Exhibit 10.38



Description of Compensation Arrangements for Non-Employee Directors



|                                          |  |   |                    |  |                                                                                                                                                                                                  
|----------------------------------------- |  | - | ------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Board Service                             |  |   |                    | 
|One-time Award upon Election to the Board |  | $ | 100,000            |  | Shares equal to this value are deposited into the Trust for the Outside Directors Supplemental Compensation Plan and do not vest to direct ownership until the director leaves the
Board         
|                                          |  |  
|Retainer                                  |  | $ | 52,000             |  | Paid in quarterly installments                                                                                                                                                                   
|                                          |  |  
|Restricted Shares                         |  | $ | 35,000             |  | Shares equal to this value are deposited annually into the Trust for the Outside Directors Supplemental Compensation Plan and do not vest to direct ownership until the director leaves the
Board
|                                          |  |  
|Stock Options                             |  |   | Determinedannually |  | Same terms as employees under the 2002 Omnibus Incentive Plan (vest ratably over three years)                                                                                                    
|                                          |  |  
|Meeting Fees                              |  | $ | 1,000              |  | Attendance at Board meeting                                                                                                                                                                      
|                                          |  |  
|Committee Service                         |  |   |                    | 
|Meeting Fees                              |  | $ | 1,000              |  | Attendance at Committee meeting for Committee members                                                                                                                                            
|                                          |  |  
|                                          |  | $ | 2,000              |  | Attendance at Committee meeting for Committee chairs                                                                                                                                             



Directors also participate in the
American Standard Companies Inc. Deferred Compensation Plan which allows them to defer all or part of their cash retainers and meeting fees into either a fixed interest cash account or an account holding notional shares of company stock. In
addition, Directors are entitled to receive company products at no cost.