8-KMaterial AgreementsExhibits & Filings

RTX Corp 8-K Report, Material Agreement (Apr 18, 2006)

Filed April 18, 2006For Securities:RTX

Summary

This 8-K filing from United Technologies Corporation (UTC) on April 17, 2006, reports on a material modification to the compensation program for its non-employee directors, effective April 12, 2006. The company has consolidated the annual retainer and annual stock option grant into a single, higher annual retainer fee. This change aims to streamline compensation and potentially align director interests more directly with shareholder value through equity awards. The revised compensation structure significantly increases the base annual retainer, with additional amounts for committee chairs and specific audit committee roles. Directors have options to receive this retainer in a mix of deferred stock units and cash, or entirely in deferred stock units. The company has also updated its stock ownership guidelines for directors, reducing the ownership requirement from three times the annual retainer to a fixed value of $300,000 within five years of joining the board.

Key Highlights

  • 1UTC modified its non-employee director compensation program effective April 12, 2006.
  • 2The annual retainer and annual stock option grant have been combined into a single, higher annual retainer fee.
  • 3The new annual retainer ranges from $220,000 to $260,000 depending on board/committee roles.
  • 4Directors can elect to receive their retainer fee in deferred stock units (100% or 60%) and cash (40%).
  • 5A one-time grant of restricted stock units valued at $100,000 remains for new directors upon election.
  • 6Stock ownership guidelines for non-employee directors were revised from 3x annual retainer to a $300,000 ownership requirement within five years.
  • 7The filing includes the Board of Directors 2006 Retainer Payment Election Form as an exhibit.

Frequently Asked Questions

The primary change is the consolidation of the annual retainer and the annual stock option grant into a single, higher annual retainer fee. This new fee structure is effective as of April 12, 2006.

The total compensation structure has been significantly increased. For example, the base annual retainer increased from $100,000 to $220,000, with additional increases for committee chairs and specific audit committee roles. This represents a substantial increase compared to the previous program's combined retainer and stock option grant values.

Directors can choose to receive their annual retainer fee in one of two ways: either 60% in deferred stock units and 40% in cash, or 100% in deferred stock units issued under the United Technologies Corporation Board of Directors Deferred Stock Unit Plan.

The stock ownership guidelines for non-employee directors have been revised. Previously, directors were required to own shares or share equivalents valued at least three times their annual retainer within five years of joining the Board. The new requirement mandates ownership of shares or share equivalents valued at $300,000 within five years of joining the Board.