Mascotech Key Employee Retention Plan

MASCOTECH, INC.
KEY EMPLOYEE RETENTION PLAN


Section 1. Purpose. The purpose of the MascoTech, Inc. Key Employee Retention Plan (the "PLAN") is to promote the interests of MascoTech, Inc. (including its subsidiaries and any successor to substantially all of its stock, assets or business, the "COMPANY") and its stockholders by fostering the continuous employment of certain of the Company's corporate headquarters personnel, general managers and other key managers as designated by the Committee. In recognition of the possibility of a Change of Control (as defined below) and the uncertainty associated with such possibility which may result in the departure or distraction of Participants to the detriment of the Company and its stockholders, this Plan is intended to provide compensation security to Participants and thereby (i) reinforce and encourage their continued attention and dedication to their assigned duties (ii) and ensure their continued availability to the Company in the event of a Change of Control.


Section 2. Definitions. As used in this Plan, the following terms shall have the meanings indicated.


"BASE SEVERANCE AMOUNT" shall mean (i) the sum of (A) the annualized base salary of a Participant as of the Effective Date or at the Date of Termination whichever is greater and (B) the Target Bonus divided by (ii) twelve (12).


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


"CAUSE" means (i) Participant's conviction of or plea of guilty or nolo contendere to a crime involving moral turpitude or a crime (other than a minor traffic or other minor violation) providing for a term of imprisonment, a pattern of alcohol abuse (whether or not constituting a crime) or illegal substance abuse on the part of Participant, or Participant's willful misconduct in the performance of his duties to the Company or (ii) Participant's failure to follow the instructions of the Company's Chairman of the Board of Directors or the Company's Board of Directors or the executive officer of the Company to whom Participant reports, or Participant's neglect of duties (other than any such neglect resulting from incapacity of Participant due to physical or mental illness), but in each such case only following 10 days' prior written notice thereof from the Company which specifically identifies such failure or neglect and the continuance of such failure or neglect during such notice period. The Company must notify Participant of any event constituting Cause within 120 days after the Company becomes aware of such event or such event shall not constitute Cause for purposes of this Agreement; provided that a failure of the Company to so notify Participant after the first occurrence of an event constituting Cause shall not preclude any


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subsequent occurrences of such event (or a similar event) from constituting Cause.


"CHANGE OF CONTROL" means the first of the following events to occur following the date hereof:


(i) Any "person" or "group of persons", as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act, directly or indirectly
purchases or otherwise become the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) or has the right to acquire such
beneficial ownership (whether or not such right is exercisable
immediately, with the passage of time or subject to any condition) of
voting securities representing 50% or more of the combined voting power
of all outstanding voting securities of the Company; or


(ii) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period constitute
the Company's Board of Directors, and any new directors whose election
by such Board or nomination for election by stockholders was approved
by a vote of at least two-thirds of the members of such Board who were
either directors on such Board at the beginning of the period or whose
election or nomination for election as directors was previously so
approved, for any reason cease to constitute at least a majority of the
members thereof.


"COMPANY" has the meaning set forth in Section 1.


"EFFECTIVE DATE" has the meaning set forth in Section 4.


"EMPLOYEE" means any corporate headquarters employee, general manager or key manager of the Company or any of its Subsidiaries as of the Effective Date.


"EMPLOYEE RETENTION COMMITTEE" or "COMMITTEE" means a committee consisting of Richard A. Manoogian, Timothy Wadhams and Daniel P. Tredwell and any successor thereto appointed by a designee of Richard A. Manoogian, in the case of Richard A. Manoogian's resignation from such committee, Richard A. Manoogian, in the case of Timothy Wadhams' resignation from such committee, or appointed by a designee of Daniel P. Tredwell, in the case of Daniel P. Tredwell's resignation from such committee.


"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.


"GOOD REASON" means


(i) any change in a Participant's title (other than as a
result of a promotion or changes which would not be significant in
relationship to Participant's duties and responsibilities immediately
prior to the Effective


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Date) or a substantial reduction or substantial change in a
Participant's duties or responsibilities from the scope of duties and
responsibilities associated with the position of a Participant prior to
the Effective Date;


(ii) any reduction in base salary or bonus opportunity, or the
failure to pay Participant a bonus determined in substantially the same
manner as the Company's or applicable subsidiary's past practice or in
such other manner that is approved by the Plan Administrator;


(iii) relocation to an office or other place of employment
more than thirty-five (35) miles from the office or other place of
employment where Participant is working immediately prior to the
Effective Date, unless such relocation would result in a shorter
commute to such Participant than his or her pre-Effective Date commute;
or


(iv) the failure of the Company to obtain the assumption of
its obligations hereunder pursuant to Section 10(g) of this Agreement.


Participant must notify the Company of any event constituting Good Reason within 120 days after Participant becomes aware of such event or such event shall not constitute Good Reason for purposes of this Plan; provided that a failure of Participant to so notify the Company after the first occurrence of an event constituting Good Reason shall not preclude any subsequent occurrences of such event (or similar event) from constituting Good Reason.


"MULTIPLE" means the number set forth as Multiple in each Participant's Retention Notice, which shall not be greater than 24.


"NON-COMPETE TERM" means, with respect to each Participant, from the date hereof until the Multiple number of months following such Participant's Date of Termination; provided, however, if the Multiple is increased pursuant to the provisions of Section 6(a)(i), the Non-Compete Terms shall be extended by a like number of months, but in no case shall the Non-Compete Term exceed 24 months.


"PARTICIPANT" means any Employee selected by the Plan Administrator to receive benefits under this Plan.


"PLAN ADMINISTRATOR" means the Employee Retention Committee.


"RETENTION NOTICE" means a notice by the Company informing a Participant as to his or her benefits under this Plan.


"TARGET BONUS" means, with respect to any Participant, the amount set forth in each Participant's Retention Notice.


Section 3. Administration. (a) The Plan Administrator shall administer this Plan, and furnish all notices and do all filings, according to law, and shall


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have the power to implement, operate and interpret this Plan and, further, to take such other action and to make such final determinations as the Plan Administrator deems equitable under the circumstances in light of the purpose of this Plan.


(b) The Company recognizes the express authority of the Plan Administrator to administer the Plan, and hereby agrees to implement any decisions of the Plan Administrator with respect to the Plan as if such decisions were its own. In the event that the Company fails to implement any decision of the Plan Administrator with respect to any Participant within thirty (30) days of notification of such decision, all equity awards held by such Participant shall vest.


(c) Any Participant whose employment has been terminated and who believes he or she is entitled to a benefit under this Plan but who has not been advised of such benefit or who believes that the calculation of the benefit is in error shall file a claim to the Plan Administrator. The claim should be filed within sixty (60) days of the date on which the Employee had been advised of the Employee's scheduled termination or within sixty (60) days of the date that the Employee has learned the amount of the benefit under this Plan, or that there will be no benefit. The claim shall be in writing, signed by the Participant, dated, and briefly explain the basis for the claim. Claims shall be decided by the Plan Administrator and a written response to the claim shall be sent to the Participant, within sixty (60) days of the date on which the claim was received by the Committee.


(d) Any Participant not satisfied by the disposition of the claim by the Plan Administrator shall have the right to appeal to the Plan Administrator. A Participant's appeal must be filed within sixty (60) days following the denial of the claim. The appeal shall be in writing and shall include a copy of the previous claim made to the Plan Administrator and the previous decision by the Plan Administrator. It shall briefly explain why the Participant believes that the decision by the Plan Administrator was in error. The appeal shall be filed by certified mail or in person to the Plan Administrator at the address set forth in Section 10(i). Appeals shall be decided by the Plan Administrator, whose determination shall be final and binding on the Participant, the Company and the Committee, and a written response to the appeal sent to the Participant, within sixty (60) days of the date on which the notice of appeal was received by the Committee.


Section 4. Term of Plan. This Plan shall be in effect from the date of a Change of Control (the "EFFECTIVE DATE") until the date two years following a Change of Control, ("TERM OF PLAN") provided that the Plan shall terminate and be of no further significance if no Change of Control has occurred by December 31, 2001; provided, further, that notwithstanding the foregoing, (i) Section 8 of this Plan shall survive the termination of this Plan, (ii) Section 9 of this Plan shall be in effect until the latest date following the Effective Date upon which may occur the final vesting of any Participant's incentive stock awards which are outstanding on the date hereof or which are granted with respect to the year 2000


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and (iii) the Plan Administrator shall continue in existence for any period that any Participant continues to have any rights under this Plan.


Section 5. Eligibility. Each Employee designated by the Committee shall be a Participant.


Section 6. Severance. Each Participant shall be entitled to the following benefits in connection with his or her termination of employment which occurs during the Term of the Plan:


(a) Without Cause by the Company or by the Participant with Good Reason. If a Participant's employment with the Company is terminated during the Term of this Plan by the Company without Cause (other than by reason of disability, as disability is defined under the Company's long-term disability program ("DISABILITY"), or death) or by the Participant with Good Reason, in lieu of any other severance benefits to which such Participant would be entitled under any other plans, programs or practices of the Company (which other severance benefits the Participant shall waive as a condition of receipt of the following benefits, or else the following benefits shall be reduced (but not below zero) in equal measure to such other severance benefits), such Participant shall be entitled to the following benefits:


(i) The Company shall pay such Participant, (A) unpaid base
salary and unpaid vacation accrued through the date of such termination
of employment (the "DATE OF TERMINATION"), (B) any prior year bonus
earned but not paid, (C) the Target Bonus for the year of termination
(unless termination occurs in calendar year 2000, in which case the
entitlement would be to ...