Exhibit 10.10

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS AGREEMENT (the “Agreement”), dated <GRANT DATE> (the “Grant Date”), is made
by and between Walter Industries, Inc., a Delaware corporation (the “Company”)
and <NAME>, <POSITION>, of the Company (or one of its Subsidiaries, as defined
herein), hereinafter referred to as the “Optionee”:

 

WHEREAS, pursuant to the 2002 Long-Term Incentive Award Plan of Walter
Industries, Inc. (the “Plan”) the Company has granted to the Optionee, effective
as of the Grant Date, an option to purchase a number of shares of its common
stock, par value $0.01 per share (the “Common Stock”) on the terms and subject
to the conditions set forth in this Agreement and the Plan;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:

 

ARTICLE I.

DEFINITIONS

 

Whenever the following terms are used in this Agreement, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
Capitalized terms used in this Agreement and not defined below shall have the
meaning given such terms in the Plan. The masculine pronoun shall include the
feminine, and the singular the plural, where the context so indicates.

 

Section 1.1             “Administrator” shall mean the Committee unless the
Board has assumed the authority for administration of the Plan generally as
provided in Section 10.2 of the Plan.

 

Section 1.2             “Board” shall mean the Board of Directors of the Company

 

Section 1.3             “Cause” shall mean  (a) any form of dishonesty or
criminal conduct connected with the employment of Optionee, (b) the refusal of
Optionee to comply with the Company’s lawful written instructions, policies or
rules as approved or mandated by the Board, (c) gross or willful misconduct by
Optionee during employment with the Company, or (d) Optionee’s conviction of, or
plea of guilty or nolo contendere to, a felony. All disputes concerning whether
a particular termination is for “Cause” shall be determined in good faith by the
Administrator.

 

Section 1.4             “Change in Control.” shall mean a change in ownership or
control of the Company effected through any of the following transactions:

 

(A)           (I)            ANY PERSON OR RELATED GROUP OF PERSONS (OTHER THAN
THE COMPANY OR A PERSON THAT, PRIOR TO SUCH TRANSACTION, DIRECTLY OR INDIRECTLY
CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH, THE COMPANY OR ANY
PERSON WHICH AS OF THE DATE OF ADOPTION OF THIS PLAN BY THE BOARD, HAS
“BENEFICIAL OWNERSHIP” (WITHIN THE MEANING OF RULE 13D-3

 

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UNDER THE EXCHANGE ACT) OF SECURITIES POSSESSING MORE THAN 30% OF THE TOTAL
COMBINED VOTING POWER OF THE COMPANY’S OUTSTANDING SECURITIES) DIRECTLY OR
INDIRECTLY ACQUIRES BENEFICIAL OWNERSHIP OF SECURITIES POSSESSING MORE THAN 40%
OF THE TOTAL COMBINED VOTING POWER OF THE COMPANY’S OUTSTANDING SECURITIES, OR

 

(II)           ANY PERSON OR RELATED GROUP OF PERSONS (OTHER THAN THE COMPANY OR
A PERSON THAT, PRIOR TO SUCH TRANSACTION, DIRECTLY OR INDIRECTLY CONTROLS, IS
CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH, THE COMPANY) WHO IS NOT, AS OF
THE DATE OF ADOPTION OF THIS PLAN BY THE BOARD, A BENEFICIAL OWNER OF 1% OR MORE
OF THE TOTAL COMBINED VOTING POWER OF THE COMPANY’S OUTSTANDING SECURITIES,
DIRECTLY OR INDIRECTLY ACQUIRES BENEFICIAL OWNERSHIP OF SECURITIES POSSESSING
MORE THAN 25% OF THE TOTAL COMBINED VOTING POWER OF THE COMPANY’S OUTSTANDING
SECURITIES AND IS, UPON THE CONSUMMATION OF SUCH ACQUISITION, THE BENEFICIAL
OWNER OF THE LARGEST PERCENTAGE OF THE TOTAL COMBINED VOTING POWER OF THE
COMPANY’S OUTSTANDING SECURITIES; OR

 

(B)           THERE IS A CHANGE IN THE COMPOSITION OF THE BOARD OVER A PERIOD OF
36 CONSECUTIVE MONTHS (OR LESS) SUCH THAT A MAJORITY OF THE BOARD MEMBERS
(ROUNDED UP TO THE NEAREST WHOLE NUMBER) CEASES TO BE COMPRISED OF INDIVIDUALS
WHO EITHER (I) HAVE BEEN BOARD MEMBERS CONTINUOUSLY SINCE THE BEGINNING OF SUCH
PERIOD, OR (II) HAVE BEEN ELECTED OR NOMINATED FOR ELECTION AS BOARD MEMBERS
DURING SUCH PERIOD BY AT LEAST A MAJORITY OF THE BOARD MEMBERS DESCRIBED IN
CLAUSE (I) WHO WERE STILL IN OFFICE AT THE TIME SUCH ELECTION OR NOMINATION WAS
APPROVED BY THE BOARD; OR

 

(C)           THE CONSUMMATION OF A MERGER OR CONSOLIDATION OF THE COMPANY WITH
ANY OTHER CORPORATION (OR OTHER ENTITY) WHERE SUCH MERGER OR CONSOLIDATION HAS
BEEN APPROVED BY THE STOCKHOLDERS OF THE COMPANY, OTHER THAN A MERGER OR
CONSOLIDATION WHICH WOULD RESULT IN THE VOTING SECURITIES OF THE COMPANY
OUTSTANDING IMMEDIATELY PRIOR THERETO CONTINUING TO REPRESENT (EITHER BY
REMAINING OUTSTANDING OR BY BEING CONVERTED INTO VOTING SECURITIES OF THE
SURVIVING ENTITY) MORE THAN 66-2/3% OF THE COMBINED VOTING POWER OF THE VOTING
SECURITIES OF THE COMPANY OR SUCH SURVIVING ENTITY OUTSTANDING IMMEDIATELY AFTER
SUCH MERGER OR CONSOLIDATION; PROVIDED, HOWEVER, THAT A MERGER OR CONSOLIDATION
EFFECTED TO IMPLEMENT A RECAPITALIZATION OF THE COMPANY (OR SIMILAR TRANSACTION)
IN WHICH NO PERSON ACQUIRES MORE THAN 25% OF THE COMBINED VOTING POWER OF THE
COMPANY’S THEN OUTSTANDING SECURITIES SHALL NOT CONSTITUTE A CHANGE IN CONTROL;
OR

 

(d)           Notwithstanding the foregoing, a transaction or series of
transactions in which Walter Industries separates one or more of its existing
businesses, whether by sale, spin-off or otherwise, and whether or not any such
transaction or series of transactions requires a vote of the stockholders, shall
not be considered a “Change in Control.”

 

(e)           The stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale, lease or other
disposition by the Company of all or substantially all of the Company’s assets.

 

Section 1.5             “Code” shall mean the Internal Revenue Code of 1986, as
amended.

 

Section 1.6             “Committee” shall mean the Compensation Committee of the
Board, or another committee or subcommittee of the Board, appointed as provided
in Section 10.2 of the Plan.

 

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Section 1.7             “Common Stock” shall mean the common stock of the
Company, par value $0.01 per share.

 

Section 1.8             “Company” shall mean Walter Industries, Inc., a Delaware
corporation.

 

Section 1.9             “Disability” shall mean any medical condition whatsoever
which leads to the absence of the Optionee from his or her job function for a
continuous period of six months without the Optionee being able to resume such
functions on a full time basis at the expiration of such period, it being
understood that unsuccessful attempts to return to work for periods under thirty
days shall not be deemed to have interrupted said continuity.

 

Section 1.10           “Eligible Representative” shall mean, upon the Optionee’s
death, the Optionee’s personal representative or such other person as is
empowered under the deceased Optionee’s will or the then applicable laws of
descent and distribution to represent the Optionee hereunder.

 

Section 1.11           “Employee” shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company, or of
any corporation which is a Subsidiary.

 

Section 1.12           “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended.

 

Section 1.13           “Option” shall mean the non-qualified option to purchase
Common Stock of the Company granted under this Agreement, which option is not
intended to qualify as an “incentive stock option” under Section 422 of the
Code.

 

Section 1.14           “Plan” shall mean the 2002 Long-Term Incentive Award Plan
of Walter Industries, Inc

 

Section 1.15           “Retirement” shall mean the time when the
employee-employer relationship between the Optionee and the Company or any
Subsidiary is terminated (a) other than for Cause, and (b) such termination
occurs either (i) on or after the date on which the Optionee attains the age of
sixty (60), or (ii) on or after the date on which the sum of the Optionee’s age
and completed years of employment (as determined by the Administrator in its
discretion) with the Company and any Subsidiary is at least eighty (80).

 

Section 1.16           “Rule 16b-3” shall mean Rule 16b-3 promulgated under the
Exchange Act, as such Rule may be amended from time to time.

 

Section 1.17           “Secretary” shall mean the Secretary of the Company.

 

Section 1.18           “Securities Act” shall mean the Securities Act of 1933,
as amended.

 

Section 1.19           “Subsidiary” shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

 

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Section 1.20           “Termination of Employment” shall mean the time when the
employee-employer relationship between the Optionee and the Company or any
Subsidiary is terminated for any reason, with or without Cause, including, but
not by way of limitation, a termination by resignation, discharge, death,
Disability or Retirement; but excluding (a) terminations where there is a
simultaneous reemployment or continuing employment of the Optionee by the
Company or any Subsidiary, (b) at the discretion of the Administrator,
terminations which result in a temporary severance of the employee-employer
relationship, and (c) at the discretion of the Administrator, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Administrator, in its
discretion, shall determine the effect of all matters and questions relating to
Termination of Employment, including, but not by way of limitation, the question
of whether a Termination of Employment resulted from a discharge for Cause, and
all questions of whether a particular leave of absence constitutes a Termination
of Employment.

 

ARTICLE II.

GRANT OF OPTION

 

Section 2.1             Grant of Option. In consideration of the Optionee’s
agreement to remain in the employ of the Company or its Subsidiaries and for
other good and valuable consideration, on the effective date hereof the Company
irrevocably grants to the Optionee the option to purchase any part or all of an
aggregate of <NUMBER OF SHARES> shares of Common Stock (the “Option”) upon the
terms and conditions set forth in this Agreement.

 

Section 2.2             Options Subject to the Plan. The Option granted
hereunder is subject to the terms and provisions of the Plan, including without
limitation, Article VI and Sections 11.1, 11.2 and 11.3 thereof.

 

Section 2.3             Option Price. The purchase price of the shares of Common
Stock covered by the Option shall be $<EXERCISE PRICE> per share (without
commission or other charge).

 

Section 2.4             Not a Contract of Employment. Nothing in this Agreement
or in the Plan shall confer upon the Optionee any right to continue in the
employ of the Company or any of its Subsidiaries or shall interfere with or
restrict in any way the rights of the Company or its Subsidiaries, which are
hereby expressly reserved, to discharge the Optionee at any time for any reason
whatsoever, with or without Cause.

 

ARTICLE III.

PERIOD OF EXERCISABILITY

 

Section 3.1             Commencement of Exercisability

 

(A)           SUBJECT TO SUBSECTIONS (B) AND (C) AND SECTION 3.3, THE OPTION
SHALL BECOME EXERCISABLE IN THREE CUMULATIVE INSTALLMENTS AS FOLLOWS:

 

(I)            THE FIRST INSTALLMENT SHALL CONSIST OF ONE-THIRD (1/3) OF THE
SHARES COVERED BY THE OPTION AND SHALL BECOME EXERCISABLE ON THE FIRST
ANNIVERSARY OF THE GRANT DATE;

 

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(II)           THE SECOND INSTALLMENT SHALL CONSIST OF ONE-THIRD (1/3) OF THE
SHARES COVERED BY THE OPTION AND SHALL BECOME EXERCISABLE ON THE SECOND
ANNIVERSARY OF THE GRANT DATE; AND

 

(III)          THE THIRD INSTALLMENT SHALL CONSIST OF ONE-THIRD (1/3) OF THE
SHARES COVERED BY THE OPTION AND SHALL BECOME EXERCISABLE ON THE THIRD
ANNIVERSARY OF THE GRANT DATE.

 

(B)           NOTWITHSTANDING SUBSECTION (A), BUT SUBJECT TO SUBSECTION (C) AND
SECTION 3.3, THE OPTION SHALL BECOME FULLY EXERCISABLE UPON THE DATE OF
CONSUMMATION OF THE FIRST CHANGE IN CONTROL.

 

(C)           NO PORTION OF THE OPTION WHICH IS UNEXERCISABLE AT TERMINATION OF
EMPLOYMENT SHALL THEREAFTER BECOME EXERCISABLE.

 

Section 3.2             Duration of Exercisability. The installments provided
for in Section 3.1 are cumulative. Each such installment which becomes
exercisable pursuant to Section 3.1 shall remain exercisable until it becomes
unexercisable under Section 3.3.

 

Section 3.3             Expiration of Option. The Option may not be exercised to
any extent by anyone after the first to occur of the following events:

 

(A)           THE EXPIRATION OF TEN YEARS FROM THE GRANT DATE; OR

 

(B)           EXCEPT AS THE ADMINISTRATOR MAY OTHERWISE APPROVE (SUBJECT TO
COMPLIANCE WITH THE REQUIREMENTS OF SECTION 409A RELATED TO MODIFICATIONS AND
EXTENSIONS OF STOCK RIGHTS), THE DATE OF THE OPTIONEE’S TERMINATION OF
EMPLOYMENT BY REASON OF TERMINATION FOR CAUSE; OR

 

(C)           THE EXPIRATION OF 90 DAYS FROM THE DATE OF THE OPTIONEE’S
TERMINATION OF EMPLOYMENT FOR ANY REASON OTHER THAN HIS OR HER DEATH, DISABILITY
OR RETIREMENT; OR

 

(D)           THE EXPIRATION OF THREE (3) YEARS FROM THE DATE OF THE OPTIONEE’S
TERMINATION OF EMPLOYMENT BY REASON OF HIS OR HER DEATH, DISABILITY OR
RETIREMENT.

 

ARTICLE IV.

EXERCISE OF OPTION

 

Section 4.1             Person Eligible to Exercise. During the lifetime of the
Optionee, only he or she may exercise the Option or any portion thereof. After
the death of the Optionee, any exercisable portion of the Option may, prior to
the time when the Option becomes unexercisable under Section 3.3, be exercised
by his or her Eligible Representative.

 

Section 4.2             Partial Exercise. Any exercisable portion of the Option
or the entire Option, if then wholly exercisable, may be exercised in whole or
in part at any time prior to the time when the Option or portion thereof becomes
unexercisable under Section 3.3; provided, however, that each partial exercise
shall be for not less than 100 shares (or the total amount then

 

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exercisable pursuant to Section 3.1, if a smaller number of shares) and shall be
for whole shares only.

 

Section 4.3             Manner of Exercise. The exercise of the Option shall be
governed by the terms of this Agreement and the terms of the Plan, including,
without limitation, the provisions of Article VI of the Plan.

 

Section 4.4             Conditions to Issuance of Stock Certificates. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of the Option or
portion thereof prior to fulfillment of all of the conditions set forth in
Section 6.3 of the Plan.

 

Section 4.5             Rights as Shareholder. The holder of the Option shall
not be, nor have any of the rights or privileges of, a shareholder of the
Company in respect of any shares purchasable upon the exercise of any part of
the Option unless and until certificates representing such shares shall have
been issued by the Company to such holder.

 

ARTICLE V.

OTHER PROVISIONS

 

Section 5.1             Administration. The Administrator shall have the power
to interpret this Agreement and to adopt such rules for the administration,
interpretation and application of this Option as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Administrator in good faith shall
be final and binding upon the Optionee, the Company and all other interested
persons. No member of the Committee or the Board shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Option.

 

Section 5.2             Transferability of Option. Neither the Option nor any
interest or right therein or part thereof shall be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution, unless and until such Option has been exercised, or the shares
underlying such Option have been issued, and all restrictions applicable to such
shares have lapsed. Neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Optionee
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

 

Section 5.3             Notices. Any notice to be given under the terms of this
Agreement to the Company shall be addressed to the Company in care of its
Secretary, and any notice to be given to the Optionee shall be addressed to him
at the address given beneath his signature hereto. By a notice given pursuant to
this Section 5.3, either party may hereafter designate a different address for
notices to be given to him. Any notice which is required to be given to the
Optionee shall, if the Optionee is then deceased, be given to the Optionee’s
personal representative if such representative has previously informed the
Company of his status and address by written notice under this Section 5.3. Any
notice shall be deemed duly given five (5) days after such notice is enclosed in
a properly sealed envelope or wrapper addressed as aforesaid, and deposited as

 

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Certified Mail or Registered Mail, Return Receipt Requested (with postage
prepaid) in a post office or branch post office regularly maintained by the
United States Postal Service; provided, however, that any notice to be given by
the Optionee relating to the exercise of the Option or any portion thereof shall
be deemed duly given upon receipt by the Secretary or his office.

 

Section 5.4             Entire Agreement. This Agreement and the Plan constitute
the entire understanding between Employee and the Company regarding the Options.
This Agreement and the Plan supersedes any prior agreements, commitments or
negotiations concerning the Option.

 

Section 5.5             Titles. Titles are provided herein for convenience only
and are not to serve as a basis for interpretation or construction of this
Agreement.

 

Section 5.6             Construction. This Agreement shall be administered,
interpreted and enforced under the internal laws of the State of Delaware
without regard to conflicts of laws thereof.

 

Section 5.7             Conformity to Securities Laws. The Optionee acknowledges
that this Option is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including, without limitation, Rule 16b-3. Notwithstanding anything
herein to the contrary, the Plan shall be administered, and the Option is
granted and may be exercised only in such a manner as to conform to such laws,
rules and regulations. To the extent permitted by applicable law, the Plan and
this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

 

Section 5.8             Amendments or Terminations. This Agreement and the Plan
may be amended or terminated without the consent of the Optionee provided that
such amendment or termination would not impair any rights of the Optionee under
this Agreement. No amendment or termination of this Agreement shall, without the
consent of the Optionee, impair any rights of the Optionee under this Agreement;
provided, however, that notwithstanding the foregoing, the Administrator may,
without obtaining the written consent of the Optionee, amend this Agreement in
any manner that it deems necessary or desirable to comply with the requirements
of Section 409A of the Code or an exemption thereto.

 

[signature page follows]

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.

 

 

 

WALTER INDUSTRIES, INC.

 

 

 

By

 

 

 

 

Its

 

 

 

 

 

 

 

 

Name of Optionee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residence Address

 

 

 

 

 

 

Optionee’s Social

 

Security Number:

 

 

 

 

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