Form of Incentive Stock Option Agreement



 Exhibit 10.10 
  
 MTC TECHNOLOGIES, INC. 
  
 INCENTIVE STOCK OPTION AGREEMENT 
  
 This INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”) is entered into by and between MTC Technologies, Inc., a Delaware corporation (the
“Company”), and                          (the “Optionee”) on
                                ,
            . 
  

	1.	Effectiveness/Operation of Agreement. This Agreement will be effective and binding immediately upon its execution (the “Date of Grant”). 


 

	2.	Grant of Stock Option. 

  

	 	(a)	Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Company’s 2002 Equity and Performance Incentive Plan (Amended and Restated
February 25, 2004) (the “Plan”), the Company grants to the Optionee as of the Date of Grant a stock option (the “Option”) to purchase          Common Shares (the “Optioned
Shares”), subject to adjustment as hereinafter provided. The Option may be exercised from time to time in accordance with the terms of this Agreement. 

  

	 	(b)	The price at which each of the Optioned Shares may be purchased pursuant to the Option shall be
$        .        , subject to further adjustment as hereinafter provided (the “Option Price”). 

  

	3.	Type of Option. Except to the extent of the $100,000 limitation set forth in Section 422(d) of the Code, the Option is intended to be an “incentive stock option”
within the meaning of that term under Section 422 of the Code, or any successor provision thereto and this Agreement shall be construed in a manner that will enable this Option to be so qualified. To the extent, if any, that the $100,000 limitation
set forth in Section 422(d) of the Code is exceeded, the Option shall constitute two separate options with the first option covering the number of Common Shares up to the $100,000 limitation intended to be an incentive stock option and the second
option covering any excess Common Shares intended to be a nonqualified stock option. 

  

	4.	Term of Option. The term of the Option shall commence on the Date of Grant and, unless earlier terminated in accordance with Section 8 hereof, shall expire ten (10) years
from the Date of Grant. 

  

	5.	 Right to Exercise. Subject to Section 8, Section 9 and Section 12 hereof, the Option will be exercisable from time to time prior to the tenth anniversary of
the Date of Grant to the extent of: (a)          percent (    %) of the Optioned Shares on the Date of Grant; and (b)
        percent (    %) of the Optioned Shares on each of the next two anniversaries of the Date of Grant, if the Optionee remains continuously employed until such time. To
the extent the Option is exercisable, it may be exercised in whole or in part. In no event shall the Optionee be entitled to acquire a fraction of one Optioned Share pursuant to the 











	 	 
Option. The Optionee shall be entitled to the privileges of ownership with respect to Optioned Shares purchased and delivered to the Optionee upon the
exercise of all or part of the Option. 


  

	6.	Option Nontransferable. The Option granted hereby shall be neither transferable nor assignable by the Optionee other than by will or by the laws of descent and distribution
and may be exercised, during the lifetime of the Optionee, only by the Optionee, or in the event of his or her legal incapacity, by his or her guardian or legal representative acting on behalf of the Optionee in a fiduciary capacity under state or
foreign law and court supervision. 

  

	7.	Notice of Exercise; Payment. To the extent then exercisable, this Option may be exercised by written notice to the Company stating the number of Optioned Shares for which the
Option is being exercised and the intended manner of payment. The date of the Optionee’s written notice shall be the exercise date. Payment equal to the aggregate Option Price of the Optioned Shares for which the Option is being exercised shall
be tendered in full with the notice of exercise to the Company in cash in the form of currency or check or other cash equivalent acceptable to the Company. The Optionee may also tender the Option Price by (a) the actual or constructive transfer to
the Company of nonforfeitable, nonrestricted Common Shares that have been owned by the Optionee for more than six months prior to the date of exercise, or (b) by any combination of the foregoing methods of payment, including a partial tender in cash
and a partial tender in nonforfeitable, nonrestricted Common Shares. Nonforfeitable, nonrestricted Common Shares that are transferred by the Optionee in payment of all or any part of the Option Price shall be valued on the basis of their Market
Value per Share. The requirement of payment in cash shall be deemed satisfied if the Optionee makes arrangements that are satisfactory to the Company with a broker that is a member of the National Association of Securities Dealers, Inc. to sell on
the exercise date a sufficient number of Optioned Shares that are being purchased pursuant to the exercise, so that the net proceeds of the sale transaction will at least equal the amount of the aggregate Option Price plus payment of any applicable
withholding taxes, and pursuant to which the broker undertakes to deliver to the Company the amount of the aggregate Option Price plus payment of any applicable withholding taxes on a date satisfactory to the Company, but not later than the date on
which the sale transaction will settle in the ordinary course of business. As a further condition precedent to the exercise of the Option, the Optionee shall comply with all regulations and requirements of any regulatory authority having control of,
or supervision over, the issuance of Common Shares and in connection therewith shall execute any documents that the Board shall in its sole discretion deem necessary or advisable. 

  

	8.	Termination of Agreement. 

  

	 	(a)	This Agreement and the Option granted hereby shall terminate automatically and without further notice on the earliest of the following dates: 

  

	 	(i)	Six (6) months after the Optionee’s retirement at or after age 65; 

  

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	 	(ii)	Six (6) months after the Optionee’s death if such death occurs while the Optionee is employed by the Company or any Subsidiary; 

  

	 	(iii)	Six (6) months after the Optionee’s permanent and total disability, if the Optionee becomes permanently and totally disabled while an employee of the Company or any Subsidiary
and ceases to be an employee as a result of such disability; 

  

	 	(iv)	Except as provided otherwise in Section 8(b) below or on a case-by-case basis, thirty (30) calendar days after the Optionee ceases to be an employee of the Company or any Subsidiary
for any reason other than as described in Section 8(a)(i), 8(a)(ii) or 8(a)(iii) hereof; or 

  

	 	(v)	Ten (10) years from the Date of Grant. 

  

	 	(b)	In the event that the Optionee’s employment is terminated for just cause, this Agreement shall terminate at the time of such termination notwithstanding any other provision of
this Agreement and the Optionee’s option will cease to be exercisable to the extent exercisable as of such termination and will not become exercisable after such termination. For purposes of this provision, “just cause” shall mean,
with respect to an Optionee, “just cause” (or any similar term) as defined in any employment, severance or other agreement between the Company or any Subsidiary and the Optionee, or if there is no such agreement in effect that contains a
definition of “just cause” (or any similar term), “just cause” shall include the commission by the Optionee of any of the following acts prior to termination of employment: 

  

	 	(i)	an intentional act of fraud, embezzlement, theft, or any other material violation of law in connection with the Optionee’s duties or in the course of the Optionee’s
employment; 

  

	 	(ii)	intentional wrongful damage to material assets of the Company or any Subsidiary; 

  

	 	(iii)	intentional wrongful disclosure of material confidential information of the Company or any Subsidiary; 

  

	 	(iv)	intentional wrongful engagement in any competitive activity that would constitute a material breach of the duty of loyalty to the Company or any Subsidiary;


  

	 	(v)	intentional breach of any stated material employment policy of the Company or any Subsidiary; or 

  

	 	(vi)	any other conduct that constitutes “cause” at common law. 

  

	 	(c)	This Agreement shall not be exercisable for any number of Optioned Shares in excess of the number of Optioned Shares for which this Agreement is then 

  

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exercisable, pursuant to Sections 5 and 9 hereof, on the date of termination of employment or other service with the Company. For the purposes of this
Agreement, the continuous employment of the Optionee with the Company shall not be deemed to have been interrupted, and the Optionee shall not be deemed to have ceased to be an employee of the Company, by reason of the transfer of his or her
employment among the Company and the Subsidiaries or a leave of absence approved by the Board. 


  

	9.	Acceleration of Option. Notwithstanding Section 5 hereof, after the Date of Grant, the Option granted hereby shall become immediately exercisable in full in the event of (i)
a Change in Control, (ii) the Optionee’s retirement at or after age 65, (iii) the death of the Optionee if such death occurs while the Optionee is employed by the Company or any Subsidiary or (iv) the Optionee’s permanent and total
disability if the Optionee becomes permanently and totally disabled while an employee of the Company or any Subsidiary. 

  

	10.	No Employment Contract. Nothing contained in this Agreement shall confer upon the Optionee any right with respect to continuance of employment by the Company or any
Subsidiary, nor limit or affect in any manner the right of the Company or any Subsidiary to terminate the employment or adjust the compensation of the Optionee. 

  

	11.	Taxes and Withholding. To the extent that the Company or any Subsidiary shall be required to withhold any federal, state, local or foreign taxes in connection with the
exercise of the Option, and the amounts available to the Company or such Subsidiary for such withholding are insufficient, it shall be a condition to the exercise of the Option that the Optionee shall pay such taxes or make provisions that are
satisfactory to the Company or the Subsidiary, as the case may be for the payment thereof. The Optionee may elect to satisfy all or any part of any such withholding obligation by (a) surrendering to the Company or the Subsidiary a portion of the
Optioned Shares that are issued or transferred to the Optionee upon the exercise of the Option, and the Optioned Shares so surrendered by the Optionee shall be credited against any such withholding obligation at the Market Value per Share of such
shares on the date of such surrender or (b) utilizing the broker assistance arrangement provided in Section 7. 

  

	12.	Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal, state and provincial securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Option shall not be exercisable if the exercise thereof would result in a violation of any such law. 

  

	13.	Adjustments. The Board may make or provide for such adjustments in the number of Optioned Shares covered by the Option, in the Option Price applicable to the Option, and in
the kind of shares covered thereby, as the Board, in its sole discretion, exercised in good faith, may determine is equitably required to prevent dilution or enlargement of the Optionee’s rights that otherwise would result from (a) any stock
dividend, stock split, combination of shares, recapitalization, or other change in the capital structure of the Company, (b) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation, or
other distribution of assets or issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event 

  

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having an effect similar to any of the foregoing. In the event of any such transaction or event, the Board, in its discretion, may provide in substitution
for the Option such alternative consideration as it may determine to be equitable in the circumstances and may require in connection therewith the surrender of the Option. 


  

	14.	Availability of Common Shares. The Company shall at all times until the expiration of the Option, reserve and keep available, either in its treasury or out of its authorized
but unissued Common Shares, the full number of Optioned Shares deliverable upon the exercise of the Option. 

  

	15.	Mandatory Notice of Disqualifying Disposition. Without limiting any other provision hereof, the Optionee hereby agrees that if the Optionee disposes (whether by sale,
exchange gift or otherwise) of any of the Optioned Shares within two (2) years of the Date of Grant or within one (1) year after the transfer of such share or shares to the Optionee, the Optionee shall notify the Company of such disposition in
writing within thirty (30) days from the date of such disposition. Such written notice shall state the principal terms of such disposition and the type and amount of the consideration received for such share or shares by the Optionee in connection
therewith. 

  

	16.	Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided,
however, that no amendment shall adversely affect the rights of the Optionee under this Agreement without the Optionee’s consent. 

  

	17.	Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so
invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable. 

  

	18.	Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan,
the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Board acting pursuant to the Plan, or any duly authorized committee thereof as constituted from time to time, shall,
except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the Option or its exercise. 

  

	19.	Successors and Assigns. Without limiting Section 6 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of the Optionee, and the successors and assigns of the Company. 

  

	20.	Governing Law. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof. Each party to this Agreement hereby consents and submits himself, herself or itself to the jurisdiction of the courts of the State of Delaware for the purposes of any legal action or proceeding arising out of
this Agreement. 

  

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	21.	Notices. Any notice to the Company provided for herein shall be in writing to the Company and any notice to the Optionee shall be addressed to the Optionee at his or her
address on file with the Company. Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when delivered personally or sent by registered mail or electronic means of communication, and addressed as aforesaid.
Any party may change the address to which notices are to be given hereunder by notice to the other party as herein specified (provided that for this purpose any mailed notice shall be deemed given on the third business day following deposit of the
same in the mail). 

  

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 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly
authorized officer and Optionee has also executed this Agreement in duplicate, as of the day and year first above written. 
  

			
	 MTC TECHNOLOGIES, INC.

		
	 By:
	 	  


	 Name:
	 	 
	 Title:
	 	 


  
 The undersigned Optionee hereby
acknowledges receipt of an executed original of this Agreement and accepts the Option granted hereunder, subject to the terms and conditions of the Plan and the terms and conditions set forth herein. 
  

	
	  
  


	                                 , Optionee




  

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