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


 

















 


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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