Exhibit 10(A)
                           ARVIN INDUSTRIES, INC.

                           1998 STOCK BENEFIT PLAN


   1.   PURPOSE OF THE PLAN

        This Plan is intended to benefit the Corporation and its subsidiaries by
   providing compensation arrangements that may be used to attract, retain and
   reward Officers and Nonemployee Directors of training, experience and
   ability, to attract new Officers and Nonemployee Directors whose services are
   considered valuable, and to provide such persons with a proprietary interest
   in and a greater concern for the welfare of the Corporation and its
   subsidiaries.

  2.   DEFINITIONS

        Whenever used herein, the following words and phrases shall (for
   purposes of this Plan and this Plan only) have the meanings stated unless a
   different meaning is plainly required by the context:
        
        (a) "Award" means a grant, pursuant to the Plan, of Options, SARs,
            Performance Shares, Performance Units, Restricted Shares, or any
            combination thereof.

        (b) "Board" means the board of directors of the Corporation.

        (c) "Cause" means (A) the willful and continued failure by a Participant
            to  substantially  perform his duties with the  Corporation or its
            subsidiaries (other than any such failure resulting from his
            Disability) after a written demand for substantial performance is
            delivered to him by the Corporation that specifically identifies the
            manner in which the Participant has not substantially performed his 
            duties, or (B) the willful engaging by the Participant in gross
            misconduct materially and demonstrably injurious to the Corporation
            or its subsidiaries. No act, or failure to act, on the Participant's
            part shall be considered "willful" unless done, or omitted to be
            done, by him not in good faith and without reasonable belief that
            his action or omission was in the best interest of the Corporation
            and its subsidiaries.

        (d) "Change of Control," for purposes of the Plan, means:
            (i)  the acquisition by any individual, entity or group
                 (within the meaning of Section 13(d)(3) or 14(d)(2) of the
                 Securities Exchange Act of 1934, as amended (the "Exchange
                 Act")) (a "Person") of beneficial ownership (within the
                 meaning of Rule 13d-3 promulgated under the Exchange Act) of
                 20% or more of either (A) the then outstanding Common Shares
                 of the Corporation (the "Outstanding Corporation Common
                 Shares") or (B) the combined voting power of the then
                 outstanding voting securities of the Corporation entitled to
                 vote





                                       48
<PAGE>





                 generally in the election of directors (the "Outstanding
                 Corporation Voting Securities"); provided, however, that for
                 purposes of this subsection (i), the following acquisitions
                 shall not constitute a Change of Control: (w) any acquisition
                 directly from the Corporation, (x) any acquisition by the
                 Corporation, (y) any acquisition by any employee benefit plan 
                 (or related trust) sponsored or maintained by the Corporation
                 or any corporation controlled by the Corporation or (z) any
                 acquisition by any corporation pursuant to a transaction which
                 complies with clauses (A), (B) and (C) of subsection (iii) of 
                 this definition of Change of Control; or

           (ii)  individuals who, as of the date hereof, constitute the Board
                 (the "Incumbent Board") cease for any reason to constitute at
                 least a majority of the Board; provided, however, that any
                 individual becoming a director subsequent to the date hereof
                 whose election, or nomination for election by the
                 Corporation's shareholders, was approved by a vote of at least
                 a majority of the directors comprising the Incumbent Board as
                 of the date hereof shall be considered as though such
                 individual were a member of the Incumbent Board, but
                 excluding, for this purpose, any such individual whose initial
                 assumption of office occurs as a result of an actual or
                 threatened election contest with respect to the election or
                 removal of directors or other actual or threatened
                 solicitation of proxies or consents by or on behalf of a
                 Person other than the Board; or

          (iii)  consummation of a reorganization, merger or consolidation or
                 sale or other disposition of all or substantially all of the
                 assets of the Corporation (a "Business Combination"), in each
                 case, unless, following such Business Combination, (A) all or
                 substantially all of the individuals and entities who were the
                 beneficial owners, respectively, of the Outstanding
                 Corporation Common Shares and Outstanding Corporation Voting
                 Securities immediately prior to such Business Combination
                 beneficially own, directly or indirectly, more than 50% of,
                 respectively, the then outstanding Common Shares and the
                 combined voting power of the then outstanding voting
                 securities entitled to vote generally in the election of
                 directors, as the case may be, of the corporation resulting
                 from such Business Combination (including, without limitation,
                 a corporation which as a result of such transaction owns the
                 Corporation or all or substantially all of the Corporation's
                 assets either directly or through one or more subsidiaries) in
                 substantially the same proportions as their ownership,
                 immediately prior to such Business Combination of the
                 Outstanding Corporation Common Shares and Outstanding
                 Corporation




                                       49
<PAGE>






                 Voting Securities, as the case may be, (B) no person
                 (excluding any corporation resulting from such Business
                 Combination or any employee benefit plan (or related trust) of
                 the Corporation or such corporation resulting from such
                 Business Combination) beneficially owns, directly or
                 indirectly, 20% or more of, respectively, the then outstanding
                 Common Shares of the corporation resulting from such Business
                 Combination or the combined voting power of the then
                 outstanding voting securities of such corporation except to
                 the extent that such ownership existed prior to the Business
                 Combination and (C) at least a majority of the members of the
                 board of directors of the corporation resulting from such
                 Business Combination were members of the Incumbent Board at
                 the time of the execution of the initial agreement, or of the
                 action of the Board, providing for such Business Combination;
                 or

           (iv)  approval by the shareholders of the Corporation of a complete 
                 liquidation or dissolution of the Corporation.

        (e) "Code" means the Internal Revenue Code of 1986, as amended 
            from time to time.

        (f) "Committee" means the Human Resources Committee of the Board or any
            other committee designated by the Board.

        (g) "Common Shares" means the Corporation's common shares, par value
            $2.50 per share, together with one Right for each Common Share to
            purchase one one-hundredth of a share of the Corporation's Series C
            Junior Participating Preferred Shares, without par value, issuable
            prior to the Distribution Date pursuant to the Rights Agreement.

        (h) "Corporation" means Arvin Industries, Inc., an Indiana corporation.

        (i) "Disability" means a physical or mental condition that renders a 
            Participant unable to perform his usual duties or any comparable
            duties for the Corporation or its subsidiaries if, in the opinion of
            a physician selected by the Corporation, such condition will 
            continue indefinitely or for a substantial period of time.

        (j) "Distribution Date," for purposes of the Plan, shall have the
            meaning given in the Rights Agreement.

        (k) "Fair Market Value" means (i) if the Common Shares are listed on the
            New York Stock Exchange, the closing price of the Common Shares on
            the consolidated tape of the New York Stock Exchange on the relevant
            date or the most recent date on which Common Shares traded on such
            Exchange; and (ii) if the Common Shares are not listed on such 
            Exchange, such value as the Committee, in good faith, shall
            determine.  Notwithstanding any provision of the Plan to the
            contrary,




                                       50
<PAGE>





            no determination made with respect to the Fair Market Value of
            Common Shares subject to an ISO shall be inconsistent with Section
            422A of the Code or regulations thereunder.

        (l) "ISO" means an incentive stock option, within the meaning of Section
            422A of the Code, granted under the Plan pursuant to Sections 5 and
            6.

        (m) "Limited Right" means a limited stock appreciation right
            granted under the Plan pursuant to Section 7.

        (n) "Nonemployee Directors" means any member of the Board who is not
            employed by the Corporation or any one of its subsidiaries.

        (o) "Non-tandem SAR" means an SAR not granted in connection with an
            Option.

        (p) "Officer" means any officer of the Corporation elected by the Board
            who is employed on a full-time salaried basis.

        (q) "Option" means an option, including an ISO, granted under the Plan
            pursuant to Section 5.

        (r) "Option Agreement" means a written agreement specifying the type of
            Option granted, the price at which the Option shall be exercisable,
            the duration of the Option, the number of Common Shares to which
            the Option pertains and such other provisions as the Committee
            shall determine.

        (s) "Participant" means any Officer who has been selected by the
            Committee to receive an Award.

        (t) "Performance Share" means a performance share granted under the
            Plan pursuant to Section 9.

        (u) "Performance Unit" means a performance unit granted under the Plan
            pursuant to Section 9.

        (v) "Plan" means the Arvin Industries, Inc. 1998 Stock Benefit
            Plan.

        (w) "Restricted Share" means a restricted share granted under the Plan
            pursuant to Section 8.

        (x) "Restricted Share Agreement" means a written agreement governing
            the issuance of a Restricted Share or Shares.

        (y) "Retirement Age" means the age at which employment is terminated or
            benefits are paid as a result of the attainment of the normal or
            early retirement age as defined in the retirement plan sponsored by
            the Corporation or one of its subsidiaries in which the Participant
            is actively participating.



                                       51
<PAGE>

        (z) "Rights Agreement" means the Rights Agreement dated as of May 29,
            1986, between the Corporation and Harris Trust and Savings Bank, as
            amended by Amendments No. 1, 2 and 3 thereto, dated February 23,
            1989, November 10, 1994 and May 10, 1996, respectively, as such
            agreement may be further amended from time to time.

       (aa) "SAR" means a stock appreciation right granted under the Plan
            pursuant to Section 7.

       (bb) "SAR Agreement" means a written agreement evidencing the terms and
            conditions applicable to an SAR.

       (cc) "Tandem SAR" means an SAR granted in connection with an
            Option.

   3.   ADMINISTRATION OF THE PLAN

        The Plan shall be administered by the Committee, which shall consist of
   two or more directors who shall be appointed by the Board, all of whom shall
   not be (or formerly have been) employees of the Corporation. The Committee
   shall, within the limits and pursuant to the terms of the Plan, determine the
   individuals to whom Awards are to be granted under the Plan, the number of
   shares to be subject to each Award, the exercise price with respect to each
   Option, the base price with respect to each SAR, the restrictions to be
   imposed on Restricted Shares, the performance goals which must be met in
   order to earn each Performance Share and each Performance Unit, and all other
   terms and conditions of such Awards and the shares to be issued pursuant to
   the Plan. The Committee is also authorized to interpret any provision of the
   Plan, to adopt, amend and rescind rules, regulations, terms and agreements
   relating to the Plan, Awards granted thereunder and the shares to be issued
   pursuant thereto, and to make all other determinations and take all other
   action that it deems necessary to advisable for the administration of the
   Plan. The Committee is also authorized to provide and accept any notices
   provided for hereunder. Action with respect to the Plan may be taken by a
   majority of the members of the Committee then in office either at a meeting
   called by any member of the Committee or by unanimous written consent.

   4. SHARES SUBJECT TO THE PLAN
     
      (a) COMMON SHARES AVAILABLE FOR DELIVERY. Subject to the Section 11 and
   the following provisions of this Section 4, the maximum number of Common 
   Shares that may be subject to Awards (excluding Awards which are Tandem SARs)
   shall be equal to the sum of (i) 1,200,000 Common Shares; (ii) any Common
   Shares available for future awards under the 1988 Stock Benefit Plan (the
   "1988 Plan") as of the Effective Date (as determined pursuant to Section 19);
   and (iii) any Common Shares that are represented by awards granted under the
   1998 Plan which are forfeited, expire or are cancelled without delivery of
   Common Shares or which result in the forfeiture of Common Shares back to the
   Corporation.


                                       52
<PAGE>



        In the event that, prior to the expiration date of the Plan, any Option
   granted under the Plan expires unexercised or is terminated, surrendered or
   cancelled (other than in connection with the exercise of an SAR) without
   being exercised, in whole or in part, for any reason, any Non-tandem SAR
   granted under the Plan expires unexercised or is terminated, surrendered or
   cancelled without being exercised, in whole or in part, for any reason, any
   Restricted Shares granted under the Plan are forfeited or reacquired by the
   Corporation in connection with the restrictions imposed upon such Common
   Shares pursuant to the Plan, or any Performance Share or Performance Unit
   distributable as Common Shares is unearned, terminated, surrendered,
   cancelled or forfeited, then the number of Common Shares theretofore subject
   to such Option, SAR, Performance Share, or Performance Unit or constituting
   such Restricted Shares, or the unexercised, terminated, surrendered,
   forfeited, cancelled or reacquired portion thereof, shall be added to the
   remaining number of Common Shares that may be made subject to Awards under
   the Plan. If either the purchase price of Common Shares upon exercise of any
   Option or the tax withholding requirement is satisfied by tendering or
   withholding Common Shares or by tendering exercisable Options, only the
   number of Common Shares issued net of the Common Shares tendered or withheld
   shall be deemed delivered for purposes of determining the number of Common
   Shares available for Awards under the Plan.

        (b)  OTHER PLAN LIMITS.  Subject to Section 11, the following
             additional maximums are imposed under the Plan:

             (i)  The maximum number of Common Shares that may be issued as ISOs
                  shall be 1,200,000 Common Shares.

            (ii)  The maximum number of Common Shares that may be covered
                  by Awards granted to any one Participant pursuant to
                  Section 5 (Options) shall be 200,000 Common Shares 
                  during any calendar year.

           (iii)  The maximum number of Common Shares that may be covered
                  by Awards granted to any one Participant pursuant to
                  Section 8 (Restricted Share Awards) and Section 9
                  (Performance Shares and Performance Units) shall be
                  25,000 Common Shares during any calendar year.

   5.   OPTIONS

        (a)  Options may be granted to Participants at any time and from
             time to time as shall be determined by the Committee.  The
             Committee shall have complete discretion in determining the
             number of Common Shares subject to Options granted to each
             Participant.  The Committee may grant any type of Option to
             purchase Common Shares that is permitted by law at the time
             of the grant, including ISOs.  Unless otherwise expressly
             provided at the time of grant, Options granted under the
             Plan will be nonqualified stock options.

                                       53
<PAGE>






        (b)  Each Nonemployee Director shall be granted automatically an Option
             (that is not an ISO) to purchase 1,000 Common Shares, on the day
             following each annual meeting of the Board held on or after each
             Annual Meeting of Shareholders. The per share exercise price of
             each option to be paid by each Nonemployee Director shall be 100%
             of the Fair Market Value of the Common Shares on the date an Option
             is granted.

        (c)  Each Option shall be evidenced by an Option Agreement.

        (d)  Except as provided in Sections 6 and 11 below, the number of Common
             Shares subject to Options to be granted to each Participant and the
             price per share to be paid by each Participant upon exercise shall 
             be determined by the Committee at the time the Options are granted,
             provided that such exercise price shall not be less than 100% of 
             the Fair Market Value of the Common Shares on the date an Option is
             granted or the par value of the Common Shares, whichever is
             greater.

        (e)  Except as provided in Section 6 and subject to earlier
             termination as provided in subsections (f) and (g) hereof,
             an Option granted under the Plan shall expire on the date
             determined by the Committee at the time the Option is
             granted, provided that such date shall not be more than ten
             years from the date the Option is granted.  The Committee
             shall specify in the Option Agreement, at the time each
             Option is granted, the time or times at which, and in what
             proportions, the Option may be exercised prior to its
             expiration or earlier termination.  The Committee, in its
             discretion, shall have the power to accelerate the
             exercisability of any or all Options, or any part thereof,
             granted under the Plan.

        (f)  Except as otherwise provided in this subsection (f), no
             Option may be exercised by a Participant at any time unless
             the Participant is then a salaried full-time employee of the
             Corporation or one of its subsidiaries.  The Options of any
             Participant whose full-time salaried employment with the
             Corporation and its subsidiaries is terminated by the
             Corporation without Cause (except in connection with a
             Disability) shall expire on the earlier of (i) three months
             after such termination, or (ii) the date that such Options
             expire in accordance with their terms.  During such period,
             the Options may be exercised by such Participant with
             respect to the same number of shares and in the same manner
             and to the same extent as if the Participant had continued
             as a full-time salaried employee of the Corporation or one
             of its subsidiaries during such period.  In the event that a
             Participant voluntarily terminates employment with the
             Corporation and its subsidiaries (except in connection with
             a Disability or after attainment of Retirement Age) or is
             discharged by the Corporation or one of its subsidiaries for
             Cause, any Option or Options held by the Participant under
             the Plan and not previously exercised shall expire

                                       54
<PAGE>






             immediately upon such termination or discharge and may not be
             exercised thereafter. The Options of any Participant whose
             full-time salaried employment with the Corporation and its
             subsidiaries is terminated in connection with attainment of
             Retirement Age shall expire upon the earlier of five years after
             such termination or the date such Options expire in accordance with
             their terms. During such period, the Options may be exercised by
             the Participant with respect to the same number of shares and in
             the same manner and to the same extent as if the Participant had
             continued as a full-time salaried employee of the Corporation or
             one of its subsidiaries during such period. The Options of any
             Participant whose full-time salaried employment with the
             Corporation and its subsidiaries is terminated by Disability or
             death shall expire upon the earlier of one year after such
             Disability or death, or the date such Options expire in accordance
             with their terms. During such period the Options may be exercised
             by the Participant, or in the event of his death by a legatee or
             legatees of the Options under the Participant's will or by his
             executors, personal representatives or distributees, with respect
             to the number of shares that the Participant could have purchased
             on the date of his Disability or death, as the case may be.

        (g)  Except as otherwise provided in this subsection (g), no
             Option may be exercised by a Nonemployee Director at any
             time unless the Nonemployee Director is then a member of the
             Board.  The Options held by any Nonemployee Director under
             the Plan and not previously exercised whose membership on
             the Board is terminated for any reason other than death
             shall expire immediately upon such termination and may not
             be exercised thereafter.  The Options of any Nonemployee
             Director whose membership on the Board is terminated by
             death shall expire upon the earlier of one year after such
             death or the date such Options expire in accordance with
             their terms.  In the event of death, the Options may be
             exercised by a legatee or legatees of the Options under the
             Nonemployee Director's will or by his executors, personal
             representatives or distributees.

        (h)  Options granted under the Plan shall be exercisable at such
             times and be subject to such restrictions and conditions as
             the Committee shall in each instance approve at the time the
             Options are granted, which restrictions and conditions need
             not be the same for all Participants; provided, however,
             that ISOs shall comply with the applicable provisions of the
             Code pertaining thereto.  The Committee may specify a
             minimum number of full shares that must be purchased by a
             Participant or Nonemployee Director  upon any exercise of an
             Option granted to him under the Plan.  Notwithstanding any
             other restriction on exercisability approved by the
             Committee, an Option granted under the Plan shall be fully
             exercisable upon a Change of Control of the Corporation or
             as of the Distribution Date.




                                       55
<PAGE>






        (i)  The purchase price of Common Shares upon exercise of any
             Option shall be paid in full either (i) in cash or (ii) in
             Common Shares valued at their Fair Market Value on the day
             before the date of exercise, (iii) by delivery of a
             promissory note of the Participant, (iv) in cash by a
             broker-dealer to whom the holder of the Option has submitted
             an exercise notice consisting of a fully endorsed Option,
             (v) by agreeing to surrender Options then exercisable by him
             valued at the excess of the aggregate Fair Market Value of
             the Common Shares subject to such Options on the date of
             exercise over the aggregate option price of such Common
             Shares, (vi) by directing the Corporation to withhold such
             number of Common Shares otherwise issuable upon exercise of
             such Option having an aggregate Fair Market Value on the
             date of exercise equal to the exercise price of the Option,
             or (vii) by any combination of (i), (ii), (iii), (iv), (v)
             and (vi), if approved by the Committee in its discretion or
             in the manner provided in the Option Agreement.  Subject to
             Section 15, the Corporation shall issue, in the name of the
             Participant, certificates representing the total number of
             Common Shares purchased pursuant to the exercise of any
             Option in a timely manner after such exercise.

        (j)  At the time of grant of an Option, the Committee may impose
             such restrictions on disposition of Common Shares acquired
             upon the exercise of such Option as it deems appropriate,
             which restrictions may, without limitation, include a right
             in the Corporation to repurchase upon the occurrence of a
             specified event or events, all or any of such shares at the
             price not less than the exercise price paid by the
             Participant or Nonemployee Director for those shares.

        (k)  Any Option granted under the Plan may be exercised by the 
             Participant or Nonemployee Director, by a legatee or
             legatees of such Option under the Participant's or Nonemployee
             Director's will, or by his executors, personal representatives or
             distributees, by delivering to the Corporation at its principal
             executive office (attention of its Secretary) written notice of the
             number of Common Shares with respect to which the Option is being
             exercised accompanied either by payment or instructions regarding
             payment in accordance with subsection (i) above. The date of
             exercise shall be the date the notice is received by the
             Corporation, unless a later date is specified in such notice.
             Notwithstanding the foregoing, if an exercise notice is received by
             the Corporation within ten days following the Distribution Date,
             such exercise shall be effective as of the day immediately
             preceding the Distribution Date unless a later date is specified in
             the notice.

        (l)  As of the effective date of a merger, consolidation or share
             exchange involving the Corporation as a result of which Common
             Shares are converted into the right to receive another security
             and/or any other consideration, each Option


                                       56
<PAGE>






             shall automatically become an option to acquire the securities
             and/or other consideration that a holder of the number of Common
             Shares then subject to the Option would have become entitled to
             receive as a result of such merger, consolidation or share
             exchange. Such converted option shall be governed by the terms and
             conditions applicable to the Option.

        (m)  The Committee may prescribe such other terms and conditions of the
             Options granted under the Plan that are neither inconsistent with
             nor prohibited by the Plan.

   6.   SPECIAL RULES RELATING TO ISOS

        Notwithstanding anything in Section 5 to the contrary, ISOs shall be in
   such form and upon such terms and conditions as the Committee shall from time
   to time determine, subject to the following to the extent necessary to comply
   with Section 422A of the Code:

        (a)  An ISO must be granted within ten years from the date the Plan is
             adopted or the date the Plan is approved by the shareholders of the
             Corporation, whichever is earlier;

        (b)  The aggregate Fair Market Value (determined at the time the ISOs
             are granted) of the Common Shares with respect to which ISOs are
             exercisable for the first time by a Participant during any calendar
             year (under all plans of the Corporation and its subsidiaries)
             shall not exceed $100,000; and

        (c)  Notwithstanding any other provision herein contained, no
             Participant may receive an ISO under the Plan if such
             Participant, at the time the ISO is granted, owns shares
             possessing more than ten percent of the total combined
             voting power of all classes of shares of the Corporation or
             of its parent or subsidiary corporation (within the
             contemplation of Section 425(d) of the Code); provided,
             however, that such Participant shall be eligible to receive
             a grant of an ISO if, at the time such ISO is granted, the
             exercise price is at least 110% of the Fair Market Value of
             Common Shares, and such ISO is not exercisable after the
             expiration of five years from the date such ISO is granted.

 7.   SHARE APPRECIATION RIGHTS

        (a)  SARs may be granted to Participants at any time and from
             time to time as shall be determined by the Committee.  The
             Committee may specify that an SAR granted under the Plan
             shall be a Tandem SAR or a Non-tandem SAR.  An SAR granted
             to a Participant at the same time and covering the same
             number of Common Shares as an Option shall be a Tandem SAR
             unless the Committee specifies to the contrary.  At the time
             of grant of a Non-tandem SAR, the Committee shall specify
             the base price of Common Shares to be used in connection
             with the calculation described in subsection (c) below and
             the number of Common Shares subject to the SAR.  The base



                                       57
<PAGE>






             price of a Non-tandem SAR shall not be less than 100% of the Fair
             Market Value of one Common Share on the date of grant. No Tandem
             SAR may be granted to a Participant in connection with an ISO in a
             manner that will disqualify the ISO under Section 422A of the Code
             unless the Participant consents thereto.


        (b) Each SAR shall be evidenced by an SAR Agreement.

        (c)  An SAR shall entitle the Participant to receive from the
             Corporation the number of Common Shares having an aggregate Fair
             Market Value equal to:

             (i)  In the case of a Tandem SAR, all, or if specified by
                  the Committee at the time of grant, some portion, of
                  the excess of the Fair Market Value of one Common Share
                  as of the date on which the SAR is exercised over the
                  Option price per share specified in such Option,
                  multiplied by the number of shares then subject to the
                  Option, or the portion thereof as to which the SAR is
                  being exercised; or

             (ii) In the case of a Non-tandem SAR, all, or if specified by the
                  Committee at the time of grant, some portion or multiple, of
                  the excess of the Fair Market Value of one Common Share as of
                  the date on which the SAR is exercised over the base price
                  specified in such SAR, multiplied by the number of Common
                  Shares then subject to the SAR, or the portion thereof as to
                  which it is being exercised.

             Cash shall be delivered in lieu of any fractional shares. The
             Corporation shall be entitled to elect to settle any part or all of
             its obligation arising out of the exercise of an SAR by the payment
             of cash in lieu of all or part of the Common Shares it would
             otherwise be obligated to deliver in an amount equal to the Fair
             Market Value of such shares.

        (d)  A Tandem SAR shall be exercisable at the time and to the
             extent, but only at such time and to such extent, that the
             Option to which it relates is exercisable.  Upon the
             exercise of a Tandem SAR, the unexercised Option or portion
             thereof, to which the exercised portion of the Tandem SAR is
             related shall expire.  The exercise of any Option shall
             cause the expiration of the Tandem SAR related to such
             Options, or portion thereof, that is exercised.

        (e)  (i)  Non-tandem SARs granted under the Plan shall be
                  exercisable at such times and be subject to such
                  restrictions and conditions as the Committee shall in
                  each instance approve at the time the Non-tandem SARs
                  are granted, which restrictions and conditions need not
                  be the same for all Participants.  The Committee may
                  specify a minimum number of full shares with respect to
                  which any exercise of a Non-tandem SAR must be made.



                                       58
<PAGE>


                  Notwithstanding any other restriction on exercisability
                  approved by the Committee, a Non-tandem SAR granted under the
                  Plan shall be fully exercisable upon a Change of Control of
                  the Corporation or as of the Distribution Date.

             (ii) Subject to earlier termination as provided in the last
                  sentence of this paragraph (ii), a Non-tandem SAR granted
                  under the Plan shall expire on the date determined by the
                  Committee, provided that such date shall not be more than ten
                  years from the date the SAR is granted. The Committee shall
                  specify at the time each Non-tandem SAR is granted, the time
                  or times at which, and in what proportions, the Non-tandem SAR
                  may be exercised prior to its expiration or earlier
                  termination. The Committee, in its discretion, shall have the
                  power to accelerate the exercisability of any or all
                  Non-tandem SARs, or any part thereof, granted under the Plan.
                  Notwithstanding the foregoing, any Non-tandem SAR granted to a
                  Participant under the Plan shall expire following a
                  termination of his full-time salaried employment with the
                  Corporation and its subsidiaries in the same manner as an
                  Option held by such Participant would expire pursuant to the
                  provisions of subsection 5(e).

        (f)  Any SAR granted under the Plan may be exercised by the
             Participant, by a legatee or legatees of such SAR under the
             Participant's last will, or by his executors, personal
             representatives or distributees, by delivering to the
             Corporation at its principal executive office (attention of
             its Secretary) written notice of the number of Common Shares
             with respect to which the SAR is being exercised accompanied
             by any related SAR Agreement and, in the case of a Tandem
             SAR, by the related Option Agreement.  The date of exercise
             shall be the date the notice is received by the Corporation,
             unless a later date is specified in such notice.
             Notwithstanding the foregoing, if an exercise notice is
             received by the Corporation within ten days following the
             Distribution Date, such exercise shall be effective as of
             the day immediately preceding the Distribution Date unless a
             later date is specified in the notice.

        (g)  Subject to Section 15, the Corporation shall, in a timely
             manner, (i) issue, in the name of the Participant,
             certificates representing the total number of Common Shares
             to which the Participant is entitled pursuant to subsection
             (c) hereof, and (ii) if the Corporation elects to settle all
             or part of its obligations arising out of the exercise of
             the SAR in cash, deliver to the Participant an amount in
             cash equal to the Fair Market Value of the Common Shares it
             would otherwise be obligated to deliver.

        (h)  On or after the effective date of a merger, consolidation or share
             exchange involving the Corporation as a result of


                                       59
<PAGE>






             which Common Shares are converted into the right to receive another
             security and/or any other consideration, each SAR shall, upon
             exercise in accordance with its terms, entitle the Participant to
             receive from the Corporation an amount of such security and/or
             other consideration (in the proportions received by the holders of
             Common Shares in the merger, consolidation or share exchange)
             having an aggregate Fair Market Value equal to:

             (i)  In the case of a Tandem SAR, all, or if specified by
                  the Committee at the time of grant pursuant to
                  paragraph (c)(i) of this Section, some portion, of the
                  excess of the Fair Market Value (as of the date of
                  exercise) of the security and/or other consideration
                  (on a per share basis) received by the holders of
                  Common Shares in the merger, consolidation or share
                  exchange over the option price per share specified in
                  the related option multiplied by the number of shares
                  then subject to the option, or portion thereof as to
                  which the SAR is being exercised; or

             (ii) In the case of a Non-tandem SAR, all, or if specified by the
                  Committee at the time of grant pursuant to paragraph (c)(ii)
                  of this Section, some portion or multiple, of the excess of
                  the Fair Market Value as of the date of exercise of the
                  security and/or other consideration (on a per share basis)
                  received by the holders of Common Shares in the merger,
                  consolidation or share exchange, over the base price specified
                  in such SAR multiplied by the number of shares then subject to
                  the SAR, or portion thereof, as to which it is being
                  exercised.

             Cash shall be delivered in lieu of fractional securities and may be
             delivered if elected by the Corporation.

        (i)  The Committee may specify that an SAR granted under the Plan shall
             be a Limited Right. Limited Rights shall, in addition to or in lieu
             of the provisions regarding exercisability described in subsection
             (c) above (as specified by the Committee), be subject to one or
             both of the following (as specified by the Committee):

             (i)  Limited Rights shall be exercisable within thirty days
                  after a Change of Control, and upon exercise shall
                  entitle the holder to receive from the Corporation a
                  cash payment equal to the number of Common Shares
                  subject to the related Option (in the case of a Tandem
                  SAR) or subject to the SAR (in the case of a Non-tandem
                  SAR) times the greater of (A) the excess of the Fair
                  Market Value of one Common Share as of the date on
                  which the Limited Right is exercised, over the Option
                  price per share (in the case of a Tandem SAR) or the
                  base price per share (in the case of a Non-tandem SAR),
                  or (B) the excess of the value (as determined by the

                                       60
<PAGE>






                  Committee as in existence immediately prior to the Change of
                  Control) of the highest per share consideration received by
                  shareholders of the Corporation in connection with the Change
                  of Control over such per share price.

             (ii) In the event of a dissolution or liquidation of the
                  Corporation, Limited Rights shall be exercisable for the
                  thirty days prior to the effective date of such dissolution or
                  liquidation, and, in the absence of exercise during such
                  period, shall be automatically exercised on the last business
                  day immediately prior to such effective date, unless both the
                  Committee and the Participant agree in writing that the
                  Limited Right shall not be exercised at that time. Upon
                  exercise of a Limited Right pursuant to this paragraph (ii),
                  the holder shall be entitled to receive from the Corporation a
                  cash payment equal to the number of Common Shares subject to
                  the related Option (in the case of a Tandem SAR) or subject to
                  the SAR (in the case of a Non-tandem SAR), multiplied by the
                  greater of (A) the excess of the Fair Market Value of one
                  Common Share as of the date on which the Limited Right is
                  exercised, over the Option price per share (in the case of a
                  Tandem SAR) or the base price per share (in the case of a
                  Non-tandem SAR), or (B) the excess of the value (as determined
                  by the Committee as in existence immediately prior to the
                  dissolution or liquidation) of the per share consideration
                  received by shareholders of the Corporation in connection with
                  the dissolution or liquidation over such per share price.

             On or after the effective date of a merger, consolidation, or share
             exchange involving the Corporation which does not constitute a
             Change of Control, but which results in the holders of Common
             Shares receiving another security and/or other consideration, the
             cash payments contemplated by this subsection shall be computed
             with reference to such security and/or other consideration in a
             manner consistent with subsection (h) above. Except as provided in
             subsection (c) of this Section and in this subsection (i), a
             Limited Right shall be subject to the same terms and conditions as
             other SARs.

        (j)  The Committee may prescribe such other terms and conditions of all
             SARs granted under the Plan that are neither inconsistent with nor
             prohibited by the Plan.

   8.   RESTRICTED SHARE AWARDS

        The Committee may from time to time grant, or sell for such amount of
   cash, Common Shares or such other consideration as the Committee deems
   satisfactory (which amount may be less than Fair Market Value), Restricted
   Shares under the Plan to such Participants


                                       61
<PAGE>






   and upon such terms and conditions as the Committee may determine at the time
   of grant or sale, subject to the following:

        (a)  Restricted Shares issued under the Plan shall be governed by a
             Restricted Share Agreement in such form as the Committee shall from
             time to time determine.

        (b)  Subject to Section 15 hereof, the Corporation shall issue, in the
             name of the Participant, certificates representing the total number
             of Restricted Shares granted or sold to the Participant, in a
             timely manner after such grant or sale.

        (c)  Subject to the provisions of subsection (d) hereof and the
             restrictions set forth in the related Restricted Share
             Agreement, the Participant acquiring Restricted Shares shall
             thereupon be a shareholder with respect to all of the shares
             represented by such certificate or certificates and shall
             have the right of a shareholder with respect to such shares,
             including the right to vote such shares and to receive
             dividends and other distributions paid with respect to such
             shares.

        (d)  Any Restricted Share granted to a Participant pursuant to
             the Plan shall be forfeited and any Restricted Share sold to
             a Participant pursuant to the Plan shall, at the
             Corporation's option, be resold to the Corporation for an
             amount equal to the value of the consideration paid therefor
             and, upon such forfeiture or resale, such share shall revert
             to the Corporation if the Participant's employment with the
             Corporation and its subsidiaries terminates prior to a date
             specified by the Committee at the time of grant or sale,
             which date shall not be earlier than the first anniversary
             of such grant or sale, unless such employment terminates (A)
             after the Participant's attainment of Retirement Age, (B)
             because of the Participant's Disability, (C) because of the
             Participant's death, or (D) following a Change of Control
             for any reason other than Cause.  As of such specified date,
             or, if earlier, the Participant's date of termination of
             employment described in (A) through (D) of the preceding
             sentence, the restrictions of this subsection (d) shall
             lapse.  The Corporation may exercise its right to require a
             resale of a Restricted Share pursuant to this subsection by
             notice to the Participant at any time within the thirty-day
             period following his termination of employment with the
             Corporation and its subsidiaries.  A Participant who has
             received such notice shall promptly surrender his Restricted
             Shares and the Corporation shall make payment therefor
             within ten days after such surrender.  The Committee, in its
             discretion, shall have the power to accelerate the date on
             which the restrictions of this subsection (d) shall lapse
             with respect to any or all Restricted Shares granted or sold
             under the Plan that have been outstanding for at least one
             year.

                                       62
<PAGE>




        (e)  Except as set forth in subsection (f), Restricted Shares
             issued pursuant to the Plan shall not be sold, assigned,
             pledged or otherwise transferred, voluntarily or
             involuntarily, by the holder thereof until the date the
             restrictions of subsection (d) lapse.  Each certificate
             evidencing Restricted Shares issued under the Plan shall
             bear a legend indicating that transferability of such shares
             is restricted by and subject to the terms and conditions
             imposed under the Plan.

        (f)  Notwithstanding anything contained herein to the contrary:

             (i)  Restricted Shares may be tendered in response to a
                  tender offer for or a request or invitation to tenders
                  of (both within the meaning of Section 14 of the
                  Securities Exchange Act of 1934, as in effect on
                  February 1, 1998) greater than 50% of the outstanding
                  Common Shares of the Corporation; provided the security
                  and/or other consideration received in exchange
                  therefor shall thereafter be subject to the
                  restrictions and conditions applicable to such
                  Restricted Shares until they lapse pursuant to the Plan
                  or the related Restricted Share Agreement and that the
                  tendering Participant agrees to any reasonable
                  provisions requested by the Corporation to assure that
                  any consideration received as a result of such tender
                  is subject to such restrictions and conditions and that
                  the consideration cannot be transferred in violation of
                  any such restrictions and conditions;

             (ii) Restricted Shares may be surrendered in a merger,
                  consolidation or share exchange involving the Corporation
                  provided that the security and/or other consideration received
                  in exchange therefor shall thereafter be subject to the
                  restrictions and conditions applicable to such Restricted
                  Shares until they lapse pursuant to the Plan or the related
                  Restricted Share Agreement and that the surrendering
                  Participant agrees to any reasonable provisions requested by
                  the Corporation to assure that any consideration received as a
                  result of such surrender is subject to such restrictions and
                  conditions and that the consideration cannot be transferred in
                  violation of any such restrictions and conditions.

        (g)  The Committee may prescribe such other terms and conditions of the
             Restricted Shares issued under the Plan that are neither
             inconsistent with nor prohibited by the Plan including, without
             limitation, terms providing for a lapse of the restrictions of
             subsection (d) in installments.
        (h)  From and after the Distribution Date, each Rights Certificate
             issued pursuant to the Rights Agreement for each Restricted Share
             and all Series C Junior Participating Preferred Shares issued upon
             exercise of the Rights

                                       63
<PAGE>




             evidenced by such Rights Certificate shall be subject to such
             restrictions and conditions applicable to such Restricted Share
             until they lapse pursuant to the Plan or the related Restricted
             Share Agreement; provided, however, that the Participant holding
             such Rights Certificate shall be entitled to surrender the Rights
             Certificate pursuant to the terms of the Rights Agreement in
             exchange for the Series C Junior Participating Preferred Shares
             issuable in respect thereof.

   9.   PERFORMANCE SHARES AND PERFORMANCE UNITS

        The Committee may from time to time grant Performance Shares or
   Performance Units to such Participants and upon such terms and conditions as
   the Committee shall determine, subject to the following:

        (a)  Each Performance Share shall represent one Common Share and
             shall be earned upon the attainment of performance goals
             established by the Committee at the time of grant.  Each
             Performance Unit shall represent the Fair Market Value of a
             Common Share as of the date of such award and shall be
             earned upon the attainment of performance goals established
             by the Committee at the time of grant.  The time period
             during which the performance goals must be met shall be
             determined by the Committee and shall be called a
             "performance period."  The Committee may provide that a
             Participant will earn a specified portion of the Performance
             Shares or Performance Units for a performance period in the
             event that performance goals for such performance period are
             partially attained.

        (b)  As of the last day of a performance period, Performance
             Shares and Performance Units earned by a Participant for
             such period shall be credited to an account (the "Account")
             established and maintained for such Participant, and any
             unearned Performance Shares or Performance Units shall be
             forfeited.  When the Corporation pays a cash dividend on
             Common Shares, each Participant's Account shall also be
             credited with the amount of any cash dividends that would
             have been paid on the number of Common Shares equal to the
             number of Performance Shares then credited to such Account.
             The Committee may provide that Performance Units credited to
             an Account shall be credited with earnings at a rate
             determined by the Committee.  The Account of any
             Participant, which shall be the record of Performance Shares
             earned by him under the Plan, dividends paid thereon,
             Performance Units earned by him under the Plan and earnings
             credited thereon, is solely for accounting purposes  and
             shall not require a segregation of any Corporation assets.

        (c)  The Committee may provide at the time of grant that any earned
             Performance Share in Account of a Participant, the amount of cash
             dividends credited with respect thereto, any Performance Units in
             an Account of a Participant, and earnings credited with respect
             thereto (as well as

                                       64
<PAGE>




             Performance Shares or Performance Shares or Performance Units for
             performance periods then in progress) shall be forfeited if the
             Participant's employment with the Corporation and its subsidiaries
             terminates prior to a date specified by the Committee at the time
             of grant, unless such employment terminates (i) because of death,
             (ii) because of Disability, (iii) after attainment of Retirement
             Age, or (iv) following a Change of Control for any reason other
             than Cause. The Committee may provide that, with respect to a
             termination described in (i) through (iv) of the prior sentence, a
             participant shall earn all or a portion of the Performance Shares
             or Performance Units granted to him for the performance period then
             in progress.

        (d)  As of the earlier of (i) the date specified by the Committee
             as referred to in subsection (c) above, or (ii) the date of
             a termination of employment described in paragraphs (c)(i)
             through (iv) above, a Participant, with respect to
             Performance Shares, shall be entitled to receive from the
             Corporation either a number of Common Shares equal to the
             number of Performance Shares in his Account, or cash in an
             amount equal to the number of Performance Shares in his
             Account times the Fair Market Value of one Common Share on
             such date, and with respect to Performance Units, shall be
             entitled to receive from the Corporation either cash in an
             amount equal to the number of Performance Units in his
             Account, multiplied by the Fair Market Value of one Common
             Share on such date, the number of Common Shares equal to the
             number of Performance Units, multiplied by the Fair Market
             Value of one Common Share on such Date, or a combination of
             such Common Shares and cash, the product of which is divided
             by the Fair Market Value of one Common Share on such date.
             In connection with a distribution pursuant to the preceding
             sentence, a Participant shall also be entitled to a cash
             payment equal to the dividends in his Account relating to
             the distributed Performance Shares and the earnings in his
             Account relating to the distributed Performance Units.
             Payment to a Participant of the amount set forth above shall
             be made or commence within 90 days after the earlier of (i)
             such specified date, or (ii) the date of termination
             described in paragraphs (c)(i) through (iv) above.  Payments
             in cash may be made either in a lump sum or in equal annual
             installments over a period not to exceed ten years.  The
             Committee shall have the sole discretion to determine the
             form and method of payment under the Plan and the period
             over which such payment shall be made.  Notwithstanding the
             foregoing, in the event that a Participant's employment with
             the Corporation and its subsidiaries terminates following a
             Change of Control of the Corporation for any reason other
             than attainment of Retirement Age, death, Disability or
             termination by the Corporation for Cause, payments with
             respect to all Performance Shares and Performance Units in
             his Account, including credits with respect to dividends on
             Performance Shares or earnings on Performance Units, shall
             be made in cash within ten days after such termination takes



                                       65
<PAGE>


             place. Except as provided in subsection (b), a Participant shall
             not be entitled to receive any earnings on the value of his
             Performance Shares or Performance Units with respect to the period
             between his termination of employment and the receipt of payments
             under the Plan.

   10.  ASSIGNMENT

        Except as provided in subsection 8(e) and (f) or in connection with
   unrestricted Common Shares issued pursuant to an Award, Awards granted under
   the Plan and any rights and privileges pertaining thereto, may not be
   transferred, assigned, pledged or hypothecated in any manner, by operation of
   law or otherwise, other than by will or by the laws of descent and
   distribution, and shall not be subject to execution, attachment or similar
   process. In the event of the death of a Participant or a Nonemployee
   Director, any distribution due under the Plan shall be made to the duly
   appointed and qualified executor or other personal representative of the
   Participant or the Nonemployee Director to be distributed in accordance with
   the will or applicable intestacy law of the Participant or Nonemployee
   Director; or in the event that there shall be no representative duly
   appointed and qualified within six months after the date of death of such
   deceased Participant or Nonemployee Director, then to such persons as, at the
   date of his death, would be entitled to share in the distribution of such
   deceased person's personal estate under the provisions of the applicable
   statute then in force governing the descent of intestate property, in the
   proportions specified in such statute.

   11.  ADJUSTMENTS

        The number of shares available for issuance under the Plan, the number
   of shares subject to Awards granted under the Plan, the number of Performance
   Shares credited to a Participant's Account or applicable to performance
   periods in progress, and the exercise price with respect to Options and base
   price with respect to SARs granted under the Plan may be appropriately
   adjusted as the Committee may determine for any increase or decrease in the
   number of issued Common Shares resulting from a subdivision or consolidation
   of shares whether through reorganization, recapitalization, share split,
   reverse share split, share distribution or combination of shares, or the
   payment of a share dividend or other increase or decrease in the number of
   such shares outstanding effected without receipt of consideration by the
   Corporation. Adjustments under this Section 11 shall be made according to the
   sole discretion of the Committee, and the decision of the Committee as to the
   timing, nature and amount of such adjustments shall be binding and
   conclusive. If any such adjustment results in the computation of a number of
   Common Shares that is not a whole number, such number shall be rounded down
   to the next whole number.

   12.  DISSOLUTION OR LIQUIDATION

        Upon the dissolution or liquidation of the Corporation, each
   Participant's and Nonemployee Director's rights with respect to Options and
   SARs that have not been exercised, Restricted Shares that are subject to
   forfeiture, and Performance Shares or Performance Units


                                       66
<PAGE>



   that are either unearned or not yet distributable, as of the date of the
   occurrence of such event, shall terminate and be forfeited and neither the
   Participant, the Nonemployee Director, nor their heirs, personal
   representatives, successors or assigns shall have any future rights with
   respect to any such Options, SARs, Restricted Shares, Performance Shares, or
   Performance Units. Notwithstanding the foregoing, the Committee, in its
   discretion exercised in a nondiscriminatory way, may (i) adjust the terms of
   any Award to give the holder thereof the opportunity to participate in any
   distribution on Common Shares related to the dissolution or liquidation, or
   (ii) otherwise provide for a distribution to any holder of an Award affected
   by the dissolution or liquidation; provided, however, that if the dissolution
   or liquidation occurs after a Change of Control of the Corporation, the
   Committee shall, (i) by such adjustment or distribution, provide that the
   holder of each Award shall benefit in the same manner as if such Award had
   been exercised or made unrestricted prior to the distributions on Common
   Shares related to the dissolution or liquidation, or (ii) make a cash
   distribution to such holder in an amount equal to the value of the Award
   (including, in the case of a Performance Share and Performance Unit, the
   Account related thereto).

   13.  GOVERNMENT REGULATIONS

        Notwithstanding any of the provisions hereof, or of any Option, SAR,
   Restricted Share, Performance Share, or Performance Unit granted hereunder,
   the obligation of the Corporation to issue and deliver shares upon the
   exercise of such Option or SAR or upon a distribution with respect to a
   Performance Share or Performance Unit, or the obligation of the Corporation
   to issue and deliver certificates evidencing Restricted Shares, shall be
   subject to all applicable laws, rules and regulations and to such approvals
   by any governmental agencies or national securities exchanges as may be
   required, including, without limitation, the obligation of the Corporation to
   have a registration statement or statement that complies with the provisions
   of the Securities Act of 1933, as amended, in effect with respect to such
   shares at the time of such issuance and delivery unless the Corporation
   receives evidence satisfactory to it that such issuance and delivery, in
   absence of such an effective registration statement or statements, would not
   constitute a violation of the terms and provisions of such act.

   14.  TERMINATION AND AMENDMENT OF PLAN

        The Board (or the Committee) may amend, alter or terminate the Plan,
   provided that, subject to Section 11, no amendment, alteration or termination
   shall be made which would materially and adversely affect the rights of any
   Participant or Nonemployee Director under any Option, SAR, Performance Share,
   or Performance Unit theretofore granted, or of any Participant who had
   theretofore acquired Restricted Shares pursuant to the Plan, without such
   Participant's or Nonemployee Director's consent, as the case may be.

                                       67
<PAGE>



   15.  WITHHOLDING TAXES

        Whenever the Corporation proposes or is required to issue or transfer
   Common Shares to a Participant under the Plan, the Corporation shall have the
   right to require the Participant to remit to the Corporation an amount
   sufficient to satisfy all federal, state and local withholding tax
   requirements prior to the delivery of any certificate or certificates for
   such shares. If such certificates have been delivered prior to the time a
   withholding obligation arises, the Corporation shall have the right to
   require the Participant to remit to the Corporation an amount sufficient to
   satisfy all federal, state or local withholding tax requirements at the time
   such obligation arises and to withhold from other amounts payable to the
   Participant, as compensation or otherwise, as necessary. Whenever payments
   under the Plan are to be made to a Participant in cash, such payments shall
   be net of any amounts sufficient to satisfy all federal, state and local
   withholding tax requirements. The Corporation may, if approved by the
   Committee in its discretion, in connection with an Award in the form of
   Common Shares, allow a Participant to direct the Corporation to withhold a
   portion of the Common Shares otherwise distributable or to transfer to the
   Corporation a certain number of Common Shares (either subject to a Restricted
   Share Award or previously owned) with a Fair Market Value at the date of
   exercise equal to the amount required to be withheld, and make necessary cash
   payments to appropriate taxing authorities to satisfy its withholding
   obligation.

   16.  RIGHT TO TERMINATE EMPLOYMENT

        Nothing in the Plan or any agreement entered into pursuant to the Plan
   shall confer upon any Participant the right to continue in the employment of
   the Corporation or its subsidiaries or affect any right that the Corporation
   or its subsidiaries may have to terminate the employment of such Participant.

   17.  RIGHTS AS SHAREHOLDER

        The recipient of any Award under the Plan shall have no rights as a
   shareholder with respect thereto unless and until certificates for Common
   Shares are issued to him.

   18.  LEAVES OF ABSENCE

        The Committee shall be entitled to make such rules, regulations and
   determinations as it deems appropriate under the Plan in respect of any leave
   of absence taken by the recipient of any Award. Without limiting the
   generality of the foregoing, the Committee shall be entitled to determine (i)
   whether or not any such leaves of absence shall constitute a termination of
   employment within the meaning of the Plan, and (ii) the impact, if any, of
   any such leave of absence on awards under the Plan theretofore made to any
   recipient who takes such leave of absence.

                                       68
<PAGE>




   19.  EFFECTIVE DATE

        The Plan shall become effective as of the date it is approved by the
   holders of a majority of the Common Shares of the Corporation (voting as a
   single class) present, or represented, and entitled to vote at the 1998
   Annual Meeting of Shareholders of the Corporation. There shall be no Options,
   SARs, Restricted Shares, Performance Shares, or Performance Units granted or
   awarded under the Plan after 2008; provided, however, that all Options, SARs,
   Restricted Shares, Performance Shares, and Performance Units granted or sold
   under the Plan prior to such date shall remain in effect and subject to
   adjustment and amendment as herein provided until they have been satisfied or
   terminated in accordance with the Plan and the terms of their related
   agreements.

   20.  GOVERNING LAW

        The Plan, and all agreements hereunder, shall be construed in accordance
   with and governed by the laws of the State of Indiana and, in the case of
   ISOs, Section 422A of the Code.

   21.  INDEMNIFICATION

        Each person who is or shall have been a member of the Committee or of
   the Board shall be indemnified and held harmless by the Corporation against
   and from any loss, cost, liability, or expense that may be imposed upon or
   reasonably incurred by him in connection with or resulting from any claim,
   action, suit, or proceeding to which he may be a party or in which he may be
   involved by reason of any action taken or failure to act under the Plan and
   against and from any and all amounts paid by him in settlement thereof with
   the Corporation's approval, or paid by him in satisfaction of any judgment in
   any such action, suit or proceeding against him; provided, however, that he
   shall give the Corporation an opportunity at its own expense, to handle and
   defend the same before he undertakes to handle and defend it on his own
   behalf. The foregoing right of indemnification shall not be exclusive of any
   other rights of indemnification to which such persons may be entitled under
   the Corporation's Articles of Incorporation or By-laws, as a matter of law,
   or otherwise, or any power that the Corporation may have to indemnify them or
   to hold them harmless.

   22.  SUCCESSORS

        In the event of a sale of substantially all of the assets of the
   Corporation, or a merger, consolidation or share exchange involving the
   Corporation, all obligations of the Corporation under the Plan with respect
   to awards granted hereunder shall be binding on the successor to the
   Corporation in the transaction. Employment with such a successor shall be
   considered employment with the Corporation for purposes of the Plan.

                                       69
<PAGE>





   23.  NOTICES

        Notices given pursuant to this Agreement shall be in writing and shall
   be deemed received when personally delivered or five days after mailed by
   United States registered or certified mail, return receipt requested,
   addressee only, postage prepaid. Notice to the Corporation shall be directed
   to:

                            Secretary
                            Arvin Industries, Inc.
                            One Noblitt Plaza
                            Box 3000
                            Columbus, Indiana 47202-3000

        Notices to Participants and Nonemployee Directors shall be directed to
   such person at the home address of such person on the records of the
   Corporation. Notwithstanding the foregoing, if either party shall have
   previously designated address by notice to the other party given in the
   foregoing manner, then notices to such party shall be directed as designated

                                       70
<PAGE>