EX-10.6








    Exhibit 10.6



 




    ITT
    CORPORATION 1997 LONG-TERM INCENTIVE PLAN

    (amended and restated as of February 15, 2008)



 


		
	
    1.  
	
    ESTABLISHMENT
    AND PURPOSE




 



    1.1  Establishment of the Plan.  ITT
    Corporation, an Indiana corporation, hereby establishes an
    incentive compensation plan to be known as the “ITT
    Corporation 1997 Long-Term Incentive Plan” (the
    “Plan”), as set forth in this document. The Plan first
    became effective as of January 1, 1997, and was previously
    knows as the “ITT Industries 1997 Long-Term Incentive
    Plan.” The Plan was amended and restated as of
    February 15, 2008, subject to shareholder approval. The
    Plan shall remain in effect until terminated by the Board.



 



    1.2  Purposes.  The purposes of the
    Plan are to promote the achievement of long-term objectives of
    the Company by tying Key Employees’ long-term incentive
    opportunities to preestablished goals; to attract and retain Key
    Employees of outstanding competence, and to encourage teamwork
    among them; and to reward performance based on the successful
    achievement of the preestablished objectives. Awards will be
    made, at the discretion of the Committee, to Key Employees
    (including officers and Directors who are also employees) whose
    responsibilities and decisions directly affect the performance
    of any Participating Company. It is intended that, if desired,
    compensation payable under the Plan will qualify as
    “performance-based compensation,” within the meaning
    of Section 162(m) of the Code and regulations promulgated
    thereunder.



 


		
	
    2.  
	
    DEFINITIONS




 



    Whenever used in the Plan, the following terms shall have the
    meanings set forth below:



 



    (a) An “Acceleration Event” shall be deemed to
    have occurred if the conditions set forth in any one or more of
    the following paragraphs shall have been satisfied:



 



    (i) a report on Schedule 13D shall be filed with the
    Securities and Exchange Commission pursuant to Section 13(d) of
    the Exchange Act disclosing that any person (within the meaning
    of Section 13(d) of the Exchange Act), other than the
    Company or a Subsidiary or any employee benefit plan sponsored
    by the Company or a Subsidiary, is the Beneficial Owner directly
    or indirectly of twenty percent (20%) or more of the outstanding
    Common Stock $1 par value, of the Company (the
    “Stock”);



 



    (ii) any person (within the meaning of Section 13(d)
    of the Exchange Act), other than the Company or a Subsidiary, or
    any employee benefit plan sponsored by the Company or a
    Subsidiary, shall purchase shares pursuant to a tender offer or
    exchange offer to acquire any Stock of the Company (or
    securities convertible into Stock) for cash, securities or any
    other consideration, provided that after consummation of the
    offer, the person in question is the Beneficial Owner, directly
    or indirectly, of twenty percent (20%) or more of the
    outstanding Stock of the Company (calculated as provided in
    paragraph (d) of
    Rule 13d-3
    under the Exchange Act in the case of rights to acquire Stock);



 



    (iii) the stockholders of the Company shall approve



 



    (a) any consolidation, business combination or merger
    involving the Company, other than a consolidation, business
    combination or merger involving the Company in which holders of
    Stock immediately prior to the consolidation, business
    combination or merger (x) hold fifty percent (50%) or more
    of the combined voting power of the Company (or the corporation
    resulting from the merger or consolidation or the parent of such
    corporation) after the merger and (y) have the same
    proportionate ownership of common stock of the Company (or the
    corporation resulting from the merger or consolidation or the
    parent of such corporation), relative to other holders of Stock
    immediately prior to the merger, business combination or
    consolidation, immediately after the merger as immediately
    before; or



 



    (b) any sale, lease, exchange or other transfer (in one
    transaction or a series of related transactions) of all or
    substantially all the assets of the Company;




    

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    (iv) there shall have been a change in a majority of the
    members of the Board within a
    12-month
    period unless the election or nomination for election by the
    Company’s stockholders of each new director during such
    12-month
    period was approved by the vote of two-thirds of the directors
    then still in office who (x) were directors at the
    beginning of such
    12-month
    period or (y) whose nomination for election or election as
    directors was recommended or approved by a majority of the
    directors who where directors at the beginning of such
    12-month
    period; or



 



    (v) any person (within the meaning of Section 13(d) of
    the Exchange Act) (other than the Company or a Subsidiary or any
    employee benefit plan (or related trust) sponsored by the
    Company or a Subsidiary) becomes the Beneficial Owner of twenty
    percent (20%) or more of the Stock.



 



    (b) “Award” means an award granted to a
    Key Employee in accordance with the provisions of the Plan and
    approved by the Committee.



 



    (c) “Award Agreement” means the written
    agreement evidencing an Award granted to a Key Employee under
    the Plan and approved by the Committee.



 



    (d) “Beneficial Owner” shall have the
    meaning ascribed to such term in
    Rule 13d-3
    of the general rules and regulations under the Exchange Act.



 



    (e) “Board of Directors” or
    “Board” means the Board of Directors of the Company.



 



    (f) “Code” means the Internal Revenue Code
    of 1986, as now in effect or as hereafter amended. (All
    citations to sections of the Code are to such sections as they
    may from time to time be amended or renumbered.)



 



    (g) “Committee” means the Compensation and
    Personnel Committee of the Board or such other committee as may
    be designated by the Board to administer the Plan, all of whose
    members shall be “Non-Employee Directors” under the
    Exchange Act and “Outside Directors” under
    Section 162(m) of the Code.



 



    (h) “Company” means ITT Corporation, an
    Indiana corporation, and its successors and assigns.



 



    (i) “Director” means an individual who is
    a member of the Board.



 



    (j) “Disability” means the complete
    permanent inability of a Key Employee to perform all of his or
    her duties under the terms of his or her employment with any
    Participating Company, as determined by the Committee upon the
    basis of such evidence, including independent medical reports
    and data, as the Committee deems appropriate or necessary.



 



    (k) “Effective Date” means the date this
    Plan becomes effective, as set forth in Section 1.1 herein.



 



    (l) “Exchange Act” means the Securities
    Exchange Act of 1934, as amended from time to time, or any
    successor act thereto.



 



    (m) “Key Employee” means an employee
    (including any officer or Director who is also an employee) of
    any Participating Company whose responsibilities and decisions,
    in the judgment of the Committee, directly affect the
    performance of the Company and its Subsidiaries.



 



    (n) “Participant” means an employee of a
    Participating Company who is a Key Employee and who has received
    an Award under the Plan.



 



    (o) “Participating Company” means the
    Company or any Subsidiary or other affiliate of the Company or
    any corporation which at the time of award qualifies as a
    “subsidiary” of the Company under Section 425(f)
    of the Code.



 



    (p) “Performance Goal” means one or more
    Performance Measures expressed as an objective formula to be
    used in calculating the amount payable, if any, with respect to
    a designated Award and shall be established by the Committee
    within the first ninety (90) days of the applicable
    Performance Period. A Performance Goal may provide for various
    levels of payout depending upon the degree to which the
    Performance Goal has been achieved.




    

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    (q) “Performance Measure” means one or
    more financial or other objectives determined by the Committee
    as provided in Section 3.4 herein.



 



    (r) “Performance Period” means the period
    determined by the Committee, which shall be in excess of one
    year, during which the Performance Goal shall be achieved.



 



    (s) “Retirement” means eligibility to
    receive immediate retirement benefits under a Participating
    Company tax-qualified defined benefit pension plan.



 



    (t) “Subsidiary” means any corporation in
    which the Company owns directly or indirectly through its
    Subsidiaries at least a majority of the total combined voting
    power of all classes of stock, or any other entity (including,
    but not limited to, partnerships and joint ventures) in which
    the Company or its Subsidiaries own at least a majority of the
    combined equity thereof.



 


		
	
    3.  
	
    ADMINISTRATION




 



    3.1  The Committee.  The Plan shall
    be administered by the Committee, the members of which shall
    serve at the pleasure of the Board.



 



    3.2  Authority of the
    Committee.  Subject to the provisions herein, the
    Committee shall have full power to select the Key Employees to
    whom Awards are granted; to determine the size and frequency of
    Awards (which need not be the same for each Participant); to
    determine the terms and conditions of each Award; to establish
    Performance Measures, Performance Goals and Performance Periods
    (which need not be the same for each Participant); to set forth
    guidelines governing the amounts of Awards; to revise the
    amounts of Awards
    and/or the
    Performance Measures
    and/or
    Performance Goals during a Performance Period to the extent
    necessary to preserve the intent thereof, and to the extent
    necessary to prevent dilution of Participants’ rights; to
    construe and interpret the Plan and any agreement or instrument
    entered into under the Plan; to establish, amend, rescind, or
    waive rules and regulations for the Plan’s administration;
    and, subject to the provisions of Article 9 herein, to
    amend, modify,
    and/or
    terminate the Plan. Further, the Committee shall have the full
    power to make all other determinations which may be necessary or
    advisable for the administration of the Plan, to the extent
    consistent with the provisions of the Plan.



 



    As permitted by law, the Committee may delegate its authority
    and responsibilities; provided, however, that the Committee may
    not delegate certain of its responsibilities hereunder where
    such delegation may jeopardize compliance with Section 16
    of the Exchange Act or Section 162(m) of the Code, and all
    rules and regulations thereunder.



 



    3.3  Decisions Binding.  All
    determinations and decisions made by the Committee pursuant to
    the provisions of the Plan shall be final, conclusive, and
    binding on all persons, including the Company, its shareholders,
    employees, Participants, and their estates and beneficiaries.



 



    3.4  Performance Goals and
    Measures.  Performance Goals shall be based on one
    or more Performance Measures as established by the Committee,
    which may include financial measures with respect to the Company
    and its Subsidiaries or with respect to a Participating Company.
    Performance Measures may include factors such as the attainment
    of certain target levels of or changes in (i) economic
    value added; (ii) after-tax profits; (iii) operational
    cash flow; (iv) debt or other similar financial
    obligations; (v) earnings; (vi) revenues;
    (vii) net income; (viii) return on capital;
    (ix) shareholders’ equity; (x) return on
    shareholders’ equity; and (xi) total shareholder
    return (measured as a change in the market price of the common
    stock of the Company plus dividend yield) relative to one or
    more indices such as the S&P 500 or the S&P
    Industrials. In addition to these Performance Measures, Awards
    that are not intended to qualify as performance-based
    compensation for purposes of Section 162(m) of the Code may
    be based on such additional or other criteria as the Committee
    may determine.



 


		
	
    4.  
	
    ELIGIBILITY
    AND PARTICIPATION




 



    4.1  Eligibility and
    Participation.  Eligibility shall be limited to
    Key Employees. Participation shall be at the discretion of the
    Committee.




    

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    5.  
	
    AWARDS




 



    5.1  Award Timing and Frequency.  The
    Committee shall have complete discretion in determining the
    number and frequency of Awards to each Participant.
    Participation in the Plan shall begin on the first day of each
    Performance Period. However, the Committee, at its sole
    discretion, may grant an Award to a Key Employee during any
    Performance Period. In such cases, the Participant’s degree
    of participation for such Performance Period may be pro rated,
    based on whatever method the Committee shall determine.



 



    5.2  Award Value.  Each Award shall
    have an initial value that is established by the Committee at
    the time of Award. The maximum payment that may be made with
    respect to Awards to any Participant in any one calendar year
    shall be $10,000,000; provided, however, that this limitation
    shall not apply with respect to any Award that is paid in a
    calendar year prior to the year it would ordinarily be paid
    because of an Acceleration Event or other transaction or event
    that provides for accelerated payment of Awards.



 



    5.3  Achieving Award Value.  The
    Committee shall establish Performance Goals to be achieved
    during the Performance Period and the various percentage
    payouts, if any, for each Award which are dependent upon the
    degree to which the Performance Goals have been achieved, all as
    shall be referred to in the individual Award Agreement.



 



    5.4  Certification of Performance
    Targets.  After the end of each Performance
    Period, and prior to the payment for such Performance Period,
    the Committee must certify in writing the degree to which the
    Performance Goals and Performance Measures for the Performance
    Period were achieved. The Committee shall calculate the amount
    of each Participant’s Award for such Performance Period
    based upon the Performance Measures and Performance Goals for
    each Participant. In establishing Performance Targets and
    Performance Measures and in calculating the degree of
    achievement thereof, the Committee may ignore extraordinary
    items, property transactions, changes in accounting standards
    and losses or gains arising from discontinued operations. The
    Committee shall have no authority or discretion to increase the
    amount of any Participant’s Award as so determined, but it
    may reduce the amount or totally eliminate any Award if it
    determines in its absolute and sole discretion that such action
    is appropriate in order to reflect the Participant’s
    performance or unanticipated factors during the Performance
    Period.



 



    5.5  Form and Timing of Payment of
    Awards.  Payment with respect to earned Awards
    shall be made as soon as practicable following the close of the
    applicable Performance Period. Payment shall be made solely in
    the form of cash.



 



    5.6  Funding of Awards.  Awards need
    not be funded during the Performance Period. Any obligation of
    the Company to make payments with respect to Awards shall be a
    general obligation of the Company with Participants to whom
    payment of an Award may have been earned and due being general
    creditors of the Company.



 



    5.7  Award Agreements.  Each Award
    shall be evidenced by an Award Agreement, which shall be
    approved by the Committee, signed by an officer of the Company
    and by the Participant, and contain or refer to the terms and
    conditions that apply to the Award, which shall include, but
    shall not be limited to, the amount of the Award, the
    Performance Measures, the Performance Goals, the levels of
    payout dependent upon the degree to which the Performance Goals
    have been achieved, and the length of the Performance Period.
    The terms and conditions need not be the same for each
    Participant, or for each Performance Period.



 


		
	
    6.  
	
    TERMINATION
    OF EMPLOYMENT




 



    6.1  Termination of Employment Due to Death,
    Disability, or Retirement.  In the event a
    Participant’s employment is terminated by reason of death,
    Disability or Retirement, the Participant may be entitled to a
    pro rata payment with respect to Awards in accordance with such
    rules and regulations as the Committee shall adopt.



 



    6.2  Termination for Reasons Other than Death,
    Disability, or Retirement.  In the event a
    Participant’s employment is terminated for reasons other
    than death, Disability, or Retirement, and other than that
    brought about by an Acceleration Event, all rights to any Awards
    shall be forfeited, unless the Committee determines otherwise.




    

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    7.  
	
    ACCELERATION
    EVENT




 



    Upon the occurrence of an Acceleration Event, the Performance
    Goals attainable under all outstanding Awards shall be deemed to
    have been fully earned at the maximum achievement level and
    shall be paid out in cash upon the effective date of the
    Acceleration Event.



 



    Subject to Article 9 herein, prior to the effective date of
    an Acceleration Event, the Committee shall have the authority to
    make any modifications to outstanding Awards as it determines to
    be necessary to provide Participants with an appropriate payout
    with respect to their Awards.



 


		
	
    8.  
	
    BENEFICIARY
    DESIGNATION




 



    8.1  Designation of
    Beneficiary.  Each Participant may file with the
    Participating Company a written designation of one or more
    persons as the beneficiary who shall be entitled to receive
    payout, if any, with respect to the Award upon his or her death.
    The Participant may from time to time revoke or change his or
    her beneficiary designation without the consent of any prior
    beneficiary by filing a new designation with the Participating
    Company. The last such designation received by the Participating
    Company shall be controlling; provided however, that no
    designation, or change or revocation thereof, shall be effective
    unless received by the Participating Company prior to the
    Participant’s death, and in no event shall it be effective
    as of a date prior to such receipt.



 



    8.2  Death of Beneficiary.  In the
    event that all the beneficiaries named by a Participant pursuant
    to Section 8.1 herein predecease the Participant, any
    amounts that would have been paid to the Participant or the
    Participant’s beneficiaries under the Plan shall be paid to
    the Participant’s estate.



 


		
	
    9.  
	
    AMENDMENT,
    MODIFICATION, AND TERMINATION




 



    9.1  Amendment, Modification, and
    Termination.  The Board may terminate, amend, or
    modify the Plan.



 



    9.2  Awards Previously Granted.  No
    termination, amendment, or modification of the Plan shall in any
    manner adversely affect any outstanding Award, without the
    written consent of the Participant holding such Award.



 


		
	
    10.  
	
    MISCELLANEOUS
    PROVISIONS




 



    10.1  Employment.  Nothing in the
    Plan shall interfere with or limit in any way the right of the
    Company to terminate any Participant’s employment at any
    time, nor confer upon any Participant any right to continue in
    the employ of the Company or any of its Subsidiaries.



 



    10.2  Nontransferability.  No Award
    may be sold, transferred, pledged, assigned, or otherwise
    alienated or hypothecated, other than by will or by the laws of
    descent and distribution.



 



    10.3  Rights to Common Stock.  Awards
    do not give Participants any right whatsoever with respect to
    shares of the Company’s common stock.



 



    10.4  Costs of the Plan.  All costs
    of the Plan including, but not limited to, payout of Awards and
    administrative expenses, shall be incurred as general
    obligations of the Company.



 



    10.5  Tax Withholding.  The Company
    shall have the right to require Participants to remit to the
    Company an amount sufficient to satisfy applicable Federal,
    state, foreign and local withholding tax requirements, or to
    deduct from all payments under the Plan amounts sufficient to
    satisfy all such requirements.



 



    10.6  Successors.  All obligations of
    the Company under the Plan with respect to payout of Awards
    shall be binding on any successor to the Company, whether the
    existence of such successor is the result of a direct or
    indirect purchase, merger, consolidation, or other acquisition
    of all or substantially all of the business or assets of the
    Company.



 



    10.7  Indemnification.  Each person
    who is or shall have been a member of the Committee or the Board
    shall be indemnified and held harmless by the Company against
    and from any loss, cost, liability, or expense that may be
    imposed upon or reasonably incurred by him or her in connection
    with or resulting from any claim, action, suit, or proceeding to
    which he or she may be a party or in which he or she may be
    involved by reason of any action taken or




    

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    failure to act under the Plan and against and from any and all
    amounts paid by him or her in settlement thereof, with the
    Company’s approval, or paid by him or her in satisfaction
    of any judgment in any such action, suit, or proceeding against
    him or her, provided he or she shall give the Company an
    opportunity, at its own expense, to handle and defend the same
    before he or she undertakes to handle and defend it on his or
    her own behalf. The foregoing right of indemnification shall not
    be exclusive of any other rights of indemnification to which
    such persons may be entitled under the Company’s Articles
    of Incorporation, By-laws, insurance or other agreement or
    otherwise.



 



    10.8  Notice.  Any notice or filing
    required or permitted to be given to the Company under the Plan
    shall be sufficient if in writing and hand delivered, or sent by
    registered or certified mail to the Secretary of the Company.
    Notice to the Secretary of the Company, if mailed, shall be
    addressed to the principal executive offices of the Company.
    Notice mailed to a Participant shall be at such address as is
    given in the records of the Company. Notices shall be deemed
    given as of the date of delivery or, if delivery is made by
    mail, as of the date shown on the postmark on the receipt for
    registration or certification.



 



    10.9  Severability.  In the event
    that any provision of the Plan shall be held illegal or invalid
    for any reason, the illegality or invalidity shall not affect
    the remaining parts of the Plan, and the Plan shall be construed
    and enforced as if the illegal or invalid provision had not been
    included.



 



    10.10  Requirements of Law.  The
    granting and payout of Awards shall be subject to all applicable
    laws, rules, and regulations and to such approvals by any
    governmental agencies or national securities exchanges as may be
    required.



 



    10.11  Governing Law.  To the extent
    not preempted by Federal law, the Plan, and all agreements
    hereunder, shall be construed in accordance with and governed by
    the laws of the State of New York.




    

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