Exhibit 10

               LONG-TERM INCENTIVE COMPENSATION PLAN

                    Effective February 22, 1990
(Amended December 2, 1992, December 7, 1994, February 24, 1995,
November 1,
1996 and as of December 4, 1996)

1.   Purpose

          The purpose of the Long-Term Incentive Compensation Plan
("the Plan") is to attract, retain and motivate strong management
employees by providing additional incentive to key employees of
Peoples Energy Corporation (the "Company") and its Subsidiaries (as
defined by paragraph 13) to acquire a proprietary interest in the
business of the Company and its Subsidiaries and by encouraging the
interest of such persons in the financial success and growth of the
Company.  The Plan contemplates the granting of non-qualified stock
options (i.e. options which are not "statutory" within the meaning
of Section 1.421-7(b) of the regulations under the Internal Revenue
Code of 1986, as amended) ("Options"), Stock Appreciation Rights
("SARs") or restricted stock awards, or combinations thereof.  A
key employee may be granted and may hold one or more Options, SARs,
restricted stock awards or any combination thereof under this Plan.

2.   Administration
     (a)  Generally
          Except to the extent that this Plan applies to the Chief
Executive Officer, this Plan shall be administered solely by the
Compensation-Nominating Committee of  the Board of Directors of the
Company (the "Committee").  The Committee shall be
composed of not less than three persons who shall be appointed by
the Board of Directors of the Company (the "Board") from the
membership of the Board.  No person who is an officer or employee
of the Company or a Subsidiary shall be a member of the Committee
nor shall any person be a member of the Committee whose membership
would disqualify any transactions made under the Plan from
complying with the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934 (the "1934 Act") or any successor rule
thereunder.  Except to the extent that this Plan applies to the
Chief Executive Officer, the Committee is solely authorized to
prescribe the form and content of Options, SARs and restricted
stock awards to be granted under the Plan, to interpret the Plan,
to prescribe, amend or rescind rules and regulations relating to
it, and to make all other determinations necessary or advisable for
its administration.
     (b)  Chief Executive Officer
          With respect to the Chief Executive Officer, this Plan
shall be administered by the Committee subject to the approval of
the majority of all members of the Board (including members of the
Committee) who are not officers or employees of the Company or a
Subsidiary and who are Non-Employee Directors as defined under Rule
16b-3 under the 1934 Act (the "Outside Directors").  The Outside
Directors shall not include any person whose inclusion would
disqualify any transactions made under the Plan from complying with
the requirements of Rule 16b-3 under the 1934 Act or any successor
rule thereunder.  With respect to the Chief Executive Officer, the
Committee is authorized to prescribe the form and content of
Options, SARs and restricted stock awards to be granted under 
the Plan to interpret the Plan, to prescribe, amend, or rescind 
rules and regulations relating to it, and to make all other 
determinations necessary or advisable for its administration, 
subject to the approval of the majority of the Outside Directors.  
All references to the "Committee" contained in any provision of 
paragraphs 3 through 13 of this Plan shall, to the extent that 
such provision applies to the Chief Executive Officer,
be deemed and construed to mean the Committee, the decisions of
which shall be subject to the approval of the majority of the
Outside Directors.

3.   Incentive Awards
          Under the Plan participants may be granted any one or
more of the following:
          (a)  Options:  non-qualified stock options to purchase
               stock of the Company at a purchase price of 100
               percent of the fair market value of such Common
               Stock on the date that the Option is granted.  The
               stock under Options granted under the Plan shall be
               shares of the Company's authorized but unissued
               common stock, without par value ("Common Stock").
          (b)  SARs:  a right to receive, for each SAR granted,
               cash in an amount equal to the excess of the fair
               market value of one share of the Common Stock of
               the Company on the date the SAR is exercised
               over the fair market value of such Common Stock on
               the date the SAR is granted.
          (c)  Restricted Stock Awards:  shares of Common Stock
               which are restricted as provided in paragraph 8.
          Up to 1,800,000 shares of Common Stock (500,000
originally authorized under the Plan plus an additional 500,000
authorized for grant by the stockholders on February 28, 1986 plus
an additional 400,000 authorized for grant by the stockholders on
February 23, 1990 plus an additional 400,000 authorized for grant
by the stockholders on February 24, 1995) may be sold under Options
granted pursuant to the Plan or awarded pursuant to restricted
stock awards granted under the Plan, provided that the number of
shares available for sale or award hereunder shall be subject to
adjustment as provided in paragraph 9.  Up to 1,800,000 SARs
(1,000,000 originally authorized under the Plan plus an additional
400,000 authorized for grant by the shareholders on February 23,
1990 plus an additional 400,000 authorized for grant by the
stockholders on February 24, 1995) may be granted pursuant to the
Plan, provided that the number of SARs available for granting
hereunder shall be subject to adjustment as provided in paragraph
9.
          If an Option or SAR ceases to be exercisable in whole or
in part by reason of the expiration of the term of the Option or
SAR, the termination of the employment of the recipient or the
waiver by a recipient of the right to exercise an Option or SAR,
the shares or SAR which were subject to such exercise but as to
which the recipient has not exercised, shall again become available for
further grants under the Plan.  If a restricted stock award is
forfeited in whole or in part by reason of the termination of the
employment of the recipient before such award has become fully
vested, the shares which were subject to such restricted stock
award but which were not vested shall again become available for
further grants under the Plan.

4.   Designation of Recipients and Allotment of Shares and SARs
          The Committee shall determine and designate from time to
time those key employees of the Company and its Subsidiaries
(including officers and directors employed in capacities other than
as directors only) to whom Options, SARs and restricted stock
awards, or any combination thereof, shall be granted and who shall
thereby become recipients.  The Committee shall also determine the
number of shares of Common Stock to be optioned, the number of SARs
to be granted and the number of shares of restricted stock to be
granted from time to time to each recipient.
          In selecting the key employees to whom Options, SARs or
restricted stock awards, or any combination thereof, shall be
granted, as well as in determining the number of SARs, shares under
Option, or shares of restricted stock to be granted to key
employees, the Committee shall weigh the positions and
responsibilities of the individuals being considered, the nature of
their services to the Company, their past, present and potential
contributions to the success of the Company or its Subsidiaries,
and such other factors as the Committee shall deem relevant to
accomplish the purposes of the Plan; provided, however, that a 
restricted stock award shall be granted only in recognition of and 
as consideration for the performance of services by the recipient or other
consideration received by the Company prior to the time of grant. 
Directors of the Company or its Subsidiaries who are not officers
or employees of the Company or its Subsidiaries shall not be
eligible to become recipients under the Plan.  No Option, SAR or
restricted stock award shall be granted to any individual
possessing more than 5 percent of the total combined voting power
or value of all classes of stock of the Company or of any of its
Subsidiaries.  Each recipient shall agree to continue such
recipient's employee status for such period (not less than one
year) as shall be provided in the Option, SAR or restricted stock
award, subject to the right of the recipient's employer to
terminate the recipient's employment at any time.  Options, SARs
and restricted stock awards shall contain such conditions and
restrictions as to exercise, the purchase and delivery of shares,
and the forfeiture of shares, and such provisions as to the rights
of the Company or its Subsidiaries, as may be deemed advisable by
the Committee.
          The Committee may grant Options, SARs or restricted stock
awards to any key employee at any time or from time to time during
the period of such employee's employment under the Plan, in
accordance with such determinations as the Committee shall make
from time to time.  Options, SARs and restricted stock awards need
not contain similar provisions.

5.   Term of Plan
          No Option, SAR or restricted stock award may be granted
under this Plan after October 31, 2000.

6.   Option and SAR Price
          Shares of the Common Stock of the Company shall be
optioned and SARs shall be granted from time to time at 100 percent
of the fair market value of the Common Stock on the date the Option
or SAR is granted (rounded, in the case of a fraction of a cent, to
the nearest full cent above).  The day on which the Committee
approves the granting of an Option or SAR shall be considered the
date on which such Option or SAR is granted.  The fair market value
of the Common Stock on the date the Option or SAR is granted shall
be the mean between the highest and lowest quoted selling price in
the New York Stock Exchange Composite Transactions on such date or,
if such stock was not traded on such date, on the last preceding
date on which such stock was traded.

7.   Terms of Options and SARs
          Each Option or SAR granted under the Plan shall be
evidenced by a written agreement which shall comply with and be
subject to the following terms and conditions:
          (a)  Full payment for shares purchased shall be made in
               cash and/or Common Stock of the Company at the time
               or times the Option is exercised in whole or in
               part.  Payment in Common Stock may be made at the
               recipient's election by the Company's deducting
               from the number of shares otherwise deliverable
               upon the exercise of the Option such number of
               shares of Common Stock as shall have a value equal
               to the amount of the Option exercise price.  Any
               such Common Stock submitted in payment for an
               Option shall be valued at the mean between the
               highest and lowest quoted selling price of such
               Common Stock of the Company in the New York Stock
               Exchange Composite Transactions on the date of
               exercise or, if such stock was not traded on such
               date, on the last preceding date on which such
               stock was traded.  No shares shall be issued
               pursuant to the exercise of an Option until full
               payment thereof has been made and no person shall
               have any of the rights of a stockholder with
               respect to Options held, except to the extent such
               Options have been exercised and the shares issued
               to such person.
          (b)  A recipient's rights to exercise an Option or SAR
               shall terminate when the recipient is no longer an
               employee of the Company or any of its Subsidiaries
               unless such recipient's employment is
               terminated by reason of such recipient's death,
               disability or retirement.
          (c)  If a recipient dies prior to termination of such
               recipient's Option or SAR without having fully
               exercised such Option or SAR, the beneficiary or
               beneficiaries designated by such recipient pursuant
               to paragraph 7(f) hereof, or, if no such
               beneficiary or beneficiaries have been designated
               by such recipient or if no such beneficiary or
               beneficiaries have survived the recipient, then the
               recipient's surviving spouse, or, if the recipient
               has no surviving spouse, then the estate of the
               recipient or any person who acquires the right to
               exercise such Option or SAR by bequest or
               inheritance or by reason of the death of the
               recipient, shall have the right to exercise the
               Option or SAR during its term within the eighteen
               month period after the recipient's death, but only
               to the extent such Option or SAR was exercisable by
               such recipient immediately prior to such
               recipient's death.
          (d)  If a recipient's employment is terminated by reason
               of such recipient's disability (as determined in
               the sole discretion of the Committee) prior to
               termination of such recipient's Option or SAR
               without the recipient's having fully exercised such
               Option or SAR, such recipient shall have the right
               to exercise the Option or SAR
               during its term within such period as may be
               provided at the time of the grant, not to exceed
               three years after termination of employment, but
               only to the extent such Option or SAR was
               exercisable by such recipient immediately prior to
               such recipient's termination of employment.
          (e)  If a recipient retires prior to termination of such
               recipient's Option or SAR without having fully
               exercised such Option or SAR, such recipient shall
               have the right to exercise the Option or SAR during
               its term within such period as may be provided at
               the time of the grant, not to exceed three years
               after retirement, but only to the extent such
               Option or SAR was exercisable by the recipient
               immediately prior to such recipient's retirement.
          (f)    Except as otherwise expressly provided in this
               paragraph 7(f),  Options and SARs shall not be
               transferable other than by will or by the laws of
               descent and distribution and during a recipient's
               lifetime shall be exercisable only by the recipient
               or the recipient's guardian or legal
               representative.  Notwithstanding the preceding
               sentence, a recipient may, by giving notice to the
               Company during the recipient's lifetime, designate
               (i) a beneficiary or beneficiaries to whom Options
               or SARs shall be transferred in the event of the
               recipient's death, and (ii) the specific number or
               proportions of the recipient's Options or SARs to 
               be transferred to each such designated beneficiary 
               if more than one beneficiary is properly designated.
               Any such designation may be revoked or changed by the
               recipient at any time and from time to time by
               similar notice.  If there is no such designated
               beneficiary living upon the death of the recipient
               or if all such designated beneficiaries die prior
               to exercise of all of the recipient's Options and
               SARs under this Plan, any remaining Options and
               SARs shall be transferred to the recipient's
               surviving spouse or, if none, then the remaining
               Options and SARs will be transferred to the estate
               or personal representative of the recipient.  If
               the Company, after reasonable inquiry, is unable to
               determine within twelve months after the
               recipient's death whether any designated
               beneficiary of such recipient did in fact survive
               the recipient, such beneficiary shall be
               conclusively presumed to have died prior to the
               recipient's death.  Any designated beneficiary,
               surviving spouse or other person acquiring any
               Options or SARs pursuant to this paragraph 7(f)
               shall have the right to exercise such Options and
               SARs as set forth in paragraph 7(c), above.
          (g)  Subject to paragraph 7(k) below, no Option or SAR
               granted under this Plan shall be exercisable before
               the expiration of one year from the date of grant
               of such Option or SAR.
          (h)  Options and SARs granted under this Plan shall
               contain such provisions as may be deemed advisable
               by the Committee.
          (i)  Subject to paragraph 7(k) below, until a recipient
               has completed five years of service, the total
               number of Options and SARs that may be exercised by
               such recipient during the first four years after
               such Options and SARs are granted thereto shall not
               exceed the following percentages of the number of
               Options and SARs so granted:

               Years Since Option            Percentage of Options
               Or SAR Is Granted              Or SARs Exercisable

               less than 1                           None
               1 but less than 2                     25%
               2 but less than 3                     50%
               3 but less than 4                     75%
               4 or more                            100%

               Notwithstanding the above, the Committee may, in

               its sole discretion, accelerate the exercisability

               under this paragraph 7(i) of any or all Options

               and/or SARs granted under the Plan.

          (j)  In no event shall any Option or SAR granted under
               the Plan be exercisable after the expiration of ten
               years from the date such Option or SAR is granted.
          (k)  All outstanding Options and SARs granted under the
               Plan shall immediately become exercisable upon the
               occurrence of a Change in Control (as defined by
               paragraph 13).

8.   Terms of Restricted Stock Awards
          Each restricted stock award granted under the Plan shall
be evidenced by a written agreement which shall comply with and be
subject to the following terms and conditions:
          (a)  Shares of Common Stock covered by a restricted
               stock award may not be sold, assigned, transferred
               or otherwise disposed of, or mortgaged, pledged or
               otherwise encumbered until such shares have become
               fully vested pursuant to paragraph 8(d) or 8(f).
          (b)  The recipient of a restricted stock award shall
               have the right to vote the shares of Common Stock
               covered by such award and to receive dividends
               thereon, unless and until such shares are forfeited
               pursuant to paragraph 8(e).
          (c)  Shares of Common Stock covered by a restricted
               stock award will be held by the Company until such
               shares have become vested pursuant to paragraph
               8(d) or 8(f), and will thereupon, subject to the
               satisfaction of the withholding obligations
               described in paragraph 11, be delivered to the
               recipient.
          (d)  Shares of Common Stock covered by a restricted
               stock award granted to a recipient shall vest in
               accordance with the terms of the grant; provided,
               however, that shares of Common Stock covered by a
               restricted stock award granted to a recipient shall
               vest with respect to 100% of the shares covered by
               the restricted stock award upon the termination of
               the recipient's employment by reason of death,
               disability (as determined in the sole discretion of
               the Committee) or retirement after attaining age 65
               (or such earlier date as determined by the
               Committee).  In addition, the Committee may, in its
               sole discretion, accelerate the vesting of any or
               all restricted stock awards granted under the Plan.
               A recipient may, by giving notice to the Company
               during the recipient's lifetime, designate (i) a
               beneficiary or beneficiaries to whom shares of
               restricted stock covered by a restricted stock
               award shall be transferred in the event of the
               recipient's death, and (ii) the specific number or
               proportions of such shares of Common Stock to be
               transferred to each such designated beneficiary if
               more than one beneficiary is properly designated. 
               Any such designation may be revoked or changed by
               the recipient at any time and from time to time by
               similar notice.  If there is no such designated
               beneficiary living upon the death of the recipient
               or if all such designated beneficiaries die prior 
               to vesting of all shares of Common Stock covered 
               by a restricted stock award of the recipient, 
               any remaining shares of Common Stock vesting upon 
               the recipient's death shall be transferred to the 
               recipient's surviving spouse or, if none, then the 
               remaining shares so vesting will be transferred to 
               the estate or personal representative of the recipient.  
               If the Company, after reasonable inquiry, is unable to 
               determine within twelve months after the recipient's death
               whether any designated beneficiary of such
               recipient did in fact survive the recipient, such
               beneficiary shall be conclusively presumed to have
               died prior to the recipient's death.
          (e)  In the event of the termination of employment of
               the recipient of a restricted stock award other
               than by reason of death, disability (as determined
               in the sole discretion of the Committee) or
               retirement after attaining age 65 (or such earlier
               date as determined by the Committee) the recipient
               will forfeit the shares of Common Stock covered by
               the restricted stock award which are not vested.
          (f)  All outstanding restricted stock awards granted
               under the Plan shall immediately become fully
               vested upon the occurrence of a Change in Control
               (as defined by paragraph 13).
          (g)  Restricted stock awards granted under this Plan
               shall contain such provisions as may be deemed
               advisable by the Committee.

9.   Adjustment Upon Changes in Capitalization, Etc.
          In the event there is any change in the Common Stock of
the Company through the declaration of stock dividends, or through
recapitalization resulting in stock split-ups, or combinations or
exchanges of shares, or otherwise, then the number of SARs and
shares remaining available for future grants of Options and
restricted stock awards under the Plan and exercisable under
existing grants of SARs and Options shall be appropriately adjusted
by the Committee.  Appropriate adjustment shall also be made in the
SAR price and the Option price per share.

10.  Amendment
          The Board may, by resolution, at any time and from time
to time, amend, revise or terminate this Plan, except that, without
stockholder approval, no amendment shall increase the maximum
number of SARs or shares which may be sold pursuant to Options or
covered by restricted stock awards granted under the Plan or reduce
the Option price of any Option or the SAR price of any SAR (except
as provided by paragraph 9), change the class of employees eligible
to receive SARs, Options or restricted stock awards under the Plan,
or extend the term of the Plan.  Except as otherwise provided in
the Plan, no SAR, Option or restricted stock award previously
granted under the Plan may be altered or impaired without the
consent of the holder of the SAR, Option or restricted stock award.

11.  Taxes
          The Company may make such provisions and take such steps
as it may deem necessary or appropriate for the withholding of all
federal, state and local taxes required by law to be withheld with
respect to Options, SARs and restricted stock awards granted
pursuant to the Plan including, but not limited to (a) deducting
the amount required to be withheld from any other amount then or
thereafter payable to a recipient or legal representative, and (b)
requiring a recipient or legal representative to pay to the Company
the amount required to be withheld as a condition of releasing
shares of Common Stock. In addition, subject to the Committee's
sole discretion and to such rules and regulations as the Committee
shall from time to time establish, a recipient shall be permitted
to satisfy federal, state and local taxes, if any, imposed upon the
exercise of an Option or the vesting of a restricted stock award at
a rate up to such recipient's maximum marginal tax rate with
respect to each such tax by (i) electing to have the Company deduct
from the number of shares of Common Stock otherwise deliverable
upon the exercise of an Option or the vesting of a restricted stock
award such number of shares of Common Stock as shall have a value
equal to the amount of tax to be withheld, or (ii) delivering to
the Company such number of shares of Common Stock or combination of
shares of Common Stock and cash as shall have a value equal to the 
amount of tax to be withheld.

12.  Effective Date
          Any amendment to this Plan requiring shareholder approval
shall become effective upon approval thereof by the holders of a
majority of the Company's outstanding shares of Common Stock,
provided such approval occurs within twelve months of the date such
amendment is adopted by the Board.  No SARs or shares of Common
Stock shall be issued pursuant to this Plan prior to compliance
with requirements under applicable laws and regulations.

13.  Definitions and Miscellaneous
          (a)  For purposes of this Plan, a Subsidiary is any
corporation more than 50 percent of the total combined voting power
of which is owned by the Company or by another corporation
qualifying as a Subsidiary within this definition, or by a
combination of any of them.
          (b)  For purposes of this Plan, a Change in Control
means, 
          (i)  with respect to Options, SARs and restricted stock
awards granted prior to December 4, 1996, that any of the following
events described in this paragraph (i) or in paragraph (ii) below
has occurred:
          (A)  twenty percent (20%) or more of the Company's
               outstanding shares of Common Stock have been
               acquired by any person (as defined by Section
               3(a)(9) of the 1934 Act) other than directly from
               the Company;
          (B)  there has been a merger or equivalent combination
               after which forty-nine percent (49%) or more of the
               voting stock of the surviving corporation is held
               by persons other than former stockholders of the
               Company; or
          (C)  twenty percent (20%) or more of the directors
               elected by stockholders to the Board of Directors
               of the Company are persons who were not nominated
               by management in the most recent proxy statement of
               the Company.
          (ii) with respect to Options, SARs and restricted stock
               awards granted on or after December 4, 1996, any of
               the following events has occurred:
          (A)  either (1) receipt by the Company of a report on
               Schedule 13D, or an amendment to such a report,
               filed with the Securities and Exchange Commission
               ("SEC") pursuant to Section 13(d) of the 1934 Act
               disclosing that any person (as such term is used in
               Section 13(d) of the 1934 Act) ("Person"), is the
               beneficial owner, directly or indirectly, of twenty
               (20) percent or more of the outstanding stock of
               the Company, or (2) actual knowledge by the
               Company of facts, on the basis of which any Person
               is required to file such a report on Schedule 13D,
               or to make an amendment to such a report, with the
               SEC (or would be required to file such a report or
               amendment upon the lapse of the applicable period
               of time specified in Section 13 (d) of the 1934
               Act) disclosing that such Person is the beneficial
               owner, directly or indirectly, of twenty (20)
               percent or more of the outstanding stock of the
               Company;
          
          (B)  purchase by any Person, other than the Company or a
               wholly-owned subsidiary of the Company, of shares
               pursuant to a tender or exchange offer to acquire
               any stock of the Company (or securities convertible
               into stock) for cash, securities or any other
               consideration provided that, after consummation of
               the offer, such Person is the beneficial owner (as
               defined in Rule 13d-3 under the 1934 Act), directly
               or indirectly, of twenty (20) percent or more of
               the outstanding stock of the Company (calculated as
               provided in paragraph (d) of Rule 13d-3 under the
               1934 Act in the case of rights to acquire stock);

          (C)  approval by the shareholders of the Company of (1)
               any consolidation or merger of the Company in which
               the Company is not the continuing or surviving
               corporation or pursuant to which shares of stock of
               the Company would be converted into cash,
               securities or other property, other than a
               consolidation or merger of the Company in which
               holders of its stock immediately prior to the
               consolidation or merger have substantially the same
               proportionate ownership of common stock of the
               surviving corporation immediately after the
               consolidation or merger as immediately before, or
               (2) any consolidation or merger in which the
               Company is the continuing or surviving corporation,
               but in which the common shareholders of the Company
               immediately prior to the consolidation or merger do
               not hold at least ninety (90) percent of the
               outstanding common stock of the continuing or
               surviving corporation (except where such holders of
               common stock hold at least ninety (90) percent of
               the common stock of the corporation which owns all
               of the common stock of the Company), or (3) any
               sale, lease, exchange or other transfer (in one
               transaction or a series of related transactions) of
               all or substantially all the assets of the Company
               (Transfer Transaction), (except where (x) the
               Company owns all of the outstanding stock of the
               transferee entity or (y) the holders of the
               Company's common stock immediately prior to the
               Transfer Transaction own at least ninety (90)
               percent of the outstanding stock of the transferee
               entity, immediately after the Transfer
               Transaction), or (4) any consolidation or merger of
               the Company where, after the consolidation or merger,
               one Person owns one hundred (100) percent of the
               shares of stock of the Company (except where the
               holders of the Company's common stock immediately
               prior to such merger or consolidation own at least
               ninety (90) percent of the outstanding stock of
               such Person immediately after such consolidation or
               merger); or
          (D)  a change in the majority of the members of the
               Board within a twenty-four (24) month period,
               unless the election or nomination for election by
               the Company's shareholders of each new director was
               approved by the vote of at least two-thirds of the
               directors then still in office who were in office
               at the beginning of the twenty-four (24) month
               period.
          (c)  The transfer of an employee from the Company to a
               Subsidiary or from a Subsidiary to the Company or
               another Subsidiary shall not be a termination of
               employment or an interruption of continuous
               employment for the purposes of this Plan.
          (d) No SAR, Option, restricted stock award, shares of
              Common Stock issuable upon the exercise of an Option
              or cash payable incident to the exercise of an SAR
              granted under this Plan shall be transferable or
              assignable by anticipation either by the voluntary
              or involuntary act of the recipient or by operation
              of law, or be liable for any debts or liabilities 
              of the recipient, except as provided herein.
          (e) Nothing herein shall entitle any employee to remain
              in the employ of the Company or any of its
              Subsidiaries or affect the right of such employer to
              discharge such employee with or without cause.
          (f) The right of recipients to designate one or more
              beneficiaries pursuant to paragraph 7(f) or
              paragraph 8(d) shall apply to any and all Options,
              SARs or restricted shares granted under the Plan,
              notwithstanding anything contained in any written
              agreement evidencing such grant of Options, SARs or
              restricted stock to the contrary.
          (g) Notwithstanding anything contained in any written
              agreement evidencing a grant of Options or
              restricted stock made under the Plan prior to
              November 1, 1996, recipients of Options or
              restricted stock may make, on or after November 1,
              1996 at any time at the recipient's discretion, but
              subject to such rules and regulations as the
              Committee may from time to time establish, one or
              more elections for the Company to withhold from the
              number of shares of Common Stock otherwise
              deliverable pursuant to the exercise of an Option or
              vesting of restricted stock in full or partial
              satisfaction of taxes imposed upon such exercise or
              vesting as described in paragraph 11 above; provided, 
              however, that any such election is made in accordance 
              with the requirements of Rule 16b-3 under the 1934 Act 
              or any successor rule or regulation so as to exempt 
              such election and the resulting transaction from 
              Section 16(b) of the 1934 Act.
          (h) This Plan shall be construed according to the laws
              of the State of Illinois.