Document:

EXHIBIT 10.10

 

Exhibit 10.10

AMERICAN STANDARD COMPANIES INC.

EXECUTIVE SUPPLEMENTAL RETIREMENT BENEFIT PROGRAM

Restated to include all amendments through

July 10, 2003

 

 

ARTICLE I

DEFINITIONS

For all purposes of the Program the following definitions shall apply, with
words in the masculine gender including, where appropriate, the feminine
gender:

	 	 	Act means the Securities Exchange Act of 1934, as amended.
	 
	 	 	Actuarial Equivalent means, with respect to any monthly payments referred
to in Article IV, the lump sum payment which is the present value as of
the date of commencement of such monthly payments, determined using the
following actuarial assumptions:

	 	(a)	 	Mortality Table - 1983 Basic Group Annuity Mortality Table for
males projected to 1988 with Scale H; and
	 
	 	(b)	 	Interest - the lesser of
	 

	 	(1)	 	120% of the annual interest rate
used by the Pension Benefit Guaranty Corporation to value immediate annuities for
plans terminating as of the date as of which the applicant’s
monthly pension payments would otherwise commence; and
	 
	 	(2)	 	the average yield of long-term U.S. Treasury bonds
issued during the one month period ending one month before the
date as of which the applicant’s monthly pension payments would
otherwise commence, as published in the Federal Reserve Bulletin
under the heading “Composite Index: Over 10 Years (long-term),”
such average yield to be rounded to the nearest .25%;
	 

	 	 	 	provided that, for purposes of calculating a lump sum payment to a
Prior Participant or his Surviving Spouse the interest rate applied
to calculate that portion of such lump sum attributable to such Prior
Participant’s Special Years of Service shall be multiplied by sixty
and four-tenths percent (60.4%).

	 	 	Average Monthly Earnings of a Participating Employee means his total
Compensation for the three (3) calendar Years of Service (or such lesser
number of calendar years as may constitute his Years of Service) in his
last ten (10) calendar Years of Service (including in such ten (10)
calendar years the year in which his Service is broken), during which his
total Compensation was the highest, divided by thirty-six (36) (or such
lesser number as may constitute the number of calendar months of his Years
of Service).
	 
	 	 	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).
	 
	 	 	Board means the Board of Directors of the Corporation.

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	 	 	Cause means a Participant’s (i) willful and continued failure
substantially to perform his or her duties with the Corporation or any
Subsidiary (other than any such failure resulting from incapacity due to
reasonably documented physical or mental illness), after a 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 Corporation 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 Corporation 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 Corporation 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 Corporation or such Subsidiary.
	 
	 	 	Change of Control shall mean the occurrence of any of the following
events:
	 
	 	 	(a) any “person”, as such term is used in Section 13(d) of the Act (other
than the Corporation, any Subsidiary or any employee benefit plan
maintained by the Corporation or any Subsidiary (or any trustee or other
fiduciary thereof)) is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation representing 20% or more of
the combined voting power of the Corporation’s then-outstanding
securities, provided, however, that an acquisition of securities of the
Corporation 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 unanimously adopt a
resolution consenting to such acquisition by such Beneficial Owners;
	 
	 	 	(b) 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 Corporation 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 or nomination for
election was previously so approved (the “Continuing Directors”), cease
for any reason to constitute a majority of the Board;
	 
	 	 	(c) the consummation of any merger, consolidation, recapitalization or
reorganization involving the Corporation, other than any such transaction
immediately following which the persons who were the Beneficial Owners of
the outstanding voting securities of the Corporation 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 Corporation’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

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	 	 	acquisition of voting securities by an employee benefit plan of the
Corporation, such surviving entity, any Subsidiary or any subsidiary of
such surviving entity;
	 
	 	 	(d) the sale of substantially all of the assets of the Corporation to any
person other than any Subsidiary or any entity in which the Beneficial
Owners of the outstanding voting securities of the Corporation 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 Corporation’s voting securities
immediately prior to such transaction; or
	 
	 	 	(e) the shareholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation.
	 
	 	 	Code means the Internal Revenue Code of 1986, as amended.
	 
	 	 	Committee means the Committee constituted under Article III, Section 2
hereof.
	 
	 	 	Compensation means, for any calendar year, the total remuneration (other
than remuneration that is not treated as “Compensation” under and for
purposes of the ESOP) for Service rendered by a Participating Employee
during such year, including any annual incentive compensation awarded to
him with respect to such year, without regard to the year in which such
incentive compensation is received; provided that Compensation shall
include amounts deferred under the American Standard Companies Inc.
Deferred Compensation Plan that would otherwise be treated as
“Compensation” under and for purposes of the ESOP, and shall not include
any payments under the American Standard Companies Inc. Long-Term
Incentive Compensation Plan.
	 
	 	 	Corporation means American Standard Companies Inc. and its successors and
any predecessor corporation merged with or into, or any business acquired
by, American Standard Companies Inc.
	 
	 	 	Disability means a Participating Employee’s inability, due to reasonably
documented physical or mental illness, for more than six months to
perform his duties with the Corporation or a Subsidiary Corporation
on a full-time basis if, within 30 days after written notice of
termination has been given to such Participating Employee, he or she
shall not have returned to the full-time performance of their duties.
	 
	 	 	Employee means an employee of the Corporation or a Subsidiary Corporation.
	 
	 	 	ESOP means the American Standard Companies Inc. Employee Stock Ownership
Plan and any successor plan thereto.
	 
	 	 	ESOP Offset means two (2) times the value, as of the date when a
Participating Employee’s Service is broken, of the Basic Company
Contributions to his account under the ESOP.

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	 	 	Good Reason means any of the following:
	 
	 	 	(a) an adverse change in a Participating Employee’s status or position as
an executive of the Corporation, any adverse change in a Participating
Employee’s status or position as an executive of the Corporation as a
result of a material diminution in his or her duties or responsibilities
or a relocation of a Participating Employee’s principal place of
employment to a location which is at least 30 miles further from such
Participating Employee’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 Participating Employee 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 death or by him or her other than for Good Reason);
	 
	 	 	(b) a reduction by the Corporation in such Participating Employee’s base
salary;
	 
	 	 	(c) the taking of any action by the Corporation or a Subsidiary Company
(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 Participating
Employee’s awards under the Corporation’s or such Subsidiary Company’s
bonus and benefit plans in which the Participating Employee was
participating at the time of the taking of such action;
	 
	 	 	(d) the taking of any action by the Corporation or a Subsidiary Company
that would substantially diminish the aggregate value of the benefits
provided to the Participating Employee under the Corporation’s or such
Subsidiary Company’s medical, health, accident, disability, life
insurance, thrift and retirement plans in which the Participating Employee
was participating at the time of the taking of such action;
	 
	 	 	(e) any purported termination by the Corporation of the Participating
Employee’s employment that is not effected for Cause, provided that this
shall not include termination of employment at age sixty-five pursuant to
the Corporation’s mandatory retirement policy for Corporate officers.
	 
	 	 	Notwithstanding the foregoing, a termination for Good Reason shall not
have occurred (a) if the Participating Employee consented in writing to
the event giving rise to the Good Reason or (b) if the Participating
Employee voluntarily terminates his or her employment more than ninety
(90) days after the occurrence of the event constituting Good Reason.
	 
	 	 	Other Post-Retirement Benefits means, with respect to a Participating
Employee, his ESOP Offset, plus all amounts paid or payable to him or his
Surviving Spouse under or with respect to the Retirement Plan (including
any monthly pension payable hereunder because it exceeds the maximum
limitation on pension amounts imposed by Section 415 of the Code), the
American Standard Profit Sharing Plan and any other non-governmental
defined benefit or defined contribution employee pension plan (except the
Savings and Stock Ownership Plan of American Standard Inc. and
Participating Subsidiary Companies and the American Standard Employee
Stock Ownership Plan) to which the Corporation, any Subsidiary Company or
any previous employer of such Participating Employee had made
contributions, provided that in calculating such amounts the following
shall apply:

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	 	(a)	 	Any Other Post-Retirement Benefit which is offset under the
terms of the Retirement Plan shall be offset under this Program;
	 
	 	(b)	 	Such amounts shall include lump sum and installment
distributions which, together with all Other Post Retirement
Benefits, shall be expressed as an Actuarially Equivalent lifetime
annuity payable monthly.
	 
	 	(c)	 	Such amounts shall exclude benefits to the extent attributable
to contributions made by such Participating Employee; and
	 
	 	(d)	 	Such amounts shall reflect reductions for early commencement of
benefits, if any.

	 	 	Participating Employee means any Employee (including, unless the context
otherwise requires, an Employee who is a Prior Participant) who has been
and so long as he remains an officer of the Corporation elected as such by
the Board, but such term shall not include the Chairman of the Board on
January 1, 1991.
	 
	 	 	Primary Social Security Benefit shall have the meaning ascribed to
that term in and by the Retirement Plan. In the event that the
Participating Employee provides the Committee with the actual amount of
his Social Security Benefit plus the amounts, if any, payable to such
Employee under a foreign social insurance or pension system (which is
comparable in nature to the U.S. Social Security System) then the total of
such amounts if less than the U.S. Primary Social Security Benefit as
defined in the Retirement Plan shall be deemed the Participating
Employee’s Primary Social Security Benefit for the purposes of this
Program.
	 
	 	 	Program means the Amended and Restated Executive Supplemental Retirement
Benefit Program of American Standard Companies Inc., as set forth in this
document and as amended from time to time.
	 
	 	 	Retirement Plan means the Retirement Plan of American Standard Inc. and
Participating Subsidiary Companies, as in effect immediately before the
amendments thereto made as of June 30, 1988.
	 
	 	 	Service and Years of Service shall have the meanings ascribed to those
terms in and by the ESOP, except as otherwise provided herein in the
context of a Change of Control.
	 
	 	 	Subsidiary Company means any corporation whose outstanding voting stock is
owned, directly or indirectly, by the Corporation or another Subsidiary
Company.
	 
	 	 	Surviving Spouse means the person to whom a Participating Employee or
former Participating Employee was legally married on the earlier of the
date of his retirement or death.

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ARTICLE II

PURPOSE

The purpose of the Program is to further the achievement of corporate goals of
the Corporation by providing improved retirement income as a component of
executive compensation, by providing retirement income not subject to the
limits imposed on retirement plans qualified under Section 401(a) of the Code,
and by assisting in recruiting and retaining senior executives.

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ARTICLE III

AMENDMENT, CONTINUATION, ADMINISTRATION

Section 1 - Amendment and Continuation

The Board shall have the right to suspend or terminate the Program at any time
and, at any time or from time to time, to amend its terms; provided, however,
that no such action shall effect a forfeiture or a reduction in the amount of
any benefit under the Program that

	 	(a)	 	an Employee who had been a Participating Employee for at least
twelve (12) months prior to the month in which such action is
authorized or
	 
	 	(b)	 	the Surviving Spouse of such an Employee

would otherwise have been entitled to receive if such Employee had died on, or
retired as of the first of the month coinciding with or following, the
effective date of such action or, if later, the date of its authorization.
Notwithstanding any such suspension, termination or amendment, the Corporation
and Subsidiary Companies will at all times be free to establish other programs,
similar or different, for the benefit of any Employees. Notwithstanding
anything contained herein to the contrary, no such suspension, termination or
amendment shall be taken within two (2) years following a Change of Control
that shall diminish the rights provided herein to any Participating Employee,
including, without limitation, benefit formulas, accrued benefits or service.

Section 2 - Administration

The Program shall be administered by a committee of the Board (the “Committee”)
which is appointed by the Board. No member of such Committee shall be eligible
to participate in the Program. The Committee shall interpret the Program,
establish administrative policies, guidelines and rules and designate
Participating Employees thereunder, and take any other action necessary or
desirable for the proper operation of the Program. All such interpretations,
policies, guidelines, rules, designations and actions shall be final and
binding upon the Corporation, all Subsidiary Companies, all Employees and all
Participating Employees.

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ARTICLE IV

ELIGIBILITY FOR AND AMOUNT OF BENEFITS

Section 1 - Upon Retirement at or After Age Sixty-five

Any Participating Employee who, after completing at least five (5) Years of
Service, ceases to be an Employee on or after his sixty-fifth (65th) birthday
shall receive from the Corporation, no later than the thirtieth (30th) day of
the month coincident with or immediately succeeding his sixty-fifth (65th)
birthday (or the month in which he ceases to be an Employee, if later), a
single lump sum payment which shall be the Actuarial Equivalent of a monthly
payment, commencing with such month and continuing for his lifetime, in an
amount equal to the sum of (i) the excess of

	 	(a)	 	four percent (4%) of his Average Monthly Earnings, multiplied
by the number, not in excess of ten (10), of his Years of Service,
plus
	 
	 	(b)	 	one percent (1%) of his Average Monthly Earnings, multiplied by
the number of his Years of Service accumulated after his first ten
(10) Years of Service (to a maximum of twenty percent (20%) of such
Average Monthly Earnings),over the sum of
	 
	 	(c)	 	such Participating Employee’s Other Post-Retirement Benefits,
plus
	 
	 	(d)	 	his Primary Social Security Benefit;

and (ii) the monthly pension, if any, which is not payable to him from the
Retirement Plan because of the maximum limitations on pension amounts imposed
by Section 415 of the Code.

Section 2 - Upon Employment Termination Before Age Sixty-five

Any Participating Employee who ceases to be an Employee after completing at
least five (5) Years of Service, but before his sixty-fifth (65th) birthday
shall receive from the Corporation, no later than the thirtieth (30th) day of
the month designated in writing by such Participating Employee to the Committee
(which month shall not be earlier than the month immediately following his
fifty-fifth (55th) birthday), a single lump sum payment which shall be the
Actuarial Equivalent of a monthly payment, commencing with the month so
designated by such Participating Employee and continuing for his lifetime, in
an amount equal to the product of the amounts determined in clauses (a), (b)
and (c) below, with such result reduced by the amount in clauses (d) and (e)
below and increased by the amount in clause (f) below.

	 	(a)	 	The monthly payment that such Participating Employee would have
received computed under the below (i) and (ii), if he had remained an
Employee (with no change in his Average Monthly Earnings) until, and
if he had retired on, his sixty-fifth (65th) birthday:

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	 	(i)	 	four percent (4%) of his Average Monthly Earnings,
multiplied by the number, not in excess of ten (10), of his
Years of Service, plus
	 
	 	(ii)	 	one percent (1%) of his Average Monthly Earnings,
multiplied by the number of his Years of Service accumulated
after his first ten (10) Years of Service (to a maximum of
twenty percent (20%) of such Average Monthly Earnings);
	 

	 	(b)	 	A fraction
	 

	 	(i)	 	the numerator of which is the number of his Years of
Service, and
	 
	 	(ii)	 	the denominator of which is the number of Years of
Service he would have accumulated if he had remained an Employee
until his sixty-fifth (65th) birthday;

	 
	 	(c)	 	The percentage determined according to attained age (in years
and completed months) on date of commencement of monthly payments, in
accordance with the following table with values for non-integral ages
to be determined by interpolation:

	 	 	 	 	 
	Attained Age on Date of	 	 	 	 
	Commencement	 	Percentage
	
	 	

	64
	 	 	.97	 
	63
	 	 	.93	 
	62
	 	 	.88	 
	61
	 	 	.82	 
	60
	 	 	.75	 
	59
	 	 	.68	 
	58
	 	 	.61	 
	57
	 	 	.54	 
	56
	 	 	.47	 
	55 or younger
	 	 	.40	 

	 	(d)	 	Such Participating Employee’s Other Post-Retirement Benefits;
	 
	 	(e)	 	Such Participating Employee’s Primary Social Security Benefit,
multiplied by clauses (b) and (c) above, or the Participating
Employee’s actual Social Security Benefit (or other comparable
benefits), if so provided by the Participating Employee;
	 
	 	(f)	 	Such Participating Employee’s monthly pension, if any, reduced
(if applicable) for early commencement, which is not payable to him
from the Retirement Plan because of the maximum limitations on
pension amounts imposed by Section 415 of the Code.

Notwithstanding anything contained herein to the contrary, if such
Participating Employee ceases to be an Employee due to the termination of his
or her employment within two (2) years following a Change of Control by the
Corporation without Cause or by the Participating Employee for Good Reason, two
(2) years shall be added to such Participating Employee’s age

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and service for purposes of the calculation of monthly payments (but not for
purposes of calculating the Actuarial Equivalent of such payments) under this
Article IV.

Section 3 - Upon Death Before Retirement

If a Participating Employee is married, and has accumulated at least five (5)
Years of Service when he ceases to be an Employee due to his death, his
Surviving Spouse shall receive from the Corporation, no later than the
thirtieth (30th) day of the month immediately succeeding the month of his
death, a single lump sum payment which shall be the Actuarial Equivalent of a
monthly payment, commencing with such succeeding month and continuing for the
lifetime of such Surviving Spouse, in an amount equal to the product of the
amounts determined in the below clauses (a), (b), (c) and (d), with such result
reduced by the amounts in the below clauses (e) and (f).

	 	(a)	 	The monthly payment that the Participating Employee would have
received computed under the below (i) and (ii), if he had remained an
Employee (with no change in his Average Monthly Earnings) until, and
if he had retired on, his sixty-fifth (65th) birthday:
	 

	 	(i)	 	four percent (4%) of his Average Monthly Earnings,
multiplied by the number, not in excess of ten (10), of his
Years of Service, plus
	 
	 	(ii)	 	one percent (1%) of his Average Monthly Earnings,
multiplied by the number of his Years of Service accumulated
after his first ten (10) Years of Service (to a maximum of 20%
of such Average Monthly Earnings),
	 

	 	(b)	 	A fraction
	 

	 	(i)	 	the numerator of which is the number of his Years of
Service, and
	 
	 	(ii)	 	the denominator of which is the number of Years of
Service he would have accumulated if he had remained an Employee
until his sixty-fifth (65th) birthday,
	 

	 	(c)	 	Fifty percent (50%), minus one percent (1%) for each full year by
which the age of the Surviving Spouse is more than five (5) years
lower than that of the Participating Employee,
	 
	 	(d)	 	The percentage specified in clause (c) of Section 2 for the
Participating Employee’s age at the time of his death,
	 
	 	(e)	 	The Participating Employee’s Other Post-Retirement Benefits,
	 
	 	(f)	 	The Participating Employee’s Primary Social Security Benefit,
multiplied by clauses (b), (c), and (d) above.

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Section 4 - Upon Death After Termination of Employment

If a Participating Employee described in Section 2 of this Article IV is
married when he dies after the termination of his employment but before his
receipt of the lump sum payment to which he is entitled under said Section, his
Surviving Spouse shall receive from the Corporation, no later than the
thirtieth (30th) day of the month immediately following the month of his death,
a single lump sum payment which shall be the Actuarial Equivalent of the single
lump sum payment that such Participating Employee would have received if the
month that he designated for purposes of said Section 2 had been the later of
the month of his death and the month of his fifty-fifth (55th) birthday and if
he had survived through such month, reduced by fifty percent (50%), minus one
percent (1%) for each year by which the age of the Surviving Spouse is more
than five (5) years lower than that of the Participating Employee.

Section 5 – Service Requirement Waived Upon Change of Control

Notwithstanding anything contained herein to the contrary, each individual who
is a Participating Employee at the time of a Change of Control shall be
eligible for benefits calculated in accordance with Article IV whether or not
such Participating Employee has completed five years of Service.

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ARTICLE V

FORFEITURES AND LIMITATIONS

Section 1 - Forfeiture of Benefits

If the Committee determines that any Participating Employee (or any
recipient of a benefit under the Program who had been a Participating
Employee) has, while or at any time after he ceased to be an Employee,
directly or indirectly engaged in any occupation in competition with, or has
wrongfully disclosed trade secrets of or confidential information relating
to, or has intentionally done any act materially harmful to the interests
of, the Corporation or any Subsidiary Company, the Committee may in its sole
discretion terminate or annul the payment of such benefit.

Section 2 - Inalienability of Benefits

No sale, transfer, anticipation, assignment, pledge or encumbrance of any kind,
at law or in equity, of any benefit under this Program shall be permitted or
recognized under any circumstances, and no benefit under this Program shall be
subject to attachment or other legal process.

Section 3 - Other Limitations

No benefit payable under the Program shall give rise to any offset or shall be
included in any reduction pursuant to Article III or any other provision of the
Retirement Plan or have any similar effect on any other benefit payable under
any other private benefit plan to which the Corporation or any Subsidiary
Company shall have contributed. Otherwise, the Committee may from time to time
determine whether the total benefits payable to any individual under the
Program and all other private benefit plans to which the Corporation or any
Subsidiary Company shall have contributed shall be subject to any limitation as
to amount other than as provided elsewhere in the Program and/or in such other
private plans, and, if so, shall determine the amount of such limitation.

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Section 4 - Minimum Benefit

For any Participating Employee, the portion of his benefit payable under
Section 1 or 2 of Article IV which is attributable to his Years of Service and
Average Monthly Earnings through December 31, 1993 shall not be less than a
minimum, which shall be deemed fixed as of December 31, 1993 and shall be
calculated on the basis of (x) a Primary Social Security Benefit determined for
a retirement occurring December 31, 1993, but increased by five percent (5%)
per annum for each whole calendar year between December 31, 1993 and the actual
date of retirement and (y) an ESOP offset determined as of December 31, 1993
and increased by twenty percent (20%) per annum for each whole calendar year
between December 31, 1993 and the actual date of retirement. This provision
shall not apply, however, to calculation of the Actuarial Equivalent of the
portion of a Participating Employee’s benefit under Section 1 or 2 of Article
VI attributable to Years of Service and Average Monthly Earnings through
December 31, 1993.

14EXHIBIT 10.11

 

Exhibit 10.11

American Standard Companies Inc.

Supplemental Compensation Plan for Outside Directors

(as amended and restated effective February 5, 2004)

1.         Definitions

		
	 	(a) “Administrator” means the Secretary of the Company.
	 
	 	(b) “Annual Stockholders Meeting” means the annual meeting of the
stockholders of the Company.
	 
	 	(c) “Board” means the Board of Directors of the Company.
	 
	 	(d) “Company” means American Standard Companies Inc. or any successor
thereto by consolidation, merger or other resolution.
	 
	 	(e) “Fair Market Value” on any date means the closing price of a Share on
such a date as reported on the New York Stock Exchange consolidated reporting
system.
	 
	 	(f) “Participant” means any director of the Company who is not an
employee of the Company or an affiliate. Participants are also referred
to herein as “Outside Directors”.
	 
	 	(g) “Plan” means this Supplemental Compensation Plan for Outside
Directors, as set forth herein and as amended from time to time.
	 
	 	(h) “Plan Account” means the account established for each Participant
pursuant to Section 2.
	 
	 	(i) “Share” means a share of common stock of the Company; the number of
Shares available for use under the Plan shall be 100,000.
	 
	 	(j) “Trust” means the Trust Agreement for the American Standard Companies
Inc. Supplemental Compensation Plan for Outside Directors.
	 
	 	(k) “Unit” means the factor of $50,000 ($100,000 in the case of any
director first elected to the Board after January 1, 1993) calculated in
accordance with Section 2 of the Plan as it existed before March 7, 1996.

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2.         Establishment of Plan Accounts.

		
	 	     The Administrator shall establish a Plan Account hereunder for each
Participant as soon as he or she becomes a member of the Board.

		
	 	     Whenever a Plan Account is established, the Administrator shall
credit to such Plan Account, that number of Shares and fractions
thereof equal in value to $50,000 ($100,000 in the case of any director
first elected to the Board after January 1, 1993), with the value of a
Share based on the Fair Market Value on the date immediately preceding
the date that the Participant becomes a member of the Board (the “Initial
Allocation”).

		
	 	     Any Units credited to Participants’ Plan Accounts under the terms of
the Plan as it existed before March 7, 1996 shall be converted to Shares
on a one for one basis.

3.         Annual Grants of Shares.

		
	 	     Effective on and after December 4, 1997, each Participant shall have
500 Shares credited to his or her Plan Account on the date immediately
preceding each Annual Stockholders Meeting.

4.         Shares Held in Trust.

		
	 	     Any Shares issued pursuant to the Plan shall be issued to and
governed by the terms of the Trust. Upon the termination of a
Participant’s Board membership other than for cause, such Participant
(or, if such termination is due to his or her death, his or her
Beneficiary) shall receive a distribution from the Trust, net of any
required tax or other withholdings, of the Shares in his or her Plan
Account.

5.         Forfeiture

		
	 	     Upon the termination for cause of a Participant’s membership on the
Board, all of the Shares and fractions thereof credited to his or her
Plan Account shall revert back to the Company.

6.     Rights of Participants Regarding the Shares in their Plan Account.

		
	 	     A Participant shall have the right to direct the voting of a number
of Shares held by the Trust that is equal to the number of Shares
credited to his or her Plan Account as to all matters with respect to
which such Shares are entitled to vote. The Trust shall distribute to
each Participant (or in the event of a Participant’s death, such
Participant’s

2

 

		
	 	Beneficiary) an amount in cash equal to the amount of any cash
dividends payable on the number of Shares allocated to the Participant’s
Plan Account.

7.         Changes in Capital Structure.

		
	 	     In the event of the payment of any dividend payable in, or the
making of any distribution of, Shares to holders of record of Shares; or
in the event of any stock split, combination of Shares, recapitalization
or other similar change in the authorized capital stock of the Company;
or in the event of the merger or consolidation of the Company into or
with any other corporation or the reorganization, dissolution or
liquidation of the Company; then (i) the number of Shares available for
issuance under the Plan, (ii) the annual grant to Participants under
Section 3 and (iii) the number of Shares subject to outstanding awards
under the Plan shall be adjusted in the same manner as Shares owned by
shareholders of the Company are adjusted upon the occurrence of such
event.

8.         Non-assignability.

		
	 	     The right of a Participant or Beneficiary to the distribution
provided for in the Plan shall not be assigned, transferred, pledged or
encumbered or be subject in any manner to alienation or anticipation.

9.         Amendment and Termination.

		
	 	     The Plan may at any time be amended, modified or terminated by the
Board; provided that no amendment, modification or termination shall,
without the consent of a Participant, reduce the number of Shares and
fractions thereof credited to such Participant’s Plan Account pursuant to
Sections 2 and 3.

10.         Notices.

		
	 	     All notices to the Company under this Plan, including a
Participant’s designation of a Beneficiary, shall be in writing and
mailed or hand delivered to the Secretary of the Company at its Corporate
Headquarters.

11.         Governing Law.

		
	 	     This Plan shall be governed by and construed in accordance with the
laws of the State of New York without reference to the principles of
conflict of laws of such State.

3

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