Document:

Exhibit

Exhibit 10.6
MYOVANT SCIENCES, INC.  
 
EMPLOYMENT AGREEMENT 
The Amended and Restated Employment Agreement (the “Agreement”) is entered into as of November 1, 2018 by and between Kim Sablich (the “Executive”) and Myovant Sciences, Inc. (the “Company”).
RECITALS
A.    The Company desires the association and services of the Executive and her skills, abilities, background and knowledge, and is willing to engage the Executive’s services on the terms and conditions set forth in the Agreement.
B.    The Executive desires to be in the employ of the Company and is willing to accept such employment on the terms and conditions set forth in the Agreement.
C.    The Agreement supersedes any and all prior and contemporaneous oral or written employment agreements or arrangements between the Executive and the Company or any predecessor thereof.
AGREEMENT
In consideration of the foregoing, the parties agree as follows:
1.EMPLOYMENT BY THE COMPANY.
1.1    Position; Duties. Subject to the terms and conditions of the Agreement, the Executive shall hold the position of Chief Commercial Officer, in which position the Executive shall be an officer of the Company for purposes of Section 16(a)(1) of the Securities Exchange Act of 1934. The Executive will report to, and be subject to the direction of, the Company’s President and Chief Executive Officer. The Executive shall devote the Executive’s full business energies, interest, abilities and productive time to the proper and efficient performance of the Executive’s duties under the Agreement; provided, however, that the Executive may devote reasonable periods of time to (a) serving on the board of directors of the corporations subject to the prior approval of the Company’s Board of Directors (the “Board”), and (b) engaging in charitable or community service activities, so long as none of the foregoing additional activities materially interfere with the Executive’s duties under the Agreement.
1.2    Relationship With Parent. It is understood and agreed that the Executive’s duties may include providing services to or for the benefit of the Company’s affiliates, including, but not limited to, Myovant Sciences Ltd. (the “Parent”), provided that the Executive agrees that she will not provide any services from within the United States for the Parent or any affiliate of the Parent that is organized in a jurisdiction outside the United States.  In addition, the Executive shall be deemed an officer or executive officer of the Parent, if at all, solely for purposes of the requirements applicable to the Parent as a registrant with the U.S. Securities and Exchange Commission. The Executive will not become an employee of the Parent, and the Executive’s activities for the Parent shall be strictly ministerial and shall not involve conducting any of the Parent’s business activities from within the United States, including day-to-day management or other operational activities of the Parent.
1.3    Location of Employment. The Executive shall work primarily from the Company’s principal base of operations, which is currently in California. The Executive understands that her duties may require periodic business travel.
1.4    Policies and Procedures. The employment relationship between the parties shall be governed by the Agreement and by the policies and practices established by the Company and/or the Board. In the 

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event that the terms of the Agreement differ from or are in conflict with the Company’s policies or practices, the Agreement shall govern and control.
1.5    Exclusive Employment; Agreement not to Participate in Company’s Competitors. Subject to Sections 1.1 and 1.2 above, except with the prior written consent of the Board, the Executive will not during her employment with the Company undertake or engage in any other employment, occupation or business enterprise. During the Executive’s employment, the Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by the Executive to be adverse or antagonistic to the Company, its business or its prospects, financial or otherwise, or in any company, person or entity that is, directly or indirectly, in competition with the business of the Company. Ownership by the Executive of professionally managed funds over which the Executive does not have control or discretion in investment decisions or an investment representing less than two percent (2%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed or publicly traded on a national securities exchange or in the over-the-counter market shall not constitute a breach of the Section.
1.6    Start Date. The Executive’s employment with the Company shall commence on December 1, 2018 (the “Start Date”).
2.    AT-WILL EMPLOYMENT.
The Executive’s employment relationship with the Company is, and shall at all times remain, at-will. The means that either the Executive or the Company may terminate the employment relationship at any time, for any reason or for no reason, with or without Cause (as defined below) or advance notice; provided, however, that the Executive must provide the Company at least three (3) months’ advance written notice of the Executive’s intention to resign from employment (except for a resignation for Good Reason, in which case such procedure shall be governed by the terms set forth in the definition of Good Reason) and the Company shall provide the Executive three (3) months’ advance written notice in the event of a termination of the Executive’s employment by the Company without Cause.
3.    COMPENSATION AND BENEFITS.
3.1    Salary. The Company shall pay the Executive a base salary at the annualized rate of $400,000 (the “Base Salary”), less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices. The Base Salary shall be prorated for any partial year of employment on the basis of a 365-day year. The Base Salary shall be subject to periodic review and may be increased from time to time in the Board’s discretion.
3.2    Sign-on Bonus. The Company shall pay the Executive a sign-on bonus in a lump sum payment totaling $105,000, together with a tax gross-up payment representing additional compensation in an amount intended to offset, on an after-tax basis, the Executive’s income taxes payable in respect of such bonus (collectively, the “Sign-on Bonus”). The payment of $105,000 will be paid within thirty (30) days after the Start Date. Should the Executive’s employment terminate voluntarily without Good Reason or involuntarily for Cause, prior to the first anniversary of the Start Date, the Executive shall be required to repay the Sign-on Bonus less the amount of the tax gross-up.
3.3    Annual Performance Bonus. Each fiscal year, the Executive will be eligible to earn an annual discretionary cash bonus (the “Annual Performance Bonus”) with a target equal to 45% of the Executive’s Base Salary, based on the Board’s assessment of the Executive’s individual performance and overall Company performance. In order to earn and receive the Annual Performance Bonus, the Executive must remain employed by the Company through and including the last day of the fiscal year to which the Annual Performance Bonus relates. The Annual Performance Bonus, if any, will be paid no later than thirty (30) days following the end of that fiscal year. The Annual Performance Bonus payable, if any, shall be prorated for the initial year of employment (on the basis of a 365-day year) or prorated if the Company’s review or assessment of the Executive’s performance covers a period that is less than a full fiscal year. The determination of whether the Executive has earned a bonus and the amount thereof shall be determined by the Board or a committee thereof in its sole discretion based upon the Executive meeting goals and 

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objectives as set by the Board. The Board or a committee thereof reserves the right to modify the bonus criteria from year to year.
3.4    Equity. 
(a)    Subject to the terms of the Parent’s 2016 Equity Incentive Plan (the “Plan”) and approval of the grant by the Parent’s board of directors (the “Parent Board”) or a committee thereof, the Executive will be granted an option to purchase up to 133,500 shares of the Parent’s common stock (the “Initial Option”). The Initial Option shall: (i) have an exercise price equal to the closing price of the Parent’s common stock on the New York Stock Exchange on the grant date; (ii) be subject to a four (4)-year vesting period, with 25% of the Initial Option shares vesting on the first anniversary of the grant date and quarterly vesting thereafter, as well as any other terms contained in the grant agreements; and (iii) expire and cease to be exercisable on the ten (10)-year anniversary of the grant date. Under the Company’s current grant date policy, option grants are effective on the 15th (or next business day) of the month next following the later of the date of approval of the option grant or the optionee’s commencement of employment. The Initial Option will be governed by the Plan and other documents issued in connection with the grant.
(b)    Subject and subsequent to the approval of the Board, the Executive will be granted 29,700 restricted stock units (the “RSUs”) of the Parent to be issued under the Plan.  The RSUs shall be subject to a 4-year vesting period, with 25% of the RSUs vesting after approximately one year and quarterly vesting thereafter, as well as any other terms contained in the grant agreement.
(c)    The Executive will also be eligible to receive discretionary annual equity incentive grants in amounts commensurate with the Executive’s position as Chief Commercial Officer (the “Annual Equity Grants”).
3.5    Benefits and Insurance. The Executive shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any benefit plan or arrangement that may be in effect from time to time and made available to similarly situated Company executives (including, but not limited to, being named as an officer for purposes of the Company’s Directors & Officers insurance policy). In particular, the Executive shall be entitled to vacation each year, in addition to sick leave and observed holidays, in accordance with the policies and practices of the Company. Vacation may be taken at such times and intervals as the Executive shall determine, subject to the business needs of the Company. The Company reserves the right to modify, add or eliminate benefits from time to time.
3.6    Expense Reimbursements. The Company will reimburse the Executive for all reasonable business expenses that the Executive incurs in conducting her duties hereunder, pursuant to the Company’s usual expense reimbursement policies. Reimbursement will be made as soon as practicable following receipt from the Executive of reasonable documentation supporting said expenses.
3.7    Relocation. The Executive will be eligible to receive a relocation package to assist in her relocation to the Company’s California office location. This relocation package will include packing and transportation of the Executive’s household goods, business class airfare to relocate Executive and her family to the Bay Area, as well as transportation of up to two (2) automobiles.  The relocation package will also include one (1) house-hunting trip for the Executive and her spouse.  In addition, the Executive will be eligible to receive up to three months of temporary housing.  The Executive shall have one year from the Start Date to utilize the relocation package.  In addition, the Executive will be eligible to receive up to three months of temporary housing with a maximum amount of $27,000.
4.    PROPRIETARY INFORMATION OBLIGATIONS.
As a condition of employment, the Executive agrees to execute and abide by the Company’s Employee Non-Disclosure and Inventions Assignment Agreement (“NDA”).
5.    TERMINATION OF EMPLOYMENT.

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5.1    Termination Without Cause Or Resignation For Good Reason. If (i) the Executive’s employment with the Company is terminated without Cause and other than due to the Executive’s death or Disability or (ii) the Executive resigns for Good Reason (each, a “Qualifying Termination”), then the Company shall pay the Executive any earned but unpaid Base Salary accrued through the date of termination, at the rate then in effect, less standard deductions and withholdings. In addition, if the Executive furnishes to the Company an executed waiver and release of claims in a form to be provided by the Company, which may include an obligation for the Executive to provide reasonable transition assistance (the “Release”), that is nonrevocable prior to the Release Date, and if the Executive allows the Release to become effective in accordance with its terms, then the Executive shall receive the following benefits, subject to Section 5.6:
(a)    The Company shall pay the Executive an amount equal to one times (1x) the sum of (i) the Executive’s then current Base Salary (determined prior to any reduction in Base Salary that otherwise constitutes Good Reason, if applicable) and (ii) the Executive’s Annual Performance Bonus (as determined under Section 3.3 above, and prior to any reduction in such annual target bonus opportunity that or otherwise constitutes Good Reason, if applicable) in respect of the fiscal year in which the termination of employment occurs, at target level. Said amount shall be paid to the Executive in a single lump sum within ten (10) days following the Release Date and will be subject to required withholding;
(b)    If the Executive is eligible for and timely elects COBRA continuation coverage, the Company will reimburse the total amount of COBRA premiums for the first twelve (12) months of COBRA coverage (for clarity, such COBRA premium reimbursements will be inclusive of premiums for the Executive’s eligible dependents for such health, dental, and vision insurance plan coverage as in effect immediately prior to the Executive’s Qualifying Termination, provided that such dependents continue to be eligible for such coverage during such twelve (12)-month period); provided, however, that if the Executive ceases to be eligible for COBRA or becomes eligible to enroll in the group health insurance plan of any other employer, the Executive will immediately notify the Company and the Company’s obligation to provide the COBRA premium benefits shall immediately cease. Further, notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of reimbursing the Executive’s COBRA premiums, the Company will pay the Executive on a monthly basis a fully taxable cash payment equal to the COBRA premium for that month, subject to applicable tax withholding. The payment may be, but need not be, used by the Executive to pay for COBRA premiums; and
(c)    Subject to Section 5.1(d), unless specifically provided otherwise in the applicable equity award agreement, the Executive shall be eligible to become fully vested in 25% of the then unvested portion of each of the Executive’s then unvested and outstanding equity awards, including the Executive’s then remaining unvested portion of any Annual Equity Grants and any other equity grants awarded. Such accelerated vesting shall be effective as of the tenth (10th) day following the Release Date. In order to give effect to the intent of this provision, if the Executive is entitled to accelerated vesting of any equity award pursuant to this provision, then notwithstanding anything to the contrary set forth in the terms of such equity award (including any applicable equity incentive plan and equity award agreement), in no event will such equity award be forfeited or terminate prior to the effective date of such acceleration.
(d)    Notwithstanding anything in this Agreement to the contrary, if, pursuant to another written plan, agreement or other arrangement with the Company, the Executive is entitled to benefits with respect to the Executive’s outstanding equity awards that are more favorable to the Executive than the accelerated vesting benefit set forth in Section 5.1(c) or 5.3, or the extended post-termination exercise period benefit set forth in Section 5.3, as applicable, as determined by the Company in its sole discretion, then the Executive will not be entitled to the accelerated vesting benefit set forth in Section 5.1(c) or 5.3 (if the more favorable benefit is regarding accelerated vesting) or the extended post-termination exercise period benefit set forth in Section 5.3 (if the more favorable benefit is regarding an extended post-termination exercise period).
5.2    Other Termination. If the Executive resigns her employment at any time without Good Reason or the Executive’s employment is terminated by the Company at any time for Cause or due to the Executive’s death or Disability, the Company shall pay the Executive (or her estate) any earned but unpaid Base Salary accrued 

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through the date of such resignation or termination, at the rate then in effect, less standard deductions and withholdings. The Company shall thereafter have no further obligations to the Executive, except as may otherwise be required by law.
5.3    Change of Control. If the Executive’s Qualifying Termination occurs within three (3) months before, upon or within eighteen (18) months after a Change of Control and the Executive satisfies the Release requirements set forth in Section 5.1, then the Executive shall receive the benefits set forth in Section 5.1 in accordance with the provisions of Section 5.1, subject to Section 5.6, plus the following benefits:
(i)    Unless specifically provided or otherwise in the applicable equity award agreement, the Executive shall be eligible to become fully vested in 100% of the then unvested portion of each of the Executive’s then unvested and outstanding equity awards, including the Executive’s then remaining unvested portion of any Annual Equity Grants and any other equity grants awarded. Such accelerated vesting shall be effective as of the tenth (10th) day following the Release Date; provided, however, that if such Qualifying Termination occurs within three (3) months before a Change of Control, then such accelerated vesting shall be effective as of the later of (x) the date of the Change of Control or (y) the tenth (10th) day following the Release Date. In order to give effect to the intent of the provision, if the Executive is entitled to accelerated vesting of any equity award pursuant to the provision, then notwithstanding anything to the contrary set forth in the terms of such equity award (including any applicable equity incentive plan and equity award agreement), in no event will such equity award be forfeited or terminate prior to the effective date of such acceleration.
(ii)    If such Qualifying Termination occurs within three (3) months before a Change of Control and the Executive is entitled to accelerated vesting of any equity award as a result of the foregoing clause (i), then with respect to any such equity award that is an option, the post-termination exercise period of such option will be extended such that the Executive will have three (3) months after the Change of Control to exercise any vested portion of such option; provided, however, that in no event may such option be exercised after the expiration of its original term.
5.4    Definitions. For purposes of the Agreement, the following terms shall have the following meanings:
(a)    “Cause” shall mean the occurrence of any of the following, the Executive’s: (i) conviction of any felony or any crime involving moral turpitude or dishonesty, (ii) participation in a fraud against the Company, (iii) willful and material breach of the Executive’s duties and obligations under the Agreement or any of the agreement between the Executive and the Company or its affiliates that has not been cured (if curable) within thirty (30) days after receiving written notice from the Board of such breach, (iv) intentional and material damage to the Company’s property, or (v) violation of any law, rule or regulation (collectively, “Law”) relating in any way to the business or activities of the Company or its subsidiaries or affiliates, or other Law that is violated during the course of the Executive’s performance of services to the Company that results in the Executive’s arrest, censure, or regulatory suspension or disqualification, including, without limitation, the Generic Drug Enforcement Act of 1992, 21 U.S.C. § 335(a), or any similar legislation applicable in the United States or in any other country where the Company intends to develop its activities.
(b)    “Disability” shall mean the Executive’s inability to perform her duties and responsibilities hereunder, with or without reasonable accommodation, due to any physical or mental illness or incapacity, which condition has continued for a period of 180 days (including weekends and holidays) in any consecutive 365-day period.
(c)    “Good Reason” shall mean the occurrence of any of the following events without the Executive’s consent: (i) reduction of the Executive’s Base Salary or in any of the percentages of the Base Salary payable as an Annual Performance Bonus as initially set forth herein or as the same may be increased from time to time; (ii) material reduction in the Executive’s authority, duties or responsibilities, as compared to the Executive’s authority, duties or responsibilities immediately prior to such reduction or any diminution of her title as Chief Commercial Officer; (iii) failure or refusal of a successor to the Company to materially assume the Company’s 

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obligations under the Agreement in the event of a Change of Control; or (iv) once a principal location of employment is selected, a change in the Executive’s principal location of employment, resulting in an increase in the Executive’s one-way driving distance by more than thirty (30) miles from the Executive’s then current principal residence on file with the Company; provided, however, that any resignation by the Executive shall only be deemed for Good Reason pursuant to the definition if: (1) the Executive gives the Company written notice of the Executive’s intent to terminate for Good Reason within ninety (90) days following the first occurrence of the condition(s) that he believes constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “Cure Period”); and (3) the Executive voluntarily terminates her employment within thirty (30) days following the end of the Cure Period.
(d)    A “Change of Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i)    A merger or consolidation in which the Company is a constituent party (or a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation), other than a merger or consolidation in which the voting securities of the Company outstanding immediately prior to such merger or consolidation continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation;
(ii)    A merger or consolidation in which the Parent is a constituent party (or a subsidiary of the Parent is a constituent party and the Parent issues shares of its capital stock pursuant to such merger or consolidation), other than a merger or consolidation in which the voting securities of the Parent outstanding immediately prior to such merger or consolidation continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation;
(iii)    Any transaction or series of related transactions in which more than fifty percent (50%) of the Company’s voting power is transferred, directly or indirectly, other than to Roivant Sciences Ltd. (directly or indirectly), and other than the sale by the Company, the Parent or any subsidiary of the Parent of stock in transactions the primary purpose of which is to raise capital for such company’s operations and activities; or
(iv)    A sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company or the Parent.
Notwithstanding the foregoing definition, the term Change of Control will not include (x) a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company or the Parent, or (y) a liquidation or dissolution ancillary to or in connection with an assignment for the benefit of creditors, a bankruptcy proceeding, appointment of receiver or similar proceeding or transaction.
For clarity, in the event that Roivant Sciences Ltd. no longer continues to own more than fifty percent (50%) of the Parent’s common shares, such event will not constitute a Change of Control, unless such event is accompanied by a transaction or series of related transactions that or otherwise constitutes a Change of Control under clauses (i), (ii), (iii) or (iv) above.
If required for compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (“Section 409A”), in no event will an event be deemed a Change of Control if such event is not also a “change in the ownership of” the Company or the Parent, a “change in the effective control of” the Company or the Parent, or a “change in the ownership of a substantial portion of the assets of” the Company or the Parent, each as determined under Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
(e)    “Release Date” shall mean the date that is fifty-five (55) days following the date of the Executive’s Qualifying Termination.

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5.5    Effect of Termination. The Executive agrees that should her employment be terminated for any reason, she shall be deemed to have resigned from any and all positions with the Company and the Parent, including, but not limited to, any position she may hold on the Board or the Parent’s board of directors.
5.6    Section 409A Compliance.
(a)    It is intended that any benefits under the Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9), and the Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, the Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), the Executive’s right to receive any installment payments under the Agreement (whether severance payments, if any, or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. A termination of employment shall not be deemed to have occurred for purposes of any provision of the Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of the Agreement, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean separation from service. Notwithstanding any provision to the contrary in the Agreement, if the Executive is deemed by the Company at the time of a separation from service to be a “specified Executive” for purposes of Section 409A(a)(2)(B)(i), and if any payments or benefits that the Executive becomes entitled to under the Agreement on account of such separation from service are deemed to be “deferred compensation,” then to the extent delayed commencement of any portion of such payments or benefits is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided prior to the earliest of (i) the expiration of the six-month period measured from the date of separation from service, (ii) the date of the Executive’s death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such period, all payments deferred pursuant to the paragraph shall be paid in a lump sum, and any remaining payments due shall be paid as or otherwise provided herein. No interest shall be due on any amounts so deferred.
(b)    With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for any other benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any of the taxable year, and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.
(c)    The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of the Agreement are determined to constitute deferred compensation subject to Section 409A but do not satisfy an exemption from, or the conditions of, Section 409A.
5.7    Section 280G.
(a)    If any payment or benefit (including payments and benefits pursuant to the Agreement) that the Executive would receive in connection with a Change of Control or other transaction (the “Transaction”) from the Company or otherwise (“Transaction Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for the sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax:  (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a part of the Transaction Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”). For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall 

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cause to be taken into account the value of all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (x) the Executive shall have no rights to any additional payments and/or benefits constituting the Transaction Payment, and (y) reduction in payments and/or benefits shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit to the Executive as determined in the paragraph. If more than one method of reduction will result in the same economic benefit, the portions of the Transaction Payment shall be reduced pro rata (the “Pro Rata Reduction Method”).
Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Transaction Payment being subject to taxes pursuant to Section 409A that would not or otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification will preserve to the greatest extent possible, the greatest economic benefit for the Executive as determined on an after-tax basis; (B) as a second priority, any amounts of the Transaction Payment that are contingent on future events (e.g., being terminated without Cause), will be reduced (or eliminated) before any amounts of the Transaction Payment that are not contingent on future events; and (C) as a third priority, any amounts of the Transaction Payment that are “deferred compensation” within the meaning of Section 409A will be reduced (or eliminated) before any amounts of the Transaction Payment that are not deferred compensation within the meaning of Section 409A.
(b)    Notwithstanding the foregoing, in the event that no stock of the Parent is readily tradeable on an established securities market or otherwise (within the meaning of Section 280G of the Code) at the time of the Change of Control and to the extent allowable pursuant to Treas. Reg. §1.280G-1, the Parent shall cause a vote of shareholders to be held to approve the portion of the Transaction Payments that equals or exceeds three times (3x) the Executive’s “base amount” (within the meaning of Section 280G of the Code) (the “Excess Parachute Payments”) in accordance with Treas. Reg. §1.280G-1, and the Executive shall cooperate with such vote of shareholders, including the execution of any required documentation subjecting the Executive’s entitlement to all Excess Parachute Payments to such shareholder vote. In the event that the Parent does not cause a vote of shareholders to be held to approve all Excess Parachute Payments, the provisions set forth in Section 5.7(a) of the Agreement shall apply.
(c)    Unless the Executive and the Company or otherwise agree in writing, any determination required under the section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes. For purposes of making the calculations required by the section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Accountants shall provide detailed supporting calculations to the Company and the Executive as requested by the Company or the Executive. The Executive and the Company shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under the section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by the section.
6.    ARBITRATION.
Except as or otherwise set forth below in connection with equitable remedies, any dispute, claim or controversy arising out of or relating to the Agreement or the Executive’s employment with the Company (collectively, “Disputes”), including, without limitation, any dispute, claim or controversy concerning the validity, enforceability, breach or termination of the Agreement, if not resolved by the parties, shall be finally settled by arbitration in accordance with the then-prevailing Employment Arbitration Rules and Procedures of JAMS, as modified herein (“Rules”). The requirement to arbitrate covers all Disputes (other than disputes which by statute are not arbitrable) including, but not limited to, claims, demands or actions under the Age Discrimination in Employment Act (including Older Workers Benefit Protection Act); Americans with Disabilities Act; Civil Rights Act of 1866; Civil Rights Act of 1991; Executive Retirement Income Security Act of 1974; Equal Pay Act; Family and Medical Leave Act of 1993; Title VII of the Civil Rights Act of 1964; Fair Labor Standards Act; Fair Employment and Housing Act; any other provision of the California Labor, Government or Civil Code; IWC Wage Orders; and any other law, ordinance or regulation regarding discrimination or harassment or any terms or conditions of employment. Thee shall be one arbitrator who shall be 

8.

jointly selected by the parties. If the parties have not jointly agreed upon an arbitrator within twenty (20) calendar days of respondent’s receipt of claimant’s notice of intention to arbitrate, either party may request JAMS to furnish the parties with a list of names from which the parties shall jointly select an arbitrator. If the parties have not agreed upon an arbitrator within ten (10) calendar days of the transmittal date of such list, then each party shall have an additional five (5) calendar days in which to strike any names objected to, number the remaining names in order of preference, and return the list to JAMS, which shall then select an arbitrator in accordance with the Rules. The place of arbitration shall be San Francisco, California. By agreeing to arbitration, the parties hereto do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, including, without limitation, with respect to the NDA. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16. Judgment upon the award of the arbitrator may be entered in any court of competent jurisdiction. Discovery shall be permitted in the arbitration as provided by Section 1283.05 of the California Code of Civil Procedure. The Company shall pay all administrative fees of JAMS in excess of $435 (a typical filing fee in court) and the arbitrator’s fees and expenses. Each party shall bear its or her own costs and expenses (including attorney’s fees) in any such arbitration and the arbitrator shall have no power to award costs and attorney’s fees except as provided by statute or by separate written agreement between the parties. In the event any portion of the arbitration provision is found unenforceable by a court of competent jurisdiction, such portion shall become null and void leaving the remainder of the arbitration provision in full force and effect. The parties agree that all information regarding the arbitration, including any settlement thereof, shall not be disclosed by the parties hereto, except as or otherwise required by applicable law.
7.    GENERAL PROVISIONS.
7.1    Representations and Warranties. The Executive represents and warrants that the Executive is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in the Agreement, and that the Executive’s execution and performance of the Agreement will not violate or breach any of the agreements between the Executive and any other person or entity. In addition, the Executive represents and warrants that the Executive is not debarred and has not received notice of any action or threat with respect to debarment under the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C. § 335(a) or any similar legislation applicable in the United States or in any other country where the Company intends to develop its activities. The Executive understands and agrees that the Agreement is contingent on the Executive’s submission of satisfactory proof of identity and legal authorization to work in the United States, as well as verification of auditor independence.
7.2    Advertising Waiver. The Executive agrees to permit the Company, and persons of other organizations authorized by the Company, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company in which the Executive’s name and/or pictures of the Executive appear. The Executive hereby waives and releases any claim or right the Executive may or otherwise have arising out of such use, publication or distribution.
7.3    Miscellaneous. The Agreement, along with the NDA and any applicable equity awards that have been granted, constitutes the complete, final and exclusive embodiment of the entire agreement between the Executive and the Company with regard to its subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. The Agreement may not be modified or amended except in a writing signed by both the Executive and a duly authorized officer or member of the Board. The Agreement will bind the heirs, personal representatives, successors and assigns of both the Executive and the Company, and inure to the benefit of both the Executive and the Company, and to her and its heirs, successors and assigns. If any provision of the Agreement is determined to be invalid or unenforceable, in whole or in part, the determination will not affect any other provision of the Agreement and the provision in question will be modified so as to be rendered enforceable. The Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of California as applied to contracts made and to be performed entirely within California. Any ambiguity in the Agreement shall not be construed against either party as the drafter. Any waiver of a breach of the Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach. The Agreement may be executed in counterparts and facsimile signatures will suffice as original signatures.

9.

IN WITNESS WHEREOF, the parties have executed the Agreement as of the day and year first written above.

	
			
	 
	 
	MYOVANT SCIENCES, INC.

	 
	By:
	/s/Lynn Seely, M.D.

	 
	 
	Name: Lynn Seely, M.D.
Title: President and Chief Executive Officer

	ACCEPTED AND AGREED: 

/s/ Kim Sablich
	 
	 

	KIM SABLICH

	 
	 

	 
	 
	 

	 
	 
	 

    

    

10.Exhibit

Exhibit 10.8

                

UNITED TECHNOLOGIES CORPORATION

BOARD OF DIRECTORS

DEFERRED STOCK UNIT PLAN

As Amended and Restated Effective April 29, 2019

UNITED TECHNOLOGIES CORPORATION BOARD OF DIRECTORS
DEFERRED STOCK UNIT PLAN
Table of Contents 
       
ARTICLE I    INTRODUCTION AND PURPOSE
1.01     Purpose of Plan        
1.02     Effective Date of Plan    

ARTICLE II    DEFINITIONS    

ARTICLE III    ELIGIBLE COMPENSATION
3.01        Annual Retainer         
3.02        Annual Deferred Stock Unit Award    
3.03        New Director Restricted Stock Unit Award     

ARTICLE IV     ACCOUNTS AND CREDITS
4.01        Annual Deferred Stock Unit Award        
4.02        Elective Annual Retainer        
4.03        New Director Restricted Stock Unit Award     
4.04        Accounts    
4.05        Deferred Stock Unit Accounts    
4.06        Hypothetical Nature of Accounts and Investments    

ARTICLE V    ELECTION PROCEDURES AND PAYMENTS
5.01        Annual Retainer Deferral Election      
5.02        Annual Retainer Deferral Election Date        
5.03        Distribution Commencement Date
5.04        Election of Form and Amount of Distribution
5.05        Change in Distribution Election        
5.06        Investment of Annual Retainer Account Election

        
ARTICLE VI    ADMINISTRATION
6.01        In General        
6.02        Plan Amendment and Termination        
6.03        Reports to Participants    
6.04        Delegation of Authority    
6.05        Distribution of Shares    
6.06        Share Ownership Requirement    

ARTICLE VII     MISCELLANEOUS
7.01    Rights Not Assignable    
7.02    Certain Rights Reserved    
7.03    Withholding Taxes    
7.04    Compliance with Section 409A        
7.05    Incompetence    
7.06    Inability to Locate Participants and Beneficiaries    
7.07    Successors    
7.08    Usage    
7.09    Severability    
7.10    Governing Law    

APPENDIX        United Technologies Corporation Board of Directors Deferred Stock Unit Plan as in effect on
                             October 3, 2004 (the “Prior Plan”)
        
APPENDIX B    United Technologies Corporation 2005 Long Term Incentive Plan Statement of Award    

ARTICLE I
INTRODUCTION AND PURPOSE

1.01     Purpose of Plan
The United Technologies Corporation Board of Directors Deferred Stock Unit Plan (the “Plan”) has been established to provide an arrangement for non-employee directors to receive an annual Deferred Stock Unit Award and a New Director Restricted Stock Unit Award and to defer their Annual Retainer in the form of deferred stock units equal in value to shares of the Corporation’s common stock for the purpose of aligning the interests of non-employee directors with those of the Corporation’s shareowners.  

1.02     Effective Date of Plan and Amendments    
(a) The Plan as originally adopted on January 1, 1996 was amended and restated effective January 1, 2005 for the purpose of complying with Section 409A of the Internal Revenue Code with respect to deferrals that were earned or vested after December 31, 2004.  Amounts that were earned or vested (within the meaning of Section 409A) prior to January 1, 2005, and any subsequent increases in these amounts that are permitted to be treated as grandfathered benefits under Section 409A, are generally subject to and shall continue to be governed by the terms of the Prior Plan set forth in Appendix A.  

(b) The Plan was amended and restated in 2010 for the purposes of: (i) revising the retainer structure; (ii) establishing share ownership guidelines for non-employee directors; and (iii) providing that distributions from this Plan and the Prior Plan will be comprised of shares of UTC Common Stock rather than cash.   Changes effected by this amendment and restatement were generally effective as of October 13, 2010.

(c) The Plan was amended effective February 1, 2013, for the purpose of revising the retainer fee and annual deferred stock unit award amounts.

(d) The Plan was amended and restated for the purposes of: (i) revising the retainer fee and annual deferred stock unit award amounts as integrated into this Plan effective 
April 27, 2015; and (ii) establishing a retainer fee and deferred stock unit award for the position of non-executive Chairman of the Board effective November 23, 2014.  

e)    The Plan was amended and restated effective April 24, 2017 for the purposes of: (i) revising the retainer fee and annual deferred stock unit award amounts; (ii) establishing that non-employee 

directors serving in multiple leadership roles would receive the additional awards specified for each role; and (iii) certain other changes related to the administration of the Plan.  

f)  The Plan is hereby amended and restated effective April 29, 2019 for the purpose of revising the retainer fee and annual deferred stock unit award amounts.

ARTICLE II
DEFINITIONS

Unless the context clearly indicates otherwise, the following terms, when used in capitalized form in the Plan, shall have the meanings set forth below:

Account means a bookkeeping account established for a Participant under Article IV that is credited with Deferred Stock Units representing compensation earned or vested after 2004.  Any compensation earned and vested before 2005 shall be credited to a Participant’s account(s) under the Prior Plan and shall be subject to the provisions set forth in Appendix A.

Annual Meeting means the Corporation’s Annual Meeting of Shareowners.

Annual Retainer means the annual retainer fee payable to a Participant under Section 3.01 for services to the Company in the capacities indicated.

Annual Deferred Stock Unit Award means the annual grant of Deferred Stock Units made to Participants in accordance with Section 3.02.  

Board Cycle means the period beginning as of the Annual Meeting and ending at the start of the next Annual Meeting.  

Beneficiary means a Participant’s beneficiary, designated in writing in a form and manner satisfactory to the Committee, or if a Participant fails to designate a beneficiary, or if all of the Participant’s designated Beneficiaries predecease the Participant, the Participant’s estate.

Board means the Board of Directors of the Corporation.

Closing Price means, with respect to any date specified by the Plan, the closing price of UTC 

Common Stock on the composite tape of New York Stock Exchange on such date (or if there was no reported sale of UTC Common Stock on such date, on the next following day on which there was such a reported sale).

Code means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.  References to any section of the Internal Revenue Code shall include any final regulations or other published guidance interpreting that section.

Committee means the Committee on Nominations and Governance of the Board.

Conversion Date means the date Deferred Stock Units are converted to shares of UTC Common Stock immediately prior to the delivery of such shares to a Participant or Beneficiary in accordance with Article V herein. 

Corporation means United Technologies Corporation.

Deferred Annual Retainer means any portion of a Participant’s Annual Retainer deferred in accordance with Article V.

Deferred Stock Unit means a hypothetical share of UTC Common Stock convertible into an actual share of UTC Common Stock following a Separation from Service and immediately prior to a distribution to be made in accordance with Article V.  Each Deferred Stock Unit is equal in value to a share of UTC Common Stock.  Deferred Stock Units are “restricted stock units” awarded under the LTIP and distributed and administered in accordance with the terms of this Plan. 

Distribution Anniversary Date means an anniversary of the Distribution Commencement Date.

Distribution Commencement Date means the first business day of the first month following the month in which the Participant has a Separation from Service.

Election means an irrevocable election by a Participant either to defer all or a portion of the Annual Retainer otherwise payable in cash or to specify how an Account will be distributed (i.e., as a lump sum, in 10 annual installments, or in 15 annual installments). 

LTIP means the 2005 United Technologies Corporation Long Term Incentive Plan, as amended 

from time to time. 

Participant means a non-employee member of the Board.

Plan means this United Technologies Corporation Board of Directors Deferred Stock Unit Plan, as amended and restated herein, effective December 23, 2014 and as it may be subsequently amended from time to time.

Plan Year means the calendar year.

Prior Plan means the United Technologies Corporation Board of Directors Deferred Stock Unit Plan as in effect on October 3, 2004, and as modified thereafter from time to time in a manner that does not constitute a "material modification" for purposes of Section 409A, as set forth in Appendix A hereto.

New Director Restricted Stock Unit Award means the one-time Deferred Stock Unit award granted to a Participant upon election to the Board as provided in Section 3.03.

Separation from Service means a Participant’s resignation, removal, or retirement from the Board (for a reason other than death) that constitutes a good-faith, complete termination of the Participant’s relationship with the Corporation and that also qualifies as a “separation from service” for purposes of Section 409A of the Code.

UTC Common Stock shall mean the common stock of the Corporation.

ARTICLE III
ELIGIBLE COMPENSATION

3.01    Annual Retainer
(a)    Annual Retainer Amount.  Effective April 29, 2019, subject to subsection (b) of this Section 3.01, each Participant will receive a base Annual Retainer of $124,000.  In addition to the base Annual Retainer, Participants serving in leadership roles on the Board and/or its committees shall receive the following additional Annual Retainer amounts: $32,000 for the Lead Director; $16,000 for the Audit Committee Chair; $12,000 for members of the Audit Committee; $10,000 for the Chair of the Compensation Committee, the Chair of the Finance Committee, and the Chair of the Committee on Governance and Public Policy.  In the event that a Participant serves in more than one role listed above, 

the Participant will receive the additional amounts specified for each role.  The Annual Retainer is subject to change from time to time at the discretion of the Committee.  
    
(b)    New Participants.  If a Participant is elected to the Board before September 30 of a Board Cycle, the Participant will receive the full amount of the then applicable Annual Retainer.  Such amount will be eligible for deferral in accordance with Article V.  If a Participant is elected to the Board after September 30 of a Board Cycle, the Participant will receive 50% of the applicable Annual Retainer Amount set forth in subsection (a) above.

3.02    Annual Deferred Stock Unit Award
(a)     Annual Deferred Stock Unit Award.  Effective April 29, 2019, subject to subsection (b) of this Section 3.02, each Participant will receive a base annual Deferred Stock Unit Award of $186,000, valued at the time of issuance, credited to the Participant’s Account. In addition to the base annual Deferred Stock Unit Award, Participants serving in leadership roles on the Board and/or its committees shall receive the following additional annual Deferred Stock Units: $48,000 for the Lead Director; $24,000 for the Audit Committee Chair; $18,000 for members of the Audit Committee; $15,000 for the Chair of the Compensation Committee, the Chair of the Finance Committee, and the Chair of the Committee on Governance and Public Policy.  In the event that a Participant serves in more than one role listed above, the Participant shall receive the additional Deferred Stock Units awards specified for each role.  The Annual Deferred Stock Unit Award is subject to change from time to time at the discretion of the Committee. 
    
(b)    New Participants.  If a Participant is elected to the Board before September 30 of a Board Cycle, the Participant will receive an Annual Deferred Stock Unit Award equal in value to the amounts specified in sub-section (a) above.  If a Participant is elected to the Board after September 30 of a Board Cycle, the Participant will receive an Annual Deferred Stock Unit Award equal to 50% of the value specified in subsection (a).  

3.03    New Director Restricted Stock Unit Award
Effective as of the date of the Participant’s election to the Board, the Participant shall receive an unvested award of restricted Deferred Stock Units, equal in value to $100,000 as of such date.  The amount of a New Director Restricted Stock Unit Award is subject to change at the discretion of the Committee.  

ARTICLE IV

ACCOUNTS AND CREDITS

4.01    Annual Deferred Stock Unit Award 
The Annual Deferred Stock Unit Award shall be credited automatically to an Account established for the Participant, effective as of the date of the Annual Meeting.  Participants may not elect to receive the Annual Deferred Stock Unit Award as current cash compensation.

4.02     Elective Annual Retainer 
The Annual Retainer will be paid on the date of the Annual Meeting unless the Participant makes a timely irrevocable election in accordance with Article V to defer the receipt of the Annual Retainer as Deferred Stock Units subject to the terms of this Plan in lieu of a current cash payment.

4.03    New Director Restricted Stock Unit Award 
Effective as of the date of the Participant’s election to the Board, the Corporation will credit the amount of the New Director Restricted Stock Unit Award to a New Director Restricted Stock Unit Account established for the Participant.  The New Director Restricted Stock Unit Account will consist of restricted Deferred Stock Units awarded under the LTIP and may not be settled prior to the Participant’s Separation from Service.  The value of the New Director Restricted Stock Unit Account is subject to forfeiture if a Separation from Service occurs before the first Annual Meeting following the date of election to the Board.  Thereafter, the percentage of the New Director Restricted Stock Unit Award subject to forfeiture will be reduced by 20 percentage points as of the date of each succeeding Annual Meeting until the fifth annual meeting when 100% of the value of the New Director Restricted Stock Unit Award will be vested.  There will be no forfeiture of interest in the New Director Restricted Stock Unit Account in the event the Separation of Service occurs by reason of the Participant’s death, Disability, or for any reason following a “Change in Control” as such terms are defined in the LTIP while the Participant is a member of the Board, or in the event of the Participant’s resignation or retirement from the Board for the purpose of accepting full-time employment in public or charitable service.  A Participant’s New Director Restricted Stock Unit Account will be credited with dividend equivalents in the form of additional Deferred Stock Units, which will vest immediately, but will otherwise be subject to the same restrictions applicable to the Deferred Stock Units credited to the Account.

4.04    Accounts
(a)    Post-December 31, 2004 Credits.  All (i) Annual Retainer deferrals, (ii) Annual Deferred Stock Unit Awards and (iii) New Director Restricted Stock Unit Awards earned or vested after December 

31, 2004, shall be maintained in a Participant’s Account established under and subject to the terms and conditions of the Plan, as amended and restated effective January 1, 2005 and as amended from time to time.  Separate Accounts for post-December 31, 2004 Deferred Stock Units will be maintained for each Participant.  Sub-accounts may be maintained within Participants’ Accounts to the extent the Committee determines such an arrangement to be necessary or useful in the administration of the Plan.

(b)    Pre-January 1, 2005 Credits.  All Deferred Stock Unit and New Director Restricted Stock Unit Awards earned and vested prior to January 1, 2005, and any subsequent increases in these amounts that are permitted to be treated as grandfathered benefits under Section 409A of the Code (e.g., increases in unit value and dividend equivalents), shall be maintained in separate account(s) under the Prior Plan and shall remain subject to the terms and conditions of the Prior Plan as in effect on October 3, 2004.  Prior Plan accounts shall be equal to the value earned and vested on December 31, 2004, as subsequently adjusted in accordance with the terms of the Prior Plan.  The Prior Plan and Prior Plan accounts are not intended to be subject to Section 409A of the Code.  No amendment to Appendix A that would constitute a “material modification” for purposes of Section 409A shall be effective unless the amending instrument states that it is intended to materially modify Appendix A and to cause the Prior Plan to become subject to Section 409A.  

		
	4.05
	Deferred Stock Unit Accounts

Calculation of Deferred Stock Units.   A Participant’s Account (including his or her New Director Restricted Stock Unit Account) shall be credited with the number of Deferred Stock Units in accordance with the following rules:

(a)    Initial Crediting of Deferred Stock Units.  The New Director Restricted Stock Unit Award, the Annual Deferred Stock Unit Award and Deferred Annual Retainer (if any) credited to a Participant’s Account for a Plan Year under Sections 4.01,  4.02 and 4.03 shall result in a number of Deferred Stock Units (including fractional Deferred Stock Units) credited to Participant’s Account equal to the sum of the dollar amounts of the Annual Deferred Stock Unit Award, the New Director Restricted Stock Unit Award (if applicable) and the Deferred Annual Retainer (if any) divided by the Closing Price on the date of the Annual Meeting or the date a Participant is elected to the Board, if applicable.

(b)     Deemed Reinvestment of Dividends.  The number of Deferred Stock Units credited to a Participant’s Account shall be increased on each date on which a dividend is paid on UTC 

Common Stock. The number of additional Deferred Stock Units credited to a Participant’s  Account as a result of such dividend payment shall be determined by (i) multiplying the total number of Deferred Stock Units (including fractional Deferred Stock Units) credited to the Participant’s Account on the dividend payment date by the amount of the dividend paid per share of UTC Common Stock on the dividend payment date, and (ii) dividing the product so determined by the Closing Price on the dividend payment date.

(c)     Effect of Recapitalization. In the event of a transaction or event described in this subparagraph (c) (a “Recapitalization Event”), the number of Deferred Stock Units credited to a Participant’s Account shall be adjusted in the same manner as outstanding shares of UTC Common Stock. A Recapitalization Event includes a dividend (other than regular quarterly dividends) or other extraordinary distribution to holders of UTC Common Stock (whether in the form of cash, shares, other securities, or other property), extraordinary cash dividend, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, repurchase, or exchange of shares or other securities, the issuance or exercisability of stock purchase rights, the issuance of warrants or other rights to purchase shares or other securities, or other similar corporate transaction or event that has a material effect on the shares of UTC Common Stock and requires conforming adjustment to the value and/or number of Deferred Stock Units to prevent dilution or enlargement of the value of Participants’ Accounts.

		
	4.06
	Hypothetical Nature of Accounts and Investments

Each Account established under this Article IV shall be maintained for bookkeeping purposes only.  Neither the Plan nor any of the Accounts established under the Plan shall hold any actual funds, shares or other assets. The Deferred Stock Units established hereunder shall be used solely to determine the amounts to be distributed hereunder, shall not be or represent an equity security of the Company, shall not be convertible into or otherwise entitle a Participant to acquire an equity security of the Company prior to a Conversion Date as provided for under the terms of this Plan and shall not carry any voting or dividend rights.  Deferred Stock Units awarded under this Plan shall be evidenced by a certificate substantially in the form set forth in Appendix B.

ARTICLE V
ELECTION PROCEDURES AND DISTRIBUTIONS

5.01    Annual Retainer Deferral Election  
Participants who elect to defer the receipt of the Annual Retainer as Deferred Stock Units for any year must make a written deferral election for that year on an Election form provided by the Committee.  

5.02    Annual Retainer Deferral Election Deadline
A written Election form must be completed and submitted to the Office of the Corporate Secretary no later than December 31st of the calendar year prior to the year for which the Annual Retainer will be earned or, for new Participants, no later than 30 days after their election to the Board.  If a Participant fails to timely submit a properly completed Election form, the Participant’s Annual Retainer earned in the next succeeding year shall be paid in cash as provided in Section 4.02.  The Participant’s deferral election shall be irrevocable following the Election deadline.    

5.03    Distribution Commencement Date
Conversion of Deferred Stock Units into shares of UTC Common Stock and distribution from a Participant’s Account shall occur as of the Participant’s Distribution Commencement Date, or, if the Participant has changed his or her distribution election as provided in Section 5.05, on the fifth anniversary of the Participant’s elected Distribution Date.  If a Participant dies at any time before distribution to the Participant commences, distribution of the entire value of the Participant’s Account shall be made to the Participant’s Beneficiary on the first business day of the third month following the month of the Participant’s death.

A distribution is treated as being made on the date when it is due under the Plan if the distribution occurs on the date specified by the Plan, or on a later date that is either (a) in the same calendar year (for a distribution whose specified due date is on or before September 30), or (b) by the 15th day of the third calendar month following the date specified by the Plan (for a distribution with a specified due date that is on or after October 1). A distribution is also treated as having been made on the date when it is due under the Plan if the distribution is made not more than 30 days before the due date specified by the Plan. A Participant may not, directly or indirectly, designate the taxable year of a distribution made in reliance on the administrative rules in this Section 5.03.

		
	5.04
	Election of Form and Amount of Distribution

(a) Full Distribution.  Following a Separation from Service, a Participant shall receive a number of 

shares of UTC Common Stock equal to the of the number of whole Deferred Stock Units credited to his or her Account unless the Participant timely elected to receive distributions from his or her Account in 10 or 15 annual installments in accordance with subsection (b), below.  A distribution of shares of UTC Common Stock shall occur as provided in Section 5.03.  Fractional Deferred Stock Units will be paid in cash.   

(b) 10 or 15 Annual Installments. A Participant may elect to receive distributions from his or her Account in 10 or 15 installments in lieu of a full distribution of shares under subsection (a) above.  Annual installment distributions shall be in shares of UTC Common Stock unless the Participant has allocated the value of all or any portion of  his or her Account into the fixed income option in accordance with Section 5.06 in which case distributions shall be payable to the Participant in cash.  Installment distributions shall commence as of the Distribution Commencement Date and continue as of each Distribution Anniversary Date thereafter until all installments have been paid. The first annual installment shall equal one-tenth (1/10) (if Participant elects 10 installment payments) or one-fifteenth (1/15th) (if Participant elects 15 installment payments) of the value of the Participant’s Account, determined as of the Distribution Commencement Date.  Each successive annual installment shall equal the value of the Participant’s Account, determined as of the Distribution Anniversary Date, multiplied by a fraction, the numerator of which is one, and the denominator of which shall be the number of remaining annual installments.  If a Participant dies after the Distribution Commencement Date but before all installments have been made, the entire remaining value of the Participant’s Account shall be distributed to the Participant’s Beneficiary on the first business day of the third month following the month of the Participant’s death.  

(c)  Form of Distribution Election.  A valid election to receive annual distributions under subsection (b) shall be made in writing on an Election form, completed and submitted to the Office of the Corporate Secretary no later than December 31st of the calendar year prior to the year for which the Annual Retainer or Deferred Stock Unit Award is earned, or for new Participants, prior to the date the Participant is elected to the Board, and in no event later than 30 days after such election. A valid distribution Election for a New Director Restricted Stock Unit Award under subsection (b) shall be made in writing on an Election form, completed and submitted to the Office of the Corporate Secretary prior to the date Participant is elected to the Board, and in no event later than 30 days after such election.  If a Participant does not make a valid distribution Election, the Participant shall be deemed to have elected to receive his or her Account in a full and immediate distribution as provided in subsection (a).  Except as provided below in Section 5.05 (Change in Payment Election), a Participant’s distribution Election shall become irrevocable on the Election deadline date.

5.05    Change in Distribution Election
A Participant may make a one-time irrevocable Election to change the form of distribution that the Participant elected under Section 5.04.  A change to the form of distribution must meet the following requirements:

		
	i.
	The new Election must be made at least twelve months prior to the Distribution Commencement Date (and the new election shall be ineffective if the Distribution Commencement Date occurs within twelve months after the date of the new Election); 

		
	ii.
	The new Election will not take effect until twelve months after the date when the Participant submits a new Election form to the Office of the Corporate Secretary; 

		
	iii.
	The new Distribution Commencement Date must be five years later than the date on which the distribution would otherwise have commenced; and

		
	iv.
	The new form of distribution must be one of the forms of payment provided under Section 5.04(a) or (b).

5.06    Investment of Annual Retainer Account Election
A Participant may elect, prior to the Distribution Commencement Date or subsequent Distribution Anniversary Date, to convert all or any portion of the Deferred Stock Units in his or her Account to a hypothetical fixed interest investment for the remaining portion of the installment distribution period by making a written election on the Election form provided by the Committee.  If a Participant makes such election to have his or her Account treated as if the Account were invested in cash during the remainder of the distribution period, the Account will be credited with a hypothetical interest at a rate equal to the average interest rate on 10-Year Treasury Bonds during the January through October period in the calendar year prior to the Plan Year in which the interest is credited, plus 1%. 

ARTICLE VI
ADMINISTRATION

		
	6.01
	In General

The Committee shall have the discretionary authority to interpret the Plan and to decide any and 

all matters arising under the Plan, including without limitation the right to determine eligibility for participation, benefits, and other rights under the Plan; the right to determine whether any Election or notice requirement or other administrative procedure under the Plan has been adequately observed; the right to determine the proper recipient of any distribution under the Plan; the right to remedy possible ambiguities, inconsistencies, or omissions by general rule or particular decision; and the right otherwise to interpret the Plan in accordance with its terms. Except as otherwise provided in Section 6.04, the Committee’s determination on any and all questions arising out of the interpretation or administration of the Plan shall be final, conclusive, and binding on all parties.

		
	6.02
	Plan Amendment and Termination

(a)    The Committee may amend, suspend, or terminate the Plan at any time; provided that no amendment, suspension, or termination of the Plan shall, without a Participant’s consent, reduce the Participant’s benefits accrued under the Plan before the date of such amendment, suspension, or termination. 

(b)    In the event of suspension of the Plan, no additional deferrals shall be made under the Plan, but all previous deferrals shall accumulate and be distributed in accordance with the otherwise applicable provisions of this Plan, the Prior Plan and the applicable Elections on file.  

(c)    Upon the termination of the Plan with respect to all Participants, and termination of all arrangements sponsored by the Corporation or its affiliates that would be aggregated with the Plan under Section 409A of the Code, the Corporation shall have the right, in its sole discretion, and notwithstanding any Elections made by the Participant, to distribute the Participant’s vested Account in full, to the extent permitted under Section 409A.  All distributions that may be made pursuant to this Section 6.02(c) shall be made no earlier than the thirteenth month and no later than the twenty-fourth month after the termination of the Plan.  The Corporation may not accelerate distributions pursuant to this Section 6.02(c) if the termination of the Plan is proximate to a downturn in the Corporation’s financial health within the meaning of Treas. Reg. section 1.409A-3(j)(4)(ix)(C)(1).  If the Corporation exercises its discretion to accelerate distributions under this Section 6.02(c), it shall not adopt any new arrangement that would have been aggregated with the Plan under Section 409A within three years following the date of the Plan’s termination.  

		
	6.03
	Reports to Participants

The Committee shall furnish an annual statement to each Participant reporting the value of the 

Participant’s Account and his or her account(s) under the Prior Plan as of the end of the most recent Plan Year.

6.04     Delegation of Authority
The Committee may delegate to officers of the Corporation any and all authority with which it is vested under the Plan, and the Committee may allocate its responsibilities under the Plan among its members.

6.05    Distribution of Shares
The Deferred Stock Units granted under the Plan shall be issued under the LTIP, but subject to administration and distribution in accordance with the terms of this Plan.  All shares of UTC Common Stock so distributed in accordance with the terms of the Plan shall be transferred to a brokerage account designated by the Participant entitled to receive the shares.

6.06    Share Ownership Requirements
Participants are expected to own shares of UTC Common Stock and have Deferred Stock Units equal in aggregate value to at least five times the then applicable base Annual Retainer amount set forth in Section 3.01 no later than the 5th Annual Meeting following a Participant’s election to the Board.  In the event such ownership requirement is not achieved by such date, Annual Retainer fees shall be deferred until combined holdings satisfy this Section 6.06.  

ARTICLE VII
MISCELLANEOUS

		
	7.01
	Rights Not Assignable

No payment due under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge in any other way. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge such payment in any other way shall be void. No such payment or interest therein shall be liable for or subject to the debts, contracts, liabilities, or torts of any Participant or Beneficiary. If any Participant or Beneficiary becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge in any other way any payment under the Plan, the Committee may direct that such payment be suspended and that all future payments to which such Participant or Beneficiary otherwise would be entitled be held and applied for the benefit of such person, the person’s children or other dependents, or any of them, in such manner and in such proportions as the Committee may deem proper.

		
	7.02
	Certain Rights Reserved

Nothing in the Plan shall confer upon any person the right to continue to serve as a member of the Board or to participate in the Plan other than in accordance with its terms.

		
	7.03
	Withholding Taxes

The Committee may make any appropriate arrangements to deduct from all credits and payments under the Plan any taxes that the Committee determines to be required by law to be withheld from such credits and payments.

		
	7.04
	Compliance with Section 409A

This Paragraph 7.04 shall apply notwithstanding any other provision of this Plan. To the extent that rights or payments under this Plan are subject to Section 409A of the Internal Revenue Code, the Plan shall be construed and administered in compliance with the conditions of Section 409A and regulations and other guidance issued pursuant to Section 409A for deferral of income taxation until the time the compensation is paid.  Any distribution election that would not comply with Section 409A of the Code shall not be effective for purposes of this Plan.  To the extent that a provision of this Plan does not comply with Section 409A of the Code, such provision shall be void and without effect.  The Corporation does not warrant that the Plan will comply with Section 409A of the Code with respect to any Participant or with respect to any payment, however.  In no event shall the Corporation; any director, officer, or employee of the Corporation (other than the Participant); or any member of the Committee be liable for any additional tax, interest, or penalty incurred by a Participant or Beneficiary as a result of the Plan’s failure to satisfy the requirements of Section 409A of the Code, or as a result of the Plan’s failure to satisfy any other requirements of applicable tax laws.

		
	7.05
	 Incompetence

If the Committee determines, upon evidence satisfactory to the Committee, that any Participant or Beneficiary to whom a distribution is due under the Plan is unable to care for his or her affairs because of illness or accident or otherwise, any distribution is due under the Plan (unless prior claim therefore shall have been made by a duly authorized guardian or other legal representative) may be distributed, upon appropriate indemnification of the Committee and the Company, to the spouse of the Participant or Beneficiary or other person deemed by the Committee to have incurred expenses for the benefit of and on behalf of such Participant or Beneficiary. Any such distribution of shares or cash payment (as the case may be) shall be a complete discharge of any liability under the Plan with respect to the amount so 

distributed or paid.

		
	7.06
	Inability to Locate Participants and Beneficiaries

Each Participant and Beneficiary entitled to receive a distribution under the Plan shall keep the Committee advised of his or her current address. If the Committee is unable to locate a Participant or Beneficiary to whom a distribution is due under the Plan, the total amount payable to such Participant or Beneficiary shall be forfeited as of the last day of the calendar year in which the distribution first becomes due. 

		
	7.07
	Successors

The provisions of the Plan shall bind and inure to the benefit of the Corporation and its successors and assigns. The term “successors” as used in the preceding sentence shall include any corporation or other business entity that by merger, consolidation, purchase, or otherwise acquires all or substantially all of the business and assets of the Corporation, and any successors and assigns of any such corporation or other business entity.

		
	7.08
	Usage

(a)    Titles and Headings.  The titles to Articles and the headings of Sections, subsections, and paragraphs in the Plan are placed herein for convenience of reference only and shall be of no force or effect in the interpretation of the Plan.

(b)    Number.  The singular form shall include the plural, where appropriate.

		
	7.09
	Severability

If any provision of the Plan is held unlawful or otherwise invalid or unenforceable in whole or in part, such unlawfulness, invalidity, or unenforceability shall not affect any other provision of the Plan or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under the Plan is held unlawful or otherwise invalid or unenforceable, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under the Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity, or unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid, or unenforceable, and the maximum payment or benefit that would not be unlawful, invalid, or 

unenforceable shall be made or provided under the Plan.

7.10     Governing Law
The Plan and all determinations made and actions taken under the Plan shall be governed by and construed in accordance with the laws of the State of Connecticut.

UNITED TECHNOLOGIES CORPORATION

By _________________________________________

Attest: ________________________________

Date:   ________________________________

APPENDIX A

This Appendix A sets forth the United Technologies Corporation Board of Directors Deferred Stock Unit Plan as in effect on October 3, 2004 (“Prior Plan”), and as modified thereafter from time to time in a manner that does not constitute a "material modification" for purposes of Section 409A.  Amounts that were earned or vested (within the meaning of Section 409A) prior to January 1, 2005, and any subsequent increases in these amounts that are permitted to be treated as grandfathered benefits under Section 409A, are generally subject to and shall continue to be governed by the terms of this Prior Plan.

Effective October 13, 2010, Stock Units credited to Participants under this Prior Plan shall be convertible into shares of UTC Common Stock that will be issued under the LTIP.  Notwithstanding any provision of this Prior Plan to the contrary, all distributions with respect to Stock Units under this Prior Plan shall be distributed in shares of Common Stock.  The settlement of Stock Units in shares of Common Stock in lieu of cash shall in no event: (i) increase the value of any Participant’s Account; (ii) modify any Participant’s distribution election; or (iii) alter the procedures in effect under this Prior Plan with respect to elections and distributions other than the substitution of shares for cash.  

UNITED TECHNOLOGIES CORPORATION

BOARD OF DIRECTORS

DEFERRED STOCK UNIT PLAN

UNITED TECHNOLOGIES CORPORATION 
BOARD OF DIRECTORS
DEFERRED STOCK UNIT PLAN
Table of Contents
       
ARTICLE I    INTRODUCTION
1.01     Purpose of Plan           
1.02     Effective Date of Plan           

ARTICLE II    DEFINITIONS    

ARTICLE III    CREDITS
3.01    Transition Credits    
3.02    Automatic Credits    
3.03    Elective Credits    

ARTICLE IV    ACCOUNTS AND INVESTMENTS
4.01    Accounts        
4.02    Stock Units    
4.03    Hypothetical Nature of Accounts and Investments    

ARTICLE V    PAYMENTS
5.01    Entitlement to Payment    
5.02    Payment Commencement Date    
5.03    Form and Amount of Payment    

ARTICLE VI    ADMINISTRATION
6.01    In General    
6.02    Plan Amendment and Termination    
6.03    Reports to Participants    
6.04    Delegation of Authority    

ARTICLE VII     MISCELLANEOUS
7.01    Rights Not Assignable    
7.02    Certain Rights Reserved    
7.03    Withholding Taxes        
7.04    Incompetence    
7.05    Inability to Locate Participants and Beneficiaries    
7.06    Successors    
7.07    Usage    
7.08    Severability    
7.09    Governing Law    

ARTICLE I
INTRODUCTION

1.01    Purpose of Plan
The purpose of the Plan is to enhance the Company’s ability to attract and retain non-employee members of the Board whose training, experience and ability will promote the interests of the Company and to directly align the interests of such non-employee Directors with the interests of the Company’s shareowners by providing compensation based on the value of UTC Common Stock. The Plan is designed to permit such non-employee directors to defer the receipt of all or a portion of the cash compensation otherwise payable to them for services to the Company as members of the Board.

1 .02     Effective Date of Plan
Except as otherwise provided by Section 3.01, the Plan shall apply only to a Participant’s annual Director’s retainer Fees with respect to service on and after January 1, 1996.  

ARTICLE II
DEFINITIONS

Unless the context clearly indicates otherwise, the following terms, when used in capitalized form in the Plan, shall have the meanings set forth below:

Account shall mean a bookkeeping account established for a Participant under Section 4.01.

Article shall mean an article of the Plan.

Beneficiary shall mean a Participant’s beneficiary, designated in writing and in a form and manner satisfactory to the Committee, or if a Participant fails to designate a beneficiary, or if the Participant’s designated Beneficiary predeceases the Participant, the Participant’s estate.

Board shall mean the Board of Directors of the Company.
Closing Price shall mean, with respect to any date specified by the Plan, the closing price of UTC Common Stock on the composite tape of New York Stock Exchange issues (or if there was no reported sale of UTC Common Stock on such date, on the next preceding day on which there was such a reported sale).

Committee shall mean the Nominating Committee of the Board.

Company shall mean United Technologies Corporation.

Director’s Fees shall mean the annual retainer fee payable to a Participant for services to the Company as a member of the Board. Director’s Fees do not include special meeting fees.

Participant shall mean each member of the Board (other than a member of the Board who is also an employee of the Company or a subsidiary thereof) who is or becomes a member of the Board on or after January 1, 1996.

Payment Anniversary Date shall mean an anniversary of the Payment Commencement Date.
Payment Commencement Date shall mean the first business day of the first month following the month in which the Participant terminates service as a member of the Board.

Plan shall mean this United Technologies Corporation Board of Directors Deferred Stock Unit Plan, as set forth herein and as amended from time to time.

Plan Year shall mean the calendar year.

Section shall mean a section of the Plan.

Stock Unit shall mean a hypothetical share of UTC Common Stock as described in Section 4.02.

UTC Common Stock shall mean the common stock of the Company.
ARTICLE Ill
CREDITS

3.01        Transition Credits
As soon as practicable on or after January 1, 1996, the Company shall credit to the Account of each Participant a number of Stock Units determined in accordance with the schedules set forth in Appendix I and Appendix II to the Plan. The credits set forth in Appendix I shall be provided in lieu of any benefits to which the Participant otherwise would have been entitled under the United Technologies Corporation Directors Retirement Plan as of its termination on December 31, 1995. The credits set forth in Appendix II shall be provided in lieu of any benefits to which the Participant otherwise would be entitled 

under certain deferred compensation arrangements entered into prior to January 1, 1996. The number of units set forth in Appendix II shall equal the number of tax deferred stock units (if any) credited to the Participant under any such prior deferred compensation arrangement, determined as of December 31, 1995.

3.02     Automatic Credits
As of the beginning of each Plan Year, the Company shall credit Stock Units to each Participant’s Account equal in value to 60% of the Participant’s Director’s Fees for the Plan Year, as determined in accordance with Section 4.02(a)(1).

3.03     Elective Credits
A Participant may elect, with respect to each Plan Year, to defer the entire portion (but not a partial portion) of the 40% of the Participant’s Director’s Fees that are not automatically deferred in accordance with Section 3.02 and that otherwise would be paid to the Participant in cash. If the Participant makes such an election, the Company shall credit Stock Units to the Participant’s Account equal in value to 40% of the Participant’s Director’s Fees for the Plan Year, as determined in accordance with Section 4.02(a)(I), as of the beginning of the Plan Year with respect to which the election is made (or, if later, as of the first day in the Plan Year on which the individual becomes a Participant). An election under this Section 3.03 shall be made in a form and manner satisfactory to the Committee and shall be effective for a Plan Year only if made before the beginning of the Plan Year; provided that an individual who becomes a Participant after the first day of a Plan Year may make the election for that Plan Year within 30 days of becoming a Participant.

ARTICLE IV
ACCOUNTS AND INVESTMENTS

		
	4.01
	Accounts

A separate Account under the Plan shall be established for each Participant. Such Account shall be (a) credited with the amounts credited in accordance with Article Ill, (b) credited (or charged, as the case may be) with the investment results determined in accordance with Section 4.02, and (c) charged with the amounts paid by the Plan to or on behalf of the Participant in accordance with Article V. Within each Participant’s Account, separate subaccounts shall be maintained to the extent the Committee determines them to be necessary or useful in the administration of the Plan.

		
	4.02
	Stock Units

(a)    Deemed Investment in UTC Common Stock. Except as provided in subsection (b), below, a Participant’s Account shall be treated as if it were invested in Stock Units that are equivalent in value to the fair market value of shares of UTC Common Stock in accordance with the following rules:

(1)    Conversion into Stock Units. Any Director’s Fees credited to a Participant’s Account for a Plan Year under Section 3.02 or 3.03 shall be converted into Stock Units (including fractional Stock Units) by dividing the amount credited by the Closing Price on the first business day of the Plan Year; provided that in the case of an individual who becomes a Participant after the first day of a Plan Year, the Closing Price shall be determined as of the day on which the individual becomes a Participant.

(2)     Deemed Reinvestment Of Dividends. The number of Stock Units credited to a Participant’s Account shall be increased on each date on which a dividend is paid on UTC Common Stock. The number of additional Stock Units credited to a Participant’s Account as a result of such increase shall be determined by (i) multiplying the total number of Stock Units (excluding fractional Stock Units) credited to the Participant’s Account immediately before such increase by the amount of the dividend paid per share of UTC Common Stock on the dividend payment date, and (ii) dividing the product so determined by the Closing Price on the dividend payment date.

(3)     Conversion Out of Stock Units. The dollar value of the Stock Units credited to a Participant’s Account on any date shall be determined by multiplying the number of Stock Units (including fractional Stock Units) credited to the Participant’s Account by the Closing Price on that date.

(4)     Effect of Recapitalization. In the event of a transaction or event described in this paragraph (4), the number of Stock Units credited to a Participant’s Account shall be adjusted in such manner as the Committee, in its sole discretion, deems equitable. A transaction or event is described in this paragraph (4) if (i) it is a dividend (other than regular quarterly dividends) or other distribution (whether in the form of cash, shares, other securities, or other property), extraordinary cash dividend, recapitalization, stock split, reverse stock split reorganization, merger, consolidation, split-up, spin-off, repurchase, or exchange of shares or other securities, the issuance or exercisability of stock purchase rights, the issuance of warrants or other rights to purchase shares or other securities, or other similar corporate transaction or event and (ii) the Committee determines that such transaction or event affects the shares of UTC Common Stock, such that an adjustment pursuant to this paragraph (4) is appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

(b)        Change in Deemed Investment Election. A Participant who elects to receive distribution of his or her Accounts in annual installments will continue to have such Account credited with Stock Units during the installment period unless the Participant irrevocably elects to have his or her Account treated, as of the Payment Commencement Date, as if the Account were invested in cash. If a Participant makes such election, the Account will be credited with a rate of interest equal to the average interest rate on 10-Year Treasury Bonds as of the January through October Period in the calendar year prior to the Plan Year in which the interest is credited, plus I %. An election under this subsection (b) shall be made in a form and manner satisfactory to the Committee and shall be effective only if made before the Payment Commencement Date.

		
	4.03
	Hypothetical Nature of Accounts and Investments

Each Account established under this Article IV shall be maintained for bookkeeping purposes only. Neither the Plan nor any of the Accounts established under the Plan shall hold any actual funds or assets. The Stock Units established hereunder shall be used solely to determine the amounts to be paid hereunder, shall not be or represent an equity security of the Company, shall not be convertible into or otherwise entitle a Participant to acquire an equity security of the Company and shall not carry any voting or dividend rights.

ARTICLE V
PAYMENTS

		
	5.01
	Entitlement to Payment

Credits to a Participant’s Account under Section 3.02 or 3.03 shall be in lieu of payment to the Participant of the related Director’s Fees. Any payment under the Plan with respect to an Account shall be made solely in cash and as further provided in this Article V. The right of any person to receive one or more payments under the Plan shall be an unsecured claim against the general assets of the Company.

		
	5.02
	Payment Commencement Date

Payments to a Participant with respect to the Participant’s Account shall begin as of the Participant’s Payment Commencement Date; provided that if a Participant dies before the Participant’s Payment Commencement Date, payment of the entire value of the Participant’s Account shall be made in a lump sum to the Participant’s Beneficiary as soon as practicable after the Committee receives all documents and other information that it requests in connection with the payment.

		
	5.03
	Form and Amount of Payment

(a) Fifteen Annual Installments.  A Participant shall receive his or her benefits in 15 annual installments unless the Participant elects to receive his or her benefits under the Plan in the form of a lump-sum payment or in less than 15 annual installments in accordance with subsection (b), below. Annual installments shall be payable to the Participant in cash beginning as of the Payment Commencement Date and continuing as of each Payment Anniversary Date thereafter until all installments have been paid. The first annual installment shall equal one- fifteenth (1/15th) of the value of the Stock Units credited to the Participant’s Account, determined as of the Payment Commencement Date. Each successive annual installment shall equal the value of the Stock Units credited to the Participant’s Account, determined as of the Payment Anniversary Date, multiplied by a fraction, the numerator of which is one, and the denominator of which is the excess of 15 over the number of installment payments previously made (i.e., 1/14th, 1/13th, etc.). If the Participant dies after the Participant’s Payment Commencement Date but before all 15 installments have been paid, the remaining installments shall be paid to the Participant’s Beneficiary in accordance with the schedule in this subsection (a).

(b) Lump Sum, or Less Than 15 Annual Installments.  A Participant may elect to receive his or her benefits under the Plan in the form of a lump-sum payment or in two to fourteen installments in lieu of the fifteen installment payments determined under subsection (a), above. The lump sum shall be payable to the Participant in cash as of the Payment Commencement Date and shall equal the value of the Stock Units credited to the Participant’s Account, determined as of the Payment Commencement Date. Installments shall be paid in the manner set forth in subsection (a) above, except that for purposes of determining the amount of the first annual installment, the denominator of the fraction shall equal the number of scheduled annual installments. An election under this subsection (b) shall be made in a form and manner satisfactory to the Committee and shall be effective only if made at least two years before the Participant’s Payment Commencement Date.

ARTICLE VI
ADMINISTRATION

		
	6.01
	In General

The Committee shall have the discretionary authority to interpret the Plan and to decide any and all matters arising under the Plan, including without limitation the right to determine eligibility for participation, benefits, and other rights under the Plan; the right to determine whether any election or notice requirement or other administrative procedure under the Plan has been adequately observed; the right to determine the proper recipient of any distribution under the Plan; the right to remedy possible 

ambiguities, inconsistencies, or omissions by general rule or particular decision; and the right otherwise to interpret the Plan in accordance with its terms. Except as otherwise provided in Section 6.03, the Committee’s determination on any and all questions arising out of the interpretation or administration of the Plan shall be final, conclusive, and binding on all parties.

		
	6.02
	Plan Amendment and Termination

The Committee may amend, suspend, or terminate the Plan at any time; provided that no amendment, suspension, or termination of the Plan shall, without a Participant’s consent, reduce the Participant’s benefits accrued under the Plan before the date of such amendment, suspension, or termination. If the Plan is terminated in accordance with this Section 6.02, the terms of the Plan as in effect immediately before termination shall determine the right to payment in respect of any amounts that remain credited to a Participant’s or Beneficiary’s Account upon termination.

		
	6.03
	Reports to Participants

The Committee shall furnish an annual statement to each Participant (or Beneficiary) reporting the value of the Participant’s (or Beneficiary’s) Account as of the end of the most recent Plan Year.

6.04     Delegation of Authority
The Committee may delegate to officers of the Company any and all authority with which it is vested under the Plan, and the Committee may allocate its responsibilities under the Plan among its member.

ARTICLE VII
MISCELLANEOUS

		
	7.01
	Rights Not Assignable

No payment due under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge in any other way. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge such payment in any other way shall be void. No such payment or interest therein shall be liable for or subject to the debts, contracts, liabilities, or torts of any Participant or Beneficiary. If any Participant or Beneficiary becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge in any other way any payment under the Plan, the Committee may direct that such payment be suspended and that all future payments to which such Participant or Beneficiary otherwise would be entitled be held and applied for the benefit of such person, the person’s children or other dependents, or any of them, in such manner and in such proportions as the 

Committee may deem proper.

		
	7.02
	Certain Rights Reserved

Nothing in the Plan shall confer upon any person the right to continue to serve as a member of the Board or to participate in the Plan other than in accordance with its terms.

		
	7.03
	Withholding Taxes

The Committee may make any appropriate arrangements to deduct from all credits and payments under the Plan any taxes that the Committee reasonably determines to be required by law to be withheld from such credits and payments.

		
	7.04
	Incompetence

If the Committee determines, upon evidence satisfactory to the Committee, that any Participant or Beneficiary to whom a benefit is payable under the Plan is unable to care for his or her affairs because of illness or accident or otherwise, any payment due under the Plan (unless prior claim therefore shall have been made by a duly authorized guardian or other legal representative) may be paid, upon appropriate indemnification of the Committee and the Company, to the spouse of the Participant or Beneficiary or other person deemed by the Committee to have incurred expenses for the benefit of and on behalf of such Participant or Beneficiary. Any such payment shall be a complete discharge of any liability under the Plan with respect to the amount so paid.

		
	7.05
	Inability to Locate Participants and Beneficiaries

Each Participant and Beneficiary entitled to receive a payment under the Plan shall keep the Committee advised of his or her current address. If the Committee is unable for a period of 36 months to locate a Participant or Beneficiary to whom a payment is due under the Plan, commencing with the first day of the month as of which such payment first comes due, the total amount payable to such Participant or Beneficiary shall be forfeited. Should such a Participant or Beneficiary subsequently contact the Committee requesting payment, the Committee shall, upon receipt of all documents and other information that it might request in connection with the payment, restore and pay the forfeited payment in a lump sum, the value of which shall not be adjusted to reflect any interest or other type of investment earnings or gains for the period of forfeiture.

		
	7.06
	Successors

The provisions of the Plan shall bind and inure to the benefit of the Company and its successors 

and assigns. The term “successors” as used in the preceding sentence shall include any corporation or other business entity that by merger, consolidation, purchase, or otherwise acquires all or substantially all of the business and assets of the Company, and any successors and assigns of any such corporation or other business entity.

		
	7.07
	Usage

(a)    Titles and Headings. The titles to Articles and the headings of Sections, subsections, and paragraphs in the Plan are placed herein for convenience of reference only and shall be of no force or effect in the interpretation of the Plan

(b)    Number.  The singular form shall include the plural, where appropriate.

		
	7.08
	Severability

If any provision of the Plan is held unlawful or otherwise invalid or unenforceable in whole or in part, such unlawfulness, invalidity, or unenforceability shall not affect any other provision of the Plan or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under the Plan is held unlawful or otherwise invalid or unenforceable, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under the Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity, or unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid, or unenforceable, and the maximum payment or benefit that would not be unlawful, invalid, or unenforceable shall be made or provided under the Plan.

7.09     Governing Law
The Plan and all determinations made and actions taken under the Plan shall be governed by and construed in accordance with the laws of the State of Connecticut.

UNITED TECHNOLOGIES CORPORATION

By _________________________________________

Attest:
________________________________

Date:
________________________________

APPENDIX B

UNITED TECHNOLOGIES CORPORATION
2005 LONG TERM INCENTIVE PLAN
STATEMENT OF AWARD

Effective _____________,  ________________________________ has been awarded ____________ Deferred Stock Units (“DSUs”) under the United Technologies Corporation Board of Directors Deferred Stock Unit Plan (the “Deferred Stock Unit Plan”).  DSUs awarded hereunder constitute long term incentive awards under the United Technologies Corporation 2005 Long Term Incentive Plan, as amended (the “LTIP”).  DSUs are convertible into shares of UTC Common Stock that will be issued under the LTIP.  The conversion of DSUs into shares and the distribution of such shares shall be subject to and in accordance with the terms of the Deferred Stock Unit Plan.

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