Document:

FORM OF XYLEM 2011 OMNIBUS INCENTIVE PLAN-- NON EMPLOYEE DIRECTOR

 Exhibit 10.26 
 FORM OF XYLEM 
 2011 OMNIBUS INCENTIVE PLAN 

2012 RESTRICTED STOCK UNIT AWARD AGREEMENT 
 Non-Employee Director 
  

 
  

NOTICE OF RESTRICTED STOCK UNIT AWARD 
 Xylem Inc. (the “Company”) grants to the Director named below, in accordance with the terms of the Xylem 2011 Omnibus 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	  	[Non-Employee Director Name]
	RESTRICTED STOCK UNITS GRANTED	  	[ #,####    ]
	DATE OF GRANT	  	[ MM/DD/YYYY]
	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:
			
		  	Vesting Date(s)	  	 Restricted

Stock Units
 Vesting

		  	 	  	 
			
		  	the Business Day immediately prior to the Xylem Inc. 2013 Annual Meeting.	  	 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. 

  
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	 	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. 

 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 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 to receive cash payments equal to the Fair Market Value of such Shares on
vest date 

  

	 	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 (other than in 

  
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connection with the Director’s commencement of services as a director of a Spinco), 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. 

  

	 	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. 

 

	 	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 

  
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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. 

 Xylem Inc.

 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
	(Online acceptance constitutes agreement)
		
	Dated:	 	 __________________________________

  
 4FORM OF XYLEM 2011 OMNIBUS INCENTIVE PLAN---OPTION AWARD AGREEMENT

 Exhibit 10.27 
 FORM OF XYLEM 
 2011 OMNIBUS INCENTIVE PLAN 

2012 NON-QUALIFIED STOCK OPTION AWARD AGREEMENT 
 THIS AGREEMENT (the “Agreement”), effective as of the 2nd day of March, 2012, by and between Xylem Inc. (the “Company”) and [name] (the “Optionee”), WITNESSETH:

 WHEREAS, the Optionee is now employed by the Company or an Affiliate (as defined in the Company’s 2011 Omnibus Incentive Plan,
(the “Plan”)) as an employee, and in recognition of the Optionee’s valued services, the Company, through the Leadership Development and Compensation Committee of its Board of Directors (the “Committee”), desires to provide
an opportunity for the Optionee to acquire or enlarge stock ownership in the Company, pursuant to the provisions of the Plan. 
 NOW,
THEREFORE, in consideration of the terms and conditions set forth in this Agreement and the provisions of the Plan, a copy of which is attached hereto and incorporated herein as part of this Agreement, and any administrative rules and regulations
related to the Plan as may be adopted by the Committee, the parties hereto hereby agree as follows: 
  

	1.	 Grant of Options.    In accordance with, and subject to, the terms and conditions of the Plan and this Agreement, the
Company hereby confirms the grant on March 2nd2012, (the “Grant Date”) to the Optionee of the option to purchase from the Company all or any part of an aggregate of #,### Shares (the “Option”), at the purchase
price of $[     ] per Share (the “Option Price” or “Exercise Price”). The Option shall be a Nonqualified Stock Option. 

 

	2.	 Terms and Conditions.    It is understood and agreed that the Option is subject to the following terms and conditions:

  

	 	(a)	 Expiration Date.    The Option shall expire on March 2, 2022, or, if the Optionee’s employment terminates before
that date, on the date specified in subsection (f) below. 

  

	 	(b)	 Exercise of Option.    The Option may not be exercised until it has become vested. 

 

	 	(c)	 Vesting.    Subject to subsections 2(a) and 2(f), the Option shall vest in three installments as follows:

  

	 	(i)	 1/3 of the Option shall vest on March 2, 2013,  

 

	 	(ii)	 1/3 of the Option shall vest on March 2, 2014, and 

 

	 	(iii)	 1/3 of the Option shall vest on March 2, 2015,  

Subject to subsections 2(a) and 2(f), to the extent not earlier vested pursuant to paragraphs (i), (ii), and (iii) of this
subsection (c), the Option shall vest in full upon an Acceleration Event (as defined in the Plan). 
  

	 	(d)	 Payment of Exercise Price. Permissible methods for payment of the Exercise Price upon exercise of the Option are described in Section 6.6 of the
Plan, or, if the Plan is amended, successor provisions. In addition to the methods of exercise permitted by Section 6.6 of the Plan, the Optionee may exercise all or part of the Option by way of (i) broker-assisted

  
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cashless exercise in a manner consistent with the Federal Reserve Board’s Regulation T, unless the Committee determines that such exercise method is prohibited by law, or
(ii) net-settlement, whereby the Optionee directs the Company to withhold Shares that otherwise would be issued upon exercise of the Option having an aggregate Fair Market Value on the date of the exercise equal to the Exercise Price, or the
portion thereof being exercised by way of net-settlement (rounding up to the nearest whole Share). 

  

	 	(e)	 Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require the Optionee to remit to the Company, all applicable
federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to the exercise of the Option. The Optionee may elect to satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares that otherwise would be issued upon exercise of the Option, with the number of Shares withheld having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on the
transaction (rounding up to the nearest whole Share). Any such election shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate. 

 

	 	(f)	 Effect of Termination of Employment. 

 If the Optionee’s employment terminates before March 2, 2022, the Option shall expire on the date set forth below, as applicable: 

 

	 	(i)	 Termination due to Death. If the Optionee’s employment is terminated as a result of the Optionee’s death, the Option shall expire on the
earlier of March 2, 2022, or the date three years after the termination of the Optionee’s employment due to death. If all or any portion of the Option is not vested at the time of the Optionee’s termination of employment due to
death, the Option shall immediately become 100% vested. 

  

	 	(ii)	 Termination due to Disability. If the Optionee’s employment is terminated as a result of the Optionee’s Disability (as defined below), the
Option shall expire on the earlier of March 2, 2022, or the date five years after the termination of the Optionee’s employment due to Disability. If all or any portion of the Option is not vested at the time of the termination of
the Optionee’s employment due to Disability, the Option shall immediately become 100% vested. 

  

	 	(iii)	 Termination due to Retirement. If the Optionee’s employment is terminated as a result of the Optionee’s Retirement (as defined below), the
Option shall expire on the earlier of March 2, 2022, or the date five years after the termination of the Optionee’s employment due to Retirement. If all or any portion of the Option is not vested at the time of the Optionee’s
termination of employment due to Retirement, a prorated portion of the unvested portion of the Option shall immediately vest as of the date of the termination of employment (see “Prorated Vesting Upon Retirement” below). Any remaining
unvested portion of the Option shall expire as of the date of the termination of the Optionee’s employment. For purposes of this subsection 2(f)(iii), the Optionee shall be considered employed during any period in which the Optionee is
receiving severance payments (disregarding any delays required to comply with tax or other requirements), and the date of the termination of the Optionee’s employment shall be the last day of any such severance period.

  

	 	(iv)	 Cause. If the Optionee’s employment is terminated by the Company (or an Affiliate, as the case may be) for cause (as determined by the Committee),
the vested and unvested portions of the Option shall expire on the date of the termination of the Optionee’s employment. 

  
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	 	(v)	 Voluntary Termination or Other Termination by the Company. If the Optionee’s employment is terminated by the Optionee or terminated by the Company
(or an Affiliate, as the case may be) for other than cause (as determined by the Committee), and not because of the Optionee’s Retirement, Disability or death, the vested portion of the Option shall expire on the earlier of March 2,
2022, or the date three months after the termination of the Optionee’s employment. Any portion of the Option that is not vested (or the entire Option, if no part was vested) as of the date the Optionee’s employment terminates shall
expire immediately on the date of termination of employment, and such unvested portion of the Option (the entire Option, if no portion was vested on the date of termination) shall not thereafter be exercisable. For purposes of this subsection
2(f)(v), the Optionee shall be considered employed during any period in which the Optionee is receiving severance payments, and the date of the termination of the Optionee’s employment shall be the last day of any such severance period.

 Notwithstanding the foregoing, if an Optionee’s employment is terminated on or after an
Acceleration Event (A) by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), and not because of the Optionee’s Retirement, Disability, or death, or (B) by the Optionee because the
Optionee in good faith believed that as a result of such Acceleration Event he or she was unable effectively to discharge his or her present duties or the duties of the position the Optionee occupied just prior to the occurrence of such Acceleration
Event, the Option shall in no event expire before the earlier of the date that is 7 months after the Acceleration Event or March 2, 2022. 
 Retirement. For purposes of this Agreement, the term “Retirement” shall mean the termination of the Optionee’s employment if, at the time of such termination, the Optionee is eligible to
commence receipt of retirement benefits under a traditional formula defined benefit pension plan maintained by the Company or an Affiliate (or would be eligible to receive such benefits if he or she were a participant in such a traditional formula
defined benefit pension plan) or if no such plan is maintained, the first day of the month which coincides with or follows the Optionee’s 65th birthday. 
 Disability. For purposes of this Agreement, the term “Disability” shall mean the complete and permanent inability of the Optionee to perform all of his or her duties under the terms of his or her
employment, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. 

Prorated Vesting Upon Retirement. The prorated portion of an Option that vests upon termination of the Optionee’s
employment due to the Optionee’s Retirement shall be determined by multiplying the total number of unvested Shares subject to the Option at the time of the termination of the Optionee’s employment by a fraction, the numerator of which is
the number of full months the Optionee has been continually employed since the Grant Date and the denominator of which is 36. For this purpose, full months of employment shall be based on monthly anniversaries of the Grant Date, not calendar months.

  

	 	(g)	 Compliance with Laws and Regulations. The Option shall not be exercised at any time when its exercise or the delivery of Shares hereunder would
be in violation of any law, rule, or regulation that the Company may find to be valid and applicable. 

  

	 	(h)	 Optionee Bound by Plan and Rules. The Optionee hereby acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by the terms
and provisions thereof as amended from time to time. The Optionee agrees to be bound by any rules and regulations for administering the Plan as may be adopted by the Committee during the life of the Option. Terms used herein and not otherwise
defined shall be as defined in the Plan. 

  
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	 	(i)	 Governing Law. This Agreement is issued, and the Option evidenced hereby is granted, in White Plains, New York and shall be governed 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.

  
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 By signing a copy of this Agreement, the Optionee acknowledges that s/he has received a copy of the
Plan, and that s/he has read and understands the Plan and this Agreement and agrees to the terms and conditions thereof. The Optionee further acknowledges that the Option awarded pursuant to this Agreement must be exercised prior to its expiration
as set forth herein, that it is the Optionee’s responsibility to exercise the Option within such time period, and that the Company has no further responsibility to notify the Optionee of the expiration of the exercise period of the Option.

 IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its President and Chief Executive Officer, or a
Vice President, as of the 2nd day of March, 2012. 
  

					
	 Agreed to:
	 		 	XYLEM INC.

  

							
				
	____________________________	 		 		 	
	Optionee	 		 		 	
	(Online acceptance constitutes agreement)	 		 		 	
				
	Dated:
                                	 		 		 	Dated: March 2, 2012
	Enclosures	 		 		 	

  
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