Exhibit 10.3

EMPLOYEE MATTERS AGREEMENT

BY AND BETWEEN AMERICAN STANDARD COMPANIES, INC. AND

WABCO HOLDINGS INC.

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EMPLOYEE MATTERS AGREEMENT

This EMPLOYEE MATTERS AGREEMENT (this “Agreement”), dated as of July 16, 2007 is
by and between American Standard Companies Inc., a Delaware corporation (“ASD”),
and WABCO Holdings Inc., a Delaware corporation (“WABCO”) (each a Party, and
together the “Parties”).

WHEREAS, the Board of Directors of ASD has determined that it is in the best
interests of ASD and its shareholders for ASD to distribute to the holders of
ASD Common Stock on such record date as may be established by the Board of
Directors of ASD on a pro rata basis all of the issued and outstanding shares of
common stock, par value $0.01 per share, of WABCO (the “WABCO Common Stock”)
(such transaction, the “Distribution”);

WHEREAS, in furtherance of the foregoing, ASD and WABCO have entered into a
Separation and Distribution Agreement, dated as of July 16, 2007 (the
“Separation Agreement”), and other specific agreements that will govern certain
matters relating to the Separation (as defined in the Separation Agreement) and
the Distribution and the relationship of ASD, WABCO, and their respective
Affiliates following the Distribution;

WHEREAS, ASD and WABCO have entered into a Transition Services Agreement, dated
as of July 16, 2007 (the “Transition Agreement”) that will govern the provision
of transition services and matters relating to transition of inter-company
services and the relationship of ASD, WABCO and their respective affiliates
following Separation; and

WHEREAS, ASD and WABCO desire to enter into this Agreement to provide for the
allocation of assets, liabilities, and responsibilities with respect to certain
matters relating to employees (including employee compensation and benefit plans
and programs) between them.

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used but not defined herein shall have the meaning ascribed to
them in the Separation Agreement. For purposes of this Agreement the following
terms shall have the following meanings:

1.1 “Agreement” means this Employee Matters Agreement.

1.2 “Ancillary Benefits” means company contributions to the American Standard
Companies Inc. Employee Stock Ownership Plan, active medical, life and dental
benefits, and accruals for retiree life and medical benefits all to the extent
applicable.

1.3 “ASD Defined Benefit Retirement Plans” means The American Standard Pension
Plan and the American Standard Merged Hourly Pension Plan.

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1.4 “ASD Defined Contribution Plans” means the American Standard Companies Inc.
Employee Stock Ownership Plan and the Savings Plan of American Standard Inc. and
Participating Subsidiary Companies.

1.5 “ASD Employee” means any individual who, as of the Effective Time, is either
actively employed by or then on a leave of absence from ASD or an ASD Group
member (including maternity, paternity, family, sick, short-term or long-term
disability leave, qualified military service under the Uniformed Services
Employment and Reemployment Rights Act of 1994, and leave under the Family
Medical Leave Act and other approved leaves), but does not include any ASD
Transferee or any WABCO Employee. Notwithstanding the foregoing, WABCO Employees
who are on long term disability benefits at the Effective Time (“WABCO LTD
Employees”) shall be considered ASD Employees unless and until either (a) their
employment is terminated by ASD or (b) they return to work or are able to return
to work, at which time they shall become WABCO Employees.

1.6 “ASD Equity-Based Plans” means the American Standard Companies Inc. 2002
Omnibus Incentive Plan, as amended and the American Standard Companies Inc.
Stock Incentive Plan, each as amended from time to time.

1.7 “ASD Transferees” means individuals who, immediately prior to the Effective
Time, performed services for WABCO or a WABCO Group member as employees of ASD
or an ASD Group member (other than WABCO or a WABCO Group member) and who will
become employees of WABCO or a WABCO Group member as of the Effective Time or
other individuals who are transferring to WABCO or a WABCO Group member from ASD
or an ASD Group member as of the Effective Time.

1.8 “COBRA” means the continuation coverage requirements for “group health
plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and as codified in Code Section 4980B and ERISA Sections 601
through 608.

1.9 “Code” means the Internal Revenue Code of 1986, as amended, or any successor
federal income tax law. Reference to a specific Code provision also includes any
proposed, temporary, or final regulation in force under that provision.

1.10 “Disposition Year” means the ASD fiscal year during which the Distribution
occurs.

1.11 “Effective Time” shall mean 11:59 p.m., New York City, New York time, on
July 31, 2007.

1.12 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific provision of ERISA also includes any proposed,
temporary, or final regulation in force under that provision.

1.13 “Health and Welfare Plans,” when immediately preceded by “ASD,” means the
health and welfare plans established and sponsored by ASD or an ASD Group member
(other than WABCO or a WABCO Group member), and when immediately preceded by
“WABCO,” means the health and welfare plans sponsored and maintained by WABCO or
a WABCO Group member before or after the Effective Time.

 

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1.14 “HIPAA” means the health insurance portability and accountability
requirements for “group health plans” under the Health Insurance Portability and
Accountability Act of 1996, as amended.

1.15 “Incentive Stock Option” means an option which qualifies as an incentive
stock option under the provisions of Section 422 of the Code.

1.16 “Individual Agreement” means an individual contract or agreement (whether
written or unwritten) entered into between ASD, an ASD Group member, WABCO, or a
WABCO Group member and a ASD Employee, ASD Transferee or WABCO Employee that
establishes the right of such individual to special compensation or benefits,
including, but not limited to, any supplemental pension benefit, deferred
compensation, severance, hiring bonus, loan, guaranteed payment, or disability
benefit.

1.17 “Option,” when immediately preceded by “ASD,” means an option (either
nonqualified or incentive) to purchase shares of ASD Common Stock pursuant to an
ASD Equity-Based Plan and, when immediately preceded by “WABCO,” means an option
to purchase shares of WABCO Common Stock, which option is granted pursuant to
the WABCO Long Term Incentive Plan as part of the adjustment to ASD Options as
set forth in Section 5.2.

1.18 “Participating Company” means (a) ASD, (b) any Person (other than an
individual) that ASD has approved for participation in, and which is
participating in, a Plan and (c) any Person (other than an individual) which, by
the terms of such a Plan, participates in such Plan.

1.19 “Plan,” when immediately preceded by “ASD,” means any plan, policy,
program, payroll practice, on-going arrangement, contract, trust, insurance
policy or other agreement or funding vehicle (including a Health and Welfare
Plan) for which the eligible classes of participants include employees or former
employees of ASD or an ASD Group member (which may include employees of WABCO
Group members prior to the Effective Time), and when immediately preceded by
“WABCO,” means any plan, policy, program, payroll practice, on-going
arrangement, contract, trust, insurance policy or other agreement or funding
vehicle (including a Health and Welfare Plan) for which the eligible classes of
participants are limited to employees or former employees (and their eligible
dependants) of WABCO or a WABCO Group member, but no other ASD Group member.

1.20 “Restricted Stock Unit,” when immediately preceded by “ASD,” means a unit
granted by ASD pursuant to an ASD Equity-Based Plan representing a general
unsecured promise by ASD to deliver a share of ASD Common Stock (or an amount in
cash equal to the value thereof) and when immediately preceded by “WABCO,” means
a unit granted by WABCO representing a general unsecured promise by WABCO to
deliver a share of WABCO Common Stock, which unit is granted pursuant to the
WABCO Long Term Incentive Plan as part of the adjustment to ASD Restricted Stock
Units as set forth in Section 5.2.

1.21 “WABCO Employee” means any individual who, as of the Effective Time, is
either actively employed by or then on a short-term leave of absence from WABCO
or a WABCO Group

 

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member (including maternity, paternity, family, sick, short-term disability
leave, qualified military service under the Uniformed Services Employment and
Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act
and other approved leaves), but shall not include WABCO LTD Employees, unless
such employees return to work with WABCO.

1.22 “WABCO 401(k) Plan” means the tax-qualified 401(k) defined contribution
savings plan to be established by WABCO or a WABCO Group member prior to the
Effective Time.

1.23 “WABCO Long Term Incentive Plan” means the WABCO Holdings Inc. Omnibus
Incentive Plan adopted or to be adopted by WABCO.

ARTICLE II

GENERAL PRINCIPLES

2.1 Assumption and Retention of Liabilities. ASD and WABCO intend that
employment-related Liabilities associated with employees of the WABCO business
are to be assumed by WABCO or a WABCO Group member and that employment-related
Liabilities associated with former employees of the WABCO business (whether such
individuals were employed by a WABCO Group member or otherwise) are also to be
assumed by WABCO, except as specifically set forth herein. As of the Effective
Time, WABCO or another member of the WABCO Group shall assume and agree to pay,
perform, fulfill, and discharge, except as expressly provided in this Agreement,
(i) all Liabilities arising under or related to WABCO Plans, (ii) all employment
or service-related Liabilities with respect to (A) all WABCO Employees (and
their dependents and beneficiaries), (B) all former employees of WABCO or a
WABCO Group member (and their dependents and beneficiaries) and (C) any
individual who is, or was, an independent contractor, temporary employee,
temporary service worker, consultant, freelancer, agency employee, leased
employee, on-call worker, incidental worker, or nonpayroll worker or in any
other employment or similar relationship primarily connected to WABCO or a WABCO
Group member, (iii) all employment or service-related Liabilities with respect
to all ASD Transferees and (iv) any Liabilities expressly transferred to WABCO
or a WABCO Group member under this Agreement. Notwithstanding the foregoing,
Liabilities described in part (B) of clause (ii) of the preceding sentence shall
not be assumed by WABCO to the extent that any individual described in such
clause is actively employed by an ASD Group member as of the Effective Time and
is not an ASD Transferee. To the extent that any employment and service-related
Liabilities exist with respect to former ASD Employees whose last employment
with an ASD Group member was primarily connected to the VCS Business and which
are not otherwise specifically dealt with herein, the parties shall cooperate to
effect the transfer to, and assumption of, such Liabilities by WABCO.

2.2 WABCO Participation in the ASD Plans. Except as set forth in Section 4.1 of
this Agreement, effective as of the Effective Time, WABCO and each WABCO Group
member shall cease to be Participating Companies in any ASD Plan, and ASD and
WABCO shall take all necessary action before the Effective Time to effectuate
such cessation as a Participating Company.

 

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2.3 Sponsorship of the WABCO Plans. Effective no later than immediately prior to
the Effective Time, ASD and WABCO shall take such actions (if any) as are
required to cause WABCO or a WABCO Group member to assume, sponsorship of, and
all liabilities with respect to, each WABCO Plan.

2.4 Terms of Participation by WABCO Employees in WABCO Plans. ASD and WABCO
shall adopt, or cause to be adopted, all reasonable and necessary amendments and
procedures to prevent WABCO Employees and former employees from receiving
duplicative benefits from the ASD Plans and the WABCO Plans. With respect to
WABCO Employees and ASD Transferees, each WABCO Plan shall provide that for
purposes of determining eligibility to participate, vesting, and entitlement to
benefits (but not for accrual of pension benefits under any defined benefit
pension plan), service prior to the Effective Time with ASD or an ASD Group
member shall be treated as service with WABCO or the applicable WABCO Group
member. Such service also shall apply for purposes of satisfying any waiting
periods, evidence of insurability requirements, or the application of any
preexisting condition limitations under any WABCO Plan. Each WABCO Plan shall,
to the extent practicable, waive pre-existing condition limitations with respect
to WABCO Employees and ASD Transferees.

2.5 Approval of Plan. Prior to the Effective Time, ASD shall cause WABCO to
adopt the WABCO Long Term Incentive Plan.

2.6 Employment of ASD Transferees. Except for purposes of the Options and
Restricted Stock Units described in Section 5.2 and subject to the last sentence
of Section 3.1(b), as of the Effective Time, all ASD Transferees shall terminate
their employment with ASD or an ASD Group member and shall commence to be
employees of WABCO or a WABCO Group member (as determined by WABCO), provided,
however, that such termination shall not be treated as a separation of service
for purposes of any plan or agreement (or any benefit thereunder) which is
subject to the provisions of Section 409A of the Code.

2.7 Delivery of Shares; Registration Statement. From and after the Effective
Time, WABCO shall have sole responsibility for delivery of shares of WABCO
Common Stock in satisfaction of any obligations to deliver such shares under the
ASD Plans (including delivery to ASD Employees and former ASD Employees) and
shall do so without compensation from any ASD Group member. WABCO shall cause a
registration statement on Form S-8 (or other appropriate form) to be filed with
respect to such delivery prior to the Effective Time and shall cause such
registration to remain in effect for so long as there may be an obligation to
deliver WABCO shares under such ASD Plans. ASD shall use commercially reasonable
efforts to assist WABCO in completing such registration. WABCO and ASD shall
cooperate to establish a procedure whereby the other party shall be promptly
informed of the obligation to deliver shares to a current or former WABCO
Employee or an ASD Employee, as the case may be.

2.8 Labor Relations. To the extent required by applicable law or any agreement
with a labor union, works council or similar employee organization, WABCO shall
provide notice, engage in consultation and take any similar action which may be
required on its part in connection with the Distribution and shall fully
indemnify each ASD Group member against any Liabilities arising from its failure
to comply with such requirements.

 

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ARTICLE III

DEFINED CONTRIBUTION, DEFINED BENEFIT AND NON-QUALIFIED DEFERRED COMPENSATION
PLANS

 

  3.1 401(k) Plan.

 

  (a) Establishment of Plan and Trust. ASD and WABCO shall adopt or cause to be
adopted the WABCO 401(k) Plan and any trust agreements or other plan documents
reasonably necessary and shall cause trustees to be appointed for such plan.
Such actions shall be completed prior to the Effective Time.

 

  (b) Assumption of Liabilities and Transfer of Assets. In accordance with
applicable law, ASD and WABCO shall cause, in the manner described herein, the
accounts under the ASD Defined Contribution Plans of each WABCO Employee and
former WABCO Employee and each ASD Transferee to be transferred to the WABCO
401(k) Plan as soon as practicable after the Effective Time. As soon as
practicable after the Effective Time: (i) ASD shall cause the accounts
(including any outstanding loan balances) of each WABCO Employee, former WABCO
employee and ASD Transferee in the ASD Defined Contribution Plans to be
transferred to the WABCO 401(k) Plan and its related trust; (ii) WABCO (or any
successor WABCO Group member) and the WABCO 401(k) Plan shall assume and be
solely responsible for all liabilities under the WABCO 401(k) Plan relating to
the accounts that are so transferred as of the time of such transfer; and
(iii) WABCO shall cause such transferred accounts to be accepted by the WABCO
401(k) Plan and its related trust and shall cause the WABCO 401(k) Plan to
satisfy all protected benefit requirements under the Code and applicable law
with respect to the transferred accounts. In determining whether a WABCO
Employee is vested in his or her account under the WABCO 401(k) Plan, the WABCO
401(k) Plan shall credit each WABCO Employee and ASD Transferee with all the
individual’s service credited under the ASD Defined Contribution Plans.
Participants in the ASD Defined Contribution Plans will not be treated as having
experienced a termination of service for purposes of such plans as a result of
the Distribution or the occurrence of the Effective Time.

 

  3.2 Other United States Retirement and Non-Qualified Deferred Compensation
Plans.

 

  (a) Following the Effective Time, ASD (or the appropriate ASD Group member)
shall retain all Liabilities with respect to each ASD Defined Benefit Plan which
is a tax-qualified pension plan under the Internal Revenue Code of the United
States. All WABCO Employees and ASD Transferees who are participants in the
American Standard Pension Plan as of the Effective Time and who terminate their
employment with all ASD Group members as a result of the Distribution shall be
fully vested in their account balances in that plan.

 

  (b)

Following the Effective Time, ASD shall retain sponsorship of and all
Liabilities with respect to each ASD Plan covering United States taxpayers which
is a

 

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non-qualified pension, savings or deferred compensation plan. A list of such
plans is set forth on Schedule 3.2b. For purposes of determining when a
distribution is required from the ASD Plans described in this Section 3.2(b),
WABCO Employees who were participants in such plans will be treated as not
having experienced a separation from service until such employees have separated
from service from all WABCO Group members.

 

  (c) ASD shall provide WABCO with a list of the WABCO Employees and ASD
Transferees who are participants in the plans described in this Section 3.2 and
WABCO shall, from and after the Effective Time, provide ASD with notice of the
separations from service of any such individual.

3.3 Non-U.S. Retirement Plans. Notwithstanding anything to the contrary herein,
following the Effective Time, ASD (or the appropriate ASD Group member) shall
retain sponsorship of the WABCO Equipment of Canada Hourly Employee Pension
Plan, including retaining all Liabilities and plan assets thereto. With respect
to any ASD Plan covering non-U.S. WABCO Employees and which is a defined benefit
or defined contribution retirement or pension plan, WABCO shall cause each such
WABCO Employee to become covered by a corresponding WABCO Plan which is a
defined benefit or defined contribution retirement or pension plan, effective as
of the Effective Time or as soon as practicable thereafter and shall, to the
extent such coverage does not commence until following the Effective Time,
indemnify ASD for any continued participation by such employee in the
corresponding ASD Plan. ASD will reasonably cooperate with WABCO in complying
with the immediately preceding sentence. With respect to any WABCO Plan, which
is a retirement or pension plan covering non-U.S. ASD Employees, ASD shall cause
each such ASD Employee to become covered by a corresponding ASD Plan which is a
defined benefit or defined contribution retirement or pension plan, effective as
of the Effective Time or as soon as practicable thereafter and shall, to the
extent such coverage does not commence until following the Effective Time,
indemnify WABCO for any continued participation by such employee in the
corresponding WABCO Plan. WABCO will reasonably cooperate with ASD in complying
with the immediately preceding sentence. The parties have set forth on Schedule
3.3a a listing of those non-U.S. ASD retirement or pension plans in which WABCO
Employees are known to participate and have set forth on Schedule 3.3b a listing
of those non-U.S. WABCO retirement or pension plans in which ASD Employees are
known to participate. Schedules 3.3a and 3.3b may be updated by mutual written
consent of ASD and WABCO at any time up to 60 days after the Effective Time.

ARTICLE IV

HEALTH AND WELFARE PLANS

4.1 Transitional Services under Health and Welfare Plans; Cessation of
Participation in ASD Plans. For the period commencing upon the Effective Time
through December 31, 2007 (or such earlier date as the parties may mutually
agree), ASD shall permit WABCO Employees and ASD Transferees to continue to
participate in the ASD United States Plans in which such employees participated
immediately prior to the Effective Time and which are Health and Welfare Plans
which provide group health, life, dental, accidental death & dismemberment,
health care reimbursements, dependent care assistance and disability benefits.
The terms and conditions of such continued participation shall be governed by
the Transition Services Agreement and the terms of the applicable ASD Plans. For
the avoidance of doubt, WABCO Employees and ASD Transferees who do not
participate in an ASD Plan which is a Health and Welfare Plan in the United
States will cease to be active participants in all ASD Plans (including those
which are

 

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Health and Welfare Plans) as of the Effective Time, except as set forth below.
The date upon which a WABCO Employee or ASD Transferee ceases to participate in
the United States ASD Health and Welfare Plans is hereinafter referred to as the
“Benefits Transition Date.” With respect to any ASD Plan outside the United
States covering WABCO Employees and which is a Health and Welfare Plan, WABCO
shall cause each such WABCO Employee to become covered by a corresponding WABCO
Plan which is a Health and Welfare Plan, effective as of the Effective Time or
as soon as practicable thereafter and shall, to the extent such coverage does
not commence until following the Effective Time, indemnify ASD for any continued
participation by such employee in the corresponding ASD Plan. ASD will
reasonably cooperate with WABCO in complying with the immediately preceding
sentence. With respect to any WABCO Plan, which is a Health and Welfare Plan
covering ASD Employees, ASD shall cause each such ASD Employee to become covered
by a corresponding ASD Plan which is a Health and Welfare Plan, effective as of
the Effective Time or as soon as practicable thereafter and shall, to the extent
such coverage does not commence until following the Effective Time, indemnify
WABCO for any continued participation by such employee in the corresponding
WABCO Plan. WABCO will reasonably cooperate with ASD in complying with the
immediately preceding sentence. The parties have set forth on Schedule 4.1a a
listing of those non-U.S. ASD Health and Welfare Plans in which WABCO Employees
are known to participate and have set forth on Schedule 4.1b a listing of those
non-U.S. WABCO Health and Welfare Plans where ASD Employees are known to
participate. Schedules 4.1a and 4.1b may be updated by mutual written consent of
ASD and WABCO at any time up to 60 days after the Effective Time.

 

  4.2 Allocation of Health and Welfare Plan Liabilities.

 

  (a) Without limiting the obligations of WABCO under the Transition Services
Agreement, all Liabilities relating to, arising out of, or resulting from health
and welfare coverage or claims incurred by or on behalf of WABCO Employees, ASD
Transferees, or their covered dependents (other than Liabilities relating to
health and welfare coverage or claims incurred under the WABCO Health and
Welfare Plans, if such WABCO Employees or ASD Transferees participate in the
WABCO Health and Welfare Plans on or before the Benefits Transition Date) under
the ASD Health and Welfare Plans on or before the Benefits Transition Date shall
remain Liabilities of ASD, and all Liabilities relating to health and welfare
coverage or claims incurred by or on behalf of WABCO Employees, ASD Transferees,
or their covered dependents after the Benefits Transition Date shall be
Liabilities of WABCO under the corresponding WABCO Health and Welfare Plans. A
claim or Liability (i) for medical and dental benefits shall be deemed to be
incurred upon the rendering of health services giving rise to the obligation to
pay such benefits; (ii) for life insurance and accidental death and
dismemberment insurance benefits shall be deemed to be incurred upon the
occurrence of the event giving rise to the entitlement to such benefits; and
(iii) for disability benefits shall be deemed to be incurred on the date an
individual is deemed to be disabled, as defined under the applicable plan.

 

  (b)

Without limiting the obligations of WABCO under the Transition Services
Agreement, ASD shall be responsible for all Liabilities under the applicable ASD
Health and Welfare Plans that relate to, arise out of, or result from any
hospitalization of a WABCO Employee, former employee, ASD Transferee or his

 

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or her covered dependent which begins on or before the Benefits Transition Date
under a ASD Health and Welfare Plan and continues after the Benefits Transition
Date until such hospitalization or treatment for such condition is concluded or
coverage is discontinued subject to applicable plan rules and limitations.

4.3 Health and Welfare Plan Transitional Coverage Rules. WABCO shall cause WABCO
Employees, ASD Transferees and their covered dependents who participate in ASD
Health and Welfare Plans immediately before the Benefits Transition Date to be
automatically eligible for enrollment on the day following the Benefits
Transition Date in WABCO Health and Welfare Plans corresponding to the ASD
Health and Welfare Plans in which the WABCO Employee, ASD Transferee, and his or
her covered dependents, if any, participated immediately before the Benefits
Transition Date. The transfer of employment from ASD or an ASD Group member to
WABCO or a WABCO Group member as of the Effective Time shall not be required to
be treated as a “status change” with respect to any WABCO Employee or ASD
Transferee under the ASD Health and Welfare Plans or the WABCO Health and
Welfare Plans.

4.4 Retiree Welfare Benefits. Each WABCO Employee and ASD Transferee shall be
deemed to have terminated employment with all ASD Group members as of the
Effective Time for purposes of each U.S. ASD Health and Welfare Plan which
provides post-termination welfare benefits (other than for purposes of COBRA
coverage, which is governed by the provisions of Section 4.7 hereof). ASD or the
applicable ASD Group member shall retain all Liabilities with respect to such
plans, other than Liabilities under those plans set forth on Schedule 4.4 which
are provided to former WABCO Employees in the United States pursuant to a
collective bargaining agreement, which Liabilities shall be assumed and
performed by WABCO as of the Effective Time and with respect to which WABCO will
fully indemnify each ASD Group member. To the extent that current WABCO
Employees have, as of the Effective Time, attained age 55 with 10 years of
service credit under the ASD retiree medical plan, such employees may, at the
time of retirement from all WABCO Group members, elect coverage under either
(1) the ASD retiree medical plan or (2) a retiree medical plan of the applicable
WABCO Group member, in each case as may be in effect at the time and as may be
amended or terminated in accordance with its terms from time to time. The WABCO
Employee will, upon such election, forfeit his or her entitlement to the
coverage that was not elected. WABCO Employees who retire between the Effective
Time and the Benefits Transition Date and who elect coverage under the WABCO
retiree medical plan, shall be provided coverage under the ASD retiree medical
plan until their Benefits Transition Date. WABCO Employees who, as of the
Effective Time, have achieved age 55 with 10 years of service credit under the
ASD welfare plan shall be entitled to retiree life insurance coverage from ASD
provided that they retiree from WABCO no later than December 31, 2008, which is
the end of the transition period during which ASD is continuing to offer retiree
life insurance coverage to its non-union employees. Notwithstanding anything to
the contrary herein, following the Effective Time, ASD (or the appropriate ASD
Group member) shall retain sponsorship of retiree health, life insurance and
other welfare benefits for WABCO retirees in Canada, including retention of all
Liabilities and assets or policies associated therewith.

4.5 Workers’ Compensation Liabilities. Except as provided below, all workers’
compensation Liabilities relating to, arising out of, or resulting from any
claim by ASD Transferees or WABCO Employees that result from an accident or from
an occupational disease which is incurred or becomes manifest, as the case may
be, on or before the Effective Time and while such individual was employed by
ASD or an ASD Group member shall be retained by ASD, provided that WABCO shall
reimburse ASD or the applicable ASD Group member for any deductibles or
co-payments paid in respect of such Liabilities, to the extent attributable to
such

 

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Liabilities. WABCO and each WABCO Group member shall be solely responsible for
all workers’ compensation Liabilities relating to, arising out of, or resulting
from any claim incurred for a compensable injury sustained by a WABCO Employee
or ASD Transferee that results from an accident or from an occupational disease
which is incurred or becomes manifest, as the case may be, after the Effective
Time. For purposes of this Agreement, an injury shall be deemed to be sustained
upon the occurrence of the event giving rise to eligibility for workers’
compensation benefits or, in the case of an occupational disease, at such time
as the occupational disease is diagnosed by a qualified medical professional.
ASD, each ASD Group member, WABCO and each WABCO Group member shall cooperate
with respect to any notification to appropriate governmental agencies of the
disposition and the issuance of new, or the transfer of existing, workers’
compensation insurance policies and claims handling contracts.

4.6 Payroll Taxes and Reporting. ASD and WABCO shall, to the extent practicable,
(i) treat WABCO (or a WABCO Group member designated by WABCO) as a “successor
employer” and ASD (or the appropriate ASD Group member) as a “predecessor,”
within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, with
respect to WABCO Employees and ASD Transferees for purposes of taxes imposed
under the United States Federal Unemployment Tax Act or the United States
Federal Insurance Contributions Act, and (ii) cooperate with each other to
avoid, to the extent possible, the filing of the more than one IRS Form W-2 with
respect to each WABCO Employee and ASD Transferee for the Disposition Year.
Without limiting in any manner the obligations and Liabilities of the parties
under the Tax Sharing Agreement, ASD, each ASD Group member, WABCO and each
WABCO Group member shall each bear its responsibility for payroll tax
obligations and for the proper reporting to the appropriate governmental
authorities of compensation earned by their respective employees after the
Effective Time, including compensation related to the exercise of Options or the
vesting or exercise of other equity awards.

4.7 COBRA and HIPAA Compliance. ASD shall be responsible for administering
compliance with the health care continuation requirements of COBRA, the
certificate of creditable coverage requirements of HIPAA, and the corresponding
provisions of the ASD Health and Welfare Plans with respect to WABCO Employees
and ASD Transferees and their covered dependents who incur a COBRA qualifying
event or loss of coverage under the ASD Health and Welfare Plans at any time on
or before the Benefits Transition Date. Subject to the provisions of the
Transition Service Agreement, effective immediately after the Benefits
Transition Date, WABCO shall be responsible for administering compliance with
the health care continuation requirements of COBRA, the certificate of
creditable coverage requirements of HIPAA, and the corresponding provisions of
the WABCO Health and Welfare Plans with respect to WABCO Employees, ASD
Transferees and their covered dependents who incur a COBRA qualifying event or
loss of coverage under the WABCO Health and Welfare Plans at any time after the
Benefits Transition Date.

4.8 Vacation and Paid Time Off. As of the Effective Time, the applicable WABCO
Group Member shall credit each WABCO Employee and ASD Transferee with the unused
vacation days and personal and sickness days that such individual has accrued
immediately prior to the Effective Time in accordance with the vacation and
personnel policies applicable to such employee immediately prior to the
Effective Time.

 

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4.9 WABCO LTD Employees. WABCO shall hire or cause a WABCO Group member to hire
each WABCO LTD Employee if such individual is able to return to work within the
time period prescribed under the applicable leave policy governing such employee
at the time the disability commenced and shall indemnify each ASD Group member
against any Liability with respect to a failure by WABCO or a WABCO Group member
to hire such employee. To the extent that a WABCO Employee in the United States
is on short-term disability leave as of the Effective Time and subsequently
becomes entitled to long-term disability benefits as a result of such disability
(without having returned to work), such long-term disability benefits will be
provided under the applicable ASD Plan. On or about one year after the Effective
Time, ASD shall calculate the net present value of the Ancillary Benefits
provided to the WABCO LTD Employees in accordance with the assumptions used
under FAS106 to determine the costs of said benefits, whereupon WABCO shall pay
such amount to ASD.

ARTICLE V

INCENTIVE COMPENSATION, EQUITY COMPENSATION AND OTHER BENEFITS

 

  5.1 ASD Cash-Based Incentive Plans.

 

  (a) ASD Annual Bonus Plans. As of the Effective Time, WABCO shall assume all
Liabilities with respect to the participation of each WABCO Employee and ASD
Transferee who is then participating in any cash-based annual bonus or incentive
compensation plan of an ASD Group member. The Management Development and
Compensation Committee of the WABCO Board of Directors (or its designee) shall
have the discretion to make equitable adjustments to the performance metrics,
goals and payments under such plans to reflect the Distribution.

 

  (b) ASD Long-Term Incentive Plans. As of the Effective Time, WABCO shall
assume all Liabilities with respect to the participation of each WABCO Employee
and ASD Transferee who is then participating in any cash-based long-term
incentive compensation plan of an ASD Group member. The Management Development
and Compensation Committee of the WABCO Board of Directors (or its designee)
shall have the discretion to make equitable adjustments to the performance
metrics, goals and payments under such plans to reflect the Distribution.

5.2 Awards under the ASD Equity-Based Plan or Otherwise. ASD and WABCO shall use
their commercially reasonable efforts to take all actions necessary or
appropriate so that each outstanding ASD Option and ASD Restricted Stock Unit
outstanding immediately prior to the Effective Time shall be adjusted as set
forth in this Section 5.2.

 

  (a) ASD Options.

 

  (i)

2007 Grants and Incentive Stock Options Held By WABCO Employees and ASD
Transferees. Each ASD Option issued under an ASD Equity-Based Plan that is
(1) held by a WABCO Employee or an ASD Transferee, (2) outstanding immediately
prior to the Effective Time and (3) either an Incentive Stock Option or any ASD
Option granted during 2007 will be

 

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converted, as of the Effective Time, solely into a WABCO Option. The number of
shares of WABCO Common Stock subject to the converted option will be equal to
the number of shares of ASD Common Stock subject to the ASD Option immediately
prior to the Effective Time, multiplied by a fraction, the numerator of which is
the fair market value of a share of ASD Common Stock immediately prior to the
Effective Time (based on the closing price of the ASD Common Stock immediately
prior to the Effective Time, trading regular way, hereinafter, the “ASD Closing
Price”) and the denominator of which is the fair market value of a share of
WABCO Common Stock immediately following the Effective Time (based on the
opening trading prices of WABCO immediately following the Effective Time,
hereinafter, the “Opening WABCO Stock Price”), with the result being rounded
down to the nearest whole share. The fraction described in the preceding
sentence is referred to hereinafter as the “WABCO Concentrated Method Fraction”.
The per share exercise price of the converted WABCO Option will be equal to the
per share exercise price of the original ASD Option divided by the WABCO
Concentrated Method Fraction, with the result being rounded up to the nearest
whole cent.

 

  (ii) Other Incentive Stock Options. Each ASD Option issued under an ASD
Equity-Based Plan that is (1) held by an individual who is not a WABCO Employee
or ASD Transferee, (2) outstanding immediately prior to the Effective Time and
(3) an Incentive Stock Option will be converted, as of the Effective Time,
solely into an adjusted ASD Option. The number of shares of ASD Common Stock
subject to the adjusted ASD Option will be equal to the number of shares of ASD
Common Stock subject to the option immediately prior to the Effective Time
multiplied by a fraction, the numerator of which is the fair market value of a
share of ASD Common Stock immediately prior to the Effective Time (based on the
closing price of ASD Common Stock immediately prior to the Effective Time,
trading regular way) and the denominator of which is the fair market value of
ASD Common Stock immediately following the Effective Time (based on the opening
trading prices of the ASD Common Stock on the first trading day immediately
following the Effective Time, hereinafter, the “Opening ASD Stock Price”), with
the result being rounded down to the nearest whole share. The fraction described
in the preceding sentence is referred to hereinafter as the “ASD Concentrated
Method Fraction”. The per share exercise price of the adjusted ASD Option will
be equal to the per share exercise price of the original ASD Option divided by
the ASD Concentrated Method Fraction, with the result being rounded up to the
nearest whole cent.

 

  (iii)

2007 Options Grants Held By Individuals Other Than WABCO Employees or ASD
Transferees and all Pre-2007 Option Grants which are not Incentive Stock
Options. Each ASD Option that is not described in clause (i) or (ii) hereof and
which is outstanding immediately prior to the Effective Time will be converted
into two separate options, an adjusted ASD Option

 

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and a WABCO Option. The number of shares of stock subject to each of the
adjusted ASD Options will be equal to the number of shares of ASD Common Stock
subject to the ASD Option immediately prior to the Effective Time. The number of
shares of stock subject to the WABCO Option will be equal to the number of
shares of WABCO Common Stock the option holder would have received had the
option to acquire the Company’s common stock been fully exercised immediately
prior to the Effective Time, rounded down to the nearest whole share. The per
share exercise price of the adjusted ASD Option shall be equal to the product of
(1) the per share exercise price of the ASD Option immediately prior to the
Effective Time multiplied by (2) a fraction, the numerator of which shall be the
Opening ASD Stock Price and the denominator of which shall be the sum of (i) the
Opening ASD Stock Price and (ii) the quotient determined by dividing the Opening
WABCO Stock Price by the WABCO Distribution Ratio (as defined below), which
product shall be rounded up to the nearest whole cent. The per share exercise
price of the WABCO Option shall be equal to the product of (1) the per share
exercise price of the ASD Option immediately prior to the Effective Time
multiplied by (2) a fraction, the numerator of which shall be the Opening WABCO
Stock Price and the denominator of which shall be the sum of (i) the Opening ASD
Stock Price and (ii) the quotient determined by dividing the Opening WABCO Stock
Price by the WABCO Distribution Ratio, which product shall be rounded up to the
nearest whole cent. For purposes of this paragraph (b), “WABCO Distribution
Ratio” shall mean the amount determined by dividing (x) the number one (1) by
(y) the number of shares of WABCO Common Stock distributed in respect of each
share of ASD Common Stock in the Distribution.

 

  (iv) Option Terms. Each adjusted ASD Option issued shall be subject to the
same terms and conditions regarding term, vesting, and other provisions
regarding exercise as set forth in the original ASD Option, except as set forth
below. Each WABCO Option issued pursuant to this Section 5.2(a) shall be subject
to the same terms and conditions regarding term, vesting, and other provisions
regarding exercise as set forth in the related ASD Option before the Effective
Time, except as set forth below. Notwithstanding the foregoing, ASD will take
such action as is necessary to ensure that with respect to Adjusted ASD Options
that are held by WABCO Employees as of or following the Effective Time, such
individuals will not incur a termination of employment as a result of the
Separation for purposes of the Adjusted ASD Options. WABCO will take such action
as is necessary to ensure that with respect to the WABCO Option grants that are
held by ASD Employees as of or following the Effective Time, such individuals
will not incur a termination of employment as a result of the Separation (or
such subsequent transfer of employment) for purposes of the WABCO Options. For
purposes of the vesting and termination provisions of the Adjusted AD Options
and the WABCO Options, continued service with an ASD Group member or a WABCO
Group Member shall be considered to be continued service for purposes of such
option.

 

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  (b) Restricted Stock Units.

 

  (i) Restricted Stock Units held by WABCO Employees and ASD Transferees. Each
Restricted Stock Unit based upon ASD common stock that is outstanding and held
by a WABCO Employee or an ASD Transferee immediately prior to the Effective Time
will be converted into a WABCO Restricted Stock Unit. The number of shares of
WABCO Common Stock subject to the WABCO Restricted Stock Unit will be equal to
the number of shares of ASD Common Stock subject to the ASD Restricted Stock
Unit immediately prior to the Effective Time multiplied by a fraction, the
numerator of which is the ASD Closing Price and the denominator of which is the
Opening WABCO Stock Price.

 

  (ii) Other Restricted Stock Units. Each other ASD Restricted Stock Unit will
be converted into an adjusted ASD Restricted Stock Unit. The number of shares of
ASD Common Stock subject to the adjusted ASD Restricted Stock Unit will be equal
to the number of shares of ASD Common Stock subject to the ASD Restricted Stock
Unit immediately prior to the Effective Time multiplied by a fraction, the
numerator of which is the ASD Closing Price and the denominator of which is the
ASD Opening Price.

 

  (iii) Restricted Stock Unit Terms. WABCO Restricted Stock Units and adjusted
ASD Restricted Stock Units shall remain subject to their existing vesting
schedule and other terms and conditions so long as the holder thereof shall have
remained (or, in accordance herewith, is deemed to have remained) in employment
with a member of the ASD Group or a member of the WABCO Group, as the case may
be.

 

  (c) Change in Control Provisions. The ASD and WABCO Options and Restricted
Stock Units shall have the change in control provisions set forth on Annex I
hereto.

 

  (d) Taxes. All adjustments described in this Section 5.2 shall be done in a
manner which complies with the requirements of Section 409A and Section 424 of
the Code, to the extent applicable.

 

  (e) Partial Interests in Shares. To the extent that any adjustment in stock
options or stock appreciation rights described in this Section 5.2 results in
any fractional interest in shares, such fractional interest shall be rounded
down to the nearest whole share. No fractional interests in shares or stock
appreciation rights shall be payable in cash or otherwise.

 

  (f) Administration. Each of ASD and WABCO shall establish an appropriate
administration system in order to handle exercises and delivery of shares in an
orderly manner and provide reasonable levels of service for equity award
holders.

 

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5.3 Individual Agreements. As of the Effective Time, WABCO shall, or shall cause
a WABCO Group member to assume, and shall thereafter perform, each Individual
Agreement with an ASD Transferee. A list of such Individual Agreements is
provided on Schedule 5.3.

5.4 ASD Employee Stock Purchase Plan. ASD shall take such action as is necessary
or appropriate to cause WABCO Employees and ASD Transferees to receive a refund
in cash of all amounts contributed during the offering period in progress under
the ASD Employee Stock Purchase Plan as soon as practicable following the
Effective Time.

5.5 Confidentiality and Proprietary Information. No provision of the Separation
Agreement or this Agreement shall be deemed to release any individual for any
violation of any agreement or policy pertaining to confidential or proprietary
information of ASD or any of its Affiliates or of WABCO or any of its
Affiliates, respectively, or otherwise relieve any individual of his or her
obligations under any such agreements or policies.

ARTICLE VI

GENERAL AND ADMINISTRATIVE

6.1 Sharing of Participant Information. To the maximum extent permitted under
applicable law, ASD and WABCO shall share, ASD shall cause each applicable ASD
Group member to share, and WABCO shall cause each applicable WABCO Group member
to share, with each other and their respective agents and vendors all
participant information reasonably necessary for the efficient and accurate
administration of each of the ASD Plans and the WABCO Plans. ASD and WABCO and
their respective authorized agents shall, subject to applicable laws on
confidentiality, be given reasonable and timely access to, and may make copies
of, all information relating to the subjects of this Agreement in the custody of
the other party, to the extent necessary for such administration. Until the
Effective Time, all participant information shall be provided in the manner and
medium applicable to Participating Companies in the ASD Plans generally, and
thereafter until the time at which the Parties subsequently determine, all
participant information shall be provided in a manner and medium that are
compatible with the data processing systems of ASD as in effect as of the
Effective Time, unless otherwise agreed to by ASD and WABCO.

6.2 Non-Termination of Employment; No Third Party Beneficiaries. Except as
expressly provided in this Agreement or as set forth in Schedule 6.2, no
provision of this Agreement or the Separation Agreement shall be construed to
create any right, or accelerate entitlement, to any compensation or benefit
whatsoever on the part of any future, present, or former employee of ASD, an ASD
Group member, WABCO, or a WABCO Group member under any ASD Plan or WABCO Plan or
otherwise. Except as expressly provided in this Agreement, nothing in this
Agreement shall preclude WABCO or any WABCO Group member, at any time after the
Effective Time, from amending, merging, modifying, terminating, eliminating,
reducing, or otherwise altering in any respect any WABCO Plan, any benefit under
any WABCO Plan or any trust, insurance policy or funding vehicle related to any
WABCO Plan; and (iii) except as expressly provided in this Agreement, nothing in
this Agreement shall preclude ASD or any ASD Group member, at any time after the
Effective Time, from amending, merging, modifying, terminating, eliminating,
reducing, or otherwise altering in any respect any ASD Plan, any benefit under
any ASD Plan or any trust, insurance policy or funding vehicle related to any
ASD Plan.

 

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6.3 Audit Rights with Respect to Information Provided. Each of ASD and WABCO,
and their duly authorized representatives, shall have the right to conduct
audits with respect to all information provided to it by the other party. The
parties shall cooperate to determine the procedures and guidelines for
conducting audits under this Section 6.3, which shall require reasonable advance
notice by the auditing party. The auditing party shall have the right to make
copies of any records at its expense, subject to applicable law. The parties
agree that time will be of the essence in the conduct and completion of such
audits.

6.4 Fiduciary Matters. ASD and WABCO each acknowledge that actions required to
be taken pursuant to this Agreement may be subject to fiduciary duties or
standards of conduct under ERISA or other applicable law, and no party shall be
deemed to be in violation of this Agreement if it fails to comply with any
provisions hereof based upon its good faith determination (as supported by
advice from counsel experienced in such matters) that to do so would violate
such a fiduciary duty or standard. Each party shall be responsible for taking
such actions as are deemed necessary and appropriate to comply with its own
fiduciary responsibilities and shall fully release and indemnify the other party
for any Liabilities caused by the failure to satisfy any such responsibility.

6.5 Consent of Third Parties. If any provision of this Agreement is dependent on
the consent of any third party (such as a vendor or governmental entity) and
such consent is withheld, ASD and WABCO shall use commercially reasonable
efforts to implement the applicable provisions of this Agreement to the full
extent practicable. If any provision of this Agreement cannot be implemented due
to the failure of such third party to consent, ASD and WABCO shall negotiate in
good faith to implement the provision in a mutually satisfactory manner. The
phrase “commercially reasonable efforts” as used herein shall not be construed
to require the incurrence of any non-routine or unreasonable expense or
liability or the waiver of any right.

6.6 Taxation. Obligations and Liabilities with respect to tax deductions with
respect to equity and other compensation and benefits provided in this Agreement
shall be governed by Schedule 2.03(d) of the Tax Sharing Agreement between ASD
and WABCO. WABCO and ASD shall cooperate to comply with applicable law governing
tax reporting and withholding with respect to compensation paid pursuant to the
plans and agreements referenced herein.

ARTICLE VII

MISCELLANEOUS

7.1 Complete Agreement; Construction. This Agreement, including the Schedules
and the Annex, shall constitute the entire agreement between the Parties with
respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.

7.2 Counterparts. This Agreement may be executed in more than one counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
Parties and delivered to the other Parties. Execution of this Agreement or any
other documents pursuant to this Agreement by facsimile or other electronic copy
of a signature shall be deemed to be, and shall have the same effect as,
executed by an original signature.

 

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7.3 Survival of Agreements. Except as otherwise contemplated by this Agreement
or any covenants and agreements of the Parties contained in this Agreement shall
survive the Effective Time and remain in full force and effect in accordance
with their applicable terms.

7.4 Notices. All notices, requests, claims, demands and other communications
under this Agreement as between the Parties, shall be in writing and shall be
given or made (and shall be deemed to have been duly given or made upon receipt
unless the day of receipt is not a Business Day, in which case it shall be
deemed to have been duly given or made on the next Business Day) by delivery in
person, by overnight courier service, by facsimile with receipt confirmed
(followed by delivery of an original via overnight courier service) or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective Parties at the following addresses (or at such other address for a
Party as shall be specified in a notice given in accordance with this
Section 7.4):

To ASD:

American Standard Companies Inc.

1 Centennial Avenue

Piscataway, NJ 08855

U.S.A.

Attn: Mary Beth Gustafsson, General Counsel

Facsimile: (732) 980 - 3377

To WABCO:

 

  c/o WABCO Europe BVBA

Chaussée de Wavre, 1789 Box 15

1160 Brussels

Belgium

Attn: General Counsel

Facsimile: + 32 2 663 98 89

With a copy to:

McDermott Will & Emery LLP

227 W. Monroe Street

Chicago, IL 60606

U.S.A.

Attn: Neal J. White

Facsimile: (312) 984 - 7700

7.5 Waivers. The failure of any Party to require strict performance by any other
Party of any provision in this Agreement will not waive or diminish that Party’s
right to demand strict performance thereafter of that or any other provision
hereof.

7.6 Assignment. The provisions of this Agreement and the obligations and rights
hereunder shall be binding upon, inure to the benefit of and be enforceable by
(and against) the Parties and their respective successors and permitted
transferees and assigns. Notwithstanding the foregoing, this Agreement shall not
be assignable, in whole or in part, by any Party without the prior written
consent of the other Party, and any attempt to assign any rights or obligations
arising under this Agreement without such consent shall be null and void.

7.7 Amendments. Subject to the terms of Section 7.8, this Agreement may not be
modified or amended except by an agreement in writing signed by each of the
Parties.

7.8 Termination, Etc. Notwithstanding anything to the contrary herein, this
Agreement may be amended, modified or terminated at any time prior to the
Effective Time by and in the sole

 

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discretion of ASD without the approval of WABCO or the stockholders of ASD. In
the event of a termination, no Party shall have any Liability to any other Party
or any other Person. After the Effective Time, this Agreement may not be
terminated except by an agreement in writing signed by each of the Parties.

7.9 No Circumvention. The Parties agree not to directly or indirectly take any
actions, act in concert with any Person who takes an action, or cause or allow
any member of any such Party’s Group to take any actions (including the failure
to take a reasonable action) such that the resulting effect is to materially
undermine the effectiveness of any of the provisions of this Agreement or any
Ancillary Agreement.

7.10 Subsidiaries. Each of the Parties shall cause to be performed all actions,
agreements and obligations set forth herein to be performed by any Subsidiary or
Affiliate of such Party or by any entity that becomes a Subsidiary or Affiliate
of such Party on and after the date hereof.

7.11 Third Party Beneficiaries. This Agreement is solely for the benefit of the
Parties and should not be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, cause of action or other right in excess of those
existing without reference to this Agreement.

7.12 Title and Headings. Titles and headings to Sections and Articles are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

7.13 Schedules. The Schedules attached hereto are incorporated herein by
reference and shall be construed with and as an integral part of this Agreement
to the same extent as if the same had been set forth verbatim herein.

7.14 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal Laws, and not the Laws governing conflicts of Laws
(other than Sections 5-1401 and 5-1402 of the New York General Obligations Law),
of the State of New York.

7.15 Consent to Jurisdiction. Subject to the provisions of Article VIII of the
Separation Agreement, each of the Parties irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York (the “New York Court“), for the purposes of any suit, action or other
proceeding to compel arbitration or for provisional relief in aid of arbitration
in accordance with Article VIII of the Separation Agreement or for provisional
relief to prevent irreparable harm, and to the non-exclusive jurisdiction of the
New York Court for the enforcement of any award issued thereunder. Each of the
Parties further agrees that service of any process, summons, notice or document
by United States registered mail to such Party’s respective address set forth in
7.4 shall be effective service of process for any action, suit or proceeding in
the New York Courts with respect to any matters to which it has submitted to
jurisdiction in this 7.15. Each of the Parties irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby in the New
York Court, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.

 

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7.16 Specific Performance. The Parties agree that irreparable damage would occur
in the event that the provisions of this Agreement were not performed in
accordance with their specific terms. Accordingly, it is hereby agreed that the
Parties shall be entitled to (i) an injunction or injunctions to enforce
specifically the terms and provisions hereof in any arbitration in accordance
with Article VIII of the Separation Agreement, (ii) provisional or temporary
injunctive relief in accordance therewith in the New York Court, and
(iii) enforcement of any such award of an arbitral tribunal or the New York
Court in any court of the United States, or any other any court or tribunal
sitting in any state of the United States or in any foreign country that has
jurisdiction, this being in addition to any other remedy or relief to which they
may be entitled.

7.17 Dispute Resolution. The resolution of any dispute between the Parties with
respect to this Agreement shall be governed by the provisions of the Separation
Agreement with respect to the resolution of disputes, including, without
limitation, the provisions of Article VIII of the Separation Agreement.

7.18 Severability. In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, and the Parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

7.19 Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. This Agreement shall be construed without regard to
any presumption or rule requiring construction or interpretation against the
party drafting or causing any instrument to be drafted.

7.20 Authorization. Each of the Parties hereby represents and warrants that it
has the power and authority to execute, deliver and perform this Agreement, that
this Agreement has been duly authorized by all necessary corporate action on the
part of such Party, that this Agreement constitutes a legal, valid and binding
obligation of each such Party enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors’ rights generally and general equity
principles.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to
be duly executed as of the day and year first above written.

 

AMERICAN STANDARD COMPANIES INC. By  

/s/    G. PETER D’ALOIA

Name:   G. Peter D’Aloia Title:   Senior Vice President and Chief Financial
Officer WABCO HOLDINGS INC. By  

/s/    ULRICH MICHEL

Name:   Ulrich Michel Title:   Chief Financial Officer

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ANNEX I

CHANGE IN CONTROL PROVISIONS APPLICABLE TO ADJUSTED EQUITY AWARDS FOLLOWING
DISTRIBUTION

 

    

WABCO change in control

  

ASD change in control

WABCO Options and Restricted Stock Units held by WABCO employees   

WABCO Options and WABCO RSUs accelerate if not assumed/replaced

 

WABCO Options and WABCO RSUs also accelerate upon qualifying termination from
WABCO following change in control

  

WABCO Options and WABCO RSUs will continue in effect following ASD change in
control, which will not affect WABCO awards

 

Subsequent termination of employment of WABCO employee will not accelerate
vesting of WABCO Options and WABCO RSUs awards

ASD Options and Restricted Stock Units held by WABCO employees   

ASD Options and ASD RSUs will continue in effect following WABCO change in
control, which will not affect ASD awards

 

ASD Options and ASD RSUs will accelerate upon qualifying termination from WABCO
following change in control

  

ASD Options and ASD RSUs accelerate if not assumed/replaced

 

Subsequent termination of employment of WABCO employee will not accelerate
vesting of ASD Options and ASD RSUs

WABCO Options and Restricted Stock Units held by ASD employees   

WABCO Options and WABCO RSUs accelerate if not assumed/replaced

 

Subsequent termination of employment will not accelerate vesting of WABCO
Options and WABCO RSUs

  

WABCO Options and WABCO RSUs will continue in effect following ASD change in
control, which will not affect WABCO awards

 

WABCO Options and WABCO RSUs will accelerate upon qualifying termination from
ASD following change in control

ASD Options and Restricted Stock Units held by ASD employees   

ASD Options and ASD RSUs will continue in effect following WABCO change in
control, which will not affect ASD awards

 

Subsequent termination of employment of ASD employee will not accelerate vesting
of ASD Options and ASD RSUs

  

ASD Options and ASD RSUs accelerate if not assumed/replaced

 

ASD Options and ASD RSUs also accelerate upon qualifying termination from ASD
following change in control

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* The applicable change in control definitions will be (i) in the case of ASD,
the change in control definition set forth in the applicable ASD Equity-Based
Plan and (ii) in the case of WABCO, the definition set forth in the WABCO
Long-Term Incentive Plan.

 

2