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EXHIBIT 10(K)
ITT INDUSTRIES, INC. 1996 RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
ARTICLE I -- PLAN ADMINISTRATION AND ELIGIBILITY
1.1 PURPOSE
The purpose of the ITT Industries 1996 Restricted Stock Plan for
Non-Employee Directors (the "Plan") is to attract and retain persons of ability
as Directors of ITT Industries, Inc. (the "Company") and to provide them with a
closer identity with the interests of the Company's stockholders by paying the
Annual Retainer in common stock of the Company.
1.2 ADMINISTRATION
The Plan shall be administered by the Compensation and Personnel Committee
of the Board of Directors (hereinafter referred to as the "Committee"). The
Committee shall have the responsibility of interpreting the Plan and
establishing and amending such rules and regulations necessary or appropriate
for the administration of the Plan. All interpretations of the Plan or any
Restricted Stock awards issued under it shall be final and binding upon all
persons having an interest in the Plan. No member of the Committee shall be
liable for any action or determination taken or made in good faith with respect
to this Plan or any award granted hereunder.
1.3 ELIGIBILITY
Directors of the Company who are not employees of the Company or any of its
subsidiaries shall be eligible to participate in the Plan.
1.4 STOCK SUBJECT TO THE PLAN
(a) The maximum number of shares which may be granted under the Plan shall
be 100,000 shares of common stock of the Company (the "Stock").
(b) If any Restricted Stock is forfeited by a Director in accordance with
the provisions of Section 2.2(c), such shares of Restricted Stock shall be
restored to the total number of shares available for grant pursuant to the Plan.
(c) Upon the grant of a Restricted Stock award the Company may distribute
newly issued shares or treasury shares.
ARTICLE II -- RESTRICTED STOCK
2.1 RESTRICTED STOCK AWARDS
Restricted Stock awards shall be made automatically on the date of the
Annual Meeting of Stockholders, to each Director elected at the meeting or
continuing in office following the meeting. The award shall equal the number of
whole shares arrived at by dividing the Annual Retainer that is in effect for
the calendar year within which the award date falls, by the Fair Market Value of
the Company's common stock. Fractional shares shall be paid in cash.
(a) "Annual Retainer" shall mean the amount that is payable to a Director
for service on the Board of Directors during the calendar year. Annual Retainer
shall not include fees paid for attendance at any Board or Committee meeting.
(b) "Fair Market Value" shall mean the average of the high and low prices
per share of the Company's common stock on the date of the Annual Meeting, as
reported by the New York Stock Exchange Composite Tape.
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2.2 TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS
(a) Written Agreement -- Each Restricted Stock award shall be evidenced by
a written agreement delivered to the Director in such form as the Committee
shall prescribe. Such agreement shall include the restrictions described under
Section 2.2(c) and any other restrictions and conditions on the shares as the
Committee deems appropriate.
(b) Shares held in Escrow -- The Restricted Stock subject to such award
shall be registered in the name of the Director and held in escrow by the
Committee until the restrictions on such shares lapse as described below.
(c) Restrictions -- Restricted Stock granted to a Director may not be sold,
assigned, transferred, pledged or otherwise disposed of, except by will or the
laws of descent and distribution, prior to the earliest of the following dates:
(1) The fifth anniversary of the date of grant.
(2) Retirement from the Board at age 72.
(3) "Change in Control" of the Company. A "Change in Control" shall be
deemed to have occurred 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 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 or more of the outstanding Stock of the
Company;
(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 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 (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of fifteen percent or more of the outstanding Stock of the
Company (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 or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of Stock
of the Company would be converted into cash, securities or other
property, other than a merger of the Company in which holders of Stock
of the Company immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
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; or
(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 were Directors at the beginning of such
12-month period.
(4) Death of the Director.
(5) Disability of the Director.
(6) Termination of service from the Board on account of (i) a physical
or mental condition that, in the opinion of a qualified physician, is
expected to impede the Director's ability to fulfill his or her principal
duties for a period of at least three months; (ii) the relocation of the
Director's principal place of business to a location that increases the
time required for such
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Director to travel to the Company's headquarters by more than 50%; (iii)
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; or (iv) any circumstances which, in the
opinion of outside counsel to the Company, would (or could reasonably be
expected to) conflict with applicable law or any written policy of the
Company.
(7) Notwithstanding Section 2.2(c)(2) hereof, retirement from the
Board at or after attaining age 65, provided that such Director was a
member of the Board of Directors of the Company's corporate predecessor,
ITT Corporation, a Delaware corporation, on December 18, 1995 and served as
a Director of the Company thereafter.
(d) Dividends and Voting Rights -- The Director shall, subject to Section
2.2(c), possess all incidents of ownership of the shares of Restricted Stock
including the right to receive dividends with respect to such shares and to vote
such shares.
(e) The Company shall deliver to the Director, or the beneficiary of such
Director, if applicable, all of the shares of stock that were awarded to the
Director as Restricted Stock, within 30 days following the lapse of restrictions
as described under Section 2.2(c). If the Director discontinues serving on the
Board prior to the date upon which restrictions lapse as described under Section
2.2(c), such Director's Restricted Stock will be forfeited by the Director and
transferred to and reacquired by the Company at no cost to the Company.
ARTICLE III -- GENERAL PROVISIONS
3.1 AUTHORITY
Appropriate officers of the Company designated by the Committee are
authorized to execute Restricted Stock agreements, and amendments thereto, in
the name of the Company, as directed from time to time by the Committee.
3.2 ADJUSTMENTS IN THE EVENT OF CHANGE IN COMMON STOCK OF THE COMPANY
In the event of any reorganization, merger, recapitalization,
consolidation, liquidation, stock dividend, stock split, reclassification,
combination of shares, rights offering, split-up, or extraordinary dividend
(including a spin-off) or divestiture, or any other change in the corporate
structure or shares, the number and kind of shares which thereafter may be
granted under the Plan and the number of shares of Restricted Stock awarded
pursuant to Section 2.1 with respect to which all restrictions have not lapsed,
shall be appropriately adjusted consistent with such change in such manner as
the Board in its discretion may deem equitable to prevent substantial dilution
or enlargement of the rights granted to, or available for, Directors
participating in the Plan. Any fractional shares resulting from such adjustments
shall be eliminated.
3.3 RIGHTS OF DIRECTORS
The Plan shall not be deemed to create any obligation on the part of the
Board to nominate any Director for reelection by the Company's stockholders or
to retain any Director at any particular rate of compensation. The Company shall
not be obligated to issue Stock pursuant to an award of Restricted Stock for
which the restrictions hereunder have lapsed if such issuance would constitute a
violation of any applicable law. Except as provided herein, no Director shall
have any rights as a stockholder with respect to any shares of Restricted Stock
awarded to him.
3.4 BENEFICIARY
A Director may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. In the event of the death of a
Director, his beneficiary shall have the right to receive the shares of
Restricted Stock awarded pursuant to the Plan. If no designated beneficiary
survives the Director, the executor or administrator of the Director's estate
shall be deemed to be the Director's beneficiary.
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3.5 LAWS AND REGULATIONS
The Committee shall have the right to condition any issuance of shares to
any Director hereunder on such Director's undertaking in writing to comply with
such restrictions on the subsequent disposition of such shares as the Committee
shall deem necessary or advisable as a result of any applicable law or
regulation. The Committee may postpone the delivery of stock following the lapse
of restrictions with respect to awards of Restricted Stock for such time as the
Committee in its discretion may deem necessary, in order to permit the Company
with reasonable diligence (i) to effect or maintain registration of the Plan, or
the shares issuable upon the lapse of certain restrictions respecting awards of
Restricted Stock, under the Securities Act of 1933 or the securities laws of any
applicable jurisdiction, or (ii) to determine that such shares and the Plan are
exempt from such registration; the Company shall not be obligated by virtue of
any Restricted Stock agreement or any provision of the Plan to recognize the
lapse of certain restrictions respecting awards of Restricted Stock or issue
shares in violation of said Act or of the law of the government having
jurisdiction thereof.
3.6 AMENDMENT, SUSPENSION AND DISCONTINUANCE OF THE PLAN
The Board may from time to time amend, suspend or discontinue the Plan,
provided that the Board may not, without the approval of the holders of a
majority of the outstanding shares entitled to vote, take any action which would
cause the Plan to no longer comply with Rule 16b-3 under the Act, or any
successor rule or other regulatory requirement.
No amendment, suspension or discontinuance of the Plan shall impair a
Director's right under a Restricted Stock award previously granted to him
without his consent.
3.7 GOVERNING LAW
This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of New York.
3.8 EFFECTIVE DATE AND DURATION OF THE PLAN
This Plan shall be effective upon the Distribution Date (as defined in the
Proxy Statement of ITT Corporation dated August 30, 1995) subject to the
approval of the Plan by the stockholders of ITT Corporation, and shall terminate
on December 31, 2005, provided that grants of Restricted Stock made prior to the
termination of the Plan may vest following such termination in accordance with
their terms.
As Amended
3/9/99