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                             American Standard Inc.

              Supplemental Compensation Plan for Outside Directors
                      (as amended through December 4, 1997)

1. Definitions

      (a) "Administrator" means the Secretary of the Company.

      (b) "Annual Stockholders Meeting" means the annual meeting of the
stockholders of ASCI.

      (c) "ASCI" means American Standard Companies Inc., the successor in
interest to ASI Holding Corporation.

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

      (e) "Company" means American Standard Inc. or any successor thereto by
consolidation, merger or other resolution.

      (f) "Fair Market Value" on any date means the closing price of a Share on
such a date as reported on the New York Stock Exchange consolidated reporting
system.

      (g) "Participant" means any director of the Company who is not an employee
of the Company, provided that Mr. Schuchert shall become a Participant effective
as of December 4, 1997. Participants are also referred to herein as "Outside
Directors".

      (h) "Plan" means this Supplemental Compensation Plan for Outside
Directors, as set forth herein and as amended from time to time.

      (i) "Plan Account" means the account established for each Participant
pursuant to Section 2.

      (j) "Share" means a share of common stock of ASCI.

      (k) "Trust" means the Trust Agreement for the American Standard Inc.
Supplemental Compensation Plan for Outside Directors.

      (l) "Unit" means the factor of $50,000 ($100,000 in the case of any
director first elected to the Board after January 1, 1993) calculated in
accordance with Section 2 of the Plan as it existed before March 7, 1996.

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2. Establishment of Plan Accounts.

            The Administrator shall establish a Plan Account hereunder for each
      Participant as soon as he or she becomes a member of the Board, or in the
      case of Mr. Schuchert, on the date immediately preceding the 1998 Annual
      Stockholder Meeting.

            Whenever a Plan Account is established, the Administrator shall
      credit to such Plan Account, that number of Shares and fractions thereof
      equal in value to $50,000 ($100,000 in the case of any director first
      elected to the Board after January 1, 1993), with the value of a Share
      based on the Fair Market Value on the date immediately preceding the date
      that the Participant becomes a member of the Board (the "Initial
      Allocation"). Notwithstanding the foregoing, there shall be no Initial
      Allocation made to the Plan Account of Mr. Schuchert.

            Any Units credited to Participants' Plan Accounts under the terms of
      the Plan as it existed before March 7, 1996 shall be converted to Shares
      on a one for one basis.

3. Annual Grants of Shares.

            Effective on and after December 4, 1997, each Participant shall have
      500 Shares credited to his or her Plan Account on the date immediately
      preceding each Annual Stockholders Meeting.

4. Shares Held in Trust.

            Any Shares issued pursuant to the Plan shall be issued to and
      governed by the terms of the Trust. Upon the termination of a
      Participant's Board membership other than for cause, such Participant (or,
      if such termination is due to his or her death, his or her Beneficiary)
      shall receive a distribution from the Trust, net of any required tax or
      other withholdings, of the Shares in his or her Plan Account.

5. Forfeiture

            Upon the termination for cause of a Participant's membership on the
      Board, all of the Shares and fractions thereof credited to his or her Plan
      Account shall revert back to ASCI.

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6. Rights of Participants Regarding the Shares in their Plan Account.

            A Participant shall have the right to direct the voting of a number
      of Shares held by the Trust that is equal to the number of Shares credited
      to his or her Plan Account as to all matters with respect to which such
      Shares are entitled to vote. The Trust shall distribute to each
      Participant (or in the event of a Participant's death, such Participant's
      Beneficiary) an amount in cash equal to the amount of any cash dividends
      payable on the number of Shares allocated to the Participant's Plan
      Account.

7. Non-assignability.

            The right of a Participant or Beneficiary to the distribution
      provided for in the Plan shall not be assigned, transferred, pledged or
      encumbered or be subject in any manner to alienation or anticipation.

8. Amendment and Termination.

            The Plan may at any time be amended, modified or terminated by the
      Board; provided that no amendment, modification or termination shall,
      without the consent of a Participant, reduce the number of Shares and
      fractions thereof credited to such Participant's Plan Account pursuant to
      Sections 2 and 3.

9. Notices.

            All notices to the Company under this Plan, including a
      Participant's designation of a Beneficiary, shall be in writing and mailed
      or hand delivered to the Secretary of the Company at its Corporate
      Headquarters.

10. Governing Law.

            This Plan shall be governed by and construed in accordance with the
      laws of the State of New York without reference to the principles of
      conflict of laws of such State.


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