Exhibit 10.35
UNITED TECHNOLOGIES
CORPORATION
INTERNATIONAL DEFERRED
COMPENSATION
REPLACEMENT PLAN
ARTICLE I –
PREAMBLE
United Technologies Corporation
hereby establishes the United Technologies International Deferred
Compensation Replacement Plan (“the Plan”), effective
January 1, 2005, for the purpose of complying with the
requirements of Section 409A of the Internal Revenue Code. The
Plan applies to any amounts credited or accrued, after
December 31, 2004, to an employee of a UTC Company who accrues
benefits or has amounts credited under a deferred compensation plan
or arrangement outside the United States, where such amounts are or
become subject to Section 409A. Such amounts shall
automatically be credited and deferred under and distributed from
this Plan in lieu of the Non-US Plan. This Plan shall be
administered and construed to effectuate the foregoing
intent.
From January 1, 2005 through
December 31, 2008, the Plan has been operated in good faith
compliance with Section 409A in accordance with guidance
provided by the Internal Revenue Service.
1. INTRODUCTION &
PURPOSE
The Plan shall be maintained as an
unfunded plan solely for the purpose of deferring compensation and
providing retirement benefits to certain employees who have
deferred income or are eligible for benefits under a Non-US Plan,
where such amounts would be deemed to be “deferred
compensation” within the meaning of and subject to
Section 409A. The amount of deferred income, retirement
benefit or survivor benefit shall be credited under this Plan, in
lieu of the Non-US Plan.
2. EFFECTIVE DATE
The Plan shall be effective
January 1, 2005.
P AGE 1
3. DEFINITIONS
Beneficiary
means the person, persons or entity
designated in writing by a Participant to receive the value of his
or her Plan Account in the event of the Participant’s death,
, in accordance with the terms of this Plan. If a Participant fails
to designate a Beneficiary under this Plan, the Beneficiary or
Contingent Annuitant shall be determined under the Non-US Plan. If
the Beneficiary (and any contingent Beneficiary) does not survive
the Participant or if no Beneficiary is designated under the Non-US
Plan, the value of the Participant’s Plan Account will be
payable to the estate of the Participant, in accordance with the
terms of this Plan.
Code means the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto. Reference to
any section of the Internal Revenue Code shall include any final
regulations or other published guidance interpreting that
section.
Corporation
means United Technologies
Corporation.
Committee means the United Technologies Corporation
Deferred Compensation Committee, which is responsible for the
administration of the Plan. The Corporation’s Pension
Administration Committee shall appoint the Committee’s
members.
Covered Participant
means an employee who participates
in a Non-US Plan who is subject to Section 409A of the
Code.
Disability
means permanent and total disability
as determined under the Corporation’s long-term disability
plan applicable to the Participant, or if there is no such plan
applicable to the Participant, “Disability” means a
determination of total disability by the Social Security
Administration; provided that, in either case, the
Participant’s condition also qualifies as a
“disability” for purposes of Section 409A(a)(2)(C)
of the Code.
Election Form
means the form provided to
Participants electronically or in paper form for the purpose of
electing the timing and form of payment for a Plan
Account.
P AGE 2
Non-US Plan
means a deferred compensation plan
or arrangement or defined benefit retirement benefit plan
maintained the Corporation or a UTC Company outside of the United
States. All amounts credited or deferred under the Non-US Plan
prior to December 31, 2004 and amounts credited or deferred
under the Non-US Plan which would not be deemed to be subject to
409A, and any subsequent increases in these amounts, shall continue
to be subject to the terms and conditions of the Non-US Plan and
shall not be affected by this Plan.
Plan Account
means an account maintained for
Covered Participants with respect to 409A Amounts credited or
accrued under the Plan.
Retirement
means Separation from Service on or
after age 50 and attainment of age 65; Separation from Service on
or after age 50 and attainment of at least age 55 and a minimum of
10 or more years of “continuous service” (as defined in
the UTC Employee Retirement Plan as in effect on January 1,
2008); or a Rule of 65 termination.
Retirement Date
means the date of a
Participant’s Retirement.
“Rule of 65”
Termination means
Separation from Service on or after age 50 and before age 55, with
a combination of age and years of “continuous service”
(as defined in the UTC Employee Retirement Plan as in effect on
January 1, 2008) equal to at least 65.
Separation from
Service means a
Participant’s Termination of Employment with all UTC
Companies, other than by reason of death or Disability that
qualifies as a “separation from service” for purposes
of Section 409A of the Code. A Separation from Service will be
deemed to occur where the Participant and the UTC Company that
employs the Participant reasonably anticipate that the bona fide
level of services the Participant will perform (whether as an
employee or as an independent contractor) will be permanently
reduced to a level that is less than thirty-seven and a half
percent (37.5%) of the average level of bona fide services the
Participant performed during the immediately preceding 36 months
(or the entire period the Participant has provided services if the
Participant has been providing services to the UTC Companies for
less than 36 months.) A Participant shall not be considered to have
had a Separation from Service as a result of a transfer from one
UTC Company to another UTC Company.
P AGE 3
Specified
Employee means each of the 50
highest-paid executives of the Corporation and its Subsidiaries,
effective annually as of March 31 st , based on annual salary and
incentive compensation paid in the prior year. The term includes
both U.S. and non-U.S. employees.
UTC Company
means United Technologies
Corporation or any entity controlled by or under common control
with United Technologies Corporation within the meaning of
Section 414(b) or (c) of the Code (but substituting
“at least 20 percent” for “at least 80
percent” as the control threshold used in applying Sections
414(b) and (c)).
409A Amount
means the amount credited, or the
actuarial present value of a benefit accrued under a Non-US Plan
that is or becomes subject to Section 409A of the
Code.
4. ELIGIBILITY
Each employee of a UTC Company who
is a Participant in a Non-US Plan shall be become a Covered
Participant under this Plan if and to the extent the
Participant’s Accrued Benefit under a Non-US Plan is subject
to 409A. Participation shall commence automatically without any
election or other action required of the employee to become a
Covered Participant. In no event shall any person who is not
entitled to benefits under a Non-US Plan be eligible for benefits
under this Plan. An employee of the UTC Companies who becomes a
Covered Participant under this Plan shall be referred to herein as
a “Participant.”
5. DETERMINATION OF PLAN
BENEFIT
The amount of the benefit payable
from this Plan to or in respect of a Participant shall equal the
409A Amount credited or accrued under any Non-US Plan in which the
employee participates.
6. PLAN ACCOUNTS
Plan Accounts shall include amounts
credited or accrued to Participants’ Accounts under the Plan
on or after January 1, 2005.
P AGE 4
7. FORM OF PLAN BENEFIT
(a) Plan benefits shall be paid to
the Participant, or on his or her behalf to any Contingent
Annuitant or Beneficiary (as designated under the Non-US Plan), as
a single life annuity or actuarially equivalent life annuity,
unless the Participant timely makes an election for an alternative
form of payment in accordance with Subparagraph (c) of this
Section 7.
(b) A Participant may elect separate
payment methods for benefits payable under the Non-US Plan and this
Plan.
(c) Unless a Participant elects an
alternative form of the benefit payment, benefits earned under the
Plan will be paid as a single life annuity or actuarially
equivalent life annuity. A Participant may elect to receive a
single lump-sum payment or a series of 2 to 10 annual installment
payments. A payment election under the Plan shall be made on an
electronic or written Election Form, completed and submitted to the
Committee no later than December 31st of the calendar year
prior to the year in which the period of service commences on which
the benefit is based. A change in actuarially equivalent annuities
shall not be deemed to be a change in payment election for purposes
of this Plan. Except as provided below in Subsection (d), a
Participant’s payment election shall become irrevocable on
the election deadline date.
(d) Change in Payment Election. A
Participant may make a one-time irrevocable election to change the
form of payment that the Participant elected under
Section 7(c), subject to the following
requirements:
(i.) The new election must be made
at least twelve months prior to the date payments are scheduled to
commence (and the new election shall be ineffective if the payment
commencement date occurs within twelve months after the date of the
new election);
(ii.) The new election will not take
effect until at least twelve months after the date when the
Participant submits a new Election Form to the Committee;
and
(iii.) The new benefit payment
commencement date must be at least five years later than the date
on which payments commence under the current election.
P AGE 5
(e) The payment of a monthly
annuity, lump-sum or annual installment distribution in accordance
with this Section 7 shall be in full satisfaction of all of
the Corporation and/or any UTC Company’s obligations with
respect to the Participant under the Plan.
8. DISTRIBUTION OF
ACCOUNTS
(a) Except as provided in
Section 7(d) (concerning the five-year delay following a
Change in Payment Election), Section 8(b) (concerning
Separation from Service before Attaining Age Fifty), and 8(c)
(concerning distributions to Specified Employees), the value of a
Participant’s Plan Accounts will be distributed (or begin to
be distributed) to the Participant in April of the calendar year
following the Retirement Date, if the benefit is a retirement
benefit. If the benefit is income deferred until a set year, the
value of a Participant’s Plan Account will be distributed (or
be
