NON-QUALIFIED STOCK OPTION AGREEMENT
                       Option Granted January 28, 1997
                                      by
                          The Interlake Corporation

           WHEREAS,      (hereinafter called the "Optionee"), is a non-employee
director of The Interlake Corporation (hereinafter called the "Corporation") or
a subsidiary thereof;

           WHEREAS, the Board of Directors of the Corporation has by resolution
dated January 28, 1997 ("Program") authorized the granting to each non-employee
director of the Corporation of options to buy from the Corporation shares of
common stock, par value $1 a share; and

           WHEREAS, the execution of a stock option agreement in the form hereof
has been authorized by such resolution of the Board of Directors of the
Corporation;

           NOW, THEREFORE, the Corporation hereby grants to the Optionee an
option to purchase 10,000  shares of common stock, par value $1 per share, of
the Corporation (or any security into which such shares may be changed by reason
of any transaction or event described in Paragraph 16(a) of the Program) at the
price of Four Dollars and Thirty-Six Cents ($4.36) per share, upon the terms and
conditions hereinafter set forth. 

               1.  Until terminated, as hereinafter provided, this option may be
           exercised in whole or in part from time-to-time as follows:

                  (a) In full, upon a "change in control," as hereinafter
               defined; and 
                  (b) Unless exercisable in full by reason of a change in
               control, to the extent of the following aggregate percentages of
               the number of shares specified above after the dates set forth
               below

                  April 29, 1998                       33 percent
                  April 29, 1999                       66 percent
                  April 29, 2000                       100 percent

           Upon the exercise of this option when fewer than all installments set
forth in sub-paragraph (b) are exercisable, any fractional share shall be
rounded down to the nearest whole share.

               2.  The option price may, at the election of the Optionee, be
           paid (i) in cash or by check acceptable to the Corporation or (ii) by
           transfer to the Corporation of shares of common stock of the
           Corporation having a value (such shares to be valued, for purposes of
           this paragraph, at the average of the high and low prices quoted on
           the New York Stock Exchange Composite Transactions for the date upon
           which the Optionee's exercise of stock option is received) equal to
           the total option price, or (iii) any combination of whole shares and
           funds equal to the total option price.  Upon receipt of the payments
           referred to in the preceding sentence, the Corporation agrees to
           cause certificates for any shares purchased hereunder to be delivered
           to the Optionee.

              3.  This option shall terminate on the earliest of the following
           dates: 
              
                  (a) Two years after the Optionee ceases to be a director of
              the Corporation; or

                  (b) January 28, 2007

              In the event the Optionee shall intentionally commit an act
           materially inimical to the interests of the Corporation or a
           subsidiary, this option shall terminate upon a finding by the Board
           of Directors of the Corporation to that effect, notwithstanding any
           other provision of this agreement.

              4.  This option is not transferrable by the Optionee otherwise
           than by will or the laws of descent and distribution, and is
           exercisable, during the lifetime of the Optionee, only by him or by
           his legal guardian or legal representative.

              5.  This option shall not be exercisable if such exercise would
           involve a violation of any applicable federal or state securities
           laws.  The Corporation hereby agrees to make reasonable efforts to
           comply with any applicable securities laws.

              6.  The Board of Directors of the Corporation shall make or
           provide for such adjustments in the number of shares of common stock
           covered by outstanding stock options granted hereunder, in the option
           price applicable to such stock options, and in the kind of securities
           covered thereby, as the Committee in its sole discretion, exercised
           in good faith, determines is equitably required to prevent dilution
           or enlargement of the rights of Optionees that otherwise would result
           from (a) any stock dividend, stock split, combination of shares,
           recapitalization or other change in the capital structure of the
           Corporation, or (b) any merger, consolidation, spin-off,
           reorganization, partial or complete liquidation, repurchase or
           exchange of shares, issuance of rights or warrants to purchase
           securities, or (c) any other corporate transaction or event having an
           effect similar to any of the foregoing.  No adjustment provided in
           this Paragraph 6 shall require the Corporation to sell any fractional
           shares.

              7.  The term "change in control," as used in this agreement, means
           the occurrence of any of the following events while the Optionee is
           employed by the Corporation or a subsidiary:

                  (a)  The Corporation is merged or consolidated or reorganized
              into or with another corporation or other legal person and as a
              result of such merger, consolidation or reorganization less than
              75% of the outstanding voting securities or other capital
              interests of the surviving, resulting or acquiring corporation or
              other legal person are owned in the aggregate by the stockholders
              of the Corporation immediately prior to such merger, consolidation
              or reorganization;

                  (b)  The Corporation sells all or substantially all of its
              business and/or assets to any other corporation or other legal
              person, less than 75% of the outstanding voting securities or
              other capital interests of which are owned in the aggregate by the
              stockholders of the Corporation, directly or indirectly,
              immediately prior to or after such sale;

                  (c)  There is a report filed on Schedule 13D or Schedule 14D-1
              (or any successor schedule, form or report) each as promulgated
              pursuant to the Securities Exchange Act of 1934 (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) 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 25% or more of the issued
              and outstanding shares of voting securities of the Corporation; or

                  (d)  During any period of two consecutive years, individuals
              who at the beginning of any such period constitute the directors
              of the Corporation cease for any reason to constitute at least a
              majority thereof unless the election, or the nomination for
              election by the Corporation's stockholders, of each new director
              of the Corporation was approved by a vote of at least two-thirds
              of such directors of the Corporation then still in office who were
              directors of the Corporation at the beginning of any such period.

              8.  This option is intended to be a non-qualified stock option and
           shall not be treated as an incentive stock option within the meaning
           of the Internal Revenue Code of 1986, as the same has been heretofore
           or may hereafter be amended.

Executed at Lisle, Illinois, as of January 28, 1997.

                                          THE INTERLAKE CORPORATION



                                         
                                          By____________________________
                                               Stephen R. Smith
                                               Vice President, Secretary
                                                and General Counsel
                                                


Receipt Acknowledged and Non-Qualified Stock Option Agreement
Accepted this       day of  ________________, 1997.



                                          Signed:                 
                        
    

                                          Name: