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United Technologies 2006

     RESOLVED, that the stockholders of United Technologies Corporation (“United Technologies”) amend the bylaws to replace Section 2.2, which currently provides for a plurality vote standard for director elections, with the following sentence:

     “The directors shall be elected annually by written ballot and by the vote of the majority of the shares voted at a meeting at which a quorum is present; provided, however, that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares voted at any such meeting.”

SUPPORTING STATEMENT

     Currently, United Technologies uses a plurality voting standard for director elections, which means that the nominee who receives the most votes will be elected.  Nearly all corporate director elections are uncontested; in other words, there is only one candidate for each open seat.  In uncontested situations, a plurality voting standard ensures that a nominee will be elected even if holders of a majority of shares voting exercise their right to withhold support from the nominee on the proxy card.  Indeed, under plurality voting, a nominee could be elected by a single share.

     Section 216 of the General Corporation Law of Delaware, where United Technologies is incorporated, allows a corporation to deviate from the plurality vote default standard by establishing a different standard in its charter or bylaws.  This proposal would do that by amending United Technologies’s bylaws to require directors in uncontested elections to be elected by a majority of shares voting at a meeting. 

     We believe that a majority vote standard for director election would foster a more robust system of board accountability.  Under Delaware case law, the power of stockholders over director elections is supposed to be a safety valve that justifies giving the board substantial discretion to manage the corporation’s business and affairs.  Requiring a nominee to garner majority support among stockholders—thus giving stockholders’ withhold votes real meaning--would help restore this safety valve. 

     We believe United Technologies stockholders would benefit from increased accountability. The Corporate Library recently gave United Technologies’s board a D for overall effectiveness and an F for CEO compensation practices.  
 
     A growing number of stockholders support a majority vote standard for director elections. The Council of Institutional Investors recently adopted a new policy in favor of it.  At approximately 60 annual meetings in spring 2005, support for proposals urging a majority vote standard averaged 44 percent, with 16 proposals receiving majority support (source: Institutional Shareholder Services).

     We urge stockholders to vote for this proposal.

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