Exhibit 10.40

 

Generic Form of Stock Option Agreement for Non-U.S. Based Employees

 

AMERICAN STANDARD COMPANIES INC.

STOCK OPTION GRANT AGREEMENT

FOR NON-U.S. EMPLOYEES

Dated as of February 1, 2006

 

AMERICAN STANDARD COMPANIES INC., a Delaware corporation (“Grantor”), hereby
grants to                  (“Participant”), an employee of Grantor or one of its
subsidiaries, the option to purchase (“Option”), at the exercise price set forth
below, a total of              shares of Common Stock, par value $.01 per share
(“Common Stock”), of the Grantor, pursuant to and subject to the terms and
conditions set forth in the Grantor’s 2002 Omnibus Incentive Plan (the “Plan”)
and to such further terms and conditions as are set forth below in this Stock
Option Grant Agreement (the “Agreement). Unless otherwise defined herein, the
terms defined in the Plan shall have the same meanings in this Agreement.

 

1. Exercise Price. The exercise price applicable to the shares of Common Stock
that may be purchased by the Participant pursuant to the Option is $            
per share, representing the Fair Market Value (as defined in the Plan) of the
Common Stock on the date hereof.

 

2. Non-Qualified Stock Option. The option to purchase shares of Common Stock
pursuant to the Option is granted as a “non-qualified stock option”, within the
meaning of the United States Internal Revenue Code of 1986, as amended.

 

3. Vesting. Participant’s right to purchase shares subject to the Option shall
vest in three equal installments on each of the first three anniversaries of the
grant, unless otherwise cancelled pursuant to Section 6 of the Plan or Section 7
of this Agreement.

 

4. Nature of Grant. In accepting the grant, the Participant acknowledges that:

 

(a) the Plan is established voluntarily by the Grantor, it is discretionary in
nature and it may be modified, suspended or terminated by the Grantor at any
time, as provided in the Plan and this Agreement;

 

(b) the grant of the Option is voluntary and occasional and does not create any
contractual or other right to receive future grants of options, or benefits in
lieu of options, even if options have been granted repeatedly in the past;

 

(c) all decisions with respect to future option grants, if any, will be at the
sole discretion of the Grantor;

 

(d) the Participant is voluntarily participating in the Plan;

 

(e) the Option is an extraordinary item which is outside the scope of the
Participant’s employment contract, if any;

 

(f) the Option is not part of normal or expected compensation or salary for any
purposes, including, but not limited to, calculating any severance, resignation,
termination, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments; and

 

(g) in the event of involuntary termination of the Participant’s employment, his
or her right to receive options and vest in the Option under the Plan, if any,
will terminate effective as of the date that the Participant is no longer
actively employed and will not be extended by any notice period mandated under
local law (e.g., active employment would not include a period of “garden

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leave” or similar period pursuant to local law); furthermore, in the event of
involuntary termination of employment, the Participant’s right to exercise the
Option after termination of employment, if any, will be measured by the date of
termination of the Participant’s active employment and will not be extended by
any notice period mandated under local law.

 

5. Responsibility for Taxes. Prior to exercise of the Option, the Participant
shall pay or make adequate arrangements satisfactory to the Grantor and/or the
Employer to satisfy all income tax, social insurance, payroll tax, payment on
account or other tax-related withholding obligations of the Grantor and/or the
Employer (“Tax-Related Items”). In this regard, the Participant authorizes the
Grantor and/or the Employer to withhold all applicable Tax-Related Items legally
payable by the Participant from his or her wages or other cash compensation paid
to the Participant by the Grantor and/or the Employer or from proceeds of the
sale of the shares of Common Stock. Finally, the Participant shall pay to the
Grantor or the Employer any amount of Tax-Related Items that the Grantor or the
Employer may be required to withhold as a result of the Participant’s
participation in the Plan or his or her purchase of shares that cannot be
satisfied by the means previously described. The Grantor may refuse to honor the
exercise and refuse to deliver the shares if the Participant fails to comply
with his or her obligations in connection with the Tax-Related Items as
described in this section.

 

6. Data Privacy. THE PARTICIPANT HEREBY EXPLICITLY AND UNAMBIGUOUSLY CONSENTS TO
THE COLLECTION, USE AND TRANSFER, IN ELECTRONIC OR OTHER FORM, OF HIS OR HER
PERSONAL DATA AS DESCRIBED IN THIS AGREEMENT BY AND AMONG, AS APPLICABLE, THE
EMPLOYER, THE GRANTOR AND ITS SUBSIDIARIES AND AFFILIATES FOR THE EXCLUSIVE
PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING HIS OR HER PARTICIPATION IN
THE PLAN.

 

THE PARTICIPANT UNDERSTANDS THAT THE GRANTOR AND THE EMPLOYER HOLD CERTAIN
PERSONAL INFORMATION ABOUT HIM OR HER, INCLUDING, BUT NOT LIMITED TO, HIS OR HER
NAME, HOME ADDRESS AND TELEPHONE NUMBER, WORK LOCATION AND PHONE NUMBER, DATE OF
BIRTH, STOCK OPTION PLAN IDENTIFICATION NUMBER, HIRE DATE, HOME COUNTRY, DETAILS
OF ALL OPTIONS OR ANY OTHER ENTITLEMENT TO SHARES OF COMMON STOCK AWARDED,
CANCELLED, EXERCISED, VESTED, UNVESTED OR OUTSTANDING IN THE PARTICIPANT’S
FAVOR, FOR THE PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING THE PLAN
(“PERSONAL DATA”). THE PARTICIPANT UNDERSTANDS THAT PERSONAL DATA MAY BE
TRANSFERRED TO ANY THIRD PARTIES ASSISTING IN THE IMPLEMENTATION, ADMINISTRATION
AND MANAGEMENT OF THE PLAN, THAT THESE RECIPIENTS MAY BE LOCATED IN THE
PARTICIPANT’S COUNTRY OR ELSEWHERE, AND THAT THE RECIPIENT’S COUNTRY MAY HAVE
DIFFERENT DATA PRIVACY LAWS AND PROTECTIONS THAN THE PARTICIPANT’S COUNTRY. THE
PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY REQUEST A LIST WITH THE NAMES AND
ADDRESSES OF ANY POTENTIAL RECIPIENTS OF THE PERSONAL DATA BY CONTACTING HIS OR
HER LOCAL HUMAN RESOURCES REPRESENTATIVE. THE PARTICIPANT AUTHORIZES THE
RECIPIENTS TO RECEIVE, POSSESS, USE, RETAIN AND TRANSFER THE PERSONAL DATA, IN
ELECTRONIC OR OTHER FORM, FOR THE PURPOSES OF IMPLEMENTING, ADMINISTERING AND
MANAGING HIS OR HER PARTICIPATION IN THE PLAN, INCLUDING ANY REQUISITE TRANSFER
OF SUCH PERSONAL DATA AS MAY BE REQUIRED TO A BROKER OR OTHER THIRD PARTY WITH
WHOM THE PARTICIPANT MAY ELECT TO DEPOSIT ANY SHARES OF COMMON STOCK ACQUIRED
UPON EXERCISE OF THE OPTION. THE PARTICIPANT UNDERSTANDS THAT PERSONAL DATA WILL
BE HELD ONLY AS LONG AS IS NECESSARY TO IMPLEMENT, ADMINISTER AND MANAGE HIS OR
HER PARTICIPATION IN THE PLAN. THE PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY,
AT ANY TIME, VIEW PERSONAL DATA, REQUEST ADDITIONAL INFORMATION ABOUT THE
STORAGE AND PROCESSING OF PERSONAL DATA, REQUIRE ANY NECESSARY AMENDMENTS TO
PERSONAL DATA OR REFUSE OR WITHDRAW THE CONSENTS HEREIN, IN ANY CASE WITHOUT
COST, BY

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CONTACTING IN WRITING HIS OR HER LOCAL HUMAN RESOURCES REPRESENTATIVE. THE
PARTICIPANT UNDERSTANDS, HOWEVER, THAT REFUSING OR WITHDRAWING HIS OR HER
CONSENT MAY AFFECT HIS OR HER ABILITY TO PARTICIPATE IN THE PLAN. FOR MORE
INFORMATION ON THE CONSEQUENCES OF PARTICIPANT’S REFUSAL TO CONSENT OR
WITHDRAWAL OF CONSENT, THE PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY CONTACT
HIS OR HER LOCAL HUMAN RESOURCES REPRESENTATIVE.

 

7. Acceptance. This grant is subject to acceptance, within 90 days of its
receipt, by return to Grantor’s Senior Vice President-Human Resources of a
signed copy of this Agreement. Failure to accept the grant within 90 days of its
receipt shall result in the cancellation of the Option.

 

IN WITNESS WHEREOF, the duly authorized officers of the Grantor named below have
hereunto subscribed as of the day and year first above written.

 

    AMERICAN STANDARD COMPANIES INC. Attest:      

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    By:           Chairman and Chief Executive Officer

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        Secretary        

 

By signing this Agreement, the Participant acknowledges that he or she accepts
the Option granted hereunder, is familiar with the terms and conditions of this
Agreement and the Plan, and agrees to be bound by said terms and conditions.

 

 

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(Date)

 

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(Participant’s Signature)

 

This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.