October 13, 1999
Xx. Xxxxxxxx X. Poses
0000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Mr. Poses:
This letter will set forth the agreement between yourself and American Standard
Companies Inc., relative to your employment with the Company.
The term of your employment will begin January 1, 2000, and will continue for a
five-year period with automatic one-year renewals thereafter unless either you
or the Company notifies the other that the term is not to renew. Such notice of
non-renewal is to be given at least 12 months before scheduled expiration.
Notwithstanding the foregoing, the Company retains the right to terminate you
with or without cause at any time subject to satisfaction of its payment
obligations to you under the existing severance plan of the Company; provided
that, any payment obligation to you shall be conditioned upon your execution and
delivery of a release in a form satisfactory to the Company. Your employment
shall automatically terminate upon your death or disability, as determined by
the Board of Directors.
Your position with the Company will be that of Chairman and Chief Executive
Officer, reporting to the Board of Directors.
The base salary for your position will be $1,000,000 per year, and will be
subject to annual review for increase at the discretion of the Board of
Directors. In addition, you will be eligible for an Annual Incentive with a
target award of 100% of your base salary. For the years 2000 and 2001 this award
will be no less than $1,300,000. You will also become a participant in the
Company's Long Term Incentive Plan, on a prorated basis, for the 1998-2000 and
1999-2001 performance periods. Your entitlement to payment of the Annual
Incentive award and the Long-Term Incentive Plan award upon your termination of
employment shall be governed by the terms of the Officers Severance Plan.
As a result of your election to the Board of Directors on October 7, 1999, you
have been awarded a stock option grant of 1,000,000 shares. This grant will have
an exercise price equal to the Fair Market Value of the Company's common stock
on October 6. These options will vest in three equal installments on October 7,
2000, October 7, 2001, and October 7, 2002.
Xx. Xxxxxxxx X. Poses
Page 2
Upon the commencement of your employment you will be awarded 250,000 restricted
shares of the Company's common stock, with vesting of such shares occurring in
three equal installments on January 1, 2003, January 1, 2004, and January 1,
2005. You should consult with your financial advisor regarding the advisability
of making an 83(b) election with respect to the grant of these restricted shares
within the appropriate 30-day period.
In the event the Company terminates your employment for reasons other than
"Cause" (as defined in the Stock Incentive Plan) prior to the vesting of any of
the aforementioned stock options, such vesting will be accelerated to coincide
with the date of such termination of employment. The exercise period with regard
to any such accelerated vested options or shares shall be governed by the terms
of the Stock Incentive Plan. In the event the Company terminates your employment
for reasons other than "Cause" (as defined in the Stock Incentive Plan) prior to
the vesting of any of the aforementioned restricted shares, you will be entitled
to receive such shares upon their originally scheduled vesting dates. If
termination of your employment is for "Cause" you will forfeit any right to
unvested stock options and/or restricted stock.
You hereby agree that during the term of your employment, and at all times
thereafter, you shall not use any confidential business materials or information
of the Company or any affiliate or any trade or proprietary information of the
Company or any affiliate other than in the course of your employment with the
Company.
You further agree that during your term of employment and for one year
thereafter if you resign or are terminated for cause you shall not engage in, or
have any ownership interest in or financial participation in, or be employed by,
or offer services to, any business that competes with the business then
conducted by the Company.
You agree that during your term of employment and for one year thereafter, you
shall not, directly or indirectly, solicit any employee of the Company or its
affiliates to terminate his or her employment. You represent that you have the
full authority to execute this agreement and that you are not a party to any
other agreement or obligation that would conflict with your duties and
responsibilities hereunder.
Your participation in the Company's Supplemental Executive Retirement Plan will
commence January 1, 2000, and the five-year service requirement for vesting will
be waived. As a result you will begin immediate vesting of any benefit payable
under such plan.
Xx. Xxxxxxxx X. Poses
Page 3
In addition to the above, you shall become eligible to participate in, and be
governed by, the various benefit plans and policies, applicable to the senior
executives of the Corporation, and perquisites traditionally made available to
the Chief Executive Officer of the Company.
This agreement represents the full agreement of the parties and supersedes any
and all previous discussions and negotiations.
Dated: October 13 , 1999 Compensation Committee
Piscataway, NJ
BY:/s/ X.X. Xxxxxxx
Title: Chairman of Compensation
Committee
/s/ Xxxxxxxx X. Poses
Executive
