Exhibit 10.3

United Technologies Corporation

Long Term Incentive Plan

Executive Leadership Group

Restricted Share Unit Retention

Award

Schedule of Terms

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United Technologies Corporation (the “Corporation”) hereby awards to the
executive designated in the Statement of Award (the “Recipient”), who has
accepted membership in the Corporation’s Executive Leadership Group (the “ELG”),
Restricted Share Units (an “Award”) pursuant to the United Technologies
Corporation 2005 Long Term Incentive Plan (the “LTIP”). This Award is subject to
this Schedule of Terms and the terms and provisions of the LTIP.

A Restricted Share Unit (an “RSU”) is equal in value to one share of Common
Stock of the Corporation (“Common Stock”). RSUs are convertible into shares of
Common Stock if the Recipient remains a member of the ELG and retires from the
Corporation on or after age 62 with at least three years of ELG service (see
“Vesting” below). The number of RSUs is set forth in the Statement of Award. The
Recipient must acknowledge and accept the terms and conditions of the RSU Award
by signing and returning the appropriate portion of the Statement of Award to
the Stock Plan Administrator.

Vesting

RSUs vest upon retirement from the Corporation on or after age 62 with
completion of at least three years of service as a member of the ELG (the
“Vesting Date”). All RSU’s will be forfeited in the event of termination from
employment before age 62 for any reason, including death, total and permanent
disability and retirement before age 62. All RSU’s will also be forfeited if the
Recipient’s membership in the ELG ceases for any reason.

No shareowner rights

An RSU is the right to receive a share of Common Stock in the future, subject to
continued employment and membership in the ELG. The holder of an RSU has no
voting, dividend or other rights accorded to owners of Common Stock.

Conversion of RSUs to Shares

RSUs will be converted into shares of Common Stock, effective as of the Vesting
Date. The converted shares will be unrestricted and freely transferable.

Dividend Equivalents

Although the Recipient will not receive dividend payments in respect of RSUs,
each RSU will be credited with an amount equal to the dividend paid on a share
of Common Stock, resulting in additional RSUs credited to the Recipient equal in
value to the number of RSUs held multiplied by the dividend paid on a share of
Common Stock.

Adjustments

If the Corporation effects a subdivision or consolidation of shares of Common
Stock or other capital adjustment, the number of RSUs (and the number of shares
of Common Stock that will be issued upon conversion) shall be adjusted in the
same manner and to the same extent as all other shares of Common Stock of the
Corporation. In the event of material changes in the capital structure of the
Corporation resulting from: the payment of a special dividend (other than
regular quarterly dividends) or other distributions to shareowners without
receiving consideration therefore; the spin-off of a subsidiary; the sale of a
substantial portion of the Corporation’s assets; a merger or consolidation in
which the Corporation is not the surviving entity; or other extraordinary
non-recurring events affecting the Corporation’s capital structure and the value
of Common Stock, equitable adjustments shall be made in the terms of outstanding
Awards, including the number of RSUs and underlying shares of Common Stock as
the Committee on Compensation and Executive Development of the Corporation’s
Board of Directors (the “Committee”) , in its sole discretion, determines are
necessary or appropriate to prevent the dilution or enlargement of the rights of
Award Recipients.

 

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ELG Covenants

Acceptance of the ELG RSU Award constitutes agreement and acceptance by the
Recipient of the following ELG covenants:

 

  •   Pre-Vesting Date Covenants

(a) During the period of the Recipient’s employment, and for a period of two
years following termination of employment, the Recipient will not disclose
“Company Information”. “Company Information” as used in this Agreement means
(i) confidential or proprietary information including without limitation
information received from third parties under confidential or proprietary
conditions; (ii) information subject to the Corporation’s attorney-client or
work-product privilege; and (iii) other technical, business or financial
information, the use or disclosure of which might reasonably be construed to be
contrary to the Corporation’s interests.

(b) During the Period of the Recipient’s employment, and for a period of two
years following termination of employment, the Recipient will not initiate,
cause or allow to be initiated (under those conditions which he or she controls)
any action which would reasonably be expected to encourage or to induce any
employee of the Corporation or any of its affiliated entities to leave the
employ of the Corporation or its affiliated entities. In this regard, the
Recipient agrees that he or she will not directly or indirectly recruit any
executive or other employee of the Corporation or provide any information or
make referrals to personnel recruitment agencies or other third parties in
connection with executives of the Corporation and other employees.

 

  •   Post-Vesting Date Covenants

(c) The pre-Vesting Date covenants described in (a) and (b) above will remain in
effect for three years following the Vesting Date.

(d) To further ensure the protection of Company Information, the Recipient
agrees not to accept employment in any form (including entering into consulting
relationships or similar arrangements) for a period of three years after the
Vesting Date with any business that: (i) competes directly or indirectly with
any of the Corporation’s businesses; or (ii) is a material customer of or a
material supplier to any of the Corporation’s businesses unless the Recipient
has obtained the written consent from the Senior Vice President, Human
Resources & Organization (or the successor to such position), which consent
shall be granted or withheld in his or her sole discretion. The Recipient agrees
that the terms of this paragraph are reasonable. However, if any portion of this
paragraph is held by competent authority to be unenforceable, this paragraph
shall be deemed amended to limit its scope to the broadest scope that such
authority determines is enforceable, and as so amended shall continue in effect.

(e) For three years after the Vesting Date, the Recipient will not make any
statements or disclose any items of information which, in either case are or may
reasonably be considered to be adverse to the interests of the Corporation. The
Recipient agrees that he or she will not disparage the Corporation, its
executives, directors or products.

The ELG covenants set forth in this Schedule of Terms are in addition to other
obligations and commitments of the ELG program, the terms and conditions of the
LTIP and the Recipient’s intellectual property agreement with the Corporation
(and as each may be amended from time to time).

Change of Control

In the event of a change of control or restructuring of the Corporation, the
Committee may, in its discretion, take certain actions with respect to
outstanding Awards to assure fair and equitable treatment of LTIP Award
Recipients. Such actions may include: acceleration of the Vesting Date; offering
to purchase an outstanding Award from the holder for its equivalent cash value
(as determined by the Committee); or providing for other adjustments or
modifications to outstanding Awards as the Committee may deem appropriate.

However, there will be no accelerated vesting, cash payment or other adjustment
in respect of this RSU Award if the Recipient receives benefits under the Senior
Executive Severance Plan as a result of a change in control.

 

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For purposes of the LTIP, a “change of control” means: (i) the acquisition of
20% of the Corporation’s outstanding voting shares by a person, entity or group
(as defined in Section 13(d)(3) of the Securities Exchange Act of 1934); (ii) a
change in the majority of the Board of Directors such that the members of the
new majority are not approved by two-thirds of the incumbent members; (iii) a
merger, reorganization, or consolidation or similar transaction resulting in a
business combination where shareowners before the transaction own less then 50%
of the new entity, or a person, entity or group owns 20% or more of the shares
of the new entity; or (iv) a dissolution or liquidation of the Corporation.

Nonassignability

Unless otherwise prescribed by the Committee, no assignment or transfer of any
right or interest of a Recipient in any RSU, whether voluntary or involuntary,
by operation of law or otherwise, shall be permitted except by will or the laws
of descent and distribution. Any attempt to assign such rights or interest shall
be void and without force or effect.

Notices

Every notice or other communication relating to the LTIP, this Award or this
Schedule of Terms shall be delivered electronically or mailed to or delivered to
the party for whom it is intended at such address as may from time to time be
designated by such party. Notices by the Recipient to the Corporation shall be
mailed to or delivered to the Corporation at its office at United Technologies
Building, MS504, Hartford, CT 06101, Attention: Stock Plan Administrator, or
emailed to stockoptionplans@utc.com. All notices by the Corporation to the
Recipient shall be transmitted to the Recipient’s email address or mailed to his
or her address as shown on the records of the Corporation.

Administration

Awards granted pursuant to the LTIP shall be interpreted and administered by the
Committee. The Committee shall establish such procedures as it deems necessary
and appropriate to administer Awards in a manner that is consistent with the
terms of the LTIP. The Committee’s decision on any matter related to an Award
shall be binding and conclusive.

Awards Not to Affect or Be Affected by Certain Transactions

RSU Awards shall not in any way affect the right or power of the Corporation or
its shareowners to effect: (a) any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation’s capital structure or its
business; (b) any merger or consolidation of the Corporation; (c) any issue of
bonds, debentures, shares of stock preferred to, or otherwise affecting the
Common Stock of the Corporation or the rights of the holders of such Common
Stock; (d) the dissolution or liquidation of the Corporation; (e) any sale or
transfer of all or any part of its assets or business; or (f) any other
corporate act or proceeding.

Taxes/Withholding

Recipients are responsible for any income or other tax liability attributable to
an Award. The closing price of Common Stock on the New York Stock Exchange on
the Vesting Date will be used to calculate income realized from the vesting of
RSUs. The Corporation shall take such steps as are appropriate to assure
compliance with applicable federal, state and local tax withholding
requirements. The Corporation shall, to the extent required by law, have the
right to deduct directly from any payment or delivery of shares due to a
Recipient or from a Recipient’s regular compensation, all federal, state and
local taxes of any kind required by law to be withheld with respect to the
vesting of an RSU. Recipients not based in the United States and foreign
nationals who are not permanent residents of the United States must pay the
appropriate taxes as required by any country where they are subject to tax.

A discussion of U.S. Federal tax treatment of RSUs may be found in the LTIP
prospectus.

 

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Deferral of Gain (U.S. based executives)

A Recipient who is resident in the U.S. and subject to U.S. income tax may
irrevocably elect to defer the conversion of vested RSUs into shares of Common
Stock to a date that is at least five years after the date the Recipient will
reach age 62. The election to defer the conversion of RSUs into shares must be
made no later than the day before the date the Recipient reaches age 61. RSUs
subject to a deferral election will be converted into shares of Common Stock on
the distribution date designated in the deferral election. Deferred RSUs will
continue to be credited with dividend equivalents. Under U.S. tax law, a
Recipient will generally not be taxed on RSUs subject to a valid deferral
election until the resulting deferred share units are converted to shares of
Common Stock. Details of the deferral of the conversion of RSUs into shares will
be provided with the election materials. The opportunity to make such an
election is subject to changes in Federal tax law. The Committee reserves the
right to discontinue offering RSU deferral elections at any time for any reason
it deems appropriate in its sole discretion.

Right of Discharge Reserved

Nothing in the LTIP or in any RSU Award shall confer upon any Recipient the
right to continue in the employment or service of the Corporation or any
affiliate thereof for any period of time, or affect any right that the
Corporation or any subsidiary or division may have to terminate the employment
or service of such Recipient at any time for any reason.

Forfeiture of Interests and Gains

RSUs shall be forfeited if a Recipient is terminated for “cause”. Termination
for cause means termination related to a violation of the ELG covenants,
criminal conduct involving a felony in the U.S. or the equivalent of a felony
under the laws of other countries, material violations of civil law related to
the Recipient’s job responsibilities, fraud, dishonesty, self-dealing, breach of
the Recipient’s intellectual property agreement or willful misconduct that the
Committee determines to be injurious to the Corporation. A Recipient will be
obligated to repay the value realized from the conversion of RSUs into shares of
unrestricted Common Stock if the Recipient violates any of the ELG covenants,
or, if following termination, the Corporation determines that the Recipient
engaged in conduct that would have constituted the basis for termination for
cause. The foregoing provisions shall be applicable to Recipients who remain
employed after age 62 and to RSUs that have been deferred beyond the Vesting
Date.

Nature of Payments

All Awards made pursuant to the LTIP are in consideration of services performed
for the Corporation or the business unit employing the Recipient. Any gains
realized pursuant to such Awards constitute a special incentive payment to the
Recipient and shall not be taken into account as compensation for purposes of
any of the employee benefit plans of the Corporation or any business unit. RSUs
will not be funded by the Corporation. In this regard, a Recipient’s rights to
RSUs are those of a general unsecured creditor of the Corporation.

Government Contract Compliance

The “UTC Policy Statement on Business Ethics and Conduct in Contracting with the
United States Government” calls for compliance with the letter and spirit of
government contracting laws and regulations. In the event of a violation of
government contracting laws or regulations, the Committee reserves the right to
revoke any outstanding Award.

Interpretations

This Schedule of Terms and each Statement of Award are subject in all respects
to the terms of the LTIP. In the event that any provision of this Schedule of
Terms or any Statement of Award is inconsistent with the terms of the LTIP, the
terms of the LTIP shall govern. Any question of administration or interpretation
arising under the Schedule of Terms or any Statement of Award shall be
determined by the Committee or its delegate, and such determination to be final
and conclusive upon all parties in interest.

Governing Law

The LTIP, this Schedule of Terms and the Statement of Award shall be governed by
and construed in accordance with the laws of the State of Delaware.

United Technologies Corporation

United Technologies Building

Hartford, CT 06101

 

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