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                                                                    EXHIBIT 10.3

                           CHAMPION ENTERPRISES, INC.

                      EXECUTIVE OFFICER SEVERANCE PAY PLAN

                       (EFFECTIVE AS OF DECEMBER 1, 2004)

                                  INTRODUCTION

      The purpose of the Plan is to enable Champion Enterprises, Inc., to offer
certain protections to its executive officers if their employment is terminated
by the Company without Cause or by the Participant with Good Reason. Capitalized
terms and phrases used herein shall have the meanings ascribed thereto in
Article I.

                                   ARTICLE I.
                                   DEFINITIONS

      1.1   AFFILIATE shall mean each of the following:

            (a)   any Subsidiary;

            (b)   any Parent;

            (c)   any corporation, trade or business (including, without
      limitation, a partnership or limited liability company) which is directly
      or indirectly controlled 50% or more (whether by ownership of stock,
      assets or an equivalent ownership interest or voting interest) by the
      Company or one of its Affiliates; and

            (d)   any other entity in which the Company or any of its Affiliates
      has a material equity interest and which is designated as an "Affiliate"
      by resolution of the Committee.

      1.2   BASE SALARY shall mean the Participant's annual base compensation
rate for services paid by the Company to the Participant at the time immediately
prior to the Participant's termination of employment, as reflected in the
Company's payroll records. Base Salary shall not include commissions, bonuses,
overtime pay, incentive compensation, benefits paid under any qualified plan,
any group medical, dental or other welfare benefit plan, noncash compensation or
any other additional compensation but shall include amounts reduced pursuant to
the Participant's salary reduction agreement under Sections 125, 132(f)(4) or
401(k) of the Code, if any, or a nonqualified elective deferred compensation
arrangement, if any, to the extent that in each such case the reduction is to
base compensation.

      1.3   BOARD shall mean the board of directors of the Company from time to
time.

      1.4   CAUSE shall mean

            (a)   a Participant's dishonesty in Participant's financial dealings
      with, or on behalf of, the Company;

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            (b)   a Participant's commission of, indictment for or pleading
      guilty or nolo contendere to a crime by the Participant which constitutes:

                  (i)   a felony (other than a traffic related offense), or

                  (ii)  a misdemeanor involving moral turpitude which, may
                        reasonably be expected to have an adverse effect on the
                        Company, its business, reputation or interest.

            (c)   a Participant's material breach the terms of Participant's
      employment contract or any other contract or agreement between the
      Participant and the Company, which breach, if curable, is not cured within
      20 days of the giving of written notice thereof to the Participant;

            (d)   a Participant's material violation of the Company's code of
      conduct, code of ethics or any other written policy or a material breach
      by the Participant of a fiduciary duty or responsibility to the Company;

            (e)   the refusal of a Participant to follow the lawful policies and
      directives of the Board or a more senior officer within five days of the
      giving of written notice thereof to the Participant;

            (f)   the willful misconduct or gross negligence of a Participant
      with regard to the Company or in the performance of Participant's duties
      that is materially injurious to the Company; or

            (g)   the willful and continued failure of a Participant to attempt
      to perform the Participant's duties with the Company (other than for any
      such failure resulting from the Participant's incapacity due to physical
      or mental illness) after written notice of such failure has been give to
      the Participant.

      1.5   CODE shall mean the Internal Revenue Code of 1986, as amended.

      1.6   COMMITTEE shall mean the Compensation and Human Resources Committee
appointed by the Board from time to time to administer the Plan. Notwithstanding
the foregoing, if, and to the extent that no Committee exists which has the
authority to administer the Plan, the functions of the Committee shall be
exercised by the Board and all references herein to the Committee shall be
deemed to be references to the Board.

      1.7   COMPANY shall mean Champion Enterprises, Inc., it Affiliates and any
successors as provided in Article VI hereof.

      1.8   DISABILITY shall mean a Participant's disability that would qualify
as such under the Company's long-term disability plan without regard to any
waiting periods set forth in such plan.

      1.9   EFFECTIVE DATE shall mean December 1, 2004.

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      1.10  ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

      1.11  GOOD REASON shall mean the occurrence of any of the following
events, without the express written consent of a Participant, unless such events
are fully corrected in all material respects by the Company within 30 days
following written notification by the Participant to the Company that
Participant intends to terminate Participant's employment hereunder for one of
the reasons set forth below:

            (a)   any reduction or diminution (except temporarily during any
      period of physical or mental incapacity) in the Participant's titles or a
      material reduction or diminution in the Participant's authorities, duties
      or responsibilities or reporting requirements;

            (b)   any reduction in the Participant's Base Salary (other than an
      across-the-board reduction of not more than 10% of Base Salary applicable
      to executive officers generally);

            (c)   Company's material breach the terms of Participant's
      employment contract or any other contract or agreement between the
      Participant and the Company; or

            (d)   the Participant is required to relocate to a principal place
      of employment more than 60 miles from Participant's principal place of
      employment with the Company.

      1.12  PARENT shall mean any parent corporation of the Company within the
meaning of Section 424(e) of the Code.

      1.13  PARTICIPANT shall mean any employee of the Company designated by the
Board as an "officer" for purposes of Section 16 of the Securities Exchange Act
of 1934, provided, however, the President and Chief Executive Officer shall not
be a Participant in this Plan.

      1.14  PLAN shall mean the Champion Enterprises, Inc. Executive Officer
Severance Pay Plan.

      1.15  SEVERANCE BENEFIT shall mean a severance benefit calculated and paid
in accordance with Section 2.1 below.

      1.16  SEVERANCE PERIOD shall mean the 18-month period (or such other
period specified by the Committee in writing to a Participant at the time such
participant first becomes a Participant) following a termination of a
Participant's employment by the Company without Cause or by a Participant for
Good Reason.

      1.17  SUBSIDIARY shall mean any corporation that is defined as a
subsidiary corporation in Section 424(f) of the Code.

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                                   ARTICLE II.
                                    BENEFITS

      2.1   ELIGIBILITY FOR BENEFITS. Upon the Participant's termination of
employment by the Company without Cause or by Participant for Good Reason,
subject to Sections 2.3, 2.4, 2.5 and 2.6 below, Participant shall receive
during the Severance Period salary continuation payments, distributed on normal
payroll dates, equal to the Participant's Base Salary less any other severance
payments provided by the Company through any other agreement or other
Company-sponsored program. Payment of the Severance Benefit for the 13th through
18th months of the Severance Period shall be conditioned on the Participant not
having commenced subsequent employment, including self-employment, and shall be
subject to the provisions of Section 2.3. The Participant shall give the Company
written notice of the Participant's commencing subsequent employment within 5
days of such commencement date.

      In the event that a Participant has a written agreement pursuant to which
the Company is obligated to pay a termination or severance benefit in an amount
greater than the Severance Benefit payable to such Participant under the Plan,
such Participant shall be entitled to accept such greater severance benefit in
lieu of the Severance Benefit payable under the Plan provided that such
Participant complies with all other terms and conditions of the Plan. If the
Participant is covered by a change in control agreement and becomes entitled to
payments or benefits thereunder, no Severance Benefit shall be payable
hereunder.

      A Participant shall not be entitled to a Severance Benefit if the
Participant's employment is terminated:

            (i)   by the Company for Cause,

            (ii)  by the Participant other than for Good Reason, or

            (iii) on account of the Participant's retirement, death or
                  Disability.

      2.2   COBRA BENEFITS. Subject to (i) the Participant's compliance with the
obligations in Sections 2.3, 2.4, 2.5 and 2.6 below and (ii) the Participant's
timely election of continuation coverage under the Consolidated Budget Omnibus
Reconciliation Act of 1985, as amended ("COBRA") and the Participant's continued
copayment of premiums at the same level and cost to the Participant as if the
Participant were an employee of the Company (excluding, for purposes of
calculating cost, an employee's ability to pay premiums with pre-tax dollars),
the Company shall pay the applicable COBRA continuation coverage premiums under
the Company's health insurance plan that generally applies to a Participant
entitled to receive a Severance Benefit for a Participant and his or her
dependents until the earliest of:

            (a)   a Participant ceasing to be entitled to receive a Severance
      Benefit;

            (b)   for each of a Participant and his or her dependents, when such
      person ceases to be eligible for COBRA; or

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            (c)   a Participant commencing other substantially full-time
      employment, including self-employment, that offers a health care program.

      With regard to (b) above, if a Participant or any of his or her dependents
cease to be eligible for COBRA, the Company's obligation to pay any premium for
such person shall cease, but the Company's obligation to pay the premium for the
Participant or any dependent who is still eligible for COBRA shall continue.
Participant shall promptly notify the Company if he or she becomes covered by a
health care program of a subsequent employer.

      2.3   NO DUTY TO MITIGATE/SET-OFF. During the first 12 months of the
Severance Period, no Participant entitled to receive a Severance Benefit
hereunder shall be required to seek other employment or to attempt in any way to
reduce any amounts payable to him or her pursuant to this Plan and the amount of
the Severance Benefit payable hereunder shall not be reduced by any compensation
earned by the Participant as a result of employment by another employer or
otherwise. Thereafter, for the remainder of the Severance Period and in order to
continue receiving a Severance Benefit, a Participant shall seek in good faith
other employment consistent with the Participant's skills, experience and
educational background and any compensation earned by a Participant as a result
of such other employment shall be set off against the Severance Benefit
otherwise payable to the Participant. In the event of the Participant's breach
of any provision hereunder, including without limitation, Sections 2.5 and 2.6,
the Participant shall be obligated to repay, and the Company shall be entitled
to recover, any payments previously made to the Participant hereunder.

      2.4   RELEASE REQUIRED. Any amounts payable and benefits provided pursuant
to this Plan shall only be payable or provided if the Participant delivers to
the Company and does not revoke a general release of all claims of any kind
whatsoever that the Participant has or may have against the Company and its
affiliates and their officers, directors and employees known or unknown as of
the date of his or her termination of employment occurring up to the release
date in such form as reasonably requested by the Company.

      2.5   RESTRICTIVE COVENANTS. As a condition of the receipt of any
Severance Benefit by any Participant, the Participant shall be deemed to have
agreed to the following provisions:

            (a)   CONFIDENTIALITY. The Participant agrees that the Participant
      shall not at any time, directly or indirectly, use, make available, sell,
      disclose or otherwise communicate to any person, other than in the course
      of the Participant's assigned duties and for the benefit of the Company,
      any nonpublic, proprietary or confidential information, knowledge or data
      relating to the Company, any of its subsidiaries, affiliated companies or
      businesses, which shall have been obtained by the Participant during the
      Participant's employment by the Company. The foregoing shall not apply to
      information that (i) was known to the public prior to its disclosure to
      the Participant; (ii) becomes generally known to the public subsequent to
      disclosure to the Participant through no wrongful act of the Participant
      or any representative of the Participant; or (iii) the Participant is
      required to disclose by applicable law, regulation or legal process
      (provided that the Participant provides the Company with prior notice of
      the contemplated

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      disclosure and reasonably cooperates with the Company at its expense in
      seeking a protective order or other appropriate protection of such
      information).

            (b)   NONSOLICITATION. During the Participant's employment with the
      Company and for the two year period thereafter, the Participant agrees
      that the Participant will not, except in the furtherance of the
      Participant's duties for the Company, directly or indirectly, individually
      or on behalf of any other person, firm, corporation or other entity, (i)
      solicit, aid or induce any employee, representative or agent of the
      Company or any of its subsidiaries or affiliates to leave such employment
      or retention or to accept employment with or render services to or with
      any other person, firm, corporation or other entity unaffiliated with the
      Company or hire or retain any such employee, representative or agent, or
      take any action to materially assist or aid any other person, firm,
      corporation or other entity in identifying, hiring or soliciting any such
      employee, representative or agent, (ii) solicit, aid or induce any
      customer of the Company or any of its subsidiaries or affiliates to
      purchase goods or services then sold by the Company or any of its
      subsidiaries or affiliates from another person, firm, corporation or other
      entity or assist or aid any other persons or entity in identifying or
      soliciting any such customer or (iii) solicit, aid or induce any vendor of
      the Company or any of its subsidiaries or affiliates to provide goods or
      services then provided to the Company or any of its subsidiaries or
      affiliates to another person, firm, corporation or other entity or assist
      or aid any other persons or entity in identifying or purchasing goods or
      services from such vendor. An employee, representative or agent shall be
      deemed covered by this paragraph while so employed or retained and for six
      months thereafter. Subpart (ii) shall not be violated by general
      advertising or solicitation not specifically targeted at activities of the
      Company.

            (c)   NONCOMPETITION. The Participant acknowledges that the
      Participant performs services of a unique nature for the Company that are
      irreplaceable, and that the Participant's performance of such services to
      a competing business will result in irreparable harm to the Company.
      Accordingly, during the Participant's employment and for the two year
      period thereafter, the Participant agrees that the Participant will not,
      directly or indirectly, own, manage, operate, control, be employed by
      (whether as an employee, consultant, independent contractor or otherwise,
      and whether or not for compensation) or render services to any person,
      firm, corporation or other entity, in whatever form, engaged in the
      production, sales or marketing of manufactured housing or any other
      material business in which the Company or any of its subsidiaries or
      affiliates is engaged on the date of termination (or, if earlier, the date
      of determination) or in which they have planned, on or prior to such date,
      to be engaged in on or after such date, in any locale of any country in
      which the Company conducts business. This Section 2.5(c) shall not prevent
      the Participant from owning not more than two percent of the total shares
      of all classes of stock outstanding of any publicly held entity engaged in
      such business.

            (d)   NONDISPARAGEMENT. The Participant shall not make or induce
      other persons or entities to make any negative statements as to the
      Company, its affiliates, employees, past or present officers, directors,
      products, services, businesses or reputation. Notwithstanding the
      foregoing, truthful statements made in the course of sworn testimony

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      in administrative, judicial or arbitral proceedings (including, without
      limitation, depositions in connection with such proceedings) shall not be
      subject to this Section 2.5(d).

            (e)   REFORMATION. If it is determined by a court of competent
      jurisdiction in any state that any restriction in this Section 2.5 is
      excessive in duration or scope or is unreasonable or unenforceable under
      the laws of that state, it is the intention of the parties that such
      restriction may be modified or amended by the court to render it
      enforceable to the maximum extent permitted by the law of that state.

            (f)   FURTHER ACKNOWLEDGMENT. The Participant acknowledges that the
      restrictive covenants (including, without limitation, confidentiality and
      non-competition) in any other agreement with the Company previously signed
      by the Participant shall not be affected by this Plan and that the
      restrictive covenants therein shall continue to apply after a termination
      of employment in accordance with the terms of such restrictive covenants.

            (g)   SURVIVAL OF PROVISIONS. The obligations contained in this
      Section 2.5 shall survive any termination of the Plan and shall be fully
      enforceable thereafter.

      2.6   COOPERATION. As a condition of the receipt of any Severance Benefit
by any Participant, the Participant shall be deemed to have agreed to the
provisions of this Section 2.6. Upon the receipt of reasonable notice from the
Company (including its outside counsel), the Participant agrees that while
employed by the Company and thereafter, the Participant will respond and provide
information with regard to matters in which the Participant has knowledge as a
result of the Participant's employment with the Company, and will provide
reasonable assistance to the Company, its affiliates and their respective
representatives in defense of any claims that may be made against the Company or
its affiliates, and will assist the Company and its affiliates in the
prosecution of any claims that may be made by the Company or its affiliates, to
the extent that such claims may relate to the period of the Participant's
employment with the Company. The Participant agrees to promptly inform the
Company if the Participant becomes aware of any lawsuits involving such claims
that may be filed or threatened against the Company or its affiliates. The
Participant also agrees to promptly inform the Company (to the extent the
Participant is legally permitted to do so) if the Participant is asked to assist
in any investigation of the Company or its affiliates (or their actions),
regardless of whether a lawsuit or other proceeding has then been filed against
the Company or its affiliates with respect to such investigation, and shall not
do so unless legally required. Upon presentation of appropriate documentation,
the Company shall pay or reimburse the Participant for all reasonable
out-of-pocket travel, duplicating or telephonic expenses incurred by the
Participant in complying with this Section 2.6.

      2.7   Equitable Relief and Other Remedies.

            (a)   Since the Company's remedies at law for a breach or threatened
      breach of any of the provisions of Sections 2.5 or 2.6 would be
      inadequate, in addition to any remedies at law, the Company, without
      posting any bond, shall be entitled to obtain

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      equitable relief in the form of specific performance, temporary
      restraining order, a temporary or permanent injunction or any other
      equitable remedy which may then be available.

            (b)   In the event of a material violation of Sections 2.5 or 2.6,
      any Severance Benefit being paid to the Participant shall immediately
      cease.

                                  ARTICLE III.
                                     FUNDING

      This Plan shall be funded out of the general assets of the Company as and
when benefits are payable under this Plan. All Participants shall be solely
unsecured creditors of the Company and, if a bankruptcy proceeding of the
Company is pending, the Participants shall be solely unsecured creditors of the
Company with administrative priority. If the Company decides in its sole
discretion to establish any advance accrued reserve on its books against the
future expense of benefits payable hereunder, or if the Company decides in its
sole discretion to fund a trust under this Plan, such reserve or trust shall not
under any circumstances be deemed to be an asset of this Plan.

                                  ARTICLE IV.
                           ADMINISTRATION OF THE PLAN

      4.1   PLAN ADMINISTRATOR. The general administration of the Plan on behalf
of the Company (as plan administrator under Section 3(16)(A) of ERISA) shall be
placed with the Committee.

      4.2   REIMBURSEMENT OF EXPENSES OF PLAN COMMITTEE. The Company shall pay
or reimburse the members of the Committee for all reasonable expenses incurred
in connection with their duties hereunder.

      4.3   ACTION BY THE PLAN COMMITTEE. Decisions of the Committee shall be
made by a majority of its members attending a meeting at which a quorum is
present (which meeting may be held telephonically), or by written action in
accordance with applicable law. Subject to the terms of this Plan and provided
that the Committee acts in good faith, the Committee shall have the authority to
determine a Participant's participation and benefits under the Plan and to
interpret and construe the provisions of the Plan.

      4.4   DELEGATION OF AUTHORITY. The Committee may delegate any and all of
its powers and responsibilities hereunder to other persons by formal resolution
filed with and accepted by the Board. Any such delegation shall not be effective
until it is accepted by the Board and the persons designated and may be
rescinded at any time by written notice from the Committee to the person to whom
the delegation is made.

      4.5   RETENTION OF PROFESSIONAL ASSISTANCE. The Committee may employ such
legal counsel, accountants and other persons as may be required in carrying out
its work in connection with the Plan.

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      4.6   ACCOUNTS AND RECORDS. The Committee shall maintain such accounts and
records regarding the fiscal and other transactions of the Plan and such other
data as may be required to carry out its functions under the Plan and to comply
with all applicable laws.

      4.7   CLAIMS/DISPUTES PROCEDURE.

            (a)   Any claim by a Participant or beneficiary ("Claimant") with
      respect to eligibility, participation, contributions, benefits or other
      aspects of the operation of the Plan shall be made in writing to the
      Committee. The Committee shall provide the Claimant with the necessary
      forms and make all determinations as to the right of any person to a
      disputed benefit. If a Claimant is denied benefits under the Plan, the
      Committee or its designee shall notify the Claimant in writing of the
      denial of the claim within 90 days (such period may be extended to 180
      days) after the Plan receives the claim, provided that in the event of
      special circumstances such period may be extended.

            (b)   If the initial 90 day period is extended, the Committee or its
      designee shall, within 90 days of receipt of the claim, notify the
      Claimant in writing of such extension. The written notice of extension
      will indicate the special circumstances requiring the extension of time
      and provide the date by which the Committee expects to make a
      determination with respect to the claim. If the extension is required due
      to the Claimant's failure to submit information necessary to decide the
      claim, the period for making the determination will be tolled from the
      date on which the extension notice is sent to the Claimant until the
      earlier of (i) the date on which the Claimant responds to the Plan's
      request for information or (ii) expiration of the 45 day period commencing
      on the date that the Claimant is notified that the requested additional
      information must be provided. If notice of the denial of a claim is not
      furnished within the required time period described herein, the claim
      shall be deemed denied as of the last day of such period.

            (c)   If the claim is wholly or partially denied, the notice to the
      Claimant shall set forth:

                  (i)   the specific reason or reasons for the denial;

                  (ii)  specific reference to pertinent Plan provisions upon
                        which the denial is based;

                  (iii) a description of any additional material or information
                        necessary for the Claimant to perfect the claim and an
                        explanation of why such material or information is
                        necessary;

                  (iv)  appropriate information as to the steps to be taken and
                        the applicable time limits if the Claimant wishes to
                        submit the adverse determination for review; and

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                  (v)   a statement of the Claimant's right to bring a civil
                        action under Section 502(a) of ERISA following an
                        adverse determination on review (collectively, the
                        "Notice Requirements").

            (d)   If the claim has been denied, the Claimant may submit the
      claim for review. Any request for review of a claim must be made in
      writing to the Committee no later than 60 days after the Claimant receives
      notification of denial or, if no notification was provided, the date the
      claim is deemed denied. The claim will then be reviewed by the Committee.
      The Claimant or his duly authorized representative may:

                  (i)   upon request and free of charge, be provided with access
                        to, and copies of, relevant documents, records, and
                        other information relevant to the Claimant's claim; and

                  (ii)  submit written comments, documents, records, and other
                        information relating to the claim. The review of the
                        claim determination shall take into account all
                        comments, documents, records, and other information
                        submitted by the Claimant relating to the claim, without
                        regard to whether such information was submitted or
                        considered in the initial claim determination.

            (e)   The decision of the Committee shall be made within 60 days
      (such period may be extended to 120 days) after receipt of the Claimant's
      request for review, unless special circumstances require an extension.

            (f)   If the initial 60 day period is extended, the Committee or its
      designee shall, within 60 days of receipt of the claim, notify the
      Claimant in writing of such extension. The written notice of extension
      will indicate the special circumstances requiring the extension of time
      and provide the date by which the Committee expects to make a
      determination with respect to the claim. If the extension is required due
      to the Claimant's failure to submit information necessary to decide the
      claim, the period for making the determination will be tolled from the
      date on which the extension notice is sent to the Claimant until the
      earlier of (i) the date on which the Claimant responds to the Plan's
      request for information or (ii) expiration of the 45 day period commencing
      on the date that the Claimant is notified that the requested additional
      information must be provided. If notice of the denial of a claim is not
      furnished within the required time period described herein, the claim
      shall be deemed denied as of the last day of such period.

            (g)   If an extension of time is required, the Claimant shall be
      notified in writing of such extension. The written notice of extension
      will indicate the special circumstances requiring the extension of time
      and the date by which the Committee expects to make a determination with
      respect to the claim. If the extension is required due to the Claimant's
      failure to submit information necessary to decide the claim on review, the
      period for making the determination will be tolled from the date on which
      the extension notice is sent to the Claimant until the earlier of (i) the
      date on which the

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      Claimant responds to the Plan's request for information or (ii) expiration
      of the 45-day period commencing on the date that the Claimant is notified
      that the requested additional information must be provided. In any event,
      a decision shall be rendered not later than 120 days after receipt of the
      request for review. If notice of the decision upon review is not furnished
      within the required time period described herein, the claim on review
      shall be deemed denied as of the last day of such period.

            (h)   The Committee's decision on the Claimant's claim for review
      will be communicated to the Claimant in writing. If the claim on review is
      denied, the notice to the Claimant shall provide a statement that the
      Claimant is entitled to receive, upon request and free of charge,
      reasonable access to, and copies of, all documents, records and other
      information relevant to the claim, and also set forth the Notice
      Requirements (other than subsection (c)(iv)).

            (i)   The claims procedures set forth in this section are intended
      to comply with U.S. Department of Labor Regulation Section 2560.503-1 and
      should be construed in accordance with such regulation. In no event shall
      it be interpreted as expanding the rights of Claimants beyond what is
      required by U.S. Dept. of Labor Section 2560.503-1.

            (j)   A Claimant shall not be required to exhaust all administrative
      remedies under this Section 4.7 prior to commencing any action in Federal
      court.

      4.8   INDEMNIFICATION. The Committee, its members and any person
designated pursuant to Section 4.4 above shall not be liable for any action or
determination made in good faith with respect to the Plan. The Company shall, to
the extent permitted by law, by the purchase of insurance or otherwise,
indemnify and hold harmless each member of the Committee and each director,
officer and employee of the Company for liabilities or expenses they and each of
them incur in carrying out their respective duties under this Plan, other than
for any liabilities or expenses arising out of such individual's willful
misconduct or fraud.

                                   ARTICLE V.
                            AMENDMENT AND TERMINATION

      The Company reserves the right to amend or terminate, in whole or in part,
any or all of the provisions of this Plan at any time, provided that in no event
shall any amendment reducing the benefits provided hereunder or any Plan
termination be effective prior to the later of the third anniversary of the
Effective Date or the date twelve months after the date the Company gives the
Participants written notice of such amendment or termination. Notwithstanding
anything in this Plan to the contrary, if the Company becomes obligated to make
any payment to the Participant pursuant to the terms hereof, then this Plan
shall remain in effect for such purposes until all of the Company's obligations
hereunder are fulfilled. Without limiting the generality of the foregoing, the
Company may amend the Plan at any time, retroactively or otherwise, as may be
necessary to preserve the intended tax characteristics of the Plan, including,
without limitation, such amendments necessary to address the requirements of
Section 409A of the Code.

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                                   ARTICLE VI.
                                   SUCCESSORS

      For purposes of this Plan, the Company shall include any and all
successors and assignees, whether direct or indirect, by purchase, merger,
consolidation or otherwise, to all or substantially all the business or assets
of the Company and such successors and assignees shall perform the Company's
obligations under this Plan, in the same manner and to the same extent that the
Company would be required to perform if no such succession or assignment had
taken place. In such event, the term "Company", as used in this Plan, shall mean
the Company, as hereinbefore defined and any successor or assignee to the
business or assets which by reason hereof becomes bound by the terms and
provisions of this Plan.

                                  ARTICLE VII.
                                  MISCELLANEOUS

      7.1   RIGHTS OF PARTICIPANTS. Nothing herein contained shall be held or
construed to create any liability or obligation upon the Company to retain any
Participant in its service. All Participants shall remain subject to discharge
or discipline to the same extent as if this Plan had not been put into effect.

      7.2   GOVERNING LAW. This Plan shall be governed by the laws of the State
of Michigan (without reference to rules relating to conflicts of law).

      7.3   WITHHOLDING. The Company shall have the right to make such
provisions as it deems necessary or appropriate to satisfy any obligations it
may have to withhold federal, state or local income or other taxes incurred by
reason of payments pursuant to this Plan.

      7.4   SEVERABILITY. In case any provision of this Plan be deemed or held
to be unlawful or invalid for any reason, such fact shall not adversely affect
the other provisions of this Plan unless such determination shall render
impossible or impracticable the functioning of this Plan, and in such case, an
appropriate provision or provisions shall be adopted so that this Plan may
continue to function properly.

      7.5   ASSIGNMENT AND ALIENATION. The benefits payable to the Participant
under the Plan shall not be subject to alienation, transfer, assignment,
garnishment, execution or levy of any kind and any attempt to cause any benefits
to be so subjected shall not be recognized.

      7.6   COMMUNICATIONS. All announcements, notices and other communications
regarding this Plan will be made by the Company in writing.

      7.7   ERISA PLAN. This Plan constitutes an unfunded compensation
arrangement for members of a select group of the Company's management, and any
exemptions under ERISA, as applicable to such an arrangement, shall be
applicable to the Plan.

      7.8   ENTIRE AGREEMENT. Except as specified herein and any change in
control agreement, this Plan sets forth the entire understanding of the Company
with respect to the subject matter hereof and supersedes all existing severance
plans, agreements and understandings

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<PAGE>

(whether oral or written) between the Company and the Participants with respect
to the subject matter herein.

      7.9   NOT AN AGREEMENT OF EMPLOYMENT. This is not a Plan or an agreement
assuring employment and the Company reserves the right to terminate any
Participant's employment at any time with or without Cause, subject to the
payment provisions hereof. Participant's shall have no claim against the Company
hereunder or for deprivation of the right to receive the amounts hereunder as a
result of any termination that does not specifically satisfy the requirements
hereof or as a result of any other action taken by the Company. Except as
provided herein, the foregoing shall not affect a Participant's rights under any
other agreement with the Company.

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