Exhibit 10.12

                   NON-QUALIFIED STOCK OPTION AGREEMENT
                     Option Granted January 22, 1998
                                    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 22, 1998 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 6 below) at the
price of Four and Fifty-Three Thousand One Hundred Twenty Five Hundred
Thousandths Dollars ($4.53125) 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, while the Optionee is a director of the Corporation; 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, if the Optionee is still
              a director of the Corporation at the start of the annual meeting
              of shareholders occurring in the following year:
                                     
                       1999                            33 percent
                       2000                            66 percent
                       2001                           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 22, 2008

              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 Board of Directors 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. A "change in control," as used in this agreement, means the
occurrence of any one of the following events:

                  (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 22, 1998.

                                          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        ________________, 1998.



                                          Signed:                      

                                          Name: