Exhibit 10.42

AMERICAN STANDARD COMPANIES INC.

2002 OMNIBUS INCENTIVE PLAN

Rules for the Grant of Restricted Units

to Grantees in France

 

1. Introduction.

The Board of Directors (the “Board”) of American Standard Companies Inc. (the
“Company”), has established the 2002 American Standard Companies Inc. Omnibus
Incentive Plan (the “U.S. Plan”) for the benefit of certain employees and
directors of the Company and its subsidiaries including its French subsidiaries
of which the Company holds directly or indirectly at least 10% of the capital
(the “French Entities”).

Sections 4.1 and 4.3 of the U.S. Plan specifically authorize the Committee or
its delegate to administer the U.S. Plan and to establish rules applicable to
Restricted Units granted under the U.S. Plan (including those in France) as the
Committee deems necessary or desirable under the circumstances presented by
local laws, e.g., to make available tax or other benefits of the laws of foreign
jurisdictions to Grantees who are subject to such laws. The Committee has
delegated to the Grantor’s Senior Vice President – Human Resources (the
“Committee’s Delegate”) authority under Section 4.3 to establish subplans as
deemed advisable to comply with tax and other regulations outside the United
States. Pursuant to that authority, the Committee’s Delegate has determined that
it is desirable to establish a subplan for the purposes of permitting Restricted
Units to qualify for favorable tax and social security treatment in France. The
Committee’s Delegate, therefore, intends to establish a subplan of the U.S. Plan
for the purpose of granting Restricted Units which qualify for the favorable tax
and social security treatment in France applicable to shares granted for no
consideration under Sections L. 225-197-1 to L. 225-197-5 of the French
Commercial Code, as amended (“French-qualified Restricted Units”), to qualifying
Grantees who are resident in France for French tax purposes and/or subject to
the French social security regime (the “French Grantees”).

The terms of the U.S. Plan, as set out in Appendix 1 hereto, shall, subject to
the limitations in the following rules, constitute the 2002 American Standard
Companies Inc. Omnibus Incentive Plan for the Grant of Restricted Units to
Grantees in France (the “French Restricted Units Plan”). Under the French
Restricted Units Plan, the qualifying French Grantees will be granted only
Restricted Units as defined under Section 8 of the U.S. Plan and under Section 2
of the French Restricted Units Plan.

 

2. Definitions.

Capitalized terms not otherwise defined herein used in the French Restricted
Units Plan shall have the same meanings as set forth in the U.S. Plan. The terms
set out below will have the following meanings:

 

  (a) Restricted Units.

The term “Restricted Units” shall mean a promise by the Company of a future
issuance or delivery of shares of Common Stock of the Company, granted to the
French Grantees, for no consideration and to which any dividend and voting
rights attach only upon the issuance of shares at the time of vesting of the
Restricted Units.

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  (b) Grant Date.

The term “Grant Date” shall be the date on which the Committee both
(1) designates the French Grantees and (2) specifies the terms and conditions of
the Restricted Units, including the number of shares, the vesting conditions and
the conditions and restrictions of the transferability of the shares.

 

  (c) Restricted Period.

The term “Restricted Period” shall mean the date as specified by the Committee
on which the Restricted Units become non-forfeitable and convertible into
shares. In principle, the issuance of shares occurs concurrently with the
expiration of the Restricted Period, although in practice there may be a delay
in the actual issuance of shares. To qualify for the French favorable tax and
social security regime, such Restricted Period specified by the Committee shall
not lapse prior to the second anniversary of the Grant Date, or such other
period as is required for French-qualified Restricted Units under Section L.
225-197-1 of the French Commercial Code, the French Tax Code, or the French
Social Security Code, as amended, except if authorized by French law.

 

  (d) Closed Period.

The term “Closed Period” means:

(i) Ten quotation days preceding and following the disclosure to the public of
the consolidated financial statements or the annual statements of the Company;
or

(ii) The period as from the date the corporate management entities involved in
the governance of the Company, such as the Board, Committee, or supervisory
directorate of the Company are in possession of material nonpublic information
which could, in the case it would be disclosed to the public, significantly
impact the quotation of the shares of the Company, until ten quotation days
after the day such information is disclosed to the public.

 

  (e) Disability.

The term “Disability” shall mean disability as determined in categories 2 and 3
under Section L. 341-4 of the French Social Security Code, as amended, and
subject to the fulfillment of related conditions.

 

3. Entitlement to Participate.

(a) Any individual who, on the Grant Date, is either bound to the French
Entities by an employment contract (“contrat de travail”) or who is a corporate
officer of the French

 

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Entities, shall be eligible to receive Restricted Units under the French
Restricted Units Plan, provided that he or she also satisfies the eligibility
conditions of Section 3 of the U.S. Plan.

(b) Restricted Units may not be issued under the French Restricted Units Plan to
employees or corporate officers owning more than ten percent (10%) of the
Company’s capital shares or to individuals other than employees and corporate
executives of the French Entities.

(c) Restricted Units may not be issued to corporate executives of the French
Entities, other than the managing directors (e.g., Président du Conseil
d’Administration, Directeur Général, Directeur Général Délégué, Membre du
Directoire, Gérant de Sociétés par actions), unless the corporate executive is
an employee of a French Entity as defined by French law.

 

4. Conditions of the Restricted Units.

 

  (a) Vesting of Restricted Units.

The Restricted Units will vest on the lapse of the Restricted Period as defined
under Section 2 above. However, notwithstanding the above, in the event of the
death of a French Grantee, all of his or her outstanding Restricted Units shall
vest as set forth in Section 7 of the French Restricted Units Plan.

 

  (b) Transfer of Shares.

The sale or transfer of the shares issued pursuant to the Restricted Units held
by the French Grantees must not occur prior to the second anniversary of each
lapse of the Restricted Period’s tranche or such other period as is required to
comply with the minimum mandatory holding period applicable to shares underlying
French-qualified Restricted Units under Section L. 225-197-1 of the French
Commercial Code, the French Tax Code or the French Social Security Code, as
amended.

A specific holding period for the shares underlying the French-qualified
Restricted Units may be specified for the French Grantees who qualify as
managing directors under French law (“mandataires sociaux”) as defined under
Section 3(c) of the French Restricted Units Plan, by the Committee.

In addition, the underlying shares cannot be sold or transferred during certain
Closed Periods as provided for by Section L. 225-197-1 of the French Commercial
Code, as amended, and as interpreted by the French administrative guideline so
long as those Closed Periods are applicable to shares underlying
French-qualified Restricted Units.

 

  (c) French Grantee’s Account.

The shares acquired upon vesting of the Restricted Units will be recorded in an
account in the name of the French Grantee with a broker or in such other manner
as the Company may otherwise determine in order to ensure compliance with
applicable law.

 

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5. Non-transferability of Restricted Units.

Except in the case of death, Restricted Units cannot be transferred or
surrendered to any third party. In addition, the Restricted Units may vest only
for the benefit of the French Grantee during the lifetime of the French Grantee.

 

6. Adjustments Upon Changes in Capital Stock.

In the event of a Change in Capital Stock as set forth in Section 5.3 of the
U.S. Plan, adjustment to the terms and conditions of the Restricted Units or
underlying shares can only be made in accordance with the U.S. Plan and pursuant
to applicable French legal and tax rules. Should the Committee decide to make
adjustments pursuant to Section 5.3 of the U.S. Plan but in a manner that is not
authorized under French law, the Restricted Units may no longer qualify for
French favorable tax and social security treatment.

 

7. Death and Disability.

If a French Grantee’s service to the Company or any subsidiary of the Company
terminates by reason of his or her death, the Restricted Units held by the
French Grantee at the time of death shall become transferable to the French
Grantee’s heirs. Within six months following the death of the French Grantee,
the heirs can request the Restricted Units to be issued the Shares and that the
Company subsequently issue and deliver the Shares, as provided in the Restricted
Unit Grant Agreement.

If a French Grantee’s service to the Company or any subsidiary of the Company
terminates by reason of his or her death or Disability, the French Grantee or
the French Grantee’s heirs, as applicable, shall not be subject to the
restriction on the sale of the Shares set forth in Section 4(b) above.

 

8. Dividend Equivalent.

Notwithstanding the provisions of Section 8.3 of the U.S. Plan, Dividend
Equivalents will not be awarded to French Grantees.

 

9. Disqualification of Restricted Units.

If the Restricted Units are otherwise modified or adjusted in a manner in
keeping with the terms of the U.S. Plan or as mandated as a matter of law or by
decision of the Company’s shareholders, or Board or Committee, and the
modification or adjustment is contrary to the terms and conditions of this
French Restricted Units Plan, the Restricted Units may no longer qualify for
favorable tax and social security treatment in France.

If the Restricted Units no longer qualify as French-qualified Restricted Units,
the Committee’s Delegate may, provided it is authorized to do so under the U.S.
Plan, and in its sole discretion, determine to lift, shorten or terminate
certain restrictions applicable to the Restricted Units or to the sale of the
shares underlying the Restricted Units, which may have been imposed under this
French Restricted Units Plan.

 

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10. Interpretation.

It is intended that Restricted Units granted under the French Restricted Units
Plan shall qualify for the favorable tax and social security treatment
applicable to Restricted Units granted under Sections L. 225-197-1 to L.
225-197-5 of the French Commercial Code, as amended, and in accordance with the
relevant provisions set forth by French tax and social security laws, but no
undertaking is made to maintain such status.

The terms of the French Restricted Units Plan shall be interpreted accordingly
and in accordance with the relevant Guidelines published by French tax and
social security administrations and subject to the fulfilment of certain legal,
tax and reporting obligations.

 

11. Employment Rights.

The adoption of this French Restricted Units Plan shall not confer upon the
French Grantees or any employees of a French Entity, any employment rights and
shall not be construed as part of any employment contracts that a French Entity
has with its employees.

 

12. Effective Date.

The French Restricted Units Plan is effective as of its date of adoption, i.e.
as of February 5, 2007.

The French Restricted Units Plan is hereby adopted as of February 5, 2007

 

By:        Lawrence B. Costello   Senior Vice President – Human Resources

 

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