ITT CORPORATION 1997 LONG-TERM INCENTIVE PLAN AWARD AGREEMENT
EXHIBIT 10.04
THIS AGREEMENT (the “Agreement”), effective as of the
3rd day of March, 2011, by and between ITT Corporation (the
“Company”) and name (the
“Participant”), WITNESSETH:
WHEREAS, the Participant is now employed by the Company or a
Participating Company (as defined in the Company’s 1997
Long-Term Incentive Plan, as amended and restated as of
March 1, 2008 (the “Plan”)) as an employee, and
in recognition of the Participant’s valued services, the
Company, through the Compensation and Personnel Committee of its
Board of Directors (the “Committee”), desires to
provide an opportunity for the Participant to receive a
performance-based long-term incentive award, pursuant to the
provisions of the Plan.
NOW, THEREFORE, in consideration of the terms and conditions set
forth in this Agreement and the provisions of the Plan, a copy
of which is attached hereto and incorporated herein as part of
this Agreement, and any administrative rules and regulations
related to the Plan as may be adopted by the Committee, the
parties hereto hereby agree as follows:
1. Grant of Target Award and Performance
Period. In accordance with, and
subject to, the terms and conditions of the Plan and this
Agreement, the Company hereby grants to the Participant a target
Award of $xxx,xxx (the “Target Award”) for the
Performance Period commencing January 1, 2011 and ending
December 31, 2013. Payment of the Award is dependent upon
the achievement during the Performance Period of certain
performance goals more fully described in Section 2 of this
Agreement.
2. Terms and Conditions. It
is understood and agreed that this Award is subject to the
following terms and conditions:
(a) Determination of TSR Award Payout.
(i) The amount of the TSR Award Payout, if any, for the
Performance Period shall be determined in accordance with the
following formula:
TSR Award Payout = Payout Factor X Target Award
The “Payout Factor” is based on the Company’s
total shareholder return (defined and measured in accordance
with paragraph (ii) below, the “TSR”) for the
Performance Period relative to the TSR for each company in the
S&P Industrials, determined in accordance with the
following table:
|
If Company’s TSR rank against the |
Payout Factor |
|||
| S&P Industrials is | (% of Target Award) | |||
|
less than the 35th percentile
|
0 | % | ||
|
at the 35th percentile
|
50 | % | ||
|
at the 50th percentile
|
100 | % | ||
|
at the 80th percentile or more
|
200 | % | ||
|
Actual results between the 35th percentile and the 80th
percentile numbers shown above are interpolated.
|
||||
(ii) TSR is the sum of the yields of the dividend and any
other extraordinary shareholder payouts over the Performance
Period, plus the cumulative percentage change in stock price
from the beginning to the end of the Performance Period. For
purposes of this Agreement, the Company’s performance will
be measured comparing (a) the average TSR over the trading
days in the month immediately preceding the start of the
Performance Period (December 2010) with (b) the
Company’s average TSR over the trading days in the last
month of the Performance Period (December 2013). The
Company’s TSR then is compared to the TSR of the other
stocks comprising the S&P Industrials over the same period.
(b) Form and Timing of Payment of
Award. Except as provided in subsection 2(f),
payment with respect to an earned TSR Award shall be made as
soon as practicable (but not later than March 15th) in the
calendar year following the close of the Performance Period.
Payment shall be made in cash.
(c) Effect of Termination of
Employment. Except as otherwise provided below,
if the Participant’s employment with the Company or a
Participating Company is terminated for any reason prior to the
end of the Performance Period, any Award subject to this
Agreement shall be immediately forfeited.
(i) Termination due to Death or
Disability. If the Participant’s termination
of employment is due to death or Disability (as defined below),
the Award shall vest and will be payable at the time and in the
form as provided in subsection 2(b) above based on the
Company’s TSR for the entire Performance Period relative to
the TSR for each company in the S&P Industrials for the
entire Performance Period.
(ii) Termination due to Retirement or Termination by the
Company for Other than Cause. If the
Participant’s termination of employment is due to
Retirement (as defined below) or if the Participant’s
employment is terminated by the Company (or a Participant
Company, as the case may be) for other than cause (as determined
by the Committee), a prorated portion of the Award shall vest
(see “Prorated Vesting Upon Retirement or Termination by
the Company for Other than Cause” below) and will be
payable at the time and in the form as provided in subsection
2(b) above. For purposes of this subsection 2(c)(ii), the
Participant shall be considered employed during any period in
which the Participant is receiving severance pay, and the date
of the termination of the Participant’s employment shall be
the last day of any such severance pay period.
Retirement. For purposes of this Agreement,
the term “Retirement” shall mean the termination of
the Participant’s employment if, at the time of such
termination, the Participant is eligible to commence receipt of
retirement benefits under a traditional formula defined benefit
pension plan maintained by the Company or a Participating
Company (or would be eligible to receive such benefits if he or
she were a participant in such traditional formula defined
benefit pension plan).
Disability. For purposes of this Agreement,
the term “Disability” shall mean the complete and
permanent inability of the Participant to perform all of his or
her duties under the terms of his or her employment, as
determined by the Committee upon the basis of such evidence,
including independent medical reports and data, as the Committee
deems appropriate or necessary.
Prorated Vesting upon Retirement or Termination by the
Company for Other than Cause. The prorated
portion of the Award that vests due to termination of the
Participant’s employment due to Retirement or by the
Company for other than cause shall be determined by multiplying
(i) the TSR Award Payout that would have been paid based on
the Company’s TSR for the entire Performance Period
relative to the TSR for each company in the S&P Industrials
for the entire Performance Period, by (ii) a fraction, the
numerator of which is the number of full months the Participant
has been continually employed since the beginning of the
Performance Period and the denominator of which is 36. For this
purpose, full months of employment shall be based on monthly
anniversaries of the commencement of the Performance Period.
(f) Acceleration Event. Notwithstanding
anything in the Plan to the contrary, upon the occurrence of an
Acceleration Event during the Performance Period, (i) a
prorated portion of the Award shall vest based on actual
performance though the date of the Acceleration Event (such
prorated portion to be determined as provided below in this
subsection 2(f)) and shall be paid within 30 days following
the Acceleration Event and (ii) the remaining portion of
the Award (such remaining portion to be determined as provided
below in this subsection 2(f)) shall vest and shall be paid
within 30 days following the Acceleration Event. The
prorated portion of the Award that vests pursuant to subpart
(i) in the prior sentence due to the Acceleration Event
shall be determined by multiplying (A) the TSR Award Payout
determined based on the Company’s TSR relative to the TSR
for each company in the S&P Industrials determined pursuant
to subsection 2(a) based on TSR performance for the period
beginning January 1, 2011 and ending on the date preceding
the date on which the Acceleration Event occurs (the
“Prorated Period”), by (B) a fraction, the
numerator of which is the number of calendar days in the
Prorated Period and the denominator of which is 1,095. The
remaining portion of the Award that vests pursuant to subpart
(ii) in the first sentence of this subsection 2(f) due to
the Acceleration Event shall be determined by multiplying
(A) the Target Award by (B) a fraction, the numerator
of which is the number of calendar days remaining in the
Performance Period as of the date of the Acceleration Event
(including day of the Acceleration Event) and the denominator of
which is 1,095.
(g) Tax Withholding. Payments with
respect to Awards under the Plan shall be subject to applicable
tax withholding obligations as described in Section 10.5 of
the Plan, or, if the Plan is amended, successor provisions.
(h) Participant Bound by Plan and
Rules. The Participant hereby acknowledges
receipt of a copy of the Plan and this Agreement and agrees to
be bound by the terms and provisions thereof. The Participant
agrees to be bound by any rules and
regulations for administering the Plan as may be adopted by the
Committee prior to the settlement of the Award subject to this
Agreement. Terms used herein and not otherwise defined shall be
as defined in the Plan.
(i) Governing Law. This Agreement is
issued in White Plains, New York, and shall be governed and
construed in accordance with the laws of the State of New York,
excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its Chairman, President and Chief Executive Officer,
or a Vice President, as of the 3rd day of March, 2011.
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Agreed to:
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ITT Corporation | |
| /s/ XXXXXX X. XXXXXXXX | ||
| Participant | ||
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Dated:
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Dated: Xxxxx 0, 0000 |
Xxxxxxxxxx
