SUPPLEMENTAL LIFE INSURANCE AGREEMENT

THIS SUPPLEMENTAL LIFE INSURANCE AGREEMENT is made in Chicago,  Illinois;  as of
the ____ day of _______, 199_, by and between JOHNSTOWN AMERICA INDUSTRIES, INC.
(the "Corporation"),  a Delaware  corporation,  and  ___________________________
(the "Employee").

WHEREAS,  the Corporation  wishes to reward the Employee with  supplemental life
insurance compensation for faithful and productive service with the Corporation;
and

WHEREAS,  the parties  hereto desire to have the  specifics of the  supplemental
life insurance compensation and the criteria pursuant to which such supplemental
life insurance compensation will be paid reduced to a written agreement;

NOW,  THEREFORE,  in  consideration  of the mutual covenants and promises herein
made, the Corporation and the Employee agree as follows:

   1. Compensation

      In addition to any and all other  compensation  paid by the Corporation to
      the Employee for services  rendered to the  Corporation,  the  Corporation
      agrees,  subject to Section 2 below,  to: (1) pay the annual  premium on a
      $__________  policy (the  "Policy")  of life  insurance on the life of the
      Employee;  and (2)  "gross-up"  the  Employee in cash for the  approximate
      amount of federal,  state and local income taxes the Employee  must pay on
      the imputed income  therefrom;  and (3) reimburse the Employee  additional
      cash so that the Employee will have no "out-of-pocket" outlay by virtue of
      this reimbursement to pay the tax.

   2. Payment Conditions

      a.  The Policy  premiums will be paid  directly to the insurer  subject to
          the following conditions precedent:

          i)  Subject to Section 4(b) below,  the Policy shall be purchased  and
              wholly owned by the Employee and, without exception, all incidents
              of ownership  shall vest in the Employee.  The Employee shall have
              sole discretion in naming the beneficiary of the Policy;  provided
              that,  in no event will the Employee name the  Corporation  or any
              affiliate  or  subsidiary  of  the  Corporation  as a  beneficiary
              thereof.  Subject to Section  4(c),  the  Employee  shall have the
              ability  to  surrender,  borrow  or to obtain  dividends  from the
              Policy.

          ii) The Corporation agrees to pay the premiums on the Policy when due.
              The  duration  and  amount of the  Policy  may be  changed  at the
              Corporation's discretion.  Except as otherwise provided in Section
              4(a)  or  in  the  last  sentence  of  Section  4(b)  below,   the
              Corporation's obligation to continue to pay premiums on the Policy
              shall cease upon the earlier of the Employee's death,  termination
              from service for any reason, or 65th birthday.




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        b.Income Tax Reimbursement Provision

          i)  The  Corporation  also agrees to pay the Employee a  reimbursement
              approximately  equal to the amount of personal federal,  state and
              local  income taxes that the Employee is obligated to pay on gross
              income  imputed to the  Employee by virtue of each premium paid on
              the policy by the Corporation.

    3.  Term

        The term of the Agreement  shall commence with the effective date of the
        Policy and terminate as provided in Section 4 below.

    4.  Termination Rights; Surrender of Policy

        a.Subject to the last  sentence of Section  4(b) below,  either party to
          this Agreement may terminate the Corporation's continued obligation to
          pay  premiums on the Policy upon the giving of sixty (60) days written
          notice of termination to the other party.

        b.Prior  to  the  third  anniversary  of  the  date  hereof,   upon  the
          termination of the Employee's  employment with the Corporation for any
          reason,  the  Employee  agrees to assign  to the  Corporation  without
          consideration  therefor  all rights of the  Employee to the Policy and
          all benefits thereunder effective as of the date of termination of the
          Employee's  employment  with the  Corporation.  The foregoing shall be
          inapplicable  to a  termination  of employment  due to the  Employee's
          death or a termination of employment pursuant to which the Employee is
          entitled to any benefits  under any severance or employment  agreement
          then in effect between the Corporation and the Employee.  In addition,
          the  Corporation  acknowledges  that in the event of a termination  of
          employment  pursuant to which the Employee is entitled to any benefits
          under any severance or employment agreement then in effect between the
          Corporation and the Employee and notwithstanding any provision in this
          Agreement to the  contrary,  the  Corporation  shall  continue to make
          premium  payments  on the  Policy as  provided  herein  for the period
          specified in such severance or employment agreement.

          On and  after  the  third  anniversary  of the date  hereof,  upon the
          termination  of the Employee's  employment  with the  Corporation  for
          Cause  (as  defined  below),  the  Employee  agrees  to  assign to the
          Corporation without consideration  therefor all rights of the Employee
          to the policy and all benefits thereunder  effective as of the date of
          termination of the Employee's  employment  with the  Corporation.  For
          purposes  of this  Agreement,  "Cause"  shall mean (i) the willful and
          continued  failure  by  the  Employee  to  substantially  perform  the
          Employee's  duties with the  Corporation  (other than any such failure
          resulting  from the  Employee's  incapacity  due to physical or mental
          illness)  after  a  written  demand  for  substantial  performance  is
          delivered to the  Employee by the  Corporation's  Board of  Directors,
          which  demand   specifically   identifies  the  manner  in  which  the
          Corporation's  Board of Directors  believes  that the Employee has not
          substantially performed the



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          Employee's  duties,  or (ii) the willful  engaging by the  Employee in
          conduct  which  is  demonstrably  and  materially   injurious  to  the
          Corporation or its subsidiaries, monetarily or otherwise. For purposes
          of clauses (i) and (ii) of this definition, no act, or failure to act,
          on the  Employee's  part shall be deemed  "willful"  unless  done,  or
          omitted to be done,  by the  Employee  not in good  faith and  without
          reasonable  belief that the Employee's  act, or failure to act, was in
          the best interest of the Corporation.

        c.So long as the Employee  continues to be employed by the  Corporation,
          the  Corporation's  consent will be required in order for the Employee
          to surrender, borrow, or to obtain dividends from the Policy, provided
          that  consent  will be given  to  obtain  Policy  values  for  college
          education  of the  Employee's  children  or for  medical  needs of the
          Employee and family.

    5.  Named Fiduciary and Plan Administrator

          The Chief Financial  Officer of the  Corporation is hereby  designated
          the "named fiduciary". As named fiduciary, the Chief Financial Officer
          shall be responsible for the management, control and administration of
          the Policy as  established  herein.  The Chief  Financial  Officer may
          allocate to others  certain  aspects of the  management  and operation
          responsibilities  of the plan including the employment of advisors and
          the delegation of any ministerial duties to qualified individuals.

    6.  Claims Procedure for Life Insurance

          Due proof of death must be submitted to the insurer at its home office
          on forms  furnished by it. These forms can be obtained  from any local
          office of the insurer or from its home office.

IN WITNESS WHEREOF,  the parties hereto have executed this AGREEMENT on the date
first above written.

                                         JOHNSTOWN AMERICA INDUSTRIES, INC.


                                 By:  /s/ Andrew M. Weller
                                   ---------------------------------
                                        Andrew M. Weller
                                        Executive Vice President & CFO





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