2-10-1
                          THE INTERLAKE CORPORATION


                   1997 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 in 1997 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, 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 (i.e., Corporate, Hoeganaes Corporation
or Chem-tronics, Inc.).

          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 Award to which the terminated Participant
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.

          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.   Award Determination

          3.1  Performance Measures--Awards will be based on the Performance
Measures in the percentages indicated below.  All participants will be measured
on individual competencies with the exception of the CEO.  For the CEO, the 10%
weight will be added to the EBIT weight.

          Corporate Participants            Weighting Factor
          
                                           Other         CEO
          Corporate EBIT                   50  %         60%
          Corporate ACWC/S                 30  %         30%
          Corporate Revenue Growth         10  %         10%
          Individual Competencies          10  %          0%


          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 %            
Total Corporation Portion                         20 %
Total Organizational Unit & Corporate Portions   100 %

          
          3.2  Award Calculation--Each Participant's  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 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  Performance Measure.  All determinations of  Awards by the
Board will be conclusive, absent manifest error.

          3.3   EBIT Threshold--Notwithstanding any other provision of this
Section 3, a Participant may not, in the case of a Corporate Participant, earn
any  Award, and in the case of any other Participant, earn any  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  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  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.  Payment of Awards

          4.1  Timing--Awards under the Plan will be paid as soon as
practicable following the end of the Year as the Board may determine.  

          4.2  Form of Payment--All Awards will be paid:

               (a)  Cash portion.   Seventy percent (70%) in cash; and
               (b)  Stock portion.   The remaining thirty percent (30%) either:

                    (i) in the discretion of the Compensation Committee, 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, 1996, of $3.494; 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 4.2 (b)(i) immediately above,
                    such market value to be based on the closing price of the
                    Stock as reported in the New York Stock Exchange Composite
                    Transactions in The Wall Street Journal, or as otherwise
                    reliably reported, on the date two weeks prior to the date
                    of the meeting of the Board at which cash awards are
                    granted.

Shares of stock issued pursuant to Section 4.2 (b) (i) may be issued either as
fully registered shares or as restricted stock, in the sole discretion of the
Compensation Committee.

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

          4.4  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 5.3 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 paid to the Participant in question under
Section 4 (a) of the Severance Pay Agreements.


                    Section 5.   Termination of Employment

          5.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.

          5.2  Other Terminations--In the event a Participant's employment is
terminated for any reason not covered by Section 5.1 or Section 5.3, 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 pro rata
portion of any Award to which the Participant would have been entitled based
upon that portion of the Year during which he or she was a Participant.


                     Section 6.   Rights of Participants

          6.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.

          6.2  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.

          6.3  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 7.   Administration

          7.l  Administration--Subject to the administrative responsibilities
of the Compensation Committee under Section 4.2(b)(i) hereof, 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.

          7.2  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 8.   Amendments

          8.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 including final Awards;
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 by more than 20%, nor may any amendment
modify the provisions of Section 4.4.

          8.2  Discretion--The Board may make such discretionary grants of cash
awards hereunder as it deems appropriate.  The Compensation Committee may make
such discretionary grants of awards payable in Stock hereunder as it deems
appropriate.


                             Section 9.   General

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

          9.2  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.

          9.3  Supersession of Prior Program--The  Plan hereunder supersedes in
its entirety, the Annual Plan under  the 1996 Senior Executive Incentive
Compensation Program of The Interlake Corporation, except as to Annual Awards
and related matters in respect of periods prior to 1997.  The Plan hereunder
shall not be deemed to supersede the Long Term Plan under the 1996 Senior
Executive Incentive Compensation Program. 


                          Section 10.   Definitions

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

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

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

          (c)  "Performance Measures"   means for each Participant the relevant 
               performance measures under the 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)  "Award Opportunities" has the meaning ascribed to it by Section
               2.3.

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

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

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

          (i)  "Company"  means The Interlake Corporation.

          (j)  "Compensation Committee"  means the Management Development and
               Compensation Committee of the Board of Directors of The Interlake
               Corporation.

          (k)  "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.

          (l)  EBIT  for any Organizational Unit means such Organizational
               Unit's earnings before interest, taxes, minority interest
               and extraordinary items.

          (m)  "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.

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

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

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

          (q)  "Revenue Growth" for any Organizational Unit means the % increase
               in net sales for the year as compared to fiscal year 1996.

          (r)  "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, 1997, regardless of whether
               any such agreements remain in effect at any time during this
               Program.

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

          (t)  "Year" means the 1997 fiscal year of the Company.