Exhibit 10.3

2004 Form
1999 AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
STOCK INCENTIVE PLAN
FORM OF
NON QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT (the “Agreement”), is made effective as of {INSERT DATE}, 2004
(hereinafter called the “Date of Grant”) between American Axle & Manufacturing
Holdings, Inc., a Delaware corporation (hereinafter called the “Company”), and
{INSERT NAME} hereinafter called the “Participant”):
R E C I T A L S:
          WHEREAS, the Company has adopted the 1999 American Axle &
Manufacturing of Michigan, Inc. Stock Incentive Plan (the “Plan”), which Plan is
incorporated herein by reference and made a part of this Agreement. Capitalized
terms not otherwise defined herein shall have the same meanings as in the Plan;
and
          WHEREAS, the Compensation Committee of the Board of Directors has
determined that it would be in the best interests of the Company and its
stockholders to grant the option provided for herein to the Participant pursuant
to the Plan and the terms set forth herein.
          NOW THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties agree as follows:
          1. Grant of the Option. The Company hereby grants to the Participant
the right and option (the “Option”) to purchase, on the terms and conditions
hereinafter set forth, all or any part of an aggregate of {Insert # of Options
Granted} Shares, subject to adjustment as set forth in the Plan. The purchase
price of the Shares subject to the Option (the “Option Price”) shall be ${INSERT
PRICE} per share, the closing price of AAM stock on the Date of Grant. This one
time Option is intended to be a non-qualified stock option, and is not intended
to be treated as an option that complies with Section 422 of the Internal
Revenue Code of 1986, as amended.
          2. Vesting. At any time, the portion of the Option that has become
vested and exercisable as described in this Section 2 is hereinafter referred to
as the “Vested Portion.”

 

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               (a) Vesting Schedule.
                    (i) Subject to (a)(ii) and (b), the Option shall vest and
become exercisable in accordance with following schedule:

              Exercisable Shares*
Prior to the first anniversary of the Date of Grant
    0 %
 
       
On or after the first anniversary of the Date of Grant
    33 %
 
       
On or after the second anniversary of the Date of Grant
    67 %
 
       
On or after the third anniversary of the Date of Grant
    100 %

 

*   whole shares only; fractional shares, if any, are added to the subsequent
anniversary date.

                    (ii) Notwithstanding the foregoing, the Options shall become
immediately vested and exercisable (by the Participant or the Participant’s
beneficiary as applicable) upon the Participant’s death, Disability, or
retirement at or after age 65 under the Company’s Retirement Program for
Salaried Employees, Restatement dated January 1, 2001 (the “Program”), or
Limited Early Retirement under Section 7.11 of the Program; or upon retirement
under the Program upon expiration of any employment agreement between the
Company and the Participant; or upon any other retirement under the Program with
the advance written approval of the Company’s Chief Executive Officer; or
termination of Participant’s employment by the Company because of a
reorganization of the Company in which the Participant’s position is eliminated;
or in the event of a Change in Control.
               (b) Termination of Employment
               Except as otherwise expressly stated in Section 2(a)(ii), if the
Participant’s employment with the Company is terminated for any reason, the
Option shall, to the extent not then vested, be canceled by the Company without
consideration and the Vested Portion of the Option shall remain exercisable for
the period set forth in Section 3(a).
          3. Exercise of Option.
               (a) Period of Exercise. Subject to the provisions of the Plan and
this Agreement, the Participant may exercise all or any part of the Vested
Portion of the Option at any time prior to the earliest to occur of:
                    (i) the tenth anniversary of the Date of Grant;

 

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                    (ii) one year following the date of the Participant’s
termination of employment as a result of the Participant’s death, Disability, or
retirement at or after age 65 under the Program, or Limited Early Retirement
under Section 7.11 of the Program; or retirement under the Program upon
expiration of any employment agreement between the Company and the Participant;
or any other retirement under the Program with the advance written approval of
the Company’s Chief Executive Officer; or termination of Participant’s
employment by the Company because of a reorganization of the Company in which
the Participant’s position is eliminated; or in the event of a Change in Control
(each of the foregoing hereinafter referred to as a “Termination Date”); except
that if Participant is a member of the Company’s Board of Directors on any such
Termination Date, then one year following the last date of Participant’s service
as a member of the Company’s Board of Directors;
                    (iii) ninety days following the date of the Participant’s
termination of employment by the Company without Cause; or, except as stated in
Section 2(a)(ii), the Participant’s resignation; and
                    (iv) the date of the Participant’s termination of employment
by the Company for Cause.
                    For purposes of this Agreement:
                    “Cause” shall mean “cause” as defined in any employment
agreement entered into by and between the Participant and the Company or any of
its Subsidiaries which is in effect as of or after the Date of Grant (as the
same may be amended in accordance with the terms thereof); or if not defined
therein or if there shall be no such agreement, “Cause” shall mean
                    (i) neglect of or willful and continuing refusal to perform
one’s duties (other than due to Disability),
                    (ii) a breach of any non-competition/no raid covenants the
Participant is subject to,
                    (iii) engaging in conduct which is demonstrably injurious to
the Company, the Company’s Subsidiaries or Affiliates, as such terms are used in
the Plan (including, without limitation, a breach of any confidentiality
covenant the Participant is subject to), or
                    (iv) a conviction or plea of guilty or nolo contendere to a
felony or a misdemeanor involving moral turpitude, dishonesty or theft, in each
case as determined in the sole discretion of the Committee.
                    “Disability” shall mean the inability of a Participant to
perform in all material respects his duties and responsibilities to the Company,
or any Subsidiary of the Company, by reason of a physical or mental disability
or infirmity which inability is reasonably expected to be permanent and has
continued (i) for a period of six consecutive months or (ii) such shorter period
as the Committee may reasonably determine in good faith. The Disability

 

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determination shall be in the sole discretion of the Committee and a Participant
(or his representative) shall furnish the Committee with medical evidence
documenting the Participant’s disability or infirmity that is satisfactory to
the Committee.
               (b) Method of Exercise.
                    (i) Subject to Section 3(a), the Vested Portion of the
Option may be exercised by delivering to the Company at its principal office, or
its designee, written notice of intent to so exercise; provided that, the Option
may be exercised with respect to whole Shares only. Such notice shall specify
the number of Shares for which the Option is being exercised and shall be
accompanied by payment in full of the Exercise Price. The payment of the
Exercise Price shall be made (i) in cash or its equivalent (e.g., by check),
(ii) in Shares having a Fair Market Value equal to the aggregate Option Price
for the Shares being purchased and satisfying such other requirements as may be
imposed by the Committee; provided, that such Shares have been held by the
Participant for no less than six months, (iii) partly in cash and partly in such
Shares or (iv) through the delivery of irrevocable instructions to a broker to
deliver promptly to the Company an amount equal to the aggregate option price
for the shares being purchased. The Participant shall also be required to pay
all withholding taxes relating to the exercise.
                    (ii) Notwithstanding any other provision of the Plan or this
Agreement to the contrary, the Option may not be exercised prior to the
completion of any registration or qualification of the Option or the Shares that
is required to comply with applicable state and federal securities laws or any
ruling or regulation of any governmental body or national securities exchange
that the Committee shall in its sole discretion determine in good faith to be
necessary or advisable.
                    (iii) Upon the Company’s determination that the Option has
been validly exercised as to any of the Shares, the Company, upon request by the
Participant, shall issue certificates in the Participant’s name for such Shares.
However, the Company shall not be liable to the Participant for damages relating
to any delays in issuing the certificates to him, any loss of the certificates,
or any mistakes or errors in the issuance of the certificates or in the
certificates themselves.
                    (iv) In the event of the Participant’s death, the Vested
Portion of the Option shall remain exercisable by the Participant’s executor or
administrator, or the person or persons to whom the Participant’s rights under
this Agreement shall pass by will or by the laws of descent and distribution as
the case may be, to the extent set forth in Section 3(a). Any heir or legatee of
the Participant shall take rights herein granted subject to the terms and
conditions hereof.
          4. No Right to Continued Employment. Neither the Plan nor this
Agreement shall be construed as giving the Participant the right to be retained
in the employ of , or in any consulting relationship to, the Company or any
Affiliate. Further, the Company or any Affiliate may at any time dismiss the
Participant or discontinue any consulting relationship, free from any liability
or any claim under the Plan or this Agreement, except as otherwise expressly
provided herein.

 

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          5. Legend on Certificates. The Committee may cause a legend or legends
to be put on certificates representing the Shares purchased by exercise of the
Option to make appropriate reference to such restrictions as the Committee may
deem advisable under the Plan or as may be required by the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which such Shares are listed, and any applicable Federal or state
laws.
          6. Transferability. Except as otherwise provided in the Plan, the
Option may not be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant otherwise than by will or by the
laws of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.
No such permitted transfer of the Option to heirs or legatees of the Participant
shall be effective to bind the Company unless the Committee shall have been
furnished with written notice thereof and a copy of such evidence as the
Committee may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions hereof.
Except as otherwise provided in the Plan, during the Participant’s lifetime, the
Option is exercisable only by the Participant.
          7. Withholding. A Participant shall be required to pay to the Company
or any Affiliate, and the Company shall have the right and is hereby authorized
to withhold, any applicable withholding taxes in respect of an Option, its
exercise or any payment or transfer under an Option or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such withholding taxes.
          8. Securities Laws. Upon the acquisition of any Shares pursuant to the
exercise of the Option, the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
          9. Notices. Any notice necessary under this Agreement shall be
addressed to the Company in care of its Secretary at the principal executive
office of the Company and to the Participant at the address appearing in the
records of the Company for the Participant or to either party at such other
address as either party hereto may hereafter designate in writing to the other.
Any such notice shall be deemed effective upon receipt thereof by the addressee.
          10. Choice of Law. The interpretation, performance and enforcement of
this agreement shall be governed by the laws of the State of New York without
regard to principles of conflicts of law.

 

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          11. Option Subject to Plan. By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received a copy of
the Plan. The Option is subject to the Plan, the terms and provisions of which,
as may be amended from time to time, are hereby incorporated herein by
reference. In the event of a conflict between any term or provision contained
herein and a term or provision of the Plan, the applicable terms and provisions
of the Plan will govern and prevail.
          12. Signature in Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
          IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

            AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
 
       
 
  By:    
 
       
 
      Patrick J. Paige
 
      Vice President, Human Resources

Agreed and acknowledged as
of the date first above written:
                                        
{Insert Participant Name}