Member Executive Review Development Finance Nominating Review
- ------------ --------- ------ -------------- ------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
A. H. Chayes X X X
G. David X* X
C. W. Duncan, Jr. X X X* X
J. P. Garnier X X X
P. G. Gyllenhammar X X X
K. J. Krapek
C. R. Lee X X
R. H. Malott X X X X*
W. J. Perry X X X
F. P. Popoff X* X
A. Villeneuve X X X
H. A. Wagner X* X X
J. G. Wexler X X X X*
* Chairperson
Meetings Held in 1998 0 4 8 4 4 4
</TABLE>
Executive Committee--The Executive Committee may exercise all powers of the
Board of Directors in the management of the Corporation, except those powers
that the Bylaws specifically reserve to the entire Board (e.g., the power to
amend the Bylaws, declare dividends). Although the Executive Committee has very
broad powers, in practice it meets only when it would be inconvenient to call a
meeting of the Board.
Audit Review Committee--The responsibilities of the Audit Review Committee are
defined in a formal written charter approved by the full Board of Directors.
The Committee recommends to the Board an accounting firm to serve as
Independent Public Accountants for the Corporation, approves services rendered
by the Independent Public Accountants and meets with such firm and with the
Corporation's internal auditors to receive reports with regard to all auditing
matters. The Committee reviews the annual audited financial statements of the
Corporation and the adequacy of internal accounting controls. The Committee also
confers with the internal auditors to review reports on compliance with the
Corporation's policies and procedures, business ethics, financial controls, and
with applicable statutes and regulations.
Committee on Compensation and Executive Development--The Committee on
Compensation and Executive Development approves compensation actions involving
elected officers and senior executives of the Corporation and periodically
-11-
<PAGE>
reviews, in the aggregate, annual salaries of all executives. The Committee
approves long-term incentive awards for elected officers and certain key
executives of the Corporation, and reviews and administers the incentive
compensation, long-term incentive and other compensation plans of the
Corporation. It also reviews and approves policies and programs for the
development of management personnel and management structure and organization.
Finance Committee--The Finance Committee is responsible for reviewing and
making recommendations to the Board on the management of the financial
resources of the Corporation. This Committee also reviews major financial
strategies and transactions and major acquisitions and divestitures.
Nominating Committee--The Nominating Committee is responsible for making
recommendations to the Board on candidates for the Board and on the
qualifications and retirement of existing members of the Board. This Committee
also is responsible for matters of corporate governance and other matters
referred to it by the Board. The Nominating Committee considers nominees
recommended to it in writing by shareowners.
Public Issues Review Committee--The Public Issues Review Committee has
oversight responsibility for the Corporation's response to such public issues
as equal employment opportunity, the environment, and safety in the workplace.
In addition, the Committee has oversight responsibility for the Corporation's
contributions program and political action committees.
Compensation of Directors
Nonemployee directors are paid an annual retainer of $60,000 ($65,000 for
committee chairpersons), with no meeting fees paid for regularly scheduled
Board or Committee meetings. 60% of this retainer is paid in stock units under
the United Technologies Corporation Board of Directors Deferred Stock Unit Plan,
and the remaining 40% is paid in cash or, at the election of the director, in
additional stock units. Each stock unit has a value equal to one share of Common
Stock of the Corporation and is settled in cash at the time of termination of
service as a director. Payment may be made either in a lump sum or in
installments at the election of the director. Each stock unit credited to a
director's account earns additional stock units equivalent in value to the
dividend paid on Common Stock. There are no voting rights attached to stock
units.
Under the United Technologies Corporation Nonemployee Director Stock Option
Plan, each nonemployee director receives an annual grant of 2,000 stock
options. The options, which are awarded each year on the date of the annual
meeting, have a ten-year term and become exercisable three years from the date
of grant. The exercise price is equal to the closing market price of Common
Stock on the date of grant.
Upon becoming a director, each nonemployee director receives a one-time grant
of 2,000 shares of restricted Common Stock. Regular quarterly dividends are
paid on the shares. The shares vest ratably over five years, but may not be
sold or otherwise transferred until the director retires or resigns from the
Board. If a director leaves the Board before all of the restricted shares vest,
the non-vested shares will be forfeited, except that, in the event of the death
or disability of a director or a change in control of the Corporation, or if a
director retires or resigns to accept full-time employment in public or
charitable service, all shares not previously vested will vest immediately. In
lieu of shares of restricted Common Stock, certain non-U.S. directors may
receive a one-time grant of 2,000 restricted share units, each corresponding in
value to one share of Common Stock. The vesting provisions for the units are
the same as for restricted stock. At retirement, the units are settled in cash.
A quarterly cash payment equal to the dividend paid on a share of Common Stock
is paid on each stock unit.
-12-
<PAGE>
As part of its overall program of support for charitable institutions and to
further enhance the ability of the Corporation to attract and retain qualified
directors, the Corporation maintains the Directors' Charitable Gift Program.
This program is funded by life insurance on the lives of the members of the
Board of Directors. Under this program, the Corporation will make charitable
contributions of up to a total of $1 million following the death of a director,
allocated among up to four charitable organizations recommended by the
director. At this date, all of the current directors are participants in this
program. Beneficiary organizations recommended by directors must be tax-exempt
under Section 501(c)(3) of the Internal Revenue Code. Donations ultimately paid
by the Corporation are expected to be deductible from taxable income for
purposes of federal and other income taxes payable by the Corporation.
Directors derive no financial benefit from the program since all insurance
proceeds and charitable deductions accrue solely to the Corporation.
Security Ownership of Directors, Nominees and Executive Officers.
The following table shows, as of February 26, 1999, the UTC equity securities
owned by each current director, each nominee for election to the Board of
Directors, each of the executive officers named in the Summary Compensation
Table on page 18, and all of the directors and executive officers as a group.
As of February 26, 1999, each of the directors and named executive officers
owned or had the right to acquire (upon the exercise of stock options
exercisable within 60 days) less than 1% of UTC's Common Stock and less than 1%
of UTC's Series A Convertible ESOP Preferred Stock. The directors and named
executive officers as a group owned or had the right to acquire (upon the
exercise of stock options exercisable within 60 days) approximately 1.9% of the
Common Stock and less than 1% of the Series A Convertible ESOP Preferred Stock.
-13-
<PAGE>
Stock Ownership of Directors, Nominees and Executive Officers
<TABLE>
- ------------------------------------------------------------------------------
<CAPTION>
Shares Beneficially
Name Class of Securities Owned(1)
---- ------------------- -------------------
<S> <C> <C>
Antonia Handler Chayes................ Common(2) 4,600
George David.......................... Common 1,992,805
ESOP Preferred 962
Charles W. Duncan, Jr. ............... Common(2)(3) 32,800
Jean-Pierre Garnier................... Common(2) 2,000
Pehr G. Gyllenhammar.................. Common(2) 2,400
Karl J. Krapek........................ Common 778,885
ESOP Preferred 965
Charles R. Lee........................ Common(2) 8,450
Robert H. Malott...................... Common(2) 5,276
Richard D. McCormick.................. Common(2) 7,000
William J. Perry...................... Common(2) 2,000
Frank P. Popoff....................... Common(2) 2,000
Andre Villeneuve...................... Common(2) 2,000
Harold A. Wagner...................... Common(2) 5,706
Jacqueline G. Wexler.................. Common(2) 6,000
Stephen F. Page....................... Common 288,728
ESOP Preferred 346
John R. Lord.......................... Common 95,994
ESOP Preferred 1,072
Eugene Buckley........................ Common 371,432
ESOP Preferred 963
Directors & Executive Officers as a
Group (29)........................... Common 4,357,673
ESOP Preferred 11,115
</TABLE>
(1) Included in the number of shares beneficially owned by Messrs. David,
Krapek, Page, Lord, Buckley and all directors and executive officers as a group
are 1,765,000; 508,000; 259,000; 76,000; 343,000; and 3,595,710 shares,
respectively, which such persons have the right to acquire within 60 days
pursuant to the exercise of employee stock options and stock appreciation
rights; 203,539; 154,115; 16,536; 6,500; 19,182; and 484,161 shares,
respectively, as to which such persons have sole voting and investment power;
and 24,266; 116,770; 13,192; 13,494; 9,250; and 237,800 shares, respectively,
as to which such persons have sole voting but no investment power. Each person
and group shown as beneficially owning shares of ESOP Preferred Stock has sole
voting and sole investment power as to such shares. Each of the following
directors has sole voting power but no investment power with respect to 2,000
shares of restricted Common Stock: Ms. Chayes, Mrs. Wexler, Messrs. Duncan,
Garnier, Lee, Malott, McCormick, Perry, Popoff, Villeneuve and Wagner. Ms.
Chayes, Mrs. Wexler and Messrs. Gyllenhammar, Lee, Malott, McCormick and Wagner
have sole voting and investment power with respect to the balance of their
holdings of Common Stock.
-14-
<PAGE>
(2) In addition to shares shown as beneficially owned at February 26, 1999,
nonemployee directors held vested deferred stock units, each unit of which is
valued by reference to one share of Common Stock, as follows:
<TABLE>
<S> <C>
Antonia Handler Chayes................................................... 8,592
Charles W. Duncan, Jr. .................................................. 11,441
Jean-Pierre Garnier...................................................... 2,286
Pehr G. Gyllenhammar..................................................... 11,885
Charles R. Lee........................................................... 5,166
Robert H. Malott......................................................... 10,926
</TABLE>
<TABLE>
<S> <C>
Richard D. McCormick..................................................... 500
William J. Perry......................................................... 2,217
Frank P. Popoff.......................................................... 3,088
Andre Villeneuve......................................................... 1,583
Harold A. Wagner......................................................... 3,605
Jacqueline G. Wexler..................................................... 10,370
</TABLE>
(3) Includes (i) 20,800 shares owned directly by Mr. Duncan as to which he has
sole voting and investment power; (ii) 8,000 shares owned by a partnership in
which Mr. Duncan is both a limited partner and a general partner, as to which
he has shared voting and investment power; and (iii) 2,000 shares as to which
he has sole voting power but no investment power.
REPORT OF THE COMMITTEE ON
COMPENSATION
AND EXECUTIVE DEVELOPMENT
Program Structure and Objectives.
The Board of Directors' Committee on Compensation and Executive Development
(the "Committee") is responsible for the Corporation's Executive Compensation
Program (the "Program"). The Program is designed to be competitive with other
corporations for purposes of recruitment and retention and to align the
interests of management and shareowners. Long-term, at risk and variable
compensation are emphasized. Performance based compensation under the Program
will generally not be subject to the $1 million deduction limit imposed by
Section 162(m) of the Internal Revenue Code.
The Committee uses benchmark information concerning compensation paid by 17 of
the companies included in the Dow Jones Thirty Industrial Index and 19 other
companies (the "Compensation Peer Group"). Compensation Peer Group companies
have characteristics similar to the Corporation and compete with the
Corporation for executive talent. The Corporation targets the value of the
Program for its most senior executives, including the named executive officers,
to be at or slightly above the 50th percentile of the Compensation Peer Group.
Actual compensation varies with individual and corporate performance.
Base salaries are competitive with salaries for comparable positions at
Compensation Peer Group companies. Adjustments to base salary are based on
evaluations of performance.
-15-
<PAGE>
Annual Incentive Compensation.
The Annual Incentive Compensation Plan rewards performance against objectives
established for the Corporation and the business units. For 1998, the corporate
headquarters' objectives were net income and cash flow, weighted 70% and 30%,
respectively. The business units' objectives were earnings before interest and
taxes, and cash flow, weighted 70% and 30%, respectively. The Committee
determines the amount available for awards at the corporate headquarters, based
on achievement of the objectives described above and an overall judgment of
corporate performance. The Chief Executive Officer (the "CEO") determines the
amount available for awards at each business unit based on achievement of
objectives and an overall judgment of each business unit's performance.
Individual awards are based on individuals' contributions to business unit or
corporate results.
The annual incentive compensation awards collectively of the five named
executive officers will not exceed 0.75% of the Corporation's adjusted net
income. The CEO receives no more than 30% of this amount, and each of the other
four named executive officers no more than 17.5%. Subject to these limits, the
Committee retains the discretion to determine the actual amount of each award.
Long-Term Incentive Compensation.
The Corporation's Long-Term Incentive Plan provides opportunity for financial
reward directly correlated with increases in shareowner value and the
achievement of specific performance targets. In 1998 the Committee approved
stock option and dividend equivalent awards to executives. The value of stock
options is contingent on share price appreciation after the date of grant and
is thus directly tied to increases in shareowner value. Stock options generally
vest three years from the date of grant and remain exercisable for seven years
thereafter. A dividend equivalent ("DE") is the right to receive payments equal
to the quarterly dividend paid to the Corporation's shareowners, subject to the
achievement of three year performance targets. Under the Continuous Improvement
Incentive Plan (the "CIIP"), executives are awarded one DE for each stock
option. For 1998, the corporate headquarters targets were earnings per share and
return on capital, weighted equally. Business Units also have financial targets.
No vesting of DEs occurs if aggregate achievement of performance targets is less
than 90%. Payment of DEs awarded in 1998 that vest will begin in March, 2001 and
will continue for two to seven years, depending upon an executive's level. DE
payments end when the DE term expires or the associated stock option is
exercised, if sooner.
Chief Executive Officer Compensation.
Compensation decisions affecting the CEO were based on quantitative and
qualitative factors related to the Corporation's excellent financial and
operating results in 1998, as well as his leadership on strategic initiatives
related to the long-term strength and competitiveness of the organization. The
Committee does not employ a specific formula in its compensation decisions.
Information about Compensation Peer Group CEOs is considered. Mr. David's base
salary and incentive compensation award for 1998 place his total cash
compensation at approximately the 50th percentile of the CEOs of the
Compensation Peer Group. Mr. David was granted 175,000 stock options and
associated DEs under the CIIP.
During 1998, the Corporation again achieved strong improvements in earnings and
returns. Diluted earnings per share increased 20%, from $4.21 to $5.05, net
income increased 17% from $1.072 billion to $1.255 billion, and return on
equity was 28.6%, up from 24.5% in 1997. Available cash flow was $1.4 billion.
These results were achieved in spite of disruptions in world markets,
especially in Asia, and were also net of cost reduction charges of $330
million.
-16-
<PAGE>
Total shareowner return for 1998, including share price appreciation and
dividends, was 51.6%, significantly ahead of the S&P 500 (28.6%) and the Dow
Jones 30 Industrials (18.1%).
During 1998 the Corporation invested $1.2 billion in acquisitions, $866 million
in capital expenditures, and $1.3 billion in research and development. Each was
a record level, and expenditures were all targeted at strengthening the
Corporation's competitive position in its core and market leading businesses.
The Corporation's initiatives to reduce costs and improve performance
registered excellent progress in 1998. The supply management initiative
announced in 1997 generated savings exceeding $250 million and is on track to
reach its year 2000 goal. Operating profit was reported net of $330 million in
cost reduction charges, with rapid paybacks and targeted at savings to insure
continued income growth in 1999 and beyond. A new shared services initiative
was launched, combining like activities across the Corporation's businesses to
provide economies in expenses and the use of assets. The Corporation's already
successful programs to enhance the quality of its products and services were
continued and expanded.
In 1998 the Corporation again improved on its excellent environmental record,
including Carrier's receipt of the EPA's Ozone Protection Award for the third
time in five years.
The Corporation regularly supports programs that benefit its employees and
their communities. In 1998 the U.S. Department of Labor awarded the Corporation
its Opportunity 2000 award, the highest recognition among all Federal
contractors for the advancement of women and minorities in the workforce.
COMMITTEE ON COMPENSATION AND EXECUTIVE DEVELOPMENT
Harold A. Wagner, Chairman
Charles W. Duncan, Jr.
Jean-Pierre Garnier
Frank P. Popoff
Jacqueline G. Wexler
-17-
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table summarizes the compensation provided
to the Corporation's Chief Executive Officer and the other four most highly
compensated executive officers of the Corporation and its subsidiaries in 1998
for services performed for the Corporation in all capacities during each of the
three fiscal years ended December 31, 1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
------------------------------------- -------------------------
Securities
Other Annual Restricted Underlying All Other
Compensation Stock Awards Options Compensa-
Name and Principal Position Year Salary ($) Bonus (1) ($) (2) ($) (3) ($) /SARs (#) tion (5) ($)
- --------------------------- ---- ---------- ------------- ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
George David 1998 $1,170,833 $1,900,000 $97,300 $0 175,000 $40,267
Chairman and Chief 1997 $1,100,000 $1,700,000 $92,179 $0 375,000 $37,271
Executive Officer 1996 $1,025,000 $1,350,000 $90,758 $0 150,000 $33,485
Karl Krapek 1998 $729,583 $1,100,000 $85,805 $0 75,000 $21,576
Executive Vice President 1997 $695,000 $1,000,000 $59,440 $0 150,000 $20,875
and President, Pratt & 1996 $656,250 $600,000 $59,223 $0 60,000 $18,860
Whitney
Stephen Page 1998 $576,667 $600,000 $62,200 $0 55,000 $52,490
Executive Vice President 1997 $551,250 $500,000 $86,525 $1,517,500(4) 140,000 $46,330
and President, Otis 1996 $520,833 $425,000 $65,698 $0 40,000 $44,224
John Lord 1998 $463,333 $475,000 $62,564 $0 45,000 $38,320
President, Carrier 1997 $442,500 $350,000 $69,068 $1,517,500(4) 130,000 $35,410
1996 $408,333 $285,000 $74,814 $0 30,000 $33,660
Eugene Buckley 1998 $448,333 $350,000 $59,992 $0 30,000 $58,360
Chairman and Chief 1997 $430,000 $275,000 $58,715 $0 125,000 $42,900
Executive Officer, Sikorsky 1996 $408,333 $300,000 $43,269 $0 30,000 $39,960
</TABLE>
- --------
(1) Incentive compensation shown in the Bonus column for the named executive
officers was paid under the Annual Incentive Compensation Plan, which is
discussed in the Compensation Committee Report on page 16.
(2) The amounts shown in this column for 1998 include: $37,100 for personal use
of corporate aircraft for security reasons for Mr. David; perquisite allowances
for each of Messrs. David, Krapek, Page, Lord and Buckley of $60,000, $46,708,
$60,000, $35,600 and $35,896, respectively; and $22,597 in tax reimbursement to
Mr. Krapek.
(3) At the close of business on December 31, 1998, the following named
executive officers held total non-vested restricted shares as follows: Mr.
Krapek: 100,000 shares valued at $10,875,000; Mr. Page: 20,000 shares valued at
$2,175,000; and Mr. Lord: 20,000 shares valued at $2,175,000. The foregoing
values were calculated by multiplying the closing market price of the Common
Stock on December 31, 1998 by the number of restricted shares held. Regular
quarterly dividends are paid on all shares of restricted stock.
Mr. Krapek's restricted shares were granted with both performance and time-
based restrictions on June 28, 1995, as reported in the Long-Term Incentive
Plan Table of the 1996 Proxy Statement. As a result of achieving the
performance target on September 4, 1996, these shares are now scheduled to vest
on June 28, 2000.
-18-
<PAGE>
(4) Consists of a grant of 20,000 shares of time-based restricted stock to each
of Mr. Page and Mr. Lord, valued at the market price of Common Stock as of the
date of grant. For each grant, 10,000 shares vested February 24, 1999 and
10,000 are scheduled to vest February 24, 2001.
(5) For 1998, consisted of employer matching contributions in the UTC Savings
Plan of $5,760 for each of the named executive officers and life insurance
premium payments by the Corporation of $34,507, $15,816, $46,730, $32,560 and
$52,600, respectively, for Messrs. David, Krapek, Page, Lord and Buckley.
The following table provides information concerning individual grants of stock
options made during 1998 to each named executive officer. No stock appreciation
rights were granted during 1998.
Option/SAR Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants (1)
-------------------------------------------------------
% of Total
Number of Shares Options/SARs
Underlying Granted to Grant Date
Options/SARs Employees in Exercise Price Expiration Present Value
Name Granted (#) Fiscal Year ($/Sh) Date ($) (2)
---- ---------------- ------------ -------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
George David 175,000(3) 4.0% $73.125 01/01/08 $4,492,983
Karl Krapek 75,000(3) 1.7% $73.125 01/01/08 $1,925,564
Stephen Page 55,000(3) 1.3% $73.125 01/01/08 $1,412,080
John Lord 45,000(3) 1.0% $73.125 01/01/08 $1,155,338
Eugene Buckley 30,000(3) 0.7% $73.125 01/01/08 $ 770,226
</TABLE>
- --------
(1) Under certain circumstances, including a change of control of the
Corporation, the Board of Directors, under the terms of the Corporation's Long-
Term Incentive Plan, may accelerate the vesting of option grants, purchase an
outstanding grant for its cash value, or provide for other adjustments or
modifications to the outstanding grants. All stock options were granted with an
exercise price equal to the market price of the Common Stock on the date of
grant.
(2) The values listed in this column are based on the Black-Scholes pricing
model. The estimated values are based on a number of variables and include the
following assumptions used in determining the value of the grant: interest rate
of 6.50%, stock price volatility of 0.1428, and a dividend yield of 1.50%. The
estimated values are not intended as a forecast of the future appreciation in
the price of the Corporation's stock. If the Corporation's stock does not
increase in value above the exercise price of the stock options, then the
grants described in the table will have no value. There is no assurance that
the value realized by an executive will be at or near the values estimated.
(3) These stock options were granted on January 2, 1998, and will vest and
become exercisable on January 2, 2001. These stock options include an equal
number of Dividend Equivalents ("DEs"), which will vest and be payable solely
on the basis of achievement of previously established performance goals
measured over the three-year vesting period.
-19-
<PAGE>
The following table provides information concerning the exercise of stock
options and stock appreciation rights during 1998 by each of the named
executive officers and the fiscal year-end values of unexercised options and
stock appreciation rights.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year End Option/SAR Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities Underlying In-The-Money
Unexercised Options/SARs at Options/SARs at Fiscal
Fiscal Year-End (#) Year-End ($) (1)
------------------------------- --------------------------
Value
Shares Acquired Realized
Name on Exercise (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ---------- ---------------- ---------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
George David 120,000 $9,081,250 1,635,000 550,000 $123,931,875 $21,750,000
Karl Krapek 66,000 $4,076,625 658,000 285,000 $ 51,679,125 $10,850,625
Stephen Page 75,000 $3,464,063 219,000 235,000 $ 16,818,000 $ 8,726,875
John Lord 23,000 $1,916,812 46,000 205,000 $ 3,448,625 $ 7,500,625
Eugene Buckley 30,000 $2,023,650 313,000 185,000 $ 22,915,063 $ 6,801,875
</TABLE>
- --------
(1) The value reported is based either on the closing price of the Common Stock
on the date of exercise or on December 31, 1998, as applicable, and is
calculated by subtracting the exercise price per share of the option or per
stock appreciation right from the applicable closing price and multiplying the
result by the relevant number of shares.
-20-
<PAGE>
Performance Graph
The following graph presents the cumulative total shareowner return for the
five years ending December 31, 1998 on the Corporation's Common Stock, as
compared to the Standard & Poor's 500 Stock Index and to the Dow Jones 30
Industrial Average. The Common Stock price is a component of both indices.
These figures assume that all dividends paid over the five-year period were
reinvested, and that the starting value of each index and the investment in the
Corporation's Common Stock was $100 on December 31, 1993.
[LINE GRAPH APPEARS HERE]
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
United Technologies $100.00 $104.5 $161.8 $230.2 $257.1 $390.1
S&P 500 Index $100.00 $101.3 $139.4 $171.4 $228.5 $293.8
Dow Jones 30 Industrials $100.00 $105.0 $143.8 $185.4 $231.6 $273.6
Section 16(a) Beneficial Ownership Reporting Compliance
The Corporation believes, based upon a review of the forms filed and written
confirmation provided by its officers and directors, that during 1998 all of
its officers and directors filed on a timely basis the reports required by
Section 16(a) of the Securities Exchange Act of 1934, except that reports were
inadvertently not filed on a timely basis to report (i) a sale of 1,232 shares
of Common Stock by Mr. Kevin Conway, (ii) the initial balance of deferred stock
units held by Mr. Angelo J. Messina and (iii) the initial balance of deferred
stock units held by Dr. John F. Cassidy. Amended reports were filed in each
case to correct these omissions.
Certain Business Relationships.
Lazard Freres & Co., LLC, of which Mr. Gyllenhammar is a senior advisor,
performs investment banking services and provides financial advisory services
to the Corporation. The Corporation and its subsidiaries have had, and expect
in the future to have, transactions in the ordinary course of business with
this firm and with other companies of which certain of the nonemployee
directors are officers or directors. In the past, the amounts involved have not
been material in relation to the business of the Corporation and the
Corporation believes that such amounts were not material in relation to the
businesses of such other companies or the interests, if any, of the directors
involved.
-21-
<PAGE>
Employment Contracts and Termination of Employment and Change-In-Control
Arrangements
In 1981, the Board of Directors adopted the Senior Executive Severance Plan
(the "Severance Plan"). The Committee on Compensation and Executive Development
has the authority to select the participants under the Severance Plan.
Effective December 31, 1998, 32 key executives, including the five executive
officers named in the Summary Compensation Table, were covered under the
Severance Plan. The Severance Plan provides that in the event of termination of
the participant's employment with the Corporation for any reason (other than
death, disability or retirement at or after the normal retirement date) within
two years after any change of control of the Corporation (as defined in the
Severance Plan) the participant will receive: (i) a cash payment equal to three
times the participant's highest annual compensation (including base salary and
incentive compensation) during the preceding three years; (ii) accelerated
vesting of all awards outstanding under the Corporation's Long Term Incentive
Plan; (iii) special supplemental retirement benefits determined as if the
participant had three years additional credited service under the Corporation's
pension plans as of the date of termination; and (iv) continuation of other
fringe benefits or equivalent benefits for a period of three years. The
Severance Plan provides for a supplemental cash payment to Severance Plan
participants to the extent necessary to preserve the level of benefits provided
in the Plan in the event of the imposition on any such participant of excise
taxes payable in respect of "excess parachute payments" under the Internal
Revenue Code.
In addition to the Severance Plan, 30 key executives, including the five
executive officers named in the Summary Compensation Table, are eligible to
receive separation benefits at the time of their termination from employment
with the Corporation, subject to certain limited exceptions. The value of such
separation benefits under this program is 2.5 times base salary at the date of
separation. Benefits are subject to offset against any amounts paid pursuant to
the Severance Plan, as described above.
-22-
<PAGE>
Pension Plan
<TABLE>
<CAPTION>
Pension Plan Table
----------------------------------------------------------------------------
Years of Service
-------------------------------------------------------------
Remuneration 15 20 25 30 35 40
------------ -------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 $146,300 $195,100 $ 218,800 $ 242,600 $ 266,800 $ 291,800
750,000 221,300 295,100 331,300 367,600 404,300 441,800
1,000,000 296,300 395,100 443,800 492,600 541,800 591,800
1,250,000 371,300 495,100 556,300 617,600 679,300 741,800
1,500,000 446,300 595,100 668,800 742,600 816,800 891,800
1,750,000 521,300 695,100 781,300 867,600 954,300 1,041,800
2,000,000 596,300 795,100 893,800 992,600 1,091,800 1,191,800
2,250,000 671,300 895,100 1,006,300 1,117,600 1,229,300 1,341,800
2,500,000 746,300 995,100 1,118,800 1,242,600 1,366,800 1,491,800
</TABLE>
The preceding table sets forth the estimated annual benefits payable upon
retirement at age 65 under the Corporation's defined benefit pension plans,
including the Corporation's supplemental plan for restoring benefits excluded
under the tax qualified plan due to Internal Revenue Code limitations.
Compensation covered by the pension plans consists of total cash remuneration
in the form of salaries and wages, including awards paid under the Annual
Executive Incentive Compensation Plan (shown in the Bonus column of the Summary
Compensation Table), but excluding awards paid under the United Technologies
Corporation Long Term Incentive Plan (shown in the Long Term Incentive
Compensation columns of the Summary Compensation Table). Benefits are computed
as a single life annuity payable at age 65. The benefit amount equals a
percentage of final average earnings during the highest five consecutive years
out of the last ten years worked, less a portion of the participant's social
security benefit. As a result of Internal Revenue Code limitations, a
substantial portion of senior executives' pension benefits are excluded from
the Corporation's tax qualified retirement plan and trust and instead are
provided through a supplemental plan that restores the excluded portion of the
benefits. Pension benefits paid from the supplemental plan are paid in the same
form of annuity applicable under the qualified plan or, subject to certain
conditions, in a lump sum or annual installments. Benefits under the
supplemental plan are generally not funded in advance except in the event of a
change of control as defined by the supplemental plan.
As of December 31, 1998, the executive officers named in the Summary
Compensation Table had the following full years of credited service for
determining benefits: G. David, 23 years; K. Krapek, 16 years; S. Page, 5
years; J. Lord, 17 years; and Eugene Buckley, 23 years.
-23-
<PAGE>
SHAREOWNER PROPOSALS
Item No. 3 on Your Proxy Card, Shareowner Proposal Concerning Director Term
Limits.
Mrs. Evelyn Y. Davis, Watergate Office Building, Suite 215, 2600 Virginia
Avenue., N.W., Washington, D.C. 20037, who is the owner of 100 shares of Common
Stock, has given notice that she intends to introduce the following proposal
for adoption at the Annual Meeting:
"RESOLVED: That the stockholders of United Technologies recommend that the
Board take the necessary steps so that future outside directors shall not serve
for more than six years.
REASONS: The President of the U.S.A. has a term limit, so do Governors of many
states.
Newer directors may bring in fresh outlooks and different approaches with
benefits to all shareholders.
No director should be able to feel that his or her directorship is until
retirement.
Last year the owners of 6,512,118 shares, representing approximately 3.2% of
shares voting, voted FOR this proposal.
If you AGREE, please mark your proxy FOR this resolution."
The Board of Directors' Statement In Opposition
The Board of Directors believes that requiring all outside directors to leave
the Board after six years of service would not be in the best interests of the
Board, the Corporation or the shareowners. Such a policy would deprive the
Corporation of the benefit of the experience and insight of directors who have
gained valuable knowledge concerning the Corporation's operations, and whose
tenure has given them an important perspective on the development and
implementation of the long-term strategies of the Corporation. Rather than
adopting fixed term limits, the Board believes it is more beneficial to
periodically review the Board's effectiveness. The Nominating Committee, which
is comprised exclusively of independent members of the Board of Directors, is
responsible for reporting to the Board on its assessment of the Board's
performance.
The Board of Directors therefore recommends that Shareowners vote AGAINST this
proposal concerning director term limits.
Item No. 4 on Your Proxy Card, Shareowner Proposal Concerning Military
Contracts
The Sisters of Charity of Saint Elizabeth, P.O. Box 476, Convent Station, New
Jersey 07961-0476, beneficial owners of 1,596 shares of Common Stock, have
given notice of their intent to introduce the following proposal for adoption
at the Annual Meeting.
This proposal is co-sponsored by The Immaculate Heart Missions, Inc., 4651
North 25th Street, Arlington, VA 22207, who are beneficial owners of 1,400
shares of Common Stock; The Sisters of Charity of the Incarnate Healthcare
System, 2600 North Loop West, Houston, TX 77092, who are beneficial owners of
7,000 shares of Common Stock; and The Marianists, P.O. Box 23130, St. Louis, MO
63156-3130, who are beneficial owners of 600 shares of Common Stock.
-24-
<PAGE>
Text of Shareowner Proposal and
Supporting Statement.
"Criteria for the Acceptance and Implementation of Military Contracts.
WHEREAS the proponents of this resolution believe that the Board of United
Technologies should establish criteria to guide management in their defense
contract bidding and implementation activities;
WHEREAS we believe that economic decision making has both an ethical and a
financial component;
WHEREAS we believe our company's ethical responsibilities include analyzing the
effects of its decisions with respect to employees, communities, and nations;
WHEREAS we believe decisions to develop and to produce weapons can have grave
consequences to the lives and/or freedoms of people worldwide if the company
has not considered its ethical responsibilities ahead of time; therefore be it
RESOLVED that the shareholders request the Board of Directors to establish a
committee to research this issue and to develop criteria for the bidding,
acceptance, and implementation of military contracts and to report the results
of its study to shareholders at its 2000 annual meeting. Proprietary
information may be omitted and the cost limited to a reasonable amount.
Supporting Statement
The proponents of this resolution believe that all human beings are called to
seek justice and peace. An ethic of stewardship of the earth must include
respect for humanity and for creation. Because we believe that corporate social
responsibility in a successful free enterprise system demands ethical
reflection and action upon activities that are socially useful as well as
economically profitable, we recommend that the Board study include the following
subjects:
. Arms sales to governments that repress their citizens
. The connection between arms sales and geographical or political
instability
. Lobbying and marketing activities, both in the United States and abroad,
including costs
. Sales of weapons, parts, technology, and components convertible to
military use ("dual-use") to foreign governments
. Transfers of technology, including co-production agreements
A YES vote recommends that the Board consider the above-listed criteria in a
study of our company's military sales and production activities."
The Board of Directors' Statement in Opposition
The Board does not believe that a study of its military business would be
beneficial since the Corporation already provides regular disclosure as to the
nature of its military business and since it has established sound standards
for the conduct of this business.
Disclosure as to the nature of the Corporation's military business is included
in the Corporation's Annual Report to Shareowners and its Annual Report on Form
10-K, as updated by the quarterly reports the Corporation files with the
Securities and Exchange Commission. This disclosure is provided in compliance
with the applicable SEC rules.
The Corporation has also established a Code of Ethics which confirms the
Corporation's commitment to doing business in full compliance with all
applicable laws and in accordance with the ethical standards of the
Corporation. These policies apply to all operations of the Corporation
-25-
<PAGE>
worldwide, including those related to military contracts, lobbying and
marketing activities. Training and compliance programs are in operation
throughout the Corporation to reinforce the Corporation's commitment to these
policies and standards.
Management of each business unit is therefore responsible for exercising sound
business judgment in evaluating any military contracts and for determining that
any military contracts comply with applicable legal requirements and the
ethical standards of the Corporation.
In addition to the ethical and business standards the Corporation has
established for its operations, exports of military equipment are also
controlled by the federal government in furtherance of the national security
and foreign policy goals of the United States. Under U.S. laws, the federal
government is responsible for the continuous supervision and general direction
of foreign military sales, financing, cooperative projects and exports. Current
law forbids sales to certain countries and requires that decisions on licensing
of exports take into account whether the export of an article will contribute
to an arms race, support international terrorism or increase the possibility of
outbreak or escalation of conflict.
The Board believes that the Corporation has already determined and established
the appropriate internal standards for the conduct of its military business,
and that the determination as to whether additional restrictions or criteria
should apply to the sale of military products is a foreign policy matter best
reserved for decision by the United States Government.
The Board of Directors therefore recommends that Shareowners vote AGAINST this
proposal concerning
military contracts.
Item No. 5 on Your Proxy Card, Shareowner Proposal Concerning Northern Ireland.
The New York City Employees' Retirement System, the New York City Teachers'
Retirement System, the New York City Fire Department Pension Fund and the New
York City Police Department Pension Fund, c/o Comptroller of the City of New
York as Custodian, 1 Centre Street, New York, NY 10007-2341, beneficial owners
of 1,184,300 shares of Common Stock, have given notice of their intent to
introduce the following proposal for adoption at the Annual Meeting. The New
York State Common Retirement Fund, c/o Office of the State Comptroller, A.E.
Smith State Office Building, Albany, NY 12236, beneficial owner of 1,700,100
shares of Common Stock, and the Minnesota State Board of Investment, Suite 105,
MEA Building, 55 Sherburne Avenue, St. Paul, MN 55155, beneficial owners of
229,306 shares of Common Stock, have notified the Corporation of their
intention to co-sponsor this shareowner proposal.
Text of Shareowner Proposal and
Supporting Statement.
WHEREAS, United Technologies Corporation operates a wholly-owned subsidiary in
Northern Ireland, Otis Elevator PLC;
WHEREAS, the security of a lasting peace in Northern Ireland encourages us to
search for non-violent means for establishing justice and equality;
WHEREAS, Dr. Sean MacBride, founder of Amnesty International and Nobel Peace
Laureate, has proposed several equal opportunity employment principles to serve
as guidelines for corporations in Northern Ireland. These include:
-26-
<PAGE>
1. Increasing the representation of individuals from underrepresented religious
groups in the workforce, including managerial, supervisory, administrative,
clerical and technical jobs.
2. Adequate security for the protection of minority employees both at the
workplace and while traveling to and from work.
3. The banning of provocative religious or political emblems from the
workplace.
4. All job openings should be publicly advertised and special recruitment
efforts should be made to attract applicants from underrepresented religious
groups.
5. Layoff, recall, and termination procedures should not, in practice, favor
particular religious groupings.
6. The abolition of job reservations, apprenticeship restrictions, and
differential employment criteria, which discriminate on the basis of
religion or ethnic origin.
7. The development of training programs that will prepare substantial numbers
of current minority employees for skilled jobs, including the expansion of
existing programs and the creation of new programs to train, upgrade, and
improve the skills of minority employees.
8. The establishment of procedures to assess, identify and actively recruit
minority employees with potential for further advancement.
9. The appointment of a senior management staff member to oversee the company's
affirmative action efforts and the setting up of timetables to carry out
affirmative action principles.
RESOLVED, Shareholders request the Board of Directors to:
1. Make all possible lawful efforts to implement and/or increase activity on
each of the nine MacBride Principles.
Supporting Statement
We believe that our company benefits by hiring from the widest available talent
pool. An employee's ability to do the job should be the primary consideration
in hiring and promotion decisions.
Implementation of the MacBride Principles by United Technologies will
demonstrate its concern for human rights and equality of opportunity in its
international operations.
Please vote your proxy FOR these concerns."
The Board of Directors' Statement
in Opposition
The Corporation's Otis Plc business unit currently employs approximately 65
persons at a facility in Belfast, Northern Ireland. Neither of the two major
religious groups is underrepresented in the Otis Plc workforce.
The Otis facility complies with all fair employment legislation, including
requirements to register with the Fair Employment Commission, to submit regular
monitoring returns showing religious composition of the workforce and to review
employment practices on a regular basis. The Fair Employment Commission has
provided training for Otis Plc management concerning fair employment practices
and Otis Plc has appointed a monitoring officer to monitor recruitment
practices in accordance with Fair Employment Commission guidelines. Otis Plc
also enforces its own strict fair employment policy, which includes a
prohibition of displays of religious and/or political emblems. Further, every
effort is made to maintain a safe and secure workplace for employees.
-27-
<PAGE>
The Corporation has provided information to the Fair Employment Commission and
to the Investor Responsibility Research Center concerning the employment
practices of the Otis facility in Northern Ireland.
The Corporation has also adopted a Code of Ethics which provides in pertinent
part that it is the Corporation's "policy to afford equal employment
opportunity to qualified individuals regardless of their . . . religion [and to
provide] its employees . . . a work environment free from discrimination,
harassment or personal behavior not conducive to a productive work climate."
These policies apply to the Otis facility in Northern Ireland and to the
operations of the Corporation worldwide.
Since the Corporation has already implemented the appropriate and legally
permitted fair employment policies in Northern Ireland, the Board of Directors
believes this proposal is unnecessary and therefore recommends that Shareowners
vote AGAINST this proposal.
William H. Trachsel
Senior Vice President, General Counsel
and Secretary
Hartford, Connecticut
March 29, 1999
-28-
<PAGE>
[LOGO OF UNITED TECHNOLOGIES APPEARS HERE]
<PAGE>
[LETTERHEAD OF UNITED TECHNOLOGIES APPEARS HERE]
Proxy Solicited on Behalf of the Board of Directors of
The Corporation for Annual Meeting, April 30, 1999
PROXY
The undersigned hereby appoints Antonia Handler Chayes, Charles R.
Lee and Harold A. Wagner, and each of them with power of
substitution to each, proxies for the undersigned to act and vote at
the Annual Meeting of the Shareowners of United Technologies
Corporation to be held April 30, 1999, at 11:00 a.m., and at any
adjournment thereof, as directed on this card, upon the matters set
forth on the reverse side hereof, all as described in the Proxy
Statement, and, in their discretion, upon any other business which
may properly come before said meeting.
This card also constitutes voting instructions to the Trustee under
each of the United Technologies Corporation employee savings plans
to vote, in person or by proxy, (i) the proportionate interest of
the undersigned in the shares of Common Stock of United Technologies
Corporation held by the Trustee under any such plan(s), and (ii) the
proportionate interest of the undersigned in the shares of Series A
ESOP Convertible Preferred Stock of United Technologies Corporation
held by the Trustee under any such plan(s), in each case as
described in the Proxy Statement.
You are encouraged to specify your choices by marking the
appropriate boxes, SEE REVERSE SIDE, but you need not mark any
boxes if you wish to vote in accordance with the Board of
Directors' recommendations. The proxy holders cannot vote your
shares unless you sign and return this card.
SEE REVERSE SIDE
................................................................................
FOLD AND DETACH HERE
United Technologies Corporation
Annual Meeting of Shareowners
Friday, April 30, 1999
11:00 a.m.
Hartford Civic Center
One Civic Center Plaza, Hartford, Connecticut
<PAGE>
[X] Please mark your
votes as in the
example.
This Proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this Proxy will be voted FOR all of the Board of
Directors nominees, FOR proposal 2, and AGAINST proposals 3, 4, and 5, or if
this card constitutes voting instructions to a Savings Plan Trustee, such
Trustee will vote as described in the Proxy Statement.
- -----------------------------------------------------------
The Board of Directors recommends a vote FOR the election
of directors.
- -----------------------------------------------------------
Election of Directors. Nominees:
Antonia Handler Chayes, George David, Jean-Pierre
Garnier, Pehr G. Gyllenhammar, Karl J. Krapek, Charles R.
Lee, Richard D. McCormick, William J. Perry, Frank P.
Popoff, Andre Villeneuve, Harold A. Wagner.
FOR WITHHELD
1. Election of Directors [_] [_]
Vote for all nominees except:
------------------------------------------
- -------------------------------------------------------------
The Board of Directors recommends a vote FOR proposal 2.
- -------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Appointment of Independent [_] [_] [_]
Public Accountants
- -------------------------------------------------------------
The Board of Directors recommends a vote AGAINST proposals
3, 4, and 5.
- -------------------------------------------------------------
3. Shareowner Proposal Regarding
Director Term Limits [_] [_] [_]
4. Shareowner Proposal Regarding [_] [_] [_]
Military Contracts
5. Shareowner Proposal Regarding
Northern Ireland [_] [_] [_]
- --------------------------------------------------------------
-------------------------
VOTER CONTROL NUMBER:
-------------------------
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
SIGNATURE(S) Date
----------------------------- ------------
................................................................................
FOLD AND DETACH HERE
VOTE BY MAIL, TELEPHONE OR VIA THE INTERNET
-------------------------------------------
This year, you may return your proxy card by mail, or you may use the telephone
--
or Internet to vote your shares electronically. You may access the telephone or
Internet voting systems 24 hours a day, 7 days a week by using the voter control
number printed in the box above.
<TABLE>
<CAPTION>
VOTING BY MAIL TELEPHONE VOTING INTERNET VOTING
<S> <C> <C>
Return your signed and If you are calling from the United States or Canada Log on to the Internet and go to the web site
dated proxy in the and using a touch-tone telephone, http://www.vote-by-net.com
envelope provided. call 1-800-OK2-VOTE (1-800-652-8683)
</TABLE>
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card. If you choose to vote your
shares electronically, there is no need for you to mail back your Proxy Card.
Please note that if you wish to attend the Annual Meeting you must still return
your pink or blue Reservation Card.
DIRECT REGISTRATION SYSTEM
--------------------------
The Corporation is now offering new investors and participating shareholders
another way to register their shares without having a physical certificate
issued. For information on this "book-entry" registration system, call UTC's
Company Information line at 1-800-881-1914.
SHAREOWNER DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
--------------------------------------------------------
The Corporation has adopted a Shareowner Dividend Reinvestment and Stock
Purchase Plan. The Plan provides eligible holders of the Corporation's Common
Stock with a simple and convenient method of investing cash dividends and
voluntary cash payments in additional shares of Common Stock without payment of
any brokerage commission or service charge. Shareowners should carefully review
the Plan Prospectus before investing. For more information and a Plan
prospectus, contact First Chicago Trust Company of New York at 1-800-519-3111.
COMPANY INFORMATION
-------------------
Our 24-hour-a-day toll-free telephone service provides recorded summaries of
UTC's quarterly earnings information and other company news. Callers also may
request copies of our quarterly earnings and news releases, by either fax or
mail, and obtain copies of the UTC Annual Report and Annual Report on Form 10-K.
To access the service, dial 1-800-881-1914
Additional information about UTC can be found at our Internet site:
http://www.utc.com
