PLEASE READ CAREFULLY.  THIS DOCUMENT IS THE SOLE
DOCUMENT WHICH SETS FORTH THE GUIDELINES FOR THE
INCENTIVE COMPENSATION PLAN FOR HCG EMPLOYEES FOR FISCAL
YEAR 1998.



                           HARRIS CHEMICAL GROUP, INC.
                 Incentive Compensation Plan ("ICP") or ("Plan")


The Incentive  Compensation  Plan's primary objective is to provide a meaningful
financial  incentive  for  participants  to achieve and exceed  vital  financial
targets.  The preeminent financial target is Equity Value Enhancement ("EVE") of
the  Company,  and  bonus  payments  will  be  tied  to  this  value.  All  Plan
participants will have the opportunity to participate in the equity appreciation
of HCG,  and many will be required  to do so.  Equity  participation  aligns the
financial  interests  of  participants  with  those  of other  shareholders;  in
addition,   equity   participation   significantly   increases  potential  total
compensation. Listed below are the Plan's guidelines:

PREMISES:

o        ICP payments will be based on fiscal year-end results.

o        All bonus  payments must be self funding.  This means all payments must
         be  budgeted  and come out of cash  from  operations.  If the cash flow
         targets with budgeted ICP payments are not met, a bonus cannot be paid.

o        Each senior BU executive  submits in writing,  as soon as practical,  a
         list of candidates for  participation  in the ICP to the Sr. VP - Human
         Resources  who will  secure  approvals  and  return a list of  approved
         participants to each executive.  Criteria for participation include but
         are   not   limited   to   individual    contributions,    professional
         contributions,  and the candidate's position. In essence, employees who
         can make a clearly greater  contribution than others to the achievement
         of EVE goals will be considered for participation.

o        Payments  will  be  made  as soon  as  practical after  audited  annual
         financial statements are available.

o        ICP payments will not be considered eligible  compensation for purposes
         of the Harris  Chemical  North  America, Inc.  Retirement,  Savings and
         Investment Plan.


                                                        ~1~

<PAGE>


HCG Incentive Compensation Plan                                Fiscal Year 1998

o        To receive an ICP payment,  an employee  must be an active  employee at
         the time the payment is made.  Any  participant  who is  discharged  or
         resigns,  voluntarily or involuntarily,  prior to the time such payment
         is made will not receive an ICP payment.

o        Employees  hired after the start of the fiscal  year may be  considered
         for ICP  participation  on a pro rata basis upon  securing  appropriate
         written approvals.

o        Participants'  actual base earnings during Fiscal Year 1998,  exclusive
         of bonuses or other forms of  compensation,  will be used to  calculate
         ICP  payments.  ICP payments at the 100% payout level can be calculated
         by multiplying a participant's  base earnings times that  participant's
         participation level (i.e., bonus percentage).

o        For purposes of establishing  performance goals each year, Equity Value
         will be approximated by multiplying  EBITDA  (Earnings Before Interest,
         Taxes,  Depreciation and  Amortization)  times six and then subtracting
         debt.  (Please note: This formula is used to determine Equity Value for
         ICP purposes only. The actual Equity Value of HCG will be determined by
         the  market.) EVE goals will be  established  for both the Company as a
         whole and for each of the nine strategic Business Units (BU's):

<TABLE>
          <S>                                <C>                                     <C>
          --------------------------------------------------------------------------------------------------
          European White Salt         |      North American Sodium            |      North American Salt -
                                      |            Bicarbonate                |            General Trade
          --------------------------------------------------------------------------------------------------
          European Rock Salt          |      North American Soda Ash          |      North American Salt -
                                      |                                       |           Highway/Chemical
          --------------------------------------------------------------------------------------------------
          European Soda Products      |      Worldwide Boron                  |      Sulfate of Potash/
                                      |                                       |           Magnesium Chloride
          --------------------------------------------------------------------------------------------------
</TABLE>



o        ICP  payments  for  corporate  participants  will be based  entirely on
         overall Company performance against EVE Goals.

o        ICP payments for BU participants will be based on both corporate and BU
         performance against EVE Goals, as follows:

                  Presidents, VP's, General Managers and Senior Staff
                           40% corporate, 60% Business Unit

                  Other BU Participants
                           20% corporate, 80% Business Unit


                                                        ~2~

<PAGE>


HCG Incentive Compensation Plan                                Fiscal Year 1998

o        ICP payments for each of the respective  Business Units are independent
         of the others.  That is, if one of the Business  Units achieves its EVE
         goal,  participants from that BU will receive that portion of their ICP
         payment, irrespective of whether the other BU's or the Company as whole
         achieve their EVE goals.

o        ICP payments  will be determined by the Equity Value of the Company and
         its  Business  Units at the end of the fiscal  year,  measured  against
         Budgeted Equity Value and Target Equity Value.

o        At Budgeted Equity Value, 50% of the expected ICP payment will be paid.
         At Target Equity Value,  125% of the expected ICP payment will be paid.
         Any Equity Value achieved above Budgeted  Equity Value will result in a
         pro-rata  ICP  payment.  There is no limit on the level of ICP payments
         for  performance  above Target Equity Value.  Failure to reach Budgeted
         Equity Value will result in no bonus being paid.

o        Business  Units will have the same payout  schedule as the Company (50%
         at Budget, 125% at Target) for Fiscal Year 1998.

o        ICP  payments  will  be  made in some  combination  of cash  and  stock
         options. The limit on the cash portion of ICP payments is determined by
         ICP participation level, as shown below:

<TABLE>
          <S>                                                          <C>   

          Participant's ICP Participation Level                        Maximum Amount of Payable in Cash
                          <=20%                                                      100%
                           25%                                                        90%
                           30%                                                        75%
                          >=35%                                                       50%
</TABLE>



o        The amount of the ICP payment which is not awarded in cash will be paid
         in the form of options to purchase HCG stock at 25% of its value at the
         time of option  award  (the  "strike"  price).  Options  will be vested
         immediately and may be retained after termination of employment.

o        At the  end  of  the  Fiscal  Year,  all  participants  will  have  the
         opportunity  to elect  additional  options in lieu of any or all of the
         cash portion of their ICP payment.


                                                        ~3~

<PAGE>


HCG Incentive Compensation Plan                                Fiscal Year 1998
o        The number of options  awarded is calculated by  dividing the amount of
         noncash compensation by 0.75 times the price of  HCG stock.  This price
         will be set annually by an independent third party.

o        The value of options  may change  over  time,  depending  on the Equity
         Value of the Company.  If the Equity Value increases,  the value of the
         stock options will also increase.

o        Participants  may  exercise  options by paying the strike price (25% of
         the stock's price at the time the option was awarded).

o        The noncash  portion of ICP  payments  is not  taxable to  participants
         until such time as they exercise their options.












THIS DOCUMENT,  DATED AUGUST 26, 1997, SUPERSEDES ANY AND ALL PREVIOUS DOCUMENTS
SETTING  FORTH  GUIDELINES  FOR THE HCG ICP.  ONLY  THE  CHAIRMAN  RESERVES  THE
EXCLUSIVE RIGHT TO MODIFY IN ANY WAY (INCLUDING ADDING OR DELETING PARTICIPANTS,
CHANGING  PARTICIPANTS'  LEVEL,  ETC.) OR CANCEL THIS PLAN FOR ANY REASON AT THE
CONCLUSION  OF FISCAL  YEAR  1998.  ADDITIONALLY,  THIS PLAN DOES NOT CREATE ANY
RIGHT OF AN EMPLOYEE TO RECEIVE AN INCENTIVE  PAYMENT OR TO  PARTICIPATE  AT ANY
TIME  IN THE  FUTURE  IN  THIS  OR ANY  OTHER  INCENTIVE  PLAN  OF THE  COMPANY.
FURTHERMORE,  PARTICIPATION  IN THE  PLAN  DOES NOT  CONSTITUTE  A  CONTRACT  OF
EMPLOYMENT  BETWEEN  THE  COMPANY  AND  THE  EMPLOYEE,  NOR  DOES  IT  GUARANTEE
EMPLOYMENT FOR ANY LENGTH OF TIME.


                                                        ~4~

<PAGE>