Document:

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                                                                   EXHIBIT 10.18

                            TECUMSEH PRODUCTS COMPANY

                      VOLUNTARY DEFERRED COMPENSATION PLAN

                     (as amended through November 22, 2000)

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                            TECUMSEH PRODUCTS COMPANY

                      VOLUNTARY DEFERRED COMPENSATION PLAN

                                      INDEX

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ARTICLE I                    PLAN PURPOSES.......................................................................1

ARTICLE II                   DEFINITIONS.........................................................................1

ARTICLE III                  ELIGIBILITY.........................................................................3

ARTICLE IV                   PARTICIPATION.......................................................................3

ARTICLE V                    GENERAL PROVISIONS..................................................................4

ARTICLE VI                   DEFERRED COMPENSATION ACCOUNTS......................................................5

ARTICLE VII                  PARTICIPANTS' RIGHTS UNSECURED......................................................8

ARTICLE VIII                 PAYMENT OF DEFERRED COMPENSATION....................................................9

ARTICLE IX                   VALUATION DATE.....................................................................11

ARTICLE X                    ALIENATION.........................................................................11

ARTICLE XI                   DOMESTIC RELATIONS ORDERS..........................................................12

ARTICLE XII                  TAX WITHHOLDING....................................................................13

ARTICLE XIII                 PARTICIPANT CONSENT................................................................13

ARTICLE XIV                  SEVERABILITY.......................................................................13

ARTICLE XV                   AMENDMENT AND TERMINATION..........................................................14

ARTICLE XVI                  CHANGE OF CONTROL..................................................................14

ARTICLE XVII                 PLAN ADMINISTRATION................................................................17

ARTICLE XVIII                LIMITATIONS OF ACTION..............................................................19
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                            TECUMSEH PRODUCTS COMPANY

                      VOLUNTARY DEFERRED COMPENSATION PLAN

                     [As amended through November 22, 2000]

                                    ARTICLE I
                                  PLAN PURPOSES

         1.1 The purpose of this Plan is to provide eligible officers and Key
Employees of the Employer with the opportunity to defer compensation. The Plan
is also intended to establish a method for attracting and retaining persons
whose abilities, experience and judgement can contribute to the long-term
strategic objectives of the Employer.

         1.2 The Company intends that the Plan be an unfunded, non-qualified
deferred compensation plan maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees of the Employer, and that payments under the Plan shall be, when paid
or otherwise made available to Participants, deductible by the Employer pursuant
to Sections 162 and 404(a)(5) of the Internal Revenue Code of 1986, as amended
(the "IRC").

                                   ARTICLE II
                                   DEFINITIONS

         As used in this Plan, the following terms shall have the meanings
hereinafter set forth:

         2.1 "Base Salary" means the annual salary paid to officers and Key
Employees of the Employer at regular intervals during the calendar year.

         2.2 "Beneficiary" means any person(s) or legal entity(ies) designated
by the Participant or otherwise determined in accordance with Section 5.4.

         2.3 "Board" means the Board of Directors of the Company.

         2.4 "Committee" means the Governance and Executive Compensation
Committee of the Board, or such other committee as the Board may subsequently
appoint to administer the Plan.

         2.5 "Company" means Tecumseh Products Company, a Michigan corporation,
and its successors and assigns.

         2.6 "Compensation" means Base Salary and other qualifying remuneration
paid by the Employer, as the Committee shall determine.
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         2.7 "Deferral Period" means the total period of time, expressed in Plan
Years, for which the Participant has elected to defer Compensation. Such
Deferral Period shall exclude the period of time beyond the Benefit Commencement
Date (as provided in ARTICLE VIII).

         2.8 "Deferred Compensation" means Compensation deferred pursuant to the
Plan.

         2.9 "Deferred Compensation Account" means the individual account
maintained under the Plan for a Participant as determined under ARTICLE VI.

         2.10 "Deferred Compensation Election Form" means an approved election
form that each Participant must execute in accordance with ARTICLE IV in order
to participate in the Plan, examples of which are attached hereto as EXHIBITS 1
and 1.1.

         2.11 "Director" means a member of the Board.

         2.12 "Eligible Participant" means any officer or Key Employee of the
Employer designated by the Committee as eligible to participate in the Plan.
Where the context so requires, this term shall also include a former officer or
Key Employee for whom the Committee maintains a Deferred Compensation Account
under the Plan.

         2.13 "Employer" means the Company, any of its present subsidiary
corporations, any corporation which becomes a controlled subsidiary of the
Company provided the Committee determines to extend coverage thereto, and/or any
successor(s) to such corporation(s). The Committee shall be deemed to have
extended coverage to a subsidiary if an employee of such subsidiary is
designated by the Committee as eligible to participate in the Plan.

         2.14 "Key Employee" means any executive employee of the Employer that
the Committee in its sole discretion decides is sufficiently important to the
ongoing business objectives of the Employer.

         2.15 "Market Price" of a Tecumseh Share on any given day means that
day's closing price per share on the NASDAQ National Market or, if the Tecumseh
Shares are not traded on a particular day, the closing NASDAQ price per share on
the closest preceding date on which Tecumseh Shares were traded.

         2.16 "Participant" for any Plan Year means an Eligible Participant who
has elected to defer Compensation in accordance with the procedures set forth in
ARTICLE IV and for whom the Committee has established and maintains a separate
Deferred Compensation Account.

         2.17 "Phantom Share" means a hypothetical or imaginary Tecumseh Share
without any of the rights attached to an actual Tecumseh Share, but whose
economic value for purposes of the Plan is the same as that of an actual
Tecumseh Share.

         2.18 "Plan" means the Tecumseh Products Company Voluntary Deferred
Compensation Plan as embodied herein and as amended from time to time by the
Board.

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         2.19 "Plan Year" means the 12-month calendar year beginning January 1
and ending December 31, or such shorter period, as applicable, in the year the
Plan is terminated.

         2.20 "Rabbi Trust" means an irrevocable trust, containing certain key
provisions, which the Internal Revenue Service would require in order to
conclude that contributions made thereto by an employer, to provide for the
payment of non-qualified deferred compensation benefits to employees, will not
be taxed to employees at the time contributions are made, but instead, at the
time the benefits are received or otherwise made available to the employee.

         2.21 "Tecumseh Share" means a share of the Company's Class A Common
Stock ($1.00 par value per share).

         2.22 "Valuation Date" means the last business day of either a calendar
year or calendar quarter, as the Committee will determine from time to time, the
date on which a Participant's Deferred Compensation Account is valued for
purposes of a hardship distribution pursuant to Section 8.8, and any other date
specified by the Committee for valuing a Participant's Deferred Compensation
Account.

         The masculine pronoun shall be deemed to include the feminine, and the
singular number shall be deemed to include the plural, unless a different
meaning is plainly required by the context.

                                   ARTICLE III
                                   ELIGIBILITY

         3.1 Prior to the end of November in each Plan Year, the Committee shall
designate the officers and Key Employees who shall be eligible to defer
Compensation under the Plan during the following Plan Year. Also, the Committee
may from time to time designate newly-hired officers and Key Employees as
eligible to defer Compensation under the Plan. The Committee shall promptly
notify each eligible officer and Key Employee of his eligibility to participate
in the Plan if selected by the Committee. The Committee has total discretion to
determine who is eligible to participate on a Plan Year by Plan Year basis.

         3.2 Directors who are not also employees of the Employer are not
eligible to participate in the Plan.

                                   ARTICLE IV
                                  PARTICIPATION

         4.1 Election to Participate. Subject to Section 4.2, in order to
participate in the Plan, in respect of Compensation for a particular Plan Year,
an Eligible Participant must make a valid election by executing and filing with
the Committee, before the commencement of such Plan Year, a Deferred
Compensation Election Form, an example of which is attached hereto as EXHIBIT 1.
Such election shall be in addition to the election provided under Section 6.10.

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         4.2 New Participant. Notwithstanding Section 4.1, a newly-hired
officer or Key Employee who becomes an Eligible Participant after the first day
of the current Plan Year, may elect to participate in the Plan, with respect to
future Compensation for such Plan Year, by filing a Deferred Compensation
Election Form within 15 days after his initial date of designation or
employment, whichever occurs later.

         4.3 Election not Revocable. Except as provided in Section 8.5, a
Deferred Compensation Election Form, once executed and filed with the Committee,
cannot be revoked for such current Plan Year's Compensation elected to be
deferred pursuant to such form.

         4.4 Vesting. A Participant will be vested in his entire Deferred
Compensation Account balance at all times and will not be subject to forfeiture
for any reason.

         4.5 New Elections Permitted for Each Year. A Participant is not
required to defer Compensation for any subsequent Plan Year by reason of having
elected to defer Compensation for a current or prior Plan Year. Compensation
payable in future Plan Years can only be deferred by filing a Deferred
Compensation Election Form for the appropriate Plan Year.

         4.6 Deferrals in 5% Increments. The minimum amount which may be
deferred by an Eligible Participant for any Plan Year is 5% of Compensation.
Deferrals in excess of the minimum amount shall be in further 5% increments of
Compensation. Elections to convert MIP Phantom Shares or to defer MIP cash
awards pursuant to Section 6.10 are not subject to this Section 4.6.

                                    ARTICLE V
                               GENERAL PROVISIONS

         5.1 No Right to Payment Except as Provided in Plan. No Participant, or
other Eligible Participant or Beneficiary, shall have any right to any payment
or benefit hereunder except to the extent provided in the Plan.

         5.2 Employment Rights. The employment rights of any Participant or
other Eligible Participant shall not be enlarged, guaranteed or affected by
reason of the provisions of the Plan.

         5.3 Recipient Under a Disability. If the Committee determines that any
person to whom a payment is due hereunder is a minor, or is adjudicated
incompetent by reason of physical or mental disability, the Committee shall have
the power to cause the payments becoming due to such person to be made to the
legal guardian for the benefit of the minor or incompetent, without
responsibility of the Employer or the Committee to see to the application of
such payment, unless prior to such payment claim is made therefor by a duly
appointed legal representative. Payments made pursuant to such power shall
operate as a complete discharge of the Employer, the Board and the Committee.

         5.4 Designation of Beneficiary. Each Participant may designate any
person(s) or legal entity(ies), including his estate or a trust, as his
Beneficiary under the Plan by filing a written beneficiary designation, in
prescribed form, with the Committee. A Participant may at

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any time revoke or change his designation of Beneficiary by filing a new
beneficiary designation with the Committee. If no person or legal entity shall
be designated by a Participant as his Beneficiary, or if no designated
Beneficiary survives him, his estate shall be his Beneficiary.

         5.5 Elections. Any election made or notice given by a Participant
pursuant to the Plan shall be in writing to the Committee, or to such
representative as may be designated by the Committee for such purpose. Notice
shall be deemed to have been made or given on the date received by the Committee
or its designated representative.

         5.6 Controlling Law. The validity of the Plan or any of its provisions
shall be determined under, and it shall be construed and administered according
to, the laws of the State of Michigan, without regard to principles of conflicts
of law.

                                   ARTICLE VI
                         DEFERRED COMPENSATION ACCOUNTS

         6.1 Accounts. Upon receipt of a Participant's valid Deferred
Compensation Election Form, the Committee shall establish, as a bookkeeping
entry only, a Deferred Compensation Account for such Participant. The Committee
shall thereafter record in each Participant's Deferred Compensation Account for
a particular Plan Year, the amount(s) which he elected to defer which otherwise
would have been paid to the Participant during the subsequent Plan Year or Plan
Years, as the case may be. Such amount(s) shall be credited (as of the date such
amount(s) would otherwise have been paid to the Participant) to one or more of
the Investment Option sub-accounts which the Committee shall make available
under the Plan. The initial Investment Options are the Phantom Share Investment
Option and the Corporate Bond Investment Option.

         6.2 Phantom Share Investment Option. Participant elections for this
Option shall be reflected in a bookkeeping sub-account, the value of which shall
be based upon the performance of Tecumseh Shares. Amounts deferred will be
credited to such sub-account as units, each reflecting one Tecumseh Share.
Fractional units will also be credited to such sub-account, if applicable. The
number of credited units will be determined by dividing the dollar amount of
Compensation deferred by the Market Price of a Tecumseh Share on the date such
amount would otherwise have been paid to the Participant. Dividends paid on
Tecumseh Shares shall be reflected in such sub-account by the crediting of
additional units in such sub-account equal to the value of the dividend and
based upon the Market Price of a Tecumseh Share on the date such dividend is
paid.

         6.3 Corporate Bond Investment Option. Participant elections for this
Option shall be reflected in a bookkeeping sub-account, the value of which shall
be based upon quarterly crediting of earnings based on the current yield of the
DJ 20 Bond Index. Amounts deferred will be credited to such sub-account on the
date such amount would otherwise have been paid to the Participant. All amounts
reflected in this sub-account shall be credited with earnings, compounded
quarterly, from the date credited, based on a rate of return equal to the
current yield of the DJ 20 Bond Index as of the last business day of the
preceding quarter.

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         6.4 Adjustments to Accounts. The value of a Participant's Deferred
Compensation Account shall be periodically adjusted for any payments made to
such Participant in the form of benefits, hardship distributions, or otherwise.
Where adjustment is made to the Phantom Stock sub-account, it shall be reflected
in reduction of units determined by the amount paid, divided by the Market Price
of a Tecumseh Share on the date of payment.

         6.5 Dilutive and Anti-dilutive Transactions Affecting Phantom Shares.
The Committee shall make appropriate adjustments to a Participant's Phantom
Share Investment Option sub-account where a "capital transaction" or "corporate
reorganization" has the effect of changing the economic equivalent number of
Phantom Shares units that a Participant has been credited under this Plan. The
Committee shall make an adjustment, either positive or negative as the case may
be, to each Participant's Phantom Share Investment Option sub-account to ensure
that neither unintended economic benefits nor detriments are conferred on a
Participant solely by reason of such "capital transaction" or "corporate
reorganization."

         6.6 No Transfers Among Investment Options. Each deferral of
Compensation under the Plan shall remain credited to the Investment Option(s)
initially selected by the Participant with respect to deferrals during that Plan
Year. However, deferrals during a subsequent Plan Year may be credited to
different Investment Options and/or in different proportions than deferrals
during prior Plan Years.

         6.7 Investment Option Allocation Election. Each Participant may elect
to allocate Deferred Compensation for a particular Plan Year among the
Investment Options described in Sections 6.2, 6.3 and/or 6.9. However, if more
than one Investment Option is selected for a particular Plan Year, such
allocation cannot be less than 10% of deferrals during that Plan Year.

         6.8 Effects On Other Plans. If, because of a Participant's deferral of
Compensation under this Plan, a Participant's retirement benefits in any pension
or retirement plan of the Employer (either qualified under IRC Section 401, or
not so qualified) are reduced, the Employer shall provide a corresponding
supplemental benefit under the Tecumseh Products Company Supplemental Retirement
Plan. However, this Section shall not apply to any qualified defined
contribution plan, such as a 401(k) plan.

         6.9 New Investment Options; Committee Discretion Limited. The Committee
may at any time in its sole discretion add an Investment Option or Options.
Further, the Committee may eliminate or modify the terms of an existing
Investment Option on a prospective basis, so long as the value of a
Participant's Plan benefits accrued prior to such modification is not adversely
affected thereby. If the Committee materially modifies the terms of an existing
Investment Option, it shall promptly notify Participants regarding the details
of such modification. Following receipt of such notice, each Participant shall
have a period of not less than ten business days within which to elect to
convert all or a portion (in 10% increments) of the affected sub-account(s) to
any other Investment Option(s) then offered under the Plan, such election to
take effect as of the effective date of the material modification.

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         6.10 Election to Convert MIP Awards.

         Phantom Shares - An Eligible Participant (including a former officer or
Key Employee who has a Deferred Compensation Account under the Plan) may, upon
written election, choose to convert all or part of his/her Account under the
Tecumseh Products Company Management Incentive Plan (the "MIP")), attributable
to phantom share allocations ("MIP Phantom Shares") first becoming vested
immediately after the end of a Plan Year, into the Phantom Share Investment
Option, the Corporate Bond Investment Option, any other Investment Option that
the Committee has made available, or a combination of the foregoing, under this
Plan. Such conversion privilege is irrevocable (subject to the Participant's
right to elect a different Investment Option under Section 6.9) and is subject
to all provisions of this Plan. Also, any such written election, as well as any
elections under Sections 8.1 - 8.3 with respect to the time, method of payment
and payment period for the portion of the Participant's Deferred Compensation
Account attributable to such conversion, must be made --

         i)       at least 9 months prior to the date the Participant becomes
                  vested in the MIP Phantom Shares, and

         ii)      on a Deferred Compensation Election Form, an example of which
                  is attached as EXHIBIT 1.1.

         However, the above 9-month restriction will not apply in the situation
         where --

-        a Participant has made an election with respect to MIP Phantom Shares
         at least 9 months before he would become vested in those Shares under
         Article VI(a) of the MIP, and

-        he subsequently becomes vested in those Shares under any other
         provision of the MIP before the end of the Plan Year and within 9
         months of the date of the original election.

In that situation, those MIP Phantom Shares which had been subject to the
earlier election, and whose vesting was thereafter accelerated, shall be covered
by the earlier election, even though they became vested within 9 months of the
election.

         The conversion shall be effective as of the date the Participant
becomes vested in the applicable MIP Phantom Shares. The conversion value of the
MIP Phantom Shares used to calculate the number of Phantom Share units to be
allocated to the Participant's Phantom Share Investment Option or the dollar
amount to be allocated to the Participant's Corporate Bond Investment Option or
to any other Investment Option that the Committee has made available shall
generally be the value of the applicable MIP Phantom Shares as of the date the
Participant became vested in such MIP Phantom Shares as determined under the
MIP. However, the number of units allocated to a Participant's Phantom Share
sub-account under this Plan as the result of a conversion pursuant to this
Section 6.10 shall not be less than A x B, where "A" represents the total number
of MIP Phantom Shares being converted and "B" represents the percentage of such
converted MIP Phantom Shares being allocated to the Participant's Phantom Share
sub-account under this Plan.

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         MIP Cash Awards - Effective for Class Years (as defined in the MIP)
beginning on and after January 1, 2000, the MIP was amended to provide that
one-third of each annual award under the MIP would be fully vested as of the end
of each such Class Year, and paid in cash within 60 days. An eligible
Participant who is covered by the MIP may elect to defer all or some portion of
a MIP cash award (in 25% increments of the award) by completing, executing and
filing with the Committee, prior to a deadline established by the Committee
(which shall be before March 31 of such Class Year), the relevant [cash award]
portion of the Deferred Compensation Election Form, previously attached hereto
as EXHIBIT 1.1. However, for the Class Year that begins January 1, 2000, such
election form may be filed within 30 days following the date on which the Board
approved the MIP amendment which authorized cash awards under the MIP. Such
deferred amounts shall be credited (as of the date such amount(s) would
otherwise have been paid to the Participant) to one or more of the Investment
Option sub-accounts which the Committee shall make available under the Plan.

                                   ARTICLE VII
                         PARTICIPANTS' RIGHTS UNSECURED

         7.1 Unsecured Creditors. Amounts credited to a Participant's Deferred
Compensation Account shall be dealt with in all respects as working capital of
the Employer. Therefore, the right of a Participant to receive any distribution
hereunder shall be an unsecured claim against the general assets of the
Employer.

         7.2 No Actual Investment Required. Subject to ARTICLE XVI and Section
17.1, no assets of the Employer shall in any way be held in trust for, or be
subject to, any claim by a Participant or his Beneficiary under the Plan.
Further, neither the Employer nor the Committee shall have any duty whatsoever
to invest any amounts credited to any Deferred Compensation Accounts established
under the Plan.

         7.3 Optional Rabbi Trust(s) or Other Arrangement to Facilitate Payment.
The Board, upon the recommendation of the Committee, may authorize the creation
of one or more Rabbi Trusts or other arrangements to facilitate payment of the
obligations under the Plan, provided that such trusts and arrangements are
consistent with the "unfunded" status of the Plan. A Participant shall have no
right, title, or interest whatsoever in or to any investments which the Company
may make to aid it in meeting its obligations hereunder. Nothing contained in
the Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Company and the Participant or any other person. To the extent that any person
acquires a right to receive payments from the Company under this Plan, such
right shall be no greater than the right of an unsecured general creditor of the
Company. All payments to be made hereunder are payable in cash from the general
funds of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payments of such amounts.

                                      -8-
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                                  ARTICLE VIII
                        PAYMENT OF DEFERRED COMPENSATION

         8.1 Commencement of Benefits. Subject to Section 8.1(a), when, and at
the same time, a Participant elects to defer Compensation for any particular
Plan Year, he shall concurrently elect, on the Deferred Compensation Election
Form, when the portion of his Deferred Compensation Account balance attributable
to such current Plan Year deferral shall be paid, which shall be as soon as
practicable, and not more than 30 days after the first business day of the
calendar month which follows:

           (i)    the date such Participant attains a selected age (maximum of
                  age 70); or

          (ii)    retirement when eligible for commencement of early, normal or
                  late retirement benefits under a qualified defined benefit
                  plan sponsored by the Employer

whichever the Participant shall elect on his Deferred Compensation Election
Form. The date elected is hereinafter referred to as the "Benefit Payment Date".
The Valuation Date to be used for such payment shall be the last business day of
the calendar month that precedes the Benefit Payment Date.

         8.1(a) 365-Day Minimum Deferral Period. Notwithstanding the time for
the commencement of benefits pursuant to Section 8.1, commencement of benefits
will not occur prior to the expiration of a 365-day period beginning the day
after the date on which an election to defer Compensation became effective as
provided in the Plan, unless the Committee determines to reduce or eliminate
such time period.

         8.2 Payment Method Election. At the time the Deferred Compensation
Election Form is filed pursuant to ARTICLE IV, Participants must also elect the
method of receiving payment of their Deferred Compensation Account balance upon
the first business day of the Plan Year following the expiration of the Deferral
Period so elected. Each Participant shall elect to receive payment of his
Deferred Compensation Account either in:

           (i)    one lump-sum on the Benefit Commencement Date;

          (ii)    annual installments, with accrued earnings or losses,
                  determined in accordance with the Plan provisions governing
                  the Investment Option(s) selected, over a specified period
                  (elected in accordance with Section 8.3), beginning on the
                  Benefit Commencement Date; or

         (iii)    a lump-sum/annual installment combination where a lump sum
                  equal to 25%, 50% or 75% of the Participant's Deferred
                  Compensation Account as specified by the Participant in the
                  Deferred Compensation Election Form is paid to the Participant
                  on his Benefit Commencement Date and where the remaining
                  Deferred Compensation Account balance is paid in annual
                  installments over a specified period (elected in accordance
                  with Section 8.3), beginning on the first anniversary of the
                  Benefit Commencement Date.

                                      -9-
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         8.2(a) Installment Payout Formula. If a Participant selects payment
option (i) of Section 8.2, the annual installment amount for a particular Plan
Year will be computed as follows:

                               $W = ($X / [Y - Z])

                  Where W = Installment amount received by Participant in a
                            particular Plan Year.

                  Where X = Participant's Deferred Compensation Account balance
                            at the end of the prior Plan Year.

                  Where Y = Number of years originally elected by Participant
                            for the payment period.

                  Where Z = Number of years in the elected payment period
                            already elapsed.

         8.2(b) Lump-Sum/Installment Combination Payout Formula. If a
Participant selects payment option (ii) of Section 8.2, the portion of the
Deferred Compensation Account balance remaining after the payment of the lump
sum on the Benefit Commencement Date to be paid out in any given Plan Year in
annual installments will be considered a separate account amount which is
computed in the same manner as described in Section 8.2(a).

         8.3 Payment Period Election. At the time an Eligible Participant elects
on the Deferred Compensation Election Form to be a Participant for any Plan
Year, he shall concurrently elect the payment method (lump sum and/or number of
years, up to a maximum of 15) over which his Deferred Compensation Account shall
be paid out to him from the Plan upon the expiration of the Deferral Period. If
a Participant has elected different pay-out methods or periods on his/her
Deferred Compensation Election Forms for different years, then the Committee
shall establish sub-accounts to keep track of the portions of such Account that
are subject to those different methods or periods.

         8.3(a) Automatic Lump Sum Payment.

         (i)      Notwithstanding the Participant's Investment Option(s) or the
                  Payment Method and Payment Period Elections previously made by
                  him pursuant to Sections 8.2 and 8.3, in the case of a
                  Participant's separation from Employer service for any reason
                  other than death or retirement when eligible for commencement
                  of pension benefits from a qualified pension or retirement
                  plan sponsored by the Employer, his Account balance under this
                  Plan automatically will be transferred to the Corporate Bond
                  Investment Option. Such balance with interest shall be paid to
                  him in a lump sum, as soon as administratively feasible
                  thereafter, unless the Committee directs a different payment
                  method and/or payment period.

         (ii)     Notwithstanding the Participant's Investment Option(s) or the
                  Payment Method and Payment Period Elections previously made by
                  him pursuant to Sections 8.2 and 8.3, in the case of a
                  Participant's death, whether before or after his Benefit
                  Commencement Date, his Account balance under this Plan
                  automatically will be

                                      -10-
<PAGE>   13

                  transferred to the Corporate Bond Investment Option. Such
                  balance with interest shall be paid to his Beneficiary or
                  estate in a lump sum, as soon as administratively feasible
                  after his death, unless the Committee directs a different
                  payment method and/or payment period.

         8.4 Payment Denomination. All payments to Participants or others will
be paid solely in cash.

         8.5 Change of Prior Elections. Subject to the consent of the Committee,
an Eligible Participant may file a request to change any prior election with
respect to the timing of commencement of benefits (Section 8.1), payment method
(Section 8.2) and/or payment period (Section 8.3). Such new election must be
filed with the Committee at least 365 days prior to the date on which payment of
benefits would commence under either the original or the revised election. Only
one such request with respect to any prior election will be approved for any
Participant.

         8.6 Hardship Withdrawal. Upon application of any Participant and
approval thereof by the Committee, the Participant may withdraw, by reason of
hardship, part or all of his/her Deferred Compensation Account balance.
"Hardship" shall mean an unanticipated emergency situation in the Participant's
financial affairs beyond the Participant's control, including illness or an
accident involving the Participant, his/her dependents or other members of
his/her family, or other significant financial emergency, as determined by the
Committee in its sole discretion. If a hardship withdrawal is made from a
Participant's Phantom Share sub-account, the Phantom Share units in such
sub-account shall be reduced by a number determined by dividing the amount
withdrawn by the Market Price of Tecumseh Shares on the trading date preceding
the date of withdrawal, rounded to the next-higher one-tenth (1/10) unit.

                                   ARTICLE IX
                                 VALUATION DATE

         9.1 Valuation. As of each Valuation Date, the Deferred Compensation
Account of each Participant shall be valued by the Committee. The current value,
and the change in value from the prior valuation (whether positive or negative),
shall be communicated in writing to each Participant within 45 days after each
Valuation Date.

                                    ARTICLE X
                                   ALIENATION

         10.1 Anticipation, alienation, sale, transfer, assignment, pledge,
levy, garnishment or other encumbrance of any payments from or benefits held
under the Plan shall not be permitted or recognized, and to the extent permitted
by law, no such payments or benefits shall be subject to legal process or
attachment for the payment of any claim of any person entitled to receive the
same.

                                      -11-
<PAGE>   14

                                   ARTICLE XI
                            DOMESTIC RELATIONS ORDERS

         11.1 Notwithstanding ARTICLE X,

         (i)      To the extent required under final judgment, decree or order
                  (including approval of a property settlement agreement) made
                  pursuant to a state domestic relations law, any portion of a
                  Participant's Deferred Compensation Account may be paid or set
                  aside for payment to a spouse, former spouse, or child of the
                  Participant. Where necessary to carry out the terms of such an
                  order, a separate account shall be established with respect to
                  the spouse, former spouse, or child who shall be entitled to
                  make investment selections with respect thereto in the same
                  manner as the Participant; any amount so set aside for a
                  spouse, former spouse, or child shall be paid out in
                  accordance with the Participant's prior elections under
                  Sections 8.2 and 8.3, unless the Committee agrees to a
                  different time and/or form of payment to such recipient(s).
                  Any payment made to a person other than the Participant
                  pursuant to this Section shall be reduced by tax withholding,
                  if required by law; the fact that payment is made to a person
                  other than the Participant may not prevent such payment from
                  being includible in the gross income of the Participant for
                  withholding and income tax reporting purposes.

         (ii)     The Employer's liability to pay benefits to a Participant
                  shall be reduced to the extent that amounts have been paid or
                  set aside for payment to a spouse, former spouse, or child
                  pursuant to subparagraph (i) of this Section. No such transfer
                  shall be effectuated unless the Employer or Committee has been
                  provided with satisfactory evidence that the Employer and the
                  Committee are released from any further claim with respect to
                  such amounts, in any case in which (a) the Employer or
                  Committee has been served with legal process or otherwise
                  joined in a proceeding relating to such transfer, (b) the
                  Participant has been notified of the pendency of such
                  proceeding in the manner prescribed by law of the jurisdiction
                  in which the proceeding is pending for service of process in
                  such action or by mail from the Employer or Committee to the
                  Participant's last known mailing address, and (c) the
                  Participant fails to obtain an order of the court in the
                  proceeding relieving the Employer or Committee from the
                  obligation to comply with the judgment, decree, or order.

         (iii)    The Employer and Committee shall not be obligated to defend
                  against or set aside any judgment, decree, or order described
                  in subparagraph (i), or any legal order relating to the
                  garnishment of a Participant's benefits, unless the full
                  expense of such legal action is borne by the Participant. In
                  the event that the Participant's action (or inaction)
                  nonetheless causes the Employer or Committee to incur such
                  expense, the amount of the expense may be charged against the
                  Participant's Deferred Compensation Account and thereby reduce
                  the Employer's obligation to pay benefits to the Participant.
                  In the course of any proceeding relating to divorce,
                  separation, or child support, the Employer and Committee shall
                  be authorized to disclose information relating to the
                  Participant's Account to the

                                      -12-
<PAGE>   15

                  Participant's spouse, former spouse, or child (including the
                  legal representatives of the spouse, former spouse, or child),
                  or to a court.

                                   ARTICLE XII
                                 TAX WITHHOLDING

         12.1 Withholding. Subject to Sections 11.1, 12.2 and 12.3, the Employer
shall deduct from all payments under this Plan each Participant's share of any
taxes required to be withheld by any Federal, state or local government. The
Participants and their Beneficiaries, distributees and personal representatives
will bear any and all Federal, foreign, state, local income taxes or any other
taxes imposed on Participants or amounts paid under this Plan.

         12.2 FICA Taxes. Pursuant to IRC Section 3121(v) and regulations
thereunder, Compensation deferred pursuant to this Plan is subject to employment
taxes under the Federal Insurance Contributions Act ("FICA") at the time of
deferral rather than at the time of distribution to the Participant.
Accordingly, at the time of deferral, each Participant will be required to pay
to the Employer, either by payroll deduction or check, his share of FICA
(including hospital insurance [Medicare]) taxes due and payable; except to the
extent the Participant has already reached the maximum compensation levels
subject to Old-Age, Survivors, and Disability Insurance ("OASDI") tax at the
time Compensation is deferred under the Plan.

         12.3 Taxes Due at Deferral Date Other than FICA Taxes. If any of the
taxes referred to in Section 12.1 are due at the time of deferral, instead of at
the time of payout, each Participant will be required to pay to the Employer, by
payroll deduction or check, the Participant's share of any such taxes due and
payable.

                                  ARTICLE XIII
                               PARTICIPANT CONSENT

         13.1 By electing to defer Compensation pursuant to this Plan,
Participants shall be deemed conclusively to have accepted and consented to all
terms of the Plan and all actions or decisions made by the Company, the Board or
the Committee with regard to the Plan. Such terms and consent shall also apply
to, and be binding upon, the Beneficiaries, distributees and personal
representatives and other successors in interest of each Participant.

                                   ARTICLE XIV
                                  SEVERABILITY

         14.1 In the event any provision of this Plan would violate applicable
law or serve to invalidate the Plan, that provision shall be deemed to be null
and void, and the Plan shall be construed as if it did not contain the provision
in question.

                                      -13-
<PAGE>   16

                                   ARTICLE XV
                            AMENDMENT AND TERMINATION

         15.1 Board May Terminate. Subject to all other provisions of this Plan,
the Board, may at any time terminate the Plan.

         15.2 Board or Committee May Amend. Subject to all other provisions of
this Plan, the Committee or the Board may amend this Plan at any time, provided
that any amendment by the Committee shall be consistent with the Plan's original
design and purpose.

         15.3 Fiduciary Guidelines. Notwithstanding Sections 6.9, 15.1 and 15.2,
the Board shall not make amendments or terminate the Plan if such amendments or
termination would reduce a Participant's respective balance in his Deferred
Compensation Account. Further, the Board shall not make amendments which would
in any way eliminate the express requirement in Section 16.1 requiring the
establishment and funding of a Rabbi Trust in the event of a Change of Control
(as defined at ARTICLE XVI) if one has not previously been established and
funded.

         15.4 Termination. In the event the Board terminates the Plan, the
Committee shall give written notice to each Participant that his Deferred
Compensation Account balance will be distributed in the manner initially elected
by each Participant pursuant to ARTICLE VIII. Further, pursuant to the
responsibility vested with the Committee as stated in Section 17.1, the
Committee will evaluate the advisability of establishing a Rabbi Trust--if one
does not already exist--in light of the circumstances that caused the Board to
terminate the Plan.

         15.5 Corporate Successors. The Plan shall not be automatically
terminated by a transfer or sale of assets of the Company or by the merger or
consolidation of the Company into or with any other corporation or other entity.
The Plan will be continued after such sale, merger or consolidation if and to
the extent that the transferee, purchaser or successor entity (hereinafter
called the "Successor") agrees to continue the Plan. In the event the Plan is
not assumed and continued by the Successor, then the Plan shall terminate in
accordance with Section 15.4; provided that each Participant's Phantom Share
sub-account shall be valued based upon Phantom Share units being valued by
reference to the greater of (a) the Market Price of Tecumseh Shares on the
effective date of such sale, merger or consolidation, or (b) the value per
share, as of such date, of consideration received by the actual holders of
Tecumseh Shares in connection with the sale, merger or consolidation in
question.

                                   ARTICLE XVI
                                CHANGE OF CONTROL

         16.1 Funding of Rabbi Trust. Notwithstanding ARTICLE VII, upon a
"Change of Control" as defined in Section 16.2, the Board is required to cause
the immediate contribution of funds to a newly-created Rabbi Trust (or existing
Rabbi Trust if previously established), i.e., a "Rabbi Trust" established in
accordance with Rev. Proc. 92-64 (or any successor), for the benefit of each
Plan Participant, as beneficiary. If the Committee determines that a Rabbi Trust
is not the appropriate funding mechanism, any other funding mechanism approved
by the Internal Revenue Service as a means to avoid Plan Participants being in
constructive receipt of income

                                      -14-
<PAGE>   17

can be used in the alternative. The assets of such Rabbi Trust shall at all
times be subject to the claims of general creditors of the Employer. Such
initial contribution will be equal to the balance in each Participant's Deferred
Compensation Account as of the Change of Control date. Further, if the Plan is
not terminated upon such Change of Control, the Employer shall continue to
contribute to the Rabbi Trust, on a monthly basis, an amount of cash and/or
Tecumseh Shares equal to the Compensation being deferred by each Participant
after the Change of Control. Also, the Employer shall continue to contribute
additional cash and/or Tecumseh Shares as required to maintain the value of the
assets of such Rabbi Trust at least equal to the estimated value of future
benefits payable under the Plan.

         16.2 Change of Control. For purposes of this Plan, a "Change of
Control" shall mean one or more of the following events:

                  i) The acquisition, after December 31, 1998, of actual or
         beneficial ownership of 25% or more of the Company's Class A Common
         Stock or Class B Common Stock then outstanding by any person (including
         a group, within the meaning of Section 13(d)(3) of the Securities
         Exchange Act of 1934 (the "1934 Act")), other than:

                  A) the trustee of any Company-sponsored employee benefit plan,

                  B) the Company or any of its subsidiaries,

                  C) Kenneth G. Herrick, his descendants, or trusts for the
                  benefit of such individuals, or

                  D) trusts or foundations established by Kenneth G. Herrick or
                  by any of the descendants or trusts mentioned in (C), above.

                  ii) The first purchase, after December 31, 1998, under a
         tender offer or exchange offer for 25% or more of the Company's Class A
         Common Stock or Class B Common Stock then outstanding, other than an
         offer by:

                  A) the trustee of any Company-sponsored employee benefit plan,

                  B) the Company or any of its subsidiaries,

                  C) Kenneth G. Herrick, his descendants, or trusts for the
                  benefit of such individuals, or

                  D) trusts or foundations established by Kenneth G. Herrick or
                  by any of the descendants or trusts mentioned in (C), above.

                  iii) The first day on which less than a majority of the total
         membership of the Board shall be Continuing Directors;

                  iv) The effective date of a transaction (or a group of related
         transactions) in which more than 50% in fair market value of the assets
         of the Company, or of the

                                      -15-
<PAGE>   18

         particular subsidiary for which a given Participant's services are
         principally performed, are disposed of pursuant to a partial or
         complete liquidation, a spin-off, a sale of assets or otherwise. In the
         event this provision applies to a particular subsidiary, only those
         Participants whose services are principally performed for that
         subsidiary shall be deemed to be affected by such Change in Control; or

                  v) The date on which the shareholders of the Company approve a
         merger or consolidation of the Company with any other corporation,
         other than a merger or consolidation which would result in the voting
         securities of the Company outstanding immediately prior thereto
         continuing to represent (either by remaining outstanding or by being
         converted into voting securities of the surviving entity) at least 51%
         of the combined voting power of the voting securities of the Company or
         such surviving entity outstanding immediately after such merger of
         consolidation.

         16.2a Definitions. For purposes of Section 16.2, the following terms
shall have the following meanings:

                  i) "Continuing Director" shall mean any director of the
         Company who either (1) is a member of the Board on the date this Plan
         is adopted by the Board and has not terminated membership on the Board,
         or (2) is recommended to Company shareholders for election or appointed
         to the Company's Board of Directors by at least three-quarters of the
         Continuing Directors.

                  ii) "Person" shall mean a person as defined in Section 3(a)(9)
         of the 1934 Act, "beneficial ownership" shall be determined in
         accordance with Rule 13d-3 promulgated under the 1934 Act or any
         successor regulation, the term "group" shall mean a group as described
         in Rule 13d-5 promulgated under the 1934 Act or any successor
         regulation, and the formation of a group hereunder shall have the
         effect described in paragraph (b) of said Rule 13d-5 or any successor
         regulation. Anything hereinabove to the contrary notwithstanding,
         however: (a) relationships by blood, adoption or marriage between or
         among two or more persons shall not be deemed to constitute any of such
         persons a member of a group with any other such persons; (b) action
         taken or agreed to be taken by any person acting in his official
         capacity as an officer or director of the Company shall not be deemed
         to constitute such person a member of a group with any other person,
         and (c) formation of a group shall not constitute an acquisition by the
         group (or any member thereof) of beneficial ownership of any shares of
         the Company's Class B ("voting") common stock beneficially owned by any
         member of such group and acquired by such group member in an Excluded
         Acquisition.

                  iii) "Excluded Acquisition" means any acquisition of shares of
         voting common stock from the Company (whether or not for consideration)
         or from any person by operation of law (including but not limited to
         the laws of descent and distribution), by will, by gift or by
         foreclosure of a security interest given to secure a bona fide loan, or
         any acquisition consummated prior to December 31, 1998.

                                      -16-
<PAGE>   19

                                  ARTICLE XVII
                               PLAN ADMINISTRATION

         17.1 Committee. The responsibilities for general administration of the
Plan as well as the decisions to establish and fund a Rabbi Trust or other
funding medium shall reside with the Committee.

         17.2 Determinations of Committee. Subject to the limitations of the
Plan or the express powers reserved solely for the Board, the Committee shall
from time to time establish rules for the administration and interpretation of
the Plan and the transaction of its business. The determination of the Committee
shall be conclusive concerning the content, import or meaning of any and all
terms in the Plan.

         17.3 Majority Vote. Any act which the Plan authorizes or requires the
Committee to do may be done by a majority (expressed from time to time by a vote
at a meeting or, in lieu thereof, a written consent) and shall constitute the
action of the Committee, and shall have the same effect for all purposes as if
assented to by all members of the Committee.

         17.4 Agents and Employees. The Committee may employ or retain agents
and may designate one or more employees of the Company, by name or by position,
to perform such clerical, accounting, and other services as the Committee may
require in carrying out the provisions of the Plan.

         17.5 Authorization of Committee Members. The members of the Committee
may authorize one or more of their members to execute or deliver any instrument,
make any payment, or perform any other act which the Plan authorizes or requires
the Committee to do.

         17.6 Costs. Any and all costs in administering this Plan will be paid
by the Employer.

         17.7 Claims. Claims for benefits under the Plan shall be made in
writing to the Committee. The Participant (or Beneficiary) may furnish the
Committee with any written material he believes necessary to perfect his claim.

         17.8 Claims Review. A person whose claim for benefits under the Plan
has been denied, or his duly authorized representative, may request a review
upon written application to the Committee, may review pertinent documents, and
may submit issues and comments in writing. The claimant's written request for
review must be submitted to the Committee within 60 days after receipt by the
claimant of written notification of the denial of a claim. A decision by the
Committee shall be made promptly, and not later than 60 days after the
Committee's receipt of a request for review, unless special circumstances
require an extension of time for proceeding, in which case a decision shall be
rendered as soon as possible, but not later than 120 days after receipt of the
request for review. The decision on review shall be in writing, shall include
reasons for the decision, may include specific reference to the pertinent
provision of the Plan on which the decision is based, and shall be written in a
manner calculated to be understood by the claimant.

                                      -17-
<PAGE>   20

         17.9 Arbitration. Unless otherwise required by law, any controversy or
claim arising out of or relating to the Plan or the breach thereof, shall be
settled by binding arbitration in the City of Tecumseh in accordance with the
laws of the State of Michigan by three arbitrators, one of whom shall be
appointed by the Company, one by the Participant (or in the event of his prior
death, his beneficiary(ies) or other distributee(s)), and the third of whom
shall be appointed by the first two arbitrators. If the selected (third)
arbitrator declines or is unable to serve for any reason, the appointed
arbitrators shall select another arbitrator. Upon their failure to agree on
another arbitrator, the jurisdiction of the Circuit Court of Lenawee County,
Michigan shall be invoked to make such selection. The arbitration shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association except as provided in 17.9(a) below. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Review by the arbitrators of any decision, action or
interpretation of the Board or Committee shall be limited to a determination of
whether it was arbitrary and capricious or constituted an abuse of discretion,
within the guidelines of Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101
(1989). In the event the Participant or his/her beneficiary shall retain legal
counsel and/or incur other costs and expenses in connection with enforcement of
any of the Participant's rights under the Plan, the Participant or beneficiary
shall not be entitled to recover from the Company any attorneys fees, costs or
expenses in connection with the enforcement of such rights (including
enforcement of any arbitration award in court) regardless of the final outcome;
except that the arbitrators in their discretion may award reasonable attorneys
fees and reasonable costs to the Participant in an arbitration initiated by the
Participant to enforce the Participant's rights under the Plan, provided the
Participant is the prevailing party in such arbitration.

         17.9(a)  Any arbitration shall be conducted as follows:

                  (i) The arbitrators shall follow the Commercial arbitration
         Rules of the American Arbitration Association, except as otherwise
         provided herein. The arbitrators shall substantially comply with the
         rules of evidence; shall grant essential but limited discovery; shall
         provide for the exchange of witness lists and exhibit copies; and shall
         conduct a pretrial and consider dispositive motions. Each party shall
         have the right to request the arbitrators to make findings of specific
         factual issues.

                  (ii) The arbitrators shall complete their proceedings and
         render their decision within 40 days after submission of the dispute to
         them, unless both parties agree to an extension. Each party shall
         cooperate with the arbitrators to comply with procedural time
         requirements and the failure of either to do so shall entitle the
         arbitrators to extend the arbitration proceedings accordingly and to
         impose sanctions on the party responsible for the delay, payable to the
         other party. In the event the arbitrators do not fulfill their
         responsibilities on a timely basis, either party shall have the right
         to require a replacement and the appointment of new arbitrators.

                  (iii) The decision of the arbitrator shall be final and
         binding upon the parties and accordingly a judgment by any Circuit
         Court of the State of Michigan or any other court of competent
         jurisdiction may be entered in accordance therewith.

                                      -18-
<PAGE>   21

                  (iv) Subject to the provisions of Section 17.9 relating to
         reasonable attorneys fees and costs in an arbitration, the costs of the
         arbitration shall be borne equally by the parties to such arbitration,
         except that each party shall bear its own legal and accounting expenses
         relating to its participation in the arbitration.

                                  ARTICLE XVIII
                              LIMITATIONS OF ACTION

         18.1 Every asserted claim to benefits or right of action by or on
behalf of any Participant, past, present, or future, or any spouse, child,
beneficiary or legal representative thereof, against the Company arising out of
or in connection with the Plan shall, irrespective of the place where such right
of action may arise or be asserted, cease and be barred by the expiration of the
earliest of: (i) one year from the date of the alleged act or omission in
respect of which such right of action first arises in whole or in part, (ii) one
year after the Participant's termination of employment, or (iii) six months
after notice is given to or on behalf of the Participant of the amount payable
to or in respect of the Participant under the Plan.

WITNESS execution of this plan document on behalf of the Company by its duly
authorized officer.

                                        TECUMSEH PRODUCTS COMPANY

                                        By
                                           -------------------------
                                             Its President and
                                             Chief Executive Officer

                                        Dated:                , 2000
                                               ---------------

                                      -19-<PAGE>   1
                                                                     EXHIBIT 4.1

                               FIFTH AMENDMENT TO
                                CREDIT AGREEMENT

                                      Among

                      ALLEGHENY TECHNOLOGIES INCORPORATED,
               (FORMERLY KNOWN AS ALLEGHENY TELEDYNE INCORPORATED)
                                 as the Borrower

                    THE FINANCIAL INSTITUTIONS PARTY THERETO
                                 as the Lenders

         BANK OF AMERICA, N.A. (FORMERLY BANK OF AMERICA NATIONAL TRUST
                            AND SAVINGS ASSOCIATION)
                            THE CHASE MANHATTAN BANK
                                MELLON BANK, N.A.
                                       and
                         PNC BANK, NATIONAL ASSOCIATION
                               as Managing Agents

                                       and

                         PNC BANK, NATIONAL ASSOCIATION
                  as the Documentation and Administrative Agent

                  Dated as of and Effective nunc pro tunc as of

                                December 29, 2000

<PAGE>   2

                       FIFTH AMENDMENT TO CREDIT AGREEMENT

         THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (the "Fifth Amendment") dated
as of and effective nunc pro tunc as of December 29, 2000, to that certain
Credit Agreement dated as of August 30, 1996, as amended by the First Amendment
to Credit Agreement dated as of August 31, 1997, the Second Amendment to Credit
Agreement dated as of March 24, 1998, the Third Amendment to Credit Agreement
dated as of March 30, 1999, and the Fourth Amendment and Waiver to Credit
Agreement dated as of August 6, 1999 (the Credit Agreement together with the
exhibits and schedules thereto and all modifications, amendments, extensions,
renewals, substitutions or replacements prior to the date hereof, the "Existing
Agreement"), among ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware corporation
(formerly known as Allegheny Teledyne Incorporated), as the borrower (the
"Borrower"), the FINANCIAL INSTITUTIONS listed on the signature pages hereto and
each other financial institution which from time to time becomes a party hereto
in accordance with Section 9.6a (individually a "Lender" and collectively the
"Lenders"), BANK OF AMERICA, N.A. (formerly Bank of America National Trust and
Savings Association), THE CHASE MANHATTAN BANK, MELLON BANK, N.A. and PNC BANK,
NATIONAL ASSOCIATION as Managing Agents (individually a "Managing Agent" and
collectively the "Managing Agents") and PNC BANK, NATIONAL ASSOCIATION, a
national banking association, Documentation and Administrative Agent for the
Lenders (in such capacity the "Agent").

                                   WITNESSETH:

         WHEREAS, the Borrower and the initial Lenders, the Managing Agents and
the Agent entered into the Existing Agreement pursuant to which the Lenders made
certain financial accommodations available to the Borrower including a Revolving
Credit Commitment;

         WHEREAS, the Borrower and the Lenders, the Managing Agents and the
Agent desire to amend the Existing Agreement as set forth herein.

         NOW THEREFORE, in consideration of the mutual premises contained herein
and other good and valuable consideration, the Borrower, the Lenders, the
Managing Agents and the Agent, with the intent to be legally bound hereby, agree
that the Existing Agreement shall be amended as follows:

                                    ARTICLE I

                        AMENDMENTS TO EXISTING AGREEMENT

         SECTION 1.01. ADDITIONAL DEFINITIONS. Section 1.1 of the Existing
Agreement is hereby amended such that the following definition shall be added
thereto in the appropriate alphabetical order:

<PAGE>   3

         "Fifth Amendment" means the Fifth Amendment to Credit Agreement and
Waiver among the Borrower, the Lenders, the Managing Agents and the Agent dated
as of and effective nunc pro tunc as of December 29, 2000.

         "Fifth Amendment Effective Date" shall mean December 29, 2000.

         "Rodney Metals" the Rodney Metals division of TDY Industries, which
consists of assets which produce stainless steel and specialty metal strip
together with other related products.

         "TDY Industries" means TDY Industries, Inc., a California corporation.

         "TILLC" means TDY Holdings, LLC, a Delaware limited liability company,
having as its sole member the Borrower.

         SECTION 1.02. AMENDMENT TO SECTION 4.11. Section 4.11 of the Existing
Agreement is amended and restated in its entirety to read as follows:

                  SECTION 4.11 OWNERSHIP OF OPERATING SUBSIDIARIES. After the
                  Fifth Amendment Effective Date, the Borrower shall at all
                  times, directly or indirectly through one or more wholly-owned
                  Subsidiaries, be the legal and beneficial owner of, and shall
                  retain all voting rights relating to, all of the issued and
                  outstanding capital stock of ATI Funding, TILLC, OREMET, ALC
                  and TDY Industries.

         SECTION 1.03. AMENDMENT TO SECTION 5.5. Section 5.5 of the Existing
Agreement is amended and restated in entirety to read as follows:

                  5.5 SALES OF ASSETS. The Borrower shall not nor shall it
                  permit any Consolidated Subsidiary to enter into any
                  arrangement, direct or indirect, pursuant to which the
                  Borrower or any Consolidated Subsidiary shall sell or
                  otherwise transfer or dispose of any property, real, personal
                  or mixed, whether now owned or hereafter acquired, except (i)
                  sales, transfers or dispositions in the ordinary course of
                  business, (ii) the sale, transfer or other disposition of the
                  stock or assets set forth on Schedule 5.5, (iii) sales,
                  transfers or dispositions of assets (A) by any one of the
                  Borrower, ATI Funding, TILLC, OREMET, ALC, TDY Industries or
                  any other direct or indirect wholly-owned Subsidiary of any of
                  the Borrower, ATI Funding, TILLC, OREMET, ALC or TDY
                  Industries, (B) to any one or more of the Borrower, ATI
                  Funding, TILLC, OREMET, ALC, TDY Industries or any direct or
                  indirect wholly-owned Subsidiaries of any of the Borrower, ATI
                  Funding, TILLC, OREMET, ALC or TDY Industries, and (iv) sales,
                  transfers or dispositions not in the ordinary course of
                  business provided that the aggregate proceeds of all such
                  sales, transfers and dispositions permitted by this item (iv)
                  shall not exceed, (A) from August 31, 1996 until December 31,
                  2001, thirty percent (30%) of the Borrower's Consolidated
                  Total Assets as of June 30, 1996, and (B) beginning with the
                  first day of the Borrower's Fiscal Year 2002, if and to the
                  extent that the Termination Date is extended pursuant to
                  Section 2.8, in any

                                       2
<PAGE>   4

                  Fiscal Year of the Borrower thereafter during the term hereof
                  more than ten (10%) of the Borrower's Consolidated Total
                  Assets as of the beginning of such Fiscal Year.

         SECTION 1.04. NO OTHER AMENDMENTS. The amendments to the Existing
Agreement set forth in Sections 1.01 and 1.03 inclusive above do not either
implicitly or explicitly alter or amend, except as expressly provided in this
Fifth Amendment, the provisions of the Existing Agreement. The amendments set
forth in Sections 1.01 and 1.03 hereof do not waive, now or in the future,
compliance with any other covenant, term or condition to be performed or
complied with nor do they impair any rights or remedies of the Lenders or the
Agent under the Existing Agreement with respect to any such violation. Nothing
in this Fifth Amendment shall be deemed or construed to be a release of, or a
limitation upon, the Lenders' or the Agents' exercise of any of their respective
rights and remedies under the Existing Agreement and the other Loan Documents,
whether arising as a consequence of any Events of Default which may now exist or
otherwise, and all such rights and remedies are hereby expressly reserved.

                                   ARTICLE II

                     BORROWER'S SUPPLEMENTAL REPRESENTATIONS

         SECTION 2.01 INCORPORATION BY REFERENCE. As an inducement to the
Lenders to enter into this Fifth Amendment, the Borrower hereby repeats herein,
for the benefit of the Lenders, the representations and warranties made by the
Borrower in Sections 3.1 through 3.15, inclusive, of the Existing Agreement, as
amended hereby, except that for purposes hereof such representations and
warranties shall be deemed to extend to and cover this Fifth Amendment.

                                   ARTICLE III

                              CONDITIONS PRECEDENT

         SECTION 3.01. CONDITIONS PRECEDENT. Each of the following shall be a
condition precedent to the effectiveness of this Fifth Amendment:

         (i) The Agent shall have received duly executed counterpart originals
of this Fifth Amendment executed by the Borrower and the Required Lenders.

         (ii) The Borrower shall deliver to the Agent a certificate of the
Secretary or assistant secretary of the Borrower certifying:

                  (A)      the corporate authority of the Borrower to execute,
                           deliver and perform under this Fifth Amendments; and

                  (B)      the names of the persons authorized on behalf of the
                           Borrower to sign this Fifth Amendment, together with
                           the true signatures of such persons.

                                       3
<PAGE>   5

         (iii) The following statements shall be true and correct on the Fifth
Amendment Effective Date and on the date of the execution and delivery of this
Fifth Amendment by the Borrower:

                  (A)      except to the extent modified in writing by the
                           Borrower heretofore delivered to the Lenders, the
                           representations and warranties made pursuant to
                           Section 2.01 of this Fifth Amendment and in the other
                           Loan Documents are true and correct on and as of the
                           Fifth Amendment Effective Date and as of the date of
                           the execution and delivery of this Fifth Amendment by
                           the Borrower as though made on and as of such dates
                           in all material respects;

                  (B)      no Event of Default or event which with the giving of
                           notice or passage of time or both would become an
                           Event of Default has occurred and is continuing, or
                           would result from the execution of or performance
                           under this Fifth Amendment;

                  (C)      the Borrower has in all material respects performed
                           all agreements, covenants and conditions required to
                           be performed on or prior to the date hereof under the
                           Existing Agreement and the other Loan Documents.

         SECTION 3.02 FIFTH AMENDMENT EFFECTIVE DATE. Upon completion of the
conditions set forth in Section 3.01 of this Fifth Amendment, the effective date
of this Fifth Amendment is deemed to be December 29, 2000, nunc pro tunc.

                                   ARTICLE IV

                               GENERAL PROVISIONS

         SECTION 4.01. RATIFICATION OF TERMS. Except as expressly amended or
waived by this Fifth Amendment, the Existing Agreement and each and every
representation, warranty, covenant, term and condition contained therein is
specifically ratified and confirmed in all material respects.

         SECTION 4.02. REFERENCES. All notices, communications, agreements,
certificates, documents or other instruments executed and delivered after the
execution and delivery of this Fifth Amendment in connection with the Agreement,
any of the other Loan Documents or the transactions contemplated thereby may
refer to the Existing Agreement without making specific reference to this Fifth
Amendment, but nevertheless all such references shall include this Fifth
Amendment unless the context requires otherwise. After the execution and
delivery of this Fifth Amendment by the Borrower and the effectiveness of this
Fifth Amendment, all references in the Existing Agreement and each of the other
Loan Documents to the "Agreement" shall be deemed to be references to the
Existing Agreement as amended hereby.

                                       4
<PAGE>   6

         SECTION 4.03. COUNTERPARTS. This Fifth Amendment may be executed in
different counterparts, and by the different parties hereto on separate
counterparts, each of which when so executed shall be regarded as an original,
and all such counterparts shall constitute one Fifth Amendment. Delivery of an
executed signature page of a counterpart of this Fifth Amendment by telecopier
shall be as effective as delivery of a manually executed counterpart of this
Fifth Amendment.

         SECTION 4.04. CAPITALIZED TERMS. Except for proper nouns and as
otherwise defined herein, capitalized terms used herein as defined terms shall
have the meanings ascribed to them in the Existing Agreement, as amended hereby.

         SECTION 4.05. TAXES. The Borrower hereby agrees (i) to pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this Fifth Amendment and
(ii) to save the Managing Agents, the Agent and the Lenders harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.

         SECTION 4.06. COSTS AND EXPENSES. The Borrower hereby agrees to pay all
costs and expenses of the Agent (including, without limitation, the reasonable
fees and the disbursements of the Agent's special counsel, Tucker Arensberg,
P.C.) in connection with the preparation, execution and delivery of this Fifth
Amendment and the related documents.

         SECTION 4.07. SEVERABILITY. Any provision of this Fifth Amendment which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or enforceability
without invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

         SECTION 4.08. GOVERNING LAW. THIS FIFTH AMENDMENT AND THE RIGHTS AND
OBLIGATIONS HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO THE PROVISIONS
THEREOF REGARDING CONFLICTS OF LAW.

         SECTION 4.09. HEADINGS. The headings of the sections in this Fifth
Amendment are for purposes of reference only and shall not be deemed to be a
part hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       5
<PAGE>   7

         IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Fifth Amendment to be duly executed by their proper and
duly authorized officers as of, and effective, nunc pro tunc as of the day first
above written.

<TABLE>
<S>                                              <C>
PNC BANK, NATIONAL ASSOCIATION,                  ALLEGHENY TECHNOLOGIES
as Lender, Managing Agent and Agent              INCORPORATED, a Delaware corporation
                                                 (formerly known as Allegheny Teledyne
                                                 Incorporated)

By:/s/David B. Gookin                 (SEAL)     By:/s/R. S. Park                             (SEAL)
   -----------------------------------              ------------------------------------------
Name:                                            Name:
     ---------------------------------                ----------------------------------------
Title:                                           Title:
      --------------------------------                 ---------------------------------------

THE CHASE MANHATTAN BANK, as                     BANK OF AMERICA, N.A. (formerly Bank
as Lender and Managing Agent                     of America National Trust and Savings
                                                 Association), as Lender and Managing Agent
                                                 and as successor in interest to NationsBank,
                                                 N.A.

By:/s/James H. Ramage                 (SEAL)     By:/s/Raju N. Patel                          (SEAL)
   -----------------------------------             -------------------------------------------
Name:                                            Name:
     ---------------------------------                ----------------------------------------
Title:                                           Title:
      --------------------------------                 ---------------------------------------

THE BANK OF NEW YORK                             MELLON BANK, N.A., as Lender and
                                                 Managing Agent

By:/s/Walter C. Parelli               (SEAL)     By:/s/Edward L. McGrath, C.F.A.              (SEAL)
   -----------------------------------              ------------------------------------------
Name:                                            Name:
     ---------------------------------                ----------------------------------------
Title:                                           Title:
      --------------------------------                 ---------------------------------------

BANK OF TOKYO-MITSUBISHI TRUST COMPANY           MORGAN GUARANTY TRUST COMPANY OF NEW YORK

By:/s/M. R. Marron                    (SEAL)     By:/s/Dennis R. Wilczek                      (SEAL)
      --------------------------------             -------------------------------------------
Name:                                            Name:
     ---------------------------------                ----------------------------------------
Title:                                           Title:
      --------------------------------                 ---------------------------------------
</TABLE>

                       [SIGNATURES CONTINUED ON NEXT PAGE]

                                       6
<PAGE>   8

                        [CONTINUATION OF SIGNATURE PAGE]

<TABLE>
<S>                                              <C>
BANK ONE, NA                                     THE TORONTO-DOMINION BANK

By:/s/Philip R. Manger                 (SEAL)    By:/s/Susan K. Strong                             (SEAL)
    ----------------------------------             -----------------------------------------------
Name:                                            Name:
     ---------------------------------                ----------------------------------------
Title:                                           Title:
      --------------------------------                 ---------------------------------------

THE FUJI BANK LIMITED, NEW YORK                  FIRST UNION NATIONAL BANK, successor
BRANCH                                           by merger to CoreStates Bank, NA

By:                                    (SEAL)    By:/s/Barbara H. Pattison                         (SEAL)
   -----------------------------------             -----------------------------------------------
Name:                                            Name:
     ---------------------------------                ----------------------------------------
Title:                                           Title:
      --------------------------------                 ---------------------------------------

THE SANWA BANK LIMITED                           NATIONAL CITY BANK OF
                                                 PENNSYLVANIA

By:/s/Christopher DiCarlo              (SEAL)    By:/s/Michael A. Heinricher                       (SEAL)
   -----------------------------------             -----------------------------------------------
Name:                                            Name:
     ---------------------------------                ----------------------------------------
Title:                                           Title:
      --------------------------------                 ---------------------------------------
</TABLE>

                                       7

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