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                                                                EXHIBIT 10.2
                                     -1-

                             EMPLOYMENT AGREEMENT
     AGREEMENT by and between Lindberg Corporation, a Delaware corporation (the
"Company") and Stephen S. Penley (the "Executive"), dated as of the 17th day of
September, 1996.

     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:

          (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;

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                                     -2-

          (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 24
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 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


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                                     -3-

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
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. 

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                                     -4-

        (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.

        (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 

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                                     -5-

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;

           (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.

                  (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 
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                                     -6-

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.


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                                     -7-

                  (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.  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 


<PAGE>   8
                                     -8-

         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 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       
         lanother 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 


<PAGE>   9

                                     -9-

executives of the Company and such affiliated companies under such plans,
programs, practices and policies relating to 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 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 


<PAGE>   10
                                     -10-

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 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, 


<PAGE>   11

                                     -11-

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:

                 (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,


<PAGE>   12

                                     -12-

                 (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 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

<PAGE>   13

                                     -13-

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.

                (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.

<PAGE>   14

                                     -14-

     (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.

                     /s/STEPHEN S. PENLEY 
                     ----------------------
                     (Executive)

                     LINDBERG CORPORATION



                     By   LEO G. THOMPSON
                        -------------------
                     President