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  Exhibit 10.20    
    


         

  



This publication describes the Annual Value Creation Plan, a discretionary bonus plan, for key employees of TriMas. Some of the AVC Plan's highlights
include:



	•
	Participants are selected by the AVCP
Committee. 

 
	•
	The Plan's financial targets are established through the annual budgeting process and are
expressed as Incentive earnings before subtracting interest, taxes, depreciation and amortization—adjusted for asset
management.

 
	•
	You and your manager set individual performance
targets. 

 
	•
	Target Plan awards may be 10% of pay or more, depending on position scope and responsibility. You
may earn more or less than your target based on actual Company (and, as applicable, Unit performance) and individual performance relative to
targets.

 
	•
	For any Plan payment to be made in any year, Company performance results must be at least 90% of
targeted results.



 
 

  The Annual Value
  Creation Plan (AVCP)    
    


TriMas is committed to ensuring that our total compensation program is consistent with market competitive pay practices, while providing opportunities to attract and retain
excellent performers essential to our business success. As a component of your total compensation, the Annual Value Creation Plan, a discretionary bonus plan, works to support our overall business
objectives by aligning individual goals with the goals of shareholders and focusing attention on the key measures of success. This plan is designed to reward achievement of key business goals and
individual performance based on your contributions.








 

Participation

The AVCP Committee identifies the specific positions that are eligible for participation in the AVCP. The AVCP Committee is made up of the CEO, CFO, and VP HR of TriMas. In general, the Committee will
award eligibility to SBU leadership, facility leadership and their direct reports (depending on size of the operation), and corporate leadership. 


Performance Measures

AVCP awards are based on "Group", "Unit", and "Individual" performance during the year. 


Group and Unit Performance

As defined in the box on the following page, the AVCP uses Incentive EBITDA ("Earnings Before Interest, Taxes, Depreciation and Amortization") as the measure of Group and Unit performance. While there
are many possible measures for performance, EBITDA was selected because it is a good measure of cash flow—the "fuel" for reinvestment in our businesses and valued by investors because cash
flow provides resources for reinvestment. In addition, consideration is given to the year over year working capital change as it relates to the percentage of sales. 


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The Annual Value Creation Plan


Each
year, baseline performance levels for EBITDA are established through the business planning process and then adjusted for the year-over-year change in working capital to
better reflect the importance of assets and asset management. 


"Incentive EBITDA"





			
	EBITDA (pronounced "E-BE-DA") is a measure of cash flow calculated as revenue minus expenses (before interest, taxes, depreciation and amortization). By excluding interest, taxes, depreciation and amortization from the
expenses used in the calculation, the earnings figure that results is a good indication of the amount of money being brought into the Company.



For the AVCP, the annual EBITDA target is adjusted to reflect the cost of additional investment in the pursuit of EBITDA and to reward and encourage asset management. The adjustment is made as shown at right.	 	 Here's how the Incentive EBITDA is

measured for the AVCP:          
 Prior year average working capital as a percent

of sales
 minus
 Current year average working capital as a

percent of sales
 equals
 Year-over-year change in average working

capital as a percent of sales
 times
 Current year sales
 times
 20%
 equals

EBITDA Incentive Factor
 






Individual Performance

At the beginning of each year, you and your immediate leader will establish three to five measurable goals that are consistent with organizational goals (and subject to approval by the next level of
management). At the end of the year, individual performance will be measured relative to those goals. Each year, there may be a corporate-wide focus for some or all of the individual
goals. 


AVCP Steps—Beginning of the Year
At the beginning of each year, we go through the following five steps:  


Beginning of Year—Step 1: Determine Your Target Award

Your AVCP target award is simply a percentage of your annual base salary. This percentage is based on your position and scope of responsibility. 


Target
Award Example:
 Setting AVCP Target Award: Assume the employee's AVCP target is 10% of base salary, and that base salary is $80,000. In this case, the employee's AVCP award target is $8,000
(10% X $80,000).


Beginning of Year—Step 2: Determine Position and Related Components

Your AVCP award will be made up of three components: 1) Group Incentive EBITDA, 2) Unit Incentive EBITDA, and 3) individual performance. 


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The Annual Value Creation Plan    
    



Beginning of Year – Step 3: Determine the Corresponding Component Weighting

Each component of your AVCP award has a "weighting" that indicates the component's relative importance to your overall Plan award, as summarized in the following chart: 



							
	Position 	 	Group

Weighting 	 	Unit

Weighting 	 	Individual

Weighting 
	Corporate/Group Controller	 	75% –

TriMas	 	0%	 	25%
	



Group President	

 	



25% –

TriMas	

 	



50% – Group

Cequent/Energy/ISG/PSG	

 	



25%
	

SBU President/Local SBU (Cequent)	
 	

50% –

Cequent	
 	

25% – Individual SBU

(Cequent)	
 	

25%
	

SBU President/Local SBU (Cequent)	
 	

15% –

Cequent	
 	

60% – Individual SBU

(Cequent – TriMas

Corporation Pty Ltd)	
 	

25%
	

SBU President/Local SBU (Energy)	
 	

15% –

TriMas	
 	

60% – Individual SBU

(Energy)	
 	

25%
	

SBU President/ Local SBU (ISG)	
 	

15% –

TriMas	
 	

60% – Individual SBU

(ISG)	
 	

25%
	

SBU President/ Local SBU (PSG)	
 	

15% –

PSG	
 	

60% Individual SBU

(PSG)	
 	

25%
	

SBU President/SBU Support (PTC)	
 	

15% –

TriMas	
 	

60% – Individual SBU

(PTC)	
 	

25%
	

Local SBU (PTC)	
 	

15% –

PTC	
 	

60% Individual SBU

(PTC)	
 	

25%






Component
Weighting Example:
 Assume an employee in an ISG Unit position has an AVCP target of $8,000. The employee's target award is made up of the following components:



			
	 Group Incentive EBITDA
	 	15% weight × $8,000 = $1,200





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The Annual Value Creation Plan    
    



			
	 Unit Incentive EBITDA
	 	60% weight × $8,000 = $4,800
	 Individual Performance
	 	25% weight × $8,000 = $2,000
	
	 	 $8,000







Beginning of Year – Step 4: Determine Target Performance for the Year

The Plan's financial targets are established through the annual business planning process. At the beginning of the year you will receive information about the target for Group Incentive EBITDA in the
coming year and, as applicable, the target for Unit Incentive EBITDA. 


Beginning of Year – Step 5: Set Your Individual Goals for the Year

By February 15 of each year, you and your leader will set individual performance targets for the year. Your individual performance goals must be approved by the next higher level of management.
Each year, there may be a corporate-wide focus on some or all of the individual goals. 


 AVCP Steps – End of the Year  


At
the end of each plan year, AVCP awards will be determined following these four steps: 


End of Year – Step 1: Determine Actual Performance Result

Soon after the end of each Plan year, actual Group Incentive EBITDA, Unit Incentive EBITDA and individual performance results will be measured. Incentive EBITDA measures are compared to the targets
determined in the business planning process, and individual performance results are compared to goals set at the beginning of the year. 


Results
for each of the categories are expressed as Actual Performance divided by Target Performance. In this way, 100% indicates performance targets were met for the measure; a percentage above 100%
indicates performance targets were exceeded—below 100% means performance targets were not achieved. 


Determine
Actual Performance Example:
 Assume the target for Unit EBITDA was $10 million, and actual Unit Incentive EBITDA was $11 million. Then performance results for Unit Incentive EBITDA equals
110% of target ($11 million actual divided by $10 million targeted = 1.10 or 110%).


End of Year – Step 2: Determine Corresponding Payment Factor

The AVCP then uses a "Performance Payment Factor" (see table, below) to determine a percentage of target award for each component (Group Incentive EBITDA, individual performance and, for Unit
positions, Unit Incentive EBITDA). 



			
	Percent of target achieved for a given

component (see Step 1): 	 	Performance Payment Factor: 
	 <90% of target
	 	0% of target award
	 90% of target
	 	50% of target award
	 95% of target
	 	90% of target award
	 100% of target
	 	100% of target award
	 105% of target
	 	110% of target award
	 110% of target
	 	120% of target award
	 115% of target
	 	135% of target award
	 120% of target
	 	150% of target award





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 The Annual Value Creation Plan  



			
	120% of target	 	150% of target award
	

120% - 150% of target	
 	

150% of target award plus 3% for each

additional 1% that performance exceeds

120% of target
	

>150% of target	
 	

240% of target award






No payment will be made for any award component when actual performance for that component is below the applicable
threshold. 


Regardless of results for other measures, if Corporate Incentive EBITDA falls below 50% for any year, there will be no AVCP awards paid for that year. 


Results
between the levels stated on the chart above will be interpolated, i.e., for actual results between the stated percentages, there will be a corresponding payment level between the
stated payment factor percentages. 


Determine
Payment Factor Example:
 Assume actual Group Incentive EBITDA is 120% of target. Using the Performance Payment Factor table, we can determine that 150% of the target award for the Group Incentive
EBITDA component will be paid.  


End of Year – Step 3: Multiply by Component Weighting
  After determining the applicable Performance Payment Factor for each award component based on the actual results for Group Incentive
EBITDA (and Unit Incentive EBITDA for Unit
positions) and individual performance results, the Performance Payment Factors are multiplied by the applicable component weighting determined at the beginning of the year. 



Component
Weighting Example:
 For an employee within the ISG unit with the following results for each performance category – Group Incentive EBITDA – 110% of
target; Unit Incentive EBITDA – 120% of target; and Individual Performance – 100% of target – the Performance Payment
Factors and the Component Weightings are multiplied as follows:  



													
	Performance Category
	 	Performance

vs. Plan
	 	Payment

Factor
	 	 
	 	Component

Weighting
	 	 
	 	Total

	
	 Group Incentive EBITDA:
	 	110%	 	120%	 	X	 	15%	 	=	 	18%
	 Unit Incentive EBITDA:
	 	120%	 	150%	 	X	 	60%	 	=	 	90%
	 Individual Performance:
	 	100%	 	100%	 	X	 	25%	 	=	 	25%






End of Year – Step 4: Sum of Weighted Payment Factors Equals Actual Award
  The fourth and final step to determine the actual AVCP award is to sum the weighted performance payment
factors for each component, then multiply the total by the target award
amount, as illustrated in the following example. 


Actual
Award Example:
 Assume you are an ISG unit employee with a total Plan award target of $8,000. Also assume the following results are achieved for each performance category: Group Incentive
EBITDA – 110% of target; Unit Incentive EBITDA – 120% of target; and Individual Performance – 100% of target. Given these
assumptions, your actual AVCP award is determined to be 133% of the $8,000 target award, or $10,640.  


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The Annual Value Creation Plan  



													
	Performance Category
	 	Performance

vs. Plan
	 	Payment

Factor
	 	 
	 	Component

Weighting
	 	 
	 	Total

	
	 Group Incentive EBITDA:
	 	110%	 	120%	 	X	 	15%	 	=	 	18%
	 Unit Incentive EBITDA:
	 	120%	 	150%	 	X	 	60%	 	=	 	90%
	 Individual Performance:
	 	100%	 	100%	 	X	 	25%	 	=	 	+    25%
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
	 	Total Weighted Performance:	 	133%
	
	 	Target Award:	 	$8,000
	
	 	Actual Award:	 	$10,640






 Additional Information


Discretion of Payments
  The AVCP Committee reserves the right to defer, increase/reduce, or cancel any payments under the plan at any time (including during a plan year) based on the best
interests of
the Corporation and its shareholders, including, but not limited to, circumstances relating to (1) individual performance, (2) the Corporation's financial performance, or (3) the
Company's future performance objectives. 


Prorated Awards
  If you move between units within the year, your award will be calculated to reflect the time spent in each unit. Base Salary and AVCP percent will be based upon the unit you
are employed in as of 12/31 (all transfers will be handled on a case by case basis). If you move into or out of an AVCP eligible position, you will receive a prorated award based on
your salary while in an eligible position. 


Payment of Awards
  Payment will be made not later than the 3/15 after the prior plan year end 12/31. 



Termination of Employment
  If you terminate employment prior to the end of the fiscal year due to death, retirement or disability, you will be eligible for a pro-rata share when awards are
paid. If you terminate for any other reasons prior to the plan payout, you forfeit your award for the plan year. 


Administration
  The AVCP Committee will administer the plan. 


Future of the Plan
  The AVCP Committee reserves the right to amend, interpret or cancel this discretionary plan at any time based on the best interests of the Company and its shareholders. This
plan supercedes all prior documentation relating to the Annual Value Creation Plan. 



Questions?

If you have questions about the Annual Value Creation Plan described here, or about any other aspect of your TriMas compensation program, contact your local Human Resources representative. 


Note:    At no time is this plan to be considered an employment contract between the participants and the Company. It does not guarantee
participants the right of continued employment. It does not affect a participant's right to leave the Company or the Company's right to discharge a participant. 


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QuickLinks



Exhibit 10.20


The Annual Value Creation Plan (AVCP)

The Annual Value Creation Plan


The Annual Value Creation Plan

The Annual Value Creation Plan