EXHIBIT 10.13



 



Exhibit 10.13


AMERICAN STANDARD COMPANIES INC.

CORPORATE OFFICER SEVERANCE PLAN



(As Amended and Restated as of July 10, 2003)



Section I. Purpose.



     The purpose of the Plan is to provide elected officers of the Company with
severance benefits should their employment with the Company terminate under the
circumstances described below. The Plan supersedes any and all previous
severance pay practices or policies of the Company, whether written or
unwritten.


Section II. Definitions.



     A.     Agreement and Release – means an agreement prepared by the Company
under which a Participant, in return for the benefits provided under the Plan,
agrees to release the Company and its affiliates from any and all claims which
such Participant may have against the Company at the time the agreement is
executed, and further agrees to certain other undertakings, including
cooperation with the Company in any matter which may give rise to legal claims
against the Company, a one year non-competition obligation, keeping
confidential proprietary information of the company as well as the terms of the
Agreement and Release, settlement of any disputes concerning the Agreement and
Release through binding arbitration, and such other undertakings as the Company
may require from time to time.


     B.     Beneficial Owner -   means any “person”, as such term is used in Section
13(d) of the Act, who, directly or indirectly, has or shares the right to vote
or dispose of such securities or otherwise has “beneficial ownership” of such
securities (within the meaning of Rule 13d-3 and Rule 13d-5 under the Act),
including pursuant to any agreement, arrangement or understanding (whether or
not in writing).


     C.     Board -  means the Board of Directors of the Company.


     D.     Cause -  means a Participant’s (i) willful and continued failure
substantially to perform his or her duties with the Company or any Subsidiary
(other than any such failure resulting from incapacity due to reasonably
documented physical or mental illness), after a


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demand for substantial
performance is delivered to such Participant by the Chairman of the
Board or officer of equivalent authority which specifically identifies the
manner in which it is believed that such Participant has not substantially
performed his or her duties, (ii) conviction of, or plea of nolo contendere
to, a felony, or (iii) the willful engaging by such Participant in gross
misconduct materially and demonstrably injurious to the Company or any
Subsidiary or to the trustworthiness or effectiveness of the Participant in the
performance of his or her duties. For purposes hereof, no act, or failure to
act, on such Participant’s part shall be considered “willful” unless done, or
omitted to be done, by him or her not in good faith and without reasonable
belief that his or her action or omission was in the best interest of the
Company or a Subsidiary. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by such Participant in good faith and in the best interest
of the Company or such Subsidiary.


     E.     Change of Control -   shall mean the occurrence of any of the following
events:



		
	 	     (i) any “person”, as such term is used in Section 13(d) of the
Act (other than the Company, any Subsidiary or any employee benefit
plan maintained by the Company or any Subsidiary (or any trustee or
other fiduciary thereof)) is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing
20% or more of the combined voting power of the Company’s
then-outstanding securities, provided, however, that an acquisition
of securities of the Company representing less than 25% of the
combined voting power shall not constitute a Change of Control if,
prior to meeting the 20% threshold, the members of the board who
are not employees of the Corporation or a Subsidiary Company
unanimously adopt a resolution consenting to such acquisition by
such Beneficial Owners;




		
	 	     (ii) during any consecutive 24-month period, individuals who
at the beginning of such period constitute the Board, together with
those individuals who first become directors during such period
(other than by reason of an agreement with the Company or the Board
in settlement of a proxy contest for the election of directors) and
whose election or nomination for election to the Board was approved
by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the period or
whose election



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	 	or nomination for election was previously so approved (the
“Continuing Directors”), cease for any reason to constitute a
majority of the Board;




		
	 	     (iii) the consummation of any merger, consolidation,
recapitalization or reorganization involving the Company, other
than any such transaction immediately following which the persons
who were the Beneficial Owners of the outstanding voting securities
of the Company immediately prior to such transaction are the
Beneficial Owners of at least 55% of the total voting power
represented by the voting securities of the entity surviving such
transaction or the ultimate parent of such entity in substantially
the same relative proportions as their ownership of the Company’s
voting securities immediately prior to such transaction; provided
that, such continuity of ownership (and preservation of relative
voting power) shall be deemed to be satisfied if the failure to
meet such threshold (or to preserve such relative voting power) is
due solely to the acquisition of voting securities by an employee
benefit plan of the Company, such surviving entity, any Subsidiary
or any subsidiary of such surviving entity;




		
	 	     (iv) the sale of substantially all of the assets of the
Company to any person other than any Subsidiary or any entity in
which the Beneficial Owners of the outstanding voting securities of
the Company immediately prior to such sale are the Beneficial
Owners of at least 55% of the total voting power represented by the
voting securities of such entity or the ultimate parent of such
entity in substantially the same relative proportions as their
ownership of the Company’s voting securities immediately prior to
such transaction; or




		
	 	     (v) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company.



     F.     Company -  means American Standard Companies Inc., a Delaware
corporation, and any successor thereto.


     G.     Disability -  means a Participant’s inability, due to reasonably
documented physical or mental illness, for more than six months to perform his
or her duties with the Company or a Subsidiary on a full time basis if, within
30 days after written notice of termination has been given to such Participant,
he or she shall not have returned to the full time performance of his or her
duties.


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H.     Effective Date -  means April 27, 1991.


I.     Good Reason -  means any of the following:



		
	          (i) an adverse change in a Participant’s status or position(s) as an
executive of the Company, any adverse change in a Participant’s status or
position as an executive of the Company as a result of a material
diminution in his or her duties or responsibilities or a relocation of a
Participant’s principal place of employment to a location which is at
least 30 miles further from such Participant’s principal residence than
his or her current location or the assignment to him or her of any duties
or responsibilities which are inconsistent with such status or
position(s), or any removal of such Participant from or any failure to
reappoint or reelect him or her to such position(s) (except in connection
with the termination of his or her employment for Cause, Disability or
retirement or as a result of his or her death or by him or her other than
for Good Reason);



           (ii)  a reduction by the Company in such Participant’s base salary;



		
	          (iii) the taking of any action by the Company or a Subsidiary
(including the elimination of a plan without providing substitutes
therefor or the reduction of his or her awards thereunder) that would
substantially diminish the aggregate projected value of such
Participant’s awards under the Company’s or such Subsidiary’s bonus and
benefit plans in which he or she was participating at the time of the
taking of such action;




		
	          (iv) the taking of any action by the Company or such Subsidiary that
would substantially diminish the aggregate value of the benefits provided
such Participant under the Company’s or such Subsidiary’s medical,
health, accident, disability, life insurance, thrift and retirement plans
in which he or she was participating at the time of the taking of such
action; or




		
	          (v) any purported termination by the Company of such Participant’s
employment that is not effected for Cause, provided that this shall not
include termination of employment at age sixty-five pursuant to the
Company’s mandatory retirement policy for Corporate Officers.



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	 	     Notwithstanding the foregoing, a termination for Good Reason shall
not have occurred (a) if the Participant consented in writing to the
event giving rise to the “Good Reason”, (b) if the Participant
voluntarily terminates his or her employment more than ninety (90) days
after the occurrence of the event constituting Good Reason, or (c) with
regard to the occurrence of the events described in paragraphs 4(ii),
(iii) and (iv) above prior to a Change of Control, if such reductions or
actions are proportionate to the reductions or actions applicable to
other employees in similar positions pursuant to a cost savings plan.



     J.     Participant -  means each elected officer of the Company.


     K.     Plan -  means the American Standard Companies Inc. Corporate Officer
Severance Plan.


     L.     Plan Administrator -  means the Management Development and Compensation
Committee of the Board (the “MDC”) or any committee or individual designated by
the MDC to perform some or all of its administrative functions hereunder.


     M.     Subsidiary -  means any corporation or partnership in which the Company
owns, directly or indirectly, 50% or more of the total combined voting power of
all classes of stock of such corporation or of the capital interest or profits
interest of such partnership.


Section III. Eligibility.



     A Participant shall be eligible to receive the benefits provided under the
Plan in the event that:



	 	(i)	 	such Participant voluntarily terminates his or her employment
for Good Reason or suffers an involuntary termination by the Company
other than a termination for Cause, provided that in either case
such termination shall not include a termination upon attainment of
age sixty-five pursuant to the Company’s mandatory retirement policy
for Corporate Officers; and
	 
	 	(ii)	 	such Participant executes an Agreement and Release in a form
acceptable to the Company at the time of the Participant’s
termination of employment.



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No other individual shall be eligible for benefits under the Plan and the
payment of benefits hereunder shall not be affected by the payment of
retirement or other benefits under any other Company plan.


Section IV. Severance Payments.



     A Participant who satisfies the eligibility requirements of Section III
hereof shall receive severance payments equal to the sum of the following:


     A.     an amount equal to two times (or in the case of the Chief Executive
Officer of the Company three times) the Participant’s annual base salary in
effect on the date the termination occurs; plus


     B.     the amount of the Participant’s annual incentive plan target award in
effect for the calendar year in which the termination occurs determined without
regard to whether the applicable targets are obtained, multiplied by a
fraction, the numerator of which is the number of days in the year of
termination that the Participant was an employee of the Company, and the
denominator of which is 365; plus


     C.     the amount (or in the case of the Chief Executive Officer, two times
the amount) of the Participant’s annual incentive plan target award in effect
for the year in which the termination occurs determined without regard to
whether the applicable targets are obtained.


Section V. Certain Additional Payments by the Company.


     (A)  Anything in this Plan to the contrary notwithstanding, in the event it
shall be determined that any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by the Company (or
any of its affiliated entities) or any entity which effectuates a Change of
Control (or any of its affiliated entities) to or for the benefit of a
Participant (whether pursuant to the terms of this Plan or otherwise, but
determined without regard to any additional payments required under this
Section V) (the “Payments”) would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or
any interest or penalties are incurred by a Participant with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter


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collectively referred to as the “Excise Tax”), then the Company shall pay
to such Participant (or to the Internal Revenue Service on behalf of
Participant) an additional payment (a “Gross-Up Payment”) in an amount such
that after payment by such Participant of all taxes (including any Excise Tax)
imposed upon the Gross-Up Payment, such Participant retains (or has had paid to
the Internal Revenue Service on his behalf) an amount of the Gross-Up Payment
equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the
product of any deductions disallowed because of the inclusion of the Gross-Up
Payment in such Participant’s adjusted gross income and the highest applicable
marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made. For purposes of determining the amount of the
Gross-Up Payment, a Participant shall be deemed (i) to pay federal income taxes
at the highest marginal rates of federal income taxation for the calendar year
in which the Gross-Up Payment is to be made, (ii) to pay applicable state and
local income taxes at the highest marginal rate of taxation for the calendar
year in which the Gross-Up Payment is to be made, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such state
and local taxes and (iii) to have otherwise allowable deductions for federal
income tax purposes at least equal to the Gross-Up Payment.


     (B)  Subject to the provisions of Section V(a), all determinations required
to be made under this Section V, including whether and when a Gross-Up Payment
is required, the amount of such Gross-Up Payment, and the assumptions to be
utilized in arriving at such determinations, shall be made by the public
accounting firm that is retained by the Company as of the date immediately
prior to the Change of Control (the “Accounting Firm”) which shall provide
detailed supporting calculations both to the Company and the Participant within
fifteen (15) business days of the receipt of notice from the Company or
Participant that there has been a Payment, or such earlier time as is requested
by the Company (collectively, the “Determination”). In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Participant may appoint another
nationally recognized public accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company and the Company shall enter into any agreement
reasonably requested by the Accounting Firm in connection with the performance
of the services hereunder. The Gross-Up Payment under this Section V with
respect to any Payments shall be made no later than thirty (30) days following
such Payment. If the Accounting Firm determines that no Excise Tax is payable
by the


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Participant, it shall furnish the Participant with a written opinion to
such effect, and to the effect that failure to report the Excise Tax, if any,
on the Participant’s applicable federal income tax return will not result in
the imposition of a negligence or similar penalty. The Determination by the
Accounting Firm shall be binding upon the Company and Participant. As a result
of the uncertainty in the application of Section 4999 of the Code at the time
of the Determination, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made (“Underpayment”) or Gross-Up
Payments are made by the Company which should not have been made
(“Overpayment”), consistent with the calculations required to be made
hereunder. In the event that the Participant thereafter is required to make
payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the
benefit of the Participant. In the event the amount of the Gross-Up Payment
exceeds the amount necessary to reimburse the Participant for his Excise Tax,
the Accounting Firm shall determine the amount of the Overpayment that has been
made and any such Overpayment (together with interest at the rate provided in
Section 1274(b)(2) of the Code) shall be promptly paid by the Participant (to
the extent he has received a refund if the applicable Excise Tax has been paid
to the Internal Revenue Service) to or for the benefit of the Company.


Section VI. Payment of Benefits.



     Unless the Plan Administrator determines otherwise, all severance payments
hereunder shall be paid in a single lump sum at, or as soon as practicable
after, the Participant’s termination of employment.


Section VII. Continuation of Welfare Plan Coverage.



     In the event of a Participant’s voluntary termination for Good Reason or
his or her involuntary termination by the Company other than a termination for
Cause, such Participant will be entitled, upon payment of any premiums or
co-payments theretofore required for such coverage, to continue all life,
accident and health coverage, on the same basis as in effect on the date he or
she terminated employment, for a period of 24 months from the date of
termination (36 months in the case of the Chief Executive Officer), provided
that, to the extent permitted by law, such coverage may be terminated at the
discretion of the Plan Administrator in the event the Participant obtains at
least equal alternate coverage.


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Section VIII. Financial Planning Assistance.



     The Company will reimburse a Participant for all bills which the Plan
Administrator determines are reasonably related to financial planning
assistance and tax preparation, provided that such bills are incurred and
evidence of payment by the Participant is submitted to the Plan Administrator
within one year after the date of termination.


Section IX. Reservation of Right to Amend and Terminate.



     The Company reserves the right, whether in an individual case or more
generally, by a majority of the Continuing Directors to amend, reduce or
eliminate the Plan, in whole or in part, at any time and from time to time
without notice, provided that no amendment to this Plan shall be made for two
years following the occurrence of a Change of Control if such amendment would
reduce the benefits hereunder and no such amendment shall be effective if a
Change of Control occurs within six months following such amendment.


Section X. Relationship to Other Benefits.



     No payment under the Plan shall be taken into account in determining any
payments, benefits, coverage levels or participation rates under any incentive
compensation plan, any pension, retirement, profit sharing, group insurance, or
other benefit plan of the Company; provided that, a Participant shall not be
entitled to receive the severance payment set forth in Section IV.B. of this
Plan if such Participant becomes entitled to receive a comparable payment
pursuant to Section 10.3 of the Company’s 2002 Omnibus Incentive Plan (or any
successor thereto) by reason of a Change of Control.


Section XI. Administration.



     Subject to Section V of the Plan, the Plan Administrator shall have full
power and authority to interpret and carry out the terms of the Plan, and to
exercise discretion where necessary or appropriate in the interpretation and
administration of the Plan, and prior to a Change of Control all decisions by
the Plan Administrator shall be final and binding on all affected parties.


Section XII. Expenses.



     All expenses of administering the Plan shall be borne by the Company.


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Section XIII. Withholding.



     The Company may withhold from any amounts payable hereunder such Federal,
state or local taxes as may be required to be withheld pursuant to any
applicable law or regulation.


Section XIV. Governing Law.



     This Plan and all rights and obligations hereunder shall be construed in
accordance with and governed by the laws of the State of Delaware, without
reference to the principles of conflict of laws.



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