

                                                            January 1, 1996

                                     GATX CORPORATION
                                 MANAGEMENT INCENTIVE PLAN


1.       OBJECTIVE.

         This Management  Incentive Plan (the "Plan"),  which is administered by
the  Compensation  Committee of the Board of  Directors  (the  "Committee"),  is
established  for the  period  January 1 through  December  31,  1996 (the  "Plan
Year"),   to  motivate  and  reward  those   employees   whose   activities  and
contributions  have a significant  bearing on the success and  profitability  of
GATX Corporation and its Subsidiaries (collectively, the "Company").

2.       ELIGIBILITY.

         Recommendation  for  participation  in the  Plan  is  initiated  by the
Subsidiary Presidents or the Vice President of Human Resources,  and approved by
the Chief Executive Officer.

3.       PARTICIPATION.

         Participants under this Plan will be exempt salaried employees with the
Company who are  individually  authorized to participate  (the  "Participants").
Each  Participant  will be notified by the  Subsidiary  President  or  Corporate
Department Head of his or her  participation  and  participation  level ("Target
Bonus").

4.       DEFINITIONS.

         For purposes of this Plan, the following  terms will have the following
meanings:

         A.  "Base  Salary"  will  mean  (1) the  total  salary  (excluding  any
incentive  compensation  or lump  sum  payments)  paid to a  Participant  by the
Company  before  reduction  for  any  contribution  authorized  under  the  GATX
Corporation   Salaried   Employees   Retirement   Savings  Plan,  plus  (2)  any
compensation   which  the  Participant   elects  to  defer  under  any  deferred
compensation plan of the Company.

         B.  "Income Goals" will mean the net income goals established annually
by the Committee for GATX and each subsidiary.  See Exhibit II.

     C. "Bonus" will mean the amount  payable to a  Participant  under this Plan
for the current Plan Year,  calculated in accordance with the provisions of this
Plan, and approved by the Committee.  

     D. "Target Bonus" will mean the percentage of base salary payable if 
100% of income goals and individual  performance goals (if applicable) 
are attained.



<PAGE>



Page 2

         E.  "Profit Attainment Percentage" will mean the quotient of income 
divided by income goal expressed as a percentage.

         F.  "Payout Percentage" will mean the percentage of the Bonus paid for 
the Company or Subsidiary performance as determined by the Profit Attainment
Percentage.  The relationship between the Profit Attainment Percentage and the
Payout Percentage is approved by the Committee and presented in Exhibit III.

         G.  "Personal Evaluation Percentage" will mean the percentage of the 
Bonus paid for the Participant's individual performance during the Plan Year. 
See Exhibit IV.

         H.  "Threshold" will mean the minimum level of income required for 
payout under the Earnings Portion of this Plan.  See Exhibit II.

5.       COMPONENTS OF THE BONUS.

         The Bonus is composed of a GATX Earnings Portion, a Subsidiary Earnings
Portion and a Personal Portion. As soon as practical following the start of each
Plan  Year,  the  Committee  will  establish  Income  Goals  for  GATX  and each
participating subsidiary.

         A. GATX  Earnings  Portion - The  extent to which GATX meets its Income
Goal - determined  by reference to the Profit  Attainment  Percentages  (Exhibit
III) - will be the basis  for the GATX  Earnings  Portion  of the Bonus for both
corporate and subsidiary participants.

         B.  Subsidiary  Earnings  Portion - For  subsidiary  Participants,  the
extent to which each subsidiary  meets its Income Goal - determined by reference
to the Profit Attainment  Percentages (Exhibit III) - will be the basis for that
subsidiary's Earnings Portion of the Bonus.

         For  corporate  Participants,  the  Subsidiary  Earnings  Portion  will
recognize  the  relative  proportion  of the Income Goals  established  for each
participating  subsidiary.  At the start of the Plan  Year,  each  participating
subsidiary will be assigned a weight by the Committee calculated on the basis of
its  Income  Goal  as a  percent  of  the  total  of  the  Income  Goals  of all
participating  subsidiaries,  with a minimum  weight of 5.0%  (Exhibit  II). The
extent to which each subsidiary  meets its Income Goal - determined by reference
to the Profit Attainment  Percentages  (Exhibit III) - will be the basis for the
Subsidiary Earnings Portion of the Bonus.

         C. Personal Portion - The Personal Portion  recognizes the level of the
Participant's  individual  performance (Exhibit IV). The percentage of the Bonus
represented  by the Personal  Portion may vary depending upon whether or not the
Threshold  levels  established  annually  for the  GATX  Earnings  Portion  (for
corporate  Participants)  and the Subsidiary  Earnings  Portion (for  subsidiary
Participants) are met.


<PAGE>

Page 3

6.       WEIGHTING OF THE COMPONENTS OF THE BONUS.

         As soon as  practical  following  the  start  of each  Plan  Year,  the
Committee  will  determine  the weight to be allocated to each of the  component
parts of the Bonus identified in paragraph 5 hereof.  For the current Plan Year,
the component  parts of the Bonus for each category of Participant  are attached
as Exhibit I.

7.       CALCULATION OF THE BONUS.

         A. The weighting of the Income Goals is multiplied by a Participant's 
Target Bonus to determine the Target Value for the Income Goal.  
(Exhibit V, Section A).

         B. Payout Percentages are determined from the Profit Attainment
Percentages as described in paragraph 5 (Exhibit V, Section B.)

         C. Payout Percentages are multiplied by the Target Values of the Income
Goals to determine  the Earnings  Portion of the Bonus.  (Exhibit V, Section C.)
The  Personal  Portion is  determined  by  multiplying  the Target  Value of the
Personal  Portion by the Personal  Evaluation  Percentage as determined from the
table attached as Exhibit IV.

         D. The Bonus will be the sum of the Earnings  Portions and the Personal
Portion of the Bonus,  provided  that no Bonus payment will be made with respect
to the Earnings Portions unless the Company and participating subsidiaries reach
Threshold levels as established by the Committee.

         E. The Company's  Chief Executive  Officer or Subsidiary  President may
increase or decrease the Bonus to an individual Participant by a maximum of 25%,
based on an assessment of that Participant's overall contribution or performance
related to a special project.

8.       ADMINISTRATION OF THE PLAN.

         A. Administration.
            Administration  of the Plan will be the  responsibility of the
Committee which may delegate responsibility thereunder to the Corporate Director
of Compensation and Benefits, Corporate Human Resources Department.

         B. New Participants.
            Subject  to the  provisions  of the  following  sentence,  new
employees  who join  the  Company  during  the Plan  Year may be  authorized  to
participate  in the Plan on a  pro-rata  basis  with the  approval  of the Chief
Executive  Officer.  Participation  under this Plan will not be available to any
new employee after October 1st of any Plan Year.

         C. Transfers and Promotions.
            If a Participant is  transferred  or promoted  during the Plan
Year causing an adjustment in his Target Bonus, such Participant's bonus will be
calculated on a pro-rata basis to reflect this change.

<PAGE>
Page 4

         D.  Retirement, Death or Disability.
             A  Participant  who  retires,  dies,  or becomes  totally  and
permanently  disabled,  as that term is  defined  in the GATX  Pension  Plan for
Salaried  Employees,  during the Plan Year will be entitled to a pro-rated bonus
in accordance with Paragraph E.

         E. Payment of Bonus.
            Bonuses will be paid as soon as possible  after the completion
of the Company's year-end audit, normally no later than March 1. The Participant
does not have a  contractual  right to receive  the Bonus.  Participants  become
entitled to receive  Bonus  payments  only after the payments have been approved
and authorized by the Committee.

         F. Employment as a Condition Precedent.
            No bonus will be paid,  except  pursuant to the  provisions of
Paragraph D above,  unless the  Participant is an employee of the Company at the
end of the Plan Year.

         G. No Employment Contract.
            Neither the establishment of the Plan nor the authorization to
be a  Participant  in the Plan will be construed as giving the  Participant  the
right to be retained in the service of the Company.

         H. Modification of Goals.
            The  Committee  may,  from time to time  during the Plan Year,
modify the Plan as  appropriate  including  (I) Income Goals,  (ii)  Thresholds,
(iii) Payout  Percentages,  (iv) assigned  weights  established  for one or more
subsidiaries  and (v)  weighting of the  Components of the Bonus if, in the sole
discretion  of the  Committee,  any part of the Plan  ceases to be a  reasonable
measure  of  desired  performance.  Notwithstanding  anything  to  the  contrary
contained  herein,   the  Committee  shall  have  the  authority  and  exclusive
discretion to determine whether income or expenses of an unusual or nonrecurring
nature are to be  included  with other  income of the  Company  for  purposes of
determining whether the established Income Goals have been achieved.

<PAGE>
                                                                   EXHIBIT I

                            WEIGHTING OF THE COMPONENTS OF THE BONUS
                                  1996 MANAGEMENT INCENTIVE PLAN






CHIEF EXECUTIVE OFFICER           100%       GATX
and CHAIRMAN OF THE BOARD




OTHER SENIOR CORPORATE OFFICERS      30%     GATX
and SUBSIDIARY PRESIDENTS            70%     subsidiary or combined subsidiaries
                                    100%





OTHER PARTICIPANTS                   10%     GATX
                                     40%     subsidiary or combined subsidiaries
                                     50%     Personal*
                                    100%

                                                *30% if Threshold not met



<PAGE>



                                                                 EXHIBIT  II



                                                Exhibit intentionally omitted


<PAGE>



                                                              EXHIBIT III

                                               Exhibit intentionally omitted



<PAGE>

                                                                    EXHIBIT IV



                            PERFORMANCE EVALUATION PERCENTAGE DETERMINATION
                                       1996 MANAGEMENT INCENTIVE PLAN




                                                             PERFORMANCE
                                                             EVALUATION
                              EVALUATION CRITERIA            PERCENTAGE

Performance was truly outstanding; consistently                 150%
exceeded job requirements and attained particularly
difficult and aggressive, high priority goals during the
performance period.

Performance was well above average; job requirements            125%
were often exceeded and difficult goals were attained
during the performance period.

Performance was fully satisfactory; met or at times             100%
exceeded job requirements and attained important
goals during the performance period.

Performance was less than satisfactory; some                     50%
but not all job requirements were met and important
goals were not attained during the performance period.

Performance was not acceptable; few job                           0%
requirements were met or goals attained during
the performance period.


<PAGE>


                                                             EXHIBIT V

                                 Exhibit intentionally omitted

<PAGE>

