Document:

Exhibit 10.1

TIER I

                             ,
20    

 

 

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                          ,
2006.  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 (including but not
limited to the Change in Control Agreement dated                          ,
         and the Severance Agreement
dated                          ,
200  ).

1.                                      TERM
OF AGREEMENT.

This Agreement is
effective immediately and will continue in effect until December 31, 2007
(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 Benefits 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 eighteen (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 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.

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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 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
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)
300% of your annualized base salary as of the date on which a Change in Control
occurs, plus (ii) 300% 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 an 18-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 

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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 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)                                  Outplacement
Services.  If you are entitled to
receive Change in Control Benefits, the Company will provide you with senior
executive outplacement services.  The
Company will select the firm to provide outplacement services.  The senior executive outplacement services
shall be provided at a time, and on a schedule, designated by the Company.  Nevertheless, in no event will the senior
outplacement services continue beyond December 31 of the second calendar
year following the calendar year in which your Separation from Service occurs.

(f)                                    Financial
Planning Benefits.  If you are
entitled to receive Change in Control Benefits, the Company also will provide
you with a tax and financial planning services stipend.  The stipend will be in an amount determined pursuant
to Company policies and will be based on your officer classification as of the
date on which the Change in Control occurs. 
The stipend shall be paid at the same time as, and along with, the
Change in Control Severance Payment.

(g)                                 Mayo
Executive Physical Program.  If you
are entitled to receive Change in Control Benefits, the Company will, for a
period of 12 months following your termination of employment, continue to allow
you to participate in the Mayo Executive Physical Program and cover all regularly
authorized expenses associated therewith, including, without limitation,
travel, meals, lodging and fees.  In
order to be reimbursed, all such expenses must be submitted promptly and no
reimbursements will be made following the December 31 of the second
calendar year following the calendar year in which your Separation from Service
occurs.

(h)                                 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.  

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Except as otherwise
provided in Section 4, the payment called for by this paragraph (h)
shall be paid within 30 days following your termination of employment.

(i)                                     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 Internal Revenue Code of 1986 (the “Code”), as
described in Prop. Treas. Reg. § 1.409A-1(b)(4).  The Company also intends that the Change in
Control Severance Payment provided by Section 3(b), the financial planning
stipend provided by Section 3(f), the retirement and savings plan
forfeiture payment provided by Section 3(h), and the gross-up
payment provided by Section 10(f) (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 no later than March 15 of the year following the year in which your
Separation from Service occurs.  If it is
administratively impracticable to make all payments by the relevant
March 15 and such impracticability was unforeseeable as of the date of
this Agreement, the payments shall be made as soon as reasonably practicable
following the applicable March 15 but not later than the following
December 31.  In addition, payments may
be delayed in accordance with regulations issued pursuant to
Section 409A.  The Company believes
that all other benefits provided or expenses reimbursed pursuant to this
Agreement either do not provide for the deferral of compensation as determined
in accordance with Prop. Treas. Reg. §1.409A-1(b) or qualify as excepted
welfare benefits under Prop. Treas. Reg. §1.409A-1(a)(5).

(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 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 “Key
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
Prop. Treas. Reg. §1.409A-1(b), benefits which qualify as excepted
welfare benefits pursuant to Prop. Treas. Reg. §1.409A-1(a)(5), or other
amounts or benefits that are not subject to the requirements of
Section 409A.

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(c)                                  Separation
from Service Defined.  For purposes
of this Agreement, the term “Separation from Service” means the termination of
your employment with Accuride and all Affiliates due to death, retirement or
other reasons.  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)                                 Key
Employee Defined.  For purposes of
this Agreement, your status as a “Key Employee” will be redetermined for each calendar
year.  You will be treated as a “Key Employee”
for a particular year if at any time during the 12 month period ending on the
August 31 prior to the beginning of the year you met the requirements of
Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance
with regulations issued pursuant to Section 409A of the Code and
disregarding Section 416(i)(5) of the Code).  If another entity merges with or into or
otherwise becomes part of the same controlled group of corporations as Accuride
so as to be treated as a single service recipient under Prop. Treas. Reg.
§1.409A-1(g), and you were an employee of Accuride or the other entity and you
were a “Key Employee” of either Accuride or the other entity immediately before
the merger or other transaction, you will be treated as a Key Employee for
purposes of this Agreement until the first day of the year that begins after
the August 31 next following the merger.

(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 Prop. Treas. Reg. §1.409A-3(e),
as applicable.

(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.  If the
Compensation Committee determines in the exercise of its discretion that
neither the short-term deferral exception nor any other exception to the
requirements of Section 409A is available, this Agreement (or the portion
that does not qualify for any exception) shall be operated in compliance with
Section 409A and each provision of the Agreement shall be interpreted, to the
extent possible, to comply with Section 409A.

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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 (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.

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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.

For purposes of this
Agreement, “Good Reason” shall have different meanings depending on whether the
termination of employment occurs during a Protection Period.

(a)                                  Outside
of Protection Period.  If the
termination of employment occurs prior to the beginning of or after the close
of a Protection Period, “Good Reason” shall mean (i) a material adverse change
in the nature of your job duties without your consent; or (ii) a material
reduction in the rate of your base cash compensation, other than in connection
with and consistent with a general program in which the compensation of one or
more categories of management of the Company (or any of its Affiliates) is
systematically reduced.

(b)                                 During
Protection Period.  If the
termination of employment occurs during a Protection Period, “Good Reason”
shall mean the occurrence (without your prior express written consent) of any
one of the following acts, or failures to act, unless, in the case of any act
or failure to act described in clauses (i), (iv), or (v) below, such act or
failure to act is corrected by the Company prior to the date of termination
specified in the Notice of Termination given by you in respect thereof:

(i)                                     A
significant change in your title, duties or responsibilities from those which
are in effect immediately prior to the Change in Control which then results in
a diminution in your position with the Company, provided, that any change
resulting from the Company no longer being a publicly traded company shall not
be considered Good Reason;

(ii)                                  A
material reduction in your annual base salary or annual bonus opportunity as in
effect as of the Change in Control unless such reduction is in connection with
a general reduction of compensation at the Company affecting at least 90% of
the officers of the Company which does not exceed 20% of your annual base
salary;

(iii)                               The
relocation of the Company’s principal executive offices to a location more than
thirty (30) miles from its location on the date of this Agreement (or, if
different, more than thirty (30) miles from where such offices are located
immediately prior to any Change in Control) or the Company requiring you to be
based anywhere other than the Company’s principal executive offices except for
required travel on the Company’s business to an extent substantially consistent
with your business travel obligations as of the date of this Agreement;

(iv)                              A
reduction in the kind or level of employee benefits to which you are entitled
immediately before a Change in Control, with the result that your overall
benefit package is significantly reduced, other than elimination of equity
based compensation in the event that the Company is no longer a publicly traded
company as long as comparable (in terms of expected value) increases are made
to other components of the total compensation package;

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(v)                                 Any
breach by the Company of any provision of this Agreement applicable to it which
is material and adverse to you; or

(vi)                              The
failure of the Company to obtain a written agreement reasonably satisfactory to
you from any successor to the Company (as described in Section 13) to perform
this Agreement.

(c)                                  Notice
of Termination.  If you elect to
terminate your employment for Good Reason, you must provide the Company with a
Notice of Termination, complying with the provisions of Section 11, within
60 days following the occurrence of the event that serves as the basis for the
Notice of Termination.

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 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 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.  In
accordance with federal law, you will be given a prescribed period of time to
consider whether to sign the Release Agreement and 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.

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 you will
not be employed as an owner, partner, shareholder, employee, consultant, or in
any other capacity by 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 

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to be reasonable:  the United States of America west 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
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.

(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.

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10.                               CAP
ON PAYMENTS.

(a)                                  General
Rules.  The Internal Revenue Code
(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 $500,000, your limit or “Cap” is $1,499,999.  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 $500,000.  In other words, if your Cap is $1,499,999,
you will not be subject to an excise tax if you receive exactly $1,499,999.  If you receive $1,500,000, you will be
subject to an excise tax of $200,000 (20% of $1,000,000).  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
unless the exception described in paragraph (e), below, applies.

(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)                                  “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.

(iii)                               “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.

(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.

 11
 

 

If the Determination states
that there would be an excess parachute payment, your payments under this
Agreement will be reduced to the extent necessary to eliminate the excess.

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 

 12
 

 

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.

(e)                                  Exception.  The Consultant selected pursuant to this
Section will calculate your “Uncapped Benefit” and your “Capped Benefit.”  The limitations of paragraphs (a), (b)
and (c) of this Section 10 will not apply to you and you will be entitled
to receive the gross-up payments provided by paragraph (f), if your
Uncapped Benefit is at least 120% of your Capped Benefit.  For this purpose, your “Uncapped Benefit” is
the amount to which you will be entitled pursuant to Section 2 or
Section 3, as applicable, without regard to the limitations of paragraphs (a),
(b) and (c) of this Section 10. 
Your “Capped Benefit” is the amount to which you will be entitled
pursuant to Sections 2 or 3, as applicable, after the application of the
limitations of paragraphs (a), (b) and (c) of this Section 10.

(f)                                    Excise
and Income Tax Gross-Up.  As
provided in paragraph (e), if your Uncapped Benefit is at least 120% of
your Capped Benefit, the Company will provide you with the special gross-up
payments called for by this paragraph (f). 
The special gross-up payment will equal the sum of (i) an amount
equal to the total excise tax imposed on you (including the excise taxes on any
excise tax reimbursements due pursuant to this paragraph and the excise taxes
on any federal, state and local tax reimbursements due pursuant to the next
clause); and (ii) an amount equal to the “total presumed federal, state
and local taxes” that could be imposed on you with respect to the excise tax
reimbursements due to you pursuant to the preceding clause and the federal, state
and local tax reimbursements due to you pursuant to this clause.  For purposes of the preceding sentence, the “total
presumed federal, state and local taxes” that could be imposed on you shall be
conclusively calculated using a combined tax rate equal to the sum of the
maximum marginal federal, state and local income tax rates and the hospital
insurance (or “HI”) portion of FICA. 
Based on rates in effect as of the date of the execution of this
Agreement, the “total presumed federal, state and local taxes” rate is 40.85% (35%
federal income tax rate plus 3.4% Indiana state income tax rate plus 1%
Vanderburgh County income tax rate plus 1.45% HI tax rate) if you reside in
Vanderburgh County.  An adjustment will
be made if you reside in another County at the time payments are made.  No adjustments will be made in this combined
rate for the deduction of state taxes on the federal return, the loss of
itemized deductions or exemptions, or for any other purpose (other than as
noted above due to your County of residence). 
You shall be responsible for paying the actual taxes.  The gross-up payments called for by
this paragraph (f) shall be made as soon as possible following your
Separation from Service unless the provisions of Section 4 require that
the payments be postponed as provided in Section 4.  All of the provisions of Section 4 are
equally applicable to the payment called for by this paragraph.

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:

 13
 

 

(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.

(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.

 14
 

 

(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, “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 

 15
 

 

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.

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 

 16
 

 

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.  §§ 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.

 17
 

 

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.  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 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 proposed
regulations issued pursuant to Section 409A shall be deemed to also refer
to the corresponding sections of the final regulations or any regulations,
rulings or other guidance that supersede or clarify the proposed 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.

 18
 

 

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.

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 Internal Revenue Code, or any other
provision of applicable law, may be made to this Agreement and any such
amendment shall be void ab initio.

 19
 

 

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,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  David K.
  Armstrong

  
	
   

  	
  Senior Vice
  President/Finance and General Counsel

  
	
   

  	
  Accuride
  Corporation

  

 

 20

 

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.Exhibit 10.2

TIER II

                 ,
20  

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              ,
20  .  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
(including but not limited to the Change in Control Agreement dated              ,
     and the Severance Agreement dated              ,
200 ).

1.             TERM OF AGREEMENT.

This Agreement is
effective immediately and will continue in effect until December 31, 2007
(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 Benefits 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 eighteen (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 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.

 2
 

 

 

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 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
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) 200%
of your annualized base salary as of the date on which a Change in Control
occurs, plus (ii) 200% 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 an 18-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 

 3
 

 

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 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)                 Outplacement Services.  If you are entitled to receive Change in
Control Benefits, the Company will provide you with senior executive
outplacement services.  The Company will
select the firm to provide outplacement services.  The senior executive outplacement services
shall be provided at a time, and on a schedule, designated by the Company.  Nevertheless, in no event will the senior
outplacement services continue beyond December 31 of the second calendar
year following the calendar year in which your Separation from Service occurs.

(f)                 Financial
Planning Benefits.  If you are
entitled to receive Change in Control Benefits, the Company also will provide
you with a tax and financial planning services stipend.  The stipend will be in an amount determined pursuant
to Company policies and will be based on your officer classification as of the
date on which the Change in Control occurs. 
The stipend shall be paid at the same time as, and along with, the
Change in Control Severance Payment.

(g)                Mayo Executive
Physical Program.  If you are
entitled to receive Change in Control Benefits, the Company will, for a period
of 12 months following your termination of employment, continue to allow you to
participate in the Mayo Executive Physical Program and cover all regularly
authorized expenses associated therewith, including, without limitation,
travel, meals, lodging and fees.  In
order to be reimbursed, all such expenses must be submitted promptly and no
reimbursements will be made following the December 31 of the second
calendar year following the calendar year in which your Separation from Service
occurs.

(h)                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.  

 4
 

 

Except as otherwise
provided in Section 4, the payment called for by this paragraph (h)
shall be paid within 30 days following your termination of employment.

(i)                  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 Internal Revenue Code of 1986 (the “Code”), as
described in Prop. Treas. Reg. § 1.409A-1(b)(4).  The Company also intends that the Change in
Control Severance Payment provided by Section 3(b), the financial planning
stipend provided by Section 3(f), and the retirement and savings plan
forfeiture payment provided by Section 3(h), (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 no
later than March 15 of the year following the year in which your
Separation from Service occurs.  If it is
administratively impracticable to make all payments by the relevant March 15
and such impracticability was unforeseeable as of the date of this Agreement,
the payments shall be made as soon as reasonably practicable following the
applicable March 15 but not later than the following December 31.  In addition, payments may be delayed in
accordance with regulations issued pursuant to Section 409A.  The Company believes that all other benefits
provided or expenses reimbursed pursuant to this Agreement either do not
provide for the deferral of compensation as determined in accordance with Prop.
Treas. Reg. §1.409A-1(b) or qualify as excepted welfare benefits under Prop.
Treas. Reg. §1.409A-1(a)(5).

(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 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 “Key
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
Prop. Treas. Reg. §1.409A-1(b), benefits which qualify as excepted welfare
benefits pursuant to Prop. Treas. Reg. §1.409A-1(a)(5), or other amounts or
benefits that are not subject to the requirements of Section 409A.

 5
 

 

 

(c)                 Separation
from Service Defined.  For purposes
of this Agreement, the term “Separation from Service” means the termination of
your employment with Accuride and all Affiliates due to death, retirement or
other reasons.  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)                Key Employee
Defined.  For purposes of this
Agreement, your status as a “Key Employee” will be redetermined for each calendar
year.  You will be treated as a “Key Employee”
for a particular year if at any time during the 12 month period ending on the
August 31 prior to the beginning of the year you met the requirements of
Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance
with regulations issued pursuant to Section 409A of the Code and
disregarding Section 416(i)(5) of the Code).  If another entity merges with or into or
otherwise becomes part of the same controlled group of corporations as Accuride
so as to be treated as a single service recipient under Prop. Treas. Reg.
§1.409A-1(g), and you were an employee of Accuride or the other entity and you
were a “Key Employee” of either Accuride or the other entity immediately before
the merger or other transaction, you will be treated as a Key Employee for
purposes of this Agreement until the first day of the year that begins after
the August 31 next following the merger.

(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 Prop. Treas. Reg. §1.409A-3(e),
as applicable.

(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.  If the
Compensation Committee determines in the exercise of its discretion that
neither the short-term deferral exception nor any other exception to the
requirements of Section 409A is available, this Agreement (or the portion
that does not qualify for any exception) shall be operated in compliance with
Section 409A and each provision of the Agreement shall be interpreted, to the
extent possible, to comply with Section 409A.

 6
 

 

 

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 (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.

 7
 

 

 

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.

For purposes of this
Agreement, “Good Reason” shall have different meanings depending on whether the
termination of employment occurs during a Protection Period.

(a)                 Outside of
Protection Period.  If the
termination of employment occurs prior to the beginning of or after the close
of a Protection Period, “Good Reason” shall mean (i) a material adverse change
in the nature of your job duties without your consent; or (ii) a material
reduction in the rate of your base cash compensation, other than in connection
with and consistent with a general program in which the compensation of one or
more categories of management of the Company (or any of its Affiliates) is
systematically reduced.

(b)                During
Protection Period.  If the
termination of employment occurs during a Protection Period, “Good Reason”
shall mean the occurrence (without your prior express written consent) of any
one of the following acts, or failures to act, unless, in the case of any act
or failure to act described in clauses (i), (iv), or (v) below, such act or
failure to act is corrected by the Company prior to the date of termination
specified in the Notice of Termination given by you in respect thereof:

(i)            A significant change
in your title, duties or responsibilities from those which are in effect
immediately prior to the Change in Control which then results in a diminution
in your position with the Company, provided, that any change resulting from the
Company no longer being a publicly traded company shall not be considered Good
Reason;

(ii)           A material reduction in
your annual base salary or annual bonus opportunity as in effect as of the
Change in Control unless such reduction is in connection with a general
reduction of compensation at the Company affecting at least 90% of the officers
of the Company which does not exceed 20% of your annual base salary;

(iii)          The relocation of the
Company’s principal executive offices to a location more than thirty (30) miles
from its location on the date of this Agreement (or, if different, more than
thirty (30) miles from where such offices are located immediately prior to any
Change in Control) or the Company requiring you to be based anywhere other than
the Company’s principal executive offices except for required travel on the
Company’s business to an extent substantially consistent with your business
travel obligations as of the date of this Agreement;

(iv)          A reduction in the kind
or level of employee benefits to which you are entitled immediately before a
Change in Control, with the result that your overall benefit package is
significantly reduced, other than elimination of equity based compensation in
the event that the Company is no longer a publicly traded company as long as
comparable (in terms of expected value) increases are made to other components
of the total compensation package;

 8
 

 

 

(v)           Any breach by the
Company of any provision of this Agreement applicable to it which is material
and adverse to you; or

(vi)          The failure of the
Company to obtain a written agreement reasonably satisfactory to you from any
successor to the Company (as described in Section 13) to perform this
Agreement.

(c)                 Notice of
Termination.  If you elect to
terminate your employment for Good Reason, you must provide the Company with a
Notice of Termination, complying with the provisions of Section 11, within
60 days following the occurrence of the event that serves as the basis for the
Notice of Termination.

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 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 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.  In
accordance with federal law, you will be given a prescribed period of time to
consider whether to sign the Release Agreement and 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.

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 you will
not be employed as an owner, partner, shareholder, employee, consultant, or in
any other capacity by 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 

 9
 

 

to be reasonable:  the United States of America west 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
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.

(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
 

 

 

10.          CAP ON PAYMENTS.

(a)                 General Rules.  The Internal Revenue Code (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 $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)           “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.

(iii)          “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.

(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 payments under this
Agreement will be reduced to the extent necessary to eliminate the excess.

 11
 

 

 

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 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.

 12
 

 

 

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.

(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 

 13
 

 

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, “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
 

 

 

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.

 15
 

 

 

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.  §§ 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.

 16
 

 

 

(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.  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 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 proposed
regulations issued pursuant to Section 409A shall be deemed to also refer
to the corresponding sections of the final regulations or any regulations,
rulings or other guidance that supersede or clarify the proposed regulations.

 17
 

 

 

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.

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 Internal Revenue Code, or any other
provision of applicable law, may be made to this Agreement and any such
amendment shall be void ab initio.

 18
 

 

 

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,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Terrence J.
  Keating

  
	
   

  	
  President and
  Chief Executive Officer

  
	
   

  	
  Accuride
  Corporation

  

 

 19

 

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.

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