Exhibit 10.14


 


TIER III


 


[RETYPE ON ACCURIDE STATIONERY AND DATE]


 


                                  ,
2008


 


 


 


 


 


 


Re:                             Severance
and Retention Agreement


 


Dear                          :


 


Our Board of Directors believes that it is in the best interests of Accuride
Corporation (“Accuride”) and its shareholders to take appropriate steps to
allay any concerns you may have about your future employment opportunities with
Accuride and its “Affiliates” (as defined in Section 2(f)).  Accuride and its Affiliates are collectively
referred to in this Agreement as the “Company.” 
As a result, the Board has decided to offer to you the special package
of benefits described below.


 


Please bear in mind that these benefits are being offered only to a few
selected employees and we accordingly ask that you refrain from discussing this
special program with others.  Please note
that the special benefits package described below will only be effective if you
sign the extra copy of this Severance and Retention Agreement (the “Agreement”)
which is enclosed and return it to me on or before December 31, 2008.  This Agreement supersedes any other severance
or change in control agreements entered into previously by you and Accuride or
any Affiliate, whether written or oral.


 


1.                                      TERM
OF AGREEMENT.


 


This Agreement
is effective immediately and will continue in effect until December 31,
2008 (the “Initial Term”).  This
Agreement will be automatically renewed at the end of the Initial Term for
additional terms commencing on each January 1, and ending on the next
following December 31 (a “Renewal Term”), unless either party serves
notice on the other of its desire not to renew this Agreement or of its desire
to modify this Agreement.  Such notice
must comply with Section 11 and be given at least six months before the
end of the Initial Term or the applicable Renewal Term.  If a Change in Control occurs during the
Initial Term or any Renewal Term, the scheduled expiration date of the Initial
Term or Renewal Term, as the case may be, shall be extended for a term ending
on the 18-month anniversary of the Change in Control.  The expiration of the term of this Agreement
will not reduce or diminish any liabilities that have accrued prior to the
expiration.


 

















 


2.                                      BASIC
SEVERANCE BENEFIT.


 


(a)                                  Entitlement to
Basic Severance Benefit.  The Basic
Severance Benefit described below will be payable to you if you terminate your
employment with the Company for “Good Reason” (as defined in Section 6)
either prior to the commencement of the “Protection Period” (as defined in Section 2(d))
or following the close of the Protection Period.  The Basic Severance Benefit also will be
payable to you if prior to the commencement of the Protection Period or
following the close of the Protection Period, the Company terminates your
employment without “Cause” (as defined in Section 7).  If your employment is terminated by the
Company for Cause, by your voluntary termination without Good Reason, or by
your death or “Disability” (as defined in Section 11(d)), no Basic
Severance Benefit shall be payable under this Agreement either upon that
termination or at any time thereafter (unless you are later reemployed and
covered by a new agreement).


 


(b)                                 Amount of Payments.  The Basic Severance Benefit will equal your
annualized base salary at the rate in effect on the date of your termination of
employment minus the sum of any other payments from the Company under any
employment or other agreement, plan, program or policy in the nature of
severance in respect of such termination, payable on or after the date of such
termination.


 


(c)                                  Timing of Payments.  Except as provided in Section 4, the
Basic Severance Benefit will be paid in a single lump sum payment within five
business days following the date on which the Release Agreement required pursuant
to Section 8 becomes irrevocable.


 


(d)                                 Protection Period.  For purposes of this Agreement, the term “Protection
Period” shall mean the period beginning with the date on which a Change in
Control occurs and ending 18 months after the Change in Control.


 


(e)                                  Transfers to
Affiliates.  In order to receive a
Basic Severance Benefit, you must terminate employment with the “Company,”
which, as noted above, refers collectively to Accuride and all of its
Affiliates.  As a result, a transfer to
an Affiliate will not be treated as a termination of employment for purposes of
this Agreement.  For purposes of
determining whether a transfer gives rise to Good Reason for your termination
of employment, a transfer shall be treated the same as a reassignment within
Accuride.


 


(f)                                    “Affiliate”
Defined.  For purposes of this
Agreement, the term “Affiliate” shall mean (i) any member a “controlled
group of corporations” (within the meaning of Section 414(b) of the
Internal Revenue Code of 1986 (the “Code”) as modified by Section 415(h) of
the Code) that includes Accuride as a member of the group; and (ii) any
member of a group of trades or businesses under common control (within the
meaning of Section 414(c) of the Code as modified by Section 415(h) of
the Code) that includes Accuride as a member of the group.


 


3.                                      CHANGE
IN CONTROL BENEFITS.


 


(a)                                  Entitlement
to Change in Control Benefits.  If
your employment with the Company is terminated by the Company without Cause
during the Protection Period, you will 


 


2

















 


receive the “Change in Control Benefits”
described in this Section 3.  The
Change in Control Benefits also will be payable if you terminate your
employment for Good Reason during the Protection Period.


 


The Change in
Control Benefits will not be payable if your employment is terminated for
Cause, if you voluntarily terminate your employment without Good Reason, or if
your employment is terminated by reason of your Disability or your death.  In addition, the Change in Control Benefits
will not be payable if your employment is terminated by you or the Company for
any or no reason prior to or following the Protection Period.


 


In addition,
as noted in Section 2(e), a transfer to an Affiliate will not be treated
as a termination of employment for purposes of this Agreement.


 


(b)                                 Change in Control
Severance Payment.  If you are
entitled to receive Change in Control Benefits, you will receive a “Change in
Control Severance Payment.”  The “Change
in Control Severance Payment” is a lump sum payment equal to the sum of: (i) 100%
of your annualized base salary as of the date on which a Change in Control
occurs, plus (ii) 100% of the applicable bonus or incentive compensation
paid or payable to you pursuant to the Accuride Incentive Compensation
Plan.  The applicable bonus or incentive
compensation amount used for purposes of clause (ii) in the preceding
sentence shall be the greater of the following: 
(i) the incentive compensation to which you would have been
entitled if the year were to end on the day on which the Change in Control
occurs, based upon an annualized figure determined using performance up to that
date; or (ii) the average of the actual incentive compensation paid to you
through the Accuride Incentive Compensation Plan during the three years
preceding the year of your termination. 
The Change in Control Severance Payment shall be reduced by the full
amount of any payments to which you may be entitled due to your termination
pursuant to any other Company severance policy, any agreement between you and
the Company providing for severance, or applicable law.


 


Except as
otherwise provided in Section 4, the Change in Control Severance Payment
will be paid in one lump sum within five business days following the date on
which the Release Agreement required pursuant to Section 8 becomes
irrevocable.


 


(c)                                  Equity Awards.  If you are entitled to receive Change in
Control Benefits, you also may be entitled to receive a benefit pursuant to the
Accuride Corporation 2005 Incentive Award Plan.  Refer to the Accuride Corporation 2005
Incentive Award Plan for more details regarding the impact of a Change in
Control on awards made pursuant to that Plan.


 


(d)                                 Welfare Benefits.  If you are entitled to receive Change in
Control Benefits, the Company shall arrange to provide you, for a 12-month
period following your termination of employment, with disability, accident,
dental and group health insurance benefits substantially similar to those which
you were receiving immediately prior to your termination.  The cost to you of a particular type of
benefit (e.g., dental insurance)
shall be not more than the cost to you of that particular benefit immediately
prior to your termination.  The Company
may provide the health insurance benefit described under this Section by
paying a portion of the premiums you are required to pay for continued health
insurance coverage under the Company’s health insurance plan pursuant to
COBRA.  The amount paid by the Company
will be equal to 


 


3

















 


the difference between the total COBRA premium and the amount you were
required to pay for health insurance immediately prior to your termination.


 


Your right to
receive continued health insurance benefits pursuant to COBRA shall commence upon
the termination of your employment and shall not be extended by your rights
under this Agreement.


 


Your right to receive all forms of welfare
benefits described under this paragraph (d) shall terminate as soon
as you become eligible to receive health care benefits, without exclusion for
preexisting conditions, from any other employer.


 


(e)                                  Retirement and
Savings Plan.  If you are entitled to
receive Change in Control Benefits, the Company shall make a payment to you
equal to 110% of the amount of any forfeitures that you experience as a result
of your termination of employment under any of the Company’s pension or profit
sharing plans.  If you experience a
forfeiture under the Accuride Retirement Plan, the amount of the Company’s
payment shall be equal to 110% of your unvested “Cash Balance Account” (as
defined in the Accuride Retirement Plan, as it may be amended from time to
time).  The additional 10% payment
provided for in this paragraph is to compensate you for the loss of the
opportunity to defer taxes through a rollover of the forfeited amounts.  Except as otherwise provided in Section 4,
the payment called for by this paragraph (e) shall be paid within 30
days following your termination of employment.


 


(f)                                    No Allowance in
Lieu of Benefits.  You may not elect
to receive cash or any other allowance in lieu of any welfare benefits provided
by this Section.


 


4.                                      COMPLIANCE
WITH SECTION 409A; REQUIRED DELAY IN PAYMENTS.


 


(a)                                  409A Compliance
Strategy.  The Company intends that
the Basic Severance Benefit provided pursuant to Section 2 will comply
with the short-term deferral exception to the requirements of Section 409A
of the Code, as described in Treas. Reg. § 1.409A-1(b)(4).  The Company also intends that the Change in
Control Severance Payment provided by Section 3(b) and the retirement
and savings plan forfeiture payment provided by Section 3(e) (collectively
the “Cash Change in Control Payments”) will comply with the short-term deferral
exception.  In order to meet the
requirements of the short-term deferral exception, despite any other provision
of this Agreement to the contrary, the Basic Severance Benefit and all Cash
Change in Control Payments due pursuant to this Agreement shall be paid at the
times stated in Section 2 or Section 3, and in no event later than March 15
of the year following the year in which your Separation from Service
occurs.  Payments may be delayed only in
accordance with regulations issued pursuant to Section 409A.  The Company intends that the Welfare Benefits
provided by Section 3(d) will comply with the exception to Section 409A
for reimbursements and certain other separation payments, as described in
Treas. Reg. § 1.409A-1(b)(9)(v)(B).  The
Company has concluded that the reimbursement payments the Company has agreed to
make pursuant to Section 20 may be subject to the requirements of Section 409A.  To ensure that the payments under Section 20
comply with Section 409A, the payments are payable at a specified time or
pursuant to a fixed schedule within the meaning of Treas. Reg. §
1.409A-3(i)(1)(iv).


 


4

















 


(b)                                 Delay in Payments.  Prior to making any payments pursuant to this
Agreement, the Accuride Compensation Committee will determine, on the basis of
any regulations, rulings or other available guidance and the advice of counsel,
whether the short-term deferral exception, the separation pay exception or any
other exception to the requirements of Section 409A is available.  If the Compensation Committee concludes that
no exception is available, no payments will be made prior to your Separation
from Service.  In addition, if you are a “Specified
Employee” (as defined in paragraph (d)), and the Compensation Committee
concludes that no exception to the requirements of Section 409A is available,
no payments shall be made to you prior to the first business day following the
date which is six months after your Separation from Service.  Any amounts that would have been paid during
the six months following your Separation from Service will be paid on the first
business day following the expiration of the six month period without interest
thereon.  The provisions of this
paragraph apply to all amounts due pursuant to this Agreement, other than
amounts that do not constitute a deferral of compensation within the meaning of
Treas. Reg. §1.409A-1(b) or other amounts or benefits that are not subject
to the requirements of Section 409A.


 


(c)                                  Separation from
Service Defined.  For purposes of
this Agreement, the term “Separation from Service” means (1) the
termination of your employment with Accuride and all Affiliates due to death,
retirement or other reasons, or (2) a permanent reduction in the level of
bona fide services you provide to Accuride and all Affiliates to an amount that
is no more than 20% of the average level of bona fide services you provided to
Accuride and all Affiliates in the immediately preceding 36 months (or the
entire time period during which you provided services to Accuride and all
Affiliates if you have been providing such services for less than 36 months),
with the level of bona fide service calculated in accordance with Treas. Reg. §
1.409A-1(h)(1)(ii).  Your employment
relationship is treated as continuing while you are on military leave, sick
leave, or other bona fide leave of absence (if the period of such leave does
not exceed six months, or if longer, so long as your right to reemployment with
Accuride or an Affiliate is provided either by statute or contract).  If your period of leave exceeds six months
and your right to reemployment is not provided either by statute or by
contract, the employment relationship is deemed to terminate on the first day
immediately following the expiration of such six month period.  Whether a termination of employment has
occurred will be determined based on all of the facts and circumstances and in
accordance with regulations issued by the United States Treasury Department
pursuant to Section 409A of the Code if the Company concludes that Section 409A
is applicable.


 


(d)                                 Specified Employee
Defined.  For purposes of this
Agreement, the term “Specified Employee” means certain officers and highly
compensated employees of the Company as defined in Treas. Reg.
§ 1.409A-1(i), and as determined in accordance with such procedures as may
be adopted from time to time by Accuride. 
The identification date for determining whether any employee is a
Specified Employee during any calendar year shall be the September 1
preceding the commencement of such calendar year.


 


(e)                                  Miscellaneous
Payment Provisions.  If payment is
not made, in whole or in part, due to a dispute between you and the Company,
the payments shall be made in accordance with Treas. Reg. §1.409A-3(g), as
applicable.


 


5

















 


(f)                                    Ban on
Acceleration or Deferral.  Under no
circumstances may the time or schedule of any payment made or benefit provided
pursuant to this Agreement be accelerated or subject to a further deferral
except as otherwise permitted or required pursuant to regulations and other
guidance issued pursuant to Section 409A of the Code.


 


(g)                                 No Elections.  You do not have any right to make any
election regarding the time or form of any payment due under this Agreement.


 


(h)                                 Compliant Operation
and Interpretation.  This Agreement
shall be operated in compliance with Section 409A or an exception thereto
and each provision of this Agreement shall be interpreted, to the extent
possible, to comply with Section 409A or to qualify for an exception
thereto.


 


5.                                      CHANGE IN CONTROL DEFINED.


 


“Change in
Control” means and includes each of the following:


 


(a)                                  A transaction or
series of transactions (other than an offering of Stock to the general public
through a registration statement filed with the Securities and Exchange
Commission) whereby any “person” or related “group” of “persons” (as such terms
are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other
than Accuride, any of its Affiliates, an employee benefit plan maintained by
Accuride or any of its Affiliates, or a “person” that, prior to such transaction,
directly or indirectly controls, is controlled by, or is under common control
with, Accuride) directly or indirectly acquires beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of securities of
Accuride possessing more than 35% of the total combined voting power of
Accuride’s securities outstanding immediately after such acquisition; or


 


(b)                                 During any period of
two consecutive years, individuals who, at the beginning of such period,
constitute the Board of Directors together with any new director(s) (other
than a director designated by a person who shall have entered into an agreement
with Accuride to effect a transaction described in paragraphs (a) or (c) of
this Section 5) whose election by the Board of Directors or nomination for
election by Accuride’s stockholders was approved by a vote of a majority of the
directors then still in office who either were directors at the beginning of
the two-year period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof; or


 


(c)                                  The consummation by
Accuride (whether directly involving Accuride or indirectly involving Accuride
through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition
of all or substantially all of Accuride’s assets in any single transaction or
series of related transactions or (z) the acquisition of assets or stock
of another entity, in each case other than a transaction:


 


(i)                                     Which results in
Accuride’s voting securities outstanding immediately before the transaction
continuing to represent (either by remaining outstanding or by being converted
into voting securities of Accuride or the person that, as a result of the
transaction, controls, directly or indirectly, Accuride or owns, directly or
indirectly, all or substantially all of Accuride’s assets or otherwise succeeds
to the business of Accuride 


 


6

















 


(Accuride or such person, the “Successor Entity”)) directly or
indirectly, at least a majority of the combined voting power of the Successor
Entity’s outstanding voting securities immediately after the transaction, and


 


(ii)                                  After which no person
or group beneficially owns voting securities representing 50% or more of the
combined voting power of the Successor Entity; provided, however, that no
person or group shall be treated for purposes of this Section 5(c)(ii) as
beneficially owning 50% or more of the combined voting power of the Successor
Entity solely as a result of the voting power held in Accuride prior to the
consummation of the transaction; or


 


(d)                                 Accuride’s
stockholders approve a liquidation or dissolution of Accuride.


 


The
Compensation Committee shall determine whether a Change in Control of Accuride
has occurred under the above definition, and the date of the occurrence of such
Change in Control and any incidental matters relating thereto.


 


6.                                      GOOD
REASON DEFINED.


 


(a)                                  Definition of Good
Reason.  For purposes of this
Agreement, “Good Reason” means a termination of your employment with the
Company following the occurrence of one or more of the following circumstances
(without your prior express written consent):


 


(i)                                     a material
diminution in your total annual compensation;


 


(ii)                                  a material diminution
in your authority, duties or responsibilities;


 


(iii)                               a material change in the
geographic location of your principal office; or


 


(iv)                              any other action or
inaction that constitutes a material breach by the Company of this Agreement.


 


(b)                                 Notice of
Termination.  If you elect to
terminate your employment for Good Reason, you must provide the Company with a
Notice of Termination (in compliance with Section 11) which sets forth the
existence of the Good Reason condition described in paragraphs (i) through
(iv) above within 60 days of the initial existence of the condition.


 


(c)                                  Opportunity to
Cure.  Notwithstanding anything to
the contrary, the existence of one of the circumstances described in paragraphs
(i) through (iv) above will not constitute Good Reason if, within 30
days after you give the Company Notice of Termination which sets forth the
existence of the Good Reason condition described in paragraphs (i) through
(iv), the Company has fully corrected such condition.


 


7.                                      CAUSE
DEFINED.


 


For purposes
of this Agreement, “Cause” shall mean (a) your continued willful failure,
neglect or refusal to perform your duties with respect to the Company or its
Affiliates which continues beyond ten days after a written demand for
substantial performance is delivered 


 


7

















 


to you by the Company; (b) conduct by you involving (i) dishonesty,
fraud, or breach of trust in connection with your employment or (ii) conduct
which would be a reasonable basis for an indictment for a felony or for a
misdemeanor involving moral turpitude; (c) your willful and continued
failure or refusal to follow material directions of the Board or any other act
of insubordination by you; or (d) willful malfeasance or willful
misconduct by you which is injurious to the Company, monetarily or otherwise.


 


8.                                      RELEASE
AGREEMENT.


 


In order to
receive the Basic Severance Benefit or any Change in Control Benefits, you must
execute, in a timely manner, a release of any known or unknown claims that you
may have against the Company.  The
release shall be in a form reasonably requested by the Company.  If you are not yet 40 years old on the date
on which the Release Agreement must be signed, you will be given 21 days to
consider whether to sign the Release Agreement. If you are 40 or over, in
accordance with federal law, you will be given 21 or 45 days, depending on the
circumstances, to consider whether to sign the Release Agreement.  In any event, you may revoke the Release Agreement
during the seven day period following your delivery of a signed Release
Agreement.  These rules will be
described in greater detail at the appropriate time.  If you fail to sign the Release Agreement
within the prescribed time period, or if you revoke the Release Agreement, you
will not be entitled to receive any Basic Severance Benefit or any Change in
Control Benefits.  The Release Agreement
to which this Section 8 refers will be provided to you on your termination
date and in no event later than ten days following your termination date.


 


9.                                      COMPETITION.


 


(a)                                  Covenant
Not to Compete.  If you terminate
employment with the Company or if your employment is terminated by the Company
and then you compete with the Company, the Company may suffer irreparable harm
and damage.  Accordingly, you agree that,
unless you receive the express prior written consent of the Company, you will
not be employed as an owner, partner, employee, consultant, or in any other
capacity by, and you will not become a shareholder in, a seller, distributor or
manufacturer of commercial vehicle components or otherwise compete with the
Company, directly or indirectly, during the “Restriction Period” in the “Restricted
Area.”


 


(b)                                 Restricted Area.  For this purpose, the “Restricted Area” means
the United States of America.  If a court
of competent jurisdiction determines that the United States of America is a
larger area than necessary to protect the Company’s business interests, the
parties agree that the Restricted Area will be the largest of the following
areas that the court determines to be reasonable:  the United States of America east of the
Mississippi River; all states in which you performed services while employed by
the Company; the State of Indiana; the County of Vanderburgh; or the City of
Evansville.


 


(c)                                  Restriction Period.  For this purpose, the “Restriction Period”
begins on the effective date of your termination of employment for whatever
reason and ends at the end of the 24th month thereafter, or if a court of
competent jurisdiction concludes that 24 months is longer than necessary to
protect the Company’s business interests, then the parties agree that the 


 


8

















 


restriction period will end at the end of the longest of the following
number of months that the court determines to be reasonable:  23, 22, 21, 20, 19, 18, 17, 16, 15, 14, 13,
12, 11, 10, 9, 8, 7, 6, 5, 4, or 3.


 


(d)                                 Competition.  You will be considered to be competing with
the Company if you are performing any services in the commercial vehicle
component industry of the type and nature that are required to be performed by
or for the Company.  You will not be
considered to be competing with the Company for purposes of this Section 9
if you acquire stock representing less than 1% of the outstanding stock of any
publicly traded corporation.


 


(e)                                  Non-Solicitation
Covenants.  For a period of two years
from the date of the termination of this Agreement and your employment with the
Company, or, if a court determines that two years is unreasonable, one year
from the date of the termination of this Agreement and your employment with the
Company, you agree that you will not (directly or indirectly through
others):  (i) contact, solicit,
contract with, or attempt to contract with any entity engaged in the commercial
vehicle component industry with which the Company has contracts at the time of
the termination of this Agreement, or (ii) solicit or attempt to solicit
away from the Company any officer, employee or agent of the Company.


 


(f)                                    Reformation of
Covenants.  The parties agree that
the scope of any provision of this Section may be modified by a judge in
any proceeding to enforce this Agreement, so that such provision can be
enforced to the maximum extent permitted by law.  If any court of competent jurisdiction
determines that any portion of this Section is invalid or unenforceable,
the remainder of this Section will not thereby be affected and will be
given full effect, without regard to invalid portions.


 


(g)                                 Breach of Covenants.  If you breach the covenant not to compete
contained in paragraph (a) or the non-solicitation covenant contained in
paragraph (e), you agree that in addition to (and without limiting) any
other remedy or right the Company may have: 
(i) the Company will have the right to an injunction against you
issued by a court of competent jurisdiction enjoining such breach; and (ii) if
you are to receive any payments or benefits pursuant to Sections 2 or 3 or
any other provision of this Agreement in the future, the Company has the right
to forfeit any future benefits to which you are entitled to compensate the
Company for injury by reason of such breach. 
You and the Company agree that the foregoing remedies are reasonable and
necessary for the protection of the Company’s goodwill and recognize that in
the event of a breach of the foregoing restrictions, it will be impossible to
ascertain or estimate the entire or exact cost, damage or injury that the
Company may sustain by reason of such breach.


 


10.                               CAP
ON PAYMENTS.


 


(a)                                  General Rules.  The Code places significant tax burdens on
you and the Company if the total payments made to you due to a Change in
Control exceed prescribed limits.  For
example, if your “Base Period Income” (as defined below) is $100,000, your limit
or “Cap” is $299,999.  If your “Basic
Payments” exceed the Cap by even $1.00, you are subject to an excise tax under Section 4999
of the Code of 20% of all amounts paid to you in excess of $100,000.  In other words, if your Cap is $299,999, you
will not be subject to an excise tax if you receive exactly $299,999.  If you receive $300,000, you will be subject
to an excise tax of 


 


9

















 


$40,000 (20% of $200,000).  In
order to avoid this excise tax and the related adverse tax consequences for the
Company, by signing this Agreement you agree that your Basic Payments will not
exceed an amount equal to your Cap.


 


(b)                                 Special Definitions.  For purposes of this Section, the following
specialized terms will have the following meanings:


 


(i)                                     “Base Period
Income.”  “Base Period Income” is an
amount equal to your “annualized includable compensation” for the “base period”
as defined in Sections 280G(d)(1) and (2) of the Code and the
regulations adopted thereunder.  Generally,
your “annualized includable compensation” is the average of your annual taxable
income from the Company for the “base period,” which is the five calendar years
prior to the year in which the Change in Control occurs.  These concepts are complicated and technical
and all of the rules set forth in the applicable regulations apply for
purposes of this Agreement.


 


(ii)                                  “Basic Payments.”  The “Basic Payments” include any “payments in
the nature of compensation” (as defined in Section 280G of the Code and the
regulations adopted thereunder), made pursuant to this Agreement or otherwise,
to you or for your benefit, the receipt of which is contingent on a Change in
Control and to which Section 280G of the Code applies.


 


(iii)                               “Cap” or “280G Cap.”  “Cap” or “280G Cap” shall mean an amount
equal to 2.99 times your “Base Period Income.” 
This is the maximum amount which you may receive without becoming
subject to the excise tax imposed by Section 4999 of the Code or which the
Company may pay without loss of deduction under Section 280G of the Code.


 


(c)                                  Calculating the
Cap.  If the Company believes that
these rules will result in a reduction of the payments to which you are
entitled under this Agreement, it will so notify you as soon as possible.  The Company will then, at its expense, retain
a “Consultant” (which shall be a law firm, a certified public accounting firm,
and/or a firm of recognized executive compensation consultants) to provide a
determination concerning whether your Basic Payments exceed the limit discussed
above (the “Determination”).  The Company
will select the Consultant.


 


At a minimum,
the Determination required by this Section must set forth the amount of
your Base Period Income, the value of the Basic Payments and the amount and
present value of any excess parachute payments.


 


If the
Determination states that there would be an excess parachute payment, your
Basic Payments will be reduced to the extent necessary to eliminate the
excess.  In making such reduction,
Accuride first will reduce the amount of your payments under this Agreement
and, if necessary, any other payments to which you are entitled under any other
arrangement that do not constitute “non-qualified deferred compensation” that
is subject to Section 409A of the Code. 
Accuride will reduce the amount of any Basic Payments payable to you
that are subject to Section 409A of the Code only to the extent reductions
in addition to those described in the preceding sentence are necessary to avoid
an excess parachute payment.  If
necessary, any Basic 


 


10

















 


Payments which are subject to Section 409A of the Code shall be
reduced proportionally to avoid an excess parachute payment.


 


If the
Consultant selected to provide the Determination so requests, a firm of
recognized executive compensation consultants selected by the Company (which
may, but is not required to be, the Consultant) shall provide an opinion, upon
which such Consultant may rely, as to the reasonableness of any item of
compensation as reasonable compensation for services rendered before or after
the Change in Control.


 


If the Company
believes that your Basic Payments will exceed the limitations of this Section,
it will nonetheless make payments to you, at the times stated above, in the maximum
amount that it believes may be paid without exceeding such limitations.  The balance, if any, will then be paid after
the opinions called for above have been received.


 


If the amount
paid to you by the Company is ultimately determined, pursuant to the
Determination or by the Internal Revenue Service, to have exceeded the
limitation of this Section, you must repay the excess promptly on demand of the
Company.  If it is ultimately determined,
pursuant to the Determination or by the Internal Revenue Service, that a
greater payment should have been made to you, the Company shall pay you the
amount of the deficiency, together with interest thereon from the date such
amount should have been paid to the date of such payment, at the rate set forth
above, so that you will have received or be entitled to receive the maximum
amount to which you are entitled under this Agreement.


 


As a general
rule, the Determination shall be binding on you and the Company.  Section 280G and the excise tax rules of
Section 4999, however, are complex and uncertain and, as a result, the
Internal Revenue Service may disagree with the Consultant’s conclusions.  If the Internal Revenue Service determines
that the Cap is actually lower than calculated by the Consultant, the Cap will
be recalculated by the Consultant.  Any
payment over that revised Cap will then be repaid by you to the Company.  If the Internal Revenue Service determines
that the actual Cap exceeds the amount calculated by the Consultant, the
Company shall pay you any shortage.


 


The Company
has the right to challenge any determinations made by the Internal Revenue
Service.  If the Company agrees to
indemnify you from any taxes, interest and penalties that may be imposed upon
you (including any taxes, interest and penalties on the amounts paid pursuant
to the Company’s indemnification agreement), you must cooperate fully with the
Company in connection with any such challenge. 
The Company shall bear all costs associated with the challenge of any
determination made by the Internal Revenue Service and the Company shall
control all such challenges.


 


You must
notify the Company in writing of any claim or determination by the Internal
Revenue Service that, if upheld, would result in the payment of excise
taxes.  Such notice shall be given as
soon as possible but in no event later than 15 days following your receipt of
notice of the Internal Revenue Service’s position.


 


(d)                                 Effect of Repeal or
Inapplicability.  In the event that
the provisions of Sections 280G and 4999 of the Code are repealed without
succession, this Section shall be of no 


 


11

















 


further force or effect. 
Moreover, if the provisions of Sections 280G and 4999 of the Code do not
apply to impose the excise tax to payments under this Agreement, then the
provisions of this Section shall not apply.


 


11.                               TERMINATION
NOTICE AND PROCEDURE.


 


Any
termination by the Company or you of your employment shall be communicated by
written Notice of Termination to you if such Notice of Termination is delivered
by the Company and to the Company if such Notice of Termination is delivered by
you, all in accordance with the following procedures:


 


(a)                                  The Notice of
Termination shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances alleged to provide a basis for termination.


 


(b)                                 Any Notice of
Termination by the Company shall be in writing signed by the President of the
Company or a member of the Board who is not a Company employee, specifying in
detail the basis for such termination.


 


(c)                                  If the Company shall
furnish a Notice of Termination for Cause and you in good faith notify the
Company that a dispute exists concerning such termination within the 15 day
period following your receipt of such notice, you may elect to continue your
employment during such dispute.  If it is
thereafter determined that Cause did exist, your “Termination Date” shall be
the earlier of (i) the date on which the dispute is finally determined,
either by mutual written agreement of the parties or pursuant to the
alternative dispute resolution provisions of Section 19 or (ii) the
date of your death.  If it is thereafter
determined that Cause did not exist, your employment shall continue as if the
Company had not delivered its Notice of Termination and there shall be no
Termination Date arising out of such notice.


 


(d)                                 If the Company shall
furnish a Notice of Termination by reason of Disability and you in good faith
notify the Company that a dispute exists concerning such termination within the
15-day period following your receipt of such notice, you may elect to continue
your employment during such dispute.  The
dispute relating to the existence of a Disability shall be resolved by the opinion
of the licensed physician selected by the Company; provided, however, that if
you do not accept the opinion of the licensed physician selected by the
Company, the dispute shall be resolved by the opinion of a licensed physician
who shall be selected by you; provided further, however, that if the Company
does not accept the opinion of the licensed physician selected by you, the
dispute shall be finally resolved by the opinion of a licensed physician
selected by the licensed physicians selected by the Company and you,
respectively.  If it is thereafter
determined that a Disability did exist, your Termination Date shall be the
earlier of (i) the date on which the dispute is resolved or (ii) the
date of your death.  If it is thereafter
determined that a Disability did not exist, your employment shall continue as
if the Company had not delivered its Notice of Termination and there shall be
no Termination Date arising out of such notice. 
For purposes of this Agreement, “Disability” shall mean your inability
to perform your customary duties for the Company due to a physical or mental
condition that is considered to be of long-lasting or indefinite duration.


 


12
















 


(e)                                  If you in good faith
furnish a Notice of Termination for Good Reason and the Company notifies you
that a dispute exists concerning the termination within the 15-day period
following the Company’s receipt of such notice, you may elect to continue your employment
during such dispute.  If it is thereafter
determined that Good Reason did exist, your Termination Date shall be the
earlier of (i) the date on which the dispute is finally determined, either
by mutual written agreement of the parties or pursuant to the alternative
dispute resolution provisions of Section 19, (ii) the date of your
death, or (iii) one day prior to the 18-month anniversary of a Change in
Control, and your payments hereunder shall reflect events occurring after you
delivered Notice of Termination.  If it
is thereafter determined that Good Reason did not exist, your employment shall
continue after such determination as if you had not delivered the Notice of
Termination asserting Good Reason.


 


(f)                                    If you submit a
Notice of Termination for Good Reason, and the Company successfully contests
the grounds you set forth in such Notice of Termination, at the Company’s
discretion you may be deemed to have voluntarily terminated your employment
other than for Good Reason regardless of whether you elect to continue
employment pending resolution of the dispute regarding your Notice of
Termination.


 


(g)                                 If the Company submits
a Notice of Termination for Cause, and you successfully contest the grounds set
forth in such Notice of Termination, the Company will be deemed to have
terminated you other than by reason of Disability or Cause if you do not elect
to continue employment pending resolution of the dispute regarding your Notice
of Termination.


 


(h)                                 For purposes of this
Agreement, a transfer from Accuride to one of its Affiliates or a transfer from
an Affiliate to Accuride or another Affiliate shall not be treated as a
termination of employment.  Such a
transfer may, however, in certain circumstances, provide you with Good Reason
to terminate employment pursuant to Section 6.


 


12.                               NO
MITIGATION.


 


The Basic
Severance Benefit, the Change in Control Benefits (except as otherwise provided
in Section 3(d)) and the other payments or benefits provided pursuant to
this Agreement will be payable without regard to whether you look for or obtain
alternative employment following your termination of employment with the
Company.


 


13.                               SUCCESSORS.


 


Accuride will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Accuride or any of its Affiliates to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that Accuride
or any Affiliate would be required to perform it if no such succession had
taken place.  Failure of Accuride to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle you to the
compensation described in this Agreement to which you would be entitled
hereunder as if you terminate your employment for Good Reason following a
Change in Control, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Termination
Date.  As used in this Agreement, 


 


13

















 


“Accuride” shall mean Accuride as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law or otherwise.


 


14.                               BINDING
AGREEMENT; ASSIGNMENT.


 


This Agreement
shall inure to the benefit of and be enforceable by you and your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If
you should die while any amount would still be payable to you hereunder had you
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee or
other designee or, if there is no such designee, to your estate.  Except as provided in the preceding sentence,
no rights of any kind under this Agreement shall, without the written consent
of Accuride, be transferable or assignable by you, your spouse, or any other
person, or be subject to alienation, encumbrance, garnishment, attachment,
execution, or levy of any kind, voluntary or involuntary.


 


15.                               NOTICE.


 


For purposes
of this Agreement, notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the first page of this Agreement, provided that all notices to Accuride
shall be directed to the attention of the President of the Company or a member
of the Board who is not a Company employee with a copy to the Secretary of
Accuride, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.


 


16.                               MISCELLANEOUS.


 


No provision
of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by you and the
President of the Company or a member of the Board who is not a Company
employee.  No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this
Agreement.  Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law.  The
obligations of the Company that arise prior to the expiration of this Agreement
shall survive the expiration of the term of this Agreement.


 


17.                               VALIDITY.


 


The invalidity
or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.


 


14

















 


18.                               COUNTERPARTS.


 


This Agreement
may be executed in several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same instrument.


 


19.                               ALTERNATIVE
DISPUTE RESOLUTION.


 


(a)                                  Mediation.  Unless otherwise provided herein (such as in
Sections 10 and 11(d)), any and all disputes arising under, pertaining to
or touching upon this Agreement or the statutory rights or obligations of
either party hereto, shall, if not settled by negotiation, be subject to
non-binding mediation before an independent mediator selected by the parties
pursuant to Section 19(d). 
Notwithstanding the foregoing, both you and Accuride may seek
preliminary judicial relief if such action is necessary to avoid irreparable
damage during the pendency of the proceedings described in this Section 19.  Any demand for mediation shall be made in
writing and served upon the other party to the dispute, by certified mail,
return receipt requested, at the business address of Accuride, or at your last
known residence address, respectively. 
The demand shall set forth with reasonable specificity the basis of the
dispute and the relief sought.  The
mediation hearing will occur at a time and place convenient to the parties in
Evansville, Indiana, within 30 days of the date of selection or appointment of
the mediator.


 


(b)                                 Arbitration.  In the event that the dispute is not settled
through mediation, the parties shall then proceed to binding arbitration before
a single independent arbitrator selected pursuant to Section 19(d).  The mediator shall not serve as
arbitrator.  TO THE EXTENT ALLOWABLE
UNDER APPLICABLE LAW, ALL DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT
DISCRIMINATION, BREACH OF CONTRACT OR POLICY, OR EMPLOYMENT TORT COMMITTED BY
ACCURIDE OR A REPRESENTATIVE OF ACCURIDE, INCLUDING CLAIMS OF VIOLATIONS OF
FEDERAL OR STATE DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED
PURSUANT TO THIS POLICY AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR
WITHOUT A JURY TRIAL.  The arbitration
hearing shall occur at a time and place convenient to the parties in
Evansville, Indiana, within 30 days of selection or appointment of the
arbitrator.  If Accuride has adopted a
policy that is applicable to arbitrations with executives, the arbitration
shall be conducted in accordance with said policy to the extent that the policy
is consistent with this Agreement and the Federal Arbitration Act, 9 U.S.C.
§§ 1-16.  If no such policy has been
adopted, the arbitration shall be governed by the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association (“AAA”)
in effect on the date of the first notice of demand for arbitration.  The arbitrator shall issue written findings
of fact and conclusions of law, and an award, within 15 days of the date of the
hearing unless the parties otherwise agree.


 


(c)                                  Damages.  In cases of breach of contract or policy,
damages shall be limited to contract damages. 
In cases of discrimination claims prohibited by statute, the arbitrator
may direct payment consistent with the applicable statute.  In cases of employment tort, the arbitrator
may award punitive damages if proved by clear and convincing evidence.  The arbitrator may award attorneys’ fees to
the prevailing party and assess costs against the non-prevailing party, only in
accordance with Section 20 of this Agreement.  Issues of procedure, arbitrability, or
confirmation of award shall be governed by the Federal Arbitration Act, 9
U.S.C.  


 


15

















 


§§ 1-16, except that Court review of the arbitrator’s award shall
be that of an appellate court reviewing a decision of a trial judge sitting
without a jury.


 


(d)                                 Selection of
Mediators or Arbitrators.  The
parties shall select the mediator or arbitrator from a panel list made
available by the AAA.  If the parties are
unable to agree to a mediator or arbitrator within 10 days of receipt of a
demand for mediation or arbitration, the mediator or arbitrator will be chosen
by alternatively striking from a list of five mediators or arbitrators obtained
by Accuride from AAA.  You shall have the
first strike.


 


20.                               EXPENSES
AND INTEREST.


 


If a good
faith dispute shall arise with respect to the enforcement of your rights under
this Agreement or if any arbitration or legal proceeding shall be brought in
good faith to enforce or interpret any provision contained herein, or to
recover damages for breach hereof, and you are the prevailing party, you shall
recover from the Company any reasonable attorneys’ fees and necessary costs and
disbursements incurred as a result of such dispute or legal proceeding, and
prejudgment interest on any money judgment obtained by you calculated at the
rate of interest announced by Citibank from time to time as its prime rate from
the date that payments to you should have been made under this Agreement.  Any reimbursement of fees, costs and
disbursements to which you are entitled pursuant to this Section 20 shall
be paid by the Company, if at all, on or before December 31 of the
calendar year following the year in which you incurred the fees, costs and
disbursements for which you are entitled to reimbursement.  The fees, costs and disbursements reimbursed
in one calendar year will not affect the fees, costs and disbursements eligible
for reimbursement by the Company in a different calendar year.  The right to reimbursement under this Section 20
is not subject to liquidation or exchange for any other benefit.  It is expressly provided that the Company
shall in no event recover from you any attorneys’ fees, costs, disbursements or
interest as a result of any dispute or legal proceeding involving the Company
and you.


 


21.                               PAYMENT
OBLIGATIONS ABSOLUTE.


 


Accuride’s
obligation to pay you the compensation and to make the arrangements in
accordance with the provisions herein shall be absolute and unconditional and
shall not be affected by any circumstances; provided, however, that the Company
may apply amounts payable under this Agreement to any debts owed to the Company
by you on your Termination Date.  All
amounts payable by the Company in accordance with this Agreement shall be paid
without notice or demand.  If the Company
has paid you more than the amount to which you are entitled under this
Agreement, the Company shall have the right to recover all or any part of such
overpayment from you or from whomsoever has received such amount.


 


22.                               ENTIRE
AGREEMENT.


 


This Agreement
sets forth the entire agreement between you and the Company concerning the
subject matter discussed in this Agreement and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether written or oral, by any officer, employee or representative
of the Company.  Any prior 


 


16

















 


agreements or understandings with respect to the subject matter set
forth in the aforementioned agreements are hereby terminated and canceled.


 


23.                               STATUTORY
REFERENCES.


 


All references
to sections of the Securities Exchange Act of 1934 or the Code shall be deemed
also to refer to any successor provisions to such sections.  All references to sections of the final
regulations issued pursuant to Section 409A shall be deemed also to refer
to any successor provisions of such regulations or rulings or other guidance
that clarify such regulations.


 


24.                               DEFINITIONS.


 


A number of
terms have been defined throughout this Agreement.  These defined terms are identified by the
capitalization of the first letter of each word or the first letter of each
substantive word of a phrase.  Whenever
these terms are capitalized they shall be given the defined meaning.


 


25.                               PARTIES.


 


This Agreement
is an agreement between you and Accuride. 
In certain cases, though, obligations imposed upon Accuride may be
satisfied by an Accuride Affiliate.  Any
payment made or action taken by an Accuride Affiliate shall be considered to be
a payment made or action taken by Accuride for purposes of determining whether
Accuride has satisfied its obligations under this Agreement.


 


26.                               NO
RIGHTS IN ANY PROPERTY OF COMPANY.


 


The
undertakings of the Company constitute merely the unsecured promise of the
Company to make payments as provided for herein.  No property of the Company shall, by reason
of this Agreement, be held in trust for you, your spouse or any other person,
and neither you nor your spouse or any other person shall have, by reason of
this Agreement, any rights, title or interest of any kind in any property of
the Company.


 


27.                               NOT
AN EMPLOYMENT AGREEMENT.


 


Nothing in
this Agreement shall be construed as an offer or commitment by the Company to
continue your employment with the Company for any period of time.


 


28.                               FACILITY
OF PAYMENT.


 


If the Company
shall find that any person to whom any amount is payable hereunder is unable to
care for his affairs, any payment due (unless a prior claim therefore shall
have been made by a duly appointed guardian, committee, or other legal
representative) may be paid to any person deemed by the Company to have
incurred expense for such person otherwise entitled to payment, in such manner
and proportions as the Company may determine.


 


17

















 


29.                               GOVERNING
LAW.


 


This Agreement
shall be construed in accordance with and governed by the laws of the State of
Indiana.  Venue for any cause of action
arising under this Agreement shall be in Vanderburgh County, Indiana, USA.


 


30.                               AMENDMENTS.


 


This Agreement
may be amended at any time by a written agreement executed by the Company and
you.  No amendment that will result in a
violation of Section 409A of the Code, or any other provision of
applicable law, may be made to this Agreement and any such amendment shall be
void ab initio.


 


If you would
like to participate in this special benefits program, please sign and return
the extra copy of this letter which is enclosed.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  John R. Murphy

  
	
   

  	
  President and Chief Executive Officer

  
	
   

  	
  Accuride Corporation

  



 


18

















 


ACCEPTANCE


 


 


I hereby accept the offer to participate in this special benefit
program and I agree to be bound by all of the provisions noted above.