THE INTERLAKE CORPORATION            EXHIBIT 10.1


                     1996 Senior Executive Incentive Program


                               Section 1.  Purpose
          l.l  Purpose  The purpose of the Senior Executive Incentive  Program
("the Program") is to promote improved performance both in 1996, through an
Annual Plan, and over the three-year period running through 1998, through a
Long Term Plan, in each case through the provision of meaningful incentives for
the achievement of specified financial and individual goals.


                    Section 2.   Eligibility and Participation

          2.l  Eligibility   Eligibility for participation in this Program is
limited to those Employees deemed to be, by virtue of the nature and scope of
their positions, most able to promote the achievement by the Company of its
financial objectives and its overall success.

          2.2  Participation   Participation in the Program will be determined
by the Board, based upon the recommendation of the Chief Executive Officer and
the Compensation Committee.  

          2.3  Award Opportunities.   For each Participant, and for each of
the Annual Plan and the Long Term Plan, the Board will designate, upon the
recommendations of the Chief Executive Officer and the Compensation Committee,
the Threshold, Plan, Target and Stretch goals for each relevant Performance
Measure, and the amount of Award payable to such Participant upon achievement
of such goals ("Award Opportunities").

          2.4  Organizational Units.  For each Participant the Board will
designate, upon the recommendations of the Chief Executive Officer and the
Compensation Committee, the Organizational Unit upon the performance of which
such Participant s Awards will be based (e.g., Corporate, Hoeganaes
Corporation, Chem-tronics, Inc., Material Handling-Worldwide, etc.).

          2.5  Changes In Participation During Year  Contemporaneously with
the demotion or reassignment of a Participant, the Board or the Chief Executive
Officer may terminate a Participant s participation in this Program without
otherwise affecting the employment status of such Employee.  The Employee will
be notified of such termination as soon as practicable following such action. 
In the case of such a termination, any Annual Award to which the terminated
Participant s would have been entitled will be pro rated based upon that
portion of the Year during which he was a Participant, adjusted for personal
performance; and any LTP Award to which such Participant would have been
entitled will be pro rated based upon the ratio of the number of complete
fiscal years the Participant was employed during the LTP Period to three (3).

          2.6  No Right to Participate   No Participant or other Employee at
any time shall have a right to be selected for participation in this Program,
despite having been approved for participation in some other year, nor any
right to be selected for participation in any plan or program for any other
year, despite having been selected for participation in this Program.


                  Section 3.  Annual Plan -- Award Determination

          3.1  Performance Measures.  Annual Awards will be based on the
following Performance Measures in the percentages indicated:

          Corporate Participants          Weighting Factor
          
            Corporate EBIT                   50  %
            Corporate ACWC/S                 30  %
            Corporate Revenue Growth         10  %
            Individual Competencies          10  %      


          Participants in Organizational
          Units Other Than Corporate      Weighting Factor
          
            Organizational Unit EBIT          40 %
            Organizational Unit ACWC/S        24 %
            Organizational Unit Revenue Growth    
           8 %
            Individual Competencies                  8 %     

Total Organizational Portion                            80%

            Corporate EBIT                    10 %
            Corporate ACWC/S                   5 %
            Corporate Revenue Growth           5 %       20  %
                                                        100 %
          
          3.2  Annual Award Calculation.  Each Participant's Annual Award will
equal the sum of the amounts earned based on the Award Opportunities set for
such Participant in accordance with Section 2.3 for the relevant Annual
Performance Measures set by the Board in accordance with Sections 2.3 and 3.1,
with interpolation between the Threshold, Plan, Target and Stretch goals in
determining the amount earned with respect to each Annual Performance Measure. 
All determinations of Annual Awards by the Board will be conclusive, absent
manifest error.

          3.3  Annual EBIT Threshold.  Notwithstanding any other provision of
this Section 3, a Participant may not, in the case of a Corporate Participant,
earn any Annual Award, and in the case of any other Participant, earn any
Annual Award based on the 80% Award Opportunity related to his or her
Organizational Unit, unless his or her Organizational Unit meets its EBIT
Threshold.  A Participant in an Organizational Unit other than Corporate may
not earn any Annual Award based on the 20% Award Opportunity related to
Corporate performance unless Corporate meets its EBIT Threshold.

          3.4  Corporate Participants - No Default on Indebtedness.  No
Corporate Participant may earn any Annual Award if the Company shall, during
the course of the Year, default in the payment of principal or interest when
due under any note, debenture or other instrument evidencing borrowed money,
which default is not cured within the applicable cure period. 


                Section 4.   Long Term Plan -- Award Determination

          4.1  LTP Performance Measure.  Each Participant s LTP Award will be
based on the EBIT Margin achieved by the Company on a consolidated basis over
the LTP Period (the "LTP Performance Measure").
          
          4.2  LTP Awards Calculation.   Each Participant s LTP Award will
equal the amount earned based on the Award Opportunity set for such Participant
in accordance with Section 2.3 based on achievement against the LTP Performance
Measure, with interpolation between the Threshold, Plan, Target and Stretch
goals in determining the amount earned with respect to such LTP Performance
Measure.  All determinations of LTP Awards by the Board will be conclusive,
absent manifest error.


                          Section 5.  Payment of Awards

          5.1  Timing.  Awards under the Annual Plan will be paid as soon as
practicable following the end of the Year as the Board may determine.  Awards
under the Long Term Plan will be paid as soon as practicable following the end
of the LTP Period as the Board may determine.

          5.2  Form of Payment.  All awards will be paid:

               (a)                        Cash portion.   Seventy percent (70%)
in cash; and

               (b)                        Stock portion.   In the discretion of
               the Compensation Committee of the Board of Directors, the
               remaining 30% either:

                  (i) by the issuance of a number of shares of Stock which has
                  an aggregate market value equal to such 30%, based on the
                  average closing price during December, 1995, of $2.275; or
                                                  
                  (ii) by the payment of an amount of cash equal to the market
                  value of the number of shares of Stock which would have been
                  issuable pursuant to clause 5.2 (b)(i) immediately above,
                  such market value to be based on the closing price of the
                  Stock on the date three business days prior to the date of
                  payment.

Shares of stock issued pursuant to Section 5.2 (b) (i) may be issued either as
fully registered shares or as restricted stock, in the sole discretion of the
Compensation Committee.

          5.3  Payment in the Event of Death.   In the event of death, Awards
will be paid to the Participant's estate.

          5.4  Payment in the Event of Change in Control.   If any Participant
becomes entitled to payments under this Program by virtue of the operation of
Section 6.3 hereof, such payments will be made at the same time any payments
under Section 4 (a) of the Severance Pay Agreements would be payable regardless
of whether any payments are actually due to the Participant in question under
Section 4 (a) of the Severance Pay Agreements.


                      Section 6.   Termination of Employment

          6.l  Voluntary Termination;  Termination for Cause.  In the event a
Participant voluntarily terminates employment, or is terminated for Cause, all
rights to Awards under this Program will be forfeited.

          6.2  Other Terminations.    In the event a Participant's employment
is terminated for any reason not covered by Section 6.1, including without
limitation by reason of death, total and permanent disability (as determined by
the Board of Directors) or retirement, or termination by the Company other than
for Cause, such Participant will be entitled to:

               (a)    a pro rata portion of any Annual Award to which the
Participant would have been entitled based upon that portion of the Year during
which he or she was a Participant; and

               (b)    a pro rata portion of any LTP Award to which such
Participant would have been entitled based upon the ratio of the number of
complete fiscal years the Participant was employed during the LTP Period to
three (3).

          6.3  Termination following a Change in Control.  In the event that
following a Change in Control a Participant's employment is terminated, or the
Participant terminates his or her own employment, under circumstances which
would entitle an Executive under the Severance Pay Agreements to receive the
severance compensation set forth under Section 4(a) of such Severance Pay
Agreements, then in addition to any other amounts due to such Participant under
this Section 6, such Participant will be entitled to receive an amount under
the Long Term Plan equal to the greater of (i) his or her Target Award
Opportunity under the Long Term Plan, or (ii) the amount which would be payable
to such Participant under the Long Term Plan were the rate of improvement in
performance of such Participant's Organizational Unit against the relevant LTP
Performance Measure since December 31, 1995, projected to continue at the same
rate to the end of the LTP Period.

                       Section 7.   Rights of Participants

          7.l  Employment    Nothing in this Program will interfere with or
limit in any way the right of the Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to continue
in the employ of the Company.

          7.2  Nontransferability    No right or interest of any Participant in
this Program is assignable or transferable, nor may be made subject to any
lien, directly, by operation of law, or otherwise, including execution, levy,
garnishment, attachment, pledge, and bankruptcy.

          7.3  Board Member Participants    No member of the Board who also is
a Participant will vote as to any action taken by the Board with respect to
awards to be made to him under the Program or with respect to his designation
as a Participant.


                           Section 8.   Administration

          8.l  Administration    This Program will be administered by the Vice
President-Human Resources of The Interlake Corporation in accordance with its
terms and such rules, if any, as may be established from time to time by the
Board for the administration of this Program.

          8.2  Disputes    The determination of the Board as to any disputed
question arising under this Program, including questions of construction and
interpretation, will be final, binding, and conclusive upon all persons.


                             Section 9.   Amendments

          9.l  Amendments    The Board, in its absolute discretion, without
notice, at any time and from time to time, may modify or amend, in whole or in
part, any or all of the provisions of this Program; provided, that no such
modification or amendment may, without the consent of a Participant, reduce the
right of a Participant (or his successor as the case may be) to a payment or
distribution hereunder to which he would have otherwise become entitled under
this Program, nor may any amendment modify the provisions of Section 5.4 and
6.3 hereof.

                              Section l0.   General

          l0.l Governing Law    The Program will be construed in accordance
with and governed by the laws of the State of Illinois.

          l0.2 Withholding Taxes    The Company has the right to deduct from
all payments under this Program any Federal, state or local taxes required by
the law to be withheld with respect to such payments.

          10.3 Supersession of Prior Plan    This Program supersedes in its
entirety the 1995 Executive Incentive Compensation Plan of The Interlake
Corporation, as heretofore restated, except as to Executive Incentive
Compensation Awards and related matters in respect of periods prior to 1996.

                            Section 11.   Definitions

          11.l Definitions  When capitalized and used in this Program, the
following terms have the following meanings:

          (a)  "Annual Award" means the amount of incentive compensation earned
               by a Participant under the Annual Plan.

          (b)  "Annual Plan" means the annual plan for the Year set forth as
               part of this Program.

          (c)  "Annual Performance Measures" means for each Participant the
               relevant    performance measures under the Annual Plan as set by
                           the Board in accordance with Sections 2.3 and 3.1.

          (d)  "Average Controllable Working Capital to Sales Ratio" 
               ("ACWC/S") means the ratio of the twelve-month average of
               Controllable Working Capital (FIFO based) to the total annual
               net sales of the Organizational Unit, except that Corporate
               Average Controllable Working Capital to Sales Ratio is the ratio
               of the twelve-month average Controllable Working Capital (FIFO
               based) of all Organizational Units (other than Corporate) to the
               total annual net sales of all such Organizational Units.  

          (e)  "Awards" means Annual Awards and LTP Awards.

          (f)  "Award Opportunities" has the meaning ascribed to it by Section
               2.3.

          (g)  "Board" means the Board of Directors of The Interlake
               Corporation.

          (h)  "Cause" means "Cause" as defined in the Severance Pay
               Agreements.

          (i)  "Change in Control" has the meaning ascribed to it in the
               Severance Pay Agreements.

          (j)  "Company" means The Interlake Corporation.

          (k)  "Compensation Committee" means the Compensation Committee of the
               Board of Directors of The Interlake Corporation.

          (l)  "Controllable Working Capital (FIFO based)" shall be the net of
               each Organizational Unit's current assets and current
               liabilities (other than cash, interest-bearing and intercompany
               items and income tax related accounts) invested in each such
               Organizational Unit, at the end of each four or five-week period
               in each Year.  It includes accounts receivable, inventories
               (before any reserves for LIFO), prepayments and other current
               assets, minus accounts payable, accrued liabilities, accrued
               salaries and wages, and taxes other than income.  Each of such
               current assets and current liabilities is subject to adjustment
               to eliminate items which, in the opinion of the Board, are
               unusual in nature, amount or both.  Corporate Controllable
               Working Capital is the sum of the Controllable Working Capital
               of all Organizational Units other than Corporate.

          (m)  "Earnings Before Interest and Taxes" or "EBIT" means net sales
               of continuing operations of each Organizational Unit less cost
               of products sold, less selling and administrative expenses
               (which shall not include any items of expenses classified by the
               Corporation's Chief Financial Officer as Corporate expenses,
               including any revenue or expense from intercompany transactions)
               adjusted so as to exclude items of revenue and expenses which,
               in the opinion of the Board, are unusual in nature, amount or
               both.

          (n)  "EBIT Margin" means the ratio of the Company's EBIT over the LTP
               Period to its aggregate Net Sales for the LTP Period.

          (o)  "Employee" means a regular, active, full-time salaried employee
               of the Company who is in a position meeting the defined
               eligibility criteria for participation set forth in Section 3.1.

          (p)  "Long-Term Plan" or "LTP" means the long term plan for the LTP
               Period set forth as part of this Program.

          (q)  "LTP Award" means the amount of incentive compensation earned by
               a Participant under the Long Term Plan.

          (r)  "LTP Performance Measure" means for each Participant the
               relevant performance measure under the Long Term Plan as set
               forth by the Board in accordance with Sections 2.3 and 4.1.

          (s)  "LTP Period" means the three-year period comprised of the
               Company's 1996, 1997 and 1998 fiscal years.

          (t)  "Net Sales" for any Organizational Unit means such unit's net
               sales for the period in question.

          (u)  "Organizational Unit" means a Participant's Organizational Unit
               as designated by the Board as contemplated by Section 2.4.

          (v)  "Participant" means an Employee who is approved by the Board to
               participate in the Plan.

          (w)  "Performance Measures" means the performance measures adopted by
               the Board as provided in Section 2.3, consistent with Sections
               3.1 and 4.1.

          (x)  "Revenue Growth" for any Organizational Unit means the %
               increase in Net Sales for the Year as compared to fiscal year
               1995.

          (y)  "Severance Pay Agreements" means those Severance Pay Agreements
               dated as of March 1, 1994, between the Company and certain
               executives as in effect on January 1, 1996, regardless of
               whether any such agreements remain in effect at any time during
               this Program.

          (z)  "Stock" means common stock of the Company.

          (aa) "Year" means the 1996 fiscal year of the Company.