EXHIBIT (10)(iii)
February 7, 2002
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of February 7,
2002, by and between American Standard Companies Inc., a Delaware corporation
(the "Company"), and Xxxxxxxx X. Poses (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company and the Executive have previously entered into an
employment agreement, dated October 13, 1999, and amended March 17, 2000 (the
"Prior Agreement"), under which the Executive's employment commenced January 1,
2000;
WHEREAS, the Company desires to continue to secure the services of the
Executive for a period of several years and to provide him with the appropriate
incentives to continue to enhance the value of the Company for the benefit of
its shareholders;
WHEREAS, the Company and the Executive wish to amend and restate the
Prior Agreement, effective as of February 7, 2002 (the "Restatement Date"); and
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and the Executive hereby agree as follows:
1. Employment. Except as provided in Paragraph 6(a), the Company shall
employ the Executive for the period commencing January 1, 2000 (the
"Commencement Date") and ending on December 31, 2006. The period during which
the Executive is employed pursuant to this Agreement shall be referred to as the
"Employment Period".
2. Position and Duties. During the Employment Period, the Executive shall
serve as Chairman and Chief Executive Officer of the Company and report directly
to the Board of Directors of the Company (the "Board"). During the Employment
Period, the Company shall use its best efforts to have the Executive continued
as a member of the Board. During the Employment Period, the Executive shall have
the duties, responsibilities and obligations customarily assigned to the chief
executive officer of a public company of similar size and such other duties and
responsibilities for the Company and its subsidiaries consistent with his
position as the Board shall from time to time specify. The Executive shall
devote his full time to the services required of him hereunder, except for
vacation time and reasonable periods of absence due to sickness,
personal injury or other disability, and shall use his best efforts, judgment,
skill and energy to perform such services in a manner consonant with the duties
of his position and to improve and advance the business and interests of the
Company and its subsidiaries. Nothing contained herein shall preclude the
Executive from (i) serving on the board of directors of any business corporation
with the consent of the Board, (ii) serving on the board of, or working for, any
charitable or community organization or (iii) pursuing his personal financial
and legal affairs, so long as such activities, individually or collectively, do
not interfere with the performance of the Executive's duties hereunder.
3. Compensation.
a. Base Salary. During the Employment Period, the Company shall pay the
Executive a base salary at the annual rate of $1,000,000. The parties
acknowledge and agree that the Executive's performance warrants an increase in
his base salary from that in effect at the Commencement Date, but because any
increase in such salary would result in a non-deductible expense for the
Company, the Executive has agreed that no increase shall be implemented. The
annual base salary payable under this paragraph shall be reduced, however, to
the extent the Executive elects to defer such salary under the terms of any
deferred compensation or savings plan or arrangement maintained or established
by the Company. The Executive's annual base salary payable hereunder, without
reduction for any amounts deferred as described above, is referred to herein as
"Base Salary". The Company shall pay the Executive the portion of his Base
Salary not deferred in accordance with its standard payroll practices for senior
executives.
b. Incentive Compensation. During the term of the Employment Period,
the Executive shall participate in the Company's existing and future annual and
long-term incentive compensation programs at a level commensurate with his
position at the Company and consistent with the Company's then current policies
and practices. Notwithstanding the foregoing, during the Employment Period, the
Company shall make available an annual incentive target award of at least
$1,700,000 and a long-term incentive target award for each performance period
commencing during the Employment Period of at least $1,700,000, in each case
subject to the terms and conditions of the applicable plan.
4. Stock Option Grants. On the Restatement Date, the Company has awarded the
Executive an option (the "Retention Grant") to purchase 1,000,000 shares of the
Company's Common Stock at an exercise price per share equal to the fair market
value of a share of such stock (determined in accordance with the terms of the
American Standard Companies Inc. Stock Incentive Plan (the "Stock Incentive
Plan")) on the date of grant. The Retention Grant shall become exercisable as
follows: 250,000 shares will vest and become exercisable in three approximately
equal annual installments on each of the first three anniversaries of the
Restatement Date; 200,000 shares will vest and become exercisable on December
31, 2005; 300,000 shares will vest and become exercisable on December 31, 2006;
and 250,000 shares will vest on December 31, 2006 and become exercisable on
December 31, 2007. The Company has awarded the Executive an additional stock
option grant (the "Contingent Grant") in respect of 250,000 shares of the
Company's Common Stock, at an exercise price per share equal to the fair market
value thereof on the Restatement Date, which will also vest on December 31, 2006
and become exercisable on December 31, 2007, and which is made under the
American Standard Companies Inc. 2002 Omnibus Incentive Plan (the "Omnibus
Plan") and is contingent on approval of the Omnibus Plan by the Company's
stockholders at their annual Meeting on May 2, 2002. Except as otherwise
provided above, each of the Retention Grant and the Contingent Grant shall be
subject to, and have such terms and conditions as are set forth in (or are
otherwise standard with respect to option grants made pursuant to), the Stock
Incentive Plan and the Omnibus Plan.
5. Benefits, Perquisites and Expenses.
a. Benefits. During the Employment Period, the Executive shall be
eligible to participate in (i) each welfare benefit plan sponsored or maintained
by the Company, including, without limitation, each group life, hospitalization,
medical, dental, health, accident or disability insurance or similar plan or
program of the Company, and (ii) each pension, profit sharing, retirement,
deferred compensation or savings plan sponsored or maintained by the Company, in
each case, whether now existing or established hereafter, to the extent that the
Executive is eligible to participate in any such plan under the generally
applicable provisions thereof. The Company may amend or terminate any such plan
at its discretion. Notwithstanding anything else contained herein to the
contrary, the Executive shall at all times be deemed vested in his accrued
benefit under the Company's Supplemental Executive Retirement Plan ("SERP") and,
so long as the Executive remains in the employ of the Company through December
31, 2006, the Executive will not be subject to any actuarial reduction factor
regardless of his age when his benefits under the SERP actually commence.
b. Perquisites. During the Employment Period, the Executive shall be
entitled to up to four weeks' paid vacation annually and shall also be entitled
to receive such perquisites as are generally provided to other senior officers
of the Company in accordance with the then current policies and practices of the
Company. To recognize the Executive's contribution to the organization, the
Company shall also make a contribution for each full year of the Employment
Period after 2001 in an amount of not less than $100,000 to such charitable
organization(s) as the Executive may from time to time specify to the Company in
writing, provided that such contribution shall be subject to any and all
conditions generally applicable to charitable contributions made by the Company.
c. Business Expenses. During the Employment Period, the Company shall
pay or reimburse the Executive for all reasonable expenses incurred or paid by
the Executive in the performance of the Executive's duties hereunder, upon
presentation of expense statements or vouchers and such other information as the
Company may require and in accordance with the generally applicable policies and
procedures of the Company.
d. Indemnification. The Company shall indemnify the Executive and hold
the Executive harmless from and against any claim, loss or cause of action
arising
from or out of the Executive's performance as an officer, director or employee
of the Company or any of its subsidiaries or in any other capacity, including
any fiduciary capacity, in which the Executive serves at the request of the
Company on at least the same basis as it indemnifies members of the Board
generally and its other senior officers.
6. Termination of Employment.
a. Early Termination of the Employment Period. Notwithstanding
Paragraph 1, the Employment Period shall end upon the earliest to occur of (i) a
termination of the Executive's employment on account of the Executive's death,
(ii) a termination due to Disability, (iii) a termination for Cause or (iv) a
termination without Cause or (v) a termination for Good Reason. The terms
"Cause" or "Disability" and "Good Reason" shall have the meanings ascribed
thereto in the American Standard Companies Inc., Corporate Officers Severance
Plan, as in effect on the Restatement Date or, if more favorable to the
Executive, as the same may be amended or restated after the Restatement Date
(the "Severance Plan").
b. Benefits Payable Upon Termination. Following the end of the
Employment Period, whether pursuant to Paragraph 1 or as a result of an early
termination pursuant to Paragraph 6(a), the Executive (or, in the event of his
death, his surviving spouse, if any, or his estate) shall in all events receive
his Earned Salary and Vested Benefits (as each such term is defined below). In
addition, upon a termination of his employment by the Company without Cause or
by the Executive for Good Reason, the Executive shall also be entitled to
receive the benefits payable to him in accordance with the terms and conditions
of the Severance Plan (including, without limitation, any requirement that the
Executive execute a standard form of release established in accordance with the
terms of the Severance Plan). "Earned Salary" means any Base Salary earned, but
unpaid, for services rendered to the Company on or prior to the date on which
the Employment Period ends (other than compensation previously deferred pursuant
to the Executive's election, which shall be treated as a Vested Benefit).
"Vested Benefits" means amounts which are vested or which the Executive is
otherwise entitled to receive under the terms of or in accordance with any plan,
policy, practice or program of, or any contract or agreement with, the Company
or any of its subsidiaries.
c. Full Discharge of Company Obligations. The amounts payable to the
Executive pursuant to this Paragraph 6 following termination of his employment
(including amounts payable with respect to Vested Benefits) and, if applicable,
the Severance Plan shall be in full and complete satisfaction of the Executive's
rights under this Agreement and any other claims he may have in respect of his
employment by the Company or any of its subsidiaries. Such amounts shall
constitute liquidated damages with respect to any and all such rights and claims
and, upon the Executive's receipt of such amounts, the Company shall be released
and discharged from any and all liability to the Executive in connection with
this Agreement or otherwise in connection with the Executive's employment with
the Company and its subsidiaries. Nothing in this Paragraph 6(c) shall be
construed to relieve the Executive from any obligations to the Company that are
imposed upon him as a condition to receive the payment of any
severance or other benefits that may be due him pursuant to Paragraph 6(b) under
the Severance Plan.
7. Non-competition and Confidentiality.
a. Non-competition. During the Employment Period and during the one
year period during which certain options will become exercisable as stated
herein, the Executive shall not become associated with any entity, whether as a
principal, partner, employee, consultant or shareholder (other than as a holder
of not in excess of 1% of the outstanding voting shares of any publicly traded
company), that is actively engaged in any geographic area in any business which
is in competition with the business of the Company.
b. Confidentiality. Except when acting on behalf of the Company, or to
the extent required by an order of a court having competent jurisdiction or
under subpoena from an appropriate government agency, the Executive shall not
disclose any trade secrets, customer lists, drawings, designs, information
regarding product development, marketing plans, sales plans, manufacturing
plans, management organization information (including data and other information
relating to members of the Board of Directors and management), operating
policies or manuals, business plans, financial records, packaging design or
other financial, commercial, business or technical information relating to the
Company or any of its subsidiaries or information designated as confidential or
proprietary that the Company or any of its subsidiaries may receive belonging to
suppliers, customers or others who do business with the Company or any of its
subsidiaries (collectively, "Confidential Information") to any third person
unless such Confidential Information has been previously disclosed to the public
by the Company or is in the public domain (other than by reason of the
Executive's breach of this Section 7(b)).
c. Company Property. Promptly following the Executive's termination of
employment, the Executive shall return to the Company all property of the
Company, and all copies thereof in the Executive's possession or under his
control.
d. Non-Solicitation of Employees. During the same period set forth in
7(a) herein, the Executive shall not directly or indirectly induce any employee
of the Company or any of its subsidiaries to terminate employment with such
entity, and (directly or indirectly), either individually or as owner, agent,
employee, consultant or otherwise, employ or offer employment to any person who
is or was employed by the Company or a subsidiary thereof unless such person
shall have ceased to be employed by such entity for a period of at least 6
months.
e. Injunctive Relief with Respect to Covenants. The Executive
acknowledges and agrees that the covenants and obligations of the Executive with
respect to non-competition, non-solicitation, confidentiality and Company
property relate to special, unique and extraordinary matters and that a
violation of any of the terms of such covenants and obligations will cause the
Company irreparable injury for which adequate
remedies are not available at law. Therefore, the Executive agrees that the
Company shall be entitled to an injunction, restraining order or such other
equitable relief (without the requirement to post bond) restraining the
Executive from committing any violation of the covenants and obligations
contained in this Paragraph 7. These injunctive remedies are cumulative and are
in addition to any other rights and remedies the Company may have at law or in
equity. In connection with the foregoing provisions of this Paragraph 7, the
Executive represents that his economic means and circumstances are such that
such provisions will not prevent him from providing for himself and his family
on a basis satisfactory to him.
8. Miscellaneous.
a. Survival. Paragraphs 6 (relating to early termination), 7 (relating
to non-competition, non-solicitation and confidentiality) and 8(g) (relating to
governing law) shall survive the termination hereof, whether such termination
shall be by expiration of the Employment Period or an early termination pursuant
to Paragraph 6 hereof.
b. Successors, Assignment and Entire Agreement. This Agreement shall be
binding on, and shall inure to the benefit of, the Company and any person or
entity that succeeds to the interest of the Company (regardless of whether such
succession does or does not occur by operation of law) by reason of the sale of
all or a portion of the Company's stock, a merger, consolidation or
reorganization involving the Company or, unless the Company otherwise elects in
writing, a sale of the assets of the business of the Company (or portion
thereof) in which the Executive performs a majority of his services. This
Agreement shall also inure to the benefit of the Executive's heirs, executors,
administrators and legal representatives. Except as provided under this
Paragraph 8(b), neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters referred to
herein and expressly supersedes and replaces the provisions of the letter
agreement between the Executive and the Company dated October 13, 1999 (other
than those provisions related to the grant of an option to acquire shares of the
Company's Common Stock and to the award of restricted shares of the Company's
Common Stock). No other agreement relating to the terms of the Executive's
employment by the Company, oral or otherwise, unless it is in writing and signed
by the party against whom enforcement is sought. There are no promises,
representations, inducements or statements between the parties other than those
that are expressly contained herein.
c. Severability; Reformation. In the event that one or more of the
provisions of this Agreement shall become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the event any of
Paragraph 7(a), (b) or (c) is not enforceable in accordance with its terms, the
Executive and the Company agree that such Paragraph shall be reformed to make
such Paragraph enforceable in a manner which provides the Company the maximum
rights permitted at law.
d. Notices. Any notice required or desired to be delivered under this
Agreement shall be in writing and shall be delivered personally, by courier
service, by registered mail, return receipt requested, or by telecopy and shall
be effective upon actual receipt by the party to which such notice shall be
directed, and shall be addressed to the Company, attn. General Counsel, at its
corporate headquarters and to the Executive on the address listed as his primary
residence on the Company books and records.
e. Amendments; Waiver. This Agreement may not be altered, modified or
amended except by a written instrument signed by each of the parties hereto.
Waiver by any party hereto of any breach or default by the other party of any of
the terms of this Agreement shall not operate as a waiver of any other breach or
default, whether similar to or different from the breach or default waived. No
waiver of any provision of this Agreement shall be implied from any course of
dealing between the parties hereto or from any failure by either party hereto to
assert its or his rights hereunder on any occasion or series of occasions.
f. Withholding. Any payments provided for herein shall be reduced by
any amounts required to be withheld by the Company from time to time under
applicable Federal, State or local income or employment tax laws or similar
statutes or other provisions of law then in effect.
g. Governing Law. This Agreement shall be governed by the laws of the
State of New Jersey, without reference to principles of conflicts or choice of
law under which the law of any other jurisdiction would apply.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has hereunto set his
hand as of the day and year first above written.
American Standard Companies Inc.
WITNESS:
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx
Xx. Vice President, Human Resources
WITNESS:
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxxx X. Poses
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Xxxxxxxx X. Poses
Chairman and Chief Executive Officer
