EXHIBIT 10.7










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                            SCOTSMAN HOLDINGS, INC.
                        1997 EMPLOYEE STOCK OPTION PLAN

                        INCENTIVE STOCK OPTION AGREEMENT
                        --------------------------------

         THIS INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made this
18th day of December, 1997, by and between Scotsman Holdings, Inc., a Delaware
corporation (the "Company"), and FIELD (name) (the "Optionee").

         WHEREAS, the Company and its stockholders have approved the Scotsman
Holdings, Inc. 1997 Employee Stock Option Plan (the "Plan"), pursuant to which
the Company may, from time to time, enter into stock option agreements with
certain of its employees eligible to participate in the Plan;

         WHEREAS, the Optionee is now in the employ of the Company or an
Affiliate of the Company as a Key Employee, and the Company desires to have the
Optionee remain in such employ and to afford the Optionee the opportunity to
acquire, or enlarge, the Optionee's stock ownership in the Company so that the
Optionee may have a direct proprietary interest in the Company's success; and

         WHEREAS, the Committee has, pursuant to its authority under the Plan,
granted to the Optionee an Award in the form of an Incentive Stock Option to
acquire up to the number of shares of the Company's Common Stock set forth in
SECTION 1 below in accordance with the provisions of the Plan and subject to the
terms and conditions of the Plan and this Agreement.

         NOW, THEREFORE, in consideration of the mutual undertakings and
obligations of the parties herein and other good and valuable consideration, the
parties hereby agree as follows:

         1. Grant of Option. Subject to the terms, conditions and provisions of
this Agreement and the Plan, the Company hereby grants to the Optionee an Option
to purchase up to shares of the Company's Common Stock, par value $.01 per share
(this "Option"), which Option is intended to be an Incentive Stock Option. The
Optionee accepts this Option subject to all of the terms, conditions and
provisions of this Agreement and the Plan, and agrees to be bound and to abide
by all requests, decisions and determinations of the Committee made in
accordance with the Plan.

         2. The Plan. This Option is intended to conform in all respects with
the terms of the Plan as presently written. Inconsistencies between this Option
and the Plan will be resolved according to the terms of the Plan, a copy of
which has been supplied to you.

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         3. Option Price.  The exercise price for the Option shall be $30.50 per
share (the "Option Price").

         4. Exercise of the Option. The Option granted hereunder shall be
exercised, in whole or in part, subject to Sections 7 and 8 hereof and the
vesting requirements set forth in EXHIBIT A, at any time during the term of the
Option by delivering to the Secretary of the Company on any business day (the
"Exercise Date"), written notice specifying the number of shares as to which the
Option is being exercised (the "Exercised Shares") pursuant to the form on
EXHIBIT B, accompanied by: (i) cash or check payable to the order of the Company
for the aggregate Option Price of the Exercised Shares; or (ii) in the
discretion of the Committee, shares of Common Stock of the Company (the "Stock
Payment") with a Fair Market Value equal to or less than the aggregate Option
Price of the Exercised Shares, plus cash or check payable to the order of the
Company for an amount equal to that amount, if any, by which the aggregate
Option Price for the Exercised Shares exceeds the Fair Market Value of the Stock
Payment. If the Option granted hereunder is exercised in part, the Optionee must
purchase no less than 100 shares at any one time.

         5. Taxes. The Company shall be entitled to require as a condition of
delivery of the certificate representing the Exercised Shares that the Optionee
remit an amount sufficient to satisfy all federal, state and other government
taxes or withholding requirements; PROVIDED, FURTHER, that the Company shall
have the right to withhold such sums from any compensation otherwise due to the
Optionee.

         6. Issuance of Stock. Upon payment in full of the aggregate Option
Price, the Company shall issue to the Optionee a certificate representing the
Exercised Shares, in the form of fully paid and non-assessable Common Stock of
the Company.

         7. Termination of Employment.

              (a) Upon termination of employment of a Participant with the
Company or an Affiliate, this Option shall, to the extent not previously
exercised, terminate and become null and void, provided that:

                      (1) if the Participant shall die while in the employ of
the Company or an Affiliate or during either the three month or one year period,
whichever is applicable, specified in clause (2) below and at a time when such
Participant was entitled to exercise any portion of this Option as herein
provided, the legal representative of such Participant, or such person who
acquired this Option by bequest or inheritance or by reason of the death of the
Participant, shall have the right to exercise this Option, to the extent not
previously exercised, in respect of any or all of such number of Shares that
such Participant is entitled to purchase pursuant to this Option at the time of
such Participant's death, at any time up to and including one year after the
date of death; and

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                      (2) if the employment of any Participant shall terminate
by reason of the Participant's Retirement, Disability or dismissal other than
for Cause, and while such Participant is entitled to exercise this Option, as
herein provided, such Participant shall have the right to exercise this Option,
to the extent not theretofore exercised, in respect of any or all of such number
of Shares that such Participant is entitled to purchase pursuant to this Option
at the time of such termination, at any time up to and including (i) three
months after the date of such termination of employment in the case of
termination by reason of Retirement or dismissal other than for cause and (ii)
one year after the date of termination of employment in the case of termination
by reason of Disability.

              (b) If a Participant voluntarily terminates his employment, or is
discharged for Cause, any Option granted hereunder shall terminate.

              (c) If this Option shall be exercised by the legal representative
of a deceased or a disabled Participant, or by a person who acquired this Option
by bequest or inheritance or by reason of death of any Participant, written
notice of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative or
other person to exercise this Option.

         8.   Vesting Upon a Change in Control.

              (a) CHANGE IN CONTROL shall be deemed to occur if: (i) any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), other than Cypress Merchant Banking Partners
L.P., Cypress Offshore Partners L.P., BT Investment Partners, Inc., and Scotsman
Partners, L.P., or any of their affiliates or any combination thereof
(collectively, the "Investor Group"), is or becomes the "beneficial owner") (as
defined in Rule 13d- 3 under the Exchange Act), directly or indirectly, of all
of the outstanding capital stock of the Employer; or (ii) a sale of all or
substantially all of the assets of the Employer other than to an entity owned or
controlled by the Investor Group is consummated; or (iii) any merger,
consolidation, issuance of securities or purchase or sale of assets, the result
of which would be the occurrence of any event described in clause (i) or (ii)
above, is consummated; or (iv) a registration statement under the Securities Act
of 1933, as amended, registering common stock in connection with the Employer's
initial public offering becomes effective.

              (b) Upon the occurrence of a change in control, this Option shall
immediately vest and become exercisable and the Participant shall receive, with
respect to each Share subject to this Option, an amount equal to the excess of
the Fair Market Value of such Share immediately prior to the occurrence of such
transaction over the exercise price for such Share under this Option; such
amount to be payable in cash, in one or more kinds of property (including the
property, if any, payable in such transaction), or in a combination thereof, as
the Committee, in its sole discretion, shall determine.

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         9. Stockholders' Agreement. It is a condition to the effectiveness of
this Option and the obligation of the Company to issue any Shares hereunder that
the Participant shall have executed, on or prior to the date hereof, the Amended
and Restated Management Stockholders' and Optionholders' Agreement, dated as of
June 6, 1994, by and among the Company, the Stockholders and Permitted
Transferees (each as defined therein) as such agreement may be amended or
restated (the "Stockholders Agreement"). If the Participant has not executed the
Stockholders Agreement on or before the date hereof, this Option shall
automatically and without any further notice terminate and be null and void.

         10. Term of Option. Subject to the terms, conditions and provisions of
this Agreement and the Plan, this Option shall terminate ten years from the date
of grant on December 18, 2007.

         11. Non-Transferability of Option. This Option may be exercised only by
the Participant and may not be assigned or transferred except as expressly
provided in the Plan. Immediately upon any attempt to assign or transfer this
Option, by operation of law or otherwise, in violation of this Agreement, this
Option shall terminate and be null and void.

         12. No Rights of Stockholder. The Participant shall not be deemed a
stockholder of the Company for any purpose until the shares of the Company's
Common Stock subject to this Option have been issued to the Participant upon the
exercise of this Option. The Participant shall have no obligation to exercise
this Option.

         13. Common Stock Acquired for Investment. The Participant agrees that
the Company may require the Participant to certify (in such form as the Company
may specify) prior to each time or times the Exercised Shares are purchased that
such Exercised Shares are being purchased by the Participant for investment and
not with any intention of distributing the same. The stock certificates for any
shares of Common Stock issued by the Company upon exercise of this Option shall
be stamped, if appropriate, with a legend restricting transferability of the
Shares in accordance with this Agreement and the Plan, the Securities Act of
1933, as amended, and any applicable state securities laws.

         14. Notice of Disposition. In the event the Participant makes a
disposition (as that term is defined in Section 424(c) of the Code) of the
Exercised Shares within two years from the date hereof or within one year from
the date of acquiring such Exercised Shares, the Participant shall notify the
Company of such disposition within thirty (30) days thereof.

         15. The Company's Rights. The existence of this Option shall not affect
in any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure, or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting the Common Stock or rights thereof, or dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

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         16. Recapitalization. In the event of a change in the number of issued
shares of Common Stock of the Company resulting from a subdivision or
consolidation of shares or other capital adjustment, or the payment of a stock
dividend or other increase or decrease in such shares, the committee may, in its
sole and absolute discretion, make such adjustments to this Option as it deems
appropriate.

         17. Miscellaneous.

             (a) The Participant acknowledges that the exercise of this Option
is subject to the Certificate of Incorporation and the Bylaws of the Company, as
both may be amended from time to time, and any applicable federal or state laws,
rules or regulations.

             (b) The Committee shall have the right, in its sole and absolute
discretion, to alter or amend this Agreement, from time to time, in any manner
for the purpose of promoting the objectives of the Plan but only if all
agreements granting options to purchase shares of the Company's Common Stock
pursuant to the Plan which are in effect and not wholly exercised at the time of
such alteration or amendment shall also be similarly altered or amended with
substantially the same effect. Any such alteration or amendment of this
Agreement by the Committee shall, upon adoption thereof by the Committee, become
and be binding and conclusive on all persons affected thereby without
requirement for consent or other action with respect thereto by any such person.
The Company shall give written notice to the Participant of any such alteration
or amendment of this Agreement by the Committee as promptly as practical after
the adoption thereof. The foregoing shall not restrict the ability of the
Participant and the Company by mutual consent to alter or amend this Agreement
in any manner which is consistent with the Plan and approved by the Committee.

             (c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland, exclusive of its conflicts of law
provisions.

             (d) The descriptive headings of the sections and paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

             (e) Any notice or communication required to be given pursuant to
this Agreement shall be in writing and shall be sufficiently made or given if
hand-delivered or mailed by certified mail, addressed to the Participant at the
address contained in the records of the Company or to the Company at its
principal office.

             (f) This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.

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             (g) To the extent that any capitalized term used in this Agreement
is not defined herein, it shall be given the meaning ascribed to such term in
the Plan.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

WITNESS:                           SCOTSMAN HOLDINGS, INC.

_________________________             By:_____________________________________
                                         Gerard E. Holthaus
                                         President and Chief Executive Officer

                                      OPTIONEE

_________________________             ________________________________________
                                      PRINT NAME:

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                                   EXHIBIT A

                            SCOTSMAN HOLDINGS, INC.
                        1997 EMPLOYEE STOCK OPTION PLAN

                        INCENTIVE STOCK OPTION AGREEMENT
                        --------------------------------

              VESTING OF INCENTIVE STOCK OPTIONS FOR FIELD(name)

         The award of Incentive Stock Options under this Agreement vest and
become exercisable as follows:

                           Performance-based Vesting
                           -------------------------
                  for 50% shares subject to options as follows
                      --

                                                         EBITDA targets *
                                                         --------------
1.    Options for FIELD(div) Shares become             1997 - $91,142,000
      exercisable on December 31, 1997 if the
      Company's 1997 EBITDA target is achieved

2.    Options for FIELD(div) Shares become             1998 - $108,591,000
      exercisable on December 31, 1998 if the
      Company's 1998 EBITDA target is achieved

3.    Options for FIELD(div) Shares become             1999 - $128,249,000
      exercisable on December 31, 1999 if the
      Company's 1999 EBITDA target is achieved

4.    Options for FIELD(div) Shares become             2000 - $150,673,000
      exercisable on December 31, 2000 if the
      Company's 2000 EBITDA target is achieved

5.    Options for FIELD(div) Shares become             2001 - $174,639,000
      exercisable on December 31, 2001 if
      the Company's 2001 EBITDA target is achieved

                               Time Based Vesting
                               ------------------

          for 50% of Shares subject to options on the following dates
              --

                     FIELD(div) shares on December 31, 1997
                     FIELD(div) shares on December 31, 1998
                     FIELD(div) shares on December 31, 1999
                     FIELD(div) shares on December 31, 2000
                     FIELD(div) shares on December 31, 2001

* Subject to annual Cap-X adjustments. If EBITDA targets are missed in any one
year, there is the opportunity for a cumulative performance-based vesting
calculation to make up for any year(s) vesting percentage not achieved. The
cumulative measurement date will be the earlier of December 31, 2001 or a change
of control.

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