October 13, 1999

Mr. Frederic M. Poses
1125 Park Avenue
New York, NY  10128

Dear Mr. Poses:

This letter will set forth the agreement  between yourself and American Standard
Companies Inc., relative to your employment with the Company.

The term of your  employment will begin January 1, 2000, and will continue for a
five-year period with automatic  one-year renewals  thereafter unless either you
or the Company notifies the other that the term is not to renew.  Such notice of
non-renewal  is to be  given at least 12  months  before  scheduled  expiration.
Notwithstanding  the foregoing,  the Company  retains the right to terminate you
with or  without  cause at any  time  subject  to  satisfaction  of its  payment
obligations to you under the existing  severance  plan of the Company;  provided
that, any payment obligation to you shall be conditioned upon your execution and
delivery of a release in a form  satisfactory  to the Company.  Your  employment
shall  automatically  terminate upon your death or disability,  as determined by
the Board of Directors.

Your  position  with the Company  will be that of Chairman  and Chief  Executive
Officer, reporting to the Board of Directors.

The base  salary for your  position  will be  $1,000,000  per year,  and will be
subject  to  annual  review  for  increase  at the  discretion  of the  Board of
Directors.  In  addition,  you will be eligible for an Annual  Incentive  with a
target award of 100% of your base salary. For the years 2000 and 2001 this award
will be no less than  $1,300,000.  You will  also  become a  participant  in the
Company's Long Term Incentive Plan, on a prorated  basis,  for the 1998-2000 and
1999-2001  performance  periods.  Your  entitlement  to  payment  of the  Annual
Incentive award and the Long-Term  Incentive Plan award upon your termination of
employment shall be governed by the terms of the Officers Severance Plan.

As a result of your  election to the Board of Directors on October 7, 1999,  you
have been awarded a stock option grant of 1,000,000 shares. This grant will have
an exercise  price equal to the Fair Market Value of the Company's  common stock
on October 6. These options will vest in three equal  installments on October 7,
2000, October 7, 2001, and October 7, 2002.
<PAGE>

Mr. Frederic M. Poses
Page 2

Upon the commencement of your employment you will be awarded 250,000  restricted
shares of the Company's  common stock,  with vesting of such shares occurring in
three equal  installments  on January 1, 2003,  January 1, 2004,  and January 1,
2005. You should consult with your financial  advisor regarding the advisability
of making an 83(b) election with respect to the grant of these restricted shares
within the appropriate 30-day period.

In the event the Company  terminates  your  employment  for  reasons  other than
"Cause" (as defined in the Stock  Incentive Plan) prior to the vesting of any of
the aforementioned  stock options,  such vesting will be accelerated to coincide
with the date of such termination of employment. The exercise period with regard
to any such accelerated  vested options or shares shall be governed by the terms
of the Stock Incentive Plan. In the event the Company terminates your employment
for reasons other than "Cause" (as defined in the Stock Incentive Plan) prior to
the vesting of any of the aforementioned restricted shares, you will be entitled
to receive  such  shares  upon their  originally  scheduled  vesting  dates.  If
termination  of your  employment  is for "Cause"  you will  forfeit any right to
unvested stock options and/or restricted stock.

You hereby  agree  that  during  the term of your  employment,  and at all times
thereafter, you shall not use any confidential business materials or information
of the Company or any affiliate or any trade or  proprietary  information of the
Company or any affiliate  other than in the course of your  employment  with the
Company.

You  further  agree  that  during  your  term of  employment  and  for one  year
thereafter if you resign or are terminated for cause you shall not engage in, or
have any ownership interest in or financial participation in, or be employed by,
or offer  services  to,  any  business  that  competes  with the  business  then
conducted by the Company.

You agree that during your term of employment and for one year  thereafter,  you
shall not,  directly or  indirectly,  solicit any employee of the Company or its
affiliates to terminate his or her  employment.  You represent that you have the
full  authority  to execute this  agreement  and that you are not a party to any
other  agreement  or  obligation  that  would  conflict  with  your  duties  and
responsibilities hereunder.

Your participation in the Company's  Supplemental Executive Retirement Plan will
commence January 1, 2000, and the five-year service requirement for vesting will
be waived.  As a result you will begin immediate  vesting of any benefit payable
under such plan.
<PAGE>

Mr. Frederic M. Poses
Page 3

In addition to the above,  you shall become  eligible to participate  in, and be
governed by, the various  benefit plans and  policies,  applicable to the senior
executives of the Corporation,  and perquisites  traditionally made available to
the Chief Executive Officer of the Company.

This  agreement  represents the full agreement of the parties and supersedes any
and all previous discussions and negotiations.


Dated: October  13 , 1999            Compensation Committee
Piscataway, NJ



                                      BY:/s/ R.W. Parsons
                                      Title: Chairman of Compensation
                                                 Committee



                                      /s/ Frederic M. Poses
                                          Executive