8-KMaterial AgreementsExhibits & Filings

RTX Corp 8-K Report, Material Agreement (Dec 20, 2005)

Filed December 20, 2005For Securities:RTX

Summary

This 8-K filing from United Technologies Corporation (UTC) on December 19, 2005, details the approval of performance targets for its 2005 Long Term Incentive Plan (2005 LTIP) by the Compensation & Executive Development Committee. These performance targets, set for awards to be granted in 2006, are crucial for the vesting of Performance Share Units. The key takeaway for investors is that executive and employee compensation, specifically long-term incentives, will be directly tied to the achievement of specific financial and market performance metrics. These metrics include the compound annual growth rate of diluted earnings per share (EPS) and the company's total shareholder return relative to the S&P 500 over a three-year period. This performance-based structure aims to align the interests of management and shareholders.

Key Highlights

  • 1United Technologies Corporation (UTC) approved performance targets for its 2005 Long Term Incentive Plan (2005 LTIP) on December 14, 2005.
  • 2These targets are for Performance Share Units to be awarded in 2006.
  • 3Vesting of these Performance Share Units is contingent upon achieving pre-established three-year performance targets.
  • 4Key performance metrics for vesting include the compound annual growth rate (CAGR) of diluted earnings per share (EPS).
  • 5Another key performance metric is UTC's total shareholder return compared to other companies in the S&P 500.
  • 6The filing includes forms of award agreements and schedules of terms for Performance Share Units and Stock Appreciation Rights as exhibits.

Frequently Asked Questions

The primary purpose of this 8-K filing is to inform investors that United Technologies Corporation's Compensation & Executive Development Committee has approved the performance targets for its 2005 Long Term Incentive Plan (2005 LTIP) for awards to be granted in 2006. This establishes the conditions under which certain executive and employee incentives will vest.

The vesting of Performance Share Units awarded in 2006 will depend on achieving pre-established three-year targets for two key performance measures: the compound annual growth rate (CAGR) of the company's diluted earnings per share (EPS) and the company's total shareholder return relative to the S&P 500.

This aligns management and employee incentives with shareholder interests. By tying a significant portion of long-term compensation to the growth of EPS and relative total shareholder return, the company aims to motivate executives to drive financial performance and enhance shareholder value.

The filing includes Exhibits 10.1, 10.2, and 10.3, which contain the form of award agreement for Performance Share Units and Stock Appreciation Rights, as well as the Schedule of Terms for these awards to be granted in 2006 under the 2005 LTIP. These exhibits are incorporated by reference into the filing.