Description of Compensation Arrangements for Non-Employee Directors of American Standard Companies Inc.
This document outlines the compensation plan for non-employee directors of American Standard Companies Inc. Directors receive a one-time stock award upon election, annual retainers, restricted shares, and stock options. They are also paid fees for attending board and committee meetings, with higher fees for committee chairs. Directors can defer their compensation into a deferred compensation plan and are eligible to receive company products at no cost. Shares awarded vest only when a director leaves the board. The plan specifies payment amounts and vesting conditions for each component.
Exhibit 10.38
Description of Compensation Arrangements for Non-Employee Directors
| Board Service | |||||
| One-time Award upon Election to the Board | $ | 100,000 | Shares equal to this value are deposited into the Trust for the Outside Directors Supplemental Compensation Plan and do not vest to direct ownership until the director leaves the Board | ||
| Retainer | $ | 52,000 | Paid in quarterly installments | ||
| Restricted Shares | $ | 35,000 | Shares equal to this value are deposited annually into the Trust for the Outside Directors Supplemental Compensation Plan and do not vest to direct ownership until the director leaves the Board | ||
| Stock Options | | Determined annually | Same terms as employees under the 2002 Omnibus Incentive Plan (vest ratably over three years) | ||
| Meeting Fees | $ | 1,000 | Attendance at Board meeting | ||
| Committee Service | |||||
| Meeting Fees | $ | 1,000 | Attendance at Committee meeting for Committee members | ||
| $ | 2,000 | Attendance at Committee meeting for Committee chairs | |||
Directors also participate in the American Standard Companies Inc. Deferred Compensation Plan which allows them to defer all or part of their cash retainers and meeting fees into either a fixed interest cash account or an account holding notional shares of company stock. In addition, Directors are entitled to receive company products at no cost.
