Exhibit 10.34
FORM OF 2006 BAND A EMPLOYEE OPTION AGREEMENT
ITT INDUSTRIES, INC.
2003 EQUITY INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
THIS AGREEMENT (the "Agreement"), effective as of the _______ of ___________, by
and between ITT Industries, Inc. (the "Company") and [name] (the "Optionee"),
WITNESSETH:
WHEREAS, the Optionee is now employed by the Company or an Affiliate (as defined
in the Company's 2003 Equity Incentive Plan, as amended and restated as of July
13, 2004 (the "Plan")) as an employee, and in recognition of the Optionee'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 Optionee to acquire or enlarge stock ownership in the Company, 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 Options. In accordance with, and subject to, the terms and
conditions of the Plan and this Agreement, the Company hereby confirms the
grant on _____________ (the "Grant Date") 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 "Option Price" or "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 (seven years from the
grant date), or, if the Optionee's employment 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
in full upon the first to occur of the following events:
(i) (three years from the grant date); or
(ii) an Acceleration Event (as defined in the Plan).
(d) Payment of Exercise Price and Tax Withholding. Permissible methods for
payment of the Exercise Price and for satisfaction of tax withholding
obligations
upon exercise of the Option shall be as described in Section 6.6 and
Article 14 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 Employment.
If the Optionee's employment terminates before (seven years from the
grant date), the Option shall expire on the date set forth below, as
applicable:
(i) Termination due to Death. If the Optionee's employment is
terminated as a result of the Optionee's death, the Option shall
immediately expire on the earlier of (seven years from the grant
date) or the date three years after the termination of the
Optionee's employment due to death. If the Option is not vested
at the time of the Optionee's termination of employment, the
Option shall immediately become 100% vested.
(ii) Termination due to Disability. If the Optionee's employment is
terminated as a result of the Optionee's Disability (as defined
below), the Option shall expire on the earlier of (seven years
from the grant date) or the date five years after the termination
of the Optionee's employment due to Disability. If the Option is
not vested at the time of the Optionee's termination of
employment, the Option shall immediately become 100% vested.
(iii) Termination due to Retirement. If the Optionee's employment is
terminated as a result of the Optionee's Retirement (as defined
below), the Option shall expire on the earlier of (seven years
from the grant date) or the date five years after the termination
of the Optionee's employment due to Retirement. If the Option is
not vested at the time of the Optionee's termination of
employment, a prorated portion of the Option shall immediately
vest as of the date of the termination of employment (see
"Prorated Vesting Upon Retirement" below). Any remaining unvested
portion of the Option shall expire as of the date of the
termination of the Optionee's employment. For purposes of this
subsection 2(e)(iii), the Optionee shall be considered employed
during any period in which the Optionee is receiving severance in
the form of salary continuation, and the date of the termination
of the Optionee's employment shall be the last day of any such
severance period.
(iv) Voluntary Termination; Cause. If the Optionee's employment is
terminated by the Optionee for any reason other than Retirement,
Disability, or death, or by the Company (or an Affiliate, as the
case may be) 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 employment.
(v) Other Termination by the Company. If the Option is vested and the
Optionee's employment is terminated by the Company (or an
Affiliate, as the case may be) for other than cause (as
determined by the Committee),
and not because of the Optionee's Retirement, Disability, or
death, the Option shall expire on the earlier of (seven years
from the grant date) or the date three months after the
termination of the Optionee's employment. If the Option is not
vested on the date the Optionee's employment terminates, the
Option shall expire immediately in full on the date of
termination of employment, and the Option shall not thereafter be
exercisable. For purposes of this subsection 2(e)(v), the
Optionee shall be considered employed during any period in which
the Optionee is receiving severance in the form of salary
continuation, and the date of the termination of the Optionee's
employment shall be the last day of any such severance period.
Notwithstanding the foregoing, if an Optionee's employment is
terminated on or after an Acceleration Event (A) by the Company (or an
Affiliate, as the case may be) for other than cause (as determined by
the Committee), and not because of the Optionee's Retirement,
Disability, or death, or (B) by the Optionee because the Optionee in
good faith believed that as a result of such Acceleration Event he or
she was unable effectively to discharge his or her present duties or
the duties of the position the Optionee occupied just prior to the
occurrence of such Acceleration Event, the Option shall in no event
expire before the earlier of the date that is 7 months after the
Acceleration Event or (seven years from the grant date).
Retirement. For purposes of this Agreement, the term "Retirement"
shall mean the termination of the Optionee's employment if, at the
time of such termination, the Optionee is eligible to commence receipt
of retirement benefits under a traditional formula defined benefit
pension plan maintained by the Company or an Affiliate (or would be
eligible to receive such benefits if he or she were a participant in
such a traditional formula defined benefit pension plan).
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 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. The prorated portion of an Option
that vests upon termination of the Optionee's employment due to the
Optionee's Retirement shall be determined by multiplying the total
number of unvested shares subject to the Option at the time of the
termination of the Optionee's employment by a fraction, the numerator
of which is the number of full months the Optionee has been
continually employed since the Grant Date and the denominator of which
is 36. For this purpose, full months of employment shall be based on
monthly anniversaries of the Grant Date, not calendar months.
(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. The Optionee hereby acknowledges
receipt of a copy of the Plan and this Agreement and agrees to be
bound by the
terms and provisions thereof. The 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.
(h) Governing Law. 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,
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.
By signing a copy of this Agreement, the Optionee acknowledges that s/he has
received a copy of the Plan, and that s/he has read and understands the Plan and
this Agreement and agrees to the terms and conditions thereof. The Optionee
further acknowledges that the Option awarded pursuant to this Agreement must be
exercised prior to its expiration as set forth herein, that it is the Optionee's
responsibility to exercise the Option within such time period, and that the
Company has no further responsibility to notify the Optionee of the expiration
of the exercise period of the Option.
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
