CHARTER OF THE COMMITTEE ON
2003 Committee Charter : UTX
COMPENSATION AND EXECUTIVE DEVELOPMENT
The Committee on Compensation and Executive Development (the "Committee")
shall be a standing committee of the Board of Directors. The purpose of the
Committee shall be to discharge the board's responsibilities related to
compensation and development of the Corporation's executive officers and such
other employees as the Committee shall determine, to prepare an annual report
on executive compensation for inclusion in the Corporation's proxy statement in
accordance with applicable rules and regulations, and to consider other matters
related to the Corporation's compensation practices.
The Committee shall be comprised exclusively of independent directors.
Committee members should have senior management experience, including a
general understanding of executive compensation practices intended to support
recruitment, retention and alignment of management and shareowner interests.
The Committee shall meet as required and normally meets four times annually.
The Committee may meet more frequently and, as the Committee may require in
fulfilling its responsibilities, it may meet privately with independent compensation
consultants, members of management and others.
The Committee shall:
A. Review and make recommendations to the board on the election of officers.
Lead the process for determining the successor(s) to the Chief Executive
Officer and report regularly to the Board, in executive session, on the
progress and development of successor candidates;
B. Develop and approve all compensation actions involving the Chairman and
Chief Executive Officer and the Vice Chairman, including review and
approval of goals and objectives relevant to compensation of these officers,
periodic evaluation of performance relative to goals and objectives and
determination of compensation based on these evaluations. In determining
annual and long-term incentives, the Committee should consider, among
other factors it deems appropriate from time to time, individual
performance, company performance, shareowner return, incentive
compensation practices of relevant peer companies and incentive
compensation received in prior years;
C. Approve all compensation actions involving other elected officers and
senior executives considered by the Committee to perform a policy-making
function for the Corporation or a significant business unit ("executive
D. Periodically review compensation practices involving other executives;
E. Periodically review management development programs and management
structure and organization;
F. Review and approve participants in the Senior Executive Severance Plan;
G. Review and approve the Corporation's annual incentive compensation and
long term incentive plans for executives, with authority to amend each plan
and to determine awards for executive officers;
H. Report annually to the board on its assessment of the Committee's
performance as a group; and
I. Undertake such other matters as may be referred to it from time to time.
The Committee shall have full access to all management and authority to consult
independent legal or other advisors, including sole authority to retain and
terminate any compensation consultant and to approve the firm's fees and other