<PAGE>

                                                                   Exhibit 10.40

                              EMPLOYMENT AGREEMENT


         This Employment Agreement ("this Agreement") is made and entered into
as of April 5, 1999 (the "Effective Date"), by and between Werner Co., a
Pennsylvania corporation (the "Company"), and Larry V. Friend ("Executive").


         The Company hereby agrees to employ Executive, and Executive hereby
accepts such employment, on the terms and conditions hereinafter set forth. The
offer of employment letter dated March 26, 1999 (the "Offer Letter"), is hereby
incorporated herein by reference; however, the provisions of this Employment
Agreement shall supersede the Offer Letter in case there is a discrepancy
between the documents or if the Offer Letter does not address certain issues.


1.       POSITION.

         From the Effective Date until the termination of Executive's employment
hereunder (the "Period of Employment"), Executive shall serve in the capacity
indicated on Schedule 1 hereto, and shall have the normal duties and
responsibilities commensurate with such position. During the Period of
Employment, Executive will (a) during normal business hours, devote his full
time and exclusive attention to, and use his best efforts to advance, the
business and welfare of the Company, and (b) not engage in any other employment
activities for any direct or indirect remuneration without the concurrence of
the Board, provided, however, Executive may serve on corporate, charitable and
community boards so long as such activities do not unreasonably interfere with
the performance of his duties under this Agreement and provided that any such
activities are approved in advance by the Board, which approval will not be
unreasonably withheld.


2.       PLACE AND TERM OF EMPLOYMENT.

         (a) Executive's office shall be at the location set forth on Schedule 1
attached hereto.


         (b) Subject to Section 6 hereunder, the term of this Agreement shall be
through April 4, 2002. This Employment Agreement shall be automatically renewed
for successive one (1)




                                       1
<PAGE>

year periods unless either party gives notice otherwise by November 30, just
prior to an expiration.

3.       COMPENSATION.

         3.1 BASE SALARY. Effective as of April 5, 1999, the Company shall pay
Executive the per annum Base Salary indicated on Schedule 1 attached hereto
during the Period of Employment payable biweekly and otherwise in accordance
with the standard policies of the Company and subject to payroll deductions as
may be necessary or customary in respect of the Company's salaried employees in
general. Thereafter Executive's Base Salary hereunder shall be subject to annual
review by the Board for such increases as the Board may determine.

         3.2 PERFORMANCE BASED COMPENSATION. In addition to the Base Salary
provided for in Section 3.1 hereof, commencing on April 5, 1999, Executive shall
be eligible to receive an annual cash bonus earned during the calendar year in
an amount equal to 40% of the Base Salary in effect at the end of such calendar
year based upon the extent to which Werner Holding Co. (PA), Inc.'s ("Holdings")
consolidated Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA"), as defined in EXHIBIT 1 hereto, equals or exceeds the percentages of
target annual EBITDA with respect to such fiscal year in accordance with the
chart set forth below, in an amount equal to a percentage of the "Bonus Amount"
set forth in Schedule 1 hereto, provided, however, that at the discretion of the
Board, such bonus may be subject to upward or downward adjustment in accordance
with chart set forth below:

<TABLE>
<CAPTION>

     Percentage of              Target % of Bonus (Subject to       Range in Which Target % of
----------------------          -----------------------------       --------------------------
EBITDA Target Achieved           Board Adjustment)                  Bonus May be Adjusted at
----------------------           -----------------                  ------------------------
                                                                    Discretion of the Board
                                                                    -----------------------
<S>                         <C>                                      <C>
   Less than 85%                        0%                                     0%

85% or above, but below                20%                                 10% - 30%

        90%

90% or above, but below                50%                                 40% - 60%

        95%
</TABLE>




                                       2
<PAGE>

<TABLE>
<CAPTION>

    Percentage of       Target % of Bonus (Subject to           Range in Which Target % of
----------------------  -----------------------------           --------------------------
EBITDA Target Achieved       Board Adjustment)                   Bonus May be Adjusted at
----------------------       -----------------                   ------------------------
                                                                  Discretion of the Board
                                                                  -----------------------
<S>                       <C>                                  <C>
95% or above, but below            75%                                    65% - 85%

        100%

        100%                       100%                                   90% - 110%
</TABLE>


The EBITDA targets for the fiscal years 1999-2002 shall be set by the Company's
Board of Directors as part of its annual budgeting process.


         Executive shall also be eligible to receive an additional annual cash
bonus at the discretion of the Board based upon the Board's evaluation of
Executive's performance for each fiscal year of Holdings during the Period of
Employment. Bonuses will be payable no later than April of the respective years
following the years with respect to which they were earned.

4.       BENEFITS.

         During the Period of Employment, Executive shall be entitled to
participate in all benefit plans and programs maintained by the Company which
are available to its executive officers or employees generally, including any
and all perquisites, provided that, subject to Section 5.4 of the
Recapitalization Agreement dated October 8, 1997 and amended October 27, 1997 by
and among the Company and certain investor clients of Investcorp S.A., (i)
Executive's right to participate in such plans and programs shall not affect the
Company's right to amend or terminate the general applicability of such plans
and programs, and (ii) Executive acknowledges that he shall have no vested
rights under or to participate in any such plan or program except as expressly
provided under the terms thereof. During the two year period following the
Effective Date, the Company shall provide the Executive with the benefits
described on Exhibit 2 hereto, provided, however, the benefits so described may
be amended or terminated upon the approval of the members of the Board nominated
pursuant to Section 4(iii) of the Shareholder Rights Agreement dated as of the
date hereof among the Company, the Executive, Investcorp Investment Equity
Limited, the other holders of shares of Class D Common Stock of the Company and
the other individuals party thereto.




                                       3
<PAGE>


5.       EXPENSES; TAXES.

         Upon presentation of acceptable substantiation therefor, the Company
will pay or reimburse Executive for such reasonable travel, entertainment and
other expenses as he may incur during the Period of Employment in connection
with the performance of his duties hereunder. Federal, state and local income
taxes shall be withheld on all cash and in-kind payments made by the Company to
Executive in accordance with applicable tax laws and regulations.

6.       TERMINATION OF EMPLOYMENT.

         The provisions of this Section 6 shall apply upon termination of
Executive's employment hereunder. In connection with any termination of
Executive's employment hereunder, Executive or his beneficiaries shall be
entitled to receive, pro-rated as appropriate, earned but unpaid Base Salary,
unreimbursed amounts pursuant to Section 5 hereof, and unpaid and unreimbursed
payments and benefits under, and in accordance with the terms of, applicable
benefit plans and programs, said payments being collectively referred to as
Standard Termination Payments.

         6.1 FOR CAUSE OR NOT FOR GOOD REASON. If the Company terminates
Executive's employment for Cause (as hereinafter defined) or if Executive
terminates his employment other than for Good Reason (as defined in Section
6.3), the Company's obligations to compensate Executive shall in all respects
cease as of the date of such termination, except for Standard Termination
Payments. Termination of Executive's employment for "Cause" shall mean
termination by the Company because Executive:

             (i) has been convicted of a felony, or has entered a plea of guilty
or NOLO CONTENDERE to a felony;

             (ii) has committed an act of fraud involving dishonesty for
personal gain which is materially injurious to the Company;

             (iii) has willfully and continually refused to substantially
perform his duties with the Company (other than any such refusal resulting from
his incapacity due to mental illness or physical illness or injury), after a
demand for substantial performance has been delivered to the




                                       4
<PAGE>


Executive by the Board, where such demand specifically identifies the manner in
which the Board believes that the Executive has refused to substantially perform
his duties and the passage of a reasonable period of time for Executive to
comply with such demand; or

         (iv) has willfully engaged in gross misconduct materially and
demonstrably injurious to the Company or its subsidiaries.

         For purposes of this paragraph, no act or failure to act on the
Executive's part shall be considered "willful" unless done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company or its subsidiaries.
Notwithstanding the foregoing, with respect to termination for Cause arising out
of conduct described in clause (ii), (iii) or (iv) above, a termination shall
not be considered for Cause for purposes of this Agreement unless there shall
have been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire Board, at a
meeting of the Board called and held for that purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with his counsel
or other advisors, to be heard at such meeting), finding that in the good faith
opinion of the Board the Executive had engaged in conduct described in clause
(ii), (iii) or (iv) above and specifying the particulars thereof in detail. Such
a finding by the Board of Directors of the Company is a prerequisite to a
termination for Cause pursuant to clauses (ii), (iii) or (iv) above; PROVIDED,
HOWEVER, that such a finding may be challenged, by appropriate judicial process,
on the merits (i.e., that Cause did not exist) or on the basis that the Board's
finding was not made in good faith (provided that proof that Cause for
termination existed shall be a complete defense to any showing that the Board's
findings were not made in good faith).

         If the Executive terminates his employment other than for Good Reason,
the Executive must provide the Company with thirty (30) days written notice
prior to such termination.

         6.2 UPON DEATH OR PERMANENT DISABILITY. If Executive's employment is
terminated as a result of death or Permanent Disability (as hereinafter
defined), the Company's obligation to compensate Executive shall in all respects
cease as of the date of such termination, except for Standard Termination
Payments including all applicable disability benefits. The Company may



                                       5
<PAGE>

terminate Executive's employment hereunder attributable to the "Permanent
Disability" of Executive if Executive becomes physically or mentally
incapacitated or disabled so that he is unable to perform for the Company
substantially the same services as he performed prior to incurring such
incapacity or disability (the Company, at its option and expense, is entitled to
retain a physician reasonably acceptable to Executive to confirm the existence
of such incapacity or disability, and the determination of such physician shall
be binding upon the Company and Executive), and such incapacity or disability
exists for an aggregate of six (6) calendar months in any twelve (12) calendar
month period.

         6.3 NOT FOR CAUSE OR FOR GOOD REASON. If (i) Executive's employment is
terminated by the Company for a reason other than Cause, Executive's death or
Executive's Permanent Disability, or (ii) Executive terminates his employment
for Good Reason (as hereinafter defined), the Company's obligation to compensate
Executive shall in all respects cease as of the date of such termination, except
(a) for Standard Termination Payments, (b) that the Company will pay to
Executive a lump sum amount equal the sum of (1) twelve (12) months of the
Executive's Base Salary in effect at the time of such termination and (2) the
bonus that the Executive received (or earned but did not receive) for the fiscal
year immediately preceding the fiscal year in which his employment terminated,
and (c) that the Company will, for a period of twelve (12) months following said
date of termination, provide Executive with retirement benefits and welfare
(including any life insurance, hospitalization, medical and disability)
benefits, substantially similar to those provided to Executive as of the date of
termination, provided that such welfare benefits shall be discontinued to the
extent Executive receives similar benefits from subsequent employment. For
purposes of this Agreement, "Good Reason" shall mean (1) except as specifically
provided herein, the assignment to the Executive of duties, or the assignment of
the Executive to a position, constituting a material diminution in the
Executive's role, responsibilities or authority compared with his role,
responsibilities or authority with the Company or its affiliates on the
Effective Date; (2) a reduction by the Company in the Executive's bonus
opportunities or, except as specifically provided herein, base salary as in
effect on the Effective Date or as the same may be increased from time to time;
(3) unless the members of the Board appointed pursuant to Section 4(iii) of the
Shareholder Agreement dated as of the




                                       6
<PAGE>


date hereof agree to such reduction or other action, any material reduction in
the level of benefits (including participation in any bonus plan) to which the
Executive is entitled under one or more employee benefit plans on the Effective
Date, or the taking of any action by the Company which would adversely affect
the Executive's accrued benefits under any such employee benefit plans or
deprive the Executive of any material fringe benefit enjoyed by the Executive on
the Effective Date; (4) a demand by the Company to the Executive to relocate to
any place that exceeds a fifty (50) mile radius beyond the location at which the
Executive performed the Executive's duties on the Effective Date; or (5) any
material breach by the Company of any provision of this Agreement.

         6.4 RELEASE AND SATISFACTION. At the time of termination of Executive's
employment, Executive and the Company agree to execute mutual releases whereby
(a) Executive will release, relinquish and forever discharge the Company and any
director, officer, employee, shareholder, controlling person or agent of the
Company from any and all claims, damages, losses, costs, expenses, liabilities
or obligations, whether known or unknown (except as set forth in Section 6.5
hereof other than any such claims, damages losses, costs, expenses, liabilities
or obligations arising under (i) any indemnification arrangement of the Company
with respect to Executive, (ii) any employee benefit plan or program (whether or
not tax-qualified) covering Executive, (iii) any stock purchase or stock option
plan or agreement to which the Company and Executive are parties (or any
document executed in connection therewith) or (iv) this Agreement, to the extent
the Company or any such person has continuing obligations pursuant to the
express provisions hereof following such termination), which Executive has
incurred or suffered or may incur or suffer as a result of Executive's
employment by the Company or the termination of such employment, and (b) the
Company will release, relinquish and forever discharge Executive and his heirs,
successors and assigns from any and all claims, damages, losses, costs,
expenses, liability or obligations, whether known or unknown (except as set
forth in Section 6.5 hereof and other than any such claims, damages, losses,
costs, expenses, liabilities or obligations arising under any of the
arrangements or agreements referred to in clauses (i) through (iii) in the
preceding clause (a) of this Section 6.4 or under this Agreement to the extent
Executive or any such person has continuing obligations pursuant to the express
provisions hereof following such




                                       7



<PAGE>


termination), which the Company has incurred or suffered or may incur or suffer
as a result of the Company's employment of Executive or the termination of such
employment.

         6.5 EFFECT ON THIS AGREEMENT. The termination of Executive's employment
shall not affect the continuing operation and effect of Sections 6.4 and 7
hereof, nor affect any obligation of the Company to make payments pursuant to
Section 6 hereof, which shall continue in full force and effect upon the Company
and Executive, and its and his heirs, successors and assigns. Nothing in Section
6.1 or 6.4 hereof shall be deemed to operate or shall operate as a release,
settlement or discharge of any liability of Executive to the Company (a) from
any act or omission by Executive enumerated in Section 6.1 which constituted a
reason for termination of Executive's employment for Cause or (b) in connection
with any amount Executive owes to the Company pursuant to a loan or other
advance.

         6.6 MITIGATION. Executive shall not be required to mitigate the amount
of any payment provided for under this Agreement by seeking other employment or
otherwise nor will any payments provided for herein be subject to offset in
respect of any claims which the Company may have against Executive and, except
as specifically provided herein, the amount of any payment or benefit provided
for in this Agreement shall not be reduced by any compensation earned or
benefits received by Executive as the result of employment by a future employer,
by offset against any amount claimed to be owed by him to the Company, or
otherwise.

7.       NON-COMPETITION; NON-DISCLOSURE OF PROPRIETARY INFORMATION, SURRENDER
         OF RECORDS; INVENTIONS AND PATENTS.

         7.1      NON-COMPETITION

            (a) Executive acknowledges that in the course of his employment with
the Company he will become familiar with the trade secrets and other
confidential information of the Company and its subsidiaries and that his
services will be of special, unique and extraordinary value to the Company.
Therefore, Executive agrees that, during the Period of Employment and for two
years thereafter (the "Noncompete Period"), he shall not directly or indirectly
own, manage, control, participate in, consult with, render services for, or in
any manner engage in any business competing with the businesses of the Company
or any of its subsidiaries (i) which



                                       8
<PAGE>


relates to (A) the manufacturing or sale of climbing equipment or (B) aluminum
extrusion or (ii) which is commenced by the Company or any of its subsidiaries
after the Effective Date and as of the date of termination constitutes or will
constitute a material portion of the Company's overall future business within
the United States and any other geographical area in which the Company or any of
its subsidiaries engage in such businesses. Nothing herein shall prohibit
Executive from being a passive owner of not more than 2% of the outstanding
equity of any class of a corporation or other entity which is publicly traded so
long as Executive has no active participation in the business of such
corporation.

            (b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any of its subsidiaries to leave the employ of such person, or
in any way interfere with the employee relationship between the Company or any
of its subsidiaries and any employee thereof, (ii) hire any person who was an
employee of the Company or any subsidiary of the Company at any time during the
Employment Period (other than individuals who have not been employed by the
Company or any subsidiary of the Company for a period of at least one year prior
to employment by Executive directly or indirectly through another entity), or
(iii) induce or attempt to induce any customer, supplier, licensee or other
person having a business relationship with the Company or any of its
subsidiaries (A) which relates to (x) the manufacturing or sale of climbing
equipment or (y) aluminum extrusion or (B) which is commenced by the Company or
any of its subsidiaries after the Effective Date and as of the date of
termination constitutes or will constitute a material portion of the Company's
overall future business to cease doing business with the Company or such
subsidiaries, or interfere materially with the relationship between any such
customer, supplier, licensee or other person having a business relationship with
the Company or any of its subsidiaries.

         7.2 PROPRIETARY INFORMATION. Executive agrees that he shall not use for
his own purpose or for the benefit of any person or entity other than the
Company or its shareholders or affiliates, nor otherwise disclose to any
individual or entity at any time while he is employed by the Company or
thereafter any proprietary information of the Company unless such disclosure (a)
has been authorized by the Board, (b) is in the good faith judgment of Executive
required in



                                       9
<PAGE>


the course of Executive's employment hereunder, (c) is in the course of such
individual's or entity's employment or retention by the Company, or (d) is
required by law, a court of competent jurisdiction or a governmental or
regulatory agency. For purposes of this Agreement, the term "proprietary
information" shall mean: (a) the name or address of any customer, supplier or
affiliate of the Company or any information concerning the transactions or
relations of any customer, supplier or affiliate of the Company or any of its
shareholders; (b) any information concerning any product, technology or
procedure employed by the Company, but not generally known to its customers,
suppliers or competitors, or under development by or being tested by the
Company, but not at the time offered generally to customers or suppliers; (c)
any information relating to the marketing methods, sales margins, discounts,
rebates, supplier incentives, or the like, the capital structure, or results of
any business plan of the Company; (d) any information contained in the Company's
policies and procedures or employees' manual; (e) any inventions, innovations,
trade secrets or other items covered by Section 7.4 below; and (f), any other
information which the Board has determined by resolution and communicated to
Executive to be confidential or proprietary. However, proprietary information
shall not include any information that is or becomes generally known to the
public other than through actions of Executive in violation of Sections 7.1, 7.2
or 7.3 hereof or any information which become available to Executive on a
non-confidential basis from a source other then the Company, its affiliates or
their respective employees, provided that such source is not known to Executive
to be subject to any obligation of secrecy to the Company or its affiliates
provided that such information was unsolicited and that with regard thereto
Executive took no action.

         7.3 CONFIDENTIALITY AND SURRENDER OF RECORDS. Executive agrees that,
while he is employed by the Company or at any time thereafter, he shall not
except as required by law give any "confidential records" (as hereinafter
defined) to, or permit any inspection or copying of confidential records by, any
individual or entity other than in the course of such individual's or entity's
employment or retention by the Company or as required by law, a court of
competent jurisdiction, or a governmental or regulatory agency, nor shall he
retain any of the same following termination of this employment, without the
prior approval of the Board. For purposes hereof, "confidential records" means
all correspondence, memoranda, files, manuals, financial,




                                       10
<PAGE>


operating or marketing records, magnetic tape, or electronic or other media of
any kind which may be in Executive's possession or under his control or
accessible to him which contain any proprietary information as defined in
Section 7.2 above.

         7.4 INVENTIONS AND PATENTS. Executive agrees that all inventions,
innovations, trade secrets, patents and processes in any way relating, directly
or indirectly, to the Company's or its subsidiaries' businesses developed by him
alone or in conjunction with others at any time during his employment by the
Company shall belong to the Company. Executive will use his best efforts to
perform all actions reasonably requested by the Board to establish and confirm
such ownership by the Company.

         7.5 DEFINITION OF COMPANY. For purposes of this Section 7, the term
"Company" shall include Holdings and any and all of its subsidiaries, ventures
or affiliates (including the Company and any and all of its subsidiaries,
ventures or affiliates) whether currently existing or hereafter formed.

         7.6 ENFORCEMENT. The parties hereto agree that the duration and area
for which the covenants set forth in Section 7 are to be effective are
reasonable. In the event that any court or arbitrator determines that the time
period or the area, or both of them, are unreasonable and that any of the
covenants are to that extent unenforceable, the parties hereto agree that such
covenants will remain in full force and effect, first, for the greatest time
period, and second, in the greatest geographical area that would not render them
unenforceable. The parties intend that this Agreement will be deemed to be a
series of separate covenants, one for each and every county of each and every
state of the United States of America. Executive agrees that damages are an
inadequate remedy for any breach of the covenants in this Section 7 and that the
Company will, whether or not it is pursuing any potential remedies at law, be
entitled to equitable relief in the form of preliminary and permanent
injunctions without bond or other security upon any actual or threatened breach
of this Agreement.



                                       11
<PAGE>

8.       MISCELLANEOUS.

         8.1 NOTICE. Any notice required or permitted to be given hereunder
shall be deemed sufficiently given if sent by registered or certified mail,
postage prepaid, addressed to the addressee at his or its address last provided
the sender in writing by the addressee for purposes of receiving notices
hereunder or, unless or until such address shall be so furnished, to the address
indicated opposite his or its signature to this Agreement. Each party may also
provide notice by sending the other party a facsimile at a number provided by
such other party.

         8.2 MODIFICATION AND NO WAIVER OF BREACH. No waiver or modification of
this Agreement shall be binding unless it is in writing signed by the parties
hereto. No waiver by a party of a breach hereof by the other party shall be
deemed to constitute a waiver of a future breach, whether of a similar or
dissimilar nature, except to the extent specifically provided in any written
waiver under this Section 8.2.

         8.3 GOVERNING LAW. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the Commonwealth of Pennsylvania,
and all questions relating to the validity and performance hereof and remedies
hereunder shall be determined in accordance with such law.

         8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement.

         8.5 CAPTIONS. The captions used herein are for ease of reference only
and shall not define or limit the provisions hereof.

         8.6 ENTIRE AGREEMENT. This Agreement together with any agreement, plans
or other documents implementing the terms of this Agreement constitute the
entire agreement between the parties hereto relating to the matters encompassed
hereby and supersede any prior oral or written agreements.




                                       12
<PAGE>


         8.7 ASSIGNMENT. The rights of the Company under this Agreement may,
without the consent of Executive, be assigned by the Company, in its sole and
unfettered discretion, to any person, firm, corporation or other business entity
which at any time, whether by purchase, merger, or otherwise, directly or
indirectly, acquires all or substantially all of the stock, assets or business
of the Company.

         8.8 NON-TRANSFERABILITY OF INTEREST. None of the rights of Executive to
receive any form of compensation payable pursuant to this Agreement shall be
assignable or transferable except through a testamentary disposition or by the
laws of descent and distribution upon the death of Executive. Any attempted
assignment, transfer, conveyance, or other disposition (other than as aforesaid)
of any interest in the rights of Executive to receive any form of compensation
to be made by the Company pursuant to this Agreement shall be void.

         8.9 ARBITRATION. Any dispute, claim or controversy arising out of or
relating to this Agreement, or the breach, termination or validity hereof, shall
be finally settled by arbitration in accordance with the then-prevailing
Commercial Arbitration Rules of the American Arbitration Association, as
modified herein ("Rules"). There shall be one arbitrator who shall be jointly
selected by the parties. If the parties have not jointly agreed upon an
arbitrator within twenty days of respondent's receipt of claimant's notice of
intention to arbitrate, either party may request the American Arbitration
Association to furnish the parties with a list of names from which the parties
shall jointly select an arbitrator. If the parties have not agreed upon an
arbitrator within ten days of the transmittal date of the list, then each party
shall have an additional five days in which to strike any names objected to,
number the remaining names in order of preference, and return the list to the
American Arbitration Association, which shall then select an arbitrator in
accordance with Rule 13 of the Rules. The place of arbitration shall be
Pittsburgh, Pennsylvania. By agreeing to arbitration, the parties hereto do not
intend to deprive any court of its jurisdiction to issue a pre-arbitral
injunction, pre-arbitral attachment or other order in aid of arbitration. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. S.S.1-16.
Judgment upon the award of the arbitrator may be entered in any court of
competent jurisdiction. Each party shall bear its or his own costs and expenses
in any such arbitration and one-half of the arbitrator's fees and expenses.




                                       13
<PAGE>

         IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first written above.


                                        WERNER CO., a Pennsylvania Corporation.

                                        By:      /s/Robert P. Tamburrino
                                                 -------------------------------
Address for Notices:                    Name:    Robert P. Tamburrino
                                        Title:   Vice President, Chief Financial
                                                 Officer and Treasurer

        93 Werner Road
        Greenville, PA 16125-9499
        Attention:  Eric J. Werner, Esq.
                    General Counsel

With a copy to:                         Consented and Agreed to for the purposes
                                        of guaranteeing the obligations of the
                                        Company under Sections 3, 6.2, and 6.3:

        Investcorp International Inc.
        280 Park Avenue, 37th Floor     WERNER HOLDING CO. (PA), INC., a
        New York, NY 10017              Pennsylvania Corporation.
        Attention: Chris J. Stadler
                                        By:      /s/Robert P. Tamburrino
                                                 -------------------------------
                                        Name:    Robert P. Tamburrino
                                        Title:   Vice President, Chief Financial
                                                 Officer and Treasurer


                                        EXECUTIVE


                                        /s/ Larry V. Friend
                                        ------------------------------------
                                        Larry V. Friend


Address for Notices:

        Larry V. Friend
        205 Cove Harbor Court
        Taylors, SC 29687



                                       14
<PAGE>


                                   SCHEDULE 1
                                   ----------

         TITLE          LOCATION OF       BASE SALARY      BONUS
                          OFFICE                           AMOUNT
                                                           AS A
                                                           PERCEN-
                                                           TAGE OF
                                                           BASE
                                                           SALARY

Vice President and      93 Werner Road     $160,000         40%
Controller              Greenville, PA





                                       15
<PAGE>

                                   EXHIBIT 1
                                   ---------

                        EARNINGS BEFORE INTEREST, TAXES,
                         DEPRECIATION AND AMORTIZATION

         Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") is defined as Consolidated Net Income (loss) of the Company and its
subsidiaries as it would appear on a statement of income (loss), which shall (i)
exclude or be adjusted otherwise for all acquisitions and additional equity
contributions to the extent such acquisitions and/or equity contributions
materially change target EBITDA for any particular Fiscal Year, (ii) reflect a
reduction for all management and employment bonuses payable with respect to the
Fiscal Year of the Company prepared in accordance with U.S. GAAP consistently
applied and (iii) be adjusted for any material Board approved amendment to the
capital expenditure plan: plus (minus) the following amounts, to the extent such
amounts are otherwise taken into account in determining EBITDA (prior to
adjustment):

         1. Any provision (benefit) for taxes (including franchise taxes)
deducted (added) in calculating such consolidated net income (loss); plus

         2. Any interest expense (net of interest income), deducted in
calculating such consolidated net income (loss); plus

         3. Amortization expenses deducted in calculating consolidated net
income (loss); plus

         4. Depreciation expense deducted in calculating consolidated net income
(loss); plus

         5. Management fees paid to Investcorp; plus (minus)

         6. Any unusual losses (gains) deducted (added) in calculating
consolidated net income (loss). (Unusual items are intended to include
transactions considered outside the ordinary course of business. EBITDA will be
adjusted to eliminate the effects, if any, of such



                                       16
<PAGE>


transactions, the intent being to calculate EBITDA as if such transactions had
not occurred; plus (minus)

         7. Any compensation expense (income) deducted (added) in calculating
consolidated net income (loss) attributable to transactions involving equity
securities of the Company or its subsidiaries.

         The Executive and his representative shall be provided reasonable
opportunity to review the computation of EBITDA and reasonable access to the
data and information supporting much computation, but the Board's determination
shall be conclusive and binding.




                                       17
<PAGE>

                                   EXHIBIT 2
                                   ---------

                       List of current Employee Benefits
                       ---------------------------------

                              Term Life Insurance

                                Travel Insurance

                                  Company Car

                                    Vacation

                                Laptop Computer

                               Cellular Telephone

                    Internet E-Mail and Web Surfing Account

                   Annual Supplemental Physical Reimbursement



                                       18
<PAGE>

                                    EXHIBIT 3
                                    ---------
                                  WERNER PERCS

                     VARIABLE PAY BONUS COMPENSATION SYSTEM
                                EMPLOYEE SUMMARY

OBJECTIVE
---------
The objective of the Werner Variable Pay Bonus Compensation System is to
motivate associates to achieve exceptional EBITDA performance by providing
substantial financial rewards when such performance is attained.

ELIGIBILITY
-----------
Participating associates shall be approved by the Board of Directors each year.
Participants must hold a position which impacts profitability and strategy,
generally Job Grade 12 and above or currently participating in the Company's
variable pay bonus program. Individuals impacting profitability, in lower
grades, may also be considered.


To be eligible a participant must be employed, designated and otherwise eligible
by June 30th and remain a participant for a minimum of six (6) months. Awards
generally will be prorated for participants who do not participate for a full
year.

At any time during the year, the Board may also designate new participants in
its sole discretion.

Only Board approved associates of the Company or its subsidiaries will be
eligible to participate in the Plan. Once a participant ceases to be an
employee, whether voluntarily or involuntarily, he or she shall automatically
cease to be a participant in the Plan, and shall cease to be entitled to receive
an award unless the participant retires, dies or becomes permanently disabled,
as noted herein. Participants must be employed by the Company at the time the
bonus is paid, unless the participant has retired, becomes permanently disabled
or is deceased (in which case, payment shall be made to the participants
estate).

An associate's participation in the Plan in any prior year(s) does not give the
associate the right to be a participant in the Plan in the current year or in
any subsequent year.

No associate shall be a participant in the Plan during any year in which he or
she is a participant in any other annual incentive plan of the Company or any of
its subsidiaries.

ADMINISTRATION
--------------
The Board shall determine whether awards will be granted. The Board will also
determine which participants will receive an award and the amount of each award,
in its sole discretion. Due consideration will be given to the award guidelines,
performance against financial objectives, individual participant performance
against objectives, the recommendations of the Chief Executive Officer and the
appropriate Executive and Management Leadership Team representative(s) and such
other factors as the Board may deem appropriate, in its sole discretion.

Payments will be made in cash as soon as practical after audited financial
results are available, normally by March 15th of each year, to participants who
are regular full-time employees on the date of payment. Federal, State and/or
local taxes or other similar payments required by law will



<PAGE>

be withheld with respect to such payments, but no 401(k) or other similar
deductions will be made.

The Board will make bonus payments at a level commensurate with the
Corporation's overall performance, including adjustments consistent with past
bonus and current stock option plans (i.e. accrued costs for acquisitions,
extraordinary expenditures, unbudgeted gains/losses arising from a change in
accounting, etc.) as follows:

         EBITDA Performance         Pool & Individual
         ------------------         -----------------
             To Target              % of Target Bonus
             ---------              -----------------
                110%                       130%
                105%                       115%
                100%                       100%
                 95%                        75%
                 90%                        50%
                <90%                         0%

The bonus is calculated by multiplying 50% times the individuals EBITDA Target
bonus percent, times the individuals bonus percent to get the EBITDA portion of
the bonus percentage. Then the Personal Performance Factor ("PPF") portion is
calculated by multiplying 50% times the individuals EBITDA Target bonus percent,
times the individuals bonus percent times their PPF rating. Finally, the two (2)
percentages are added together to get the final bonus percentage.

Under this format, it is possible for individuals to earn awards greater or less
than the formula, however, there shall be a calculated fixed bonus pool for each
year and a cap on each individual target bonus of 150% of the participant's
target bonus percent. In the event that the sum of all individual bonus's exceed
the fixed bonus pool, each individual bonus will be proportionately reduced so
that the total pay out does not exceed the fixed bonus pool. However, additional
funding can be attained if business exceeds budgeted EBITDA and the Company
makes significant progress against strategic objectives as determined by the
Board of Directors.

No person shall have any claim or right to be granted an award under the Plan.
The decisions to pay or not to pay an award, the amount of the award to be paid,
and to whom an award will be paid, shall be made by the Board, in its sole
discretion. The Board may pay an award even when the results would not otherwise
call for an award payment. Likewise, the Board may elect not to pay awards even
when minimum objectives are met.

Any exceptions to the Plan must be approved in writing by the Chief Executive
Officer based on approval of the Board.

Nothing in the Plan or in any action taken hereunder shall affect the Company's
right to terminate at any time and for any reason the employment of any employee
who is a participant in the Plan.

The Plan may be amended, suspended, terminated or reinstated in whole or in part
by the Board of Directors.




<PAGE>


              WERNER PERCS VARIABLE PAY BONUS COMPENSATION SYSTEM
              ---------------------------------------------------

KEY COMPONENTS
--------------

Core Funding Pool
-----------------
Total dollars calculated by summing the total of each individual's particular
target bonus percent multiplied by their base salary multiplied by EBITDA
adjustment factor as indicated in the 2000 EBITDA Target chart below. Under this
format, it is possible for individuals to earn awards greater or less than the
formula; however, there shall be a calculated fixed bonus pool for each year. In
the event that the sum of all individual bonus's exceed the fixed bonus pool,
each individual bonus will be proportionately reduced so that the total pay out
does not exceed the fixed bonus pool.

                               2000 EBITDA TARGET

    $ (in millions)  % of Target         EBITDA       Potential   Total
                                  Adjustment Factor   Additional
                                  % of Target Bonus    Funding
         <$67.05        <90%               0%             0        0%
         $67.05          90%              50%             0       50%
         $70.775         95%              75%             0       75%
         $74.5          100%             100%            20%     120%
         $78.225        105%             115%            20%     135%
         $81.95         110%             130%            20%     150%

Potential Additional Funding - Strategic Objectives
---------------------------------------------------
Additional plan funding can be attained if business exceeds budgeted EBITDA and
makes significant progress against strategic objectives as determined by the
Board of Directors.

Strategic Objectives are identified separately.

The Board of Directors, in its sole discretion, can approve additional funding
up to 20% for exceptional financial performance and significant progress against
strategic objectives. Therefore, the total pool could be funded at 150% of
target (130% maximum based upon EBITDA results and an additional 20% based on
significant progress of strategic objectives).

The decisions to pay or not to pay an award, the amount of the award to be paid,
and to whom an award will be paid, shall be made by the Board, in its sole
discretion. The Board may pay an award even when the results would not otherwise
call for an award payment. Likewise, the Board may elect not to pay awards even
when minimum objectives are met.




<PAGE>

ADMINISTRATION
--------------
Each individual participant in the program will be evaluated and performance
rated to reflect their own attainment of individual goals on a measure of 0 -
1.5 measured in 1/10th increments.

Example:

Personal
Performance
Factor/Modifier   Description
(PPF)

          0       Did not attain any individual goals

         .5       Attained some individual goals

         .8       Attained most individual goals

        1.0       Attained all individual goals

        1.2       Exceeded individual goals

        1.5       Outstanding performance, greatly exceeded all individual goals

Individual bonus payout has two (2) components:

        1.  50% of individual's target bonus is based upon Enterprise Financial
            Results (EBITDA) which may be adjusted consistent with past bonus
            and current stock option plans (i.e. accrued costs for acquisitions,
            extraordinary expenditures, unbudgeted gains/losses arising from a
            change in accounting, etc.).

        2.  50% of individual's bonus is based upon personal factors.

Therefore, a bonus can be "0" if the Company does not meet minimum EBITDA target
(if EBITDA is less than 90%) or up to a maximum of 1.5 times the individual
target if the Company achieves 110% of EBITDA Target and the individual receives
a 1.5 personal performance factor/modifier.

EXAMPLES:
---------
         Individual     Salary     Bonus Percent
         1.             $ 50,000        10%
         2.             $ 75,000        15%
         3.             $125,000        20%
         4.             $175,000        50%
         5.             $250,000        70%
         6.             $300,000        95%


<PAGE>


To calculate the bonus amount, take 75% times the individuals EBITDA Target
bonus percent, times the individuals bonus % to get the EBITDA portion of the
bonus % and for the PPF portion, multiply 25% times the individuals EBITDA
Target bonus percent, times the individuals bonus % times their PPF rating. Add
these two (2) percentages together to get the final bonus percentage. See
examples below

FOR THE FOLLOWING EXAMPLES, ASSUME THAT THE TOTAL BONUS POOL HAS ADEQUATE
FUNDING EXCEPT FOR EXAMPLE #4.

1) Individual #1 above, assuming the Company reaches 95% of EBITDA and the
   individuals PPF=.5

                        EBITDA            PPF
          Bonus =50% (75% x 10%) + 50% (75% x 10% x .5)
                        3.75%    +        1.875%

          Total Bonus Percentage = 5.625%
            [5.625% x $50,000]

          Bonus = $2,812.50

2) Individual #2 above, assuming the Company reached 90% of EBITDA and the
   individuals PPF = .9

                        EBITDA            PPF
          Bonus = 50% (50% x 15%) + 50% (50% x 15% x .9)
                         3.75%    +        3.375%

          Total Bonus Percentage = 7.125%
            [7.125% x $75,000]

          Bonus = $5,343.75

3) Individual #3 above, assuming the Company reached 110% of EBITDA and
   the individuals PPF =0

                        EBITDA            PPF
          Bonus = 50% (130% x 20%) + 50% (130% x 20% x 0)
                          13.0%    +        0%

          Total Bonus Percentage = 13.0%
            [13.0%x$125,000]

          Bonus = $16,250.00



<PAGE>


4) Individual #4 above, assuming the Company reached 100% of EBITDA and
   the individuals PPF=1.5

                         EBITDA               PPF
          Bonus = 50% (100% x 50%) + 50% (100% x 50% x 1.5)
                          25%      +        37.5%

          Total Bonus Percentage = 56.25
             [62.5% x $175,000]

         Total of all bonuses = 110% of total authorized bonus pool, therefore
         bonuses must be proportionately reduced by pro-rata. (Ex. If pool =
         $1,425,647 and total bonuses = $1,568,212, would need to reduce each
         individual by 10%)

          Bonus = $109,375 less proportionate reduction of $10,937.50

          Total Final Bonus = $98,437.50

5) Individual #5 above, assuming the Company reached 100% of EBITDA, plus
   additional 20% and the individuals PPF = 1.3

                         EBITDA               PPF
          Bonus = 50% (120% x 70%) + 50% (120% x 70% x 1.3)
                          42%      +        54.6%

          Total Bonus Percentage = 96.6%
             [96.6% x $250,000]

          Bonus = $241,500

6) Individual #5 above, assuming the Company reached 110% of EBITDA, plus
   additional 20% and the individuals PPF = 1.5

                         EBITDA               PPF
          Bonus = 50% (150% x 95%) + 50% (150% x 95% x 1.5)
                 71.25    %        +        106.875%

          Total Bonus Percentage = 178.125%
                  [Maximum of 142.5% (150% OF 95% TARGET BONUS) x $300,000]

          Bonus = $427,500


                                       6
<PAGE>

<TABLE>
<CAPTION>

ACTUAL EBITDA $ <$67.05M         $67.05M              $70.775M               $74.5M             $78.225M             $81 .95M
----------------------------------------------------------------------------------------------------------------------------------
ACTUAL EBITDA %
OF TARGET         <90%        90%                  95%                  100%                   105%              110%
----------------------------------------------------------------------------------------------------------------------------------
% OF TARGET BONUS  0%         50%                  75%                  100%                   115%              130%
% FOR INDIVIDUAL & POOL
----------------------------------------------------------------------------------------------------------------------------------
TARGET BONUS %             Minimum     Maximum %  Minimum   Maximum %  Minimum     Maximum   Minimum  Maximum %  Minimum    Maximum
OF BASE SALARY                %                      %                    %           %         %                   %          %
----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>       <C>          <C>        <C>       <C>        <C>         <C>       <C>      <C>        <C>        <C>
    10%            0         2.50%      6.25%      3.75%      9.38%      5.00%      12.50%     5.75%   14.38%     6.50%      15.00%
----------------------------------------------------------------------------------------------------------------------------------
    15%            0         3.75%      9.38%      5.63%     14.06%      7.50%      18.75%     8.63%   21.56%     9.75%      22.50%
----------------------------------------------------------------------------------------------------------------------------------
    20%            0         5.00%     12.50%      7.50%     18.75%     10.00%      25.00%    11.50%   28.75%    13.00%      30.00%
----------------------------------------------------------------------------------------------------------------------------------
    25%            0         6.25%     15.63%      9.38%     23.44%     12.50%      31.25%    14.38%   35.94%    16.25%      37.50%
----------------------------------------------------------------------------------------------------------------------------------
    30%            0         7.50%     18.75%     11.25%     28.13%     15.00%      37.50%    17.25%   43.13%    19.50%      45.00%
----------------------------------------------------------------------------------------------------------------------------------
    35%            0         8.75%     21.88%     13.13%     32.81%     17.50%      43.75%    20.13%   50.31%    22.75%      52.50%
----------------------------------------------------------------------------------------------------------------------------------
    40%            0        10.00%     25.00%     15.00%     37.50%     20.00%      50.00%    23.00%   57.50%    26.00%      60.00%
----------------------------------------------------------------------------------------------------------------------------------
    45%            0        11.25%     28.13%     16.88%     42.19%     22.50%      56.25%    25.88%   64.69%    29.25%      67.50%
----------------------------------------------------------------------------------------------------------------------------------
    50%            0        12.50%     31.25%     18.75%     46.88%     25.00%      62.50%    28.75%   71.88%    32.50%      75.00%
----------------------------------------------------------------------------------------------------------------------------------
    55%            0        13.75%     34.38%     20.63%     51.56%     27.50%      68.75%    31.63%   79.06%    35.75%      82.50%
----------------------------------------------------------------------------------------------------------------------------------
    60%            0        15.00%     37.50%     22.50%     56.25%     30.00%      75.00%    34.50%   86.25%    39.00%      90.00%
----------------------------------------------------------------------------------------------------------------------------------
    65%            0        16.25%     40.63%     24.38%     60.94%     32.50%      81.25%    37.38%   93.44%    42.25%      97.50%
----------------------------------------------------------------------------------------------------------------------------------
    70%            0        17.50%     43.75%     26.25%     65.63%     35.00%      87.50%    40.25%  100.63%    45.50%     105.00%
----------------------------------------------------------------------------------------------------------------------------------
    75%            0        18.75%     46.88%     28.13%     70.31%     37.50%      93.75%    43.13%  107.81%    48.75%     112.50%
----------------------------------------------------------------------------------------------------------------------------------
    80%            0        20.00%     50.00%     30.00%     75.00%     40.00%     100.00%    46.00%  115.00%    52.00%     120.00%
----------------------------------------------------------------------------------------------------------------------------------
    85%            0        21.25%     53.13%     31.88%     79.69%     42.50%     106.25%    48.88%  122.19%    55.25%     127.505
----------------------------------------------------------------------------------------------------------------------------------
    90%            0        22.50%     56.25%     33.75%     84.38%     45.00%     112.50%    51.75%  129.38%    58.50%     135.00%
----------------------------------------------------------------------------------------------------------------------------------
    95%            0        23.75%     59.38%     35.63%     89.06%     47.50%     118.75%    54.63%  136.56%    61.75%     142.50%
----------------------------------------------------------------------------------------------------------------------------------
    100%           0        25.00%     62.50%     37.50%     93.75%     50.00%     125.00%    57.50%  143.75%    65.00%     150.00%
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Note: Maximum percentage is capped to 150% of target bonus percent. This chart
does not show any calculations for the potential additional 20% funding.



<PAGE>

<TABLE>

<S>                                    <C>             <C>                         <C>                        <C>             <C>
        Personal Performance Objectives
Bonus Participant Name:    Supervisor:
Key Performance Objectives              Weight          Measurement of Success                  Results         Rating(1)       PPF
1.                                            %                                                                                 (2)
2.                                            %
3.                                            %
4.                                            %
5.                                            %
6.                                            %
7.                                            %
TOTAL                                      100%


ESTABLISHING KEY PERFORMANCE OBJECTIVES:                                                        RESULTS:


                                                        This is general guidance for performance
__________________________________  ________            rating. You can use any number between
Participant                         Date
                                                        ______________________________________  ______________________ ____________
                                                        0 - 1.5 in 1/10ths.                     Participant            Date

___________________________________ ________            0 - Did not attain any individual goals ______________________ ____________
Supervisor                          Date                .5 - Attained some individual goals     Supervisor             Date
                                                        .8 - Attained most individual goals
Executive Leadership Team                               1.0 - Attained all individual goals     ______________________ ____________
Representative                                          1.2 - Exceeded individual goals         Executive Leadership   Date
                                                        1.5 - Outstanding performance, greatly  Team Representative
___________________________________ ________                  exceeded all individual goals
                                    Date

CEO                                 Date                (2) Personal Performance Factor/Modifier =   CEO               Date
___________________________________ ________                Performance Rating x Percentage Weight   _________________ ____________
</TABLE>



<PAGE>

                     AMENDMENT NO.1 TO EMPLOYMENT AGREEMENT

         This Amendment No.1 to Employment Agreement (this "Amendment") is made
and entered into as of May 31, 2000, by and between Werner Co., a Pennsylvania
corporation (the "Company"), and Larry V. Friend ("Executive").

         WHEREAS, the Company and Executive desire to enter into this Amendment
to amend certain terms of the Employment Agreement (the "Agreement").

         NOW THEREFORE, the Company and Executive agree as follows:

         1. AMENDMENT TO PERFORMANCE BASED COMPENSATION.

         Section 3.2 of the Agreement shall be amended by deleting the first
paragraph and chart and replacing with the following:


         In addition to the Base Salary provided for in Section 3.1 hereof,
         commencing for the fiscal year 2000, Executive shall be eligible to
         receive an annual cash bonus (prorated based on service) earned during
         the calendar year in an amount equal to 40% of the Base Salary in
         effect at the end of such calendar year based upon the extent to which
         Werner Holding Co. (PA), Inc.'s ("Holdings") consolidated Earnings
         Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as
         defined in EXHIBIT 1 hereto, equals or exceeds the percentages of
         target annual EBITDA with respect to such fiscal year in accordance
         with the attached Exhibit 3.

         2. REMAINING PROVISIONS.

         All provisions of the Agreement not otherwise amended by this Amendment
shall remain in full force and effect.



                                       1
<PAGE>


         IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first above written.



                                                WERNER CO., a Pennsylvania
                                                Corporation

                                                By:  /s/ Dennis G. Heiner
                                                     ---------------------------
                                                Name:    Dennis G. Heiner
                                                Title:   President and CEO



                                                EXECUTIVE

                                                /s/ Larry V. Friend
                                                --------------------------------
                                                Larry V. Friend



                                       2
<PAGE>


                     AMENDMENT NO.2 TO EMPLOYMENT AGREEMENT

         This Amendment No.2 to Employment Agreement (this "Amendment") is made
and entered into as of October 31, 2001, by and between Werner Co., a
Pennsylvania corporation (the "Company"), and Larry V. Friend ("Executive").

         WHEREAS, the Company and Executive desire to enter into this Amendment
to certain terms of the Amended Employment Agreement dated as of May 31, 2000
(the "Agreement").

         NOW THEREFORE, the Company and Executive agree as follows:

         1. PLACE AND TERM OF EMPLOYMENT

         Section 2(b) of the Agreement shall be amended by deleting such section
in its entirety and replacing it with the following:

                  (b) Subject to Section 6 hereunder, the term of this Agreement
         shall be through April 4, 2005. This Employment Agreement shall be
         automatically renewed for successive one (1) year periods thereafter
         unless either party gives notice otherwise within 12 months, but not
         less than 6 months prior to an expiration.

         2. TERMINATION OF EMPLOYMENT

         Section 6.3 of the Agreement shall be amended by deleting such section
in its entirety and replacing it with the following:

                  6.3 NOT FOR CAUSE OR FOR GOOD REASON. If (i) Executive's
         employment is terminated by the Company for a reason other than Cause,
         Executive's death or Executive's Permanent Disability, or (ii)
         Executive terminates his employment for Good Reason (as hereinafter
         defined), the Company's obligation to compensate Executive shall in all
         respects cease as of the date of such termination, except (a) for
         Standard Termination Payments, (b) that the Company will pay to
         Executive a lump sum amount equal the sum of(l) twelve (12) months of
         the Executive's Base Salary in effect at the time of such termination
         and (2) the bonus that the Executive received (or earned but did not
         receive) for the fiscal year immediately preceding the fiscal year in
         which his




<PAGE>


employment terminated, and (c) that the Company will, for a period of twelve
(12) months following said date of termination, provide Executive with
retirement benefits and welfare (including any life insurance, hospitalization,
medical and disability) benefits, substantially similar to those provided to
Executive as of the date of termination, provided that such welfare benefits
shall be discontinued to the extent Executive receives similar benefits from
subsequent employment. For purposes of this Agreement, "Good Reason" shall mean
(1) a reduction by the Company in the Executive's bonus opportunities or, except
as specifically provided herein, base salary as in effect on the Effective Date
or as the same may be increased from time to time; (2) unless the members of the
Board appointed pursuant to Section 4(iii) of the Shareholder Agreement dated as
of the date hereof agree to such reduction or other action, any material
reduction in the level of benefits (including participation in any bonus plan)
to which the Executive is entitled under one or more employee benefit plans on
the Effective Date, or the taking of any action by the Company which would
adversely affect the Executive's accrued benefits under any such employee
benefit plans or deprive the Executive of any material fringe benefit enjoyed by
the Executive on the Effective Date; (3) a demand by the Company to the
Executive to relocate to any place that exceeds a fifty (50) mile radius beyond
the location at which the Executive performed the Executive's duties on the
Effective Date; or (4) any material breach by the Company of any provision of
this Agreement.

         3. REMAINING PROVISIONS.

         All provisions of the Agreement not otherwise amended by this Amendment
shall remain in full force and effect.




                                       20
<PAGE>


         IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first above written.



                                                WERNER CO., a Pennsylvania
                                                Corporation



                                                By: /s/  Dennis G. Heiner
                                                -------------------------------
                                                Name: Dennis G. Heiner
                                                Title: President



                                                EXECUTIVE



                                                /s/ Larry V. Friend
                                                --------------------------------
                                                Larry V. Friend