Document:

EX-10.7

    Exhibit 10.7

 

    ITT
    Corporation Annual Incentive Plan For Executive Officers

    (amended and restated as of February 15, 2008)

 

		
	
    1.  
	
    Purpose

 

    The purpose of this ITT Corporation Annual Incentive Plan for
    Executive Officers (the “Incentive Plan”) is to
    provide incentive compensation in the form of a cash award to
    executive officers of ITT Corporation (the
    “Company”) for achieving specific
    pre-established performance objectives and to continue to
    motivate participating executive officers to achieve their
    business goals, while tying a portion of their compensation to
    measures affecting shareholder value. The Incentive Plan seeks
    to enable the Company to continue to be competitive in its
    ability to attract and retain executive officers of the highest
    caliber.

 

    It is intended that compensation payable under the Incentive
    Plan will qualify as “performance-based compensation,”
    within the meaning of Section 162(m) of the Internal
    Revenue Code of 1986, as amended (the “Code”)
    and regulations promulgated thereunder, if such qualification is
    desired.

 

		
	
    2.  
	
    Plan
    Administration

 

    The Compensation and Personnel Committee (the
    “Committee”) of the Board of Directors (the
    “Board”) of the Company, as constituted by the
    Board from time to time, shall be comprised completely of
    “outside directors” as defined under
    Section 162(m) of the Code.

 

    The Committee shall have full power and authority to administer,
    construe and interpret the provisions of the Incentive Plan and
    to adopt and amend administrative rules and regulations,
    agreements, guidelines and instruments for the administration of
    the Incentive Plan and for the conduct of its business as the
    Committee considers appropriate.

 

    Except with respect to matters which under Section 162
    (m) of the Code are required to be determined in the sole
    and absolute discretion of the Committee, the Committee shall
    have full power, to the extent permitted by law, to delegate its
    authority to any officer or employee of the Company to
    administer and interpret the procedural aspects of the Incentive
    Plan, subject to the terms of the Incentive Plan, including
    adopting and enforcing rules to decide procedural and
    administrative issues.

 

    The Committee may rely on opinions, reports or statements of
    officers or employees of the Company and of counsel to the
    Company (inside or retained counsel), public accountants and
    other professional or expert persons.

 

    The Board reserves the right to amend or terminate the Incentive
    Plan in whole or in part at any time; provided,
    however, that except as necessary to maintain an
    outstanding incentive award’s qualification as
    performance-based compensation under Section 162(m) of the
    Code (“Performance-Based Compensation”), no
    amendments shall adversely affect or impair the rights of any
    participant that have previously accrued hereunder, without the
    written consent of the participant. Unless otherwise prohibited
    by applicable law, any amendment required to cause an incentive
    award to qualify as Performance-Based Compensation may be made
    by the Committee. No amendment to the Incentive Plan may be made
    to alter the class of individuals who are eligible to
    participate in the Incentive Plan, the performance criteria
    specified in Section 4 hereof or the maximum incentive
    award payable to any participant without shareholder approval
    unless shareholder approval of the amendment is not required in
    order for incentive awards paid to participants to constitute
    Performance-Based Compensation.

 

    No member of the Committee shall be liable for any action taken
    or omitted to be taken or for any determination made by him or
    her in good faith with respect to the Incentive Plan, and the
    Company shall indemnify and hold harmless each member of the
    Committee against any cost or expense (including counsel fees)
    or liability (including any sum paid in settlement of a claim
    with the approval of the Committee) arising out of any act or
    omission in connection with the administration or interpretation
    of the Incentive Plan, unless arising out of such person’s
    own fraud or bad faith.

    

    1

 

		
	
    3.  
	
    Eligible
    Executives

 

    Executive officers of the Company and its subsidiaries, as
    defined by the Securities Exchange Act of 1934,
    Rule 3b-7,
    as that definition may be amended from time to time, shall be
    eligible to participate in the Incentive Plan. The Committee
    shall select from all eligible executive officers, those to whom
    incentive awards shall be granted under the Incentive Plan.

 

		
	
    4.  
	
    Plan
    Year, Performance Periods, Performance Measures and Performance
    Targets

 

    Each fiscal year of the Incentive Plan (the “Plan
    Year”) shall begin on January 1 and end on
    December 31. The performance period (the
    “Performance Period”) with respect to which
    incentive awards may be payable under the Incentive Plan shall
    be the Plan Year unless the Committee designates one or more
    different Performance Periods.

 

    The Committee shall establish the performance measures (the
    “Performance Measures”) to be used which may
    include, one or more of the following criteria:
    (i) consolidated earnings before or after taxes (including
    earnings before interest, taxes, depreciation and amortization);
    (ii) net income; (iii) operating income;
    (iv) earnings per share; (v) book value per share;
    (vi) return on shareholders’ equity;
    (vii) expense management; (viii) return on investment;
    (ix) improvements in capital structure;
    (x) profitability of an identifiable business unit or
    product; (xi) maintenance or improvement of profit margins;
    (xii) stock price; (xiii) market share;
    (xiv) revenues or sales (including organic revenue);
    (xv) costs; (xvi) cash flow; (xvii) working
    capital (xviii) return on assets; (xix) total
    shareholder return; (xx) return on invested or total
    capital and (xxi) economic value added.

 

    In addition, to the extent consistent with Section 162(m)
    of the Code, Performance Measures may be based upon other
    objectives such as negotiating transactions or sales,
    implementation of Company policy, development of long-term
    business goals or strategic plans, negotiation of significant
    corporate transactions, meeting specified market penetration
    goals, productivity measures, geographic business expansion
    goals, cost targets, customer satisfaction or employee
    satisfaction goals, goals relating to merger synergies,
    management of employment practices and employee benefits, or
    supervision of litigation and information technology, and goals
    relating to acquisitions or divestitures of subsidiaries
    and/or other
    affiliates or joint ventures; provided however, that the
    measurement of any such Performance Measures must be objectively
    determinable.

 

    All Performance Measures shall be objectively determinable and,
    to the extent they are expressed in standard accounting terms,
    shall be according to generally accepted accounting principles
    as in existence on the date on which the applicable Performance
    Period is established and without regard to any changes in such
    principles after such date (unless the modification of a
    Performance Measure to take into account such a change is
    pre-established in writing at the time the Performance Measures
    are established in writing by the Committee
    and/or the
    modification would not affect the ability of the incentive award
    to qualify as Performance-Based Compensation).

 

    Notwithstanding the foregoing, incentive awards that are not
    intended to qualify as Performance-Based Compensation may be
    based on the Performance Measures described above or such other
    measures as the Committee may determine.

 

    The Committee shall establish the performance targets (the
    “Performance Targets”) to be achieved which
    shall be based on one or more Performance Measures relating to
    the Company as a whole or to the specific businesses of the
    Company, subsidiaries, operating groups, or operating units, as
    determined by the Committee. Performance Targets may be
    established on such terms as the Committee may determine, in its
    discretion, including in absolute terms, as a goal relative to
    performance in prior periods, or as a goal compared to the
    performance of one or more comparable companies or an index
    covering multiple companies. The Committee also shall establish
    with respect to each incentive award an objective formula to be
    used in calculating the amount of incentive award each
    participant shall be eligible to receive. There may be a sliding
    scale of payment dependent upon the percentage levels of
    achievement of Performance Targets.

 

    The Performance Measures and Performance Targets, which may be
    different with respect to each participant and each Performance
    Period, must be set forth in writing by the Committee within the
    first ninety (90) days of the applicable Performance Period
    or, if sooner, prior to the time when 25 percent of the
    relevant Performance Period has elapsed.

    

    2

 

		
	
    5.  
	
    Certification
    of Performance Targets and Calculation of Incentive
    Awards

 

    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 Targets for the
    Performance Period were achieved, including the specific target
    objective or objectives and the satisfaction of any other
    material terms of the incentive award. The Committee shall
    calculate the amount of each participant’s incentive award
    for such Performance Period based upon the Performance Measures
    and Performance Targets for such 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
    incentive award as so determined to the extent such incentive
    award is intended to qualify as Performance-Based Compensation,
    but it may reduce the amount or totally eliminate any such
    incentive 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. The Committee shall have the
    authority to increase or decrease the amount of an incentive
    award to the extent the incentive award is not intended to
    qualify as Performance-Based Compensation.

 

    The maximum payment that may be made with respect to incentive
    awards under the Plan to any participant in any one calendar
    year shall be $8,000,000; provided, however, that this
    limitation shall not apply with respect to any incentive 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 an
    incentive award.

 

		
	
    6.  
	
    Payment
    of Awards

 

    Approved incentive awards shall be payable by the Company in
    cash to each participant, or to the participant’s estate in
    the event of the participant’s death, as soon as
    practicable (and in any event no later than
    21/2
    months) after the end of each Performance Period. No incentive
    award that is intended to qualify as Performance-Based
    Compensation may be paid under the Incentive Plan until the
    Committee has certified in writing that the relevant Performance
    Targets were achieved. If a participant is not an employee on
    the last day of the Performance Period, the Committee shall have
    sole discretion to determine what portion, if any, the
    participant shall be entitled to receive with respect to any
    award for the Performance Period. The Committee shall have the
    authority to adopt appropriate rules and regulations for the
    administration of the Incentive Plan in such termination cases.

 

    The Company retains the right to deduct from any incentive
    awards paid under the Incentive Plan any Federal, state, local
    or foreign taxes required by law to be withheld with respect to
    such payment.

 

    Notwithstanding the above, no incentive awards shall be paid
    under the Incentive Plan unless the Incentive Plan is approved
    by the requisite shareholders of the Company.

 

		
	
    7.  
	
    Other
    Terms and Conditions

 

    Any award made under this Incentive Plan shall be subject to the
    discretion of the Committee. No person shall have any legal
    claim to be granted an award under the Incentive Plan and the
    Committee shall have no obligation to treat participants
    uniformly. Except as may be otherwise required by law, incentive
    awards under the Incentive Plan shall not be subject in any
    manner to anticipation, alienation, sale, transfer, assignment,
    pledge, encumbrance, charge, garnishment, execution, or levy of
    any kind, either voluntary or involuntary. Incentive awards
    granted under the Incentive Plan shall be payable from the
    general assets of the Company, and no participant shall have any
    claim with respect to any specific assets of the Company.

 

    Nothing contained in the Incentive Plan shall give any
    participant the right to continue in the employment of the
    Company or affect the right of the Company to terminate the
    employment of a participant.

 

		
	
    8.  
	
    Acceleration
    Event.

 

    An “Acceleration Event” shall occur if
    (i) a report on Schedule 13D shall be filed with the
    Securities and Exchange Commission pursuant to
    Section 13(d) of the Securities Exchange Act of 1934 (the
    “Act”) disclosing that any person (within the
    meaning of Section 13(d) of the Act), other than the
    Company or a subsidiary of the

    

    3

 

    Company or any employee benefit plan sponsored by the Company or
    a subsidiary of the Company, 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 Act), other than the
    Company or a subsidiary of the Company, or any employee benefit
    plan sponsored by the Company or a subsidiary of the Company,
    shall purchase shares pursuant to a tender offer or exchange
    offer to acquire any Stock (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 (as such term is defined in
    Rule 13d-3
    under the Act), directly or indirectly, of twenty percent (20%)
    or more of the outstanding Stock (calculated as provided in
    paragraph (d) of
    Rule 13d-3
    under the 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, (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 Act) (other than the Company or any
    subsidiary of the Company or any employee benefit plan (or
    related trust) sponsored by the Company or a subsidiary of the
    Company) becomes the beneficial owner (as such term is defined
    in
    Rule 13d-3
    under the Act) of twenty percent (20%) or more of the Stock.

 

    Upon the occurrence of such Acceleration Event, the Performance
    Measures for each Performance Period with respect to which
    incentive awards may be payable under the Incentive Plan shall
    be deemed to be achieved at the greater of (i) the
    Performance Target established for such Performance Measures or
    (ii) the Company’s actual achievement of such
    Performance Measures as of the Acceleration Event. Payment of
    the incentive awards, for the full year, will be made to each
    participant, in cash, within five (5) business days
    following such Acceleration Event.

 

		
	
    9.  
	
    Miscellaneous.

 

    The Incentive Plan, as amended and restated, shall be effective
    February 15, 2008 subject to the approval of the requisite
    shareholders of the Company. Once approved, the Incentive Plan
    shall remain in effect unless/until terminated by the Board;
    provided, however, that if an Acceleration Event
    has occurred no amendment or termination shall impair the rights
    of any participant with respect to any prior award.

 

    This Incentive Plan shall be construed and governed in
    accordance with the laws of the State of New York.

    

    4EX-10.46

    Exhibit 10.46

 

    ITT
    CORPORATION

    2003 EQUITY INCENTIVE PLAN

    RESTRICTED STOCK UNIT AWARD AGREEMENT

    Non-Employee Director

 

 

    NOTICE OF
    RESTRICTED STOCK UNIT AWARD

 

    ITT Corporation (the “Company”) grants to the Director
    named below, in accordance with the terms of the ITT Corporation
    2003 Equity Incentive Plan (the “Plan”) and this
    Restricted Stock Unit award agreement (this
    “Agreement”), the number of Restricted Stock Units
    (the “Restricted Stock Units” or the
    “Award”) provided as follows:

 

	 	 	 
	

    DIRECTOR

	
 
	
    [          ]

	

    RESTRICTED STOCK UNITS GRANTED

	
 
	
    [          ]

	

    DATE OF GRANT

	
 
	
    [          ]

	

    VESTING SCHEDULE

	
 
	
    Except as provided in Section 3 of this Agreement, the
    Restricted Stock Units will vest on the following date(s),
    subject to the Director’s continued service as a director
    of the Company:

 

	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    Restricted

    

	
 
	
 
	
 
	
 
	
    Stock Units

    

	
 
	
 
	

    Vesting Date(s)

	
 
	

    Vesting

	 

	
 
	
 
	
    Day before the Regular Annual Meeting of Shareholders in 200[9]
	
 
	
    100% of

    Award

 

    AGREEMENT

 

    1. Grant of Award.  The Company
    hereby grants to the Director the Restricted Stock Units,
    subject to the terms, definitions and provisions of the Plan and
    this Agreement. All terms, provisions, and conditions applicable
    to the Restricted Stock Units set forth in the Plan and not set
    forth herein are incorporated by reference. To the extent any
    provision hereof is inconsistent with a provision of the Plan
    the provisions of the Plan will govern. All capitalized terms
    that are used in this Agreement and not otherwise defined herein
    shall have the meanings ascribed to them in the Plan.

 

    2.  Vesting and Settlement of Award.

 

    a. Right to Award.  This Award
    shall vest in accordance with the vesting schedule set forth
    above (the “Vesting Schedule”) and with the applicable
    provisions of the Plan and this Agreement.

 

    b. Settlement of Award.  Except as
    otherwise provided in a deferral agreement duly executed by the
    Director on a form prescribed by the Company for such elections
    and timely filed with the Company, the vested portion of this
    Award shall be settled (and any related dividend equivalents
    shall be paid) on or as soon as practicable following the
    vesting date set forth in the Vesting Schedule or in
    Section 3 of this Agreement, as the case may be, but in no
    event later than the following dates, as applicable: (i) if
    the vesting date is the vesting date set forth in the Vesting
    Schedule above, the last day of the calendar year in which the
    vesting date occurs or (ii) if the vesting date is a
    separation from service described in Section 3 of this
    Agreement, the date that is 90 days following the date of
    such separation from service.

 

    The Company may require the Director to furnish or execute such
    documents as the Company shall reasonably deem necessary
    (i) to evidence such settlement and (ii) to comply
    with or satisfy the requirements of the Securities Act of 1933,
    as amended, the Exchange Act or any applicable laws. If the
    Director dies before the settlement of all or a portion of the
    Award, the vested but unsettled portion of the Award may be
    settled by

    

    1

 

    delivery of Shares (and payment of related dividend equivalents)
    to the Participant’s designated beneficiary or, if no such
    beneficiary has been designated, the Participant’s estate.

 

    c. Method of Settlement.  The
    Company shall deliver to the Director one Share for each vested
    Restricted Stock Unit. Share certificates shall be issued in the
    name of the Director (or in the name of the Director’s
    designated beneficiary or estate, as the case may be, if the
    Director dies prior to settlement).

 

    d. Dividend Equivalents.  If a cash
    dividend is declared on the Shares, the Director shall be
    credited with a dividend equivalent in an amount of cash equal
    to the number of Restricted Stock Units held by the Director as
    of the dividend payment date, multiplied by the amount of the
    cash dividend paid per Share. Any such dividend equivalents
    shall be paid if and when the underlying Restricted Stock Units
    are settled. Dividend equivalents shall not accrue interest.

 

    3.  Separation from
    Service.  The Award shall become 100% vested
    prior to the vesting date set forth in the Vesting Schedule
    above upon the Director’s separation from service for any
    of the following reasons:

 

    a. the Director’s death;

 

    b. the Director’s Disability (as defined below);

 

    c. the Director’s retirement from the Board at or
    after age 72; or

 

    d. the Director’s separation from service on account
    of the acceptance by the Director of a position (other than an
    honorary position) in the government of the United States, any
    State or any municipality or any subdivision thereof or any
    organization performing any quasi-governmental function.

 

    If the Director’s service on the Board terminates for any
    reason other than one listed above prior to the vesting date set
    forth in the Vesting Schedule above, the Award shall be
    forfeited immediately with respect to the number of Restricted
    Stock Units for which the Award is not yet vested.

 

    For purposes of this Agreement, the term “Disability”
    means the complete and permanent inability of the Director to
    perform all of his or her duties as a member of the Board, as
    determined by the Committee upon the basis of such evidence,
    including independent medical reports and data, as the Committee
    deems appropriate or necessary.

 

    4.  Transferability of Award.

 

    The Award may not be sold, transferred, pledged, assigned, or
    otherwise alienated or hypothecated.

 

    5.  Miscellaneous Provisions.

 

    a. Rights as a Stockholder.  The
    Director shall have no rights as a stockholder with respect to
    any Shares subject to this Award, except as provided in
    Paragraph 2(d), until the Award has vested and Shares, if
    any, have been issued.

 

    b. Compliance with Federal Securities Laws and Other
    Applicable Laws.  Notwithstanding anything to
    contrary in this Agreement or in the Plan, to the extent
    permitted by Section 409A of the Code and any treasury
    regulations or other applicable guidance promulgated with
    respect thereto, the issuance or delivery of any Shares pursuant
    to this Agreement may be delayed if the Company reasonably
    anticipates that the issuance or delivery of the Shares will
    violate Federal securities laws or other applicable law;
    provided that delivery or issuance of the Shares shall be made
    at the earliest date at which the Company reasonably anticipates
    that such delivery or issuance will not cause a violation. The
    Company shall not be liable to the Director for any damages
    relating to any delays in issuing the certificates to the
    Director, any loss of the certificates, or any mistakes or
    errors in the issuance of the certificates or the certificates
    themselves.

 

    c. Choice of Law.  This Agreement
    shall be governed by, 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.

    

    2

 

    d. Modification or Amendment.  This
    Agreement may only be modified or amended by written agreement
    executed by the parties hereto; provided, however, that the
    adjustments permitted pursuant to Section 4.2 of the Plan
    may be made without such written agreement.

 

    e. Severability.  In the event any
    provision of this Agreement shall be held illegal or invalid for
    any reason, the illegality or invalidity shall not affect the
    remaining provisions of this Agreement, and this Agreement shall
    be construed and enforced as if such illegal or invalid
    provision had not been included.

 

    f. References to Plan.  All
    references to the Plan shall be deemed references to the Plan as
    may be amended from time to time.

 

    g. Headings.  The captions used in
    this Agreement are inserted for convenience and shall not be
    deemed a part of this Award for construction or interpretation.

 

    h. Interpretation.  Any dispute
    regarding the interpretation of this Agreement shall be
    submitted by the Director or by the Company forthwith to the
    Committee, which shall review such dispute at its next regular
    meeting. If the Director is a member of the Committee, the
    Director shall not participate in such review. The resolution of
    such dispute by the Committee shall be final and binding on all
    persons.

 

    i. Section 409A of the
    Code.  The provisions of this Agreement and
    any payments made herein are intended to comply with, and should
    be interpreted consistent with, the requirements of
    Section 409A of the Code, and any related regulations or
    other effective guidance promulgated thereunder by the
    U.S. Department of the Treasury or the Internal Revenue
    Service.

 

    j. Signature in Counterparts.  This
    Agreement may be signed in counterparts, each of which shall be
    an original, with the same effect as if the signatures thereto
    and hereto were upon the same instrument.

 

    ITT Corporation

 

			
	 	    By: 
	
        

    Name:     

			
	 	    Title: 
	

 

    The Director represents that s/he is familiar with the terms and
    provisions thereof, and hereby accepts this Agreement subject to
    all of the terms and provisions thereof. The Director has
    reviewed the Plan and this Agreement in their entirety, has had
    an opportunity to obtain the advice of counsel prior to
    executing this Agreement and fully understands all provisions of
    this Agreement. The Director hereby agrees to accept as binding,
    conclusive and final all decisions or interpretations of the
    Committee upon any questions arising under the Plan or this
    Agreement.

 

 

    Signed: ­
    ­

                     Director

 

    Dated: ­
    ­

    

    3

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