<PAGE>


                               HA-LO INDUSTRIES, INC.

                        EXECUTIVE DEFERRED COMPENSATION PLAN

                (AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 1, 1997
                            AND PREVIOUSLY KNOWN AS THE
                        HA-LO ADVERTISING SPECIALTIES, INC.
                    1990 KEY EMPLOYEE WEALTH ACCUMULATION PLAN)


<PAGE>

<TABLE>
                              HA-LO INDUSTRIES, INC.
                       EXECUTIVE DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 1, 1997 AND PREVIOUSLY KNOWN AS THE
HA-LO ADVERTISING SPECIALTIES, INC. 1990 KEY EMPLOYEE WEALTH ACCUMULATION PLAN)

                                TABLE OF CONTENTS

<S>                                                                               <C>
ARTICLE I - INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.1  Adoption and Name of Plan. . . . . . . . . . . . . . . . . . . . . . . .  1
     1.2  Purposes of Plan.. . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.3  "Top Hat" Pension Benefit Plan.. . . . . . . . . . . . . . . . . . . . .  1
     1.4  Plan Unfunded. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.5  Effective Date.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.6  Administration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

ARTICLE II - DEFINITIONS AND CONSTRUCTION. . . . . . . . . . . . . . . . . . . . .  2
     2.1  Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
     2.2  Number and Gender. . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
     2.3  Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4

ARTICLE III - PARTICIPATION AND ELIGIBILITY. . . . . . . . . . . . . . . . . . . .  5
     3.1  Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
     3.2  Commencement of Participation. . . . . . . . . . . . . . . . . . . . . .  5
     3.3  Cessation of Active Participation. . . . . . . . . . . . . . . . . . . .  5

ARTICLE IV - DEFERRALS AND MATCHING CONTRIBUTIONS. . . . . . . . . . . . . . . . .  6
     4.1  Deferrals by Participants. . . . . . . . . . . . . . . . . . . . . . . .  6
     4.2  Effective Date of Participation Agreement. . . . . . . . . . . . . . . .  6
     4.3  Modification or Revocation of Election by Participant. . . . . . . . . .  6
     4.4  Matching Contributions.. . . . . . . . . . . . . . . . . . . . . . . . .  7

ARTICLE V - VESTING, DEFERRAL PERIODS AND EARNINGS ELECTIONS . . . . . . . . . . .  8
     5.1  Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8
     5.2  Election of In-Service Distribution. . . . . . . . . . . . . . . . . . .  8
     5.3  Earnings Elections.. . . . . . . . . . . . . . . . . . . . . . . . . . .  9

ARTICLE VI - ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     6.1  Establishment of Bookkeeping Accounts. . . . . . . . . . . . . . . . . . 10
     6.2  Subaccounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     6.3  Hypothetical Nature of Accounts. . . . . . . . . . . . . . . . . . . . . 10

ARTICLE VII - PAYMENT OF ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . 11
     7.1  Distribution After Deferral Period or Termination of Employment. . . . . 11


                                           i
<PAGE>


     7.2  Time of Distribution and Valuation.. . . . . . . . . . . . . . . . . . . 11
     7.3  Form of Payment or Payments. . . . . . . . . . . . . . . . . . . . . . . 11
     7.4  Accelerated Distribution.. . . . . . . . . . . . . . . . . . . . . . . . 12
     7.5  Designation of Beneficiaries.. . . . . . . . . . . . . . . . . . . . . . 12
     7.6  Amendments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
     7.7  No Beneficiary Designation.. . . . . . . . . . . . . . . . . . . . . . . 12
     7.8  Unclaimed Benefits.. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
     7.9  Hardship Withdrawals.. . . . . . . . . . . . . . . . . . . . . . . . . . 13
     7.10 Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE VIII - ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
     8.1  Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
     8.2  General Powers of Administration.. . . . . . . . . . . . . . . . . . . . 15
     8.3  Indemnification of Committee.. . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE IX - DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND
          ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
     9.1  Claims.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
     9.2  Claim Decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
     9.3  Request for Review.. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
     9.4  Review of Decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
     9.5  Discretionary Authority. . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE X - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
     10.1 Plan Not a Contract of Employment. . . . . . . . . . . . . . . . . . . . 18
     10.2 Non-Assignability of Benefits. . . . . . . . . . . . . . . . . . . . . . 18
     10.3 Amendment and Termination. . . . . . . . . . . . . . . . . . . . . . . . 18
     10.4 Unsecured General Creditor Status Of Employee. . . . . . . . . . . . . . 18
     10.5 Severability.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
     10.6 Governing Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
     10.7 Binding Effect.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
     10.8 Entire Agreement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>

                                          ii

<PAGE>


                             HA-LO INDUSTRIES, INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 1, 1997 AND PREVIOUSLY KNOWN AS THE
HA-LO ADVERTISING SPECIALTIES, INC. 1990 KEY EMPLOYEE WEALTH ACCUMULATION PLAN)



                                   ARTICLE I
                                  INTRODUCTION


1.1  ADOPTION AND NAME OF PLAN.

     The Company adopts the amended and restated HA-LO Industries, Inc.
     Executive Deferred Compensation Plan which was previously known as the
     HA-LO Advertising Specialties, Inc. 1990 Key Employee Wealth
     Accumulation Plan.

1.2  PURPOSES OF PLAN.

     The purposes of the Plan are to provide deferred compensation for a select
     group of management or highly compensated Employees of the Company.

1.3  "TOP HAT" PENSION BENEFIT PLAN.

     The Plan is an "employee pension benefit plan" within the meaning of ERISA
     Section 3(2).  The Plan is maintained, however, only for a select group of
     management or highly compensated employees and, therefore, is exempt from
     Parts 2, 3 and 4 of Title 1 of ERISA.  The Plan is not intended to qualify
     under Code Section 401(a).

1.4  PLAN UNFUNDED.

     The Plan is unfunded.  All benefits will be paid from the general assets of
     the Company, which will continue to be subject to the claims of the
     Company's creditors.  No amounts will be set aside for the benefit of Plan
     Participants or their Beneficiaries.

1.5  EFFECTIVE DATE.

     The amended and restated Plan is effective as of the Effective Date.

1.6  ADMINISTRATION.

     The Plan shall be administered by the Committee.



         1
<PAGE>


                                ARTICLE II
                      DEFINITIONS AND CONSTRUCTION


2.1  DEFINITIONS.

     For purposes of the Plan, the following words and phrases shall have the
     respective meanings set forth below, unless their context clearly requires
     a different meaning:

     "ACCOUNT" means the bookkeeping account maintained by the Company on behalf
               of each Participant pursuant to Article VI that is credited with
               Deferrals and Matching Contributions made on behalf of each
               Participant pursuant to Article IV and the earnings and losses on
               such amounts as determined in accordance with Article V.  As of
               any Valuation Date, a Participant's benefit under the Plan shall
               be equal to the amount credited to his Account as of such date.

     "BASE SALARY" means the base rate of cash compensation paid by the Company
               to or for the benefit of a Participant for services rendered or
               labor performed.

     "BASE SALARY DEFERRAL" means the amount of a Participant's Base Salary
               which the Participant elects to have withheld on a pre-tax basis
               and credited to his Account pursuant to Section 4.1.

     "BENEFICIARY" means the person or persons designated by the Participant in
               accordance with Section 7.5.

     "BOARD" means the board of Directors of the Company.

     "BONUS COMPENSATION" means the amount awarded to a Participant for a Plan
               Year under any bonus arrangement maintained by the Company.

     "BONUS DEFERRAL" means the amount of a Participant's Bonus Compensation
               which the Participant elects to have withheld on a pre-tax basis
               and credited to his account pursuant to Section 4.1.

     "CODE" means the Internal Revenue Code of 1986, as amended.

     "COMMITTEE" means the administrative committee appointed by the Board to
               administer the Plan in accordance with Article VIII.



               2
<PAGE>


     "COMMISSIONS" means remuneration paid by the Company to a Participant based
               on sales of the Company's products and/or services made by the
               Participant or individuals under his supervision.

     "COMMISSION DEFERRAL" means the amount of a Participant's Commissions which
               the Participant elects to have withheld on a pre-tax basis and
               credited to his Account pursuant to Section 4.1.

     "COMPANY" means HA-LO Industries, Inc. and any successor thereto.

     "DEFERRAL" means a Base Salary Deferral, Bonus Deferral and/or a Commission
               Deferral.

     "DEFERRAL PERIOD" means the period of time for which a Participant elects
               to defer receipt of the Deferrals credited to such Participant's
               Account as specified in Section 5.2.  Deferral Periods shall be
               measured on the basis of Plan Years, beginning with the Plan Year
               that commences immediately following the Plan Year for which the
               applicable Deferrals are credited to the Participant's Account.

     "DIRECTOR" means a director of the Company.

     "EFFECTIVE DATE" means February 1, 1997.

     "EMPLOYEE" means any common-law employee of the Company.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
               amended.

     "MATCHING CONTRIBUTION" means the contribution made by the Company for a
               Participant based on a Deferral made by the Participant.


     "PARTICIPANT" means each Employee who has been selected for participation
               in the Plan and who has become a Participant pursuant to Article
               III.

     "PARTICIPATION AGREEMENT" means the written agreement pursuant to which the
               Participant elects the amount of his Base Salary, Bonus
               Compensation, and/or Commissions to be deferred pursuant to the
               Plan, the Deferral Period, the deemed investment of amounts
               credited to his Account, and such other matters as the Committee
               shall determine from time to time.

     "PLAN" means the HA-LO Industries, Inc. Executive Deferred Compensation
               Plan, as amended from time to time.



               3
<PAGE>


     "PLAN YEAR" means the twelve-consecutive month period commencing January 1
               of each year ending on December 31.  Notwithstanding the
               foregoing, for purposes of making any election under the Plan
               which is to be made as of the first day of the Plan Year, the
               Effective Date shall be deemed a first day of a Plan Year.

     "RETIREMENT DATE" means the date a Participant voluntarily terminates his
               employment with the Company:

               on or after he has attained at least 65 years of age;

               on or after he has attained 55 years of age and completed at
               least 10 Years of Service; or

               with the Committee's consent.

     "VALUATION DATE" means the last business day of each calendar month and
               each special valuation date designated by the Committee.

     "YEAR OF SERVICE" means a twelve (12) month period that an Employee is
               employed by the Company, including any period during which the
               Employee is on an authorized leave of absence.

2.2  NUMBER AND GENDER.

     Wherever appropriate herein, words used in the singular shall be considered
     to include the plural and words used in the plural shall be considered to
     include the singular.  The masculine gender, where appearing in the Plan,
     shall be deemed to include the feminine gender.

2.3  HEADINGS.

     The headings of Articles and Sections herein are included solely for
     convenience, and if there is any conflict between such headings and the
     rest of the Plan, the text shall control.



          4
<PAGE>


                                    ARTICLE III
                            PARTICIPATION AND ELIGIBILITY


3.1  PARTICIPATION.

     Participants in the Plan are those Employees who are (a) subject to the
     income tax laws of the United States, (b) members of a select group of
     highly compensated or management Employees of the Company, and (c) selected
     by the Committee, in its sole discretion, as Participants.  The Committee
     shall notify each Participant of his selection as a Participant.  Subject
     to the provisions of Section 3.3 a Participant shall remain eligible to
     continue participation in the Plan for each Plan Year following his initial
     year of participation in the Plan.

3.2  COMMENCEMENT OF PARTICIPATION.

     Except as provided in the following sentence, an Employee shall become a
     Participant effective as of the first day of the Plan Year following the
     date on which his Participation Agreement becomes effective.  A newly
     eligible Employee (because of hire or promotion) who completes a
     Participation Agreement within thirty (30) days of the date on which his
     employment commences shall become a Participant as of the date on which his
     Participation Agreement becomes effective under Section 4.2.

3.3  CESSATION OF ACTIVE PARTICIPATION.

     Notwithstanding any provision herein to the contrary, an individual who has
     become a Participant in the Plan shall cease to be a Participant hereunder
     effective as of any date designated by the Committee.  In the event of such
     cessation, the last sentence of Section 4.1 shall apply as if such
     cessation had been a termination of employment.  Any such Committee action
     shall be communicated to such Participant prior to the effective date of
     such action.



         5
<PAGE>


                                 ARTICLE IV
                    DEFERRALS AND MATCHING CONTRIBUTIONS


4.1  DEFERRALS BY PARTICIPANTS.

     Before the first day of each Plan Year, a Participant may file with the
     Committee a Participation Agreement pursuant to which such Participant
     elects to make Deferrals.  The minimum Deferral for a Plan Year is Two
     Thousand Dollars ($2000.00).  Deferrals must be in whole percentages and
     cannot exceed the following limits:  (a) seventy five percent (75%) of Base
     Salary, (b) seventy five percent (75%) of Commissions, and one hundred
     percent (100%) of Bonus Compensation.  Any Participant election shall be
     subject to rules prescribed by the Committee. Deferrals will be credited to
     the Account of each Participant at the time they would have been paid to
     the Participant in cash but for the election to defer.  If a Participant's
     employment has terminated when a Deferral would otherwise be credited to
     his Account, the amount which would have been deferred will be paid to him
     in cash.

4.2  EFFECTIVE DATE OF PARTICIPATION AGREEMENT.

     A Participant's Participation Agreement shall become effective on the first
     day of the Plan Year to which it relates.  The Participation Agreement of
     Employees who are first eligible during a Plan Year shall become effective
     as of the first day of the month following completion of a Participation
     Agreement provided the Participation Agreement is completed within thirty
     (30) days of the date the Employee first becomes eligible.  Participation
     Agreements shall relate only to compensation earned after such agreement is
     completed and executed.  If a Participant fails to complete a Participation
     Agreement before the first day of the Plan Year in which Participant shall
     earn the compensation to which the Participation Agreement relates, the
     Participant shall be deemed to have elected not to make Base Salary
     Deferrals, Bonus Deferrals, and/or Commission Deferrals for such Plan Year.

4.3  MODIFICATION OR REVOCATION OF ELECTION BY PARTICIPANT.

     A Participant may not change the amount of his Base Salary, Bonus, or
     Commission Deferrals during a Plan Year unless the Committee determines
     that he has suffered a severe, sudden and unforeseeable hardship as is more
     fully described in Section 7.9.  Under no circumstances may a Participant's
     Participation Agreement be made, modified or revoked retroactively.



       6
<PAGE>


4.4  MATCHING CONTRIBUTIONS.

     For each Plan Year, the Account of each Participant shall be credited with
     a Matching Contribution equal to the lesser of fifty percent (50%) of a
     Participant's Deferral for such Plan Year or Two Thousand Dollars
     ($2000.00).



         7
<PAGE>

                                     ARTICLE V
                  VESTING, DEFERRAL PERIODS AND EARNINGS ELECTIONS


5.1  VESTING.

     A Participant shall be 100% vested at all times in the amount of his
     Account which is attributable to his Deferrals.  The amount of his Account
     attributable to Matching Contributions for each Plan Year shall vest in
     accordance with the following schedule:


<TABLE>
<CAPTION>
          Number of Plan Years that have ended              Vested percentage of
          after the Plan Year for which the                Account attributable to
          Matching Contribution was made that             Matching Contribution for
          the participant is still employed                    such Plan Year
          ------------------------------------            -------------------------
          <S>                                             <C>
                           0                                          0%
                           1                                         20%
                           2                                         40%
                           3                                         60%
                           4                                         80%
                       5 or more                                    100%
</TABLE>

     In addition, to the extent it is not already vested, Matching Contributions
     shall be fully vested upon a Participant's Retirement Date or his death
     while employed.  All provisions of the Plan relating to the distribution of
     a Participant's Account shall mean only the vested portion of such Account.
     Since the Plan is unfunded, the portion of a Participant's Account which is
     not vested and therefore not distributed with the vested portion of his
     Account shall remain property of the Company and not be allocated to
     Accounts of other Participants or otherwise inure to their benefit.

5.2  ELECTION OF IN-SERVICE DISTRIBUTION.

     If a Participant desires an in-service distribution of all or a percentage
     of his Deferrals for a Plan Year, he must so elect on his Participation
     Agreement.  In the case of any such election, the Deferral Period must be
     for at least five (5) years.  If the Participant elects an in-service
     distribution and is entitled to such a distribution pursuant to such
     election prior to the events listed in Section 7.1, distribution pursuant
     to such election shall not include Matching Contributions and earnings on
     such contributions and must be in a lump sum.



        8
<PAGE>

5.3  EARNINGS ELECTIONS.

     Amounts credited to a Participant's Account shall be credited with earnings
     and losses based on hypothetical investments elected by the Participant.  A
     Participant may elect different investment allocations for new
     contributions and existing Account balances.  Only whole percentages may be
     elected, the minimum percentage for any allocation is ten percent (10%),
     and the total elections must allocate one hundred percent (100%) of all new
     contributions and one hundred percent (100%) of all existing Account
     balances.  Investment elections may be changed once per calendar quarter,
     effective as of the first day of such quarter, by written direction given
     at least seven (7) days before the start of such quarter.  The hypothetical
     investment alternatives and the procedures relating to the election of such
     investments, other than those set forth in this Section 5.3, shall be
     determined by the Committee from time to time.  A Participant's Account
     shall be adjusted as of each Valuation Date to reflect investment gains and
     losses.



         9
<PAGE>

                              ARTICLE VI
                              ACCOUNTS


6.1  ESTABLISHMENT OF BOOKKEEPING ACCOUNTS.

     A separate bookkeeping Account shall be maintained for each Participant.
     Such account shall be credited with the Deferrals made by the Participant
     pursuant to Section 4.1 and Matching Contributions made by the Company
     pursuant to Section 4.4, credited (or charged, as the case may be) with the
     hypothetical investment results determined pursuant to Section 5.3, and
     charged with distributions made to or with respect to a Participant.

6.2  SUBACCOUNTS.

     Within each Participant's bookkeeping Account, separate subaccounts shall
     be maintained to the extent necessary for the administration of the Plan.

6.3  HYPOTHETICAL NATURE OF ACCOUNTS.

     The Account established under this Article VI shall be hypothetical in
     nature and shall be maintained for bookkeeping purposes only, so that
     Deferrals and Matching Contributions can be credited to the Participant and
     so that earnings and losses on such amounts so credited can be credited (or
     charged, as the case may be).  Neither the Plan nor any of the Accounts (or
     subaccounts) shall hold any actual funds or assets.  The right of any
     person to receive one or more payments under the Plan shall be an unsecured
     claim against the general assets of the Company.  Any liability of the
     Company to any Participant, former Participant, or Beneficiary with respect
     to a right to payment shall be based solely upon contractual obligations
     created by the Plan.  Neither the Company, the Board, nor any other person
     shall be deemed to be a trustee of any amounts to be paid under the Plan.
     Nothing contained in the Plan, and no action taken pursuant to its
     provisions, shall create or be construed to create a trust of any kind, or
     a fiduciary relationship, between the Company and a Participant, former
     Participant, Beneficiary, or any other person.



        10
<PAGE>


                              ARTICLE VII
                         PAYMENT OF ACCOUNT


7.1  DISTRIBUTION AFTER DEFERRAL PERIOD OR TERMINATION OF EMPLOYMENT.

     Distribution of that portion of a Participant's Account for which an
     in-service distribution has been elected pursuant to Section 5.2 shall
     be made at the time specified in such election unless the Participant's
     employment terminates prior to such time, in which event the remaining
     provisions of this Section 7.1, shall apply.  Except as provided below,
     a Participant's entire Account shall be distributed to him (or his
     Beneficiary in the event of his death) following the earliest to occur
     of the following:

     (a)       the Participant's death;

     (b)       the Participant's Retirement Date; or

     (c)       the Participant's other termination of employment.



7.2  TIME OF DISTRIBUTION AND VALUATION.

     Upon a distributable event described in Section 7.1, the balance of a
     Participant's Account shall be determined as of the Valuation Date
     immediately following such event.  Distribution will be made or begin to be
     made as soon as practical after such valuation or 60 days following the
     event, whichever shall last occur.

7.3  FORM OF PAYMENT OR PAYMENTS.

     If the value of the Participant's Account as of the Valuation Date
     described in Section 7.2 is at least Five Thousand Dollars ($5,000.00),
     benefits payable after the Participant's Retirement Date shall be paid in
     the form elected by the Participant.  The form elected shall apply to the
     entire Account.  The election may be amended, provided that the amended
     election does not increase the duration of payments in the previous
     election and the election is made no later than December 31 of the calendar
     year prior to his Retirement Date.  The forms of distributions are:

     (a)       A lump sum amount; or

     (b)       Substantially equal monthly installments over a period of sixty
               (60), one hundred twenty (120), or one hundred eighty (180)
               months or substantially equal annual installments over a period
               of five (5), ten (10), or fifteen (15) years.



              11
<PAGE>

               Earnings on the unpaid balance shall continue to be credited
               to subaccounts at the appropriate earnings rate, in accordance
               with the Participant's investment election.

     In all cases other than those described in the first sentence of this
     Section 7.3, the form of benefit shall be a lump sum.  If a former
     Participant is receiving an installment form of distribution and dies prior
     to the distribution of his entire Account, distributions will be continued
     to his Beneficiary.

7.4  ACCELERATED DISTRIBUTION.

     Notwithstanding any other provision of the Plan, a Participant shall be
     entitled to receive, upon written request to the Committee, a lump sum
     distribution of his Account balance, valued as of the end of the month,
     immediately prior to the month in which such request is made subject to a
     penalty of ten percent (10%) of such balance which shall be forfeited.  A
     Participant who receives a distribution under this Section 7.4 shall not be
     eligible to make Deferrals until the first day of the second Plan Year
     which begins after such distribution.  The amount payable under this
     section shall be paid in a lump sum as soon as practical following the
     receipt of the Participant's written request by the Committee and the
     valuation of his Account.

7.5  DESIGNATION OF BENEFICIARIES.

     Each participant shall have the right, at any time, to designate one (1) or
     more persons or an entity as Beneficiary (both primary as well as
     secondary) to whom benefits under this Plan shall be paid in the event of a
     Participant's death prior to complete distribution of the Participant's
     Account.  Each Beneficiary designation shall be in a written form
     prescribed by the Committee and will be effective only when filed with the
     Committee during the Participant's lifetime.  Designation by a married
     Participant who is a resident of a community property state of a
     Beneficiary other than the Participant's spouse shall not be effective
     unless the spouse executes a written consent that acknowledges the effect
     of the designation and is witnessed by a notary public, or the consent
     cannot be obtained because the spouse cannot be located.

7.6  AMENDMENTS.

     Except as provided below, any nonspousal designation of Beneficiary may be
     changed by a Participant without the consent of such Beneficiary by the
     filing of a new designation with the Committee.  The filing of a new
     designation shall cancel all designations previously filed.

7.7  NO BENEFICIARY DESIGNATION.



       12
<PAGE>

     If any Participant fails to designate a Beneficiary in the manner provided
     above, or if the Beneficiary designated by a deceased Participant dies
     before the Participant or before complete distribution of the Participant's
     benefits, the Participant's Beneficiary shall be the person in the first of
     the following classes in which there is a survivor:

     (a)       The Participant's surviving spouse;

     (b)       The Participant's children in equal shares, except that if any of
               the children predeceases the Participant but leaves issue
               surviving, then such issue shall take by right of representation
               the share the parent would have taken if living;

     (c)       The Participant's estate.

7.8  UNCLAIMED BENEFITS.

     In the case of a benefit payable on behalf of such Participant, if the
     Committee is unable to locate the Participant or beneficiary to whom such
     benefit is payable, such benefit may be forfeited to the Company, upon the
     Committee's determination.  Notwithstanding the foregoing, if subsequent to
     any such forfeiture the Participant or beneficiary to whom such benefit is
     payable makes a valid claim for such benefit, such forfeited benefit shall
     be paid by the Company or restored to the Plan by the Company.

7.9  HARDSHIP WITHDRAWALS.

     A Participant may apply in writing to the Committee for, and the Committee
     may permit, a hardship withdrawal of all (valued as of the last day of the
     month prior to the month in which the application is made) or any part of a
     Participant's Account if the Committee, in its sole discretion, determines
     that the Participant has incurred a severe financial hardship resulting
     from a sudden and unexpected illness or accident of the Participant or of a
     dependent (as defined in section 152(a) of the Code) of the Participant,
     loss of the Participant's property due to casualty, or other similar
     extraordinary and unforeseeable circumstances arising as a result of events
     beyond the control of the Participant, as determined by the Committee, in
     its sole and absolute discretion.  The amount that may be withdrawn shall
     be limited to the amount reasonably necessary to relieve the hardship or
     financial emergency upon which the request is based, plus the federal and
     state taxes due on the withdrawal, as determined by the Committee.  The
     Committee may require a Participant who requests a hardship withdrawal to
     submit such evidence as the Committee, in its sole discretion, deems
     necessary or appropriate to substantiate the circumstances upon which the
     request is based.  A Participant who receives a distribution under this
     Section 7.9 shall not be eligible to make Deferrals until the first day of
     the second Plan Year which begins after such distribution.



        13
<PAGE>

7.10 WITHHOLDING.

     All Deferrals and distributions shall be subject to legally required income
     and employment tax withholding.



       14
<PAGE>

                                    ARTICLE VIII
                                   ADMINISTRATION


8.1  COMMITTEE.

     The Plan shall be administered by a Committee, which shall be appointed by
     and serve at the pleasure of the Board.  The Committee shall be responsible
     for the general operation and administration of the Plan and for carrying
     out the provisions thereof.  The Committee may delegate to others certain
     aspects of the management and operational responsibilities of the Plan
     including the employment of advisors and the delegation of ministerial
     duties to qualified individuals, provided that such delegation is in
     writing.  No member of the Committee who is a Participant shall participate
     in any matter relating to his status as a Participant or his rights or
     entitlement to benefits as a Participant.

8.2  GENERAL POWERS OF ADMINISTRATION.

     The Committee shall have all powers necessary or appropriate to enable it
     to carry out its administrative duties.  Not in limitation, but in
     application of the foregoing, the Committee shall have discretionary
     authority to construe and interpret the Plan and determine all questions
     that may arise hereunder as to the status and rights of Employees,
     Participants, and Beneficiaries.  The Committee may exercise the powers
     hereby granted in its sole and absolute discretion.  The Committee may
     promulgate such regulations as it deems appropriate for the operation and
     administration of the Plan.  No member of the Committee shall be personally
     liable for any actions taken by the Committee unless the member's action
     involves gross negligence or willful misconduct.

8.3  INDEMNIFICATION OF COMMITTEE.

     The Company shall indemnify the members of the Committee against any and
     all claims, losses, damages, expenses, including attorney's fees, incurred
     by them, and any liability, including any amounts paid in settlement with
     their approval, arising from their action or failure to act, except when
     the same is judicially determined to be attributable to their gross
     negligence or willful misconduct.



       15
<PAGE>

                                 ARTICLE IX
                         DETERMINATION OF BENEFITS,
                    CLAIMS PROCEDURE AND ADMINISTRATION


9.1  CLAIMS.

     A person who believes that he is being denied a benefit to which he is
     entitled under the Plan (the "Claimant") may file a written request for
     such benefit with the Committee, setting forth his claim.  The request must
     be addressed to the Committee at the Company at its then principal place of
     business.

9.2  CLAIM DECISION.

     Upon receipt of a claim, the Committee shall advise the Claimant that a
     reply will be forthcoming within ninety (90) days and shall, in fact,
     deliver such reply within such period.  The Committee may, however, extend
     the reply period for an additional ninety (90) days for reasonable cause.

     If the claim is denied in whole or in part, the Committee shall adopt a
     written opinion, using language calculated to be understood by the
     Claimant, setting forth:

     (a)       The specific reason or reasons for such denial;

     (b)       The specific reference to pertinent provisions of the Plan on
               which such denial is based;

     (c)       A description of any additional material or information necessary
               for the Claimant to perfect his claim and an explanation why such
               material or such information is necessary;

     (d)       Appropriate information as to the steps to be taken if the
               Claimant wishes to submit the claim for review; and

     (e)       The time limits for requesting a review under Section 9.3 and for
               review under Section 9.4 hereof.

9.3  REQUEST FOR REVIEW.

     Within sixty (60) days after the receipt by the Claimant of the written
     opinion described above, the Claimant may request in writing that the
     Secretary of the Company (the "Secretary") review the determination of the
     Committee.  Such request must be addressed to the Secretary of the Company,
     at its then principal place of business.  The



        16
<PAGE>

     Claimant or his duly authorized representative may, but need not, review
     the pertinent documents and submit issues and comments in writing for
     consideration by the Secretary.  If the Claimant does not request a
     review of the Committee's determination by the Secretary of the Company
     within such sixty (60) day period, he shall be barred and estopped from
     challenging the Committee's determination.

9.4  REVIEW OF DECISION.

     Within sixty (60) days after the Secretary's receipt of a request for
     review, he will review the Committee's determination.  After considering
     all materials presented by the Claimant, the Secretary will render a
     written opinion, written in a manner calculated to be understood by the
     Claimant, setting forth the specific reasons for the decision and
     containing specific references to the pertinent provisions of the Plan on
     which the decision is based.  If special circumstances require that the
     sixty (60) day time period be extended, the Secretary will so notify the
     Claimant and will render the decision as soon as possible, but no later
     than one hundred twenty (120) days after receipt of the request for review.

9.5  DISCRETIONARY AUTHORITY.

     The Committee and Secretary shall both have discretionary authority to
     determine a Claimant's entitlement to benefits upon his claim or his
     request for review of a denied claim, respectively.



        17
<PAGE>

                                     ARTICLE X
                                   MISCELLANEOUS

10.1 PLAN NOT A CONTRACT OF EMPLOYMENT.

     The adoption and maintenance of the Plan shall not be or be deemed to be a
     contract between the Company and any person or to be consideration for the
     employment of any person.  Nothing herein contained shall give or be deemed
     to give any person the right to be retained in the employ of the Company or
     to restrict the right of the Company to discharge any person at any time;
     nor shall the Plan give or be deemed to give the Company the right to
     require any person to remain in the employ of the Company or to restrict
     any person's right to terminate his employment at any time.

10.2 NON-ASSIGNABILITY OF BENEFITS.

     No Participant, Beneficiary or distributee of benefits under the Plan shall
     have any power or right to transfer, assign, anticipate, hypothecate or
     otherwise encumber any part or all of the amounts payable hereunder, which
     are expressly declared to be unassignable and non-transferable.  Any such
     attempted assignment or transfer shall be void.  No amount payable
     hereunder shall, prior to actual payment thereof, be subject to seizure by
     any creditor of any such Participant, Beneficiary or other distributee for
     the payment of any debt, judgment, or other obligation, by a proceeding at
     law or in equity, nor transferable by operation of law in the event of the
     bankruptcy, insolvency or death of such Participant, Beneficiary or other
     distributee hereunder.

10.3 AMENDMENT AND TERMINATION.

     The Board may from time to time, in its discretion, amend, in whole or in
     part, any or all of the provisions of the Plan; provided, however, that no
     amendment may be made which would impair the rights of a Participant with
     respect to amounts already allocated to his Account.  The Board may
     terminate the Plan at any time.  In the event that the Plan is terminated,
     the balance in a Participant's Account shall be paid to such Participant or
     his Beneficiary in a lump sum or in equal monthly installments as the
     Committee determines.

10.4 UNSECURED GENERAL CREDITOR STATUS OF EMPLOYEE.

     The payments to Participant, his Beneficiary or any other distributee
     hereunder shall be made from assets which shall continue, for all purposes,
     to be a part of the general, unrestricted assets of the Company; no person
     shall have nor acquire any interest in any such assets by virtue of the
     provisions of this Agreement.  The Company's obligation hereunder shall be
     an unfunded and unsecured promise to pay money in the future.  To the
     extent that the Participant, a Beneficiary, or other distributee acquires a
     right to



      18
<PAGE>


     receive payments from the Company under the provisions hereof, such right
     shall be no greater than the right of any unsecured general creditor of
     the Company; no such person shall have nor require any legal or
     equitable right, interest or claim in or to any property or assets of
     the Company.  In the event that, in its discretion, the Company
     purchases an insurance policy or policies insuring the life of the
     Participant (or any other property) to allow the Company to recover the
     cost of providing the benefits, in whole, or in part, hereunder, neither
     the Participant, his Beneficiary or other distributee shall have nor
     acquire any rights whatsoever therein or in the proceeds therefrom.  The
     Company shall be the sole owner and beneficiary of any such policy or
     policies and, as such, shall possess and may exercise all incidents of
     ownership therein.  No such policy, policies or other property shall be
     held in any trust for a Participant, Beneficiary or other distributee or
     held as collateral security for any obligation of the Company hereunder.

10.5 SEVERABILITY.

     If any provision of this Plan shall be held illegal or invalid for any
     reason, said illegality or invalidity shall not affect the remaining
     provisions hereof; instead, each provision shall be fully severable and the
     Plan shall be construed and enforced as if said illegal or invalid
     provision had never been included herein.

10.6 GOVERNING LAWS.

     All provisions of the Plan shall be construed in accordance with the laws
     of Illinois except to the extent preempted by federal law.

10.7 BINDING EFFECT.

     This Plan shall be binding on each Participant and his heirs and legal
     representatives and on the Company and its successors and assigns.

10.8 ENTIRE AGREEMENT.

     This document and any amendments contain all the terms and provisions of
     the Plan and shall constitute the entire Plan, any other alleged terms or
     provisions being of no effect.



       19
<PAGE>


          IN WITNESS WHEREOF, the Company has caused this Plan to be executed on
the ____ day of April, 1997.

                                          HA-LO INDUSTRIES, INC.


                                          By:
                                             -----------------------------
                                          Title:
                                                --------------------------


           20