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                                  BORDEN FOODS

The objective of the Borden Foods management incentive compensation plan is to
reaffirm the interest of the enterprise as a whole over short term self-interest
while optimizing the "whole system" versus sub-optimizing the pieces.

TARGET INCENTIVE

Each participant will have a target incentive opportunity, stated as a
percentage of salary (on December 31 of the plan year). Actual financial
performance of Borden Foods and contribution to three critical areas will
determine if awards are paid at, above, or below the established target
incentive opportunity.

BORDEN FOODS CORPORATION FINANCIAL PERFORMANCE

The financial performance of the target incentive for BFC is based on an actual
EBITDA (Earnings before interest and taxes, plus depreciation and amortization)
performance compared to the established EBITDA budget.

               MANAGEMENT INCENTIVE PROGRAM - DETAILED INFORMATION
               ---------------------------------------------------

                                TARGET INCENTIVE

The annual target incentive opportunity for each participant is stated as a
percentage of salary (on December 31 of the plan year). Actual financial
performance and individual contribution to the BFC transformation process will
determine if awards are paid at, above or below the established target incentive
opportunity. .
<TABLE>
<CAPTION>

                    Example:
<S>                                                  <C>
                    Salary:                          $70,000
                    Annual Incentive Target:         20%
                    Incentive Target:                $14,000 (20% of $70,000)
</TABLE>

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                            BFC FINANCIAL PERFORMANCE

The financial performance portion of the target incentive for BFC is based on an
established EBITDA budget which is defined as earnings before interest and
taxes, plus depreciation and amortization. A financial performance award is paid
only if actual EBITDA reported is at least 80% of the established Borden, Inc.
EBITDA budget. If actual financial performance is at 120% of EBITDA budget, the
maximum financial performance award will be paid.

DETERMINING FINANCIAL AWARD BASED ON EBITDA

The primary basis for determining the financial award will be actual EBITDA
relative to the approved EBITDA budget. EBITDA has been selected because it
provides a measure of earnings that reflects performance of our business on a
day-to-day basis, since it excludes financing and tax considerations.

The following procedures will be followed in determining the financial
performance award based on EBITDA:

          -         EBITDA will be adjusted for accounting policy changes
                    dictated by the U.S. Securities and Exchange Commission
                    (SEC), the U.S. Financial Accounting Standards Board (FASB)
                    or the Borden, Inc. Chief Financial Officer.

          -         Special situations such as a provision for the sale or
                    closing of a plant or business may be proposed for
                    exclusion.

The relationship between the incentive pool relative to actual EBITDA
performance is as follows:
<TABLE>
<CAPTION>
STRIKE POINTS         ACTUAL EBITDA DEVIATION                 PERCENT OF TARGET AWARD
                            FROM BUDGET                                EARNED
<S>                <C>                                     <C>
Minimum               EBITDA underachieved by                 50% of Target Award
                      $20 million

Target                EBITDA at budget                        100% of Target Award

Maximum               EBITDA overachieved by                  200% of Target Award
                      $20 million
</TABLE>


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         -        If the EBITDA budget is achieved, the financial performance
                  award at the target incentive level will be paid.

         -        If the EBITDA budget is under achieved by more than $20
                  million, no incentive awards will be paid.

         -        If the EBITDA budget is under achieved by $20 million, 50% of
                  the total MIP participants' incentive target will be paid.

         -        If EBITDA is over achieved by $20 million, 200% of total MIP
                  participants' incentive targets will be paid.

         -        Based on actual EBITDA performance compared to the EBITDA
                  budget established for BFC, the incentive award pool will be
                  interpolated when performance is between minimum under
                  achievement by $20 million) and target (100%), or target
                  (100%) and maximum (over achievement by $20 million)
                  performance based on the above table.

                           Example:

                           Actual EBITDA Performance:  $60.4 million (halfway
                                                       between EBITDA budget
                                                       and maximum)

                           Incentive Level:            150% (halfway between
                                                       target and maximum
                                                       opportunity)

                           Incentive Pool:             150% of the total
                                                       participants'
                                                       incentive targets

INDIVIDUAL PERFORMANCE

Each individual participant will be evaluated on three criteria:

-         Achievement of 1996 business or functional objectives in support of
          BFC attaining financial EBITDA goals

-         Support of the BFC transformation process

-         Support of the BFC transformation process of the organization to the
          next level.

Each participant will be measured using the performance rating scale below which
is aligned with performance rating percentage


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<TABLE>
<CAPTION>
PERFORMANCE                    GUIDELINE
   RATING                      PERCENTAGE

<S>                              <C>
         <2                         0%
          2                        50%
          3                        100%
          4                        150%
          5                        200%
</TABLE>


Any performance ratings between the points indicated above will be interpolated.

Once an individual's performance has been rated on all three criteria using the
above scale, then a weighted average performance will be calculated by summing
the three ratings and dividing by three.
<TABLE>
<CAPTION>

                  Example:
<S>                                                                  <C>
                  Objective criteria:                                  Performance Rating:
                  Support of achieving EBITDA Goal                              3
                  Support of Transformation process                             4
                  Support of Transformation to next level                       4

                  Weighted average performance                                  3.67
</TABLE>

Using the weighted average performance rating, and the guideline percentages,
the weighted average performance rating will be translated to an incentive
percentage which when multiplied by the incentive target will give a preliminary
payout.
<TABLE>
<CAPTION>
<S>                                                        <C>
                  Example:
                  Weighted average performance                3.67
                  Incentive percentage                        133% (2/3 between 100% for 3 performance
                                                              and 150% for 4 performance
                  Incentive target                            $14,000 (20% of $70,000)
                  Preliminary Payout                          $18,620 (133% of $14,000)
</TABLE>

ADJUSTING THE PRELIMINARY PAYOUTS

The overall incentive pool available for payouts to individuals is limited by
BFC financial performance compared to budget. Once the preliminary payouts are
determined for each participant, it is likely that the sum of the preliminary
payouts will either exceed or fall below the established incentive pool.


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The total preliminary payout for all MIP participants will be divided by the
total MIP participants incentive target to obtain an adjustment factor.

All individual preliminary payouts will be multiplied by the adjustment factor
to realign awards with the total incentive target pool.
<TABLE>
<CAPTION>
                  Example:
<S>                                                                   <C>
                  Individual Preliminary Payout                        $18,620
                  Total Preliminary payout                             $1,050,000
                  Total incentive target                               $1,000,000
                  Adjustment factor                                    95.2%
                  Adjusted Individual Payout                           $17,726 ($18,620 times 95.2%)
</TABLE>


TOTAL AWARD

Based on actual BFC financial performance versus EBITDA budget, the total
incentive pool will be established as outlined previously. Once the percent of
target award earned has been determined, the adjusted individual payout will be
multiplied by the percent of target award earned to calculate the final payment.
<TABLE>
<CAPTION>
                  Example:
<S>                                                                   <C>
                  BFC Actual performance:                              $60.4 million
                  Incentive level                                      150%
                  Individual Incentive Payment                         $26,589
</TABLE>

                            ADMINISTRATIVE GUIDELINES
                            -------------------------

1.  Base Salary for Bonus Calculations
    ----------------------------------

         December 31, 1996 Annual Base Salary will be used to calculate the
incentive

2.  Eligibility

         To be eligible to receive an incentive award under the program, you
         must be an active associate as of the end of the measurement period
         (i.e., December 31, 1996). The only exceptions to this rule are
         detailed below under item number 5.

3.  Pro-Rata Eligibility

         Where incentives are to be paid for partial periods, the incentive
         will be calculated on a pro-rata basis. Eligibility for pro-rata
         payments is detailed in items number 4, 5, and 6 below. Pro-rata


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         calculations will be done on whole months only.

4.  New Hires, Transfers or Promotions During the Incentive Period
    --------------------------------------------------------------

         For New Hires or participants added to the Plan, the bonus will be
         calculated on a pro-rated basis from the date of hire, but only in
         whole months.

         For Promotions and Transfers, the bonus will be pro-rated from the date
         of promotion or transfer in whole months. This pro-ration will apply to
         both changes in target incentive percentage and to changes in goals.

         For all pro-rations under this item, effective dates as of the first
         through the fifteenth of the month will count the full month. Effective
         dates as of the sixteenth through the last day of the month will not
         include that month in the pro-ration calculation.

5.  Termination During the Incentive Period
    ---------------------------------------

         If it is a Voluntary Termination, no bonus will be earned.

         If it is an Involuntary Termination due to unsatisfactory performance
         or cause, no bonus will be earned. Note: Achieving business results at
         the expense of violations of laws, regulations or business ethics or
         allowing any individuals to behave in this manner will be considered
         cause for termination.

         If it is an Involuntary Termination due to job elimination or
         reorganization, the bonus will be paid, if earned, on a pro-rated basis
         as of the termination date. Termination effective on the first through
         the fifteenth of the month will not include the termination month in
         the pro-rata calculation. Terminations effective on the sixteenth
         through the last day of the month will include the termination month in
         the pro-rata calculation. Payments will be made at the same time as
         they are made to participants who continue to work for the Company
         through the end of the year.

6.  Death or Disability During the Incentive Period
    -----------------------------------------------

         The incentive earned as of the date of death will be paid, on a
         pro-rated basis, to the estate of the participant at the same time
         payments are made to associates who continue to work for the Company
         through the end of the year.

         Disabilities of 30 days or less will not have an impact on the
         participant's ability to continue to be eligible for an incentive.

         If a disability lasts more than 30 days, then the incentive will be
         earned only for the period worked. The period worked will be determined
         on a pro-rated basis up until the date of disability and from the date
         of return to work. The pro-ration will operate in whole months where
         the first through the fifteenth as the date of disability will not
         count the month and the sixteenth through the end of the month as the
         date of disability will count the month; and where the first through
         the fifteenth as the date of return to work will count the month and
         the sixteenth through the end of the month as the date of return to
         work will not count the month. Incentive payments will be


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         made at the same time as they are made to participants who work
         full-time for the Company through the end of the year.

7.  Adding Participants to the Plan
    -------------------------------

         New participants will be added to this program during the year as
         recommended by members of the Senior Management Team and reviewed and
         approved by Vice President Human Resources, BFC and the Chief Executive
         Officer. The criteria for participation will be based on both similar
         job classification as the list of current participants in this program
         and a responsibility level commensurate with the participant's ability
         to influence goal outcomes. Approval will be required for both the
         addition of a participant to the program and the proposed participant's
         target incentive level.

8.  Timing of Payments
    ------------------

         Bonus awards will be paid as quickly after the end of 1996 as possible.
         Financial results will need to be finalized as appropriate by the
         Borden, Inc. Controller and the independent auditors before bonuses can
         be calculated and paid.

9.  Financial Adjustments
    ---------------------

         Actual financial results as reported on a GAAP basis will be utilized
         for incentive award calculation with the following exceptions:

         -        Special situations, such as a provision for the sale or
                  closing of a plant or business, may be proposed for exclusion
                  IF THE PROPOSAL IS PRESENTED WHEN THE CHARGE IS TAKEN.
                  Exclusions will need to be approved by the Borden, Inc. Chief
                  Executive Officer and Chief Financial Officer.

         -        Accounting policy changes dictated by the U.S. Securities and
                  Exchange Commission (SEC), the U.S. Financial Accounting Board
                  (FASB), or the Borden, Inc. Chief Financial Officer may be
                  proposed for exclusion IF THE PROPOSAL IS PRESENTED WHEN THE
                  CHANGE IS MADE. Exclusions will need to be approved by the
                  Borden, Inc. Chief Executive Officer and Chief Financial
                  Officer

         -        If earnings were achieved in ways that are considered
                  undesirable (such as reducing budgeted advertising
                  expenditures where this would hurt the business), an
                  adjustment may be made at the discretion of the Borden, Inc.
                  Chief Executive Officer.

10.  All Plan Payments Subject to Discretion
     ---------------------------------------

         Notwithstanding the attainment of financial results, or part or all of
         the goals, all awards under the Plan are subject to the approval of the
         Chief Executive Officer of Borden, Inc.