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                                                                   EXHIBIT 10.12

                               FOURTH AMENDMENT TO
                            TECUMSEH PRODUCTS COMPANY
                            MANAGEMENT INCENTIVE PLAN

         Effective January 1, 2000, Tecumseh Products Company (the "Company")
amends the Company's Management Incentive Plan as follows:


1. Article II(a) of the Plan is amended to read:

                  (a) "Account" means the cumulative record of an Employee's
         Phantom Share allocations as adjusted in the manner described in the
         Plan. The cash award portion of a Phantom Share allocation for 2000 and
         subsequent Class Years shall be fully vested as of the Allocation Date
         and shall not become part of an Employee's Account.


2. Article II(k) of the Plan is amended to read:

                  (k) "Phantom Share allocation" or "allocation" includes, where
         the context so requires, the cash portion of an allocation awarded for
         2000 and subsequent Class Years, as provided by Article VI.

         and former Article II(k) is redesignated as Article II(l)


3. Article IV(a)(ii) of the Plan is amended to read:

                           (ii) Each Phantom Share, which has been allocated as
                  of the record date applicable to a declared dividend on Class
                  A Common Stock, shall be credited with the amount of any such
                  per-share cash dividend paid to Class A shareholders, and the
                  total amount credited shall thereupon be deemed reinvested in
                  additional Phantom Shares at the Class A Common Stock's
                  closing price on the date said dividend is paid. Any such
                  dividends (and/or additional dividends thereon) shall vest
                  when and only if the associated Phantom Shares vest.


4. Article V(c) of the Plan is amended to read:

                           (c) Except as provided herein with respect to
                  transfers to the Company or another Employer, an Employee's
                  interest in his Account and in the cash portion of any
                  allocation shall not be transferable other than by will or the
                  laws of descent and distribution. During the Employee's
                  lifetime, an Account and the cash portion of any allocation
                  shall be paid only to the Employee, except that, in the event
                  of the Employee's incapacity, the Committee may permit payment
                  to the Employee's guardian or legal representative. The
                  Committee also shall permit the payment, upon the Employee's
                  death, to one or more beneficiaries designated by the Employee
                  in a manner authorized by the Committee, and otherwise to his
                  estate.


5. Article VI of the Plan is amended to read:

         VI.      Vesting and Payment

                  (a) Each Phantom Share allocation made by the Company shall be
         assigned a "Class Year" corresponding to the calendar year in which the
         Allocation Date occurs.


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                  Class Years 1994 - 1999 - Allocations for Class Years 1994 -
         1999 (both inclusive) shall be 0% vested in the year for which they are
         made, and shall not become vested until the fifth December 31 following
         the end of the Class Year. For example: Allocations made with respect
         to Class Year 1994 shall be 0% vested when allocated, 0% vested on
         December 31, 1995, 0% vested on December 31, 1996, etc., but shall
         become 100% vested on December 31, 1999.

                  Class years 2000 and thereafter - Allocations for Class Years
         2000 and thereafter shall be vested as follows:

                  One-third of each Employee's allocation shall be fully vested
                  as of December 31st in the Class Year for which such
                  allocation is made, one-third of such allocation shall become
                  vested as of the third December 31 following the end of such
                  Class Year and the remaining one-third of such allocation
                  shall become vested as of the fifth December 31 following the
                  end of such Class Year. For example: Allocations made with
                  respect to Class Year 2000 shall be one-third vested as of
                  December 31, 2000 (and promptly payable in cash pursuant to
                  Article VI(b)), one-third vested on December 31, 2003, and the
                  remaining one-third vested on December 31, 2005.

                  The provisions of Article VII shall generally govern the
         forfeiture of allocations which are not vested and, in certain
         circumstances, even those which are otherwise fully vested. Except as
         otherwise provided in Article VII, allocations to the Account of an
         Employee shall not be forfeited during his continued employment with an
         Employer.

                  (b) Within 60 days following December 31st of 2000 and each
         subsequent Class Year, the one-third cash portion of each active
         Employee's allocation, vested in accordance with Article VII(A), shall
         be paid. Upon each active Employee's completion of three (3) and five
         (5) full calendar years of service with an Employer following the end
         of the Class Year for which a Phantom Share award was made, the portion
         of his Account which became vested in accordance with Article VI(a)
         shall be valued in accordance with Article IV(b) and paid within 60
         days.


6. Article VII(c) of the Plan is amended to read:

                   (c) Notwithstanding Article VI(a), an Employee's Phantom
         Share allocations shall be 100% vested as of the first day of the month
         that includes his last day of active work prior to normal or early
         retirement under the pension or retirement plan sponsored by his
         Employer. However, such vested allocations shall only become payable
         following the date they would have otherwise vested under Article VI,
         i.e. within 30 days after the third and/or fifth December 31st
         following each Allocation Date.


7. Except as amended above, the Plan continues in full force and effect.


WITNESS execution of this amendment on behalf of the Company.


                                                  TECUMSEH PRODUCTS COMPANY



                                                  By /s/ Todd W. Herrick
                                                    ----------------------------
                                                      Its President and
                                                      Chief Executive Officer

                                                  Dated: January   , 2000
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