Exhibit 10.14
AMERICAN STANDARD COMPANIES INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated as of January 1,
2004)
This document constitutes part of
a Prospectus covering securities that have been
registered
under the Securities Act of 1993.
Section 1.
Purpose
The
purpose of this American Standard Companies Inc. Deferred
Compensation Plan (the “Plan”), as amended as of
January 1, 2004, is to provide a select group of management or
highly compensated employees of American Standard Companies Inc.
(the “Company”) and its subsidiaries and certain
members of the Company’s Board of Directors (the
“Board”) with the opportunity to defer receipt of
certain compensation, and for the Company to defer payment of
certain compensation to such individuals, into future years. The
Plan covers employees of the Company and subsidiaries of the
Company which, with the consent of the Company, elect to
participate in the Plan (the “Employer”).
Section 2.
Eligibility
Each employee of
the Employer who is a U.S. taxpayer and who either (i) participates
in the Company’s Long Term Incentive Compensation Plan or
(ii) is a district sales manager for the Trane Commercial
Sales business is eligible to participate in the Plan. In addition,
all non-employee members of the Board are Participants. All those
who are eligible to participate in the Plan are considered to be
Participants. The Plan Administrator shall provide a copy of the
Plan to each Participant together with a form of letter which the
Participant may use to notify the Company of his or her election to
defer compensation under the Plan.
Section 3.
Participation
a. Deferral Election. On or
before the date chosen from time to time by the Plan Administrator,
a Participant may elect to defer receipt of certain forms of
compensation which, but for such election, would have been paid to
him or her, and to have such amounts credited, in whole or in part,
to a memorandum account credited with a fixed annual return (the
“Interest
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Account”) and/or a
memorandum account deemed to be invested in notional Common Shares
of the Company (the “Stock Account”). A Participant may
elect to defer up to (i) 50% of base pay, (ii) 100% of
payments under the Company’s Annual Incentive Plan,
(iii) 100% of payments under the Company’s Long Term
Incentive Compensation, (iv) 100% of fees and retainers to be
paid to members of the Company’s Board, and (v) 100% of
such other sources as are determined from time to time by the Plan
Administrator; provided, however, that the total amount
deferred by a Participant shall be limited in any calendar year, if
necessary, to satisfy Social Security Tax (including Medicare),
income tax and employee benefit plan withholding requirements as
determined in the sole and absolute discretion of the Plan
Administrator.
b. Form and Duration of Deferral
Election. A deferral election shall be made by a Participant in
the form of a written notice filed on a designated form with the
Plan Administrator (the “Deferral Election”). The
Deferral Election shall specify the amount being deferred under
that election and how much, if any, of the deferral amount is going
to each of the Interest Account and the Stock Account. The minimum
amount that each Participant may defer under the Plan for each year
shall be $5,000 (or such other amount as the Plan Administrator
shall determine from time to time). Any such election shall be
effective solely with respect to payments that would otherwise be
made in the calendar year following the year in which such election
is filed, except that with respect to individuals who first become
Participants during a calendar year, such election shall apply to
compensation to be earned and paid in that calendar year. Such
deferral election shall remain in effect for future years until it
is modified or revoked. Any revocation or modification of a
Deferral Election shall become effective only with respect to
compensation payable in the calendar year following receipt of such
revocation or modification by the Plan Administrator.
c. Renewal. A Participant who
has revoked an election to participate in the Plan may file a new
election to defer compensation payable in the calendar year
following the year in which such election is filed, if the
Participant continues to meet the Plan’s eligibility criteria
as are then in effect.
d. Discretionary Company
Contributions; Change of Control. The Employer may from time to
time elect to make fully discretionary contributions
(“Discretionary Company Contributions”) to the Interest
Accounts of some or all Participants, in such amounts as it, in its
sole discretion, elects. Such Discretionary Company Contributions
may be subject to a vesting
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schedule, as determined by the
Plan Administrator. Notwithstanding the vesting schedule, such
amounts will become fully vested upon the occurrence of a Change of
Control, or upon the death or disability (as defined below) of the
Participant (while actively employed by the Employer as an employee
or member of the Board). “Change of Control” shall have
the same meaning as set forth in the American Standard Companies
Inc. Stock Incentive Plan, as amended, or any successor plan
thereto.
e. Matching Contributions. The
Employer may from time to time elect to make fully discretionary
matching contributions (“Matching Contributions”) to
the Interest Accounts of some or all Participants, in such amounts
as it, in its sole discretion, elects. Such Matching Contributions
shall be fully vested at all times.
Section 4.
Participant’s Accounts
a. Establishment of Account.
The Company shall maintain an Interest Account and a Stock Account
for each Participant, and shall make additions to and subtractions
from such Accounts as provided in this Plan. For each amount
credited to the Interest Account, such Account shall note the date
the amount was credited to the Account, any interest accrued
pursuant to this Section 4, as well as the date that
distribution is to commence. For each amount credited to the Stock
Account, the Account shall note the date the amount was credited to
the Account, the number of notional shares credited on such date,
the Market Value per Share used to determine the notional shares
credited, as well as the date distribution is to
commence.
b. Interest Account.
Compensation allocated to the Interest Account pursuant to this
Section 4 shall be credited to such Account as of the date
such compensation would otherwise have been paid to the
Participant, and for Matching Contributions and Discretionary
Company Contributions, as of the date on which such amounts are
credited to the Interest Account. Any amounts credited to the
Interest Account shall earn interest on an annual basis at the
Applicable Interest Rate in effect for each calendar year, as
defined below, which interest shall be credited on the last
business day of each calendar month.
The
Applicable Interest Rate for amounts credited prior to
January 1, 2002, shall mean the percentage equal to the prime
rate of interest in effect at Chase Manhattan Bank (or any
successor thereto) on the last business day of the previous
calendar year, plus one percent.
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For
amounts credited to the Interest Account after December 31,
2001, Applicable Interest Rate shall mean the rate of interest to
be determined by the Plan Administrator from time to
time.
c. Stock Account. Any
compensation allocated to the Stock Account pursuant to this
Section 4 shall be deemed to be invested in a number of
notional Common Shares (including fractional shares) of the Company
(the “Shares”) equal to the quotient of (i) the
dollar amount of such compensation divided by (ii) the Market
Value Per Share (as defined below) on the date the compensation
being allocated to the Stock Account would otherwise have been
payable to the Participant. The Market Value Per Share on any date
shall mean the average of the high and low prices per share for a
Common Share of the Company as reported on the Consolidated Tape of
the New York Stock Exchange on such date. If such date is not a
business day or if no sale occurs on such date, Market Value Per
Share shall be determined, in the manner described above, as of the
first preceding business day on which a sale occurs.
Whenever a
dividend other than a dividend payable in the form of the
Corporation’s Common Shares is declared with respect to the
Company’s Common Shares, the number of Shares in the
Participant’s Stock Account shall be increased by the number
of Shares determined by dividing (i) the product of (A) the
number of Shares in the Participant’s Stock Account on the
related dividend record date and (B) the amount of any cash
dividend declared by the Company on a Common Share (or, in the case
of any dividend distributable in property other than Common Shares,
the per share value of such dividend, as determined by the Company
for purposes of income tax reporting) by (ii) the Market Value
Per Share on the related dividend payment date. In the case of any
dividend declared on the Company’s Common Shares which is
payable in Common Shares, the Participant’s Stock Account
shall be increased by the number of Shares equal to the product of
(i) the number of Shares credited to the Participant’s
Stock Account on the related dividend record date and (ii) the
number of shares of Common Shares (including any fraction thereof)
distributable as a dividend on a Common Share.
In
the event of any change in the number or kind of outstanding Common
Shares by reason of any recapitalization, reorganization, merger,
consolidation, stock split or any similar change affecting the
Common Shares, other than a stock dividend as provided above, the
Administrator shall make an appropriate adjustment in the number of
Shares credited to each Participant’s Stock
Account.
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(d) Investment Elections for Deferrals and Other
Contributions. At the time a Participant elects to defer
compensation pursuant to Section 3(a), the Participant shall
designate in writing the portion of such compensation, stated as a
whole percentage, to be credited to the Interest Account and the
portion to be credited to the Stock Account. Any compensation to be
credited to either Account shall be rounded to the nearest whole
cent. If a Participant fails to designate how the deferrals and/or
other contributions are to be allocated between the two Accounts,
100% of such amounts shall be credited to the Interest Account.
Participants may not elect to transfer from the Interest Account to
the Stock Account, or vice versa . In addition, any
Discretionary or Matching Company Contributions shall be invested
in the Interest Account.
Section 5. Distributions
from the Accounts
a. Distribution Elections. At
the time a Participant makes a Deferral Election with respect to a
particular calendar year, such Participant shall also file with the
Plan Administrator a written election (a “Distribution
Election”) with respect to the timing and manner of
distribution of the aggregate amount, if any, credited to the
Int
