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Exhibit 10 (xi)

                        AMERICAN STANDARD COMPANIES INC.

                              STOCK INCENTIVE PLAN

                      (AS AMENDED THROUGH DECEMBER 2, 1999)

                                   SECTION 1.

                                     PURPOSE

               The purpose of the Plan is to foster and promote the long-term
financial success of the Company and materially increase shareholder value by
(a) motivating superior performance by means of performance-related incentives,
(b) encouraging and providing for the acquisition of an ownership interest in
the Company by Employees, and (c) enabling the Company to attract and retain the
services of an outstanding management team upon whose judgment, interest and
special effort the successful conduct of its operations is largely dependent.

                                   SECTION 2.

                                   DEFINITIONS

               2.1   Definitions. Whenever used herein, the following terms
shall have the respective meanings et forth below:

               (a)   "Act" means the Securities Exchange Act of 1934, as
        amended.

               (b)   "Adjustment Event" shall mean any stock dividend, stock
        split or share combination of, or extraordinary cash dividend on, the
        Common Stock or recapitalization, reorganization, merger, consolidation,
        split-up, spin-off, combination, exchange of shares, warrants or rights
        offering to purchase Common Stock at a price substantially below Fair
        Market Value, or other similar event affecting the Common Stock of the
        Company.

               (c)   "Board" means the Board of Directors of the Company.




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               (d)   "Cause" means a Participant's (i) willful and continued
        failure substantially to perform his duties with the Company or any
        Subsidiary (other than any such failure resulting from incapacity due to
        reasonably documented physical or mental illness), after a demand for
        substantial performance is delivered to such Participant by the Chairman
        of the Board or any executive officer which specifically identifies the
        manner in which it is believed that such Participant has not
        substantially performed his duties, or (ii) the willful engaging by such
        Participant in illegal misconduct materially and demonstrably injurious
        to the Company or any Subsidiary or to the trustworthiness or
        effectiveness of such Participant in the performance of his duties. For
        purposes hereof, no act, or failure to act, on such Participant's part
        shall be considered "willful" unless done, or omitted to be done, by him
        not in good faith and without reasonable belief that his action or
        omission was in the best interest of the Company or a Subsidiary. Any
        act, or failure to act, based upon authority given pursuant to a
        resolution duly adopted by the Board or based upon the advice of counsel
        for the Company shall be conclusively presumed to be done, or omitted to
        be done, by such Participant in good faith and in the best interest of
        the Company or such Subsidiary.

               (e)   "Change of Control" shall mean the occurrence of any of the
        following events:

                     (i)   any person is or becomes the Beneficial Owner,
               directly or indirectly, of securities of the Company representing
               15% or more of the combined voting power of the Company's
               then-outstanding securities (a "15% Beneficial Owner"); provided,
               however, that (a) the term "15% Beneficial Owner" shall not
               include any Beneficial Owner who has crossed such 15% threshold
               solely as a result of an acquisition of securities directly from
               the Company, or solely as a result of an acquisition by the
               Company of Company securities, until such time thereafter as such
               person acquires additional voting securities other than directly
               from the Company and, after giving effect to such acquisition,
               such person would constitute a 15% Beneficial Owner; and (b) with
               respect to any person eligible to file a Schedule 13G pursuant to
               Rule 13d-1(b)(1) under the Act with respect to Company securities
               (an "Institutional Investor"), there shall be excluded from the
               number of securities deemed to be beneficially owned by such
               person a number of securities representing not more than 10% of
               the combined



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               voting power of the Company's then-outstanding securities;

                     (ii)  during any period of two consecutive years beginning
               after December 1, 1996, individuals who at the beginning of such
               period constitute the Board together with those individuals who
               first become directors during such period (other than by reason
               of an agreement with the Company or the Board in settlement of a
               proxy contest for the election of directors) and whose election
               or nomination for election to the Board was approved by a vote of
               at least two-thirds of the directors then still in office who
               either were directors at the beginning of the period or whose
               election or nomination for election was previously so approved
               (the "Continuing Directors"), cease for any reason to constitute
               a majority of the Board;

                     (iii) the shareholders of the Company approve a merger,
               consolidation, recapitalization or reorganization of the Company,
               or a reverse stock split of any class of voting securities of the
               Company, or the consummation of any such transaction if
               shareholder approval is not obtained, other than such transaction
               which would result in at least 75% of the total voting power
               represented by the voting securities of the Company or the
               surviving entity outstanding immediately after such transaction
               being beneficially owned by persons who together owned at least
               75% of the combined voting power of the voting securities of the
               Company outstanding immediately prior to such transaction, with
               the relative voting power of each such continuing holder compared
               to the voting power of each other continuing holder not
               substantially altered as a result of the transaction; provided
               that, for purposes of this paragraph (iii), (a) such continuity
               of ownership (and preservation of relative voting power) shall be
               deemed to be satisfied if the failure to meet such 75% threshold
               (or to preserve such relative voting power) is due solely to the
               acquisition of voting securities by an employee benefit plan of
               the Company or of such surviving entity or of any subsidiary of
               the Company or such surviving entity and (b) voting securities
               beneficially owned by such persons who receive them other than as
               holders of voting securities of the Company outstanding
               immediately prior to such transaction shall not be taken into
               account for purposes of determining whether such 75% threshold
               (or such relative voting power) is



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               satisfied;

                     (iv)  the shareholders of the Company approve a plan of
               complete liquidation or dissolution of the Company or an
               agreement for the sale or disposition of all or substantially all
               the assets of the Company unless following the completion of such
               liquidation or dissolution, or such sale or disposition, the 75%
               threshold (and relative voting power) requirements set forth in
               sub-paragraph (iii) above are satisfied; or

                     (v)   any other event which the Committee determines shall
               constitute a Change of Control for purposes of this Plan;

        provided, however, that a Change of Control shall not be deemed to have
        occurred if one of the following exceptions applies:

               (1)   Unless a majority of the Continuing Directors and of the
                     Committee determine that the exception set forth in this
                     paragraph (1) shall not apply, none of the foregoing
                     conditions would have been satisfied but for one or more
                     of the following persons acquiring or otherwise becoming
                     the Beneficial Owner of securities of the Company: (A)
                     any person who has entered into a binding agreement with
                     the Company, which agreement has been approved by
                     two-thirds of the Continuing Directors, limiting the
                     acquisition of additional voting securities by such
                     person, the solicitation of proxies by such person or
                     proposals by such person concerning a business
                     combination with the Company (a "Standstill Agreement");
                     (B) any employee benefit plan, or trustee or other
                     fiduciary thereof, maintained by the Company or any
                     Subsidiary; (C) any Subsidiary; or (D) the Company.

               (2)   Unless a majority of the Continuing Directors and of the
                     Committee determine that the exception set forth in this
                     paragraph (2) shall not apply, none of the foregoing
                     conditions would have been satisfied but for the
                     acquisition by or of the Company of or by another entity
                     (whether by the merger or consolidation, the acquisition
                     of stock or assets, or otherwise) in exchange, in whole or
                     in part, for securities of the Company, provided that,
                     immediately following such acquisition, the Continuing
                     Directors



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                     constitute a majority of the Board, or a majority of the
                     board of directors of any other surviving entity, and, in
                     either case, no agreement, arrangement or understanding
                     exists at that time which would cause such Continuing
                     Directors to cease thereafter to constitute a majority of
                     the Board or of such other board of directors.

               Notwithstanding the foregoing, unless otherwise determined by a
        majority of the Continuing Directors, no Change of Control shall be
        deemed to have occurred with respect to a particular Participant if the
        Change of Control results from actions or events in which such
        Participant is involved in a capacity other than solely as an officer,
        employee or director of the Company.

               For purposes of the foregoing definition of Change of Control,
        the term "Beneficial Owner," with respect to any securities, shall mean
        any person who, directly or indirectly, has or shares the right to vote
        or dispose of such securities or otherwise has "beneficial ownership" of
        such securities (within the meaning of Rule 13d-3 and Rule 13d-5 (as
        such Rules are in effect on December 1, 1996) under the Act), including
        pursuant to any agreement, arrangement or understanding (whether or not
        in writing); provided, however, that (i) a person shall not be deemed
        the Beneficial Owner of any security as a result of any agreement,
        arrangement or understanding to vote such security (A) arising solely
        from a revocable proxy or consent solicited pursuant to, and in
        accordance with, the applicable provisions of the Act and the rules and
        regulations thereunder or (B) made in connection with, or otherwise to
        participate in, a proxy or consent solicitation made, or to be made,
        pursuant to, and in accordance with, the applicable provisions of the
        Act and the rules and regulations thereunder, in either case described
        in clause (A) or clause (B) above whether or not such agreement,
        arrangement or understanding is also then reportable by such person on
        Schedule 13D under the Act (or any comparable or successor report), and
        (ii) a person engaged in business as an underwriter of securities shall
        not be deemed to be the Beneficial Owner of any securities acquired
        through such person's participation in good faith in a firm commitment
        underwriting until the expiration of forty days after the date of such
        acquisition.

               f)    "Change of Control Settlement Value" shall mean, with
        respect to a share of Common Stock, the excess of the Change of Control
        Stock Value over the option



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        price of the Option covering such share of Common Stock, provided that,
        with respect to any Option which is an Incentive Stock Option
        immediately prior to the election to receive the Change of Control
        Settlement Value, the Change of Control Settlement Value shall not
        exceed the maximum amount permitted for such Option to continue to
        qualify as an Incentive Stock Option.

               (g)   "Change of Control Stock Value" shall mean the value of a
        share of Common Stock determined as follows:

                     (i)   if the Change of Control results from an event
               described in clause (iii) of the Change of Control definition,
               the highest per share price paid for shares of Common Stock of
               the Company in the transaction resulting in the Change of
               Control;

                     (ii)  if the Change of Control results from an event
               described in clauses (i), (ii) or (v) of the Change of Control
               definition and no event described in clauses (iii) or (iv) of the
               Change of Control definition has occurred in connection with such
               Change of Control, the highest sale price of a share of Common
               Stock of the Company on any trading day during the 60 consecutive
               trading days immediately preceding and following the date of such
               Change of Control as reported on the New York Stock Exchange
               Composite Tape, or other national securities exchange on which
               the Common Stock is traded, and published in The Wall Street
               Journal; or

                     (iii) if the Change of Control results from an event
               described in clause (iv) of the Change of Control definition, the
               price per share at which shares of Common Stock are redeemed or
               exchanged by their holders in the transaction described in such
               clause (iv) or, if there has been no such redemption or exchange,
               the higher of the amounts determined in accordance with clause
               (i) or clause (ii) of this Change of Control Stock Value
               definition.

               (h)   "Code" means the Internal Revenue Code of 1986, as amended.

               (i)   "Committee" means the Management Development and Nominating
        Committee of the Board (or such other committee of the Board that the
        Board shall designate), which shall consist of two or more members, each
        of whom shall be a non-employee director within the meaning of Rule
        16b-3, as promulgated under the Act and



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        serving at the pleasure of the Board. Notwithstanding the foregoing,
        with respect to Incentive Awards granted to non-employee directors, the
        Committee shall mean the entire Board.

               (j)   "Common Stock" means the common stock of the Company, par
        value $0.01 per share.

               (k)   "Company" means American Standard Companies Inc., a
        Delaware corporation, and any successor thereto.

               (l)   "Disability" means a Participant's inability, due to
        reasonably documented physical or mental illness, for more than six
        months to perform his duties with the Company or a Subsidiary on a full
        time basis if, within 30 days after written notice of termination has
        been given to such Participant, he shall not have returned to the full
        time performance of his duties.

               (m)   "Dividend Equivalents" means an amount equal to the cash
        dividends paid by the Company upon one share of Common Stock for each
        Restricted Unit awarded to a Participant in accordance with Section 7 of
        the Plan.

               (n)   "Employee" means any officer or other key employee of the
        Company or any of its Subsidiaries, including any employee of a
        minority-owned joint venture.

               (o)   "Fair Market Value" means, on any date, the average of the
        highest and lowest sales price reported for such day on a national
        exchange or the average of the highest and lowest bid and asked prices
        on such date as reported on a nationally recognized system of price
        quotation. In the event that there are no Common Stock transactions
        reported on such exchange or system on such date, Fair Market Value
        shall mean the closing price on the immediately preceding date on which
        Common Stock transactions were so reported.

               (p)   "Incentive Award" means the award of an Option, a Stock
        Appreciation Right, a Restricted Unit, or Restricted Stock under the
        Plan and shall also include an award of Common Stock or Restricted Units
        made in conjunction with other incentive programs established by the
        Company.

               (q)   "Option" means the right to purchase Common Stock at a
        stated price for a specified period of time. For purposes of the Plan,
        an Option may be either (i) an



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        "Incentive Stock Option" with the meaning of Section 422 of the Code or
        (ii) an Option which is not an Incentive Stock Option (a "Non-Qualified
        Stock Option").

               (r)   "Participant" means any Employee or any non-employee
        director of the Company designated by the Committee to receive an
        Incentive Award under the Plan.

               (s)   "Plan" means the American Standard Companies Inc. Stock
        Incentive Plan, as set forth herein and as the same may be amended from
        time to time.

               (t)   "Public Offering" means the Company's offering of Common
        Stock to the general public through a registration statement filed with
        the Securities and Exchange Commission that covers (together with prior
        effective registrations) not less than 15% of the shares of Common Stock
        outstanding at the closing of such offering on a fully diluted basis.

               (u)   "Restricted Period" means the period during which
        Restricted Units or shares of Restricted Stock are subject to forfeiture
        or restrictions on transfer (if applicable) pursuant to Section 7 of the
        Plan.

               (v)   "Restricted Stock" means Common Stock awarded to a
        Participant pursuant to the Plan which is subject to forfeiture and
        restrictions on transferability in accordance with Section 7 of the
        Plan.

               (w)   "Restricted Unit" means a Participant's right to receive
        pursuant to the Plan one share of Common Stock at the end of a specified
        period of time, which right is subject to forfeiture in accordance with
        Section 7 of the Plan.

               (x)   "Retirement" means termination of a Participant's
        employment on or after the date the Participant attains age 55 with 10
        years of service.

               (y)   "Stock Appreciation Right" means the right to receive a
        payment from the Company, in cash or Common Stock, in an amount
        determined under Section 6.12 of the Plan.

               (z)   "Subsidiary" means any corporation or partnership in which
        the Company owns, directly or indirectly, 50% or more of the total
        combined voting power of all classes of stock of such corporation or of
        the capital interest or profits interest of such partnership.



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               2.2.  Gender and Number. Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.

                                   SECTION 3.

                          ELIGIBILITY AND PARTICIPATION

               Participants in the Plan shall be those Employees and
non-employee directors selected by the Committee to participate in the Plan.

                                   SECTION 4.

                                 ADMINISTRATION

               4.1.  Power to Grant and Establish Terms of Awards. The Committee
shall have the authority, subject to the terms of the Plan, to determine the
Participants to whom Incentive Awards shall be granted and the terms and
conditions of any and all Incentive Awards, including but not limited to the
number of shares of Common Stock to be covered by each Incentive Award, the time
or times at which Incentive Awards shall be granted, and the terms and
provisions of the instruments by which Options shall be evidenced; to designate
Options as Incentive Stock Options or Non-Qualified Stock Options; and to
determine the period of time during which restrictions on Restricted Stock or
Restricted Units shall remain in effect. The proper officers of the Company may
suggest to the Committee the Participants who should receive Incentive Awards.
The terms and conditions of each Incentive Award shall be determined by the
Committee at the time of grant, and such terms and conditions shall not be
subsequently changed in a manner which would be adverse to the Participant
without the consent of the Participant to whom such Incentive Award has been
granted. The Committee may establish different terms and conditions for
different Participants receiving Incentive Awards and for the same Participant
for each Incentive Award such Participant may receive, whether or not granted at
different times. The grant of any Incentive Award to any Participant shall
neither entitle such Participant to, nor disqualify him from, the grant of any
other Incentive



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Awards. Notwithstanding anything else contained in the Plan to the contrary, the
Committee may delegate, subject to such terms and conditions as it shall
determine, to any officer of the Company or to a committee of officers of the
Company the authority to grant Incentive Awards (and to make any and all
determinations related thereto) to Participants who are not subject to the
reporting requirements of Section 16(a) of the Act.

               4.2.  Substitute Options. The Committee shall have the right,
subject to the consent of Participants to whom Options have been granted, to
grant in substitution for outstanding Options, replacement Options which may
contain terms more favorable to the Participant than the Options they replace,
including, without limitation, a lower exercise price (subject to Section 6.2),
and to cancel replaced Options.

               4.3.  Administration. The Committee shall be responsible for the
administration of the Plan. Any Incentive Award granted by the Committee may be
subject to such conditions, not inconsistent with the terms of the Plan, as the
Committee shall determine. The Committee, by majority action thereof, is
authorized to prescribe, amend and rescind rules and regulations relating to the
Plan, to provide for conditions deemed necessary or advisable to protect the
interests of the Company to interpret the Plan and to make all other
determinations necessary or advisable for the administration and interpretation
of the Plan to carry out its provisions and purposes. Determinations,
interpretations or other actions made or taken by the Committee pursuant to the
provisions of the Plan shall be final, binding and conclusive for all purposes
and upon all persons. The Committee may consult with legal counsel, who may be
counsel to the Company, and shall not incur any liability for any action taken
in good faith in reliance upon the advice of counsel.

                                   SECTION 5.

                              STOCK SUBJECT TO PLAN

               5.1.  Number. Subject to the provisions of Section 5.3, the
number of shares of Common Stock subject to Incentive Awards under the Plan may
not exceed 12,604,475, provided that, no more than 7,604,475 of such shares may
be granted as Incentive Stock



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Options under the Plan. The shares to be delivered under the Plan may consist,
in whole or in part, of Common Stock held in treasury or authorized but unissued
Common Stock, not reserved for any other purpose.

               5.2.  Canceled, Terminated, or Forfeited Awards. Any shares of
Common Stock subject to an Incentive Award which for any reason expires, or is
canceled, terminated or otherwise settled without the issuance of any Common
Stock shall again be available under the Plan.

               5.3.  Adjustment in Capitalization. The aggregate number of
shares of Common Stock available for Incentive Awards under Section 5.1 or
subject to outstanding Incentive Awards and the respective prices and/or vesting
criteria applicable to outstanding Incentive Awards shall be proportionately
adjusted to reflect, as deemed equitable and appropriate by the Committee, an
Adjustment Event. To the extent deemed equitable and appropriate by the
Committee, subject to any required action by stockholders, in any merger,
consolidation, reorganization, liquidation, dissolution, or other similar
transaction, any Incentive Award granted under the Plan shall pertain to the
securities and other property to which a holder of the number of shares of
Common Stock covered by the Incentive Award would have been entitled to receive
in connection with such event.

               Any shares of stock (whether Common Stock, shares of stock into
which shares of Common Stock are converted or for which shares of Common Stock
are exchanged or shares of stock distributed with respect to Common Stock) or
cash or other property received with respect to any award of Restricted Stock or
Restricted Units granted under the Plan as a result of any Adjustment Event, any
distribution of property or any merger, consolidation, reorganization,
liquidation, dissolution or other similar transaction shall, except as provided
in Section 7.4 or as otherwise provided by the Committee at or after the date an
award of Restricted Stock or Restricted Units is made by the Committee, be
subject to the same terms and conditions, including restrictions on transfer, as
are applicable to such shares of Restricted Stock or Restricted Units and any
stock certificate(s) representing or evidencing any shares of stock so received
shall be legended in substantially the same manner as provided in Section 7.5
hereof.



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                                   SECTION 6.

                                  STOCK OPTIONS

               6.1.  Grant of Options. Options may be granted to Participants at
such time or times as shall be determined by the Committee. Options granted to
non-employee directors shall be in such amounts and intervals as determined by
the Board from time to time. Options granted under the Plan may be of two types:
(i) Incentive Stock Options and (ii) Non-Qualified Stock Options, except that no
Incentive Stock Option may be granted to a non-employee director or to any
Employee of a Subsidiary which is not a corporation. The date of grant of an
Option under the Plan will be the date on which the Option is awarded by the
Committee or, if so determined by the Committee, the date on which occurs any
event the occurrence of which is an express condition precedent to the grant of
the Option. The Committee shall determine the number of Options, if any, to be
granted to the Participant, provided that, in no event shall the number of
shares of Common Stock subject to any Options or related Stock Appreciation
Rights granted to any Participant during any 12 month period exceed 1,000,000
shares as such number may be adjusted pursuant to Section 5.3. Each Option shall
be evidenced by an Option agreement that shall specify the type of Option
granted, the exercise price, the duration of the Option, the number of shares of
Common Stock to which the Option pertains, and such other terms and conditions
not inconsistent with the Plan as the Committee shall determine.

               6.2.  Option Price. Non-Qualified Stock Options and Incentive
Stock Options granted pursuant to the Plan shall have an exercise price which is
not less than the Fair Market Value on the date the Option is granted.

               6.3.  Exercise of Options. Options awarded to a Participant under
the Plan shall be exercisable at such times and shall be subject to such
restrictions and conditions including the performance of a minimum period of
service or the satisfaction of performance goals, as the Committee may impose
either at or after the time of grant of such Options, subject to the Committee's
right to accelerate the exercisability of such Option in its discretion.
Notwithstanding the foregoing, unless otherwise determined by the Committee,
Options shall



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become exercisable in three equal installments on each of the first three
anniversaries of the date of grant. Except as may be provided in any provision
approved by the Committee pursuant to this Section 6.3, after becoming
exercisable each installment shall remain exercisable until expiration,
termination or cancellation of the Option. An Option may be exercised from time
to time, in whole or in part, up to the total number of shares of Common Stock
with respect to which it is then exercisable. Notwithstanding the foregoing, no
Option shall be exercisable for more than 10 years after the date on which it is
granted.

               6.4.  Payment. The Committee shall establish procedures governing
the exercise of Options, which shall require that written notice of exercise be
given and that the Option price be paid in full at the time of exercise (i) in
cash or cash equivalents, (ii) in the discretion of the Committee, in shares of
Common Stock which have been owned by the Participant for at least six months'
(or such greater or lesser period as the Committee shall determine) having a
Fair Market Value on the date of exercise equal to such Option price or in a
combination of cash and Common Stock or (iii) in accordance with such procedures
or in such other form as the Committee shall from time to time determine. As
soon as practicable after receipt of a written exercise notice and payment of
the exercise price in accordance with this Section 6.4, the Company shall
deliver to the Participant a certificate or certificates representing the
acquired shares of Common Stock.

               6.5.  Incentive Stock Options. Notwithstanding anything in the
Plan to the contrary, no term of the Plan relating to Incentive Stock Options
shall be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consent of any Participant affected
thereby, to cause any Incentive Stock Option previously granted to fail to
qualify for the Federal income tax treatment afforded under Section 421 of the
Code.

               6.6.  Settlement. At the time a Participant exercises an Option
in lieu of accepting payment of the exercise price of the Option and delivering
the number of shares of Common Stock for which the Option is being exercised,
the Committee may direct that the Company either (i) pay the Participant a cash
amount, or (ii) issue a lesser number of shares



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of Common Stock having a Fair Market Value on the date of exercise, equal to the
amount, if any, by which the aggregate Fair Market Value of the shares of Common
Stock as to which the Option is being exercised exceeds the aggregate exercise
price for such shares, based on such terms and conditions as the Committee shall
establish.

               6.7.  Termination of Employment Due to Retirement. Unless
otherwise determined by the Committee at the time of grant, in the event a
Participant's employment with the Company or a Subsidiary terminates by reason
of Retirement, any Options granted to such Participant which are exercisable at
the date of such Participant's termination of employment may be exercised at any
time prior to three (3) years following the Participant's termination of
employment or the expiration of the term of the Options, whichever period is
shorter.

               6.8.  Termination of Employment Due to Death or Disability.
Unless otherwise determined by the Committee at the time of grant, in the event
a Participant's employment with the Company or a Subsidiary terminates by reason
of death or Disability, any Options granted to such Participant which are
exercisable at the date of such Participant's termination of employment may be
exercised by the Participant or the Participant's designated beneficiary, and if
none is named, in accordance with Section 10.2, at any time prior to one (1)
year following the Participant's termination of employment or the expiration
date of the term of the Options, whichever period is shorter.

               6.9.  Termination of Employment for Cause. Unless otherwise
determined by the Committee at the time of grant, in the event a Participant's
employment with the Company or a Subsidiary is terminated for Cause, all Options
granted to such Participant which are then outstanding (whether or not
exercisable prior to the date of such termination) shall be forfeited.

               6.10. Termination of Employment for Any Other Reason. Unless
otherwise determined by the Committee at or after the time of grant, in the
event a Participant's employment with the Company or a Subsidiary terminates for
any reason other than one described in Section 6.7, 6.8 or 6.9, any Options
granted to such Participant which are



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exercisable at the date of such Participant's termination of employment shall be
exercisable at any time prior to 90 days following such Participant's
termination of employment or the expiration of the term of such Options,
whichever period is shorter.

               6.11. Committee Discretion. Notwithstanding anything else
contained in this Section 6 to the contrary, the Committee may permit all or any
portion of any Options to be exercised following a Participant's termination of
employment for any reason on such terms and subject to such conditions as the
Committee shall determine for a period up to and including, but not beyond, the
expiration of the term of such Options.

               6.12. Stock Appreciation Rights. The Committee may, in its
discretion, include in any Option, either at the time the Option is granted or
thereafter at any time prior to the exercise, termination or expiration of the
Option, a right of the Participant to elect, in lieu of purchasing any shares of
Common Stock in respect of which such Option is exercisable at any time, to
relinquish his Option with respect to any and all of such shares of Common Stock
and to receive from the Company a payment, in cash or Common Stock, equal to the
amount by which (i) the product of (x) the Fair Market Value of a share of
Common Stock on the date of such election multiplied by (y) the number of shares
of Common Stock as to which the Participant shall have made such election
exceeds (ii) the total exercise price for that number of shares of Common Stock
under the terms of such Option. If the Participant shall exercise Stock
Appreciation Rights appertaining to any Option, such Option shall thereafter
remain exercisable, according to its term, only with respect to the number of
shares of Common Stock as to which it would otherwise be exercisable less the
number of shares of Common Stock with respect to which such Stock Appreciation
Rights have been exercised. Each Stock Appreciation Right shall be subject to
the same terms and conditions as the related Option and shall be exercisable
only to the extent the related Option is exercisable.

                                   SECTION 7.

                      RESTRICTED STOCK AND RESTRICTED UNITS

               7.1.  Grant of Restricted Stock and Restricted Units. Any award
made



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<PAGE>   16

hereunder of Restricted Stock or Restricted Units shall be subject to the terms
and conditions of the Plan and to any other terms and conditions not
inconsistent with the Plan (including, but not limited to, requiring the
Participant to pay the Company an amount equal to the par value per share for
each share of Restricted Stock awarded) as shall be prescribed by the Committee
in its sole discretion. As determined by the Committee, with respect to an award
of Restricted Stock, the Company shall either (i) transfer or issue to each
Participant to whom an award of Restricted Stock has been made the number of
shares of Restricted Stock specified by the Committee or (ii) hold such shares
of Restricted Stock for the benefit of the Participant for the Restricted
Period. In the case of an award of Restricted Units, no shares of Common Stock
shall be issued at the time an award is made, and the Company shall not be
required to set aside a fund for the payment of such award.

               7.2.  Restrictions on Transferability. Shares of Restricted Stock
may not be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered by the Participant during the Restricted Period, except as
hereinafter provided. Notwithstanding the foregoing, the Committee may permit
(on such terms and conditions as it shall establish) shares of Restricted Stock
to be transferred during the Restricted Period by the Participant to a member of
the Participant's immediate family or to a trust or similar vehicle for the
benefit of such immediate family members, provided that any shares of Restricted
Stock so transferred shall remain subject to the provisions of this Section 7.

               7.3.  Rights as a Shareholder. Except for the restrictions set
forth herein and unless otherwise determined by the Committee, the Participant
shall have all the rights of a shareholder with respect to such shares of
Restricted Stock, including but not limited to, the right to vote and the right
to receive dividends. A Participant shall not have any right, in respect of
Restricted Units awarded pursuant to the Plan, to vote on any matter submitted
to the Company's stockholders until such time as the shares of Common Stock
attributable to such Restricted Units have been issued. At the discretion of the
Committee, a Participant's Restricted Unit account may be credited with Dividend
Equivalents during the Restricted Period.

               7.4.  Restricted Period. Unless the Committee shall otherwise
determine at or



                                      -16-

<PAGE>   17

after the date an award of Restricted Stock or Restricted Units is made to the
Participant by the Committee, the Restricted Period shall commence upon the date
of grant and shall lapse with respect to the shares of Restricted Stock or
Restricted Units on the third anniversary of the date of grant, unless sooner
terminated as otherwise provided herein. Without limiting the generality of the
foregoing, the Committee may provide for termination of the Restricted Period
upon the achievement by the Participant of performance goals specified by the
Committee at the date of grant. The determination of whether the Participant has
achieved such performance goals shall be made by the Committee in its sole
discretion.

               7.5.  Legend. Each certificate issued to a Participant in respect
of shares of Restricted Stock awarded under the Plan shall be registered in the
name of the Participant and Shall bear the following (or similar) legend:

               "The shares of stock represented by this certificate are subject
        to the terms and conditions contained in the American Standard Companies
        Inc. Stock Incentive Plan and may not be sold, pledged, transferred,
        assigned, hypothecated or otherwise encumbered in an manner (except as
        provided in Section 7.2 of the Plan) until _____________________."

               7.6.  Death, Disability or Retirement. Unless the Committee shall
otherwise determine at the date of grant, if a Participant ceases to be employed
by the Company or any Subsidiary by reason of death, Disability or Retirement,
the Restricted Period will lapse as to a pro rated portion of the shares of
Restricted Stock and Restricted Units transferred or issued to such Participant
under the Plan based on the number of days the Participant actually worked since
the date the shares of Restricted Stock or Restricted Units were granted (or in
the case of an award which becomes vested in installments, since the date, if
any, on which the last installment of such Restricted Stock or Restricted Units
became vested); provided that, in the case of an award with respect to which the
restrictions will lapse, if at all, based on the attainment of performance goals
or targets, such vesting shall be deferred until the end of the applicable
performance period and be based on that number of shares of Restricted Stock or
Restricted Units, if any, that would have been earned based on the attainment or
partial attainment of such performance goals or targets. Any shares of
Restricted Stock or Restricted



                                      -17-

<PAGE>   18

Units as to which the Restricted Period has not lapsed at the date of a
Participant's termination of employment by reason of death, Disability or
Retirement (or which do not become vested after such date under the preceding
sentence) shall revert back to the Company upon such Participant's termination
of employment (or, if applicable, such deferred vesting date).

        7.7.   Termination of Employment. Unless the Committee shall otherwise
determine at or after the date of grant, if a Participant ceases to be employed
by the Company or any Subsidiary for any reason other than those specified in
Section 7.6 at any time prior to the date when the Restricted Period lapses, all
shares of Restricted Stock held by the Participant shall revert back to the
Company and all Restricted Units and any Dividend Equivalents credited to such
Participant shall be forfeited upon the Participant's termination of employment.

        7.8.   Issuance of New Certificates; Settlement of Restricted Units.
Upon the lapse of the Restricted Period with respect to any shares of Restricted
Stock, such shares shall no longer be subject to the restrictions imposed under
Section 7.2 and the Company shall issue or have issued new share certificates
without the legend described in Section 7.5 in exchange for those previously
issued. Upon the lapse of the Restricted Period with respect to any Restricted
Units, the Company shall deliver to the Participant, or the Participant's
beneficiary or estate, as provided in Section 10.2, one share of Common Stock
for each Restricted Unit as to which restrictions have lapsed and any Dividend
Equivalents credited with respect to such Restricted Units and any interest
thereon. The Committee may, in its sole discretion, elect to pay cash or part
cash and part Common Stock in lieu of delivering only Common Stock for
Restricted Units. If a cash payment is made in lieu of delivering Common Stock,
the amount of such cash payment for each share of Common Stock to which a
Participant is entitled shall be equal to the Fair Market Value of the Common
Stock on the date on which the Restricted Period lapsed with respect to the
related Restricted Unit.

        7.9.   Performance Related Awards. Notwithstanding anything else
contained in the Plan to the contrary, unless the Committee otherwise determines
at the time of grant, any award of Restricted Shares or Restricted Units, or an
award of Common Stock or Restricted Units made in conjunction with other
incentive plans established by the Company, to an officer of the



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<PAGE>   19

Company or a Subsidiary who is subject to the reporting requirements of Section
16(a) of the Exchange Act, other than an award which will vest solely on the
basis of the passage of time, shall become vested, if at all, upon the
determination by the Committee that performance objectives established by the
Committee have been attained, in whole or in part (a "Performance Award"), to
the extent required to ensure that the grant of such awards are deductible by
the Company or such Subsidiary pursuant to Section 162(m) of the Code. Such
performance objectives shall be determined over a measurement period or periods
established by the Committee and related to at least one of the following
criteria, which may be determined solely by reference to the performance of (i)
the Company, (ii) a Subsidiary, (iii) an affiliate of the Company, or (iv) a
division or unit of any of the foregoing or based on comparative performance of
any of the foregoing relative to other companies: (A) earnings per share; (B)
revenues; (C) operating cash flow; (D) operating earnings; (E) working capital;
(F) inventory turnover rates; (G) earnings to sales ratio; and (H) return on
capital (the "Performance Criteria"). The maximum number of shares of Common
Stock that may be subject to any such Performance Award in any 12 month period
shall not exceed 500,000 shares, as such number may be adjusted pursuant to
Section 5.3.

                                   SECTION 8.

                                CHANGE OF CONTROL

        8.1.   Accelerated Vesting and Payment. In the event of a Change of
Control, the Restricted Period with respect to each share of Restricted Stock
and each Restricted Unit will lapse and each Option and Stock Appreciation Right
shall become immediately exercisable on the date of such Change of Control.

        8.2.   Alternative Awards. Notwithstanding any provision of Section 6,
any Participant who holds on the date of a Change of Control an Option or Stock
Appreciation Right granted under this Plan shall be entitled to elect, during
the 60-days period immediately following such Change of Control, in lieu of
acquiring the shares of Common Stock covered by any such Option (or, in the case
of a Stock Appreciation Right, the amount of cash and Common Stock such
Participant would otherwise be entitled to receive upon the relinquishment of
the Option related to such Stock Appreciation Right), to receive, and the
Company shall be obligated to



                                      -19-

<PAGE>   20

pay, the Change of Control Settlement Value with respect to shares of Common
Stock up to the number of shares covered by such Option or Stock Appreciation
Right, which amount shall be paid in cash.

        8.3.   No Amendment. Notwithstanding Section 9, the provisions of this
Section 8 may not be amended in any respect following a Change of Control.

                                   SECTION 9.

               AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

               The Board may at any time terminate or suspend the Plan, and from
time to time may amend or modify the Plan. No action of the Board may, without
the consent of a Participant alter or impair his rights under any previously
granted Incentive Award.

                                   SECTION 10.

                            MISCELLANEOUS PROVISIONS

        10.1.  Nontransferability of Awards. Unless the Committee shall permit
(on such terms and conditions as it shall establish) an Incentive Award to be
transferred, no Incentive Award granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. All rights with respect to any
Incentive Award granted to a Participant under the Plan shall be exercisable
during his lifetime only by such Participant or, if transferred as contemplated
by the previous sentence, a permitted transferee.

        10.2.  Beneficiary Designation. Each Participant under the Plan may from
time to time name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
or by whom any right under the Plan is to be exercised in case of his death.
Each designation will revoke all prior designations by the same Participant,
shall be in a form prescribed by the Committee, and will be effective only when
filed by the Participant in writing with the Committee during his lifetime. In
the absence of any such



                                      -20-

<PAGE>   21

designation, benefits remaining unpaid or Incentive Awards outstanding at the
Participant's death shall be paid to or exercised by the Participant's surviving
spouse, if any, or otherwise to or by his estate.

        10.3.  No Guarantee of Employment or Participation. Nothing in the Plan
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary or affiliate. No Employee or non-employee director shall have a right
to be selected as a Participant, or, having been so selected, to receive any
future Incentive Awards.

        10.4.  Tax Withholding. The Company shall have the power to withhold, or
require a Participant to remit to the Company promptly upon notification of the
amount due, an amount sufficient to satisfy Federal, state and local withholding
tax requirements on with respect to any Incentive Award, and the Company may
defer payment of cash or issuance or delivery of Common Stock until such
requirements are satisfied. The Committee may, in its discretion, permit a
Participant to elect, subject to such conditions as the Committee shall impose
(i) to have Common Stock otherwise issuable or deliverable under the Plan
withheld by the Company or (ii) to deliver to the Company previously acquired
shares of Common Stock, in each case, having a Fair Market Value sufficient to
satisfy not more than the Participant's statutory minimum Federal, state and
local tax obligation associated with the transaction.

        10.5.  Indemnification. Each person who is or shall have been a member
of the Committee or of the Board shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be made a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him in settlement
thereof, with the Company's approval, or paid by him in satisfaction of any
judgment in any such action, suit or proceeding against him, provided he shall
give the Company an opportunity, at its own expense, to handle and defend the
same before he undertakes to handle and defend it on his



                                      -21-

<PAGE>   22

own behalf. The foregoing right of indemnification shall not be exclusive and
shall be independent of any other rights of indemnification to which such
persons may be entitled under the Company's Articles of Incorporation or
By-laws, by contract, as a matter of law, or otherwise.

        10.6.  No Limitation on Compensation. Nothing in the Plan shall be
construed to limit the right of the Company to establish other plans or to pay
compensation to its employees in cash or property, in a manner which is not
expressly authorized under the Plan.

        10.7.  Requirements of Law. The granting of Incentive Awards and the
issuance of shares of Common Stock shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.

        10.8.  Governing Law.  The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Delaware.

        10.9.  No Impact On Benefits. Incentive Awards granted under the Plan
are not compensation for purposes of calculating an Employee's rights under any
employee benefit plan.

        10.10. Securities Law Compliance. Instruments evidencing Incentive
Awards may contain such other provisions, not inconsistent with the Plan, as the
Committee deems advisable, including (i) a provision limiting the period during
which Stock Appreciation Rights could be exercised to the extent required in
order to avoid the application of Section 16(b) of the Act in the case of
officers of the Company and (ii) a requirement that the Participant represent to
the Company in writing, when an Incentive Award is granted or when he receives
shares with respect to such Award (or at such other time as the Committee deems
appropriate) that he is accepting such Incentive Award, or receiving or
acquiring such shares (unless they are then covered by a Securities Act of 1933
registration statement), for his own account for investment



                                      -22-

<PAGE>   23

only and with no present intention to transfer, sell or otherwise dispose of
such shares except such disposition by a legal representative as shall be
required by will or the laws of any jurisdiction in winding up the estate of the
Participant. Such shares shall be transferable only if the proposed transfer
shall be permissible pursuant to the Plan and if, in the opinion of counsel
satisfactory to the Company, such transfer at such time will be in compliance
with applicable securities laws.

        10.11  Term of Plan. The Plan shall be effective upon its adoption by
the Board and approval by the holders of the Common Stock, provided, however,
that in no event shall the Plan become effective until immediately prior to the
occurrence of a Public Offering. The Plan shall expire on the tenth anniversary
of the date on which it is adopted by the Board (except as to Incentive Awards
outstanding on that date), unless sooner terminated pursuant to Section 9.



                                      -23-