SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
              /X/ Quarterly Report Pursuant to Section 13 OR 15(d)
                     of the Securities Exchange Act of 1934

                For the quarterly period ended September 30, 1998
                                       OR
              / /Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                         Commission file number: 0-28354
                                Great Lakes REIT
             (Exact name of Registrant as specified in its Charter)
                    Maryland                36-4238056
         (State or other jurisdiction      (I.R.S. employer identification no.)
           of incorporation or organization)

               823 Commerce Drive, Suite 300, Oak Brook, IL 60523
               (Address of principal executive offices) (Zip Code)

                                (630) 368 - 2900
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

Number of shares of the registrant's common shares of beneficial interest,  $.01
par value, outstanding as of November 13, 1998: 16,789,925

<PAGE>


                                Great Lakes REIT
                               Index to Form 10-Q
                               September 30, 1998

                                                                  Page Number
Part I - Financial Information
         Item 1.      Financial Statements (unaudited):

                      Consolidated Balance Sheets
                      as of September 30, 1998
                      and December 31, 1997                                4

                      Consolidated Statements of Income
                      for the three months
                      ended September 30, 1998 and 1997                    5

                      Consolidated Statements of Income
                      for the nine months
                      ended September 30, 1998 and 1997                    6

                      Consolidated Statement of Changes
                      in Shareholders' Equity
                      for the nine months ended September 30, 1998         7

                      Consolidated Statements of Cash Flows
                      for the nine months
                      ended September 30, 1998 and 1997                    8

                      Notes to Consolidated Financial Statements           9

         Item 2.      Management's Discussion and Analysis of 
                      Results of Operations and Financial Condition       11

         Item 3.      Quantitative and Qualitative Disclosures about 
                      Market Risk                                         15

Part II - Other Information
         Item 2.      Changes in Securities                               15

         Item 4.      Submission of Matters to a Vote of Security Holders 16

         Item 6.      Exhibits and Reports on Form 8-K                    16





<PAGE>
<TABLE>
<CAPTION>
Great Lakes REIT
Consolidated Balance Sheets (unaudited)
(Dollars in Thousands)                                                            September 30,     December 31,
                                                                                 ----------------------------------
                                                                                       1998             1997
<S>                                                                                  <C>              <C>  
Assets
Properties:
Land                                                                                      $60,960          $46,044
Buildings, improvements, and equipment                                                    385,022          251,353
                                                                                 ----------------------------------
                                                                                          445,982          297,397
Less accumulated depreciation                                                              19,072           11,456
                                                                                 ----------------------------------
                                                                                          426,910          285,941
Cash and cash equivalents                                                                   2,136            1,437
Real estate tax escrows                                                                       400              332
Rents receivable                                                                            4,356            3,279
Deferred financing and leasing costs, net of accumulated amortization                       5,708            3,444
Goodwill, net of accumulated amortization                                                   1,303            1,359
Other assets                                                                                1,645            1,345
                                                                                 ----------------------------------

Total assets                                                                             $442,458         $297,137
                                                                                 ==================================

Liabilities and Shareholders' Equity

Bank loan payable                                                                        $186,869          $72,500
Mortgage loans payable                                                                     29,674           17,568
Bonds payable                                                                               4,800            5,030
Accounts payable and accrued liabilities                                                    6,319            3,464
Accrued real estate taxes                                                                  11,845            7,777
Prepaid rent                                                                                3,310            2,781
Security deposits                                                                           1,112              925
                                                                                 ----------------------------------

Total liabilities                                                                         243,929          110,045
                                                                                 ----------------------------------

Common shares of beneficial interest ($0.01 par value,                                        175              159
60,000,000 shares authorized; 17,457,009 and 15,862,811
shares issued in 1998 and 1997 respectively)
Paid-in-capital                                                                           223,963          196,431
Retained earnings (deficit)                                                                (7,667)          (4,501)
Employee share loans                                                                      (11,169)          (4,654)
Deferred compensation                                                                         (51)             (73)
Treasury shares, at cost (460,884 and 21,784 shares in                                     (6,722)            (270)
1998 and 1997 respectively)
                                                                                 ----------------------------------

Total shareholders' equity                                                                198,529          187,092
                                                                                 ----------------------------------

Total liabilities and shareholders' equity                                               $442,458         $297,137
                                                                                 ==================================

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

<TABLE>
<CAPTION>

Great Lakes REIT                                                                             
Consolidated Statements of Income (unaudited)
(Dollars in Thousands, except per share data)

                                                                      Three months ended September 30,
                                                                      -------------------------------------------
                                                                                     1998                  1997

<S>                                                                              <C>                  <C>    
Revenues:
Rental                                                                              $16,617               $8,922
Reimbursements                                                                        4,556                2,634
Interest and other                                                                      285                  261
                                                                      -------------------------------------------

Total revenues                                                                       21,458               11,817
                                                                      -------------------------------------------

Expenses:
Real estate taxes                                                                     3,332                1,692
Other property operating                                                              5,541                2,863
General and administrative                                                            1,393                  923
Interest                                                                              3,440                  221
Depreciation and amortization                                                         3,505                2,002
                                                                      -------------------------------------------

Total expenses                                                                       17,211                7,701
                                                                      -------------------------------------------

Net income                                                                           $4,247               $4,116
                                                                      ===========================================

Earnings per common share - basic                                                     $0.25                $0.26
                                                                      ===========================================

Weighted average common shares outstanding - basic                               17,275,676           15,596,765
                                                                      ===========================================
 
Diluted earnings per common share                                                     $0.24                $0.26
                                                                      ===========================================

Weighted average common shares outstanding - diluted                             17,406,102           15,727,905
                                                                      ===========================================
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Great Lakes REIT
Consolidated Statements of Income (unaudited)
(Dollars in Thousands, except per share data)

                                                                       Nine months ended September 30,
                                                                      -------------------------------------------
                                                                                      1998                  1997
<S>                                                                             <C>                      <C>    

Revenues:
Rental                                                                              $44,655              $25,219
Reimbursements                                                                       12,404                7,775
Interest and other                                                                      693                  540
                                                                      -------------------------------------------

Total revenues                                                                       57,752               33,534
                                                                      -------------------------------------------

Expenses:
Real estate taxes                                                                     9,072                5,401
Other property operating                                                             14,881                8,323
General and administrative                                                            3,643                2,598
Interest                                                                              8,354                3,145
Depreciation and amortization                                                         9,426                5,839
                                                                      -------------------------------------------

Total expenses                                                                       45,376               25,306
                                                                      -------------------------------------------

Net income                                                                          $12,376               $8,228
                                                                      ===========================================

Earnings per common share - basic                                                     $0.74                $0.67
                                                                      ===========================================

Weighted average common shares outstanding - basic                               16,801,186           12,344,223
                                                                      ===========================================
 
Diluted earnings per common share                                                     $0.73                $0.66
                                                                      ===========================================

Weighted average common shares outstanding - diluted                             17,015,289           12,475,363
                                                                      ===========================================
</TABLE>

<PAGE>


Great Lakes REIT
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
For the Nine Months Ended September 30, 1998
(Dollars in Thousands)

                                                             1998
-----------------------------------------------------------------------
Common Shares
Balance at beginning of period                                    $158
Net proceeds from the sale of common shares                         12
Exercise of share options                                            5
Restricted share awards                                             --
Issuance of shares for property acquisitions                        --
-----------------------------------------------------------------------
Balance at end of period                                           175

Paid-in capital
Balance at beginning of period                                 196,431
Net proceeds from the sale of common shares                     21,009
Exercise of share options                                        6,523
Restricted share awards                                             --
Issuance of shares for property acquisitions                        --
-----------------------------------------------------------------------
Balance at end of period                                       223,963

Retained earnings (deficit)
Balance at beginning of period                                  (4,501)
Net income                                                      12,376
Distributions/dividends                                        (15,542)
-----------------------------------------------------------------------
Balance at end of period                                        (7,667)

Employee share loans
Balance at beginning of period                                  (4,654)
Exercise of share options                                       (6,515)
-----------------------------------------------------------------------
Balance at end of period                                       (11,169)

Deferred compensation
Balance at beginning of period                                     (72)
Restricted share award                                              --
Amortization of deferred compensation                               21
-----------------------------------------------------------------------
Balance at end of period                                           (51)

Treasury shares
Balance at beginning of period                                    (270)
Purchase of treasury shares                                     (6,452)
-----------------------------------------------------------------------
Balance at end of period                                        (6,722)
-----------------------------------------------------------------------
Total shareholders' equity                                    $198,529
=======================================================================


The accompanying notes are an integral part of these financial statements.

<PAGE>
<TABLE>
<CAPTION>

Great Lakes REIT
Consolidated Statements of Cash Flows (unaudited)
(Dollars in Thousands)

                                                                    Nine Months Ended
                                                             -----------------------------
                                                                        September 30,
                                                             -----------------------------
                                                                      1998           1997


<S>                                                              <C>            <C>    
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                         $12,376         $8,228
Adjustments to reconcile net income to cash
     flows from operating activities
   Depreciation and amortization                                     9,448          6,011
Net changes in assets and liabilities:
   Rents receivable                                                 (1,077)          (256)
   Real estate tax escrows and other assets                           (669)           908
   Accounts payable, accrued expenses and other liabilities          2,670          2,248
   Accrued real estate taxes                                         4,068            (94)
   Payment of deferred leasing costs                                (2,044)          (628)
                                                             -----------------------------
Net cash provided by operating activities                           24,772         16,417
                                                             -----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of properties                                            (128,793)       (51,993)
Additions to buildings, improvements and equipment                  (8,338)        (5,146)
Other investing activities                                           1,610           (100)
                                                             -----------------------------
Net cash used by investing activities                             (135,521)       (57,239)
                                                             -----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common shares                                 22,500        101,603
Payment of share offering costs                                     (1,479)        (8,573)
Proceeds from exercise of share options                                 13            387
Proceeds from bank and mortgage loans payable                      189,035         49,800
Distributions / dividends                                          (15,542)       (12,031)
Purchase of treasury shares                                         (6,452)            --
Payment of bank and mortgage loans and bonds                       (75,225)       (89,391)
Payment of deferred financing costs                                 (1,402)          (298)
                                                             -----------------------------
Net cash provided by financing activities                          111,448         41,497
                                                             -----------------------------
Net increase (decrease) in cash and cash equivalents                   699            675
Cash and cash equivalents, beginning of year                         1,437          1,688
                                                             =============================
Cash and cash equivalents, end of quarter                           $2,136         $2,363
                                                             =============================

Supplemental disclosure of cash flow:
Interest paid                                                       $7,581         $3,091
                                                             =============================


Non cash financing transactions:
Employee share loans                                                $6,515         $1,618
                                                             =============================
Issuance of shares and units to acquire properties                    $887         $1,848
                                                             =============================
Mortgages assumed to acquire properties                            $12,435         $2,989
                                                             =============================
</TABLE>


The accompanying notes are an integral part of these financial statements.
<PAGE>


                                Great Lakes REIT
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1.       Basis of Presentation

Great Lakes REIT, a Maryland real estate  investment  trust,  successor to Great
Lakes  REIT,  Inc.,  a  Maryland  corporation,  formed  in 1992,  owns a limited
partnership  interest and the sole general  partnership  interest in Great Lakes
REIT,  L.P.  (the  "Operating  Partnership")  totaling  more  than  99%  of  the
outstanding  partnership  interests of the  Operating  Partnership.  Great Lakes
REIT,  its  subsidiaries  and the Operating  Partnership  are referred to herein
collectively as the "Company".

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance with the instructions to Form 10-Q and do not include all information
and footnotes necessary for a fair presentation of financial  position,  results
of operations and cash flows in conformity  with generally  accepted  accounting
principles.  These  statements  should be read in conjunction with the Company's
most recent year-end audited financial statements. In the opinion of management,
the accompanying  financial statements contain all adjustments (which are normal
and  recurring)  necessary  for a fair  statement of  financial  results for the
interim periods.  For further information,  refer to the consolidated  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K for the year ended December 31, 1997.

2.       Properties Acquired in 1998

In January 1998, the Company  acquired a 196,105 square foot building located in
Columbus,  Ohio  for a total  acquisition  cost of  $21,939,000.  Funds  for the
purchase came from a borrowing under the Company's unsecured line of credit.

In April 1998,  the  Company  acquired a 370,000  square  foot  office  building
located in Milwaukee,  Wisconsin for a contract price of $46,700,000.  Funds for
the purchase came from a borrowing under the Company's unsecured line of credit.

In May 1998, the Company acquired two office  buildings  totaling 389,000 square
feet in Englewood,  Colorado for a contract price of $41,900,000.  Funds for the
purchase came from a borrowing  under the Company's  unsecured line of credit as
well as the assumption of a long-term mortgage loan of $12,435,000 with interest
at 7.11% per  annum  maturing  in  December  2007,  and the  issuance  of 48,447
operating partnership units valued at $887,000.

In July 1998,  the Company  acquired a 120,734  square foot portion of an office
building  located in St. Paul,  Minnesota  for a contract  price of  $9,750,000.
Funds for the purchase came from a borrowing under the Company's  unsecured line
of credit.

In September 1998, the Company  acquired a six-story  150,000 square foot office
building  located in Lisle,  Illinois at a contract price of  $17,800,000  and a
62,000 square foot office building located in Northfield, Illinois at a contract
price of  $4,500,000.  Funds for the purchases  came from  borrowings  under the
Company's unsecured line of credit.

The unaudited pro forma information presents the results of operations as if the
newly acquired Columbus, Ohio, Milwaukee,  Wisconsin,  Englewood,  Colorado, St.
Paul, Minnesota, Lisle and Northfield,  Illinois properties were acquired at the
beginning  of 1997,  after  giving  effect  to  certain  adjustments,  including
increased  depreciation  and interest  expense.  The unaudited pro forma summary
information does not necessarily reflect the results of operations as they would
have been if the Company had acquired  these  properties  on January 1, 1997 (in
thousands, except per share data).

<TABLE>
<CAPTION>

          
                                                                     Nine months ended            Nine months ended
                                                                     September 30, 1998           September 30, 1997

<S>                                                                     <C>                          <C>       
Revenues .....................................................          $   65,910                   $   63,767
Net income ...................................................          $   12,332                   $   11,968

Earnings per common share-basic ..............................          $    0.73                    $     0.71
Diluted earnings per common share ............................          $    0.72                    $     0.70
</TABLE>


3.       Financing Activities

In June 1998, the Company entered into a $60 million  unsecured credit facility.
Amounts  due mature on December  28, 1998 and bear  interest at LIBOR plus 1.45%
per annum. At September 30, 1998, $37,150 was outstanding on the loan.

On April 6, 1998,  the Company  entered  into a $150  million  unsecured  credit
facility with a group of banks, which refinanced its $75 million secured line of
credit. Amounts due mature in April 2001 and bear interest at LIBOR plus 1.1% to
1.3%, depending on overall Company leverage. At September 30, 1998, $149,719 was
outstanding on the loan.

On  April  24,  1998,  the  Company  closed  the  sale  of  common  shares  to a
newly-formed registered unit investment trust. The Company sold 1,184,211 common
shares with net proceeds of approximately $21.0 million,  all of which were used
to repay a portion of its bank lines of credit.



<PAGE>


4.       Conversion to Business Trust

In July 1998,  the Company  converted its form of  organization  from a Maryland
Corporation to a Maryland real estate investment trust. This action was approved
by the Company's  shareholders at it's Annual Shareholders'  Meeting on July 17,
1998.


5.       Subsequent Event

The Company has a commitment  for a $75 million term loan with a life  insurance
company.  The loan will be secured  by first  mortgages  on 13 of the  Company's
properties  and will  bear  interest  at a fixed  rate of 6.83% per  annum.  The
Company expects to use the proceeds from the term loan to retire in full the $60
million  unsecured  credit  facility  and  repay a portion  of its $150  million
unsecured credit facility.


ITEM 2.  Management's  Discussion  and  Analysis  of Results of  Operations  and
Financial Condition

Overview of Operating Results

The  following  is a  discussion  and  analysis  of the  consolidated  financial
condition  and  results  of  operations  for the  three  and nine  months  ended
September  30,  1998.  The  following  should  be read in  conjunction  with the
consolidated  financial  statements and related notes appearing elsewhere herein
and the  consolidated  financial  statements and related notes  contained in the
Company's 1997 Form 10-K.

Great  Lakes  REIT,  a Maryland  real estate  investment  trust  formed in 1998,
successor  to Great Lakes REIT,  Inc., a Maryland  corporation,  formed in 1992,
owns a limited partnership interest and the sole general partnership interest in
Great Lakes REIT, L.P. (the "Operating  Partnership")  totaling more than 99% of
the outstanding partnership interests of the Operating Partnership.  Great Lakes
REIT,  its  subsidiaries  and the Operating  Partnership  are referred to herein
collectively as the "Company."

The  primary  business  of the Company is the  ownership,  management,  leasing,
renovation,  and acquisition of suburban  office  properties  generally  located
within a 500 mile radius of Chicago.  At September  30, 1998,  the Company owned
and  operated  40  properties  located in suburban  areas of  Chicago,  Detroit,
Milwaukee, Cincinnati, Columbus,  Minneapolis/St.  Paul, and Denver. The Company
leases space to over 600 tenants in a variety of businesses.

The Company has expanded its real estate  portfolio  through the  acquisition of
suburban office properties.  The Company has financed its growth by the issuance
of its common  shares , operating  partnership  units,  and short and  long-term
debt.

Growth in net  income  and funds  from  operations  (FFO) for the three and nine
months ended  September 30, 1998 as compared to September 30, 1997 resulted from
a  combination  of  improved  operations  of the  Company's  properties  and the
inclusion of the operating results of properties  acquired in 1997 and 1998 from
the dates of their respective acquisitions.

Three months ended  September 30, 1998 compared to three months ended  September
30, 1997

In analyzing the operating  results for the quarter ended September 30, 1998 the
changes in rental  income,  real estate taxes and property  operating  expenses,
from 1997 are due  principally to three  factors:  (1) the addition of operating
results from  properties  acquired  subsequent  to September  30, 1997;  (2) the
addition of a full quarter of operating results in 1998 from properties acquired
in the third  quarter of 1997 as compared to the  partial  quarter of  operating
results  from the  dates  of  their  respective  acquisitions  in 1997;  and (3)
improved operations of properties during 1998 as compared to 1997.

The Company  acquired  three  properties  during the third quarter of 1998.  The
operating  results of these properties were included in the Company's  financial
statements from the date of their acquisition. In 1997 the Company acquired nine
properties including three properties subsequent to September 30, 1997 and three
properties  during  the  third  quarter  of  1997.  In  1998 a full  quarter  of
operations  for  these  properties  is  included  in  the  Company's   financial
statements.

A summary of these changes as they impact rental income,  real estate taxes, and
property operating expenses follows:

<TABLE>
<CAPTION>
                                                                     Rental and           Real        Property
                                                                     reimbursement        estate      operating
                                                                     income               taxes       expenses

<S>                                                                 <C>            <C>            <C>    
Inrease due to inclusion
of results of properties
acquired in 1997 .................................................   $ 4,256,000    $   711,000    $ 1,306,000

Increase due to 1998 acquisitions ................................     4,952,000        663,000      1,408,000
Property dispositions in 1998 ....................................       (37,000)        (6,000)        (3,000)
Improved operations in 1998
 compared to 1997 ................................................       446,000        272,000        (34,000)
                                                                         -------        -------        ------- 
                                                                                                   

Total increase in 1998 ...........................................   $ 9,617,000    $ 1,640,000    $ 2,677,000
                                                                      ===========    ===========    ===========
</TABLE>
   

Interest  expense  during the quarter  ended  September  30, 1998  increased  by
$3,220,000 as the Company had greater amounts of debt  outstanding in 1998. This
debt was used to finance a portion of the cost of properties acquired subsequent
to September 30, 1997.

General and  administrative  expenses  increased  by $470,000  due  primarily to
increased compensation costs ($155,000),  certain one-time costs associated with
converting  the Company from a Maryland  corporation  to a Maryland  real estate
investment  trust  ($270,000),  and  increases in other  office costs  ($45,000)
related to the increased size of the Company.

Depreciation  and  amortization  increased in 1998 by  $1,503,000 as the Company
incurred these expenses on 40 properties as of September 30, 1998 as compared to
31 properties as of September 30, 1997.

Nine months ended September 30, 1998 compared to nine months ended September 30,
1997.

In analyzing the operating results for the nine months ended September 30, 1998,
the changes in rental income, real estate taxes, and property operating expenses
are due principally to three factors: (1) the addition of operating results from
properties acquired subsequent to September 30, 1997; (2) the addition of a full
nine months of operating  results in 1998 from properties  acquired in the first
nine months of 1997 as compared to the partial  period of the operating  results
from the  dates of  their  respective  acquisitions  in 1997;  and (3)  improved
operations of properties during 1998 as compared to 1997.

During the nine months ended  September  30, 1998,  the Company  acquired  seven
properties.  The operating results of these properties have been included in the
Company's financial  statements from the dates of their  acquisitions.  In 1997,
the Company acquired nine properties  including three  properties  subsequent to
September 30, 1997. In 1998, nine months of operations for these properties have
been included in the Company's financial statements.

A summary of these changes as they impact rental income,  real estate taxes, and
property operating expenses follows:
<TABLE>
<CAPTION>

                                                                            Rental and        Real estate      Property
                                                                            reimbursement     taxes            operating
                                                                            income                             expenses

<S>                                                                       <C>             <C>             <C>    
Increase due to inclusion
 of results of properties
 acquired in 1997 .......................................................   $ 13,356,000    $  2,177,000   $  3,837,000

Increase due to 1998 acquisitions .......................................      8,897,000       1,208,000      2,669,000
Property dispositions in 1998 ...........................................       (149,000)          4,000          1,000
Improved operations in 1998
 compared to 1997 .......................................................      1,960,000         283,000         51,000
                                                                               ---------         -------         ------
                                                                                                           

Total increase in 1998 ..................................................   $ 24,064,000    $  3,672,000   $  6,558,000
                                                                            ============    ============   ============
                                                                                                           
</TABLE>


Interest  expense  during the nine months ended  September 30, 1998 increased by
$5,208,000 as the Company had greater amounts of debt outstanding in 1998.

General and  administrative  expenses  increased by $1,044,000  due primarily to
certain costs associated with converting the Company from a Maryland corporation
to a Maryland real estate  investment trust ($270,000),  increased  compensation
costs  ($384,000),   costs  associated  with  abandoned  property   acquisitions
($106,000),  increased  travel expenses  ($54,000),  and increased  office costs
($230,000) related to the increased size of the Company.

Depreciation  and  amortization  increased in 1998 by  $3,587,000 as the Company
incurred these expenses on 40 properties as of September 30, 1998 as compared to
31 properties as of September 30, 1997.

Liquidity and Capital Resources

Cash and cash equivalents as of September 30, 1998 were $2,136,000,  an increase
of $699,000 as compared to December 31, 1997.  The increase is primarily  due to
increased  cash flow from  operating  activities in 1998 as compared to 1997 and
increased net cash provided by financing activities in 1998 as compared to 1997.

The Company expects to meet its short-term  liquidity  requirements  principally
through its working capital and net cash provided by operating  activities.  The
Company  considers its cash  provided by operating  activities to be adequate to
meet  operating  requirements  and to fund the payment of  dividends in order to
comply with certain  federal income tax  requirements  applicable to real estate
investment trusts ("REITs").

The Company expects to meet its liquidity requirements for property acquisitions
and  significant  capital  improvements  through  additional  borrowings  on its
existing $60 million and $150 million  unsecured lines of credit which mature in
December 1998 and April 2001, respectively.

So far in 1998 the Company has completed $145 million of property  acquisitions.
The  ability of the Company to  continue  to make  acquisitions  at this pace is
predicated  upon the Company's  ability to access the public and private  equity
and debt markets at acceptable prices and rates.  However,  the Company does not
plan to sell equity  securities  so long as the market  pricing of the Company's
common shares of beneficial  interest  remains in the range recorded  during the
third quarter. Accordingly,  unless the Company's equity market value increases,
the Company expects its acquisition activity will be reduced.

The  Company  expects  to meet its  long-term  liquidity  requirements  (such as
scheduled  mortgage debt  maturities,  property  acquisitions,  and  significant
capital  improvements)  through long-term  collateralized  and  uncollateralized
borrowings, the issuance of debt or additional equity securities in the Company,
and targeted property dispositions.

The Company has a commitment  for a $75 million term loan with a life  insurance
company. The loan will bear interest at a fixed rate of 6.83% per annum and will
have a term of ten years. Proceeds from the term loan are expected to be used to
retire the Company's $60 million unsecured loan of credit and to repay a portion
of its $150 million unsecured line of credit.

Pursuant to its previously  announced share repurchase program,  the Company has
purchased  (as of September  30, 1998) 439,100 of its common shares at a cost of
$6,452,000.  Funds for the  purchases  came from  borrowings  on its $60 million
unsecured line of credit and working capital.

On July 17, 1998,  the Company's  Board of Trustees  approved a plan to sell six
properties.  These properties  include five office properties and one industrial
building. The specific properties, all in suburban Chicago, are:

                           Property                           Location

                           565 Lakeview Parkway               Vernon Hills
                           2800 River Road                    Des Plaines
                           1251 Plum Grove Road               Schaumburg
                           Kensington Corporate Center        Mount Prospect
                           Court Office Center                Markham
                           1675 Holmes Road                   Elgin

The Company  expects to generate  proceeds  from the sale of these assets in the
range  of $30 to $35  million,  and  formally  commenced  marketing  efforts  in
September 1998.  These proposed  dispositions  are consistent with the Company's
strategy  to  seek to  enhance  shareholder  value  in  part  through  strategic
dispositions.  The  Company  currently  plans to use the  proceeds  from sale to
reduce  outstanding  balance  of its  unsecured  credit  facilities,  to acquire
additional investment properties, and for working capital.

Year 2000 Issues and Status

The Company  recognizes the importance of the Year 2000 issues and has initiated
a program of  evaluating,  remediating  and testing  the  systems and  equipment
serving its  businesses for Year 2000  readiness.  The Company is also assessing
the readiness of external parties,  including its suppliers,  vendors,  bankers,
insurers and other  service  providers as well as its  tenants.  The  evaluation
phase is intended to determine the  readiness of internal  systems and equipment
as well as the  readiness  of third  parties.  The  remediation  phase  includes
reprogramming of software with testing of specific modifications, replacement of
computer  software,  hardware and  operating  equipment  as well as  identifying
solutions to possible  third party  noncompliance.  The testing  phase  includes
integrated testing of all systems which are modified.

Amounts  incurred  to date for  remediation  costs have not been  material.  The
current status of the Company's state of readiness and expected completion dates
for  evaluation,  remediation  and  testing  related  to Year  2000  issues  are
summarized below:

Financial  software:  The evaluation of its financial  software is 100% complete
and since  the  Company  believes  this  software  is Year  2000  compliant,  no
remediation  is required.  The Company has not yet tested  whether the financial
systems are in fact Year 2000  compliant,  but expects to begin such  testing in
the first quarter of 1999.  Costs  associated with the testing phase will not be
material.

Networking  software:  The Company  operates its internal  computer network on a
product which is not Year 2000 compliant.  The Company has ordered an upgrade to
this  product as well as the  necessary  hardware  to  compliment  the  software
upgrade.  The Company  initiated  training of its  employees  for this  software
upgrade in the third  quarter of 1998.  The  software  and  hardware  upgrade is
expected to be installed  and tested  during the second  quarter of 1999.  Total
costs  associated  with this  effort are  anticipated  to be $50,000  (including
$15,000 for the hardware).

Building systems:  Building systems include heating and air-conditioning control
systems,  elevator  operating  software,  building security  systems,  telephone
systems, and alarm monitoring systems. The Company has contacted all its vendors
related to these  systems in order to evaluate  Year 2000 issues with respect to
embedded technology related to these building systems. The Company has requested
that its vendors for these  systems  indicate  their  compliance  with Year 2000
issues.  Most vendors have been  reluctant to disclose  their  readiness to Year
2000 issues.

The Company has identified several building systems which need to be upgraded in
its  properties  for Year 2000 issues.  Total costs for the upgrades,  which are
expected to occur in 1999, are expected to be $250,000.

Tenants:  The Company is  developing a plan to contact its tenants to inquire as
to whether the tenant's  accounts  payable  systems  will be able make  required
payments for the Year 2000 on a timely  basis.  The Company  expects to complete
its evaluation of this issue by March 1999 and to develop  contingency plans, if
necessary, beginning in July of 1999.

The Company  believes  that in the most likely,  worst case  scenario,  internal
remediation  and testing of  financial  and  networking  technology  systems and
building  systems will be  completed  as  indicated  above and will have minimal
unfavorable impact on the results of operations and financial condition.  If any
or all of these efforts are delayed, there could be disruption of the financial,
networking,  and building systems.  Critical third party vendors,  suppliers and
service  providers have been  contacted to evaluate  their Year 2000  readiness.
However,  external parties providing  materials and services to the Company have
been reluctant to fully disclose information about their readiness. Accordingly,
the Company cannot be assured there will be no disruption of operations  because
of  vendors  and  service  providers  who are not  fully  Year  2000  compliant.
Contingency plans will be developed, where necessary, as part of the remediation
phases indicated above, to provide a continued supply of building services.  The
Company is developing a plan to contact  significant  tenants to determine their
compliance with Year 2000 issues.  However,  the Company has not completed these
evaluations  and cannot  determine  whether  there are  vendors,  suppliers  and
tenants who will not be  compliant  on a timely  basis or whether the failure of
any of these entities to become  compliant could have a material  adverse effect
on its business,  consolidated results of operations and consolidated  financial
position.

Funds from Operations (FFO)

The White Paper on Funds From  Operations  approved by the Board of Governors of
the National  Association of Real Estate  Investment  Trusts ("NAREIT") in March
1995  (the  "White  Paper")  defines  FFO  as net  income  (loss)  (computed  in
accordance with generally accepted  accounting  principles),  excluding gains or
losses  from  debt  restructuring  and  sales  of  property,  plus  real  estate
depreciation  and  amortization   and  after   adjustments  for   unconsolidated
partnerships and joint ventures. Management considers FFO an appropriate measure
of  performance  for an  equity  REIT  because  it is  predicated  on cash  flow
analyses.  The Company computes FFO in accordance with standards  established by
the White Paper (except for the amortization of deferred compensation related to
restricted  stock awards) which may differ from the  methodology for calculating
FFO utilized by other equity REITs and  accordingly,  may not be  comparable  to
other such REITs.  FFO should not be considered as an  alternative to net income
(determined in accordance with generally accepted  accounting  principles) as an
indicator of the Company's financial  performance or to cash flow from operating
activities   (determined  in  accordance  with  generally  accepted   accounting
principles)  as a measure of the  Company's  liquidity,  nor is it indicative of
funds available to fund the Company's cash needs,  including its ability to make
distributions.  FFO for the three months ended September 30, 1998 and 1997 is as
follows (Dollars in Thousands):

                                                        1998     1997

Net income                                           $ 4,247  $ 4,116
Depreciation and amortization                          3,384    1,764
                                                     -------  -------

FFO                                                  $ 7,631  $ 5,880
                                                     =======  =======

FFO for the nine months ended September 30, 1998 and 1997 is as follows (Dollars
in Thousands):

                                                        1998     1997

Net income                                           $12,376  $ 8,228
Depreciation and amortization                          8,827    4,983
Loan prepayment costs                                    ---      644
                                                     -------  -------

FFO                                                  $21,203  $13,855
                                                     =======  =======

Forward-Looking Statements

Certain  statements in this  document  constitute  "forward-looking  statements"
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the  Securities  Exchange  Acts of 1934,  and the Company  intends  that such
"forward-looking statements" be subject to the safe harbors created thereby. The
words  "believe",  "expect" and "anticipate"  and similar  expressions  identify
forward-looking  statements.  For example,  statements  regarding  the Company's
expectations with respect to its short-term and long-term liquidity requirements
and related sources including its ability to successfully  conclude its expected
$75 million  secured term loan and possible  disposition  of certain  identified
properties  including  expectations  related to proceeds from such dispositions,
and  compliance  with Year 2000  issues are  forward-looking  statements.  These
forward-looking  statements  reflect the Company's current views with respect to
future events and financial  performance,  but are subject to many uncertainties
and factors relating to the Company's  operations and business  environment that
may cause the actual results of the Company to be materially  different from any
future results expressed or implied by such forward-looking statements. Examples
of such  uncertainties  include,  but are not  limited  to,  changes in interest
rates,  fluctuations  in  market  value  of  the  Company's  equity  securities,
increased  competition  for  acquisition  of  new  properties,  availability  of
alternative  financing sources,  unanticipated  expenses and delays in acquiring
properties  or  increasing  occupancy  rates,  regional  economic  and  business
conditions  and the  ability of the  Company,  its  vendors,  and its tenants to
identify and remediate Year 2000 issues on a timely and cost-effective basis.

Item 3.  Qualitative and Quantitative Disclosures about Market Risk.

Not applicable.
Part II Other Information

Item 2. Changes in Securities

During the quarter ended September 30, 1998, the Company issued 21,274 shares of
common  stock  pursuant to the  exercise of  outstanding  share  options with an
aggregate  exercise  price of  $318,262.  These shares were issued to the option
holders  pursuant  to  exemptions  from  the  registration  requirements  of the
Securities  Act of 1933, as amended (the "Act")  provided by Section 4(2) of the
Act or Rule 701 thereunder.


<PAGE>


Item 4.  Submission of Matters to a Vote of Security Holders

On July 17, 1998, the Company conducted its 1998 Annual Stockholders' Meeting in
Schaumburg,  Illinois  pursuant to a Notice of Meeting and Proxy Statement dated
June 17, 1998.

Five  members  of the  Company's  Board  of  Trustees  were  nominated  and were
reelected to serve  another term at such Annual  Meeting.  The  following is the
list of the individuals who were nominated and elected to the Board of Trustees:
Mr. James J. Brinkerhoff, Mr. Patrick R. Hunt, Mr. Daniel E. Josephs, Mr. Daniel
P. Kearney,  Mr. Edward  Lowenthal,  Mr. Richard A. May, Mr. Donald E. Phillips.
The following is a description of the voting results for each of the nominees.
<TABLE>
<CAPTION>

Issue:                      For                     Against           Abstain           Total
Election of Directors

Nominees Name:

<S>                        <C>                       <C>               <C>              <C>       
James J. Brinkerhoff       12,282,817                5,672             38,874           12,327,363
Patrick R. Hunt            12,293,742                  522             33,099           12,327,363
Daniel E. Josephs          12,283,457                8,673             35,233           12,327,363
Daniel P. Kearney          12,276,806                1,522             49,035           12,327,363
Edward Lowenthal           12,293,742                  522             33,099           12,327,363
Richard A. May             12,292,759                1,305             33,299           12,327,363
Donald E. Phillips         12,258,966                9,480             58,917           12,327,363
</TABLE>

One other matter was submitted to a vote at the Annual Meeting. The shareholders
were asked to consider and vote upon the Trust Conversion Proposal. The Proposal
was  approved by the  Company's  shareholders  with the  following  vote totals:
10,146,008  for  and  28,362  against  with  2,152,993  abstentions  and  broker
non-votes.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

The following exhibits are attached hereto:

Exhibit
Number                                      Description of Document

10.1 Form of  employment  Agreement  dated July 17,  1998 for Richard A. May and
     Patrick R. Hunt

10.2 Form of  Employment  Agreement  dated July 17,  1998 for  Raymond M. Braun,
     James Hicks, and Richard L. Rasley

10.3 Form of Employment Agreement dated July 17, 1998 for Kim S. Mills and Edith
     M. Scurto

27.1 Financial Data Schedule


(b)      Reports on Form 8-K:

         The  following  report on Form 8-K/A was filed during the quarter ended
September 30, 1998:

                  Current  Report  on Form  8-K/A  dated  July  24,  1998  which
included  the  required  financial  statements  related  to the  acquisition  of
properties reported in a Current Report on Form 8-K filed June 4, 1998.


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                         Great Lakes REIT
                                        (Registrant)



Date:    November 13, 1998               /s/ James Hicks
                                         Senior Vice President &
                                         Chief Financial Officer
                                        (Principal Financial and
                                         Accounting Officer)


<PAGE>




Exhibit 10.1                                  FORM FOR MAY AND HUNT



                              EMPLOYMENT AGREEMENT


                  THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of July
17, 1998, is made and entered by and between Great Lakes REIT,  Inc., a Maryland
corporation (the "Company"), and __________________ (the "Executive").

                                   WITNESSETH:

                  WHEREAS,  the  Executive is a senior  executive of the Company
and has made and is  expected to  continue  to make major  contributions  to the
short-term  and long-term  profitability,  growth and financial  strength of the
Company; and

                  WHEREAS,  the Company recognizes that, as is the case for most
publicly-held  companies, the possibility of a Change in Control (as hereinafter
defined) exists; and

                  WHEREAS,  the Company desires to assure itself of both present
and future  continuity of management  and desires to establish  certain  minimum
severance  benefits  for  certain  of  its  senior  executives,   including  the
Executive, applicable in the event of a Change in Control and otherwise; and

                  WHEREAS,   the  Company  wishes  to  ensure  that  its  senior
executives are not practically disabled from discharging their duties in respect
of a proposed or actual transaction involving a Change in Control; and

                   WHEREAS,  the  Company  desires to provide  additional  
inducement for the Executive to continue to remain in the employ of the Company;

                  NOW,  THEREFORE,  the  Company  and  the  Executive  agree  as
follows:

                  1.  Certain  Defined  Terms.  In  addition  to  terms  defined
elsewhere herein,  the following terms have the following  meanings when used in
this Agreement with initial capital letters:

                  (a) "Base Pay" means the  Executive's  annual base salary at a
rate not less  than the  Executive's  annual  fixed or base  compensation  as in
effect for the Executive immediately prior to the date of this Agreement or such
higher rate as may be  determined  from time to time by the Board or a committee
thereof.

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



<PAGE>



           
                  (c) "Cause" means that the Executive  shall have (i) willfully
and  continually  failed to perform his duties with the Company  (other than any
such  failure that is due to physical or mental  incapacity)  after a demand for
substantial performance shall have been delivered to the Executive by the Board,
specifically  identifying  the manner in which the Board  believes the Executive
has not  substantially  performed  his  duties,  or (ii)  willfully  engaged  in
misconduct or illegal conduct that is materially  injurious to the Company.  For
the purposes of this  Section  1(c),  no act or failure to act by the  Executive
shall be  considered  "willful",  unless  done or omitted to be done not in good
faith and without a  reasonable  belief that the act or omission was in the best
interests of the Company,  and the  unwillingness of the Executive to accept any
change in the nature, scope or level of his authority, powers, responsibilities,
functions or duties, a reduction in his total  compensation  (including Base Pay
and Incentive Pay) or Employee Benefits, a relocation of his place of employment
that  the  Executive  deems to be  unreasonable  in the  light  of his  personal
circumstances, or other action by or at the request of the Company in respect of
his position, authority, powers, responsibilities,  functions or duties that the
Executive  reasonably  deems to be  contrary  to this  Agreement,  shall  not be
considered  by the Board to be a failure to perform on the part of the Executive
or to be misconduct or illegal  conduct by the  Executive.  Notwithstanding  the
foregoing, the Executive shall not be deemed to have been terminated for "Cause"
hereunder  unless and until there shall have been  delivered to the  Executive a
copy of a resolution duly adopted by the  affirmative  vote of not less than 75%
of the members of the Board then in office  (excluding for all purposes  related
to this determination,  each member of the Board who is also then an employee of
the Company) at a meeting of the Board  called and held for such purpose  (after
reasonable  notice  to the  Executive  and an  opportunity  for  the  Executive,
together with the  Executive's  counsel (if the  Executive  shall choose to have
counsel present at such meeting), to be heard before the Board) finding that, in
the good faith opinion of the Board,  the Executive shall have been guilty of an
act or omission  constituting  Cause and specifying the  particulars  thereof in
detail.   Nothing   herein  will  limit  the  right  of  the  Executive  or  his
beneficiaries  to contest the  validity or  propriety of any such finding of the
Board.

                  (d)      "Change in Control" means the occurrence during the 
Term of any of the following events:

                           (i)  The   Company   is   merged,   consolidated   or
         reorganized into or with another corporation or other legal person, and
         as a result of such merger, consolidation or reorganization less than a
         majority of the combined  voting power of the  then-outstanding  Voting
         Stock of such corporation or person  immediately after such transaction
         is held in the  aggregate by the holders of Voting Stock of the Company
         immediately prior to such transaction;

                           (ii) The Company sells or otherwise  transfers all or
         substantially  all of its assets to another  corporation or other legal
         person,  and as a result of such sale or transfer  less than a majority
         of the combined  voting power of the  then-outstanding  Voting Stock of
         such corporation or person  immediately  after such sale or transfer is
         held in the  aggregate  by the  holders of Voting  Stock of the Company
         immediately prior to such sale or transfer;



<PAGE>


                           (iii)  There is a report  filed  on  Schedule  13D or
         Schedule  14D-1  (or  any  successor  schedule,  form  or  report),  as
         promulgated in each case pursuant to the Exchange Act,  disclosing that
         any person (as the term "person" is used in Section 13(d)(3) or Section
         14(d)(2) of the Exchange  Act) (a "Person")  has become the  beneficial
         owner (as the term  "beneficial  owner" is defined  under Rule 13d-3 or
         any successor rule or regulation promulgated under the Exchange Act) of
         securities representing 50% or more of the combined voting power of the
         then-outstanding Voting Stock of the Company;

                           (iv) The  Company  files a report or proxy  statement
         with the  Securities and Exchange  Commission  pursuant to the Exchange
         Act  disclosing  in  response  to  Form  8-K or  Schedule  14A  (or any
         successor  schedule,  form or report or item  therein) that a change in
         control  of the  Company  has  occurred  or will  occur  in the  future
         pursuant to any then-existing contract or transaction; or

                           (v) If, during any period of 24  consecutive  months,
         individuals  who at the  beginning  of any such period  constitute  the
         Directors of the Company  cease for any reason to constitute at least a
         majority  thereof;  provided,  however,  that for the  purposes of this
         clause (v) each Director who is first  elected (or first  nominated for
         election  by  the  Company's  stockholders)  by  a  vote  of  at  least
         two-thirds  of the  Directors  of the Company  then still in office who
         were  Directors of the Company at the beginning of any such period will
         be deemed to have been a Director  of the Company at the  beginning  of
         such period,  but excluding any such Director whose initial  assumption
         of  office  occurs as a result  of an  actual  or  threatened  election
         contest  (within  the meaning of Rule 14a-1 of the  Exchange  Act) with
         respect to the  election  or removal of  Directors  or other  actual or
         threatened  solicitation  of proxies or  consents  by or on behalf of a
         Person other than the Board.

Notwithstanding  the foregoing  provisions  of Sections  1(d)(iii) and 1(d)(iv),
unless otherwise  determined in a specific case by majority vote of the Board, a
"Change in Control"  shall not be deemed to have  occurred  for the  purposes of
Section  1(d)(iii) or 1(d)(iv) solely because (1) the Company,  (2) a Subsidiary
or (3) any Company-sponsored employee stock ownership plan or any other employee
benefit plan of the Company or any Subsidiary  either files or becomes obligated
to file a report or a proxy  statement  under or in response  to  Schedule  13D,
Schedule  14D-1,  Form 8-K or Schedule 14A (or any successor  schedule,  form or
report or item therein) under the Exchange Act disclosing  beneficial  ownership
by it of shares of Voting  Stock in excess of 50% or  otherwise,  or because the
Company  reports  that a change in control of the Company  has  occurred or will
occur in the future by reason of such beneficial ownership.



<PAGE>


                  (e) "Competitive Activity" means the Executive's participation
in the management of any business  enterprise  without the written consent of an
officer of the Company, if (i) such enterprise engages in substantial and direct
competition with the Company and such enterprise's  revenues attributable to any
operations that are competitive  with any revenue  generating  operations of the
Company amounted to 10% of such  enterprise's net revenues for its most recently
completed  fiscal year and (ii) the Company's net revenues  attributable to such
operations  amounted to 10% of the  Company's net revenues for its most recently
completed  fiscal  year.  "Competitive  Activity"  shall  not  include  the mere
ownership  of  securities  in any such  enterprise  and the  exercise  of rights
appurtenant thereto and shall not include participation in the management of any
such  enterprise  except in connection with any such  competitive  operations of
such enterprise.

                  (f) "Employee  Benefits" means the  perquisites,  benefits and
service  credit for benefits as provided  under any and all employee  retirement
income and welfare  benefit plans,  policies,  programs or arrangements in which
the Executive is entitled to participate, including but not limited to any stock
option, performance share, performance unit, stock purchase, stock appreciation,
savings, pension,  supplemental executive retirement, or other retirement income
or welfare benefit,  deferred  compensation,  incentive  compensation,  group or
other life,  health,  medical/hospital  or other  insurance  (whether  funded by
actual  insurance or self-insured  by the Company or a Subsidiary),  disability,
salary  continuation,  expense  reimbursement  and other employee benefit plans,
policies,  programs  or  arrangements  that  may  now  exist  or any  equivalent
successor  plans,  policies,  programs  or  arrangements  that  may  be  adopted
hereafter by the Company or a Subsidiary,  providing  perquisites,  benefits and
service  credit for  benefits at least as great in the  aggregate as are payable
thereunder as of the date of this  Agreement or at any time within the six month
period immediately preceding the applicable measurement date.

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

                  (h)      "Good Reason" means any of the following:

                           (i) (1) A failure to elect or reelect or otherwise to
         maintain  the   Executive  in  the  office  or  the   position,   or  a
         substantially  equivalent office or position, of or with the Company or
         a  Subsidiary  (or any  successor  thereto  by  operation  of law of or
         otherwise),  as the case may be, that the Executive held as of the date
         of  this  Agreement  or  at  any  time  within  the  six  month  period
         immediately  preceding  the  applicable  measurement  date  or (2)  the
         removal of the  Executive  as a Director of the Company or a Subsidiary
         (or any successor  thereto) if the Executive shall have been a Director
         of the Company or a Subsidiary  as of the date of this  Agreement or at
         any  time  within  the  six  month  period  immediately  preceding  the
         applicable measurement date;

                           (ii) A  significant  adverse  change  in the  nature,
         scope or level of the authority, powers, responsibilities, functions or
         duties  attached to the  position  with the Company and any  Subsidiary
         that the Executive held as of the date of this Agreement or at any time
         within  the six  month  period  immediately  preceding  the  applicable
         measurement date, or a reduction in the Executive's  aggregate Base Pay
         and Incentive Pay received from the Company and any Subsidiary,  or the
         termination or denial of the Executive's rights to Employee Benefits or
         a reduction in the scope or value thereof,  any of which shall not have
         been  remedied by the Company  within 30 calendar days after receipt by
         the  Company of  written  notice  from the  Executive  of such  change,
         reduction or termination, as the case may be;



<PAGE>


                           (iii) A good  faith  determination  by the  Executive
         that a change in circumstances  shall have occurred  following the date
         of this  Agreement,  including but not limited to a change in the scope
         of the  business  or other  activities  for  which  the  Executive  was
         responsible  as of the date of this Agreement or at any time within the
         sixth month  period  immediately  prior to the  applicable  measurement
         date, which shall have rendered the Executive  substantially  unable to
         carry  out,   shall  have   substantially   hindered  the   Executive's
         performance  of,  or  shall  have  caused  the  Executive  to  suffer a
         substantial    reduction   in,   any   of   the   authority,    powers,
         responsibilities,  functions or duties attached to the position held by
         the  Executive as of the date of this  Agreement or any time within the
         six month period  immediately prior to the applicable  measurement date
         and shall not have been remedied  within 30 calendar days after written
         notice to the Company  from the  Executive of such  determination  (Any
         such determination by the Executive shall be presumed to have been made
         in good faith and shall be final and binding  upon the parties  hereto,
         unless within such  thirty-calendar-day  period,  there shall have been
         delivered to the  Executive a copy of a resolution  duly adopted by the
         affirmative  vote of not less than 75% of the members of the Board then
         in office  (excluding for all purposes  related to this  determination,
         each member of the Board who is also then an  employee of the  Company)
         at a meeting of the Board  called and held for such  purpose  (after an
         opportunity for the Executive,  together with the  Executive's  counsel
         (if  the  Executive  shall  choose  to  have  counsel  present  at such
         meeting), to be heard before the Board) finding that, in the good faith
         opinion of the Board,  such  determination  by the Executive  shall not
         have been made in good faith and specifying in detail the bases of such
         finding.  Nothing  herein will limit the right of the  Executive or his
         beneficiaries  to contest the validity or propriety of any such finding
         of the Board.);

                           (iv)   The    liquidation,    dissolution,    merger,
         consolidation  or  reorganization  of the Company or transfer of all or
         substantially  all of its business or assets,  unless the  successor or
         successors  (by  liquidation,  merger,  consolidation,  reorganization,
         transfer  or  otherwise)  to  which  all  or  substantially  all of the
         Company's  business or assets shall have been transferred (by operation
         of law or otherwise)  shall have assumed all duties and  obligations of
         the Company under this Agreement pursuant to Section 11(a);

                           (v)  A  relocation  of  the   Executive's   place  of
         employment to a place that is more than 50 miles farther from the place
         where he or she is residing on the date of this  Agreement  than is the
         place of his or her employment on the date of this Agreement; or

                           (vi) Without limiting the generality or effect of the
         foregoing,  any material breach of this Agreement by the Company or any
         successor  thereto  that is not  remedied  by the  Company (or any such
         successor) within 30 calendar days after receipt by the Company (or any
         such successor) of written notice from the Executive of such breach.

                  (i) "Incentive Pay" means an annual bonus,  incentive or other
payment of  compensation,  in addition to Base Pay, made or to be made in regard
to  services  rendered  in any  year or  other  period  pursuant  to any  bonus,
incentive, profit-sharing,  performance, discretionary pay or similar agreement,
plan, policy,  program or arrangement (whether or not funded) of the Company (or
any successor  thereto) that shall provide the Executive with the opportunity to
receive  benefits at least equal to those that he had an  opportunity to receive
under any such plan, policy, program or arrangement maintained by the Company as
of the  date of this  Agreement  or at any  time  within  the six  month  period
immediately prior to the applicable measurement date.



<PAGE>


                  (j)   "Retirement   Plans"   means  the   retirement   income,
supplemental executive retirement, excess benefits and retiree medical, life and
similar benefit plans  providing  retirement  perquisites,  benefits and service
credit for benefits at least as great in the aggregate as are payable thereunder
prior to a Change in Control.

                  (k) "Severance  Period" means the period of time commencing on
the date of the first occurrence of a Change in Control and continuing until the
first anniversary of the occurrence of the Change in Control.

                  (l) "Subsidiary" means an entity in which the Company directly
or indirectly beneficially owns 50% or more of the outstanding Voting Stock.

                  (m) "Term" means the period  commencing  as of the date hereof
and expiring at the close of business on June 30, 2001; provided,  however, that
commencing  on July 1,  1999,  and on each July 1  thereafter,  the term of this
Agreement  will  automatically  be extended  for an  additional  year unless the
Company or the  Executive  shall have given not less than 90 days' prior written
notice that the Company or the  Executive,  as the case may be, does not wish to
have the Term so extended.  For the purposes of this Section 1(m), the Executive
shall not be deemed to have  ceased to be an  employee  of the  Company  and any
Subsidiary by reason of the transfer of Executive's employment among the Company
and any Subsidiaries.

                  (n) "Termination Date" means the date on which the Executive's
employment  is  terminated  (the  effective  date of which  shall be the date of
termination  or such other date that may be  specified  by the  Executive if the
termination is by the Executive for Good Reason pursuant to Section 4(a)).

                  (o) "Voting Stock" means securities entitled to vote generally
in the election of directors.

                  2. Duties of Executive.  During the Term, the Executive  shall
remain in the employ of the Company in the position and with  substantially  the
same authority, powers, responsibilities, functions and duties that he had as of
the date of this Agreement or such different or additional positions, authority,
powers, responsibilities,  functions and duties as the Company and the Executive
may hereafter  mutually  agree in writing.  Throughout  the Term,  the Executive
shall devote substantially all of his time during normal business hours (subject
to vacations,  sick leave and other absences in accordance  with the policies of
the Company as in effect for senior executives as of the date of this Agreement)
to the business and affairs of the Company,  but nothing in this Agreement shall
preclude the Executive  from devoting  reasonable  periods of time during normal
business hours to (a) serving as a director, trustee or member of or participant
in  any  organization  or  business,  provided  that  such  activity  would  not
constitute  Competitive  Activity  if  conducted  by  the  Executive  after  the
Termination  Date,  (b) engaging in charitable  and community  activities or (c)
managing  his  personal  investments,  provided  that  such  activities  do  not
materially interfere with the Executive's performance of his duties hereunder.

                  3.       Compensation During Term.  During the Term:

                  (a) The Executive (i) shall receive Base Pay and (ii) shall be
provided the opportunity to receive Incentive Pay.



<PAGE>


                  (b) The Executive shall be a full participant in, and shall be
entitled to the perquisites,  benefits and service credit for benefits  provided
under,  any and all plans,  policies,  programs or  arrangements in which senior
executives of the Company  participate  providing Employee  Benefits;  provided,
however,  that the Executive's  rights thereunder shall be governed by the terms
thereof  and shall not be  expanded  hereunder  or  otherwise  affected  hereby;
provided further,  however,  notwithstanding the foregoing, if and to the extent
such Employee Benefits are not payable or provided under any such plan,  policy,
program or arrangement,  the Company shall pay or provide  therefor.  Nothing in
this  Agreement  shall  preclude the  improvement or enhancement of any Employee
Benefits,  provided that no such  improvement  or  enhancement  shall in any way
diminish any other obligation of the Company under this Agreement.

                  4.   Termination   of   Employment   and   Related   Severance
Compensation.  (a) If the  Executive's  employment  shall be  terminated  by the
Company or a  Subsidiary  during the Term for any reason other than Cause or the
Executive's death or the Executive's  permanent disability within the meaning of
the long-term  disability plan in effect for (or applicable to) the Executive as
of the  date of this  Agreement  or at any  time  within  the six  month  period
immediately  prior to the  applicable  measurement  date, or if the  Executive's
employment shall be terminated by the Executive during the Term for Good Reason,
the  Executive  shall be entitled to the  severance  compensation  and  benefits
described in Annex A to this Agreement.

                  (b) If the Executive's  employment shall be terminated  during
the Term because the Executive becomes  permanently  disabled within the meaning
of the long-term  disability plan in effect for (or applicable to) the Executive
as of the date of this  Agreement  or at any time  within  the six month  period
immediately  prior to the applicable  measurement  date, the Executive  shall be
entitled to the severance compensation and benefits described in Annex B to this
Agreement.

                  (c) If the Executive's  employment  shall terminate during the
Term as a result of the  Executive's  death,  the Executive shall be entitled to
the severance compensation and benefits described in Annex C to this Agreement.

                  (d) Notwithstanding the provisions of Sections 4(a) , 4(b) and
4(c),  if the  Executive's  employment  shall be  terminated by the Company or a
Subsidiary  during the Severance  Period for any reason other than Cause,  or if
the  Executive's  employment  shall be terminated  by the  Executive  during the
Severance  Period  for  any  reason  or for  no  reason,  or if the  Executive's
employment  shall  terminate  during  the  Severance  Period  as a result of the
Executive's death, the Executive shall be entitled to the severance compensation
and benefits described in Annex D to this Agreement.

                  (e) No termination of the Executive's  employment  pursuant to
Section 4(a),  4(b), 4(c) or 4(d) shall affect any rights that the Executive may
have pursuant to any  agreement,  plan,  policy,  program or  arrangement of the
Company or any  Subsidiary  providing  Employee  Benefits,  and the  Executive's
rights under any such agreement,  plan, policy,  program or arrangement shall be
governed by the terms thereof.



<PAGE>


                  (f) Without  limiting the rights of the Executive at law or in
equity,  if the  Company  shall fail to make any  payment or provide any benefit
required to be made or provided  under this  Agreement  on a timely  basis,  the
Company will pay interest on the amount or value thereof at an  annualized  rate
of interest equal to the so-called composite "prime rate" as quoted from time to
time during the  relevant  period in The Wall Street  Journal,  plus 1.0%.  Such
interest will be payable as it accrues on demand.  Any change in such prime rate
will be effective on and as of the date of such change.

                  (g)  Notwithstanding  any other provision of this Agreement to
the contrary,  the parties' respective rights and obligations under this Section
4 and under  Sections 5, 7, 8 and 9 shall survive any  termination or expiration
of this Agreement or the termination of the Executive's  employment  following a
Change in Control for any reason whatsoever.

                  (h)  Notwithstanding  any  provision  to the  contrary  in any
applicable  plan,  program  or  agreement,  (i)  upon  the  termination  of  the
Executive's  employment  pursuant to Section 4(a), 4(b), 4(c) or 4(d), all stock
options then held by the Executive shall become fully vested and exercisable and
shall remain so exercisable for a period of 12 months  following the Termination
Date, and (ii) upon the  termination of the Executive's  employment  pursuant to
Section  4(d),  all  restricted  stock awards then held by the  Executive  shall
become fully vested and nonforfeitable.

                  (i)  Notwithstanding  any  provision  to the  contrary  in any
applicable agreement,  note or other document evidencing any indebtedness of the
Executive to the Company, (i) upon the termination of the Executive's employment
pursuant to Section 4(a),  4(b) or 4(d), the Executive shall have 36 months from
and after the  Termination  Date in which to repay such  indebtedness,  and (ii)
upon the termination of the Executive's employment pursuant to Section 4(c), the
Executive shall have 18 months from and after the  Termination  Date in which to
repay such indebtedness.



<PAGE>


                  5.   Certain   Additional   Payments  by  the   Company.   (a)
Notwithstanding  any other  provision of this Agreement to the contrary,  in the
event that it shall be  determined  (as  hereafter  provided)  that any  payment
(other  than  the  Gross-Up   payments  provided  for  in  this  Section  5)  or
distribution  by the Company or any of its  affiliates  to or for the benefit of
the Executive,  whether paid or payable or distributed or distributable pursuant
to the terms of this  Agreement  or  otherwise  pursuant  to or by reason of any
other agreement, plan, policy, program or arrangement, including but not limited
to any stock option,  performance  share,  performance unit, stock  appreciation
right or similar right, or the lapse or termination of any restriction on or the
vesting  or  exercisability  of any of the  foregoing  (a  "Payment"),  would be
subject to the excise tax imposed by Section 4999 of the  Internal  Revenue Code
of 1986, as amended (the "Code") (or any successor provision thereto), by reason
of being  considered  "contingent  on a change in  ownership  or control" of the
Company,  within  the  meaning  of  Section  280G of the Code (or any  successor
provision  thereto)  or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such tax (such tax or taxes, together with
any such interest and penalties, being hereafter collectively referred to as the
"Excise  Tax"),  then the  Executive  shall be entitled to receive an additional
payment or payments  (collectively,  a "Gross-Up Payment");  provided,  however,
that  no  Gross-up  Payment  shall  be  made  with  respect  to any  Excise  Tax
attributable  to (i) any "incentive  stock option" (as defined by Section 422 of
the Code)  granted  prior to the  execution of this  Agreement or (ii) any stock
appreciation or similar right granted in tandem with any incentive stock option.
The  Gross-Up  Payment  shall be in an amount  such that,  after  payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes),  including any Excise Tax imposed upon the Gross-Up Payment, the
Executive  retains  an amount of the  Gross-Up  Payment  equal to the Excise Tax
imposed upon the Payment.

                  (b)  Subject  to  the   provisions   of  Section   5(f),   all
determinations  required to be made under this Section 5, including  whether any
Excise Tax is payable by the Executive and the amount of any such Excise Tax and
whether  a  Gross-Up  Payment  is  required  to be  paid by the  Company  to the
Executive  and the  amount  of any  such  Gross-Up  Payment,  shall be made by a
nationally  recognized  accounting firm (the "Accounting  Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its  determination  and detailed  supporting  calculations to both the
Company and the Executive within 30 calendar days after the Termination Date, if
applicable,  and any such other time or times as may be requested by the Company
or the  Executive.  If the  Accounting  Firm  determines  that any Excise Tax is
payable by the Executive, the Company shall pay the required Gross-Up Payment to
the Executive within five business days after receipt of such  determination and
calculations  with respect to any Payment to the  Executive.  If the  Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall deliver
to  the  Company  and  the  Executive  at  the  same  time  as it  makes  such a
determination  an opinion that the  Executive has  substantial  authority not to
report any Excise Tax on his federal, state or local income or other tax return.
As a result of the  uncertainty  in the  application of Section 4999 of the Code
(or any successor  provision thereto) and the possibility of similar uncertainty
regarding  applicable state or local tax law at the time of any determination by
the Accounting Firm hereunder,  it is possible that Gross-Up Payments that shall
not have been made by the  Company  should  have been made (an  "Underpayment"),
consistent with the  calculations  required to be made  hereunder.  In the event
that the Company  exhausts or fails to pursue its  remedies  pursuant to Section
5(f) and the  Executive  thereafter  is required to make a payment of any Excise
Tax, the Executive  shall direct the Accounting  Firm to determine the amount of
the Underpayment  that has occurred and to submit its determination and detailed
supporting  calculations  to both the Company and the  Executive  as promptly as
possible. Any such Underpayment shall be promptly paid by the Company to, or for
the benefit of, the  Executive  within five  business days after receipt of such
determination and calculations.

                  (c) The  Company  and the  Executive  shall each  provide  the
Accounting Firm access to and copies of any books,  records and documents in the
possession  of the  Company  or the  Executive,  as the case may be,  reasonably
requested  by the  Accounting  Firm  and  shall  otherwise  cooperate  with  the
Accounting  Firm  in  connection  with  the  preparation  and  issuance  of  the
determinations and calculations  contemplated by Section 5(b). Any determination
by the Accounting Firm as to the amount of the Gross-Up Payment shall be binding
upon the Company and the Executive.



<PAGE>


                  (d) The  federal,  state and local income or other tax returns
filed by the  Executive  shall be prepared and filed on a consistent  basis with
the  determination of the Accounting Firm with respect to any Excise Tax payable
by the Executive.  The Executive  shall make proper payment of the amount of any
Excise Tax and, at the request of the Company, shall provide to the Company true
and correct  copies (with any  amendments)  of his federal  income tax return as
filed with the Internal Revenue Service and any relevant corresponding state and
local tax returns as filed with the applicable taxing authority,  and such other
documents reasonably requested by the Company, evidencing such payment. If prior
to the filing of the  Executive's  federal  income  tax  return or any  relevant
corresponding state or local tax return, the Accounting Firm determines that the
amount of the Gross-Up  Payment  should be reduced,  the Executive  shall within
five business days pay to the Company the amount of such reduction.

                  (e) The  fees  and  expenses  of the  Accounting  Firm for its
services in connection with the determinations and calculations  contemplated by
Section  5(b)  shall be borne by the  Company.  If such  fees and  expenses  are
initially paid by the Executive,  the Company shall  reimburse the Executive the
full amount of such fees and expenses  within five  business  days after receipt
from the  Executive  of a  statement  therefor  and  reasonable  evidence of his
payment thereof.

                  (f) The  Executive  shall notify the Company in writing of any
claim by the Internal  Revenue  Service or any other taxing  authority  that, if
successful, would require the payment by the Company of a Gross-Up Payment. Such
notification  shall be given as  promptly  as  practicable  but no later than 10
business days after the Executive actually receives notice of such claim and the
Executive  shall further apprise the Company of the nature of such claim and the
date on which such claim is  requested  to be paid (in each case,  to the extent
known by the  Executive).  The  Executive  shall not pay such claim prior to the
earlier of (i) the expiration of the  thirty-calendar-day  period  following the
date on which he gives  such  notice to the  Company  and (ii) the date that any
payment of any amount with respect to such claim is due. If the Company notifies
the Executive in writing prior to the  expiration of such period that it desires
to contest such claim, the Executive shall:

                           (i) provide the Company  with any written  records or
         documents in his possession relating to such claim reasonably requested
         by the Company;

                           (ii) take such action in connection  with  contesting
         such claim as the Company shall reasonably request in writing from time
         to time,  including but not limited to accepting  legal  representation
         with  respect to such claim by an attorney  competent in respect of the
         subject matter and reasonably selected by the Company;

                           (iii)  cooperate  with the  Company  in good faith in
         order to effectively contest such claim; and

                           (iv)     permit the Company to participate in any 
proceedings relating to such claim;



<PAGE>


provided,  however,  that the Company  shall bear and pay directly all costs and
expenses  (including  interest and penalties)  incurred in connection  with such
contest and shall  indemnify  and hold harmless the  Executive,  on an after-tax
basis,  from and against any Excise Tax or income tax,  including  interest  and
penalties with respect thereto,  imposed as a result of such  representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Section 5(f), the Company shall control all proceedings taken in connection with
the  contest of any claim  contemplated  by this  Section  5(f) and, at its sole
option,  may pursue or forego any and all administrative  appeals,  proceedings,
hearings  and  conferences  with the taxing  authority  in respect of such claim
(provided  that  the  Executive  may  participate  therein  at his own  cost and
expense)  and may at its  option  either  direct  the  Executive  to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Executive  agrees to prosecute  such contest to a  determination  before any
administrative  tribunal,  in a court of initial jurisdiction and in one or more
appellate  courts,  as the Company shall determine;  provided,  however,  if the
Company  directs the Executive to pay the tax claimed and sue for a refund,  the
Company  shall  advance  the  amount  of such  payment  to the  Executive  on an
interest-free  basis and shall indemnify and hold harmless the Executive,  on an
after-tax basis, from any Excise Tax or income or other tax,  including interest
or  penalties  with  respect  thereto,  imposed  with  respect to such  advance;
provided  further,  however,  that any  extension of the statute of  limitations
relating to payment of taxes for the taxable year of the Executive  with respect
to which the  contested  amount is claimed  to be due is limited  solely to such
contested amount. Furthermore, the Company's control of any such contested claim
shall be limited to issues  with  respect to which a Gross-Up  Payment  would be
payable  hereunder and the Executive shall be entitled to settle or contest,  as
the case may be, any other issue raised by the Internal  Revenue  Service or any
other taxing authority.

                  (g) If,  after  the  receipt  by the  Executive  of an  amount
advanced by the Company  pursuant to Section 5(f),  the  Executive  receives any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 5(f)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
any taxes  applicable  thereto).  If,  after the receipt by the  Executive of an
amount advanced by the Company pursuant to Section 5(f), a determination is made
that the  Executive  shall not be entitled  to any refund  with  respect to such
claim and the Company does not notify the  Executive in writing of its intent to
contest such denial or refund prior to the  expiration of 30 calendar days after
such  determination,  then  such  advance  shall be  forgiven  and  shall not be
required to be repaid and the amount of any such advance  shall  offset,  to the
extent  thereof,  the  amount of  Gross-Up  Payment  required  to be paid by the
Company to the Executive pursuant to this Section 5.

                  6. No Mitigation  Obligation.  The Company hereby acknowledges
that it will  be  difficult  and may be  impossible  for the  Executive  to find
reasonably  comparable  employment  following the Termination  Date and that the
non-competition   covenant  contained  in  Section  8  will  further  limit  the
employment   opportunities   for  the  Executive.   In  addition,   the  Company
acknowledges  that its severance pay plans applicable in general to its salaried
employees do not provide for  mitigation,  offset or reduction of any  severance
payment  received  thereunder.   Accordingly,   the  payment  of  the  severance
compensation  by the Company to the  Executive in  accordance  with the terms of
this Agreement is hereby  acknowledged by the Company to be reasonable,  and the
Executive  will not be required to mitigate  the amount of any payment  provided
for in this Agreement by seeking other employment or otherwise,  and no profits,
income,  earnings or other benefits from any source  whatsoever  will create any
mitigation,  offset,  reduction  or any  other  obligation  on the  part  of the
Executive  hereunder  or  otherwise,  except as  expressly  provided in the last
sentence of Paragraph 2 of Annex A and the last sentence of Paragraph B of Annex
D.



<PAGE>


                  7.  Legal  Fees  and  Expenses.  (a) It is the  intent  of the
Company that the  Executive  not be required to incur legal fees and the related
expenses  associated  with  the   interpretation,   enforcement  or  defense  of
Executive's rights under this Agreement by litigation or otherwise,  because the
cost and expense thereof would substantially  detract from the benefits intended
to be extended to the Executive hereunder.  Accordingly,  if it should appear to
the Executive that the Company has failed to comply with any of its  obligations
under this  Agreement or in the event that the Company or any other person takes
or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any  litigation or other action or proceeding  designed to deny or
recover from the Executive  the benefits  provided or intended to be provided to
the Executive hereunder,  the Company irrevocably  authorizes the Executive from
time to time to retain  counsel of  Executive's  choice,  at the  expense of the
Company  as  hereafter  provided,  to advise  and  represent  the  Executive  in
connection with any such interpretation,  enforcement or defense,  including but
not  limited  to the  initiation  or defense of any  litigation  or other  legal
action, whether by or against the Company or any Director, officer,  stockholder
or  other   person   affiliated   with  the   Company,   in  any   jurisdiction.
Notwithstanding any existing or prior  attorney-client  relationship between the
Company and such counsel,  the Company  irrevocably  consents to the Executive's
entering into an  attorney-client  relationship  with such counsel,  and in that
connection the Company and the Executive agree that a confidential  relationship
shall exist between the Executive and such counsel.  Without  respect to whether
the  Executive  prevails  in  whole  or in part in  connection  with  any of the
foregoing,  the Company will pay and be solely  financially  responsible for any
and all  attorneys'  and related fees and expenses  incurred by the Executive in
connection  with  any of the  foregoing  up to a  maximum  aggregate  amount  of
$100,000,  provided that, in regard to such matters, the Executive has not acted
in bad faith or with no colorable claim of success.

                  (b) Without  limiting the obligations of the Company  pursuant
to  Section  7(a)  hereof,  in the event that a Change in  Control  occurs,  the
performance of the Company's  obligations  under this Section 7 shall be secured
by amounts, which shall in the aggregate be not less than $100,000, deposited or
to be  deposited  in trust  pursuant to certain  trust  agreements  to which the
Company  shall  be a party  providing  that the fees  and  expenses  of  counsel
selected  from time to time by the  Executive  pursuant to Section 7(a) shall be
paid,  or  reimbursed  to the  Executive  if paid by the  Executive,  either  in
accordance with the terms of such trust agreements or, if not so provided,  upon
presentation from time to time by the Executive to the trustee of a statement or
statements prepared by such counsel in accordance with its customary  practices.
Any failure by the Company to satisfy any of its obligations  under this Section
7(b)  shall not limit the  rights of the  Executive  hereunder.  Subject  to the
foregoing,  the Executive shall have the status of a general unsecured  creditor
of the Company and shall have no right to, or security  interest  in, any assets
of the Company or any Subsidiary.

                  8. Competitive Activity; Confidentiality; Nonsolicitation. (a)
If the  Executive's  employment  shall  terminate or be  terminated  pursuant to
Section 4(a) or 4(d) and the Executive shall have received or shall be receiving
benefits  pursuant to Section  4(a) or 4(d) and, if  applicable,  Section 5, the
Executive  shall not engage in any  Competitive  Activity  for one year from and
after the Termination Date in any geographical market where the Company shall be
operating on the Termination Date.



<PAGE>


                  (b) During the Term,  the Company agrees that it will disclose
to Executive its  confidential  or proprietary  information  (as defined in this
Section 8(b)) to the extent necessary for Executive to carry out his obligations
to the Company.  The Executive  hereby  covenants  and agrees that,  without the
prior written consent of the Company,  he will not during the Term or thereafter
disclose to any person not employed or otherwise engaged by the Company,  or use
in connection with engaging in competition with the Company, any confidential or
proprietary information of the Company. For the purposes of this Agreement,  the
term  "confidential or proprietary  information" will include all information of
any  nature  and in any form that is owned by the  Company  and is not  publicly
available  (other than by Executive's  breach of this Section 8(b)) or generally
known to  persons  engaged  in  businesses  similar  or  related to those of the
Company.  Confidential or proprietary  information will include, but will not be
limited to, the Company's  financial  matters,  customers,  employees,  industry
contracts,  strategic business plans,  product development (or other proprietary
product data),  marketing plans, and all other secrets and all other information
of a confidential or proprietary  nature.  For the purposes of the two preceding
sentences,  the term "Company"  will also include any Subsidiary  (collectively,
the "Restricted Group"). The foregoing  obligations imposed by this Section 8(b)
will not apply (i) in the course of the  business  of and for the benefit of the
Company during the Term, (ii) if such  confidential  or proprietary  information
shall  have  become  generally  known  to the  public  through  no  fault of the
Executive or (iii) if the Executive is required by law to make disclosure (after
giving the Company notice and an opportunity to contest such requirement).

                  (c) If the Executive's employment shall be terminated pursuant
to  Section  4(a) or 4(d) and the  Executive  shall  have  received  or shall be
receiving benefits pursuant to Section 4(a) or 4(d) and, if applicable,  Section
5, the Executive  hereby  covenants and agrees that, for one year from and after
the Termination  Date, the Executive will not, without the prior written consent
of the Company (which consent shall not  unreasonably  be withheld)  directly or
indirectly  on behalf of  himself  or on  behalf  of any other  person,  firm or
company, attempt to influence, persuade or induce, or assist any other person in
so persuading or inducing,  any employee of the Restricted  Group to give up, or
to not  commence,  employment  or a business  relationship  with the  Restricted
Group.

                  9. Termination of Employment Prior to and in Anticipation of a
Change in Control.  Notwithstanding any other provision of this Agreement to the
contrary,  if a Change in Control occurs and not more than 180 days prior to the
date on which the Change in Control occurs, the Executive's  employment with the
Company is terminated by the Company or the Executive  terminates his employment
for  Good  Reason,  such  termination  of  employment  shall be  deemed  to be a
termination of employment  pursuant to Section 4(d) during the Severance  Period
for the  purposes  of this  Agreement  if the  Executive  shall have  reasonably
demonstrated  that such  termination  of employment  (i) was at the request of a
third  party who has taken  steps  reasonably  calculated  to effect a Change in
Control or (ii)  otherwise  arose in  connection  with or in  anticipation  of a
Change in Control.

                  10.  Withholding  of Taxes.  The Company may withhold from any
amounts  payable under this  Agreement all such federal,  state,  local or other
taxes as the Company is required to  withhold  pursuant to any  applicable  law,
regulation or ruling.

                  11.  Successors  and Binding  Agreement.  (a) The Company will
require  any  successor  (whether  direct  or  indirect,  by  purchase,  merger,
consolidation,  reorganization  or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance reasonably
satisfactory  to the  Executive,  to expressly  assume and agree to perform this
Agreement  in the  same  manner  and to the same  extent  the  Company  would be
required to perform if no such  succession had taken place.  This Agreement will
be binding upon and inure to the benefit of the Company and any successor to the
Company,  including  but  not  limited  to any  persons  acquiring  directly  or
indirectly all or substantially  all of the business or assets of the Company by
purchase, merger, consolidation, reorganization or otherwise (and such successor
shall thereafter be deemed the "Company" for the purposes of this Agreement) but
will not otherwise be assignable, transferable or delegable by the Company.


<PAGE>


                  (b)  This  Agreement  will  inure  to  the  benefit  of and be
enforceable by the  Executive's  personal or legal  representatives,  executors,
administrators, successors, heirs, distributees and legatees.

                  (c) This  Agreement  is  personal in nature and neither of the
parties  hereto shall assign,  transfer or delegate this Agreement or any rights
or obligations  hereunder without the consent of the other,  except as expressly
provided in Sections 11(a) and 11(b).  Without limiting the generality or effect
of the foregoing,  the Executive's right to receive payments  hereunder will not
be  assignable,  transferable  or  delegable  by pledge,  creation of a security
interest or otherwise,  except by a transfer by the Executive's will or the laws
of descent and  distribution,  and in the event of any  attempted  assignment or
transfer  contrary to this Section 11(c), the Company shall have no liability to
pay any amount so attempted to be assigned, transferred or delegated.

                  12.  Notices.   For  all  purposes  of  this  Agreement,   all
communications,  including  but not  limited to notices,  consents,  requests or
approvals,  required or permitted to be given  hereunder  will be in writing and
will be deemed to have been duly  given when hand  delivered  or  dispatched  by
electronic  facsimile  transmission (with receipt thereof orally confirmed),  or
five business  days after having been mailed by  registered or certified  United
States mail (return receipt  requested and postage  prepaid),  or three business
days  after  having  been  sent by a  nationally  recognized  overnight  courier
service,  addressed  to the Company (to the  attention  of the  Secretary of the
Company) at its principal  executive office or to the Executive at his principal
residence,  as the case may be, or to such other  address as either  party shall
furnish to the other in writing and in accordance herewith,  except that notices
of changes of address shall be effective only upon receipt.

                  13. Governing Law. The validity, interpretation,  construction
and  performance  of  this  Agreement  will  be  governed  by and  construed  in
accordance  with the substantive  laws of the State of Illinois,  without giving
effect to the principles of conflict of laws thereof.

                  14.  Validity.  If any  provision  of  this  Agreement  or the
application  of any  provision  hereof to any  person or  circumstances  is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances  will not
be affected, and the provision so held to be invalid, unenforceable or otherwise
illegal  will be reformed to the extent  (and only to the extent)  necessary  to
make it enforceable, valid or legal.

                  15.  Miscellaneous.  No  provision  of this  Agreement  may be
modified, waived or discharged unless such waiver,  modification or discharge is
agreed to in a writing  signed by the  Executive  and the Company.  No waiver by
either  party  hereto at any time of any  breach by the  other  party  hereto or
compliance  with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar  provisions or
conditions  at the same or at any prior or  subsequent  time.  No  agreements or
representations,  oral or written or expressed  or implied,  with respect to the
subject  matter  hereof  have been made by either  party  that are not set forth
expressly  in this  Agreement.  References  to  Sections  are to  references  to
Sections of this Agreement.



<PAGE>


                  16.  Counterparts.  This  Agreement  may be executed in one or
more  counterparts,  each of which shall be deemed to be an original  and all of
which together will constitute one and the same agreement.

                  17. Prior Agreement. This Agreement supersedes in its entirety
the Change in Control  Agreement  dated as of September  20,  1997,  between the
Company and the Executive.

                  IN WITNESS WHEREOF,  the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.



                                                     GREAT LAKES REIT, INC.


                                                     By:    
                                                           Name     
                                                           Title 




<PAGE>



                                                                        Annex A

                                       Severance Compensation


                  (1) A lump sum payment in an amount equal to two times the sum
of (a) Base Pay (at the  highest  rate in  effect  for any  period  prior to the
Termination Date) and (b) an amount equal to the product of (i) Base Pay (at the
highest rate in effect for any period prior to the Termination Date), multiplied
by (ii) a fraction,  the  numerator  of which shall be the  aggregate  amount of
Incentive Pay earned by the Executive during the most recently  completed fiscal
year of the Company (or any  successor  thereto)  and the  denominator  of which
shall be Base Pay (as in effect for the most recently  completed  fiscal year of
the Company or any successor thereto).

                  (2) For a period of 12 months  following the Termination  Date
(the "Continuation  Period"), the Company will provide the Executive (at no cost
to the Executive) with Employee  Benefits that are welfare  benefits  (including
medical,  dental and other group health plan benefits)  substantially similar to
those that the Executive was receiving or entitled to receive  immediately prior
to the  Termination  Date or, if  greater,  immediately  prior to the  Change in
Control.  If and to the extent that any benefit described in this Paragraph 2 is
not or cannot be paid or provided under any plan, policy, program or arrangement
of the Company or any  Subsidiary,  as the case may be,  then the  Company  will
itself pay or provide for the payment to the  Executive,  and his dependents and
beneficiaries,  of such  Employee  Benefits  (together  with, in the case of any
benefit  described in this  Paragraph 2 that is subject to tax because it is not
or  cannot  be  paid or  provided  under  any  such  plan,  policy,  program  or
arrangement of the Company or any  Subsidiary,  an additional  amount such that,
after payment by the Executive or his dependents or  beneficiaries,  as the case
may be, of all taxes so imposed,  the recipient  retains an amount equal to such
taxes).  Notwithstanding  the foregoing or any other provision of the Agreement,
for the purpose of determining the period of continuation  coverage to which the
Executive or any of his  dependents is entitled  pursuant to Section 601 et seq.
of the  Employee  Retirement  Income  Security  Act of 1974,  as amended (or any
successor  provision  thereto),  and Section 4980B of the Code (or any successor
provision  thereto) under the Company's  medical,  dental and other group health
plans (or successor  plans),  the  Executive's  "qualifying  event" shall be the
termination of the Continuation  Period and the Executive shall be considered to
have remained actively employed on a full-time basis through that date.  Without
otherwise  limiting  the  purposes  or  effect of  Section  6 of the  Agreement,
Employee  Benefits  otherwise  receivable  by the  Executive  pursuant  to  this
Paragraph  2 will be reduced  to the  extent  comparable  welfare  benefits  are
actually received by the Executive from another employer during the Continuation
Period,  and any such  benefits  actually  received  by the  Executive  shall be
reported by the Executive to the Company.



<PAGE>



                                      

                  (3)  In  addition  to  the  retirement  income,   supplemental
executive  retirement,  and other  benefits to which the  Executive  is entitled
under the Company's  Retirement  Plans, a lump sum payment in an amount equal to
the  actuarial  equivalent of the excess of (a) the  retirement  pension and the
medical,  life and other  benefits that would be payable to the Executive  under
the  Retirement  Plans if the  Executive  continued  to be employed  through the
Continuation  Period given the Executive's  Base Pay (as determined in Paragraph
1) (without regard to any amendment to the Retirement Plans made subsequent to a
Change in Control  that  adversely  affects in any  manner  the  computation  of
retirement or welfare benefits thereunder),  less (b) the retirement pension and
the medical,  life and other  benefits that the Executive is entitled to receive
(either  immediately or on a deferred basis) under the Retirement Plans. For the
purposes of this Paragraph 3, "actuarial  equivalent"  shall be determined using
the  same  methods  and  assumptions  utilized  under  the  Company's  qualified
retirement plan for salaried  employees in effect  immediately prior to the date
of this Agreement.



<PAGE>




                                                                 Annex B



                             Severance Compensation


                  (1) A lump sum payment in an amount equal to two times the sum
of (a) Base Pay (at the  highest  rate in  effect  for any  period  prior to the
Termination Date) and (b) an amount equal to the product of (i) Base Pay (at the
highest rate in effect for any period prior to the Termination Date), multiplied
by (ii) a fraction,  the  numerator  of which shall be the  aggregate  amount of
Incentive Pay earned by the Executive during the most recently  completed fiscal
year of the Company (or any  successor  thereto)  and the  denominator  of which
shall be Base Pay (as in effect for the most recently  completed  fiscal year of
the Company or any successor thereto).

                  (2) For a period of 24 months  following the Termination  Date
or such longer  period of time as may be required  under  Section 601 et seq. of
the Employee  Retirement  Income Security Act of 1974, as amended  ("ERISA") (or
any  successor  provision  thereto),  and  Section  4980B  of the  Code  (or any
successor  provision  thereto),  the Company will provide the  Executive (at the
Executive's expense and in accordance with Section 601 et. seq. of ERISA (or any
successor  provision  thereto) and Section  4980B of the Code (or any  successor
provision  thereto)) with Employee Benefits that are welfare benefits (including
medical,  dental and other group health plan benefits)  substantially similar to
those that the Executive was receiving or entitled to receive  immediately prior
to the Termination  Date or, if greater,  immediately  prior to the date of this
Agreement.





<PAGE>




                                                                       Annex C



                                                       Severance Compensation


                  A lump sum  payment in an amount  equal to the sum of (1) Base
Pay (at the highest rate in effect for any period prior to the Termination Date)
and (2) an amount  equal to the product of (a) Base Pay (at the highest  rate in
effect  for any  period  prior to the  Termination  Date),  multiplied  by (b) a
fraction,  the numerator of which shall be the aggregate amount of Incentive Pay
earned by the Executive  during the most recently  completed  fiscal year of the
Company (or any successor  thereto) and the  denominator  of which shall be Base
Pay (as in effect for the most recently  completed fiscal year of the Company or
any successor thereto).


<PAGE>




                                                                       Annex D



                                                     Severance Compensation


                  (A) A lump sum  payment in an amount  equal to three times the
sum of (1) Base Pay (at the highest  rate in effect for any period  prior to the
Termination Date) and (2) an amount equal to the product of (a) Base Pay (at the
highest rate in effect for any period prior to the Termination Date), multiplied
by (b) a fraction,  (i) the numerator of which shall be the aggregate  amount of
Incentive  Pay earned by the  Executive  during the fiscal  year of the  Company
ended December 31, 1997,  and the  denominator of which shall be Base Pay (as in
effect for the fiscal year of the  Company  ended  December  31,  1997),  if the
Change in Control  shall occur during 1998, or (ii) the numerator of which shall
be the average of the aggregate  amount of Incentive Pay earned by the Executive
during the fiscal year of the Company ended December 31, 1997, and the aggregate
amount of Incentive Pay that shall have been earned by the Executive  during the
fiscal year of the Company  ending  December 31, 1998,  and the  denominator  of
which  shall be the average of Base Pay (as in effect for the fiscal year of the
Company ended  December 31, 1997) and Base Pay (as in effect for the fiscal year
of the Company ending  December 31, 1998),  if the Change in Control shall occur
during  1999,  or (iii)  the  numerator  of which  shall be the  average  of the
aggregate  amounts of Incentive Pay that shall have been earned by the Executive
during  each of the  three  then most  recently  completed  fiscal  years of the
Company,  and the  denominator  of which shall be the average of Base Pay (as in
effect for each of the three then most  recently  completed  fiscal years of the
Company), if the Change in Control shall occur in 2000 or thereafter.



<PAGE>




                  (B) For a period of 12 months  following the Termination  Date
(the "Continuation  Period"), the Company will provide the Executive (at no cost
to the Executive) with Employee  Benefits that are welfare  benefits  (including
medical,  dental and other group health plan benefits)  substantially similar to
those that the Executive was receiving or entitled to receive  immediately prior
to the  Termination  Date or, if  greater,  immediately  prior to the  Change in
Control.  If and to the extent that any benefit described in this Paragraph B is
not or cannot be paid or provided under any plan, policy, program or arrangement
of the Company or any  Subsidiary,  as the case may be,  then the  Company  will
itself pay or provide for the payment to the  Executive,  and his dependents and
beneficiaries,  of such  Employee  Benefits  (together  with, in the case of any
benefit  described in this  Paragraph B that is subject to tax because it is not
or  cannot  be  paid or  provided  under  any  such  plan,  policy,  program  or
arrangement of the Company or any  Subsidiary,  an additional  amount such that,
after payment by the Executive or his dependents or  beneficiaries,  as the case
may be, of all taxes so imposed,  the recipient  retains an amount equal to such
taxes).  Notwithstanding  the foregoing or any other provision of the Agreement,
for the purpose of determining the period of continuation  coverage to which the
Executive or any of his  dependents is entitled  pursuant to Section 601 et seq.
of the  Employee  Retirement  Income  Security  Act of 1974,  as amended (or any
successor  provision  thereto),  and Section 4980B of the Code (or any successor
provision  thereto) under the Company's  medical,  dental and other group health
plans (or successor  plans),  the  Executive's  "qualifying  event" shall be the
termination of the Continuation  Period and the Executive shall be considered to
have remained actively employed on a full-time basis through that date.  Without
otherwise  limiting  the  purposes  or  effect of  Section  6 of the  Agreement,
Employee  Benefits  otherwise  receivable  by the  Executive  pursuant  to  this
Paragraph  B will be reduced  to the  extent  comparable  welfare  benefits  are
actually received by the Executive from another employer during the Continuation
Period,  and any such  benefits  actually  received  by the  Executive  shall be
reported by the Executive to the Company.

                  (C)  In  addition  to  the  retirement  income,   supplemental
executive  retirement,  and other  benefits to which the  Executive  is entitled
under the Company's  Retirement  Plans, a lump sum payment in an amount equal to
the  actuarial  equivalent of the excess of (1) the  retirement  pension and the
medical,  life and other  benefits that would be payable to the Executive  under
the  Retirement  Plans if the  Executive  continued  to be employed  through the
Continuation  Period  given the  Executive's  Base Pay (at the  highest  rate in
effect for any period  prior to the  Termination  Date)  (without  regard to any
amendment to the  Retirement  Plans made  subsequent to a Change in Control that
adversely  affects  in any  manner  the  computation  of  retirement  or welfare
benefits thereunder),  less (2) the retirement pension and the medical, life and
other benefits that the Executive is entitled to receive (either  immediately or
on a deferred  basis)  under the  Retirement  Plans.  For the  purposes  of this
Paragraph C, "actuarial  equivalent"  shall be determined using the same methods
and  assumptions  utilized  under the Company's  qualified  retirement  plan for
salaried employees in effect immediately prior to the Change in Control.


<PAGE>



Exhibit 10.2                                   FORM FOR RASLEY, HICKS AND BRAUN


                              EMPLOYMENT AGREEMENT


                  THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of July
17, 1998, is made and entered by and between Great Lakes REIT,  Inc., a Maryland
corporation (the "Company"), and Richard L. Rasley (the "Executive").

                                   WITNESSETH:

                  WHEREAS,  the  Executive is a senior  executive of the Company
and has made and is  expected to  continue  to make major  contributions  to the
short-term  and long-term  profitability,  growth and financial  strength of the
Company; and

                  WHEREAS,  the Company recognizes that, as is the case for most
publicly-held  companies, the possibility of a Change in Control (as hereinafter
defined) exists; and

                  WHEREAS,  the Company desires to assure itself of both present
and future  continuity of management  and desires to establish  certain  minimum
severance  benefits  for  certain  of  its  senior  executives,   including  the
Executive, applicable in the event of a Change in Control and otherwise; and

                  WHEREAS,   the  Company  wishes  to  ensure  that  its  senior
executives are not practically disabled from discharging their duties in respect
of a proposed or actual transaction involving a Change in Control; and

                  WHEREAS, the Company desires to provide additional inducement 
for the Executive to continue to remain in the employ of the Company;

                  NOW,  THEREFORE,  the  Company  and  the  Executive  agree  as
follows:

                  1.  Certain  Defined  Terms.  In  addition  to  terms  defined
elsewhere herein,  the following terms have the following  meanings when used in
this Agreement with initial capital letters:

                  (a) "Base Pay" means the  Executive's  annual base salary at a
rate not less  than the  Executive's  annual  fixed or base  compensation  as in
effect for the Executive immediately prior to the date of this Agreement or such
higher rate as may be  determined  from time to time by the Board or a committee
thereof.

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



<PAGE>



                                                       

                  (c) "Cause" means that the Executive  shall have (i) willfully
and  continually  failed to perform his duties with the Company  (other than any
such  failure that is due to physical or mental  incapacity)  after a demand for
substantial performance shall have been delivered to the Executive by the Board,
specifically  identifying  the manner in which the Board  believes the Executive
has not  substantially  performed  his  duties,  or (ii)  willfully  engaged  in
misconduct or illegal conduct that is materially  injurious to the Company.  For
the purposes of this  Section  1(c),  no act or failure to act by the  Executive
shall be  considered  "willful",  unless  done or omitted to be done not in good
faith and without a  reasonable  belief that the act or omission was in the best
interests of the Company,  and the  unwillingness of the Executive to accept any
change in the nature, scope or level of his authority, powers, responsibilities,
functions or duties, a reduction in his total  compensation  (including Base Pay
and Incentive Pay) or Employee Benefits, a relocation of his place of employment
that  the  Executive  deems to be  unreasonable  in the  light  of his  personal
circumstances, or other action by or at the request of the Company in respect of
his position, authority, powers, responsibilities,  functions or duties that the
Executive  reasonably  deems to be  contrary  to this  Agreement,  shall  not be
considered  by the Board to be a failure to perform on the part of the Executive
or to be misconduct or illegal  conduct by the  Executive.  Notwithstanding  the
foregoing, the Executive shall not be deemed to have been terminated for "Cause"
hereunder  unless and until there shall have been  delivered to the  Executive a
copy of a resolution duly adopted by the  affirmative  vote of not less than 75%
of the members of the Board then in office  (excluding for all purposes  related
to this determination,  each member of the Board who is also then an employee of
the Company) at a meeting of the Board  called and held for such purpose  (after
reasonable  notice  to the  Executive  and an  opportunity  for  the  Executive,
together with the  Executive's  counsel (if the  Executive  shall choose to have
counsel present at such meeting), to be heard before the Board) finding that, in
the good faith opinion of the Board,  the Executive shall have been guilty of an
act or omission  constituting  Cause and specifying the  particulars  thereof in
detail.   Nothing   herein  will  limit  the  right  of  the  Executive  or  his
beneficiaries  to contest the  validity or  propriety of any such finding of the
Board.

                  (d)      "Change in Control" means the occurrence during the
Term of any of the following events:

                           (i)  The   Company   is   merged,   consolidated   or
         reorganized into or with another corporation or other legal person, and
         as a result of such merger, consolidation or reorganization less than a
         majority of the combined  voting power of the  then-outstanding  Voting
         Stock of such corporation or person  immediately after such transaction
         is held in the  aggregate by the holders of Voting Stock of the Company
         immediately prior to such transaction;

                           (ii) The Company sells or otherwise  transfers all or
         substantially  all of its assets to another  corporation or other legal
         person,  and as a result of such sale or transfer  less than a majority
         of the combined  voting power of the  then-outstanding  Voting Stock of
         such corporation or person  immediately  after such sale or transfer is
         held in the  aggregate  by the  holders of Voting  Stock of the Company
         immediately prior to such sale or transfer;



<PAGE>


                           (iii)  There is a report  filed  on  Schedule  13D or
         Schedule  14D-1  (or  any  successor  schedule,  form  or  report),  as
         promulgated in each case pursuant to the Exchange Act,  disclosing that
         any person (as the term "person" is used in Section 13(d)(3) or Section
         14(d)(2) of the Exchange  Act) (a "Person")  has become the  beneficial
         owner (as the term  "beneficial  owner" is defined  under Rule 13d-3 or
         any successor rule or regulation promulgated under the Exchange Act) of
         securities representing 50% or more of the combined voting power of the
         then-outstanding Voting Stock of the Company;

                           (iv) The  Company  files a report or proxy  statement
         with the  Securities and Exchange  Commission  pursuant to the Exchange
         Act  disclosing  in  response  to  Form  8-K or  Schedule  14A  (or any
         successor  schedule,  form or report or item  therein) that a change in
         control  of the  Company  has  occurred  or will  occur  in the  future
         pursuant to any then-existing contract or transaction; or

                           (v) If, during any period of 24  consecutive  months,
         individuals  who at the  beginning  of any such period  constitute  the
         Directors of the Company  cease for any reason to constitute at least a
         majority  thereof;  provided,  however,  that for the  purposes of this
         clause (v) each Director who is first  elected (or first  nominated for
         election  by  the  Company's  stockholders)  by  a  vote  of  at  least
         two-thirds  of the  Directors  of the Company  then still in office who
         were  Directors of the Company at the beginning of any such period will
         be deemed to have been a Director  of the Company at the  beginning  of
         such period,  but excluding any such Director whose initial  assumption
         of  office  occurs as a result  of an  actual  or  threatened  election
         contest  (within  the meaning of Rule 14a-1 of the  Exchange  Act) with
         respect to the  election  or removal of  Directors  or other  actual or
         threatened  solicitation  of proxies or  consents  by or on behalf of a
         Person other than the Board.

Notwithstanding  the foregoing  provisions  of Sections  1(d)(iii) and 1(d)(iv),
unless otherwise  determined in a specific case by majority vote of the Board, a
"Change in Control"  shall not be deemed to have  occurred  for the  purposes of
Section  1(d)(iii) or 1(d)(iv) solely because (1) the Company,  (2) a Subsidiary
or (3) any Company-sponsored employee stock ownership plan or any other employee
benefit plan of the Company or any Subsidiary  either files or becomes obligated
to file a report or a proxy  statement  under or in response  to  Schedule  13D,
Schedule  14D-1,  Form 8-K or Schedule 14A (or any successor  schedule,  form or
report or item therein) under the Exchange Act disclosing  beneficial  ownership
by it of shares of Voting  Stock in excess of 50% or  otherwise,  or because the
Company  reports  that a change in control of the Company  has  occurred or will
occur in the future by reason of such beneficial ownership.



<PAGE>


                  (e) "Competitive Activity" means the Executive's participation
in the management of any business  enterprise  without the written consent of an
officer of the Company, if (i) such enterprise engages in substantial and direct
competition with the Company and such enterprise's  revenues attributable to any
operations that are competitive  with any revenue  generating  operations of the
Company amounted to 10% of such  enterprise's net revenues for its most recently
completed  fiscal year and (ii) the Company's net revenues  attributable to such
operations  amounted to 10% of the  Company's net revenues for its most recently
completed  fiscal  year.  "Competitive  Activity"  shall  not  include  the mere
ownership  of  securities  in any such  enterprise  and the  exercise  of rights
appurtenant thereto and shall not include participation in the management of any
such  enterprise  except in connection with any such  competitive  operations of
such enterprise.

                  (f) "Employee  Benefits" means the  perquisites,  benefits and
service  credit for benefits as provided  under any and all employee  retirement
income and welfare  benefit plans,  policies,  programs or arrangements in which
the Executive is entitled to participate, including but not limited to any stock
option, performance share, performance unit, stock purchase, stock appreciation,
savings, pension,  supplemental executive retirement, or other retirement income
or welfare benefit,  deferred  compensation,  incentive  compensation,  group or
other life,  health,  medical/hospital  or other  insurance  (whether  funded by
actual  insurance or self-insured  by the Company or a Subsidiary),  disability,
salary  continuation,  expense  reimbursement  and other employee benefit plans,
policies,  programs  or  arrangements  that  may  now  exist  or any  equivalent
successor  plans,  policies,  programs  or  arrangements  that  may  be  adopted
hereafter by the Company or a Subsidiary,  providing  perquisites,  benefits and
service  credit for  benefits at least as great in the  aggregate as are payable
thereunder as of the date of this  Agreement or at any time within the six month
period immediately preceding the applicable measurement date.

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

                  (h)      "Good Reason" means any of the following:

                           (i) (1) A failure to elect or reelect or otherwise to
         maintain  the   Executive  in  the  office  or  the   position,   or  a
         substantially  equivalent office or position, of or with the Company or
         a  Subsidiary  (or any  successor  thereto  by  operation  of law of or
         otherwise),  as the case may be, that the Executive held as of the date
         of  this  Agreement  or  at  any  time  within  the  six  month  period
         immediately  preceding  the  applicable  measurement  date  or (2)  the
         removal of the  Executive  as a Director of the Company or a Subsidiary
         (or any successor  thereto) if the Executive shall have been a Director
         of the Company or a Subsidiary  as of the date of this  Agreement or at
         any  time  within  the  six  month  period  immediately  preceding  the
         applicable measurement date;

                           (ii) A  significant  adverse  change  in the  nature,
         scope or level of the authority, powers, responsibilities, functions or
         duties  attached to the  position  with the Company and any  Subsidiary
         that the Executive held as of the date of this Agreement or at any time
         within  the six  month  period  immediately  preceding  the  applicable
         measurement date, or a reduction in the Executive's  aggregate Base Pay
         and Incentive Pay received from the Company and any Subsidiary,  or the
         termination or denial of the Executive's rights to Employee Benefits or
         a reduction in the scope or value thereof,  any of which shall not have
         been  remedied by the Company  within 30 calendar days after receipt by
         the  Company of  written  notice  from the  Executive  of such  change,
         reduction or termination, as the case may be;



<PAGE>


                           (iii) A good  faith  determination  by the  Executive
         that a change in circumstances  shall have occurred  following the date
         of this  Agreement,  including but not limited to a change in the scope
         of the  business  or other  activities  for  which  the  Executive  was
         responsible  as of the date of this Agreement or at any time within the
         sixth month  period  immediately  prior to the  applicable  measurement
         date, which shall have rendered the Executive  substantially  unable to
         carry  out,   shall  have   substantially   hindered  the   Executive's
         performance  of,  or  shall  have  caused  the  Executive  to  suffer a
         substantial    reduction   in,   any   of   the   authority,    powers,
         responsibilities,  functions or duties attached to the position held by
         the  Executive as of the date of this  Agreement or any time within the
         six month period  immediately prior to the applicable  measurement date
         and shall not have been remedied  within 30 calendar days after written
         notice to the Company  from the  Executive of such  determination  (Any
         such determination by the Executive shall be presumed to have been made
         in good faith and shall be final and binding  upon the parties  hereto,
         unless within such  thirty-calendar-day  period,  there shall have been
         delivered to the  Executive a copy of a resolution  duly adopted by the
         affirmative  vote of not less then 75% of the members of the Board then
         in office  (excluding for all purposes  related to this  determination,
         each member of the Board who is also then an  employee of the  Company)
         at a meeting of the Board  called and held for such  purpose  (after an
         opportunity for the Executive,  together with the  Executive's  counsel
         (if  the  Executive  shall  choose  to  have  counsel  present  at such
         meeting), to be heard before the Board) finding that, in the good faith
         opinion of the Board,  such  determination  by the Executive  shall not
         have been made in good faith and specifying in detail the bases of such
         finding.  Nothing  herein will limit the right of the  Executive or his
         beneficiaries  to contest the validity or propriety of any such finding
         of the Board.);

                           (iv)   The    liquidation,    dissolution,    merger,
         consolidation  or  reorganization  of the Company or transfer of all or
         substantially  all of its business or assets,  unless the  successor or
         successors  (by  liquidation,  merger,  consolidation,  reorganization,
         transfer  or  otherwise)  to  which  all  or  substantially  all of the
         Company's  business or assets shall have been transferred (by operation
         of law or otherwise)  shall have assumed all duties and  obligations of
         the Company under this Agreement pursuant to Section 11(a);

                           (v)  A  relocation  of  the   Executive's   place  of
         employment to a place that is more than 50 miles farther from the place
         where he or she is residing on the date of this  Agreement  than is the
         place of his or her employment on the date of this Agreement; or

                           (vi) Without limiting the generality or effect of the
         foregoing,  any material breach of this Agreement by the Company or any
         successor  thereto  that is not  remedied  by the  Company (or any such
         successor) within 30 calendar days after receipt by the Company (or any
         such successor) of written notice from the Executive of such breach.

                  (i) "Incentive Pay" means an annual bonus,  incentive or other
payment of  compensation,  in addition to Base Pay, made or to be made in regard
to  services  rendered  in any  year or  other  period  pursuant  to any  bonus,
incentive, profit-sharing,  performance, discretionary pay or similar agreement,
plan, policy,  program or arrangement (whether or not funded) of the Company (or
any successor  thereto) that shall provide the Executive with the opportunity to
receive  benefits at least equal to those that he had an  opportunity to receive
under any such plan, policy, program or arrangement maintained by the Company as
of the  date of this  Agreement  or at any  time  within  the six  month  period
immediately prior to the applicable measurement date.



<PAGE>


                  (j)   "Retirement   Plans"   means  the   retirement   income,
supplemental executive retirement, excess benefits and retiree medical, life and
similar benefit plans  providing  retirement  perquisites,  benefits and service
credit for benefits at least as great in the aggregate as are payable thereunder
prior to a Change in Control.

                  (k) "Severance  Period" means the period of time commencing on
the date of the first occurrence of a Change in Control and continuing until the
first anniversary of the occurrence of the Change in Control.

                  (l) "Subsidiary" means an entity in which the Company directly
or indirectly beneficially owns 50% or more of the outstanding Voting Stock.

                  (m) "Term" means the period  commencing  as of the date hereof
and expiring at the close of business on June 30, 2000; provided,  however, that
commencing  on July 1,  1999,  and on each July 1  thereafter,  the term of this
Agreement  will  automatically  be extended  for an  additional  year unless the
Company or the  Executive  shall have given not less than 90 days' prior written
notice that the Company or the  Executive,  as the case may be, does not wish to
have the Term so extended.  For the purposes of this Section 1(m), the Executive
shall not be deemed to have  ceased to be an  employee  of the  Company  and any
Subsidiary by reason of the transfer of Executive's employment among the Company
and any Subsidiaries.

                  (n) "Termination Date" means the date on which the Executive's
employment  is  terminated  (the  effective  date of which  shall be the date of
termination  or such other date that may be  specified  by the  Executive if the
termination is by the Executive for Good Reason pursuant to Section 4(a)).

                  (o) "Voting Stock" means securities entitled to vote generally
in the election of directors.

                  2. Duties of Executive.  During the Term, the Executive  shall
remain in the employ of the Company in the position and with  substantially  the
same authority, powers, responsibilities, functions and duties that he had as of
the date of this Agreement or such different or additional positions, authority,
powers, responsibilities,  functions and duties as the Company and the Executive
may hereafter  mutually  agree in writing.  Throughout  the Term,  the Executive
shall devote substantially all of his time during normal business hours (subject
to vacations,  sick leave and other absences in accordance  with the policies of
the Company as in effect for senior executives as of the date of this Agreement)
to the business and affairs of the Company,  but nothing in this Agreement shall
preclude the Executive  from devoting  reasonable  periods of time during normal
business hours to (a) serving as a director, trustee or member of or participant
in  any  organization  or  business,  provided  that  such  activity  would  not
constitute  Competitive  Activity  if  conducted  by  the  Executive  after  the
Termination  Date,  (b) engaging in charitable  and community  activities or (c)
managing  his  personal  investments,  provided  that  such  activities  do  not
materially interfere with the Executive's performance of his duties hereunder.

                  3.       Compensation During Term.  During the Term:

                  (a) The Executive (i) shall receive Base Pay and (ii) shall be
provided the opportunity to receive Incentive Pay.



<PAGE>


                  (b) The Executive shall be a full participant in, and shall be
entitled to the perquisites,  benefits and service credit for benefits  provided
under,  any and all plans,  policies,  programs or  arrangements in which senior
executives of the Company  participate  providing Employee  Benefits;  provided,
however,  that the Executive's  rights thereunder shall be governed by the terms
thereof  and shall not be  expanded  hereunder  or  otherwise  affected  hereby;
provided further,  however,  notwithstanding the foregoing, if and to the extent
such Employee Benefits are not payable or provided under any such plan,  policy,
program or arrangement,  the Company shall pay or provide  therefor.  Nothing in
this  Agreement  shall  preclude the  improvement or enhancement of any Employee
Benefits,  provided that no such  improvement  or  enhancement  shall in any way
diminish any other obligation of the Company under this Agreement.

                  4.   Termination   of   Employment   and   Related   Severance
Compensation.  (a) If the  Executive's  employment  shall be  terminated  by the
Company or a  Subsidiary  during the Term for any reason other than Cause or the
Executive's death or the Executive's  permanent disability within the meaning of
the long-term  disability plan in effect for (or applicable to) the Executive as
of the  date of this  Agreement  or at any  time  within  the six  month  period
immediately  prior to the  applicable  measurement  date, or if the  Executive's
employment shall be terminated by the Executive during the Term for Good Reason,
the  Executive  shall be entitled to the  severance  compensation  and  benefits
described in Annex A to this Agreement.

                  (b) If the Executive's  employment shall be terminated  during
the Term because the Executive becomes  permanently  disabled within the meaning
of the long-term  disability plan in effect for (or applicable to) the Executive
as of the date of this  Agreement  or at any time  within  the six month  period
immediately  prior to the applicable  measurement  date, the Executive  shall be
entitled to the severance compensation and benefits described in Annex B to this
Agreement.

                  (c) If the Executive's  employment  shall terminate during the
Term as a result of the  Executive's  death,  the Executive shall be entitled to
the severance compensation and benefits described in Annex C to this Agreement.

                  (d)  Notwithstanding the provisions of Sections 4(a), 4(b) and
4(c),  if the  Executive's  employment  shall be  terminated by the Company or a
Subsidiary  during the Severance  Period for any reason other than Cause,  or if
the  Executive's  employment  shall be terminated  by the  Executive  during the
Severance  Period  for  any  reason  or for  no  reason,  or if the  Executive's
employment  shall  terminate  during  the  Severance  Period  as a result of the
Executive's death, the Executive shall be entitled to the severance compensation
and benefits described in Annex D to this Agreement.

                  (e) No termination of the Executive's  employment  pursuant to
Section 4(a),  4(b), 4(c) or 4(d) shall affect any rights that the Executive may
have pursuant to any  agreement,  plan,  policy,  program or  arrangement of the
Company or any  Subsidiary  providing  Employee  Benefits,  and the  Executive's
rights under any such agreement,  plan, policy,  program or arrangement shall be
governed by the terms thereof.



<PAGE>


                  (f) Without  limiting the rights of the Executive at law or in
equity,  if the  Company  shall fail to make any  payment or provide any benefit
required to be made or provided  under this  Agreement  on a timely  basis,  the
Company will pay interest on the amount or value thereof at an  annualized  rate
of interest equal to the so-called composite "prime rate" as quoted from time to
time during the  relevant  period in The Wall Street  Journal,  plus 1.0%.  Such
interest will be payable as it accrues on demand.  Any change in such prime rate
will be effective on and as of the date of such change.

                  (g)  Notwithstanding  any other provision of this Agreement to
the contrary,  the parties' respective rights and obligations under this Section
4 and under  Sections 5, 7, 8 and 9 shall survive any  termination or expiration
of this Agreement or the termination of the Executive's  employment  following a
Change in Control for any reason whatsoever.

                  (h)  Notwithstanding  any  provision  to the  contrary  in any
applicable  plan,  program  or  agreement,  (i)  upon  the  termination  of  the
Executive's  employment  pursuant to Section 4(a), 4(b), 4(c) or 4(d), all stock
options then held by the Executive shall become fully vested and exercisable and
shall remain so exercisable for a period of 12 months  following the Termination
Date, and (ii) upon the  termination of the Executive's  employment  pursuant to
Section  4(d),  all  restricted  stock awards then held by the  Executive  shall
become fully vested and nonforfeitable.

                  (i)  Notwithstanding  any  provision  to the  contrary  in any
applicable agreement,  note or other document evidencing any indebtedness of the
Executive to the Company, (i) upon the termination of the Executive's employment
pursuant to Section 4(a),  4(b) or 4(d), the Executive shall have 36 months from
and after the  Termination  Date in which to repay such  indebtedness,  and (ii)
upon the termination of the Executive's employment pursuant to Section 4(c), the
Executive shall have 18 months from and after the  Termination  Date in which to
repay such indebtedness.



<PAGE>


                  5.   Certain   Additional   Payments  by  the   Company.   (a)
Notwithstanding  any other  provision of this Agreement to the contrary,  in the
event that it shall be  determined  (as  hereafter  provided)  that any  payment
(other  than  the  Gross-Up   payments  provided  for  in  this  Section  5)  or
distribution  by the Company or any of its  affiliates  to or for the benefit of
the Executive,  whether paid or payable or distributed or distributable pursuant
to the terms of this  Agreement  or  otherwise  pursuant  to or by reason of any
other agreement, plan, policy, program or arrangement, including but not limited
to any stock option,  performance  share,  performance unit, stock  appreciation
right or similar right, or the lapse or termination of any restriction on or the
vesting  or  exercisability  of any of the  foregoing  (a  "Payment"),  would be
subject to the excise tax imposed by Section 4999 of the  Internal  Revenue Code
of 1986, as amended (the "Code") (or any successor provision thereto), by reason
of being  considered  "contingent  on a change in  ownership  or control" of the
Company,  within  the  meaning  of  Section  280G of the Code (or any  successor
provision  thereto)  or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such tax (such tax or taxes, together with
any such interest and penalties, being hereafter collectively referred to as the
"Excise  Tax"),  then the  Executive  shall be entitled to receive an additional
payment or payments  (collectively,  a "Gross-Up Payment");  provided,  however,
that  no  Gross-up  Payment  shall  be  made  with  respect  to any  Excise  Tax
attributable  to (i) any "incentive  stock option" (as defined by Section 422 of
the Code)  granted  prior to the  execution of this  Agreement or (ii) any stock
appreciation or similar right granted in tandem with any incentive stock option.
The  Gross-Up  Payment  shall be in an amount  such that,  after  payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes),  including any Excise Tax imposed upon the Gross-Up Payment, the
Executive  retains  an amount of the  Gross-Up  Payment  equal to the Excise Tax
imposed upon the Payment.

                  (b)  Subject  to  the   provisions   of  Section   5(f),   all
determinations  required to be made under this Section 5, including  whether any
Excise Tax is payable by the Executive and the amount of any such Excise Tax and
whether  a  Gross-Up  Payment  is  required  to be  paid by the  Company  to the
Executive  and the  amount  of any  such  Gross-Up  Payment,  shall be made by a
nationally  recognized  accounting firm (the "Accounting  Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its  determination  and detailed  supporting  calculations to both the
Company and the Executive within 30 calendar days after the Termination Date, if
applicable,  and any such other time or times as may be requested by the Company
or the  Executive.  If the  Accounting  Firm  determines  that any Excise Tax is
payable by the Executive, the Company shall pay the required Gross-Up Payment to
the Executive within five business days after receipt of such  determination and
calculations  with respect to any Payment to the  Executive.  If the  Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall deliver
to  the  Company  and  the  Executive  at  the  same  time  as it  makes  such a
determination  an opinion that the  Executive has  substantial  authority not to
report any Excise Tax on his federal, state or local income or other tax return.
As a result of the  uncertainty  in the  application of Section 4999 of the Code
(or any successor  provision thereto) and the possibility of similar uncertainty
regarding  applicable state or local tax law at the time of any determination by
the Accounting Firm hereunder,  it is possible that Gross-Up Payments that shall
not have been made by the  Company  should  have been made (an  "Underpayment"),
consistent with the  calculations  required to be made  hereunder.  In the event
that the Company  exhausts or fails to pursue its  remedies  pursuant to Section
5(f) and the  Executive  thereafter  is required to make a payment of any Excise
Tax, the Executive  shall direct the Accounting  Firm to determine the amount of
the Underpayment  that has occurred and to submit its determination and detailed
supporting  calculations  to both the Company and the  Executive  as promptly as
possible. Any such Underpayment shall be promptly paid by the Company to, or for
the benefit of, the  Executive  within five  business days after receipt of such
determination and calculations.

                  (c) The  Company  and the  Executive  shall each  provide  the
Accounting Firm access to and copies of any books,  records and documents in the
possession  of the  Company  or the  Executive,  as the case may be,  reasonably
requested  by the  Accounting  Firm  and  shall  otherwise  cooperate  with  the
Accounting  Firm  in  connection  with  the  preparation  and  issuance  of  the
determinations and calculations  contemplated by Section 5(b). Any determination
by the Accounting Firm as to the amount of the Gross-Up Payment shall be binding
upon the Company and the Executive.



<PAGE>


                  (d) The  federal,  state and local income or other tax returns
filed by the  Executive  shall be prepared and filed on a consistent  basis with
the  determination of the Accounting Firm with respect to any Excise Tax payable
by the Executive.  The Executive  shall make proper payment of the amount of any
Excise Tax and, at the request of the Company, shall provide to the Company true
and correct  copies (with any  amendments)  of his federal  income tax return as
filed with the Internal Revenue Service and any relevant corresponding state and
local tax returns as filed with the applicable taxing authority,  and such other
documents reasonably requested by the Company, evidencing such payment. If prior
to the filing of the  Executive's  federal  income  tax  return or any  relevant
corresponding state or local tax return, the Accounting Firm determines that the
amount of the Gross-Up  Payment  should be reduced,  the Executive  shall within
five business days pay to the Company the amount of such reduction.

                  (e) The  fees  and  expenses  of the  Accounting  Firm for its
services in connection with the determinations and calculations  contemplated by
Section  5(b)  shall be borne by the  Company.  If such  fees and  expenses  are
initially paid by the Executive,  the Company shall  reimburse the Executive the
full amount of such fees and expenses  within five  business  days after receipt
from the  Executive  of a  statement  therefor  and  reasonable  evidence of his
payment thereof.

                  (f) The  Executive  shall notify the Company in writing of any
claim by the Internal  Revenue  Service or any other taxing  authority  that, if
successful, would require the payment by the Company of a Gross-Up Payment. Such
notification  shall be given as  promptly  as  practicable  but no later than 10
business days after the Executive actually receives notice of such claim and the
Executive  shall further apprise the Company of the nature of such claim and the
date on which such claim is  requested  to be paid (in each case,  to the extent
known by the  Executive).  The  Executive  shall not pay such claim prior to the
earlier of (i) the expiration of the  thirty-calendar-day  period  following the
date on which he gives  such  notice to the  Company  and (ii) the date that any
payment of any amount with respect to such claim is due. If the Company notifies
the Executive in writing prior to the  expiration of such period that it desires
to contest such claim, the Executive shall:

                           (i) provide the Company  with any written  records or
         documents in his possession relating to such claim reasonably requested
         by the Company;

                           (ii) take such action in connection  with  contesting
         such claim as the Company shall reasonably request in writing from time
         to time,  including but not limited to accepting  legal  representation
         with  respect to such claim by an attorney  competent in respect of the
         subject matter and reasonably selected by the Company;

                           (iii)  cooperate  with the  Company  in good faith in
         order to effectively contest such claim; and

                           (iv)     permit the Company to participate in any 
proceedings relating to such claim;



<PAGE>


provided,  however,  that the Company  shall bear and pay directly all costs and
expenses  (including  interest and penalties)  incurred in connection  with such
contest and shall  indemnify  and hold harmless the  Executive,  on an after-tax
basis,  from and against any Excise Tax or income tax,  including  interest  and
penalties with respect thereto,  imposed as a result of such  representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Section 5(f), the Company shall control all proceedings taken in connection with
the  contest of any claim  contemplated  by this  Section  5(f) and, at its sole
option,  may pursue or forego any and all administrative  appeals,  proceedings,
hearings  and  conferences  with the taxing  authority  in respect of such claim
(provided  that  the  Executive  may  participate  therein  at his own  cost and
expense)  and may at its  option  either  direct  the  Executive  to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Executive  agrees to prosecute  such contest to a  determination  before any
administrative  tribunal,  in a court of initial jurisdiction and in one or more
appellate  courts,  as the Company shall determine;  provided,  however,  if the
Company  directs the Executive to pay the tax claimed and sue for a refund,  the
Company  shall  advance  the  amount  of such  payment  to the  Executive  on an
interest-free  basis and shall indemnify and hold harmless the Executive,  on an
after-tax basis, from any Excise Tax or income or other tax,  including interest
or  penalties  with  respect  thereto,  imposed  with  respect to such  advance;
provided  further,  however,  that any  extension of the statute of  limitations
relating to payment of taxes for the taxable year of the Executive  with respect
to which the  contested  amount is claimed  to be due is limited  solely to such
contested amount. Furthermore, the Company's control of any such contested claim
shall be limited to issues  with  respect to which a Gross-Up  Payment  would be
payable  hereunder and the Executive shall be entitled to settle or contest,  as
the case may be, any other issue raised by the Internal  Revenue  Service or any
other taxing authority.

                  (g) If,  after  the  receipt  by the  Executive  of an  amount
advanced by the Company  pursuant to Section 5(f),  the  Executive  receives any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 5(f)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
any taxes  applicable  thereto).  If,  after the receipt by the  Executive of an
amount advanced by the Company pursuant to Section 5(f), a determination is made
that the  Executive  shall not be entitled  to any refund  with  respect to such
claim and the Company does not notify the  Executive in writing of its intent to
contest such denial or refund prior to the  expiration of 30 calendar days after
such  determination,  then  such  advance  shall be  forgiven  and  shall not be
required to be repaid and the amount of any such advance  shall  offset,  to the
extent  thereof,  the  amount of  Gross-Up  Payment  required  to be paid by the
Company to the Executive pursuant to this Section 5.

                  6. No Mitigation  Obligation.  The Company hereby acknowledges
that it will  be  difficult  and may be  impossible  for the  Executive  to find
reasonably  comparable  employment  following the Termination  Date and that the
non-competition   covenant  contained  in  Section  8  will  further  limit  the
employment   opportunities   for  the  Executive.   In  addition,   the  Company
acknowledges  that its severance pay plans applicable in general to its salaried
employees do not provide for  mitigation,  offset or reduction of any  severance
payment  received  thereunder.   Accordingly,   the  payment  of  the  severance
compensation  by the Company to the  Executive in  accordance  with the terms of
this Agreement is hereby  acknowledged by the Company to be reasonable,  and the
Executive  will not be required to mitigate  the amount of any payment  provided
for in this Agreement by seeking other employment or otherwise,  and no profits,
income,  earnings or other benefits from any source  whatsoever  will create any
mitigation,  offset,  reduction  or any  other  obligation  on the  part  of the
Executive  hereunder  or  otherwise,  except as  expressly  provided in the last
sentence of Paragraph 2 of Annex A and the last sentence of Paragraph B of Annex
D.



<PAGE>


                  7.  Legal  Fees  and  Expenses.  (a) It is the  intent  of the
Company that the  Executive  not be required to incur legal fees and the related
expenses  associated  with  the   interpretation,   enforcement  or  defense  of
Executive's rights under this Agreement by litigation or otherwise,  because the
cost and expense thereof would substantially  detract from the benefits intended
to be extended to the Executive hereunder.  Accordingly,  if it should appear to
the Executive that the Company has failed to comply with any of its  obligations
under this  Agreement or in the event that the Company or any other person takes
or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any  litigation or other action or proceeding  designed to deny or
recover from the Executive  the benefits  provided or intended to be provided to
the Executive hereunder,  the Company irrevocably  authorizes the Executive from
time to time to retain  counsel of  Executive's  choice,  at the  expense of the
Company  as  hereafter  provided,  to advise  and  represent  the  Executive  in
connection with any such interpretation,  enforcement or defense,  including but
not  limited  to the  initiation  or defense of any  litigation  or other  legal
action, whether by or against the Company or any Director, officer,  stockholder
or  other   person   affiliated   with  the   Company,   in  any   jurisdiction.
Notwithstanding any existing or prior  attorney-client  relationship between the
Company and such counsel,  the Company  irrevocably  consents to the Executive's
entering into an  attorney-client  relationship  with such counsel,  and in that
connection the Company and the Executive agree that a confidential  relationship
shall exist between the Executive and such counsel.  Without  respect to whether
the  Executive  prevails  in  whole  or in part in  connection  with  any of the
foregoing,  the Company will pay and be solely  financially  responsible for any
and all  attorneys'  and related fees and expenses  incurred by the Executive in
connection  with  any of the  foregoing  up to a  maximum  aggregate  amount  of
$100,000,  provided that, in regard to such matters, the Executive has not acted
in bad faith or with no colorable claim of success.

                  (b) Without  limiting the obligations of the Company  pursuant
to  Section  7(a)  hereof,  in the event that a Change in  Control  occurs,  the
performance of the Company's  obligations  under this Section 7 shall be secured
by amounts, which shall in the aggregate be not less than $100,000, deposited or
to be  deposited  in trust  pursuant to certain  trust  agreements  to which the
Company  shall  be a party  providing  that the fees  and  expenses  of  counsel
selected  from time to time by the  Executive  pursuant to Section 7(a) shall be
paid,  or  reimbursed  to the  Executive  if paid by the  Executive,  either  in
accordance with the terms of such trust agreements or, if not so provided,  upon
presentation from time to time by the Executive to the trustee of a statement or
statements prepared by such counsel in accordance with its customary  practices.
Any failure by the Company to satisfy any of its obligations  under this Section
7(b)  shall not limit the  rights of the  Executive  hereunder.  Subject  to the
foregoing,  the Executive shall have the status of a general unsecured  creditor
of the Company and shall have no right to, or security  interest  in, any assets
of the Company or any Subsidiary.

                  8. Competitive Activity; Confidentiality; Nonsolicitation. (a)
If the  Executive's  employment  shall  terminate or be  terminated  pursuant to
Section 4(a) or 4(d) and the Executive shall have received or shall be receiving
benefits  pursuant to Section  4(a) or 4(d) and, if  applicable,  Section 5, the
Executive  shall not engage in any  Competitive  Activity  for one year from and
after the Termination Date in any geographical market where the Company shall be
operating on the Termination Date.



<PAGE>


                  (b) During the Term,  the Company agrees that it will disclose
to Executive its  confidential  or proprietary  information  (as defined in this
Section 8(b)) to the extent necessary for Executive to carry out his obligations
to the Company.  The Executive  hereby  covenants  and agrees that,  without the
prior written consent of the Company,  he will not during the Term or thereafter
disclose to any person not employed or otherwise engaged by the Company,  or use
in connection with engaging in competition with the Company, any confidential or
proprietary information of the Company. For the purposes of this Agreement,  the
term  "confidential or proprietary  information" will include all information of
any  nature  and in any form that is owned by the  Company  and is not  publicly
available  (other than by Executive's  breach of this Section 8(b)) or generally
known to  persons  engaged  in  businesses  similar  or  related to those of the
Company.  Confidential or proprietary  information will include, but will not be
limited to, the Company's  financial  matters,  customers,  employees,  industry
contracts,  strategic business plans,  product development (or other proprietary
product data),  marketing plans, and all other secrets and all other information
of a confidential or proprietary  nature.  For the purposes of the two preceding
sentences,  the term "Company"  will also include any Subsidiary  (collectively,
the "Restricted Group"). The foregoing  obligations imposed by this Section 8(b)
will not apply (i) in the course of the  business  of and for the benefit of the
Company during the Term, (ii) if such  confidential  or proprietary  information
shall  have  become  generally  known  to the  public  through  no  fault of the
Executive or (iii) if the Executive is required by law to make disclosure (after
giving the Company notice and an opportunity to contest such requirement).

                  (c) If the Executive's employment shall be terminated pursuant
to  Section  4(a) or 4(d) and the  Executive  shall  have  received  or shall be
receiving benefits pursuant to Section 4(a) or 4(d) and, if applicable,  Section
5, the Executive  hereby  covenants and agrees that, for one year from and after
the Termination  Date, the Executive will not, without the prior written consent
of the Company (which consent shall not  unreasonably  be withheld)  directly or
indirectly  on behalf of  himself  or on  behalf  of any other  person,  firm or
company, attempt to influence, persuade or induce, or assist any other person in
so persuading or inducing,  any employee of the Restricted  Group to give up, or
to not  commence,  employment  or a business  relationship  with the  Restricted
Group.

                  9. Termination of Employment Prior to and in Anticipation of a
Change in Control.  Notwithstanding any other provision of this Agreement to the
contrary,  if a Change in Control occurs and not more than 180 days prior to the
date on which the Change in Control occurs, the Executive's  employment with the
Company is terminated by the Company or the Executive  terminates his employment
for  Good  Reason,  such  termination  of  employment  shall be  deemed  to be a
termination of employment  pursuant to Section 4(d) during the Severance  Period
for the  purposes  of this  Agreement  if the  Executive  shall have  reasonably
demonstrated  that such  termination  of employment  (i) was at the request of a
third  party who has taken  steps  reasonably  calculated  to effect a Change in
Control or (ii)  otherwise  arose in  connection  with or in  anticipation  of a
Change in Control.

                  10.  Withholding  of Taxes.  The Company may withhold from any
amounts  payable under this  Agreement all such federal,  state,  local or other
taxes as the Company is required to  withhold  pursuant to any  applicable  law,
regulation or ruling.

                  11.  Successors  and Binding  Agreement.  (a) The Company will
require  any  successor  (whether  direct  or  indirect,  by  purchase,  merger,
consolidation,  reorganization  or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance reasonably
satisfactory  to the  Executive,  to expressly  assume and agree to perform this
Agreement  in the  same  manner  and to the same  extent  the  Company  would be
required to perform if no such  succession had taken place.  This Agreement will
be binding upon and inure to the benefit of the Company and any successor to the
Company,  including  but  not  limited  to any  persons  acquiring  directly  or
indirectly all or substantially  all of the business or assets of the Company by
purchase, merger, consolidation, reorganization or otherwise (and such successor
shall thereafter be deemed the "Company" for the purposes of this Agreement) but
will not otherwise be assignable, transferable or delegable by the Company.


<PAGE>


                  (b)  This  Agreement  will  inure  to  the  benefit  of and be
enforceable by the  Executive's  personal or legal  representatives,  executors,
administrators, successors, heirs, distributees and legatees.

                  (c) This  Agreement  is  personal in nature and neither of the
parties  hereto shall assign,  transfer or delegate this Agreement or any rights
or obligations  hereunder without the consent of the other,  except as expressly
provided in Sections 11(a) and 11(b).  Without limiting the generality or effect
of the foregoing,  the Executive's right to receive payments  hereunder will not
be  assignable,  transferable  or  delegable  by pledge,  creation of a security
interest or otherwise,  except by a transfer by the Executive's will or the laws
of descent and  distribution,  and in the event of any  attempted  assignment or
transfer  contrary to this Section 11(c), the Company shall have no liability to
pay any amount so attempted to be assigned, transferred or delegated.

                  12.  Notices.   For  all  purposes  of  this  Agreement,   all
communications,  including  but not  limited to notices,  consents,  requests or
approvals,  required or permitted to be given  hereunder  will be in writing and
will be deemed to have been duly  given when hand  delivered  or  dispatched  by
electronic  facsimile  transmission (with receipt thereof orally confirmed),  or
five business  days after having been mailed by  registered or certified  United
States mail (return receipt  requested and postage  prepaid),  or three business
days  after  having  been  sent by a  nationally  recognized  overnight  courier
service,  addressed  to the Company (to the  attention  of the  Secretary of the
Company) at its principal  executive office or to the Executive at his principal
residence,  as the case may be, or to such other  address as either  party shall
furnish to the other in writing and in accordance herewith,  except that notices
of changes of address shall be effective only upon receipt.

                  13. Governing Law. The validity, interpretation,  construction
and  performance  of  this  Agreement  will  be  governed  by and  construed  in
accordance  with the substantive  laws of the State of Illinois,  without giving
effect to the principles of conflict of laws thereof.

                  14.  Validity.  If any  provision  of  this  Agreement  or the
application  of any  provision  hereof to any  person or  circumstances  is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances  will not
be affected, and the provision so held to be invalid, unenforceable or otherwise
illegal  will be reformed to the extent  (and only to the extent)  necessary  to
make it enforceable, valid or legal.

                  15.  Miscellaneous.  No  provision  of this  Agreement  may be
modified, waived or discharged unless such waiver,  modification or discharge is
agreed to in a writing  signed by the  Executive  and the Company.  No waiver by
either  party  hereto at any time of any  breach by the  other  party  hereto or
compliance  with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar  provisions or
conditions  at the same or at any prior or  subsequent  time.  No  agreements or
representations,  oral or written or expressed  or implied,  with respect to the
subject  matter  hereof  have been made by either  party  that are not set forth
expressly  in this  Agreement.  References  to  Sections  are to  references  to
Sections of this Agreement.



<PAGE>


                  16.  Counterparts.  This  Agreement  may be executed in one or
more  counterparts,  each of which shall be deemed to be an original  and all of
which together will constitute one and the same agreement.

                  17. Prior Agreement. This Agreement supersedes in its entirety
the Change in Control  Agreement  dated as of September  20,  1997,  between the
Company and the Executive.

                  IN WITNESS WHEREOF,  the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.



                                                     GREAT LAKES REIT, INC.


                                                     By:  
                                                           Name  
                                                           Title  


                                                           


<PAGE>




                                                                     Annex A



                                                     Severance Compensation


                  (1) A lump sum payment in an amount equal to two times the sum
of (a) Base Pay (at the  highest  rate in  effect  for any  period  prior to the
Termination Date) and (b) an amount equal to the product of (i) Base Pay (at the
highest rate in effect for any period prior to the Termination Date), multiplied
by (ii) a fraction,  the  numerator  of which shall be the  aggregate  amount of
Incentive Pay earned by the Executive during the most recently  completed fiscal
year of the Company (or any  successor  thereto)  and the  denominator  of which
shall be Base Pay (as in effect for the most recently  completed  fiscal year of
the Company or any successor thereto).

                  (2) For a period of 12 months  following the Termination  Date
(the "Continuation  Period"), the Company will provide the Executive (at no cost
to the Executive) with Employee  Benefits that are welfare  benefits  (including
medical,  dental and other group health plan benefits)  substantially similar to
those that the Executive was receiving or entitled to receive  immediately prior
to the  Termination  Date or, if  greater,  immediately  prior to the  Change in
Control.  If and to the extent that any benefit described in this Paragraph 2 is
not or cannot be paid or provided under any plan, policy, program or arrangement
of the Company or any  Subsidiary,  as the case may be,  then the  Company  will
itself pay or provide for the payment to the  Executive,  and his dependents and
beneficiaries,  of such  Employee  Benefits  (together  with, in the case of any
benefit  described in this  Paragraph 2 that is subject to tax because it is not
or  cannot  be  paid or  provided  under  any  such  plan,  policy,  program  or
arrangement of the Company or any  Subsidiary,  an additional  amount such that,
after payment by the Executive or his dependents or  beneficiaries,  as the case
may be, of all taxes so imposed,  the recipient  retains an amount equal to such
taxes).  Notwithstanding  the foregoing or any other provision of the Agreement,
for the purpose of determining the period of continuation  coverage to which the
Executive or any of his  dependents is entitled  pursuant to Section 601 et seq.
of the  Employee  Retirement  Income  Security  Act of 1974,  as amended (or any
successor  provision  thereto),  and Section 4980B of the Code (or any successor
provision  thereto) under the Company's  medical,  dental and other group health
plans (or successor  plans),  the  Executive's  "qualifying  event" shall be the
termination of the Continuation  Period and the Executive shall be considered to
have remained actively employed on a full-time basis through that date.  Without
otherwise  limiting  the  purposes  or  effect of  Section  6 of the  Agreement,
Employee  Benefits  otherwise  receivable  by the  Executive  pursuant  to  this
Paragraph  2 will be reduced  to the  extent  comparable  welfare  benefits  are
actually received by the Executive from another employer during the Continuation
Period,  and any such  benefits  actually  received  by the  Executive  shall be
reported by the Executive to the Company.



<PAGE>



 
                  (3)  In  addition  to  the  retirement  income,   supplemental
executive  retirement,  and other  benefits to which the  Executive  is entitled
under the Company's  Retirement  Plans, a lump sum payment in an amount equal to
the  actuarial  equivalent of the excess of (a) the  retirement  pension and the
medical,  life and other  benefits that would be payable to the Executive  under
the  Retirement  Plans if the  Executive  continued  to be employed  through the
Continuation  Period given the Executive's  Base Pay (as determined in Paragraph
1) (without regard to any amendment to the Retirement Plans made subsequent to a
Change in Control  that  adversely  affects in any  manner  the  computation  of
retirement or welfare benefits thereunder),  less (b) the retirement pension and
the medical,  life and other  benefits that the Executive is entitled to receive
(either  immediately or on a deferred basis) under the Retirement Plans. For the
purposes of this Paragraph 3, "actuarial  equivalent"  shall be determined using
the  same  methods  and  assumptions  utilized  under  the  Company's  qualified
retirement plan for salaried  employees in effect  immediately prior to the date
of this Agreement.



<PAGE>




                                                                       Annex B



                                                     Severance Compensation


                  (1) A lump sum payment in an amount equal to two times the sum
of (a) Base Pay (at the  highest  rate in  effect  for any  period  prior to the
Termination Date) and (b) an amount equal to the product of (i) Base Pay (at the
highest rate in effect for any period prior to the Termination Date), multiplied
by (ii) a fraction,  (i) the numerator of which shall be the aggregate amount of
Incentive Pay earned by the Executive during the most recently  completed fiscal
year of the Company (or any  successor  thereto)  and the  denominator  of which
shall be Base Pay (as in effect for the most recently  completed  fiscal year of
the Company or any successor thereto).

                  (2) For a period of 24 months  following the Termination  Date
or such longer  period of time as may be required  under  Section 601 et seq. of
the Employee  Retirement  Income Security Act of 1974, as amended  ("ERISA") (or
any  successor  provision  thereto),  and  Section  4980B  of the  Code  (or any
successor  provision  thereto),  the Company will provide the  Executive (at the
Executive's expense and in accordance with Section 601 et. seq. of ERISA (or any
successor  provision  thereto) and Section  4980B of the Code (or any  successor
provision  thereto)) with Employee Benefits that are welfare benefits (including
medical,  dental and other group health plan benefits)  substantially similar to
those that the Executive was receiving or entitled to receive  immediately prior
to the Termination  Date or, if greater,  immediately  prior to the date of this
Agreement.





<PAGE>




                                                                   Annex C



                                                     Severance Compensation


                  A lump sum  payment in an amount  equal to the sum of (1) Base
Pay (at the highest rate in effect for any period prior to the Termination Date)
and (2) an amount  equal to the product of (a) Base Pay (at the highest  rate in
effect  for any  period  prior to the  Termination  Date),  multiplied  by (b) a
fraction,  the numerator of which shall be the aggregate amount of Incentive Pay
earned by the Executive  during the most recently  completed  fiscal year of the
Company (or any successor  thereto) and the  denominator  of which shall be Base
Pay (as in effect for the most recently  completed fiscal year of the Company or
any successor thereto).


<PAGE>




                                                                     Annex D



                                                     Severance Compensation


                  (A) A lump sum payment in an amount equal to two times the sum
of (1) Base Pay (at the  highest  rate in  effect  for any  period  prior to the
Termination Date) and (2) an amount equal to the product of (a) Base Pay (at the
highest rate in effect for any period prior to the Termination Date), multiplied
by (b) a fraction,  (i) the numerator of which shall be the aggregate  amount of
Incentive  Pay earned by the  Executive  during the fiscal  year of the  Company
ended December 31, 1997,  and the  denominator of which shall be Base Pay (as in
effect for the fiscal year of the  Company  ended  December  31,  1997),  if the
Change in Control  shall occur during 1998, or (ii) the numerator of which shall
be the average of the aggregate  amount of Incentive Pay earned by the Executive
during the fiscal year of the Company ended December 31, 1997, and the aggregate
amount of Incentive Pay that shall have been earned by the Executive  during the
fiscal year of the Company  ending  December 31, 1998,  and the  denominator  of
which  shall be the average of Base Pay (as in effect for the fiscal year of the
Company ended  December 31, 1997) and Base Pay (as in effect for the fiscal year
of the Company ending  December 31, 1998),  if the Change in Control shall occur
during  1999,  or (iii)  the  numerator  of which  shall be the  average  of the
aggregate  amounts of Incentive Pay that shall have been earned by the Executive
during  each of the  three  then most  recently  completed  fiscal  years of the
Company,  and the  denominator  of which shall be the average of Base Pay (as in
effect for each of the three then most  recently  completed  fiscal years of the
Company), if the Change in Control shall occur in 2000 or thereafter.



<PAGE>




                  (B) For a period of 12 months  following the Termination  Date
(the "Continuation  Period"), the Company will provide the Executive (at no cost
to the Executive) with Employee  Benefits that are welfare  benefits  (including
medical,  dental and other group health plan benefits)  substantially similar to
those that the Executive was receiving or entitled to receive  immediately prior
to the  Termination  Date or, if  greater,  immediately  prior to the  Change in
Control.  If and to the extent that any benefit described in this Paragraph B is
not or cannot be paid or provided under any plan, policy, program or arrangement
of the Company or any  Subsidiary,  as the case may be,  then the  Company  will
itself pay or provide for the payment to the  Executive,  and his dependents and
beneficiaries,  of such  Employee  Benefits  (together  with, in the case of any
benefit  described in this  Paragraph B that is subject to tax because it is not
or  cannot  be  paid or  provided  under  any  such  plan,  policy,  program  or
arrangement of the Company or any  Subsidiary,  an additional  amount such that,
after payment by the Executive or his dependents or  beneficiaries,  as the case
may be, of all taxes so imposed,  the recipient  retains an amount equal to such
taxes).  Notwithstanding  the foregoing or any other provision of the Agreement,
for the purpose of determining the period of continuation  coverage to which the
Executive or any of his  dependents is entitled  pursuant to Section 601 et seq.
of the  Employee  Retirement  Income  Security  Act of 1974,  as amended (or any
successor  provision  thereto),  and Section 4980B of the Code (or any successor
provision  thereto) under the Company's  medical,  dental and other group health
plans (or successor  plans),  the  Executive's  "qualifying  event" shall be the
termination of the Continuation  Period and the Executive shall be considered to
have remained actively employed on a full-time basis through that date.  Without
otherwise  limiting  the  purposes  or  effect of  Section  6 of the  Agreement,
Employee  Benefits  otherwise  receivable  by the  Executive  pursuant  to  this
Paragraph  B will be reduced  to the  extent  comparable  welfare  benefits  are
actually received by the Executive from another employer during the Continuation
Period,  and any such  benefits  actually  received  by the  Executive  shall be
reported by the Executive to the Company.

                  (C)  In  addition  to  the  retirement  income,   supplemental
executive  retirement,  and other  benefits to which the  Executive  is entitled
under the Company's  Retirement  Plans, a lump sum payment in an amount equal to
the  actuarial  equivalent of the excess of (1) the  retirement  pension and the
medical,  life and other  benefits that would be payable to the Executive  under
the  Retirement  Plans if the  Executive  continued  to be employed  through the
Continuation  Period  given the  Executive's  Base Pay (at the  highest  rate in
effect for any period  prior to the  Termination  Date)  (without  regard to any
amendment to the  Retirement  Plans made  subsequent to a Change in Control that
adversely  affects  in any  manner  the  computation  of  retirement  or welfare
benefits thereunder),  less (2) the retirement pension and the medical, life and
other benefits that the Executive is entitled to receive (either  immediately or
on a deferred  basis)  under the  Retirement  Plans.  For the  purposes  of this
Paragraph C, "actuarial  equivalent"  shall be determined using the same methods
and  assumptions  utilized  under the Company's  qualified  retirement  plan for
salaried employees in effect immediately prior to the Change in Control.


<PAGE>


Exhibit 10.3                                     FORM FOR MILLS AND SCURTO


                           CHANGE IN CONTROL AGREEMENT


                  THIS CHANGE IN CONTROL AGREEMENT (this "Agreement"),  dated as
of July 17, 1998, is made and entered by and between  Great Lakes REIT,  Inc., a
Maryland corporation (the "Company"), and ______________ (the "Executive").

                                   WITNESSETH:

                  WHEREAS,  the  Executive is a senior  executive of the Company
and has made and is  expected to  continue  to make major  contributions  to the
short-term  and long-term  profitability,  growth and financial  strength of the
Company; and

                  WHEREAS,  the Company recognizes that, as is the case for most
publicly-held  companies, the possibility of a Change in Control (as hereinafter
defined) exists; and

                  WHEREAS,  the Company desires to assure itself of both present
and future  continuity of management  and desires to establish  certain  minimum
severance  benefits  for  certain  of  its  senior  executives,   including  the
Executive, applicable in the event of a Change in Control; and

                  WHEREAS,   the  Company  wishes  to  ensure  that  its  senior
executives are not practically disabled from discharging their duties in respect
of a proposed or actual transaction involving a Change in Control; and

                  WHEREAS,  the Company desires to provide  additional  
inducement for the Executive to continue to remain in the employ of the Company;

                  NOW,  THEREFORE,  the  Company  and  the  Executive  agree  as
follows:

                  1.  Certain  Defined  Terms.  In  addition  to  terms  defined
elsewhere herein,  the following terms have the following  meanings when used in
this Agreement with initial capital letters:

                  (a)      "Base Pay" means the  Executive's  annual  base  
salary  rate as in effect  from time to time.

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



<PAGE>




                  (c) "Cause" means that the Executive  shall have (i) willfully
and  continually  failed to perform his duties with the Company  (other than any
such  failure that is due to physical or mental  incapacity)  after a demand for
substantial performance shall have been delivered to the Executive by the Board,
specifically  identifying  the manner in which the Board  believes the Executive
has not  substantially  performed  his  duties,  or (ii)  willfully  engaged  in
misconduct or illegal conduct that is materially  injurious to the Company.  For
the purposes of this  Section  1(c),  no act or failure to act by the  Executive
shall be  considered  "willful",  unless  done or omitted to be done not in good
faith and without a  reasonable  belief that the act or omission was in the best
interests of the Company,  and the  unwillingness of the Executive to accept any
change in the nature, scope or level of his authority, powers, responsibilities,
functions or duties, a reduction in his total  compensation  (including Base Pay
and Incentive Pay) or Employee Benefits, a relocation of his place of employment
that  the  Executive  deems to be  unreasonable  in the  light  of his  personal
circumstances, or other action by or at the request of the Company in respect of
his position, authority, powers, responsibilities,  functions or duties that the
Executive  reasonably  deems to be  contrary  to this  Agreement,  shall  not be
considered  by the Board to be a failure to perform on the part of the Executive
or to be misconduct or illegal  conduct by the  Executive.  Notwithstanding  the
foregoing, the Executive shall not be deemed to have been terminated for "Cause"
hereunder  unless and until there shall have been  delivered to the  Executive a
copy of a resolution duly adopted by the  affirmative  vote of not less than 75%
of the members of the Board then in office  (excluding for all purposes  related
to this determination,  each member of the Board who is also then an employee of
the Company) at a meeting of the Board  called and held for such purpose  (after
reasonable  notice  to the  Executive  and an  opportunity  for  the  Executive,
together with the  Executive's  counsel (if the  Executive  shall choose to have
counsel present at such meeting), to be heard before the Board) finding that, in
the good faith opinion of the Board,  the Executive shall have been guilty of an
act or omission  constituting  Cause and specifying the  particulars  thereof in
detail.   Nothing   herein  will  limit  the  right  of  the  Executive  or  his
beneficiaries  to contest the  validity or  propriety of any such finding of the
Board.

                  (d)      "Change  in  Control"  means  the  occurrence  during
  the Term of any of the  following events:

                           (i)  The   Company   is   merged,   consolidated   or
         reorganized into or with another corporation or other legal person, and
         as a result of such merger, consolidation or reorganization less than a
         majority of the combined  voting power of the  then-outstanding  Voting
         Stock of such corporation or person  immediately after such transaction
         is held in the  aggregate by the holders of Voting Stock of the Company
         immediately prior to such transaction;

                           (ii) The Company sells or otherwise  transfers all or
         substantially  all of its assets to another  corporation or other legal
         person,  and as a result of such sale or transfer  less than a majority
         of the combined  voting power of the  then-outstanding  Voting Stock of
         such corporation or person  immediately  after such sale or transfer is
         held in the  aggregate  by the  holders of Voting  Stock of the Company
         immediately prior to such sale or transfer;



<PAGE>


                           (iii)  There is a report  filed  on  Schedule  13D or
         Schedule  14D-1  (or  any  successor  schedule,  form  or  report),  as
         promulgated in each case pursuant to the Exchange Act,  disclosing that
         any person (as the term "person" is used in Section 13(d)(3) or Section
         14(d)(2) of the Exchange  Act) (a "Person")  has become the  beneficial
         owner (as the term  "beneficial  owner" is defined  under Rule 13d-3 or
         any successor rule or regulation promulgated under the Exchange Act) of
         securities representing 50% or more of the combined voting power of the
         then-outstanding Voting Stock of the Company;

                           (iv) The  Company  files a report or proxy  statement
         with the  Securities and Exchange  Commission  pursuant to the Exchange
         Act  disclosing  in  response  to  Form  8-K or  Schedule  14A  (or any
         successor  schedule,  form or report or item  therein) that a change in
         control  of the  Company  has  occurred  or will  occur  in the  future
         pursuant to any then-existing contract or transaction; or

                           (v) If, during any period of 24  consecutive  months,
         individuals  who at the  beginning  of any such period  constitute  the
         Directors of the Company  cease for any reason to constitute at least a
         majority  thereof;  provided,  however,  that for the  purposes of this
         clause (v) each Director who is first  elected (or first  nominated for
         election  by  the  Company's  stockholders)  by  a  vote  of  at  least
         two-thirds  of the  Directors  of the Company  then still in office who
         were  Directors of the Company at the beginning of any such period will
         be deemed to have been a Director  of the Company at the  beginning  of
         such period,  but excluding any such Director whose initial  assumption
         of  office  occurs as a result  of an  actual  or  threatened  election
         contest  (within  the meaning of Rule 14a-1 of the  Exchange  Act) with
         respect to the  election  or removal of  Directors  or other  actual or
         threatened  solicitation  of proxies or  consents  by or on behalf of a
         Person other than the Board.

Notwithstanding  the foregoing  provisions  of Sections  1(d)(iii) and 1(d)(iv),
unless otherwise  determined in a specific case by majority vote of the Board, a
"Change in Control"  shall not be deemed to have  occurred  for the  purposes of
Section  1(d)(iii) or 1(d)(iv) solely because (1) the Company,  (2) a Subsidiary
or (3) any Company-sponsored employee stock ownership plan or any other employee
benefit plan of the Company or any Subsidiary  either files or becomes obligated
to file a report or a proxy  statement  under or in response  to  Schedule  13D,
Schedule  14D-1,  Form 8-K or Schedule 14A (or any successor  schedule,  form or
report or item therein) under the Exchange Act disclosing  beneficial  ownership
by it of shares of Voting  Stock in excess of 50% or  otherwise,  or because the
Company  reports  that a change in control of the Company  has  occurred or will
occur in the future by reason of such beneficial ownership.

                  (e) "Competitive Activity" means the Executive's participation
in the management of any business  enterprise  without the written consent of an
officer of the Company, if (i) such enterprise engages in substantial and direct
competition with the Company and such enterprise's  revenues attributable to any
operations that are competitive  with any revenue  generating  operations of the
Company amounted to 10% of such  enterprise's net revenues for its most recently
completed  fiscal year and (ii) the Company's net revenues  attributable to such
operations  amounted to 10% of the  Company's net revenues for its most recently
completed  fiscal  year.  "Competitive  Activity"  shall  not  include  the mere
ownership  of  securities  in any such  enterprise  and the  exercise  of rights
appurtenant thereto and shall not include participation in the management of any
such  enterprise  except in connection with any such  competitive  operations of
such enterprise.



<PAGE>


                  (f) "Employee  Benefits" means the  perquisites,  benefits and
service  credit for benefits as provided  under any and all employee  retirement
income and welfare  benefit plans,  policies,  programs or arrangements in which
the Executive is entitled to participate, including but not limited to any stock
option, performance share, performance unit, stock purchase, stock appreciation,
savings, pension,  supplemental executive retirement, or other retirement income
or welfare benefit,  deferred  compensation,  incentive  compensation,  group or
other life,  health,  medical/hospital  or other  insurance  (whether  funded by
actual  insurance or self-insured  by the Company or a Subsidiary),  disability,
salary  continuation,  expense  reimbursement  and other employee benefit plans,
policies,  programs  or  arrangements  that  may  now  exist  or any  equivalent
successor  plans,  policies,  programs  or  arrangements  that  may  be  adopted
hereafter by the Company or a Subsidiary,  providing  perquisites,  benefits and
service  credit for  benefits at least as great in the  aggregate as are payable
thereunder prior to a Change in Control.

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

                  (h)      "Good Reason" means any of the following:

                           (i) (1) A failure to elect or reelect or otherwise to
         maintain  the   Executive  in  the  office  or  the   position,   or  a
         substantially  equivalent office or position, of or with the Company or
         a  Subsidiary  (or any  successor  thereto  by  operation  of law of or
         otherwise),  as the case may be, that the  Executive  held  immediately
         prior to the Change in Control or (2) the removal of the Executive as a
         Director of the Company or a Subsidiary  (or any successor  thereto) if
         the Executive shall have been a Director of the Company or a Subsidiary
         immediately prior to the Change in Control;

                           (ii) A  significant  adverse  change  in the  nature,
         scope or level of the authority, powers, responsibilities, functions or
         duties  attached to the  position  with the Company and any  Subsidiary
         that the Executive held immediately prior to the Change in Control,  or
         a reduction in the  Executive's  aggregate  Base Pay and  Incentive Pay
         received from the Company and any  Subsidiary,  or the  termination  or
         denial of the Executive's rights to Employee Benefits or a reduction in
         the scope or value  thereof,  any of which shall not have been remedied
         by the Company  within 30 calendar days after receipt by the Company of
         written  notice  from  the  Executive  of  such  change,  reduction  or
         termination, as the case may be;



<PAGE>


                           (iii) A good  faith  determination  by the  Executive
         that a change in circumstances  shall have occurred  following a Change
         in Control,  including  but not limited to a change in the scope of the
         business or other  activities  for which the Executive was  responsible
         immediately  prior to the Change in Control,  which shall have rendered
         the   Executive   substantially   unable  to  carry  out,   shall  have
         substantially  hindered the  Executive's  performance of, or shall have
         caused the Executive to suffer a  substantial  reduction in, any of the
         authority,  powers,  responsibilities,  functions or duties attached to
         the position held by the Executive  immediately  prior to the Change in
         Control  and is not  remedied  within 10  calendar  days after  written
         notice to the Company  from the  Executive of such  determination  (Any
         such determination by the Executive shall be presumed to have been made
         in good faith and shall be final and binding  upon the parties  hereto,
         unless within such  thirty-calendar-day  period,  there shall have been
         delivered to the  Executive a copy of a resolution  duly adopted by the
         affirmative  vote of not less than 75% of the members of the Board then
         in office  (excluding for all purposes  related to this  determination,
         each member of the Board who is also then an  employee of the  Company)
         at a meeting of the Board  called and held for such  purpose  (after an
         opportunity for the Executive,  together with the  Executive's  counsel
         (if  the  Executive  shall  choose  to  have  counsel  present  at such
         meeting), to be heard before the Board) finding that, in the good faith
         opinion of the Board,  such  determination  by the Executive  shall not
         have been made in good faith and specifying in detail the bases of such
         finding.  Nothing  herein will limit the right of the  Executive or his
         beneficiaries  to contest the validity or propriety of any such finding
         of the Board.);

                           (iv)   The    liquidation,    dissolution,    merger,
         consolidation  or  reorganization  of the Company or transfer of all or
         substantially  all of its business or assets,  unless the  successor or
         successors  (by  liquidation,  merger,  consolidation,  reorganization,
         transfer  or  otherwise)  to  which  all  or  substantially  all of the
         Company's  business or assets shall have been transferred (by operation
         of law or otherwise)  shall have assumed all duties and  obligations of
         the Company under this Agreement pursuant to Section 11(a);

                           (v)  A  relocation  of  the   Executive's   place  of
         employment to a place that is more than 50 miles farther from the place
         where he or she shall be  residing  immediately  prior to the Change in
         Control than is the place where he or she shall be employed immediately
         prior to the Change in Control; or

                           (vi) Without limiting the generality or effect of the
         foregoing,  any material breach of this Agreement by the Company or any
         successor  thereto  that is not  remedied  by the  Company (or any such
         successor) within 30 calendar days after receipt by the Company (or any
         such successor) of written notice from the Executive of such breach.

                  (i) "Incentive Pay" means an annual bonus,  incentive or other
payment of  compensation,  in addition to Base Pay, made or to be made in regard
to  services  rendered  in any  year or  other  period  pursuant  to any  bonus,
incentive, profit-sharing,  performance, discretionary pay or similar agreement,
plan, policy, program or arrangement (whether or not funded) of the Company or a
Subsidiary or any successor thereto.

                  (j)   "Retirement   Plans"   means  the   retirement   income,
supplemental executive retirement, excess benefits and retiree medical, life and
similar benefit plans  providing  retirement  perquisites,  benefits and service
credit for benefits at least as great in the aggregate as are payable thereunder
prior to a Change in Control.

                  (k) "Severance  Period" means the period of time commencing on
the date of the first occurrence of a Change in Control and continuing until the
first anniversary of the occurrence of the Change in Control.

                  (l) "Subsidiary" means an entity in which the Company directly
or indirectly beneficially owns 50% or more of the outstanding Voting Stock.



<PAGE>


                  (m) "Term" means the period  commencing  as of the date hereof
and expiring on the later of (i) the close of business on June 30, 2000, or (ii)
the expiration of the Severance Period;  provided,  however, that (1) commencing
on July 1, 1999, and on each July 1 thereafter,  the term of this Agreement will
automatically  be  extended  for an  additional  year  unless the Company or the
Executive  shall have given not less than 90 days' prior written notice that the
Company or the Executive,  as the case may be, does not wish to have the Term so
extended,  and (2) subject to Section 9, if the Executive  ceases for any reason
to be an officer of the Company and any Subsidiary  prior to the occurrence of a
Change in Control,  the Term shall thereupon without further action be deemed to
have expired and this Agreement will immediately  terminate and be of no further
effect. For the purposes of this Section 1(m), the Executive shall not be deemed
to have ceased to be an employee of the Company and any  Subsidiary by reason of
the transfer of Executive's employment among the Company and any Subsidiaries.

                  (n) "Termination Date" means the date on which the Executive's
employment  is  terminated  (the  effective  date of which  shall be the date of
termination  or such other date that may be  specified  by the  Executive if the
termination is by the Executive for Good Reason pursuant to Section 4(a)).

                  (o) "Voting Stock" means securities entitled to vote generally
in the election of directors.

                  2.  Operation  of  Agreement.  (a)  This  Agreement  shall  be
effective and binding  immediately upon its execution,  but  notwithstanding any
other  provision of this  Agreement to the contrary,  this  Agreement  shall not
become  operative  unless and until a Change in Control  shall  occur.  Upon the
occurrence  of a Change in Control at any time during the Term,  this  Agreement
(including  but not limited to Section 9) shall  without  further  action become
immediately  operative,  regardless  of  whether  the Term may have  theretofore
expired.  Until a Change in Control shall occur, the Executive's employment with
the company shall continue to be as an employee at will, and if the  Executive's
employment with the Company or a Subsidiary shall terminate for any reason prior
to the occurrence of a Change in Control, neither the Company nor any Subsidiary
shall have any obligation whatsoever to the Executive under this Agreement. This
Agreement  shall not confer  upon the  Executive  any right to  continue  in the
employ of the Company or a Subsidiary, or obligate the Company or any Subsidiary
to continue the  Executive  in its employ,  unless and until a Change in Control
shall occur.

                  (b) Upon the  occurrence  of a Change in Control,  the Company
shall continue to employ the Executive during the Severance  Period.  During the
Severance Period, the Executive shall exercise such powers and authority,  shall
have such  responsibilities  and shall  perform such duties and functions as are
commensurate  with the powers and authority  exercised by, the  responsibilities
of, and the duties and functions  performed by, the Executive  immediately prior
to the Change in Control,  and the Executive  shall  faithfully and  efficiently
devote  his  full  time  and  attention  during  normal  business  hours to such
responsibilities, duties and functions with the Company.

                  3.       Compensation During Severance Period.  During the 
                           Severance Period:

                  (a) The Executive  shall receive (i) Base Pay in an amount not
less than the highest rate of Base Pay received by the  Executive for any period
prior to the Change in Control and (ii) Incentive Pay in an amount not less than
the largest  amount of Incentive Pay received by the Executive in any year prior
to the Change in Control.



<PAGE>


                  (b) The Executive shall be a full participant in, and shall be
entitled to the perquisites,  benefits and service credit for benefits  provided
under,  any and all plans,  policies,  programs or  arrangements in which senior
executives of the Company  participate  providing Employee  Benefits;  provided,
however,  that the Executive's  rights thereunder shall be governed by the terms
thereof  and shall not be  expanded  hereunder  or  otherwise  affected  hereby;
provided further,  however,  notwithstanding the foregoing, if and to the extent
such Employee Benefits are not payable or provided under any such plan,  policy,
program or arrangement,  the Company shall pay or provide  therefor.  Nothing in
this  Agreement  shall  preclude the  improvement or enhancement of any Employee
Benefits,  provided that no such  improvement  or  enhancement  shall in any way
diminish any other obligation of the Company under this Agreement.

                  4.   Termination   of   Employment   and   Related   Severance
Compensation  Following a Change in Control.  (a) If the Executive's  employment
shall be terminated by the Company or a Subsidiary  during the Severance  Period
for any  reason  other than Cause or the  Executive's  death or the  Executive's
permanent  disability  within the meaning of the  long-term  disability  plan in
effect for (or applicable to) the Executive  immediately  prior to the Change in
Control,  or if the Executive's  employment shall be terminated by the Executive
during the Severance Period for Good Reason,  the Executive shall be entitled to
the severance compensation and benefits described in Annex A to this Agreement.

                  (b) If the Executive's  employment shall be terminated  during
the Severance Period because the Executive becomes  permanently  disabled within
the meaning of the long-term  disability  plan in effect for (or  applicable to)
the Executive immediately prior to the Change in Control, the Executive shall be
entitled to the severance compensation and benefits described in Annex B to this
Agreement.

                  (c) If the Executive's  employment  shall terminate during the
Severance  Period as a result of the Executive's  death,  the Executive shall be
entitled to the severance compensation and benefits described in Annex C to this
Agreement.

                  (d) No termination of the Executive's  employment  pursuant to
Section  4(a),  4(b) or 4(c) shall affect any rights that the Executive may have
pursuant to any agreement,  plan, policy,  program or arrangement of the Company
or any Subsidiary providing Employee Benefits,  and the Executive's rights under
any such agreement,  plan,  policy,  program or arrangement shall be governed by
the terms thereof.

                  (e) Without  limiting the rights of the Executive at law or in
equity,  if the  Company  shall fail to make any  payment or provide any benefit
required to be made or provided  under this  Agreement  on a timely  basis,  the
Company will pay interest on the amount or value thereof at an  annualized  rate
of interest equal to the so-called composite "prime rate" as quoted from time to
time during the  relevant  period in The Wall Street  Journal,  plus 1.0%.  Such
interest will be payable as it accrues on demand.  Any change in such prime rate
will be effective on and as of the date of such change.

                  (f)  Notwithstanding  any other provision of this Agreement to
the contrary,  the parties' respective rights and obligations under this Section
4 and under  Sections 5, 7, 8 and 9 shall survive any  termination or expiration
of this Agreement or the termination of the Executive's  employment  following a
Change in Control for any reason whatsoever.



<PAGE>


                  (g)  Notwithstanding  any  provision  to the  contrary  in any
applicable  plan,  program  or  agreement,  (i)  upon  the  termination  of  the
Executive's employment pursuant to Section 4(a), 4(b) or 4(c), all stock options
then held by the Executive  shall become fully vested and  exercisable and shall
remain so exercisable for a period of 12 months following the Termination  Date,
and (ii) upon the termination of the Executive's  employment pursuant to Section
4(a), all restricted  stock awards then held by the Executive shall become fully
vested and nonforfeitable.

                  (h)  Notwithstanding  any  provision  to the  contrary  in any
applicable agreement,  note or other document evidencing any indebtedness of the
Executive to the Company, (i) upon the termination of the Executive's employment
pursuant to Section 4(a) or 4(b),  the  Executive  shall have 36 months from and
after the Termination  Date in which to repay such  indebtedness,  and (ii) upon
the  termination  of the  Executive's  employment  pursuant to Section 4(c), the
Executive shall have 18 months from and after the  Termination  Date in which to
repay such indebtedness.

                  5.   Certain   Additional   Payments  by  the   Company.   (a)
Notwithstanding  any other  provision of this Agreement to the contrary,  in the
event that this Agreement shall become  operative and it shall be determined (as
hereafter  provided) that any payment (other than the Gross-Up payments provided
for in this Section 5) or  distribution  by the Company or any of its affiliates
to or for the benefit of the  Executive,  whether paid or payable or distributed
or distributable  pursuant to the terms of this Agreement or otherwise  pursuant
to or by reason of any other agreement,  plan,  policy,  program or arrangement,
including but not limited to any stock option,  performance  share,  performance
unit, stock  appreciation right or similar right, or the lapse or termination of
any restriction on or the vesting or  exercisability  of any of the foregoing (a
"Payment"),  would be subject to the excise tax  imposed by Section  4999 of the
Internal  Revenue  Code of 1986,  as  amended  (the  "Code")  (or any  successor
provision  thereto),  by reason of being  considered  "contingent on a change in
ownership or control" of the Company,  within the meaning of Section 280G of the
Code (or any successor provision thereto) or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such tax (such tax or
taxes,   together  with  any  such  interest  and  penalties,   being  hereafter
collectively  referred  to as the "Excise  Tax"),  then the  Executive  shall be
entitled to receive an additional payment or payments (collectively, a "Gross-Up
Payment");  provided,  however,  that no  Gross-up  Payment  shall be made  with
respect to any Excise Tax  attributable to (i) any "incentive  stock option" (as
defined by  Section  422 of the Code)  granted  prior to the  execution  of this
Agreement or (ii) any stock appreciation or similar right granted in tandem with
any  incentive  stock  option.  The Gross-Up  Payment shall be in an amount such
that,  after  payment by the Executive of all taxes  (including  any interest or
penalties imposed with respect to such taxes),  including any Excise Tax imposed
upon the  Gross-Up  Payment,  the  Executive  retains an amount of the  Gross-Up
Payment equal to the Excise Tax imposed upon the Payment.



<PAGE>


                  (b)  Subject  to  the   provisions   of  Section   5(f),   all
determinations  required to be made under this Section 5, including  whether any
Excise Tax is payable by the Executive and the amount of any such Excise Tax and
whether  a  Gross-Up  Payment  is  required  to be  paid by the  Company  to the
Executive  and the  amount  of any  such  Gross-Up  Payment,  shall be made by a
nationally  recognized  accounting firm (the "Accounting  Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its  determination  and detailed  supporting  calculations to both the
Company and the Executive within 30 calendar days after the Termination Date, if
applicable,  and any such other time or times as may be requested by the Company
or the  Executive.  If the  Accounting  Firm  determines  that any Excise Tax is
payable by the Executive, the Company shall pay the required Gross-Up Payment to
the Executive within five business days after receipt of such  determination and
calculations  with respect to any Payment to the  Executive.  If the  Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall deliver
to  the  Company  and  the  Executive  at  the  same  time  as it  makes  such a
determination  an opinion that the  Executive has  substantial  authority not to
report any Excise Tax on his federal, state or local income or other tax return.
As a result of the  uncertainty  in the  application of Section 4999 of the Code
(or any successor  provision thereto) and the possibility of similar uncertainty
regarding  applicable state or local tax law at the time of any determination by
the Accounting Firm hereunder,  it is possible that Gross-Up Payments that shall
not have been made by the  Company  should  have been made (an  "Underpayment"),
consistent with the  calculations  required to be made  hereunder.  In the event
that the Company  exhausts or fails to pursue its  remedies  pursuant to Section
5(f) and the  Executive  thereafter  is required to make a payment of any Excise
Tax, the Executive  shall direct the Accounting  Firm to determine the amount of
the Underpayment  that has occurred and to submit its determination and detailed
supporting  calculations  to both the Company and the  Executive  as promptly as
possible. Any such Underpayment shall be promptly paid by the Company to, or for
the benefit of, the  Executive  within five  business days after receipt of such
determination and calculations.

                  (c) The  Company  and the  Executive  shall each  provide  the
Accounting Firm access to and copies of any books,  records and documents in the
possession  of the  Company  or the  Executive,  as the case may be,  reasonably
requested  by the  Accounting  Firm  and  shall  otherwise  cooperate  with  the
Accounting  Firm  in  connection  with  the  preparation  and  issuance  of  the
determinations and calculations  contemplated by Section 5(b). Any determination
by the Accounting Firm as to the amount of the Gross-Up Payment shall be binding
upon the Company and the Executive.

                  (d) The  federal,  state and local income or other tax returns
filed by the  Executive  shall be prepared and filed on a consistent  basis with
the  determination of the Accounting Firm with respect to any Excise Tax payable
by the Executive.  The Executive  shall make proper payment of the amount of any
Excise Tax and, at the request of the Company, shall provide to the Company true
and correct  copies (with any  amendments)  of his federal  income tax return as
filed with the Internal Revenue Service and any relevant corresponding state and
local tax returns as filed with the applicable taxing authority,  and such other
documents reasonably requested by the Company, evidencing such payment. If prior
to the filing of the  Executive's  federal  income  tax  return or any  relevant
corresponding state or local tax return, the Accounting Firm determines that the
amount of the Gross-Up  Payment  should be reduced,  the Executive  shall within
five business days pay to the Company the amount of such reduction.

                  (e) The  fees  and  expenses  of the  Accounting  Firm for its
services in connection with the determinations and calculations  contemplated by
Section  5(b)  shall be borne by the  Company.  If such  fees and  expenses  are
initially paid by the Executive,  the Company shall  reimburse the Executive the
full amount of such fees and expenses  within five  business  days after receipt
from the  Executive  of a  statement  therefor  and  reasonable  evidence of his
payment thereof.



<PAGE>


                  (f) The  Executive  shall notify the Company in writing of any
claim by the Internal  Revenue  Service or any other taxing  authority  that, if
successful, would require the payment by the Company of a Gross-Up Payment. Such
notification  shall be given as  promptly  as  practicable  but no later than 10
business days after the Executive actually receives notice of such claim and the
Executive  shall further apprise the Company of the nature of such claim and the
date on which such claim is  requested  to be paid (in each case,  to the extent
known by the  Executive).  The  Executive  shall not pay such claim prior to the
earlier of (i) the expiration of the  thirty-calendar-day  period  following the
date on which he gives  such  notice to the  Company  and (ii) the date that any
payment of any amount with respect to such claim is due. If the Company notifies
the Executive in writing prior to the  expiration of such period that it desires
to contest such claim, the Executive shall:

                           (i) provide the Company  with any written  records or
         documents in his possession relating to such claim reasonably requested
         by the Company;

                           (ii) take such action in connection  with  contesting
         such claim as the Company shall reasonably request in writing from time
         to time,  including but not limited to accepting  legal  representation
         with  respect to such claim by an attorney  competent in respect of the
         subject matter and reasonably selected by the Company;

                           (iii)  cooperate  with the  Company  in good faith in
         order to effectively contest such claim; and

                           (iv)     permit the Company to participate in any 
         proceedings relating to such claim;

provided,  however,  that the Company  shall bear and pay directly all costs and
expenses  (including  interest and penalties)  incurred in connection  with such
contest and shall  indemnify  and hold harmless the  Executive,  on an after-tax
basis,  from and against any Excise Tax or income tax,  including  interest  and
penalties with respect thereto,  imposed as a result of such  representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Section 5(f), the Company shall control all proceedings taken in connection with
the  contest of any claim  contemplated  by this  Section  5(f) and, at its sole
option,  may pursue or forego any and all administrative  appeals,  proceedings,
hearings  and  conferences  with the taxing  authority  in respect of such claim
(provided  that  the  Executive  may  participate  therein  at his own  cost and
expense)  and may at its  option  either  direct  the  Executive  to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Executive  agrees to prosecute  such contest to a  determination  before any
administrative  tribunal,  in a court of initial jurisdiction and in one or more
appellate  courts,  as the Company shall determine;  provided,  however,  if the
Company  directs the Executive to pay the tax claimed and sue for a refund,  the
Company  shall  advance  the  amount  of such  payment  to the  Executive  on an
interest-free  basis and shall indemnify and hold harmless the Executive,  on an
after-tax basis, from any Excise Tax or income or other tax,  including interest
or  penalties  with  respect  thereto,  imposed  with  respect to such  advance;
provided  further,  however,  that any  extension of the statute of  limitations
relating to payment of taxes for the taxable year of the Executive  with respect
to which the  contested  amount is claimed  to be due is limited  solely to such
contested amount. Furthermore, the Company's control of any such contested claim
shall be limited to issues  with  respect to which a Gross-Up  Payment  would be
payable  hereunder and the Executive shall be entitled to settle or contest,  as
the case may be, any other issue raised by the Internal  Revenue  Service or any
other taxing authority.



<PAGE>


                  (g) If,  after  the  receipt  by the  Executive  of an  amount
advanced by the Company  pursuant to Section 5(f),  the  Executive  receives any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 5(f)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
any taxes  applicable  thereto).  If,  after the receipt by the  Executive of an
amount advanced by the Company pursuant to Section 5(f), a determination is made
that the  Executive  shall not be entitled  to any refund  with  respect to such
claim and the Company does not notify the  Executive in writing of its intent to
contest such denial or refund prior to the  expiration of 30 calendar days after
such  determination,  then  such  advance  shall be  forgiven  and  shall not be
required to be repaid and the amount of any such advance  shall  offset,  to the
extent  thereof,  the  amount of  Gross-Up  Payment  required  to be paid by the
Company to the Executive pursuant to this Section 5.

                  6. No Mitigation  Obligation.  The Company hereby acknowledges
that it will  be  difficult  and may be  impossible  for the  Executive  to find
reasonably  comparable  employment  following the Termination  Date and that the
non-competition   covenant  contained  in  Section  8  will  further  limit  the
employment   opportunities   for  the  Executive.   In  addition,   the  Company
acknowledges  that its severance pay plans applicable in general to its salaried
employees do not provide for  mitigation,  offset or reduction of any  severance
payment  received  thereunder.   Accordingly,   the  payment  of  the  severance
compensation  by the Company to the  Executive in  accordance  with the terms of
this Agreement is hereby  acknowledged by the Company to be reasonable,  and the
Executive  will not be required to mitigate  the amount of any payment  provided
for in this Agreement by seeking other employment or otherwise,  and no profits,
income,  earnings or other benefits from any source  whatsoever  will create any
mitigation,  offset,  reduction  or any  other  obligation  on the  part  of the
Executive  hereunder  or  otherwise,  except as  expressly  provided in the last
sentence of Paragraph 2 set forth on Annex A.

                  7.  Legal  Fees  and  Expenses.  (a) It is the  intent  of the
Company that the  Executive  not be required to incur legal fees and the related
expenses  associated  with  the   interpretation,   enforcement  or  defense  of
Executive's rights under this Agreement by litigation or otherwise,  because the
cost and expense thereof would substantially  detract from the benefits intended
to be extended to the Executive hereunder.  Accordingly,  if it should appear to
the Executive that the Company has failed to comply with any of its  obligations
under this  Agreement or in the event that the Company or any other person takes
or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any  litigation or other action or proceeding  designed to deny or
recover from the Executive  the benefits  provided or intended to be provided to
the Executive hereunder,  the Company irrevocably  authorizes the Executive from
time to time to retain  counsel of  Executive's  choice,  at the  expense of the
Company  as  hereafter  provided,  to advise  and  represent  the  Executive  in
connection with any such interpretation,  enforcement or defense,  including but
not  limited  to the  initiation  or defense of any  litigation  or other  legal
action, whether by or against the Company or any Director, officer,  stockholder
or  other   person   affiliated   with  the   Company,   in  any   jurisdiction.
Notwithstanding any existing or prior  attorney-client  relationship between the
Company and such counsel,  the Company  irrevocably  consents to the Executive's
entering into an  attorney-client  relationship  with such counsel,  and in that
connection the Company and the Executive agree that a confidential  relationship
shall exist between the Executive and such counsel.  Without  respect to whether
the  Executive  prevails  in  whole  or in part in  connection  with  any of the
foregoing,  the Company will pay and be solely  financially  responsible for any
and all  attorneys'  and related fees and expenses  incurred by the Executive in
connection  with  any of the  foregoing  up to a  maximum  aggregate  amount  of
$100,000,  provided that, in regard to such matters, the Executive has not acted
in bad faith or with no colorable claim of success.



<PAGE>


                  (b) Without  limiting the obligations of the Company  pursuant
to  Section  7(a)  hereof,  in the event that a Change in  Control  occurs,  the
performance of the Company's  obligations  under this Section 7 shall be secured
by amounts, which shall in the aggregate be not less than $100,000, deposited or
to be  deposited  in trust  pursuant to certain  trust  agreements  to which the
Company  shall  be a party  providing  that the fees  and  expenses  of  counsel
selected  from time to time by the  Executive  pursuant to Section 7(a) shall be
paid,  or  reimbursed  to the  Executive  if paid by the  Executive,  either  in
accordance with the terms of such trust agreements or, if not so provided,  upon
presentation from time to time by the Executive to the trustee of a statement or
statements prepared by such counsel in accordance with its customary  practices.
Any failure by the Company to satisfy any of its obligations  under this Section
7(b)  shall not limit the  rights of the  Executive  hereunder.  Subject  to the
foregoing,  the Executive shall have the status of a general unsecured  creditor
of the Company and shall have no right to, or security  interest  in, any assets
of the Company or any Subsidiary.

                  8. Competitive Activity; Confidentiality; Nonsolicitation. (a)
If the Executive's  employment shall be terminated  pursuant to Section 4(a) and
the  Executive  shall have received or shall be receiving  benefits  pursuant to
Section 4(a) and, if  applicable,  Section 5, the Executive  shall not engage in
any Competitive Activity for one year from and after the Termination Date in any
geographical  market where the Company  shall be  operating  on the  Termination
Date.

                  (b) During the Term,  the Company agrees that it will disclose
to Executive its  confidential  or proprietary  information  (as defined in this
Section 8(b)) to the extent necessary for Executive to carry out his obligations
to the Company.  The Executive  hereby  covenants  and agrees that,  without the
prior written consent of the Company,  he will not during the Term or thereafter
disclose to any person not employed or otherwise engaged by the Company,  or use
in connection with engaging in competition with the Company, any confidential or
proprietary information of the Company. For the purposes of this Agreement,  the
term  "confidential or proprietary  information" will include all information of
any  nature  and in any form that is owned by the  Company  and is not  publicly
available  (other than by Executive's  breach of this Section 8(b)) or generally
known to  persons  engaged  in  businesses  similar  or  related to those of the
Company.  Confidential or proprietary  information will include, but will not be
limited to, the Company's  financial  matters,  customers,  employees,  industry
contracts,  strategic business plans,  product development (or other proprietary
product data),  marketing plans, and all other secrets and all other information
of a confidential or proprietary  nature.  For the purposes of the two preceding
sentences,  the term "Company"  will also include any Subsidiary  (collectively,
the "Restricted Group"). The foregoing  obligations imposed by this Section 8(b)
will not apply (i) in the course of the  business  of and for the benefit of the
Company during the Term, (ii) if such  confidential  or proprietary  information
shall  have  become  generally  known  to the  public  through  no  fault of the
Executive or (iii) if the Executive is required by law to make disclosure (after
giving the Company notice and an opportunity to contest such requirement).

                  (c) If the Executive's employment shall be terminated pursuant
to Section  4(a) and the  Executive  shall have  received or shall be  receiving
benefits  pursuant to Section 4(a) and, if applicable,  Section 5, the Executive
hereby  covenants and agrees that,  for one year from and after the  Termination
Date, the Executive will not,  without the prior written  consent of the Company
(which  consent shall not  unreasonably  be withheld)  directly or indirectly on
behalf of himself or on behalf of any other person, firm or company,  attempt to
influence,  persuade or induce,  or assist any other person in so  persuading or
inducing,  any employee of the Restricted  Group to give up, or to not commence,
employment or a business relationship with the Restricted Group.



<PAGE>


                  9. Termination of Employment Prior to and in Anticipation of a
Change in Control.  Notwithstanding any other provision of this Agreement to the
contrary,  if a Change in Control occurs and not more than 180 days prior to the
date on which the Change in Control occurs, the Executive's  employment with the
Company is terminated by the Company or the Executive  terminates his employment
for  Good  Reason,  such  termination  of  employment  shall be  deemed  to be a
termination of employment pursuant to Section 4(a) following a Change in Control
and during  the  Severance  Period for the  purposes  of this  Agreement  if the
Executive shall have reasonably demonstrated that such termination of employment
(i)  was at the  request  of a  third  party  who  has  taken  steps  reasonably
calculated to effect a Change in Control or (ii)  otherwise  arose in connection
with or in anticipation of a Change in Control.

                  10.  Withholding  of Taxes.  The Company may withhold from any
amounts  payable under this  Agreement all such federal,  state,  local or other
taxes as the Company is required to  withhold  pursuant to any  applicable  law,
regulation or ruling.

                  11.  Successors  and Binding  Agreement.  (a) The Company will
require  any  successor  (whether  direct  or  indirect,  by  purchase,  merger,
consolidation,  reorganization  or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance reasonably
satisfactory  to the  Executive,  to expressly  assume and agree to perform this
Agreement  in the  same  manner  and to the same  extent  the  Company  would be
required to perform if no such  succession had taken place.  This Agreement will
be binding upon and inure to the benefit of the Company and any successor to the
Company,  including  but  not  limited  to any  persons  acquiring  directly  or
indirectly all or substantially  all of the business or assets of the Company by
purchase, merger, consolidation, reorganization or otherwise (and such successor
shall thereafter be deemed the "Company" for the purposes of this Agreement) but
will not otherwise be assignable, transferable or delegable by the Company.

                  (b)  This  Agreement  will  inure  to  the  benefit  of and be
enforceable by the  Executive's  personal or legal  representatives,  executors,
administrators, successors, heirs, distributees and legatees.

                  (c) This  Agreement  is  personal in nature and neither of the
parties  hereto shall assign,  transfer or delegate this Agreement or any rights
or obligations  hereunder without the consent of the other,  except as expressly
provided in Sections 11(a) and 11(b).  Without limiting the generality or effect
of the foregoing,  the Executive's right to receive payments  hereunder will not
be  assignable,  transferable  or  delegable  by pledge,  creation of a security
interest or otherwise,  except by a transfer by the Executive's will or the laws
of descent and  distribution,  and in the event of any  attempted  assignment or
transfer  contrary to this Section 11(c), the Company shall have no liability to
pay any amount so attempted to be assigned, transferred or delegated.

                  12.  Notices.   For  all  purposes  of  this  Agreement,   all
communications,  including  but not  limited to notices,  consents,  requests or
approvals,  required or permitted to be given  hereunder  will be in writing and
will be deemed to have been duly  given when hand  delivered  or  dispatched  by
electronic  facsimile  transmission (with receipt thereof orally confirmed),  or
five business  days after having been mailed by  registered or certified  United
States mail (return receipt  requested and postage  prepaid),  or three business
days  after  having  been  sent by a  nationally  recognized  overnight  courier
service,  addressed  to the Company (to the  attention  of the  Secretary of the
Company) at its principal  executive office or to the Executive at his principal
residence,  as the case may be, or to such other  address as either  party shall
furnish to the other in writing and in accordance herewith,  except that notices
of changes of address shall be effective only upon receipt.



<PAGE>


                  13. Governing Law. The validity, interpretation,  construction
and  performance  of  this  Agreement  will  be  governed  by and  construed  in
accordance  with the substantive  laws of the State of Illinois,  without giving
effect to the principles of conflict of laws thereof.

                  14.  Validity.  If any  provision  of  this  Agreement  or the
application  of any  provision  hereof to any  person or  circumstances  is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances  will not
be affected, and the provision so held to be invalid, unenforceable or otherwise
illegal  will be reformed to the extent  (and only to the extent)  necessary  to
make it enforceable, valid or legal.

                  15.  Miscellaneous.  No  provision  of this  Agreement  may be
modified, waived or discharged unless such waiver,  modification or discharge is
agreed to in a writing  signed by the  Executive  and the Company.  No waiver by
either  party  hereto at any time of any  breach by the  other  party  hereto or
compliance  with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar  provisions or
conditions  at the same or at any prior or  subsequent  time.  No  agreements or
representations,  oral or written or expressed  or implied,  with respect to the
subject  matter  hereof  have been made by either  party  that are not set forth
expressly  in this  Agreement.  References  to  Sections  are to  references  to
Sections of this Agreement.

                  16.  Counterparts.  This  Agreement  may be executed in one or
more  counterparts,  each of which shall be deemed to be an original  and all of
which together will constitute one and the same agreement.

                  17. Prior Agreement. This Agreement supersedes in its entirety
the Change in Control  Agreement  dated as of September  20,  1997,  between the
Company and the Executive.


<PAGE>




                  IN WITNESS WHEREOF,  the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.



                                                     GREAT LAKES REIT, INC.


                                                     By:  
                                                           Name  
                                                           Title           



                                                                           


<PAGE>




                                                                Annex A


                                                     Severance Compensation


                  (1) A lump sum payment in an amount equal to two times the sum
of (a) Base Pay (at the  highest  rate in  effect  for any  period  prior to the
Termination  Date) and (b) an amount equal to the average Incentive Pay received
by the  Executive in each of the three most recently  completed  fiscal years of
the Company (or any successor  thereto)  immediately  preceding the  Termination
Date or, if greater, the average Incentive Pay received by the Executive in each
of the  three  most  recently  completed  fiscal  years of the  Company  (or any
successor thereto) immediately preceding the Change in Control.

                  (2) For a period of 12 months  following the Termination  Date
(the "Continuation  Period"), the Company will provide the Executive (at no cost
to the Executive) with Employee  Benefits that are welfare  benefits  (including
medical,  dental and other group health plan benefits)  substantially similar to
those that the Executive was receiving or entitled to receive  immediately prior
to the  Termination  Date or, if  greater,  immediately  prior to the  Change in
Control.  If and to the extent that any benefit described in this Paragraph 2 is
not or cannot be paid or provided under any plan, policy, program or arrangement
of the Company or any  Subsidiary,  as the case may be,  then the  Company  will
itself pay or provide for the payment to the  Executive,  and his dependents and
beneficiaries,  of such  Employee  Benefits  (together  with, in the case of any
benefit  described in this  Paragraph 2 that is subject to tax because it is not
or  cannot  be  paid or  provided  under  any  such  plan,  policy,  program  or
arrangement of the Company or any  Subsidiary,  an additional  amount such that,
after payment by the Executive or his dependents or  beneficiaries,  as the case
may be, of all taxes so imposed,  the recipient  retains an amount equal to such
taxes).  Notwithstanding  the foregoing or any other provision of the Agreement,
for the purpose of determining the period of continuation  coverage to which the
Executive or any of his  dependents is entitled  pursuant to Section 601 et seq.
of the  Employee  Retirement  Income  Security  Act of 1974,  as amended (or any
successor  provision  thereto),  and Section 4980B of the Code (or any successor
provision  thereto) under the Company's  medical,  dental and other group health
plans (or successor  plans),  the  Executive's  "qualifying  event" shall be the
termination of the Continuation  Period and the Executive shall be considered to
have remained actively employed on a full-time basis through that date.  Without
otherwise  limiting  the  purposes  or  effect of  Section  6 of the  Agreement,
Employee  Benefits  otherwise  receivable  by the  Executive  pursuant  to  this
Paragraph  2 will be reduced  to the  extent  comparable  welfare  benefits  are
actually received by the Executive from another employer during the Continuation
Period,  and any such  benefits  actually  received  by the  Executive  shall be
reported by the Executive to the Company.



<PAGE>




                  (3)  In  addition  to  the  retirement  income,   supplemental
executive  retirement,  and other  benefits to which the  Executive  is entitled
under the Company's  Retirement  Plans, a lump sum payment in an amount equal to
the  actuarial  equivalent of the excess of (a) the  retirement  pension and the
medical,  life and other  benefits that would be payable to the Executive  under
the  Retirement  Plans if the  Executive  continued  to be employed  through the
Continuation  Period given the Executive's  Base Pay (as determined in Paragraph
1) (without regard to any amendment to the Retirement Plans made subsequent to a
Change in Control  that  adversely  affects in any  manner  the  computation  of
retirement or welfare benefits thereunder),  less (b) the retirement pension and
the medical,  life and other  benefits that the Executive is entitled to receive
(either  immediately or on a deferred basis) under the Retirement Plans. For the
purposes of this Paragraph 3, "actuarial  equivalent"  shall be determined using
the  same  methods  and  assumptions  utilized  under  the  Company's  qualified
retirement plan for salaried employees in effect immediately prior to the Change
in Control.



<PAGE>




                                                                     Annex B



                                                     Severance Compensation


                  (1) A lump sum  payment  in an amount  equal to the sum of (a)
Base Pay (at the highest rate in effect for any period prior to the  Termination
Date) and (b) an amount  equal to the  product of (i) the  target  amount of the
Executive's  Incentive  Pay for the then current  fiscal year of the Company (or
any successor  thereto),  multiplied by (ii) a fraction,  the numerator of which
shall be the number of days in the then  current  fiscal year of the Company (or
any  successor  thereto)  that  shall  have  elapsed  up to  and  including  the
Termination Date and the denominator of which shall be 365.

                  (2) For a period of 12 months  following the Termination  Date
or such longer  period of time as may be required  under  Section 601 et seq. of
the Employee  Retirement  Income Security Act of 1974, as amended  ("ERISA") (or
any  successor  provision  thereto),  and  Section  4980B  of the  Code  (or any
successor  provision  thereto),  the Company will provide the  Executive (at the
Executive's expense and in accordance with Section 601 et. seq. of ERISA (or any
successor  provision  thereto) and Section  4980B of the Code (or any  successor
provision  thereto)) with Employee Benefits that are welfare benefits (including
medical,  dental and other group health plan benefits)  substantially similar to
those that the Executive was receiving or entitled to receive  immediately prior
to the  Termination  Date or, if  greater,  immediately  prior to the  Change in
Control.





<PAGE>


                                                                Annex C



                                                     Severance Compensation


                  A lump sum  payment in an amount  equal to the sum of (1) Base
Pay (at the highest rate in effect for any period prior to the Termination Date)
and  (2) an  amount  equal  to the  product  of (a)  the  target  amount  of the
Executive's  Incentive  Pay for the then current  fiscal year of the Company (or
any successor  thereto),  multiplied  by (b) a fraction,  the numerator of which
shall be the number of days in the then  current  fiscal  year of the Company or
any  successor  thereto)  that  shall  have  elapsed  up to  and  including  the
Termination Date and the denominator of which shall be 365.




<PAGE>