<PAGE>

                                                                    EXHIBIT 10.2

                              AMENDED AND RESTATED
                                CHANGE IN CONTROL
                                       AND
                               SEVERANCE AGREEMENT

     This Agreement, dated as of the _____ day of ______ 2008 (the "Agreement")
by and between TECUMSEH PRODUCTS COMPANY, a Michigan corporation (the
"Company"), and ____________________ ("Executive").

                                   WITNESSETH:

     WHEREAS, the Company desires to retain the services of the Executive on
behalf of the Company as outlined in the employment letter, term sheet or job
description and duties attached hereto as Exhibit A (collectively, the "Assigned
Duties and Responsibilities"); and

     WHEREAS, the Company and the Executive are entering into this Agreement to
set forth their respective duties and obligations in the event of the
termination of Executive's employment with the Company under certain
circumstances.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:

     1. Employment and Duties. Executive shall have the duties and
responsibilities outlined in the Assigned Duties and Responsibilities as such
duties and responsibilities may be revised or supplemented in written directives
from the Chief Executive Officer or the Board of Directors of the Company (the
"Board"). So long as Executive is employed by the Company, Executive shall
devote his business time, attention and energy on a full-time basis exclusively
to the affairs of the Company and its affiliates and shall use his best efforts
to promote the interests of the Company, and the Executive shall not engage in
any other business activity without the approval of the Board.

     2. Term of Agreement; Termination of Agreement.

          (a) Term. This Agreement shall commence on the date first set forth
     above and shall remain in effect for three (3) years (the "Initial Term").
     At the end of the Initial Term, this Agreement shall thereafter be
     automatically renewed for successive one (1) year periods (each a "Renewal
     Term"), unless the Company shall have given the Executive written notice of
     cancellation and termination at least sixty (60) days prior to the end of
     the Initial term or the Renewal Term then

<PAGE>

     in effect that the Agreement shall terminate at the end of such Initial
     Term or Renewal Term.

          (b) Termination.

               (1) In addition to termination under Subsection (a) of this
          Section 2, this Agreement may be terminated, at any time, by mutual
          agreement of the parties.

               (2) Notwithstanding anything herein to the contrary, except as
          provided in Subsections 3(c) and (f) hereof, this Agreement shall
          terminate and be of no further force or effect on Executive's death.

3.   Termination of Employment; Termination Payments.

          (a) Termination of Executive's Employment. The Executive may terminate
     his employment with the Company in accordance with this Section 3: (i)
     voluntarily; or (ii) with Good Reason on Change of Control (as hereinafter
     defined). The Company may terminate the Executive's employment with the
     Company, in accordance with this Section 3: (x) for Cause (as hereinafter
     defined); (y) without Cause; or (z) for Executive's Disability. Any
     termination of the Executive under this Agreement that would trigger an
     obligation to make any payments to the Executive must constitute a
     "separation from service" within the meaning of Section 409A of the
     Internal Revenue Code of 1986, as amended (the "Code").

          (b) Payments - Termination by Executive. If Executive voluntarily
     terminates his employment without Good Reason on Change of Control, then
     Executive shall be entitled to receive: (A) a cash payment equal to the
     aggregate amount of (x) accrued but unpaid base salary and (y) unused
     vacation days; and (B) for a period of 180 days beginning on the effective
     date of Executive's termination (the "Termination Date"), the ability to
     exercise any then vested awards ("Incentive Awards") under the Company's
     Long Term Incentive Plan ("LTIP") in accordance with the terms of the LTIP
     and any such Incentive Awards. All of Executive's unvested Incentive Awards
     will be cancelled as of the Termination Date. All of Executive's vested
     Initial Incentive Award and Annual Awards not exercised on or before the
     180th day referred to above (the "Last Exercise Date"), will be cancelled
     as of the Last Exercise Date. After the Termination Date, other than the
     foregoing, Executive will not be entitled to receive any other
     post-termination payments or severance. Any cash payments due under this
     Section 3(b) shall be payable in a lump sum within sixty (60) days of the
     Termination Date, provided that, in the event that the Termination Date is
     a date during the period beginning on December 16 and ending on December
     31,


                                      -2-

<PAGE>

     payment will occur no later than March 15 of the year following the year in
     which the Termination Date falls.

          (c) Payments - Termination - by the Company without Cause. In the
     event that the Executive's employment is terminated by the Company without
     Cause, then Executive shall be entitled to: (A) cash payment in an amount
     equal to the aggregate of (i) accrued but unpaid base salary; (ii) unused
     vacation days; (iii) one year's base salary then in effect; (iv) one times
     the Executive's then applicable annual target bonus under the Company's
     performance-based annual incentive plan ("Target Bonus"); (B) for a period
     of 180 days beginning on the Termination Date, the ability to exercise any
     vested Incentive Awards in accordance with their respective terms for
     exercise; and (C) for a period of twelve (12) months after the Termination
     Date, subject to any applicable co-payments and deductibles, health
     insurance coverage (medical, dental and vision) for Executive and
     Executive's eligible family members to the extent Executive is a
     participant in a Company health insurance plan as of the Termination Date
     and, at least equal to the coverage provided to such persons under the
     Company's health insurance plans in effect on the Termination Date. In the
     event that Executive dies or incurs a Disability during such twelve (12)
     month period, the Company will continue to provide health insurance
     coverage for the Executive's eligible family members for the balance of
     such twelve (12) months. All of Executive's vested Incentive Awards not
     exercised on or before the Last Exercise Date, will be cancelled as of the
     Last Exercise Date.

          After the Termination Date, other than the foregoing, Executive will
     not be entitled to receive any other post-termination payments or
     severance. Any cash payments due under Section 3(c)(A)(i) and (ii) above
     shall be paid within thirty (30) days of the Termination Date. Any cash
     payments due under Section 3(c)(A)(iii) above shall be paid in installments
     over the twelve (12) months after the Termination Date in accordance with
     the Company's normal payroll practices. Any cash payment due under Section
     3(c)(A)(iv) above shall be paid at the time bonuses are payable to other
     participants in the plan or program under which the applicable Target Bonus
     was established.

          (d) Payments - Termination Without Cause - Good Reason - Following a
     Change of Control. In the event that (A) following the effective date of a
     Change of Control, Executive's employment is terminated by the Company
     without Cause; or (B) within 180 days following the effective date of a
     Change in Control, Executive terminates his employment for Good Reason on
     Change of Control, then in either event as of the Termination Date,
     Executive shall be entitled to: (i) immediate vesting of one hundred
     percent (100%) of the Executive's Incentive Awards, if any; and (ii)
     receive the compensation and benefits specified


                                      -3-

<PAGE>

     under Section 3(c) of this Agreement (subject to the same time periods and
     conditions provided in Section 3(c)), but any cash payment due under
     Section 3(c)(A)(iii) and (iv) above shall be paid in a lump sum within
     thirty (30) days of the Termination Date. All of Executive's vested
     Incentive Awards not exercised on or before the Last Exercise Date, will be
     cancelled as of the Last Exercise Date.

          After the Termination Date, other than the foregoing, Executive will
     not be entitled to receive any other post-termination payments or
     severance.

          (e) Payments - Termination - Cause. If the Company terminates
     Executive's employment for Cause, then Executive shall be entitled to
     receive a cash payment equal to the aggregate amount of (i) accrued but
     unpaid base salary and (ii) unused vacation days. All Incentive Awards, if
     any, whether or not vested, which have not been exercised or paid, as the
     case may be, will be forfeited and immediately cancelled effective on the
     date notice of the for Cause termination is delivered to Executive. After
     the Termination Date, other than the foregoing, Executive will not be
     entitled to receive any other post-termination payments or severance. Any
     cash payments due under this Section 3(e) shall be payable in a lump sum
     within ninety (90) days of the Termination Date, provided that, in the
     event that the Termination Date is a date during the period beginning on
     December 16 and ending on December 31, payment will occur no later than
     March 15 of the year following the year in which the Termination Date
     falls.

          (f) Termination Payments - Disability. If Executive is terminated by
     the Company for a Disability (as hereinafter defined), then Executive shall
     be entitled to receive: (i) a cash payment equal to the aggregate amount of
     (A) accrued but unpaid Base Salary, (B) unused vacation days, and (C) the
     Target Bonus on a pro rata basis through the Termination Date; (D)
     settlement of any then vested Incentive Awards; (ii) the immediate vesting
     of the next tranche of any Incentive Award that would have vested after the
     Termination Date; (iii) for a period of twelve (12) months after the
     Termination Date, subject to any applicable co-payments and deductibles,
     health insurance coverage (medical, dental and vision) for Executive and
     Executive's eligible family members to the extent Executive is a
     participant in a Company health insurance plan as of the Termination Date
     and, at least equal to the coverage provided to such persons under the
     Company's health insurance plans in effect on the Termination Date; (iv) in
     the event that Executive dies during such twelve (12) month period, the
     Company will continue to provide health insurance coverage for the
     Executive's eligible family members for the balance of such twelve (12)
     months; and (v) the ability to exercise any then vested Incentive Awards in
     accordance with their terms. All of Executive's unvested Incentive Awards
     or other grants will be cancelled as of the Termination Date. After the
     Termination Date, other than the foregoing, Executive will not be entitled
     to receive any other post-termination


                                      -4-
<PAGE>

     payments or severance. Any cash payments due under this Section 3(f) shall
     be payable in a lump sum within ninety (90) days of the Termination Date,
     provided that, in the event that the Termination Date is a date during the
     period beginning on December 16 and ending on December 31, payment will
     occur no later than March 15 of the year following the year in which the
     Termination Date falls.

          (g) Definitions. The following definitions shall apply to this
     Agreement:

               (i) "Cause" shall mean any of the following: (A) the Executive's
          deliberate and willful continuing substantial failure to perform his
          duties for the Company for thirty (30) days (other than as a result of
          incapacity due to mental or physical illness) after a written demand
          is delivered to the Executive by the Company's Chief Executive Officer
          or Board of Directors; (B) the Executive's willful engagement in
          illegal conduct or gross misconduct that is materially and
          demonstrably injurious to the Company; (C) the Executive's conviction
          of a felony or his plea of guilty or nolo contendere to a felony; or
          (D) the Executive's willful and material breach of his confidentiality
          obligations under local law or the Company's code of conduct.

               (ii) "Change of Control" shall occur if at any time:

                    (A) Any person or group (as such terms are used in
               connection with Section 13(d) and 14(d) of the Exchange Act)
               hereafter becomes the "beneficial owner" (as defined in Rule
               13(d)(3) and 13(d)(5) under the Exchange Act), directly or
               indirectly, of securities of the Company representing thirty-five
               percent (35%) or more of the combined voting power of the
               Company's then outstanding securities;

                    (B) A merger, consolidation, sale of assets, reorganization,
               or proxy contest is consummated and, as a consequence of which,
               members of the Board in office immediately prior to such
               transaction or event constitute less than a majority of the Board
               thereafter;

                    (C) A merger, consolidation, or reorganization is
               consummated with any other corporation pursuant to which the
               shareholders of the Company immediately prior to the merger,
               consolidation, or reorganization do not immediately thereafter
               directly or indirectly own more than fifty percent (50%) of the
               combined voting power of the voting securities entitled to vote
               in the


                                      -5-

<PAGE>

               election of directors of the merged, consolidated, or reorganized
               entity; or

                    (D) members of the Incumbent Board (as hereinafter defined)
               cease for any reason to constitute a majority of the Board of
               Directors of the Company.

               (iii) "Disability" means any medically determinable physical or
          mental impairment which can be expected to result in death or can be
          expected to last for a continuous period of not less than 12 months:
          (A) which renders Executive unable to engage in any substantial
          gainful activity; or (B) which enables Executive to receive income
          replacement benefits for a period of not less than three (3) months
          under an accident and health plan covering employees of the Company,
          provided that this definition shall be interpreted in accordance with
          Code Section 409A(a)(2)(A)(v) and regulations and other guidance
          thereunder. Notwithstanding (A) and (B) of this Section 3(g)(iii),
          Executive shall be deemed to have a total and permanent disability
          when determined to be totally disabled by the Social Security
          Administration.

               (iv) "Good Reason on Change of Control" shall mean any of the
          following occurrences following a Change of Control: (A) without the
          Executive's prior written consent, the assignment to duties that are a
          material diminution of the Executive's then assigned duties and
          responsibilities, or the taking of any action that results in the
          material diminution of such assigned duties or responsibilities; (B)
          the failure to maintain the Executive in an equivalent position in the
          entity surviving a merger or consolidation involving the Company; (C)
          any material reduction in the Executive's base salary or target bonus
          opportunity or Incentive Awards as or when required other than an
          across-the-board reduction applicable to all executives of the
          Company; or (D) the Executive is assigned to a location more than one
          hundred (100) miles from the then current headquarters of the Company.

               (v) "Incumbent Board" shall mean the individuals who, as of the
          date of this Agreement, constitute the entire Board of Directors of
          the Company and any new director whose election by the Board or
          nomination for election by the shareholders of the Company was
          approved by a vote of at least a majority of the directors then still
          in office who either were directors on the date of this Agreement or
          whose election or nomination for election was previously so approved.


                                      -6-

<PAGE>

          (h) Termination Notice. The Executive must provide the Company with
     thirty (30) days advance written notice of his intention to terminate his
     employment for any reason other than Good Reason on Change of Control for
     which reason the Executive shall give the Company ten (10) days advance
     written notice.

          (i) Special Termination Provision. If the Executive is terminated
     without Cause by the Company anytime within one year following the election
     of any individual as a director of the Company ("Election") (which Election
     occurs during the period beginning November 1, 2008 and the date of the
     Company's 2010 shareholders meeting), as a result of an actual or
     threatened solicitation of proxies or consents or otherwise by or on behalf
     of any person other than the Board ("Election Contest"), including by
     reason of any agreement intended to avoid or settle any Election Contest,
     if following such Election at least a majority of the directors on the
     Board would have been nominated, appointed or otherwise selected (whether
     in connection with the Election Contest or at any time prior to the
     Election Contest) by the person or entity who solicited proxies or consents
     in connection with the Election Contest or such person's or entity's
     affiliates, provided that either in connection with such Election Contest
     (or an agreement intended to avoid or settle such Election Contest) and
     during the one-year period following such Election the Chief Executive
     Officer of the Company immediately prior to such Election Contest is no
     longer employed by the Company (other than as a result of the Company
     terminating the Chief Executive Officer for "Cause"), the Executive shall
     be entitled the payments set forth in paragraph 3(d) above.

          (j) Post Termination Cooperation. In the event of termination of the
     Executive's employment, for whatever reason (other than death or
     Disability), the Executive agrees to cooperate with the Company and to be
     reasonably available to the Company for a reasonable period of time
     thereafter with respect to matters arising out of the Executive's
     employment hereunder or any other relationship with the Company, whether
     such matters are business-related, legal or otherwise.

          (k) Resignation. Upon termination of the Executive's employment for
     any reason, the Executive shall be deemed to have resigned from all
     positions with the Company and its affiliates.

          (l) Release; Full Satisfaction. (i) Notwithstanding any other
     provision of this Agreement, no post-termination payments to which
     Executive becomes entitled under this Agreement or any agreement or plan
     referenced herein shall become payable under this Agreement unless and the
     Executive within 30 days of the date of termination executes a general
     release of claims in form and manner reasonably satisfactory to the Company
     including, where relevant, a release of any statutory claims, and such
     release has become irrevocable; provided, that the Executive shall not be
     required to release any indemnification rights. (ii) The


                                      -7-

<PAGE>

     payments to be provided to the Executive pursuant to this Agreement upon
     termination of the Executive's employment shall constitute the exclusive
     payments in the nature of severance or termination pay or salary
     continuation which shall be due to the Executive upon a termination of
     employment and shall be in lieu of any other such payments under any plan,
     program, policy or other arrangement which has heretofore been or shall
     hereafter be established by any member of the Company.

          (m) Termination Payments - Delay. To the extent (i) any
     post-termination payments to which Executive becomes entitled under this
     Agreement or any agreement or plan referenced herein constitute "deferred
     compensation" subject to Section 409A of the Code; and (ii) Executive is
     deemed at the time of such termination of employment to be a "specified
     employee" under Section 409A of the Code, then such payment will not be
     made or commence until the earliest of (x): the expiration of the six (6)
     month period measured from the date of Executive's "separation from
     service" (as such term is defined in Treasury Regulations under Section
     409A of the Code and any other guidance issued under Section 409A of the
     Code) with the Company; (y) the date Executive has a Disability; and (z)
     the date of Executive's death following such separation from service. Upon
     the expiration of the applicable deferral period as described in this
     Section 3(m), any payments which would have otherwise been made during that
     period (whether in a single sum or in installments) in the absence of this
     provision (together with reasonable accrued interest) will be paid to
     Executive or Executive's beneficiary in one lump sum.

     4. Integration; Amendment. This Agreement contains the entire agreement of
the parties relating to the subject matter hereof and thereof, and supersedes
and replaces in their entirety any prior agreements or understandings concerning
such subject matter. This Agreement may not be waived, changed, modified,
extended, or discharged orally, but only by agreement in writing.

     5. Noncompetition. Executive agrees not to engage in competitive activities
while employed by the Company and, in the event Executive's employment is
terminated voluntarily by Executive or without Cause by the Company, during the
Restricted Period (as hereinafter defined). Executive shall be deemed to engage
in competitive activities if he shall, without the prior written consent of the
Company, render services directly or indirectly, as an employee, officer,
director, consultant, advisor, partner, or otherwise, for any organization or
enterprise which competes directly or indirectly with the business of Company or
any of its affiliates. For purposes of this Agreement the term, "Restricted
Period" shall equal the longer of (y) twelve (12) months, or (z) the period
during which Executive receives salary and benefits under this Agreement, in
each case commencing as of the Termination Date.


                                      -8-

<PAGE>

     6. Non-disparagement. During the Restricted Period, (a) the Executive shall
not make or publish any disparaging statements (whether written or oral)
regarding the Company or its affiliates, directors, officers or employees, and
(b) the Company shall not make or publish any disparaging statements (whether
written or oral) regarding the Executive. Notwithstanding anything herein to the
contrary, during the Restricted Period, the Company may respond to inquiries
from Executive's prospective employers who contact the Company, and may make any
public announcements or filings that may be necessary for a public company.

     7. Taxes. The Executive shall be solely responsible for taxes imposed on
the Executive by reason of any compensation, benefits or termination payments
provided under this Agreement and all such compensation, benefits, and
termination payments shall be subject to applicable withholding taxes or excise
tax. In the event that the aggregate payments or benefits to be made or afforded
to Executive under this Agreement would be deemed to include an "excess
parachute payment" under Section 280G of the Code or any successor thereof, and
subject to any excise tax imposed under Section 4999 (or any successor thereto)
of the Code, under no circumstances will the Company pay whether in form of
additional compensation or otherwise any portion of such excise tax.

     8. Certain Continuing Obligations of Executive. So long as he is employed
by the Company or an affiliate and thereafter, Executive agrees to keep
confidential all trade secrets, technical information, intellectual property,
business and marketing plans, strategies, customer information, other
information concerning the products, promotions, development, financing,
expansion plans, business policies and practices of the Company, and other data
concerning the private affairs of the Company and its affiliates, made known to
or developed by Executive during the course of his employment hereunder
("Confidential Information"), not to use any Confidential Information or supply
Confidential Information to others other than in furtherance of the Company's
business, and to return to the Company upon termination of his employment all
copies, in whatever form or media, of all Confidential Information and all other
documents relating to the business of the Company or any of its affiliates which
may then be in the possession or under the control of Executive.

     At the request of the Company, Executive agrees to execute such
confidentiality agreements, assignments of intellectual property rights, and
other documents as hereafter may be reasonably determined by the Company to be
appropriate to carry out the purposes of this Section.

     9. At-Will Employment. The Company and Executive acknowledge that
Executive's employment is and will continue to be at-will within the meaning of
applicable law.


                                      -9-

<PAGE>

     10. Notices. For the purposes of this Agreement, notices and all other
communications provided for shall be in writing and shall be deemed to have been
given when delivered or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, or national overnight courier with
proof of delivery addressed as follows:

     If to the Executive:               _____________________________
                                        _____________________________
                                        _____________________________

     If to the Company:                 Tecumseh Products Company
                                        1136 Oak Valley Drive
                                        Ann Arbor, Michigan 48108
                                        Attn: General Counsel

or to such other address as either party may have furnished to the other in
writing. Notices of change of address shall be effective only upon receipt.

     11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan applicable to contracts made
and to be performed within such State without regards to the principles of
conflicts of law.

     12. Venue and Jurisdiction; Enforcement.

     (A). The parties hereby consent to the jurisdiction of the state and
federal courts located in the Eastern District of Michigan, which shall be the
exclusive venue for any legal action or proceeding filed by either party with
respect to this Agreement. The parties hereby further agree and irrevocably
waive any objection, including any objection to the laying of venue or based on
the grounds of forum non conveniens that either of them may now or hereafter
have to the bringing of any such action or proceedings in such jurisdictions.

     (B). In connection with any proceeding brought by the Executive to enforce
any provision of this Agreement, whether brought by the Executive as plaintiff
or as a counter- or cross-claim by the Executive, the Company shall the Company
shall advance to Executive all cash amounts required to pay Executive's costs,
expenses and fees (including actual attorneys' fees) incurred in connection with
such proceeding.

     13. Conflict. In the event of a conflict between the terms of this
Agreement and any other agreement between the Company and Executive, this
Agreement shall control.


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<PAGE>

     14. Headings. The headings contained herein are solely for the purposes of
reference, are not part of this Agreement and shall not in any way affect the
meaning or interpretation of this Agreement.

     15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]


                                      -11-

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                        TECUMSEH PRODUCTS COMPANY


                                        ----------------------------------------
                                        By:
                                        Its:

                                        EXECUTIVE

                                        ----------------------------------------


                                      -12-

<PAGE>

                                    EXHIBIT A

                      [Assigned Duties & Responsibilities]


                                      - 13-