Long-Term Performance Plan - HON Industries Inc.


                               HON INDUSTRIES INC.

                           LONG-TERM PERFORMANCE PLAN
       (As Adopted February 16, 2000 and Effective as of January 1, 2000)


         HON INDUSTRIES Inc., an Iowa corporation (the "Company"), hereby
establishes this Long-Term Performance Plan (the "Performance Plan") effective
as of January 1, 2000.

         1. PURPOSE. The purpose of this Performance Plan is to promote the
attainment of the Company's performance goals by providing incentive
compensation for certain designated key executives and employees of the Company
and its Subsidiaries.

         2. DEFINITIONS. As used in this Performance Plan, the following terms
have the following meanings when used herein with initial capital letters:

         (a) "Board" means the Board of Directors of the Company or, pursuant to
any delegation by the Board to the Committee pursuant to Section 13, the
Committee.

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

         (c) "Committee" means the Human Resources and Compensation Committee of
the Board.

         (d) "Earned Performance Unit Award" means the number of Performance
Units, if any, payable to a Participant at the end of the Performance Period,
the dollar amount of which shall be based on the ending value of the Performance
Units.

         (e) "Operating Unit" means either the Company as a whole or other
individual subsidiary, division, store, or other business unit of the Company in
which individuals employed thereby or therein have been approved to participate
in this Performance Plan by the Board.

         (f) "Participant" means a person who is designated by the Board to
receive benefits under this Performance Plan and who is at the time an officer,
executive, or other employee of the Company or any one or more of its
Subsidiaries, or who has agreed to commence serving in any of such capacities.

         (g) "Performance Measure" means the level of performance for the
Operating Unit; a division or other business unit of an operating unit; or an
individual Participant, or any of them, for each Performance Period, in each
case as established pursuant to Section 6.

         (h) "Performance Period" means a period of three consecutive fiscal
years of the Company commencing on the first day of a fiscal year of the
Company.

         (i) Performance Unit shall mean a unit of a value, the initial value of
which at the time of a Target Performance Unit Award shall be $1.00, and the
ending value of which shall be determined by application of the Valuation
Formula.


         (j) "Retirement" means a Participant's voluntary termination of
employment with the Company on or after attainment of age 65, or when the
Participant is at least 55 years old and the sum of a Participant's age and
service equals at least 65.

         (k) "Target Performance Unit Award" shall mean the initial number of
Performance Units awarded to a Participant at the beginning of a Performance
Period.

         (l) "Valuation Formula" shall mean the financial measurement approved
by the Board used to determine the ending value of Performance Units.

         (m) Subsidiary" has the meaning specified in Rule 405 promulgated under
the Securities Act of 1933, as amended (or under any successor rule
substantially to the same effect).

         3. ELIGIBILITY. (a) Except as otherwise provided in this Section 3, an
employee of the Company or one of its Subsidiaries will become a Participant for
a particular Performance Period to the extent designated by the Board.

         (b) An employee who first becomes eligible to participate after the
beginning of a particular Performance Period will become a Participant for such
Performance Period only in accordance with this Section 3(b). The Board may
allow participation for a portion of such Performance Period for such employee
on such terms and conditions as the Board may determine.

         4. EARNED PERFORMANCE UNIT AWARD. Unless changed by the Board, each
eligible Participant may earn an Earned Performance Unit Award as hereinafter
provided. The performance of the Operating Unit, during a particular Performance
Period will be measured using the Performance Measures established therefor by
the Board in accordance with Section 6. In the event such performance for such
Performance Period is below the minimum Performance Measures established
therefore, no Earned Performance Unit Award would be paid to Participants in
respect thereof.

         5. PERFORMANCE UNITS. Each Participant shall be granted a Target
Performance Unit Award valued at $1.00 per Performance Unit at the beginning of
the Performance Period, as determined by the Board. The number of Performance
Units payable to a Participant at the end of the Performance Period will be
determined by applying the Performance Measures applicable to the Performance
Period to determine the Earned Performance Unit Award. The ending value of each
Performance Unit in an Earned Performance Unit Award will be calculated pursuant
to the Valuation Formula at the end of the Performance Period.

         6. PERFORMANCE MEASURES. (a) The Board will approve for each
Performance Period the applicable Performance Measures, which will be used to
determine the number of Performance Units in the Earned Performance Unit Award.
Such Performance Measures may be adjusted during a Performance Period to prevent
dilution or enlargement of award as a result of extraordinary events or
circumstances as determined by the Board or to exclude the effects of
extraordinary, unusual or nonrecurring events, changes in accounting principles,
discontinued operations, acquisitions, divestitures and material restructuring
charges.


         (b) The Company will (i) notify each eligible employee who has been
selected to participate in this Performance Plan that he or she is a Participant
under this Performance Plan for such Performance Period and (ii) communicate in
writing to each Participant the Target Performance Unit Award granted to such
Participant pursuant to Section 5 and the Performance Measure and Valuation
Formula applicable to such Participant for such Performance Period.

         7. PAYMENT OF AWARDS. Subject to Sections 8 and 9, the value of the
Earned Performance Unit Award with respect to a Performance Period will be paid
as soon as practicable after the end of such Performance Period, provided the
Participant is employed by the Operating Unit as of the date of such payment,
and such payment shall be made in the following form: (i) 50% of the value
thereof in the form of cash, and (ii) 50% of the value thereof in the form of
common stock of HON INDUSTRIES Inc. as Bonus Stock or deferred shares, as
elected by the Participant, and as granted by the Board under the 1995
Stock-Based Compensation Plan. All Earned Performance Unit Awards that are paid
in cash will be paid in U.S. dollars. The Company may deduct from any payment
such amounts as may be required to be withheld under any federal, state, or
local tax laws.

         8. TERMINATION OF EMPLOYMENT. (a) If a Participant terminates
employment with the Company and its Subsidiaries due to death, disability, or
Retirement occurring before the date that a Earned Performance Unit Award for a
Performance Period is paid, the Participant's Earned Performance Unit Award, if
any, will be payable as soon as practicable after the end of such Performance
Period, and the value of such Award shall be equal to a value determined using
the Performance Measures as of the end of the Performance Period with respect to
a number of Performance Units equal to the product of (i) the number of units in
the Target Performance Unit Award, multiplied by (ii) a fraction, the numerator
of which is the number of months in the Performance Period that occurred prior
to such termination of employment, and the denominator of which is the total
number of months in such Performance Period ("Prorated Number of Performance
Units"), provided that any unpaid units in the Target Performance Unit Award in
such event shall be forfeited.

         (b) Except as provided in Section 9, if a Participant's employment with
the Company and its Subsidiaries terminates before the date and Earned
Performance Unit Award is paid for any reason other than death, disability or
Retirement the Participant will not be entitled to any payment or award under
this Performance Plan unless otherwise determined by the Board.

         9. CHANGE IN CONTROL OF THE COMPANY. (a) In connection with a Change in
Control of the Company, the value of each Target Performance Unit Award shall be
determined by the Board prior to the effective date of the Change in Control,
and each Participant's Target Performance Unit Award will become payable without
proration prior to such date.

         (b)      A "Change in Control of the Company" shall mean:

                           i) the acquisition by any individual, entity or group
         (with 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 shares of common stock of the Company (the "Outstanding
         Company Common Stock") or (b) the combined voting power of the then
         outstanding voting securities of the Company entitled to vote generally
         in the election of Directors (the "Outstanding Company Voting
         Securities"); provided, however, that for purposes of this subsection
         (i), the following acquisitions shall not constitute a Change in
         Control: (a) any acquisition


         directly from the Company, (b) any acquisition by the Company, (c) any
         acquisition by any employee benefit plan (or related trust) sponsored
         or maintained by the Company or any corporation controlled by the
         Company or (d) any acquisition by any corporation pursuant to a
         transaction which complies with clauses (a), (b) and (c) of subsection
         (iii) of this paragraph; or

                           ii) individuals who, as of the date hereof,
         constitute the Board (the "Incumbent Board") cease for any reason to
         constitute at least two-thirds of the Board; provided, however, that
         any individual becoming a Director subsequent to the date hereof whose
         election, or nomination for election by the Company's shareholders, was
         approved by a vote of at least three-quarters of the Directors then
         comprising the Incumbent Board 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 Company (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 Company Common Stock and Outstanding
         Company Voting Securities immediately prior to such Business
         Combination beneficially own, directly or indirectly, more than 50% of,
         respectively, the then outstanding shares of common stock 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 Company or all or substantially all of the
         Company'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 Company Common
         Stock and Outstanding Company 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
         Company or such corporation resulting from such Business Combination)
         beneficially owns, directly or indirectly, 20% or more of,
         respectively, the then outstanding shares of common stock 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 Company of a complete
         liquidation or dissolution of the Company.

         10. SALE OF OPERATING UNIT. Except as provided in paragraph 9, in the
event of the sale of substantially all of the stock or assets of an Operating
Unit, with respect to each Participant employed by such Operating Unit on the
date of such sale, the value of each Performance Unit shall be determined as of
the date of such sale, and the Participant shall be entitled to payment as of
such date of a number of Performance Units equal to the product of (a) 



the number of Performance Units in the Participant's Target Performance Unit
Award, multiplied by (b) a fraction, the numerator of which is the number of
months in the Performance Period that occurred prior to such sale, and the
denominator of which is the total number of months in such Performance Period,
provided that any unpaid Performance Units in such event shall be forfeited. The
ending value of each performance unit awarded under this paragraph 10 shall be
calculated using the actual purchase price of the Operating Unit in lieu of any
ending value calculation that would otherwise have resulted by applying the
Valuation Formula under this Plan.

         11. TRANSFERS AND CHANGES IN RESPONSIBILITIES. (a) If a Participant's
responsibilities materially change or the Participant is transferred during a
Performance Period to another Operating Unit or to a position that is not
designated or eligible to participate in this Performance Plan, the Company may,
as determined by the Board, either (i) continue the Participant's participation
in this Performance Plan and, establish a new Target Performance Unit Award and
Performance Measures for the Participant with respect to his or her new
position, or (ii) terminate the Participant's participation in this Performance
Plan and, as of the date of such change or transfer, prorate the Participant's
Target Performance Unit Award on the basis of the ratio of the number of months
of the Participant's participation during the Performance Period to which such
Target Performance Unit Award relates to the aggregate number of months in such
Performance Period.

         (b) If in the event of such a change or transfer the Participant's
participation in this Performance Plan in respect of Earned Performance Unit is
not terminated pursuant to Section 11(a)(ii), then the Participant's Earned
Performance Unit will be prorated on the basis of the number of months of
service by the Participant at each Operating Unit during the Performance Period.

         12. SECURITY OF PAYMENT OF BENEFITS. Unless otherwise determined by the
Board, all Earned Performance Unit Awards will be paid from the Company's
general assets, and nothing contained in this Performance Plan will require the
Company to set aside or hold in trust any funds for the benefit of any
Participant, who will have the status of a general unsecured creditor of the
Company.

         13. ADMINISTRATION OF THE PLAN. (a) This Performance Plan will be
administered by the Board, which may from time to time delegate all or any part
of its authority under this Performance Plan to the Human Resources and
Compensation Committee of the Board.

         (b) The Board will take such actions as are required to be taken by it
hereunder, may take the actions permitted to be taken by it hereunder, and will
have the authority from time to time to interpret this Performance Plan and to
adopt, amend, and rescind rules and regulations for implementing and
administering this Performance Plan. All such actions will be in the sole
discretion of the Board and, when taken, will be final, conclusive, and binding.
Without limiting the generality or effect of the foregoing, the interpretation
and construction by the Board of any provision of this Performance Plan or of
any agreement, notification, or document evidencing the grant of benefits
payable to Participants and any determination by the Board in its sole
discretion pursuant to any provision of this Performance Plan or any provision
of such agreement, notification, or document will be final and conclusive.

         (c) The existence of this Performance Plan or any right granted or
other action taken pursuant hereto will not affect the authority of the Board or
the Company to take any other action, including in respect of the grant or award
of any annual or long-term incentive or other 



right or benefit, whether or not authorized by this Performance Plan, subject
only to limitations imposed by other benefit plans of the Company and by
applicable law.

         14. MISCELLANEOUS. (a) This Performance Plan will not confer upon any
Participant any right with respect to continuance of employment or other service
with the Company or any Subsidiary, nor will it interfere in any way with any
right the Company or any Subsidiary would otherwise have to terminate or modify
the terms of such Participant's employment or other service at any time.

         (b) Except as otherwise provided in this Performance Plan, no right or
benefit under this Performance Plan will be subject to anticipation, alienation,
sale, assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber, or charge such right or benefit will
be void. No such right or benefit will in any manner be liable for or subject to
the debts, liabilities, or torts of a Participant.

         (c) This Performance Plan may be amended or terminated from time to
time by the Board. In the event this Performance Plan is terminated before the
last day of a Performance Period, the Earned Performance Unit Award otherwise
payable for such Performance Period will be prorated on the basis of the ratio
of the number of months in such Performance Period prior to such termination to
the aggregate number of months in such Performance Period and will be paid only
after the end of such Performance Period, which will be deemed to continue until
the expiration thereof as if this Performance Plan had not been terminated.

         (d) If any provision in this Performance Plan is held to be invalid or
unenforceable, no other provision of this Performance Plan will be affected
thereby.

         (e) This Performance Plan will be governed by and construed in
accordance with applicable United States federal law and, to the extent not
preempted by such federal law, in accordance with the laws of the State of Iowa,
without giving effect to the principles of conflict of laws thereof.

         15. EFFECTIVENESS. The amendment and restatement of this Performance
Plan set forth herein will become effective as of January 1, 2000