<PAGE 1>

EXHIBIT 10.3

                          EMPLOYMENT AGREEMENT
                          --------------------

          AGREEMENT by  and  between Lindberg  Corporation,  a  Delaware
corporation (the  "Company") and  Stephen S.  Penley (the  "Executive"),
dated as of the 22nd day of July, 1999.

          The Board  of  Directors of  the  Company (the  "Board"),  has
determined that  it is  in the  best interests  of the  Company and  its
shareholders  to  assure  that  the  Company  will  have  the  continued
dedication of the Executive, notwithstanding the possibility, threat  or
occurrence of a  Change of Control  (as defined below)  of the  Company.
The  Board  believes  it  is  imperative  to  diminish  the   inevitable
distraction of the Executive by virtue of the personal uncertainties and
risks created  by a  pending  or threatened  Change  of Control  and  to
encourage the Executive's full attention  and dedication to the  Company
currently and  in the  event  of any  threatened  or pending  Change  of
Control, and to  provide the  Executive with  compensation and  benefits
arrangements upon a Change of Control which ensure that the compensation
and benefits expectations of the Executive  will be satisfied and  which
are competitive with those of other  corporations.  Therefore, in  order
to accomplish  these objectives,  the Board  has caused  the Company  to
enter into this Agreement.

          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

          1.   Certain Definitions.  (a)  The "Effective Date" shall  be
               -------------------
the first date during the Protection Period (as defined in Section l(b))
on which a Change of Control occurs.  Anything in this Agreement to  the
contrary notwithstanding,  if a  Change of  Control  occurs and  if  the
Executive's employment with the Company is terminated prior to the  date
on which  the  Change  of  Control  occurs,  and  if  it  is  reasonably
demonstrated by the  Executive that such  termination of employment  (i)
was at the  request of a  third party which  has taken steps  reasonably
calculated to effect the  Change of Control or  (ii) otherwise arose  in
connection with or anticipation of the  Change of Control, then for  all
purposes of  this Agreement  the "Effective  Date" shall  mean the  date
immediately prior to the date of such termination of employment.

               (b)    The  "Protection  Period"  shall  be  the   period
commencing on the date  hereof and ending 24  calendar months after  the
date hereof; provided,  however, that commencing  on the  date one  year
after the date hereof, and on each annual anniversary of such date (such
date and each annual anniversary  thereof shall be hereinafter  referred
to as the "Renewal Date"), the Protection Period shall be  automatically
extended so as to terminate 24  calendar months from such Renewal  Date,
unless at least 60 days prior to the Renewal Date the Company shall give
notice  to  the  Executive  that  the  Board  has  determined  that  the
Protection Period shall not be so extended.

          2.   Change of Control.  For the purpose of this Agreement,  a
               -----------------
"Change of Control" shall  mean the occurrence of  any of the  following
events:

<PAGE 2>
               (a)  The Company  is merged, consolidated or  reorganized
into or with another corporation or  other legal person, or there is  an
offer  to  holders  of  the  common  stock  generally  relating  to  the
acquisition  of  their  shares,  and  as   a  result  of  such   merger,
consolidation, reorganization or offer, less than 75% of the outstanding
voting securities or other capital interests of the surviving, resulting
or acquiring  corporation  or  other  legal  person  are  owned  in  the
aggregate by the stockholders of the  Company immediately prior to  such
merger, consolidation, reorganization or offer;

               (b)  The Company  sells all or  substantially all of  its
business and/or assets to any other  corporation or other legal  person,
less than  75% of  the outstanding  voting securities  or other  capital
interests of which are owned in  the aggregate, directly or  indirectly,
by the persons who were stockholders  of the Company immediately  before
or after such sale; or

               (c)    During  any  period  of  two  consecutive   years,
individuals who  at the  beginning of  any  such period  constitute  the
directors of the Company cease for  any reason to constitute at least  a
majority thereof, unless the election, or the nomination for election by
the Company's  stockholders, of  each new  director of  the Company  was
approved by  a vote  of at  least two-thirds  of such  directors of  the
Company then still in  office who were directors  of the Company at  the
beginning of any such period.

          3.   Employment Period.  The Company hereby agrees to continue
               -----------------
the Executive in its employ, and  the Executive hereby agrees to  remain
in the employ of the Company, for the period commencing on the Effective
Date and  ending  30  calendar months  after  the  Effective  Date  (the
"Employment Period").

          4.   Terms of  Employment.   (a)  Position  and Duties.    (i)
               --------------------         --------------------
During the Employment  Period, (A) the  Executive's position  (including
status, offices, titles and  reporting requirements), authority,  duties
and responsibility  shall  be  at least  commensurate  in  all  material
respects with the most significant of those held, exercised and assigned
at any time during the 90-day period immediately preceding the Effective
Date and (B) the Executive's services shall be performed at the location
where the  Executive was  employed immediately  preceding the  Effective
Date or any office or location  less than 35 miles from the  Executive's
primary residence immediately prior to such relocation.

               (ii)   During the  Employment Period,  and excluding  any
periods of vacation and sick leave  to which the Executive is  entitled,
the Executive  agrees to  devote reasonable  attention and  time  during
normal business hours to the business and affairs of the Company and, to
the extent necessary to discharge  the responsibilities assigned to  the
Executive hereunder, to use the  Executive's reasonable best efforts  to
perform faithfully and  efficiently such responsibilities.   During  the
Employment Period it shall not be a violation of this Agreement for  the
Executive to  (A) serve  on corporate,  civic  or charitable  boards  or
committees, (B) deliver lectures, fulfill speaking engagements or  teach
at educational institutions and (C) manage personal investments, so long
as such activities do not  significantly interfere with the  performance
of the Executive's  responsibilities as an  employee of  the Company  in
                                   2
<PAGE 3>
accordance with this Agreement.  It  is expressly understood and  agreed
that to the extent that any  such activities have been conducted by  the
Executive prior to  the Effective Date,  the continued  conduct of  such
activities (or the  conduct of activities  similar in  nature and  scope
thereto) subsequent to the Effective Date shall not thereafter be deemed
to interfere with the performance of the Executive's responsibilities to
the Company.

               (b)    Compensation.    (i)  Base  Salary.    During  the
                      ------------          ------------
Employment Period, the  Executive shall  receive an  annual base  salary
("Annual Base Salary"), which shall be paid at a monthly rate, at  least
equal to twelve times the highest monthly base salary paid or payable to
the Executive by the Company and its affiliated companies in respect  of
the twelve-month period  immediately preceding  the month  in which  the
Effective Date occurs.   During the Employment  Period, the Annual  Base
Salary shall be reviewed at least annually and shall be increased at any
time and from  time to time  as shall be  substantially consistent  with
increases in base  salary generally awarded  in the  ordinary course  of
business to  other peer  executives of  the Company  and its  affiliated
companies.  Any increase in Annual Base Salary shall not serve to  limit
or reduce any other  obligation to the  Executive under this  Agreement.
Annual Base Salary shall not be reduced after any such increase and  the
term Annual Base  Salary as utilized  in this Agreement  shall refer  to
Annual Base Salary as so increased.  As used in this Agreement, the term
"affiliated  companies"  shall  include   any  company  controlled   by,
controlling or under common control with the Company.

               (ii)  Annual Bonus.  In  addition to Annual Base  Salary,
                     ------------
the Executive shall be awarded, for  each fiscal year ending during  the
Employment Period, an annual bonus (the "Annual Bonus") in cash at least
equal to the midpoint of his current annual bonus range, but in no event
less than the average annualized (for any fiscal year consisting of less
than 12 full  months or  with respect to  which the  Executive has  been
employed by the  Company for  less than 12  full months)  bonus paid  or
payable, including by reason  of any deferral, to  the Executive by  the
Company and  its affiliated  companies in  respect of  the three  fiscal
years immediately preceding the fiscal year in which the Effective  Date
occurs.  Each such Annual Bonus shall be  paid no later than the end  of
the third month of  the fiscal year next  following the fiscal year  for
which the Annual Bonus is awarded,  unless the Executive shall elect  to
defer the receipt of such Annual Bonus.

               (iii)  Profit Sharing, Thrift, Savings and Pension Plans.
                      -------------------------------------------------
In  addition  to  Annual  Base  Salary  and  Annual  Bonus  payable   as
hereinabove provided,  the Executive  shall be  entitled to  participate
during the Employment Period in all profit sharing, thrift, savings  and
pension plans, practices, policies and programs generally applicable  to
other peer executives of the Company  and its affiliated companies,  but
in no event shall such plans,  practices, policies and programs  provide
the Executive with profit  sharing opportunities (measured with  respect
to both  regular  and  special  profit  sharing  opportunities),  thrift
opportunities, savings opportunities and pension benefits opportunities,
in each case, less favorable, in the aggregate, than the most  favorable
of those provided by  the Company and its  affiliated companies for  the
Executive under
                                   3
<PAGE 4>
such  plans, practices,  policies, and programs as in effect at any time
during the 90-day  period immediately preceding  the Effective Date.

               (iv)   Welfare  Benefit  Plans.   During  the  Employment
                      -----------------------
Period, the Executive and/or the Executive's family, as the case may be,
shall be eligible for  participation in and  shall receive all  benefits
under welfare benefit plans,  practices, policies and programs  provided
by  the  Company  and  its  affiliated  companies  (including,   without
limitation,   medical,   prescription,   dental,   disability,    salary
continuance, employee  life, group  life,  accidental death  and  travel
accident  insurance  plans  and   programs)  to  the  extent   generally
applicable to other peer  executives of the  Company and its  affiliated
companies, but in  no event shall  such plans,  practices, policies  and
programs provide benefits  which are less  favorable, in the  aggregate,
than the most favorable of such plans, practices, policies and  programs
in effect  for  the Executive  at  any  time during  the  90-day  period
immediately preceding the Effective Date.

               (v)    Expenses.    During  the  Employment  Period,  the
                      --------
Executive shall  be entitled  to receive  prompt reimbursement  for  all
reasonable expenses incurred  by the  Executive in  accordance with  the
most favorable policies, practices and procedures of the Company and its
affiliated companies in effect for the Executive at any time during  the
90-day period  immediately  preceding the  Effective  Date or,  if  more
favorable to  the  Executive,  as  in  effect  at  any  time  thereafter
generally with respect to other peer  executives of the Company and  its
affiliated companies.

               (vi)    Perquisites.   During the  Employment Period, the
                       -----------
Executive  shall  be entitled  to  perquisites  in  accordance with  the
most favorable plans,  practices,  programs  and policies of the Company
and its  affiliated companies in effect for  the Executive at  any  time
during the 90-day period immediately preceding the Effective Date or, if
more favorable  to the Executive, as in  effect  at  any time thereafter
generally with respect  to other peer executives  of the Company and its
affiliated companies.

               (vii)  Office and Support  Staff.  During the  Employment
                      -------------------------
Period, the Executive  shall be entitled  to an office  or offices of  a
size and  with  furnishings  and other  appointments,  and  to  personal
secretarial and other assistance, at least  equal to the most  favorable
of the  foregoing provided  to  the Executive  by  the Company  and  its
affiliated companies at  any time during  the 90-day period  immediately
preceding the Effective Date or, if more favorable to the Executive,  as
provided at any  time thereafter generally  with respect  to other  peer
executives of the Company and its affiliated companies.

               (viii)   Vacation.  During  the  Employment  Period,  the
                        --------
Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for  the Executive at any time  during
the 90-day period immediately preceding the  Effective Date or, if  more
favorable to  the  Executive,  as  in  effect  at  any  time  thereafter
generally with respect to other peer  incentives of the Company and  its
affiliated companies.
                                   4
<PAGE 5>
               (ix)  Substitution of  Nonqualified  Benefits.    If  the
                     ---------------------------------------
continued provision  of benefits  to the  Executive under  any  employee
benefit plan of the Company at  the level required by this Section  4(b)
would cause such employee benefit plan  to violate any minimum  coverage
or nondiscrimination  requirement of  any  applicable provision  of  the
Internal Revenue Code of 1986 (the "Code"), the Company may provide  the
closest possible economic equivalent  of such benefit in  the form of  a
nonqualified plan or additional compensation.

          5.  Termination of Employment.  (a) Death or Disability.   The
              -------------------------       -------------------
Executive's  employment   shall   terminate   automatically   upon   the
Executive's  death  during  the  Employment  Period.    If  the  Company
determines in  good  faith that  the  Disability of  the  Executive  has
occurred during the  Employment Period  (pursuant to  the definition  of
"Disability" set  forth below),  it may  give to  the Executive  written
notice of its  intention to terminate  the Executive's  employment.   In
such event, the Executive's employment with the Company shall  terminate
effective on the 30th day after receipt of such notice by the  Executive
(the "Disability Effective  Date"), provided  that, within  the 30  days
after such receipt, the Executive shall  not have returned to  full-time
performance of the Executive's duties.  For purposes of this  Agreement,
"Disability" means the  absence of  the Executive  from the  Executive's
duties with  the Company  on a  substantially  full-time basis  for  180
consecutive business days  as a result  of incapacity due  to mental  or
physical illness which  is determined  to be  total and  permanent by  a
physician selected by the Company or its insurers and acceptable to  the
Executive or the Executive's legal representative (such agreement as  to
acceptability not to be withheld unreasonably).

               (b)  Cause.   The Company  may terminate the  Executive's
                    -----
employment during the Employment Period for Cause.  For purposes of this
Agreement, "Cause" shall mean (i)  repeated violations by the  Executive
of the material obligations of the Executive under Section 4(a) of  this
Agreement (other  than as  a result  of incapacity  due to  physical  or
mental illness) which  are demonstrably  willful and  deliberate on  the
Executive's part, which are committed in bad faith or without reasonable
belief that such violations are in the best interests of the Company and
which  are   not   remedied  in   a reasonable  period  of  time   after
receipt by the  Executive of  written notice  from the  Company of  such
violations or (ii) the conviction of the Executive of a felony involving
moral turpitude.

               (c)   Good Reason.   The  Executive's employment  may  be
                     -----------
terminated during  the  Employment  Period by  the  Executive  for  Good
Reason.  For purposes of this Agreement, "Good Reason" shall mean:

          (i) the assignment to the Executive of any duties inconsistent
     in any  respect with  the Executive's  position (including  status,
     offices, titles and reporting  requirements), authority, duties  or
     responsibilities as contemplated by Section 4(a) of this Agreement,
     or any other action by the Company which results in a diminution in
     such position, authority, duties or responsibilities, excluding for
     this purpose an isolated, insubstantial and inadvertent action  not
     taken in bad faith  and which is remedied  by the Company  promptly
     after receipt of notice thereof given by the Executive;
                                   5
<PAGE 6>
          (ii) any failure  by the  Company to  comply with  any of  the
     provisions of  Section  4(b)  of  this  Agreement,  other  than  an
     isolated, insubstantial and  inadvertent failure  not occurring  in
     bad faith  and which  is remedied  by  the Company  promptly  after
     receipt of notice thereof given by the Executive;

          (iii) the Company's requiring the Executive to be based at any
     office or location other than that described in Section  4(a)(i)(B)
     hereof;

          (iv)  any  purported  termination   by  the  Company  of   the
     Executive's employment  otherwise than  as expressly  permitted  by
     this Agreement; or

          (v) any failure by the Company or any successor to comply with
     and satisfy Section  11(c) of  this Agreement,  provided that  such
     successor has received at least ten days prior written notice  from
     the Company or the Executive of  the requirements of Section  11(c)
     of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good
Reason" made by  the Executive shall  be conclusive.   Anything in  this
Agreement  to  the  contrary  notwithstanding,  a  termination  by   the
Executive for any reason during the 30-day period immediately  following
the first anniversary  of the  Effective Date shall  be deemed  to be  a
termination for Good Reason for all purposes of this Agreement.

               (d) Notice  of  Termination.    Any  termination  by  the
                   -----------------------
Company for  Cause,  or by  the  Executive  for Good  Reason,  shall  be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 12(b)  of this Agreement.  For purposes of  this
Agreement, a "Notice of Termination" shall  mean a written notice  which
(i) indicates  the  specific  termination provision  in  this  Agreement
relied upon, (ii)  to the extent  applicable, sets  forth in  reasonable
detail the  facts  and circumstances  claimed  to provide  a  basis  for
termination  of  the  Executive's  employment  under  the  provision  so
indicated and (iii)  if the Date  of Termination (as  defined below)  is
other than the date of receipt of such notice, specifies the termination
date (which date shall be not more than 15 days after the giving of such
notice).  The failure by  the Executive or the  Company to set forth  in
the Notice of Termination any fact or circumstance which contributes  to
a showing of Good Reason or Cause, as  the case may be, shall not  waive
any right of  the Executive  or the  Company hereunder  or preclude  the
Executive or the  Company from asserting  such fact  or circumstance  in
enforcing the Executive's or the Company's rights hereunder.

               (e)    Date of Termination.   "Date of Termination" shall
                      -------------------
mean (i) if  the  Executive's  employment  is terminated by  the Company
for  Cause, or  by  the Executive  for  Good Reason, the date of receipt
of the Notice  of Termination or any  later  date specified therein,  as
the  case may  be, (ii)  if the  Executive's employment is terminated by
the  Company  other  than  for  Cause, Disability  or death, the Date of
Termination  shall  be  the  date  on  which  the  Company  notifies the
Executive  of  such termination, and (iii) if the Executive's employment
is terminated by reason of  death or Disability, the Date of Termination
shall  be  the  date  of  death  of  the  Executive  or  the  Disability
Effective Date, as the case may be.
                                   6
<PAGE 7>
          6.  Obligations  of the Company  upon Termination.   (a)  Good
              ---------------------------------------------         ----
Reason; Other than for Cause or  Disability.  If, during the  Employment
-------------------------------------------
Period, the  Company shall  terminate the  Executive's employment  other
than for Cause or Disability or the Executive shall terminate employment
for Good Reason, the Company shall have the following obligations.

          (i) The Company shall  pay to the Executive  in a lump sum  in
     cash within 30 days after the Date of Termination the aggregate  of
     the following amounts:

               (A) the amount equal  to the product of  (x) 2.5 and  (y)
          the  sum  of  the  Executive's  Annual  Base  Salary  and  the
          Executive's Annual Bonus; provided, however, that such  amount
          shall be paid in lieu of, and the Executive hereby waives  the
          right to receive,  any other amount  of severance relating  to
          salary or bonus continuation to  be received by the  Executive
          upon such termination of employment under any severance  plan,
          policy or arrangement of the Company; and

               (B) the amount  equal to the  product of  (x) the  Annual
          Bonus and (y) a fraction, the numerator of which is the number
          of days in the  then current fiscal year  through the Date  of
          Termination, and the denominator of which is 365; and

               (C) the  amount of  the  Executive's Annual  Base  Salary
          through the Date of Termination to the extent not  theretofore
          paid and the amount of any compensation previously deferred by
          the Executive (together with any accrued interest thereon) and
          not yet paid by  the Company and any  accrued vacation pay  of
          the Executive not yet paid by the Company.

     For purposes  of  this  Agreement, the  aggregate  of  the  amounts
     described in clauses (A),  (B) and (C) of  this Section 6(a)  shall
     hereafter be referred to as the "Special Termination Amount."

          (ii) For 30  months after such  termination of employment,  or
     such longer period  as any plan,  program, practice  or policy  may
     provide, the Company shall continue benefits to the Executive  and,
     where applicable, the  Executive's family at  least equal to  those
     which would  have been  provided to  them  in accordance  with  the
     plans,  programs,  practices  and  policies  described  in  Section
     4(b)(iv) of this  Agreement if the  Executive's employment had  not
     been terminated  in  accordance  with  the  most  favorable  plans,
     practices, programs or policies of  the Company and its  affiliated
     companies generally applicable to  other peer executives and  their
     families  during  the  90-day  period  immediately  preceding   the
     Effective Date or, if more favorable to the Executive, as in effect
     at any  time  thereafter  generally  with  respect  to  other  peer
     executives of the  Company and its  affiliated companies and  their
     families (such  continuation of  such benefits  for the  applicable
     period set forth herein hereinafter referred to as "Welfare Benefit
     Continuation").   For purposes  of determining  eligibility of  the
     Executive   for   retiree   benefits  pursuant   to   such   plans,
     practices,  programs  and   policies,  the  Executive
                                   7
<PAGE 8>
     shall be considered to have remained employed until the end of such
     30  months' period  and  to have  retired  on the last day of  such
     period.  In the event the Executive becomes reemployed with another
     employer   and  is eligible  to  receive medical  or other  welfare
     benefits  under any  employer provided plan, the medical  or  other
     welfare  benefits  described  herein  shall not be  provided by the
     Company during such applicable period  of  eligibility,  but  shall
     resume if such period  of eligibility shall terminate.  In the case
     of any benefit subject to the  continuation  coverage  requirements
     of  Section   4980A  of   the  Code, the  Executive and his covered
     dependents shall be  considered   to have  lost  their  coverage by
     reason of the termination of  employment at the end of the  Welfare
     Benefit Continuation period or, if earlier,  on the day  before the
     day  the Executive  becomes covered  by a plan sponsored by another
     employer as provided above.

          (iii) The 30 month period referred  to in Section 6(a)(ii)  of
     this Agreement (or,  if longer, the  period provided  in each  such
     plan) shall  be considered  a period  of service  for all  purposes
     (including, as applicable, benefit accrual, employer contributions,
     and  matching)  under  each  of  the  plans  described  in  Section
     4(b)(iii) of this  Agreement, and the  accrued benefit or  employer
     contributions of  the  Executive  under each  such  plan  shall  be
     determined as if the Executive had been employed through the end of
     such period; provided, however, that  if the provision of  benefits
     under any employee benefit plan pursuant to this Section  6(a)(iii)
     (or Section 6(a)(ii) of  this Agreement) would  cause such plan  to
     violate any minimum  coverage or  nondiscrimination requirement  of
     the Code,  the provisions  of Section  4(b)(ix) of  this  Agreement
     shall  apply.     For  purposes  hereof,   any  matching   employer
     contribution for any period that ends  during such 30 months  shall
     be determined  as  if the  Executive  had made  the  same  employee
     contribution during such period as he  made during the last  period
     ending prior to or  with the date of  termination (or, if  greater,
     the actual amount of the Executive's contribution for such period).

               (b) Death.  If  the Executive's employment is  terminated
                   -----
by reason of the  Executive's death during  the Employment Period,  this
Agreement shall terminate without further obligations to the Executive's
legal representatives under  this Agreement, other  than the payment  by
the Company of  the Special Termination  Amount, provided however,  that
the amount of such payment determined under Section 6(a)(i)(A) shall  be
adjusted as follows.  The amount set forth in clause (A) shall be offset
in all cases  by any  basic life insurance  benefit paid  or payable  in
respect of the Executive's death as  a consequence of any premiums  paid
by the Company, and, in addition,  if the death occurs after six  months
following the Change of Control, it shall be offset by the amount of any
salary payments  made to  the Executive  for any  periods of  employment
following the Change of Control.   The Special Termination Amount  shall
be paid to the  Executive's estate or beneficiary,  as applicable, in  a
lump sum in cash within 30 days of the Date of Termination.  Anything in
this Agreement to the  contrary notwithstanding, the Executive's  family
shall be  entitled  to receive  benefits  at  least equal  to  the  most
favorable   benefits  provided   generally  by  the  Company   and   any
of its affiliated companies to  surviving  families of  peer  executives
of  the   Company  and  such  affiliated  companies  under  such  plans,
programs, practices   and   policies  relating   to
                                   8
<PAGE 9>
family death benefits, if any, as  in effect generally  with respect  to
other  peer  executives and their families at any time during the 90-day
period immediately preceding  the Effective Date  or, if  more favorable
to  the  Executive  and/or  the Executive's family, as in  effect on the
date  of the Executive's  death generally  with  respect  to other  peer
executives   of   the  Company  and  its  affiliated companies and their
families.

               (c)  Disability.    If  the  Executive's  employment   is
                    ----------
terminated   by   reason   of   the Executive's  Disability  during  the
Employment  Period,  this  Agreement  shall  terminate  without  further
obligations to the Executive, other than  the payment by the Company  of
the Special Termination  Amount.   Such Special  Termination Amount,  if
Executive's Disability occurs after six  months following the Change  of
Control, shall be offset  by the amount of  any salary payments made  to
the Executive  for any  periods of  employment following  the Change  of
Control.  The Special Termination Amount shall be paid to the  Executive
in a  lump sum  in cash  within  30 days  of  the Date  of  Termination.
Anything  in  this  Agreement  to  the  contrary  notwithstanding,   the
Executive shall  be  entitled after  the  Disability Effective  Date  to
receive disability  and  other  benefits at  least  equal  to  the  most
favorable of those generally provided by the Company and its  affiliated
companies to  disabled executives  and/or their  families in  accordance
with  such  plans,   programs,  practices  and   policies  relating   to
disability, if any, as  in effect generally with  respect to other  peer
executives and  their families  at any  time  during the  90-day  period
immediately preceding the Effective  Date or, if  more favorable to  the
Executive and/or  the  Executive's family,  as  in effect  at  any  time
thereafter through the  Date of  Termination generally  with respect  to
other peer executives of  the Company and  its affiliated companies  and
their families.

               (d)  Cause;  Other  than  for   Good  Reason.    If   the
                    ---------------------------------------
Executive's  employment  shall  be  terminated  for  Cause  during   the
Employment  Period,  this  Agreement  shall  terminate  without  further
obligations to the  Executive other than  the obligation to  pay to  the
Executive Annual Base Salary  through the Date  of Termination plus  the
amount of any compensation previously deferred by the Executive, in each
case to  the extent  theretofore unpaid.   If  the Executive  terminates
employment during  the Employment  Period, excluding  a termination  for
Good Reason, this Agreement shall terminate without further  obligations
to the Executive, other than for the following obligations: (1)  payment
of the Executive's Annual Base Salary through the Date of Termination to
the extent not theretofore paid, (ii) payment of the product of (x)  the
Annual Bonus and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination, and the
denominator of  which  is 365  and  (iii) payment  of  any  compensation
previously deferred by the Executive (together with any accrued interest
thereon) and not yet paid by the Company and any accrued vacation pay of
the Executive not  yet paid  by the  Company (the  amounts described  in
paragraphs (i),  (ii)  and  (iii) shall  be  hereafter  referred  to  as
"Accrued Obligations").  In such case, all Accrued Obligations shall  be
paid to the Executive in a lump sum in  cash within 30 days of the  Date
of Termination.

          7.  Non-exclusivity of Rights.  Except as explicitly  modified
              -------------------------
or   otherwise   explicitly  provided  by  this  Agreement, (i)  nothing
in this  Agreement shall prevent or  limit  the  Executive's  continuing
or  future  participation  in  any benefit,  bonus,  incentive or
                                   9
<PAGE 10>
other plans, programs, policies or practices provided by the  Company or
any of its affiliated companies and for which the Executive may qualify,
nor shall  anything herein limit or otherwise affect such  rights as the
Executive may  have under any other  agreements with the  Company or any
of its  affiliated companies and (ii) amounts which are  vested benefits
or  which  the Executive  is  otherwise  entitled  to receive  under any
plan,   policy,   practice   or  program  of the  Company  or any of its
affiliated companies at or  subsequent  to the Date of Termination shall
be payable in  accordance with such  plan,  policy, practice or  program
except  as  explicitly modified by this Agreement.

          8.  Full  Settlement.  The  Company's obligation  to make  the
              ----------------
payments provided for  in this Agreement  and otherwise  to perform  its
obligations  hereunder   shall  not   be   affected  by   any   set-off,
counterclaim, recoupment, defense or other claim, right or action  which
the Company  may  have against  the Executive or  others.   In no  event
shall the Executive be  obligated to seek other  employment or take  any
other action  by  way  of  mitigation of  the  amounts  payable  to  the
Executive under any of the provisions  of this Agreement and, except  as
provided in Section 6(a)(ii) of this  Agreement, such amounts shall  not
be reduced whether or not the  Executive obtains other employment.   The
Company agrees to pay,  to the full extent  permitted by law, all  legal
fees and expenses which the Executive  may reasonably incur as a  result
of any contest (regardless of the  outcome thereof) by the Company,  the
Executive or others of the validity  or enforceability of, or  liability
under, any provision of this Agreement  or any guarantee of  performance
thereof (including as a result of any contest by the Executive about the
amount of any  payment pursuant to  this Agreement), plus  in each  case
interest on any delayed payment at the applicable Federal rate  provided
for in Section 7872(f)(2)(B) of the Code.  If there shall be any dispute
between  the  Company  and  the  Executive  (i) in  the  event  of   any
termination of the Executive's employment  by the Company, whether  such
termination was for Cause,  or (ii) in the event  of any termination  of
employment by the Executive, whether  Good Reason existed, then,  unless
and until  there  is a  final,  nonappealable  judgment by  a  court  of
competent jurisdiction declaring that such termination was for Cause  or
that the determination by the Executive of the existence of Good  Reason
was not  made in  good faith,  the Company  shall pay  all amounts,  and
provide all benefits, to the Executive and/or the Executive's family  or
other beneficiaries,  as the  case may  be, that  the Company  would  be
required to  pay or  provide pursuant  to Section  6(a) as  though  such
termination were by the Company without Cause, or by the Executive  with
Good Reason; provided, however, that the  Company shall not be  required
to pay  any  disputed amount  pursuant  to this  paragraph  except  upon
receipt of an undertaking by or on behalf of the Executive to repay  all
such amounts to which the Executive is ultimately adjudged by such court
not to be entitled.

          9.  Certain Additional Payments by the Company.
              ------------------------------------------
               (a)    Anything  in   this  Agreement  to  the   contrary
notwithstanding, in the event it shall  be determined that as a  result,
directly   or  indirectly,  of  any  payment  or  distribution   by  the
Company to  or  for  the  benefit  of  the Executive,  whether  paid  or
payable  or distributed  or distributable  pursuant to the terms of this
Agreement  or otherwise (a "Payment"), the  Executive  would be  subject
to  the  excise  tax  imposed  by
                                   10
<PAGE 11>
Section  4999  of the Code  or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together
with any  such interest  and  penalties,  are  hereinafter  collectively
referred to as the "Excise Tax"), then the Executive  shall be  entitled
to  promptly receive  an  additional payment  (a  "Gross-Up Payment") in
an  amount  such  that  after  payment  by  the  Executive of  all taxes
(including  any  interest  or  penalties  imposed  with  respect to such
taxes),  including,  without  limitation,  any  income  taxes  (and  any
interest and  penalties imposed  with respect  thereto) and  Excise  Tax
imposed upon the Gross-Up Payment, but excluding any income taxes on the
Payment, the Executive is in the same after-tax position as if no Excise
Tax had been imposed upon the Executive.

               (b)   Subject  to the  provisions  of Section  9(c),  all
determinations required  to  be made  under  this Section  9,  including
whether or when a  Gross-Up Payment is required  and the amount of  such
Gross-Up Payment and the assumptions to be utilized in arriving at  such
determinations, shall be made by the accounting firm of Arthur  Andersen
& Co., or such other nationally  recognized accounting firm selected  by
the Company  (the  "Accounting  Firm"),  which  shall  provide  detailed
supporting calculations both to the Company and the Executive within  15
business days of  receipt of notice  from the Executive  that there  has
been a Payment or such earlier time as is requested by the Company.  All
fees and expenses of  the Accounting Firm shall  be borne solely by  the
Company.  Any Gross-Up  Payment, as determined pursuant to this  Section
9, shall be paid to the Executive within five days of the receipt of the
Accounting Firm's determination.  If the Accounting Firm determines that
no Excise  Tax  is  payable  by the  Executive,  it  shall  furnish  the
Executive with a written opinion that  failure to report the Excise  Tax
on the Executive's applicable federal income tax return would not result
in the imposition of a negligence or similar penalty.  Any determination
by the  Accounting  Firm shall  be  binding  upon the  Company  and  the
Executive.  As a result of the uncertainty in the application of Section
4999 of  the  Code at  the  time of  the  initial determination  by  the
Accounting Firm hereunder, it is  possible that Gross-Up Payments  which
will  not  have  been  made  by  the  Company  should  have  been   made
("Underpayment"), consistent with the  calculations required to be  made
hereunder.  In the event that the Company exhausts its remedies pursuant
to Section  9(c) and  the Executive  thereafter is  required to  make  a
payment of  any Excise  Tax, the  Accounting  Firm shall  determine  the
amount of the Underpayment that has  occurred and any such  Underpayment
shall be promptly  paid by  the Company  to or  for the  benefit of  the
Executive.

               (c)  The Executive shall notify the Company in writing of
any claim by  the Internal Revenue  Service that,  if successful,  would
require the  payment by  the  Company of  the  Gross-Up Payment.    Such
notification shall be given as soon as practicable but no later than ten
business days after the Executive knows of such claim and shall  apprise
the Company of the nature of such claim and the date on which such claim
is requested to be paid.  The  Executive shall not pay such claim  prior
to the expiration of  the 30-day period following  the date on which  it
gives such notice to the Company  (or such shorter period ending on  the
date that any payment of taxes with respect  to such claim is due).   If
the Company notifies the Executive in writing prior to the expiration of
such period that it desires to contest such claim, the Executive shall:
                                   11
<PAGE 12>
               (i) give the Company any information reasonably requested
          by the Company relating to such claim,

               (ii) take such action in connection with contesting  such
          claim as the Company shall reasonably request in writing  from
          time to time, including,  without limitation, accepting  legal
          representation with  respect  to  such claim  by  an  attorney
          reasonably selected by the Company,

               (iii) cooperate with the Company  in good faith in  order
          effectively to contest such claim, and,

               (iv) permit the Company to participate in any proceedings
          relating to such claim;

provided, however,  that the  Company shall  bear and  pay directly  all
costs  and  expenses  (including  additional  interest  and   penalties)
incurred in connection with  such contest and  shall indemnify and  hold
the Executive harmless,  on an after-tax  basis, for any  Excise Tax  or
income tax  (including  interest  and penalties  with  respect  thereto)
imposed as a  result of  such representation  and payment  of costs  and
expenses.   Without  limitation  on the  foregoing  provisions  of  this
Section 9(c),  the  Company  shall  control  all  proceedings  taken  in
connection with such  contest and,  at its  sole option,  may pursue  or
forego any  and all  administrative appeals,  proceedings, hearings  and
conferences with the taxing authority in respect of such claim and  may,
at its sole option, either direct  the Executive to pay the tax  claimed
and sue for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court  of initial jurisdiction and  in
one or more appellate courts, as the Company shall determine;  provided,
however, that if the Company directs the Executive to pay such claim and
sue for a refund, the  Company shall advance the amount of such  payment
to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on  an after-tax basis, from  any Excise Tax  or
income tax  (including  interest  or  penalties  with  respect  thereto)
imposed with respect  to such  advance or  with respect  to any  imputed
income with  respect to  such advance;  and  further provided  that  any
extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive  with respect to which such  contested
amount is claimed to be due is limited solely to such contested  amount.
Furthermore, the Company's control  of the contest  shall be limited  to
issues with  respect  to  which a  Gross-Up  Payment  would  be  payable
hereunder and the Executive shall be  entitled to settle or contest,  as
the case may be, any other issue raised by the Internal Revenue  Service
or any other taxing authority.

               (d) If, after the receipt by  the Executive of an  amount
advanced by the Company pursuant to Section 9(c), the Executive  becomes
entitled to receive any refund with respect to such claim, the Executive
shall (subject  to  the Company's  complying  with the  requirements  of
Section 9(c)) promptly  pay to  the Company  the amount  of such  refund
(together with  any  interest  paid  or  credited  thereon  after  taxes
applicable thereto).   If,  after the  receipt by  the Executive  of  an
amount advanced by the Company pursuant to Section 9(c), a determination
is  made  that  the  Executive  shall  not
                                   12
<PAGE 13>
be  entitled to  any refund  with respect to such claim and the  Company
does not notify the Executive  in writing of its intent to  contest such
denial  of  refund  prior  to  the  expiration  of  30  days  after such
determination, then such advance  shall be  forgiven  and  shall  not be
required  to be repaid  and the amount  of such advance shall offset, to
the  extent thereof, the amount of Gross-Up Payment required to be paid.

          10. Confidential Information.  The  Executive shall hold in  a
fiduciary capacity  for  the  benefit  of  the  Company  all  secret  or
confidential information, knowledge or data  relating to the Company  or
any of its affiliated companies, and their respective businesses,  which
shall have  been  obtained  by  the  Executive  during  the  Executive's
employment by the Company or any  of its affiliated companies and  which
shall not  be or  become public  knowledge (other  than by  acts by  the
Executive or  representatives  of the  Executive  in violation  of  this
Agreement).  After  termination of the  Executive's employment with  the
Company, the Executive shall not, without  the prior written consent  of
the Company or  as may otherwise  be required by  law or legal  process,
communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it.  In no event shall an
asserted violation of  the provisions of  this Section  10 constitute  a
basis for deferring or withholding any amounts otherwise payable to  the
Executive under this Agreement.

          11. Successors.    (a)  This  Agreement  is  personal  to  the
Executive and without the prior written consent of the Company shall not
be assignable by  the Executive otherwise  than by will  or the laws  of
descent and distribution.  This Agreement shall inure to the benefit  of
and be enforceable by the Executive's legal representatives.

               (b) This Agreement shall inure to  the benefit of and  be
binding upon the Company and its successors and assigns.

               (c) The  Company  shall require  any  successor  (whether
direct or indirect, by purchase, merger, consolidation or otherwise)  to
all or substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same  manner
and to the same extent that the Company would be required to perform  it
if no  such succession  had taken  place.   As used  in this  Agreement,
"Company" shall  mean  the  Company  as  hereinbefore  defined  and  any
successor to its business and/or assets  as aforesaid which assumes  and
agrees to perform this Agreement by operation of law, or otherwise.

          12.  Miscellaneous.  (a) This  Agreement shall be governed  by
and construed in  accordance with  the laws  of the  State of  Illinois,
without reference to principles  of conflict of laws.   The captions  of
this Agreement are not part of  the provisions hereof and shall have  no
force or  effect.    This  Agreement may  not  be  amended  or  modified
otherwise than by a written agreement executed by the parties hereto  or
their respective successors and  legal representatives.  This  Agreement
replaces in its  entirety the Employment  Agreement between the  Company
and the Executive dated as of September 17, 1996.
                                   13
<PAGE 14>
               (b) All notices and other communications hereunder  shall
be in writing and shall be given by hand delivery to the other party  or
by registered  or  certified  mail, return  receipt  requested,  postage
prepaid, addressed as follows:

               If to the Executive:
               --------------------
                    Stephen S. Penley
                    604 Maple Avenue
                    Wilmette, Illinois 60091


               If to the Company:
               ------------------
                    Lindberg Corporation
                    6133 North River Road, Suite 700
                    Rosemont, Illinois  60018
                    Attention:  Chief Executive Officer

or to such  other address as  either party shall  have furnished to  the
other in  writing in  accordance herewith.   Notice  and  communications
shall be effective when actually received by the addressee.

               (c) The invalidity or  unenforceability of any  provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.

               (d) The  Company may  withhold from  any amounts  payable
under this Agreement  such Federal,  state or  local taxes  as shall  be
required to be withheld pursuant to any applicable law or regulation.

               (e) The Executive's  or the Company's  failure to  insist
upon strict compliance with any provision hereof shall not be deemed  to
be a waiver of such provision or any other provision of this Agreement.

               (f) The  Executive  and  the  Company  acknowledge  that,
except as may otherwise  be provided under  any other written  agreement
between the Executive and the Company,  the employment of the  Executive
by the Company is  "at will" and,  prior to the  Effective Date, may  be
terminated  by  either  the  Executive  or  the  Company  at  any  time.
Moreover, if prior  to the  Effective Date,  the Executive's  employment
with the  Company  terminates  (other than  as  provided  in  Section  1
hereof), then  the Executive  shall have  no further  rights under  this
Agreement.

          IN  WITNESS  WHEREOF,  the  Executive  has  hereunto  set  the
Executive's hand and, pursuant  to the authorization  from its Board  of
Directors, the Company has caused these  presents to be executed in  its
name on its behalf, all as of the day and year first above written.
                                   14
<PAGE 15>


                              /s/ Stephen S. Penley
                              --------------------------------

                                       (Executive)

                              LINDBERG CORPORATION



                              By /s/ Leo G. Thompson
                                ------------------------------
                                   15