EXHIBIT 10.37
FORM OF 2006 NON EMPLOYEE DIRECTOR OPTION AGREEMENT
ITT INDUSTRIES, INC.
2003 EQUITY INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
THIS AGREEMENT, effective as of the _____ day of _______, by and between ITT
Industries, Inc. (the "Company") and ________________ (the "Optionee"),
WITNESSETH:
WHEREAS, the Optionee is now a member of the Board of Directors (the "Board") of
the Company and, in recognition of the Optionee's valued services, the Company
desires to provide an opportunity for the Optionee to acquire or enlarge stock
ownership in the Company pursuant to the provisions of the Company's 2003 Equity
Incentive Plan (the "Plan");
NOW, THEREFORE, in consideration of the terms and conditions set forth in this
Agreement and pursuant to 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 Compensation and Personnel Committee of the Board (the "Committee"), the
parties hereto hereby agree as follows:
1. GRANT OF OPTIONS. In accordance with, and subject to, the terms and
conditions of the Plan and this Agreement, the Company hereby confirms the
grant on __________ to the Optionee of the option to purchase from the
Company all or any part of an aggregate of _____ shares of common stock of
the Company (the "Option"), at the purchase price of $_____ per share (the
"Exercise Price"). The Option shall be a Nonqualified Stock Option.
2. TERMS AND CONDITIONS. It is understood and agreed that the Option is
subject to the following terms and conditions:
(a) EXPIRATION DATE. The Option shall expire on ______, or, if the
Optionee's service on the Board terminates before that date, on the
date specified in subsection (e) below.
(b) EXERCISE OF OPTION. The Option may not be exercised until it has
become vested.
(c) VESTING. Subject to subsections 2(a) and 2(e), the Option shall vest
as follows:
(i) 1/3 of the Option shall vest on _______, the first
anniversary of the grant date
(ii) 1/3 of the Option shall vest on _______, the second of the
grant date anniversary ,and
(iii) 1/3 of the Option shall vest on _________; the third
anniversary of the grant date
Subject to subsections 2(a) and 2(e), to the extent not earlier
vested pursuant to paragraphs (i), (ii), and (iii) of this
subsection (c), the Option shall vest in full upon the first to
occur of the following events:
(A) termination of the Optionee's service on the Board due to
Retirement (as defined below), Disability (as defined below)
or death; or
(B) an Acceleration Event (as defined in the Plan).
(d) PAYMENT OF EXERCISE PRICE. Permissible methods for payment of the
Exercise Price shall be as described in Section 6.6 of the Plan, or,
if the Plan is amended, successor provisions. In addition to the
methods of exercise permitted by Section 6.6 of the Plan, the
Optionee may exercise the Option by way of a broker-assisted
cashless exercise in a manner consistent with the Federal Reserve
Board's Regulation T, unless the Committee determines that such
exercise method is prohibited by law.
(e) EFFECT OF TERMINATION OF BOARD SERVICE.
If the Optionee's service on the Board terminates before (seven
years from the grant date), the Option shall expire on the date set
forth below, as applicable:
(i) Retirement, Disability or Death. If the Optionee's service is
terminated as a result of the Optionee's Retirement,
Disability or death, except as otherwise determined by the
Committee, the Option shall expire on the earlier of
(seven years from the grant date) or the date three years
after the termination of the Optionee's service.
(ii) Cause. If the Optionee's service on the Board is terminated
for cause (as determined by the Committee), the vested and
unvested portions of the Option shall expire on the date of
the termination of the Optionee's service.
RETIREMENT. For purposes of this Agreement, the term "Retirement"
shall mean the termination of the Optionee's service on the Board
for any reason other than death, Disability or cause (as determined
by the Committee).
DISABILITY. For purposes of this Agreement, the term "Disability"
shall mean the complete and permanent inability of the Optionee to
perform all of his or her duties as a director, as determined by the
Committee upon the basis of such evidence, including independent
medical reports and data, as the Committee deems appropriate or
necessary.
ACCELERATION EVENT. Notwithstanding the foregoing, upon the
occurrence of an Acceleration Event (as defined in the Plan), the
Option shall be exercisable in full for a period of 60 calendar days
beginning on the date that such Acceleration Event occurs and ending
on the 60th calendar day following that date; provided, however,
that in no event shall the Option be exercisable beyond (seven
years)
(f) COMPLIANCE WITH LAWS AND REGULATIONS. The Option shall not be
exercised at any time when its exercise or the delivery of shares
hereunder would be in
violation of any law, rule, or regulation that the Company may find
to be valid and applicable.
(g) OPTIONEE BOUND BY PLAN AND RULES. Optionee hereby acknowledges
receipt of a copy of the Plan and agrees to be bound by the terms
and provisions thereof. Optionee agrees to be bound by any rules and
regulations for administering the Plan as may be adopted by the
Committee during the life of the Option. Terms used herein and not
otherwise defined shall be as defined in the Plan.
This Agreement is issued, and the Option evidenced hereby is granted, in White
Plains, New York, and shall be governed and construed in accordance with the
laws of the State of New York.
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
___ day of __________.
Agreed to: ITT INDUSTRIES, INC.
/s/ Xxxxxx X. Xxxxxxxx
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_____________________________
Optionee
Dated: _________________ Dated: ________________
Enclosures
