Allied Products Corporation
                            1997 Incentive Stock Plan

                          (Established March 31, 1997)



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                                TABLE OF CONTENTS
                                -----------------

Section 1..........Purpose...................................................1

Section 2..........Definitions...............................................1

Section 3..........Administration............................................3

Section 4..........Common Stock Subject to Plan..............................4

Section 5..........Eligibility ..............................................4

Section 6..........Options...................................................5

Section 7..........Stock Awards..............................................6

Section 8 .........Stock Appreciation Rights ................................7

Section 9 .........Performance Units ........................................7

Section 10.........Treatment of Incentives Upon Termination .................8

Section 11 ........Adjustment Provisions ....................................10

Section 12 ........Change in Control.........................................10

Section 13.........Term of Plan............................................. 10

Section 14 ........General Provisions........................................10

Section 15 ........Amendment or Discontinuance of the Plan...................12








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                           Allied Products Corporation
                            1997 Incentive Stock Plan

                          (Established March 31, 1997)

Section 1.                     Purpose.

         The purpose of the Plan,  as  hereinafter  set forth,  is to enable the
Company to attract,  retain and reward key employees and non-employee  directors
by  offering  such  individuals  an  opportunity  to have a greater  proprietary
interest in and a closer identity with the Company and its financial success.

Section 2.                     Definitions .

              Board:  The Board of Directors of the Company.

             Change In Control:  "Change in Control" shall be deemed to have 
occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied:

                  (i) Any  "person"  as such term is defined in Section  3(a)(9)
                  and  modified  and used in  Sections  13(d)  and  14(d) of the
                  Securities Exchange Act of 1934, (other than the Company,  any
                  trustee  or  other  fiduciary  holding   securities  under  an
                  employee  benefit plan of the Company (or of any subsidiary of
                  the  Company),   or  any   corporation   owned,   directly  or
                  indirectly,   by   the   stockholders   of  the   Company   in
                  substantially the same proportions as their ownership of stock
                  of the  Company,  is or  becomes  the  "beneficial  owner" (as
                  defined in Rule 13d-3  under the  Securities  Exchange  Act of
                  1934),  directly or  indirectly,  of securities of the Company
                  representing  25% or more of the combined  voting power of the
                  Company's then outstanding securities,  unless such beneficial
                  ownership  is  acquired  in  connection  with the  transaction
                  described in clause (iii)(2) of this definition;

                  (ii) During any period of two consecutive years (not including
                  any period  prior to the  adoption of this Plan),  individuals
                  who at the beginning of such period  constitute the Board, and
                  any new director (other than a director designated by a person
                  who has entered into an agreement with the Company to effect a
                  transaction





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                  described  in clause  (i),  (iii) or (iv) of this  definition)
                  whose  election by the Board or nomination for election by the
                  Company's  stockholders  was  approved  by a vote of at  least
                  two-thirds  (2/3) of the  directors  then  still in office who
                  either were  directors at the beginning of the period or whose
                  election or nomination for election was previously so approved
                  cease  for any  reason  to  constitute  at  least  a  majority
                  thereof;

                  (iii)  The  stockholders  of the  Company  approve a merger or
                  consolidation of the Company with any other corporation, other
                  than (1) a merger or  consolidation  which would result in the
                  voting securities of the Company outstanding immediately prior
                  thereto   continuing   to   represent   (either  by  remaining
                  outstanding or by being  converted  into voting  securities of
                  the surviving  entity),  more than 75% of the combined  voting
                  power  of  the  voting  securities  of  the  Company  or  such
                  surviving entity outstanding  immediately after such merger or
                  consolidation  or (2) a merger or  consolidation  effected  to
                  implement  a  recapitalization  of  the  Company  (or  similar
                  transaction) in which no "person" (as defined in clause (i) of
                  this  definition  but without the  exceptions  given  therein)
                  acquires  50% or  more of the  combined  voting  power  of the
                  Company's then outstanding securities; or

                  (iv)  The  stockholders  of the  Company  approve  a  plan  of
                  complete  liquidation  of the Company or an agreement  for the
                  sale or disposition by the Company of all or substantially all
                  of the Company's assets.

         Code:  The Internal Revenue Code of 1986, as amended.

         Committee:  The Compensation Committee of the Board or such other 
committee as shall be appointed by the Board to administer the Plan pursuant to
Section 3.

         Common Stock: The common stock, $0.01 par value, of the Company or such
other class of shares or other  securities as may be applicable  pursuant to the
provisions of Section 11.

         Company:  Allied Products Corporation, a Delaware corporation, its 
subsidiary or subsidiaries, and any successor thereto.

         



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         Covered Employee: A Participant who is or is expected to be a "covered 
employee" within the meaning of Code Section 162(m) and the related  regulations
for the year in which an  Incentive  is  taxable  to such  employee  and for 
whom the  Committee intends  that such  Incentive  qualify  for the  
performance-based  compensationexemption under Code Section 162(m).

         Disabled or Disability: Permanent and total disability as determined in
accordance with the Company's then existing policies. A Participant shall not be
considered  Disabled unless the Committee  determines that the Disability  arose
prior to such  Participant's  termination  of  employment  or,  in the case of a
non-employee  director  Participant,  prior to the  termination  of service as a
director.

         Fair Market Value: The average of the highest and lowest price at which
Common Stock was traded on the relevant date, as reported in the "NYSE-Composite
Transactions"  section of the Midwest Edition of the Wall Street Journal, or, if
no sales of  Common  Stock  were  reported  for that  date,  on the most  recent
preceding date on which Common Stock was traded.

         Incentive Stock Option:  An Option that is intended to qualify as an 
"incentive stock option" under Code Section 422.

         Incentives: Options (including Incentive Stock Options), Stock Awards, 
Performance Units and Stock Appreciation Rights.

         Nonqualified Stock Option:  An Option that is not an Incentive Stock 
Option.

         Option:  An option to purchase shares of Common Stock granted to a 
Participant pursuant to Section 6.

         Participant:  An employee of the Company (including any employee who is
a  member  of  the  Board)  or  any  non-employee  member  of  the  Board  whose
participation  in the Plan is determined by the Board to be in the best interest
of the Company.

            Performance Unit:  A unit representing a cash sum or one or more 
shares of Common Stock that is granted to a Participant pursuant to Section 9.

         Plan:  The Allied Products Corporation 1997 Stock Incentive Plan, as
amended from time to time.

         




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          Restricted Shares:  Shares of Common Stock issued subject to 
restrictions pursuant to Section 7(b).

         Retirement: Termination of employment upon "retirement" or, in the case
of a non-employee  director  Participant,  "retirement"  from the Board, in each
case as  determined  by the  Committee in  accordance  with the  Company's  then
existing policies.

         Stock Appreciation Right:  An award granted to a Participant pursuant 
to Section 8.

         Stock Award:  An award of Common Stock granted to a Participant
pursuant to Section 7.

Section 3.                     Administration.

        (a) Committee.  The Plan shall be administered by the Committee.  To the
            ----------   
extent  required to comply with Rule 16b-3 under the Securities  Exchange Act of
1934, each member of the Committee  shall qualify as a "non-employee  director,"
as defined therein. To the extent required to comply with the  performance-based
compensation  exemption  under Code Section 162(m) and the related  regulations,
each member of the Committee shall qualify as an "outside  director," as defined
therein.

        (b) Authority of the Committee.  The Committee  shall have the authority
            --------------------------
to approve individuals for participation; to approve in advance the grant of any
Incentive;  to construe and interpret  the Plan;  to  establish,  amend or waive
rules  and   regulations   for  its   administration;   and  to  accelerate  the
exercisability  of any Incentive or the termination of any restriction under any
Incentive.  Incentives may be subject to such  provisions as the Committee shall
deem advisable,  and may be amended by the Committee from time to time; provided
that no such  amendment  may  adversely  affect  the  rights of the holder of an
Incentive without such holder's consent, and no amendment,  as it applies to any
Covered  Employee,  shall be made that would cause an Incentive  granted to such
Covered Employee to fail to satisfy the performance-based compensation exemption
under  Code  Section  162(m) and the  related  regulations  (to the extent  such
Incentive is intended to satisfy this exemption when granted).

        (c)  Powers of the  Committee.  The  Committee  may  employ  such  legal
             ------------------------
counsel,  consultants and agents as it may deem desirable for the administration
of the Plan and may rely upon any  opinion  received  from any such  counsel  or
consultant and any computation received from any





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such consultant or agent.

        (d)  Indemnification.  No member of the  Committee or the Board shall be
             ---------------
liable for any action or  determination  made in good faith with  respect to the
Plan or any  Incentive  awarded  under it. To the maximum  extent  permitted  by
applicable  law, each  Committee or Board member shall be  indemnified  and held
harmless by the Company  against any cost or expense  (including  legal fees) or
liability  (including any sum paid in settlement of a claim with the approval of
the Company)  arising out of any act or omission to act in  connection  with the
Plan  unless  arising  out  of  such  member's  own  fraud  or bad  faith.  Such
indemnification  shall be in  addition  to any  rights  of  indemnification  the
members may have as members of the Board or under the by-laws of the Company.

Section 4.                     Common Stock Subject to Plan .

                The  aggregate  shares of Common  Stock that may be issued under
the Plan shall not exceed 500,000 as adjusted in accordance  with the provisions
of Section 11. In the event of a lapse, expiration,  termination,  forfeiture or
cancellation  of any  Incentive  granted  under the Plan without the issuance of
shares or the payment of cash,  the Common Stock subject to or reserved for such
Incentive may be used again for new  Incentives  hereunder;  provided that in no
event may the number of shares of Common Stock issued hereunder exceed the total
number of shares  reserved for issuance.  Any shares of Common Stock withheld or
surrendered  to pay  withholding  taxes pursuant to Section 14(e) or withheld or
surrendered  in full or  partial  payment  of the  exercise  price of an  Option
pursuant to Section 6(d) or the purchase price of any other  Incentive  shall be
added to the aggregate shares of Common Stock available for issuance.

Section 5.                     Eligibility .

         Incentives  may be  granted  under  the  Plan  to any  employee  of the
Company, including employees who are officers and/or members of the Board and to
any  non-employee  director of the Company  whose  participation  the  Committee
determines   is  in   the   best   interest   of  the   Company   (collectively,
"Participants").  The  Committee  shall have  absolute  discretion to determine,
within the limits of the express  provisions of the Plan, those  Participants to
whom and the time or times at which Incentives  shall be granted.  The Committee
shall also determine,  within the limits of the express  provisions of the Plan,
the number of shares to be subject to each Incentive,  the duration and specific
terms of each  Incentive,  including the exercise  price under each Option,  the
time or times  within  which  (during the term of the Option) all or portions of
each Option may become vested and exercisable, and whether an Option shall be an
Incentive Stock Option, a Nonqualified Stock Option





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or a combination  thereof. In making such determination,  the Committee may take
into account the nature of the services rendered by the Participant,  his or her
present and  potential  contributions  to the  Company's  success and such other
factors as the Committee in its discretion shall deem relevant

Section 6.                       Options .

          Options  granted  under this Plan may be  Incentive  Stock  Options or
Nonqualified Stock Options.  However, no Incentive Stock Option shall be granted
to any  individual  who is not an employee of the Company.  Each Option  granted
under the Plan shall be evidenced  by an  agreement,  in a form  approved by the
Committee,  which shall be subject to the following express terms and conditions
and to such other terms and conditions as the Committee may deem appropriate:

          (a) Option Period.  Each Option agreement shall specify the period for
              -------------
which the Option  thereunder is granted  (which,  in the case of Incentive Stock
Options,  shall not exceed  ten years from the date of grant) and shall  provide
that the Option shall expire at the end of such period.

          (b) Exercise Price.  The per share exercise price of each Option shall
              --------------
be determined  by the  Committee at the time the Option is granted,  and, in the
case of Incentive  Stock  Options and in the case of Options  granted to Covered
Employees,  shall not be less than the Fair Market  Value of Common Stock on the
date the Option is granted.

          (c) Vesting of Options.  No part of any Option may be exercised  until
              ------------------
the grantee shall have satisfied the vesting conditions (e.g., such as remaining
in the  employ of the  Company  for a certain  period of time),  if any,  as the
Committee  may  specify  in the  applicable  Option  agreement.  Subject  to the
provisions  of  Section  6(e),  any  Option  may be  exercised,  to  the  extent
exercisable  by its  terms,  at such time or times as may be  determined  by the
Committee.

          (d) Payment.  The exercise price of an Option shall be paid in full at
              -------
the  time  of   exercise   (i)  in  cash,   (ii)   through  the   surrender   of
previously-acquired  shares of Common  Stock having a Fair Market Value equal to
the exercise price of the Option,  (iii) through the  withholding by the Company
(upon such  exercise)  of Common  Stock  having a Fair Market Value equal to the
exercise price or (iv) by a combination of (i), (ii), and (iii).

          (e)       Other Rules Applicable to Incentive Stock Options.
                    --------------------------------------------------





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                     (i) Grant Period. Consistent with Section 13, an Incentive 
                         ------------ 
         Stock Option must be granted within ten years of the date this Plan is 
         adopted or the date the Plan is approvedby the stockholders of the 
         Company, whichever is earlier.

                     (ii) Ten Percent  Owner.  If a Participant on the date that
                          ------------------ 
         an Incentive  Stock  Option is granted  owns,  directly or  indirectly,
         within the meaning of Section  424(d) of the Code,  stock  representing
         more  than  10% of the  voting  power  of all  classes  of stock of the
         Company, then the exercise price per share shall in no instance be less
         than 110% of the Fair  Market  Value  per share of Common  Stock at the
         time the  Incentive  Stock Option is granted,  and no  Incentive  Stock
         Option shall be exercisable by such Participant after the expiration of
         five years from the date it is granted.

                     (iii) Employee Status. To retain favorable  Incentive Stock
                           --------------- 
         Option tax treatment, the Option holder must at all times from the date
         the Option is granted  through a date that is no more than three months
         prior to the date it is  exercised  (or no more than one year  prior to
         the date it is exercised if the Option holder terminates employment due
         to death or  Disability)  remain an employee of the  Company.  For this
         purpose,  authorized leaves of absence shall not be deemed to sever the
         employment relationship.

                     (iv)  Limitations  on  Dispositions.  To  retain  favorable
                           ----------------------------- 
         Incentive  Stock Option tax  treatment,  Common Stock received upon the
         exercise of an  Incentive  Stock Option may not be disposed of prior to
         the  later of two years  from the date the  Incentive  Stock  Option is
         granted  or one year  from the date the  shares  of  Common  Stock  are
         transferred  to the  Participant  upon exercise of the Incentive  Stock
         Option.

                     (v)  Value of  Shares.  The  aggregate  Fair  Market  Value
                          ---------------- 
         (determined  at the  date of  grant)  of the  Incentive  Stock  Options
         exercisable  for the first time by a  Participant  during any  calendar
         year shall not exceed $100,000 or any other limit imposed by the Code.

           (f)      Covered Employee Limitation.  Options for more than 100,000 
         shares of Common Stock may not be granted in any calendar year to any
         Covered Employee.






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Section 7.                 Stock Awards .

            (a) Grant of Stock Awards.  Stock Awards may be made to Participants
                --------------------- 
on terms and conditions fixed by the Committee.  Stock Awards may be in the form
of  unrestricted  shares of  Common  Stock or in the form of  Restricted  Shares
authorized pursuant to Section 7(b). The recipient of Common Stock pursuant to a
Stock Award shall be a stockholder  of the Company with respect  thereto,  fully
entitled  to  receive  dividends,  vote  and  exercise  all  other  rights  of a
stockholder except to the extent otherwise provided in the Stock Award.

            (b)   Restricted Shares.  Restricted Shares may not be sold by the
                  ----------------- 
holder, or subject to execution, attachment or similar process, until the lapse 
of the applicable restriction period or satisfaction of other conditions 
specified by the Committee.

            (c) Stock Awards to Covered  Employees.  For purposes of  satisfying
                ---------------------------------- 
the  performance-based  compensation  exemption under Code Section  162(m),  the
Committee may condition the grant of any Stock Award to any Covered  Employee or
the vesting or lapse of  restrictions  of any  Restricted  Shares granted to any
Covered Employee upon the attainment of one or more pre-established  performance
goals. In so doing, the Committee shall set the specific performance goals on or
about the beginning of the relevant  performance  period and, after the relevant
performance  period  has  ended,  it shall  determine  the  extent  to which the
relevant  performance  goals have been satisfied and the resulting Stock Awards.
The objective  performance  criteria upon which  performance  goals may be based
shall consist of the  following:  total  stockholder  return,  return on equity,
return on capital, return on assets, return on investment, net income, operating
income, earnings per share, market share, stock price, sales, costs, net income,
cash  flow,  retained  earnings,   results  of  customer  satisfaction  surveys,
aggregate product price and other product price measures, safety record, service
reliability,  and operating and maintenance  cost  management.  Such performance
goals also may be based upon the  attainment of specified  levels of performance
of the Company under one or more of the measures described above relative to the
performance of other corporations.  Stock Awards for more than 100,000 shares of
Common Stock may not be granted in any calendar year to any Covered Employee.






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Section 8.                 Stock Appreciation Rights .

            (a)   Grant of Stock Appreciation Rights.  Stock Appreciation Rights
                  ---------------------------------- 
 may be granted in connection  with an Option (at the time of the grant or at
any time  thereafter) or may be granted independently. Stock Appreciation Rights
for more than 100,000 shares of Common  Stock may not be granted in any  
calendar  year to any Covered Employee.

            (b)  Value of  Stock  Appreciation  Rights.  The  holder  of a Stock
                 ------------------------------------- 
Appreciation  Right granted in connection with an Option,  upon surrender of the
Option, will receive cash or shares of Common Stock equal in value to the excess
of the Fair Market Value on the exercise date over the Option's  exercise price,
multiplied by the number of shares covered by such Option. The holder of a Stock
Appreciation Right granted independent of an Option, upon exercise, will receive
cash or shares of Common  Stock  equal in value to the excess of the Fair Market
Value on the  exercise  date  over  the Fair  Market  Value on the  grant  date,
multiplied by the number of shares covered by the Stock Appreciation Right.

Section 9.                 Performance Units.

            (a) Value of Performance  Units.  Prior to the  commencement  of the
                --------------------------- 
performance  period,  the Committee shall establish in writing an initial target
value or  number of shares  of  Common  Stock  for the  Performance  Units to be
granted to a  Participant,  the  duration  of the  performance  period,  and the
specific performance goals to be attained, including performance levels at which
various  percentages  of  Performance  Units  will be earned  and,  for  Covered
Employees,  the minimum level of attainment to be met to earn any portion of the
Performance Units. If the Committee intends the Performance Units granted to any
Covered Employee to satisfy the performance-based  compensation  exemption under
Code Section 162(m)  ("Qualifying  Performance  Units"),  the performance  goals
shall  be  based  on one or  more of the  following  objective  criteria:  total
stockholder  return,  return on  equity,  return on  capital,  return on assets,
return on investment,  net income,  operating income, earnings per share, market
share,  stock price,  sales,  costs, net income,  cash flow,  retained earnings,
results of customer  satisfaction  surveys,  aggregate  product  price and other
product price measures,  safety record,  service reliability,  and operating and
maintenance cost management.

            (b) Payment of  Performance  Units.  After the end of a  performance
                ------------------------------ 
period,  the Committee shall certify in writing the extent to which  performance
goals  have  been met and  shall  compute  the  payout  to be  received  by each
Participant.  With respect to  Qualifying  Performance  Units,  for any calendar
year,  the  maximum  amount  payable in cash to any  Covered  Employee  shall be
$400,000  and the  aggregate  shares of Common  Stock  that may be issued to any
Covered  Employee is 100,000.  The  Committee  may not adjust  upward the amount
payable to any Covered Employee with respect to Qualifying Performance Units.





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Section 10.       Treatment of Incentives Upon Termination .

            (a) Termination due to Disability or Death.  Upon termination of the
                -------------------------------------- 
employment  of an  employee  Participant  or upon the  termination  of the Board
membership  of a  non-employee  Participant  by reason of  Disability,  death or
Retirement, the following provisions shall apply:

                     (i)  Options  and  Stock   Appreciation   Rights  shall  be
         exercisable by the Participant (or, in the case of death, by his or her
         estate)  during  the  three-year  period  commencing  on  the  date  of
         termination  (except that Incentive  Stock Options shall be exercisable
         for only three  months),  but not later than the expiration of the term
         of the Options or Stock  Appreciation  Rights.  If a  Participant  dies
         during such three-month period, such Participant's  estate may exercise
         the Incentive  Stock Options during the one-year  period  commencing on
         the date of death, but not later than the expiration of the term of the
         Options.

                     (ii) Upon  termination  due to death,  any  restrictions on
         Stock  Awards  shall  lapse   immediately.   Upon  termination  due  to
         Disability or Retirement after age 65, any restrictions on Stock Awards
         may be removed by the  Committee in its  discretion  at any time during
         the three years following termination.

                     (iii) Unvested  Performance Units shall be payable prorated
         based upon the number of full months of service  during the  applicable
         performance  period,  adjusted based on the  achievement of performance
         goals during the performance period.  Payment shall be made at the time
         payments would have been made had the Participant not died,  terminated
         or retired.

                     (iv) The Committee,  in its discretion,  may accelerate the
         vesting of any Option,  Stock Appreciation  Right,  Performance Unit or
         Stock Award upon the Participant's
         Disability, death or Retirement.

            (b) Voluntary Termination or Involuntary Termination Other than For
                --------------------------------------------------------------- 
Cause.  Upon  the  voluntary  termination  of  the  employment  of  an  employee
----- 
Participant  or upon the  voluntary  termination  of the Board  membership  of a
non-employee  Participant or upon the involuntary  termination of the employment
of  an  employee  Participant  or  the  involuntary  termination  of  the  Board
membership  of  a  non-employee  Participant  for  any  reason  other  than  for
substantial cause (defined





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below), Disability, death or Retirement, the following provisions shall apply:

                     (i)  Options and Stock  Appreciation  Rights (to the extent
         vested  prior  to  such   termination  or  to  the  extent  vesting  is
         accelerated  by the  Committee)  may be  exercised  by the  Participant
         during the  three-month  period  commencing on the date of termination,
         but not later than the  expiration  of the term of the Options or Stock
         Appreciation  Rights.  If a  Participant  dies during such  three-month
         period,  such  Participant's  estate may  exercise the Options or Stock
         Appreciation  Rights (to the extent such Options or Stock  Appreciation
         Rights were vested and exercisable  prior to death) during the one-year
         period  commencing  on the  date of  death,  but  not  later  than  the
         expiration of the term of the Options or Stock Appreciation Rights.

                     (ii)  Unvested  Stock Awards shall be forfeited  unless the
         terms of the Stock Award provide otherwise or unless the Committee,  in
         its discretion, waives this forfeiture provision.

                     (iii) Unvested  Performance Units shall be forfeited unless
         the terms of the  Performance  Unit  provide  otherwise  or unless  the
         Committee, in its discretion, waives the forfeiture provision.

                     (iv) The Committee,  in its discretion,  may accelerate the
         vesting of any Option, Stock Appreciation Right or Stock Award upon the
         Participant's involuntary termination.

            (c)  Termination for Cause.  Upon the involuntary  termination of an
                 --------------------- 
employee or Board member for  "substantial  cause," the  Participant's  right to
exercise his or her Options or Stock Appreciation Rights shall terminate and any
unvested  Performance  Units and Stock  Awards  shall be  forfeited  at the time
notice of involuntary termination is given by the Company to such Participant.
For purposes of this provision, substantial cause shall include:

                     (i) The commission of an action against or in derogation of
         the interests of the Company which,  if proven in a court of law, would
         constitute a violation of a criminal code or similar law;

                     (ii)  A material breach of any material duty or obligation 
imposed upon the Participant by the Company or by law;

                     (iii) Divulging the Company's confidential information; or





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                     (iv)  The  performance  of  any  similar  action  that  the
         Committee,  in  its  sole  discretion,  may  deem  to  be  sufficiently
         injurious  to  the  interests  of  the  Company  so  as  to  constitute
         substantial cause for termination.

Section 11.       Adjustment Provisions .

                  In   the   event   of   a   stock   split,   stock   dividend,
recapitalization,  reclassification  or combination of shares,  merger,  sale of
assets or similar event, the Committee shall adjust equitably (a) the number and
class of shares or other  securities  that are reserved  for issuance  under the
Plan, (b) the number and class of shares or other securities that are subject to
outstanding  Incentives,  and (c) the  appropriate  Fair Market  Value and other
price  determinations  applicable to  Incentives.  The Committee  shall make all
determinations  under  this  Section  11, and all such  determinations  shall be
conclusive and binding.

Section 12.       Change in Control.

                  In the event of a Change in Control, all Incentives shall vest
in each  Participant,  and the maximum value of all  Performance  Units shall be
immediately  payable in cash,  prorated for the number of days in the applicable
performance period that have elapsed as of the date of the Change in Control.

Section 13.       Term of Plan .

                  The Plan shall be deemed adopted and shall become effective on
the date it is approved by the  stockholders  of the Company and shall  continue
until  terminated  by the Board or until no Common Stock  remains  available for
issuance under Section 4, whichever occurs first.

Section 14.       General Provisions .

            (a)  Employment.  Nothing in the Plan or in any  related  instrument
                 ---------- 
shall confer upon any employee  Participant or upon any other employee any right
to  continue  in the  employ of the  Company  or shall  affect  the right of the
Company to terminate  the  employment of any employee  Participant  or any other
employee with or without cause.





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            (b) Legality of Issuance of Shares.  No Common Stock shall be issued
                ------------------------------ 
pursuant to any Incentive unless and until all legal requirements  applicable to
such issuance have been satisfied.

            (c)  Ownership of Common Stock  Allocated  to Plan.  No  Participant
                 ------------------------- 
(individually  or as a member of a group),  and no  beneficiary  or other person
claiming  under or through  such  Participant,  shall  have any right,  title or
interest in or to any Common  Stock  allocated  or reserved  for purposes of the
Plan or subject to any Incentive,  except as to shares of Common Stock,  if any,
as shall have been issued to such Participant or beneficiary.

            (d)  Governing Law. The Plan, and all agreements hereunder, shall be
                 ------------- 
 construed in accordance with and governed by the laws of the State of Illinois.

            (e)  Withholding  of Taxes.  The  Company may  withhold,  or allow a
                 --------------------- 
Participant  to  remit  to the  Company,  any  Federal,  state  or  local  taxes
applicable to any grant, exercise,  vesting,  distribution or other event giving
rise to income tax liability  with respect to an Incentive.  In order to satisfy
all or any portion of such income tax liability,  an Incentive  holder may elect
to  surrender  Common  Stock  previously  acquired  by the holder or to have the
Company  withhold  Common  Stock that would  otherwise  have been  issued to the
holder  pursuant to the  exercise of an Option or in  connection  with any other
Incentive,  the number of shares of such withheld or surrendered Common Stock to
be  sufficient  to satisfy  all or a portion of the  income tax  liability  that
arises upon the exercise,  vesting,  distribution  or other event giving rise to
income tax liability with respect to an Incentive.

            (f)  Non-transferability.  Except as provided in this Section 14(f),
                 ------------------- 
no Incentive may be assigned or subjected to any  encumbrance,  pledge or charge
of any nature. Participant's may transfer all or a portion of an Incentive to be
granted to a Participant on terms to (i) the spouse,  children,  stepchildren or
grandchildren of the Participant  ("Immediate Family Members"),  (ii) a trust or
trusts for the exclusive  benefit of such Immediate  Family Members,  or (iii) a
partnership or  corporation in which such Immediate  Family Members are the only
partners or shareholders, provided that (x) the agreement pursuant to which such
Incentives  are granted must be approved by the  Committee,  and must  expressly
provide  for,  or  be  amended  to  provide  for,  transferability  in a  manner
consistent  with this Section,  and (y) subsequent  transfers of such Incentives
shall be  prohibited  except those  permitted by will or the laws of descent and
distribution.  The Committee may, at its sole  discretion,  permit  transfers to
other persons or entities. Following transfer, such Incentives shall continue to
be subject to the same terms and conditions as were applicable immediately prior
to transfer.  The treatment of Incentives upon  termination set forth in Section
10 hereof shall continue to be applied with respect to the original Participant,
following which the Incentives shall be exercisable by the





<PAGE>



transferee only to the extent,  and for the periods specified in Section 10. The
committee may establish  such rules and  procedures as it deems  necessary  with
respect to such transfer,  including without limitation,  the requirement that a
Participant  provide  such  documentation  or  information  concerning  any such
transfer or transferee as the Committee may  reasonably  request.  Such transfer
rights shall in no event apply to any Incentive Stock Option.

            (g) No Implied Rights. Neither the establishment of the Plan nor any
                ----------------- 
amendment  thereof  shall be  construed as giving any  Participant  or any other
person any legal or  equitable  right  unless such right  shall be  specifically
provided  for in the Plan or conferred  by specific  action of the  Committee in
accordance with the terms and provisions of the Plan.

            (h) Successors.  All obligations of the Company under the Plan, with
                ---------- 
respect to Incentives  granted  hereunder,  shall be binding on any successor to
the Company,  whether the existence of such  successor is the result of a direct
or  indirect   purchase,   merger,   consolidation  or  otherwise,   of  all  or
substantially all of the business and/or assets of the Company.

Section 15.       Amendment or Discontinuance of the Plan .

            (a) Amendment or Discontinuance.  The Board, acting by a majority of
                --------------------------- 
its members,  without further action on the part of the  stockholders,  may from
time to time alter, amend or suspend the Plan or any Incentive granted hereunder
or may at any time terminate the Plan; provided, however, that the Board may not
(i) materially increase the number of shares of Common Stock subject to the Plan
(except as provided in Section 11 hereof), (ii) amend any other provision of the
Plan, the amendment of which would require stockholder approval by the standards
of New York Stock  Exchange  or any other stock  exchange  upon which the Common
Stock is then  listed,  or (iii)  amend any  other  provision  of the Plan,  the
amendment of which would  require  stockholder  approval in order to continue to
satisfy the performance-based  compensation  exemption under Code Section 162(m)
and the related regulations with respect to any Incentive awarded to any Covered
Employee.

            (b) Effect of Amendment or Discontinuance on Outstanding Options. No
                ------------------------------------------------------------ 
amendment or  discontinuance of the Plan by the Board or the stockholders of the
Company  shall  materially  and  adversely  affect  any  outstanding   Incentive
theretofore granted without the consent of the holder thereof.