Document:

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                                                                  Exhibit 10.60

                                AMENDMENT TO THE

                         METROPOLITAN LIFE SUPPLEMENTAL

                      AUXILIARY SAVINGS AND INVESTMENT PLAN

         The METROPOLITAN LIFE SUPPLEMENTAL AUXILIARY SAVINGS AND INVESTMENT
PLAN (the "Plan") is hereby amended as follows:

           1. Article 3 is hereby amended by adding at the end thereof, the
              following:

              "Notwithstanding any provision in this Plan to the contrary, no
              benefit shall be payable under this Plan with respect to any year
              in which a Participant defers compensation under the MetLife
              Deferred Compensation Plan for Officers, or any other plan under
              which employer matching contributions are made on account of
              deferred compensation. Except as provided in the preceding
              sentence, no similar benefit that is paid under this Plan shall be
              paid under any other deferred compensation plan(s) created by the
              Company or any of its affiliates, notwithstanding any provision in
              this Plan to the contrary."

           2. This Amendment shall become effective on January 1, 1998.

                                     METROPOLITAN LIFE INSURANCE COMPANY
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Date

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Witness<PAGE>   1
                                                                   EXHIBIT 10.13

                            TECUMSEH PRODUCTS COMPANY
                            MANAGEMENT INCENTIVE PLAN

                     [As amended through November 22, 2000]

I.       Purposes of the Plan

         The purposes of the Tecumseh Products Company Management Incentive Plan
(the "Plan") are to provide a means to attract, reward and retain strong
management, to encourage teamwork among members of management and excellence in
the performance of their individual responsibilities, and to align the interests
of key managers participating in the Plan with the interests of shareholders by
offering an incentive compensation vehicle that is based upon the growth in
shareholders' equity and the value and profitability of Tecumseh Products
Company.

II.      Definitions

         In this Plan, the following terms shall have the meanings set forth
below:

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

                  (b) "Allocation Date" means the December 31st as of which a
         Phantom Share allocation is made on behalf of an Employee pursuant to
         this Plan.

                  (c) "Board" means the Board of Directors of the Company.

                  (d) "Committee" means the Governance and Executive
         Compensation Committee of the Board, or such other committee as the
         Board may subsequently appoint to administer the Plan. All the
         Directors serving on the Committee at any given time shall be
         "Non-Employee Directors", as that term is used in Securities and
         Exchange Commission Rule 16b-3 (or any successor regulation) as in
         effect at such time ("Rule 16b-3"), and the number of Directors serving
         on the Committee at any given time shall be no less than the minimum
         number then required by Rule 16b-3.

                  (e) "Class A Common Stock" means the Class A Common Stock,
         $1.00 par value per share, of the Company.
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                  (f) "Class B Common Stock" means the Class B Common Stock,
         $1.00 par value per share, of the Company.

                  (g) "Company" means Tecumseh Products Company, a Michigan
         corporation.

                  (h) "Employee" means a person who is employed by an Employer
         and who has been selected by the Committee to participate in the Plan.

                  (i) "Employer" means the Company, any of its present
         subsidiary corporations, any corporation which becomes a controlled
         subsidiary of the Company provided the Committee determines to extend
         coverage thereto, and/or any successor(s) to such corporation(s). The
         Committee shall be deemed to have extended coverage to a subsidiary if
         an employee of such subsidiary is awarded an allocation under this
         Plan.

                  (j) "Phantom Share" means an allocation credited to an
         Employee's Account and maintained in such Account together with any
         prior or subsequent allocations made on behalf of such Employee. The
         value of an Employee's Account shall be adjusted from time to time, as
         provided in the Plan. An allocation of Phantom Shares shall confer only
         such rights as are specified in the Plan. Employees who receive Phantom
         Share allocations shall not (as a consequence of such allocations) be
         treated as shareholders under the Articles of Incorporation or By-Laws
         of the Company or under applicable law.

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

                  (l) The following terms are defined elsewhere in the Plan:

                  "Class Year"........................ Art. VI(a);
                  "Company Change in Control"......... Art. IX;
                  "Reason"............................ Art. VII(a).

III.     Factors to be Considered in Phantom Share Allocations

         In making any decisions as to the Employees to whom Phantom Share
allocations shall be made and as to the amount of each allocation, the Committee
shall take into account such factors as the duties and responsibilities of the
respective Employees, their present and potential contributions to the success
of the Employer,

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and the financial success of the Company during the year. Not later than the end
of April of each calendar year with respect to which allocations may be made,
the Committee shall establish targeted group allocations and targeted financial
results, and may establish targeted individual allocations, for that year.
Actual Phantom Share allocations for such calendar year shall be based on the
attainment of specified types and combinations of performance measurement
criteria, which may differ as to various Employees or classes thereof, and from
time to time. Such criteria may include, without limitation, (i) the attainment
of certain performance levels by, and measured against objectives of, the
Company, the individual Employee, and/or a group of Employees, (ii) net income
growth, (iii) increases in operating efficiency, (iv) completion of specified
strategic actions, (v) the recommendation of the Chief Executive Officer, and
(vi) such other factors as the Committee shall deem important in connection with
accomplishing the purposes of the Plan, provided that any relevant decisions
shall be made in its own discretion solely by the Committee. However, no
Employee or group of Employees shall receive an actual Phantom Share allocation
greater than the applicable targeted individual allocation (if any) or group
allocation for a given year, unless due to extraordinary circumstances the
Committee deems it appropriate (in its sole discretion) to make allocations to
one or more Employees or groups of Employees in excess of his/their targeted
individual allocation(s). The maximum aggregate number of Phantom shares that
may be awarded and allocated to the accounts of all Employees with respect to
any calendar year shall be equal to two percent (2 %) of the number of shares of
Class A Common Stock which are issued an outstanding on the last day of such
calendar year. Such maximum shall not apply to Phantom Shares resulting from
deemed reinvestment of amounts corresponding to dividends, pursuant to Article
IV, subsection (a)(ii).

IV.      Valuation of Phantom Share Accounts; Accounting Treatment

         (a) Except as otherwise provided in (b) below or in Article IX,
Accounts shall be valued as follows:

                  (i) Each Phantom Share allocation shall have an initial dollar
         value at which it shall be credited to the Employee's Account as of the
         last day of the calendar year for which such allocation was made. Such
         allocation shall then be converted into a share amount corresponding to
         the number of whole and fractional (to the nearest hundredth) shares of
         Class A Common Stock that could be purchased at the price determined as
         of such date in the manner described in (b) below.

                 (ii) Each Phantom Share, which has been allocated as of the
         record date applicable to a declared dividend on Class A

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

         (b) The price of Phantom Shares comprising the Account (adjusted
pursuant to (c) below) shall be computed as the average of the closing prices of
Class A Common Stock on the first trading day of each of the eleven calendar
months which precede or coincide with the valuation date; provided that if any
stock splits, stock-on-stock dividends or other capital adjustments have
occurred during the period beginning with the first such trading day and ending
on the valuation date, then the closing prices used in the averaging computation
shall also be adjusted as the Committee, in the reasonable exercise of its
discretion, believes to be equitable and appropriate. As used in the preceding
sentence, a "trading day" is one for which such sale prices are reported on the
NASDAQ national market reporting system.

         (c) If, between the time an award is made and the date an Account is
paid, any change shall occur in the market price of the Company's Class A Common
Stock outstanding as the result of any stock split or any stock-on-stock
dividend, then the number of Phantom Shares in the Account shall be adjusted in
proportion to the adjustment in the price of Class A Common Stock. In the event
of any other change in the number or character of the outstanding securities of
the Company as the result of any recapitalization, reclassification, merger or
any analogous change in capitalization or of any distribution to holders of the
Company's Class A Common Stock other than a cash or stock dividend, the
Committee shall make such adjustments, if any, in the number and/or kind of any
Phantom Shares then allocated to the Account or thereafter becoming allocated to
the Account as the Committee, in the reasonable exercise of its discretion,
believes to be equitable and appropriate.

V.       Terms and Conditions of Allocations to Accounts

         Each Phantom Share allocation to the Account of an Employee shall be
subject to the following terms and conditions:

                  (a) Each allocation shall continue in effect for an indefinite
         period from the applicable Allocation Date until subsequently paid or
         forfeited, as hereinafter provided.

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                  (b) The Company shall maintain records for each Employee's
         Account and shall furnish him a summary thereof upon request, but not
         more frequently than once a year.

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

VI.      Vesting and Payment

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

         Class Years 1994 - 1999 - Allocations for Class Years 1994 - 1999 (both
inclusive) shall be 0% vested in the year for which they are made, and shall not
become vested until the fifth December 31 following the end of the Class Year.
For example: Allocations made with respect to Class Year 1999 shall be 0% vested
when allocated, 0% vested on December 31, 2000, 0% vested on December 31, 2001,
etc., but shall become 100% vested on December 31, 2004.

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

         One-third of each Employee's allocation shall be fully vested as of
         December 31 in the Class Year for which such allocation is made,
         one-third of such allocation shall become vested as of the third
         December 31 following the end of such Class Year and the remaining
         one-third of such allocation shall become vested as of the fifth
         December 31 following the end of such Class Year.

         EXAMPLE: Allocations made with respect to Class Year 2000 shall be
         one-third vested as of December 31, 2000, one-third vested on December
         31, 2003, and the remaining one-third vested on December 31, 2005.

         The provisions of Article VII shall generally govern the forfeiture of
allocations which are not vested and, in certain

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

         (b) Within 60 days following December 31 of 2000 and each subsequent
year,

         (i)      the one-third cash portion of each active Employee's
                  allocation, which became vested at the close of the Class Year
                  then ended in accordance with Article VI(a), shall be paid.

         (ii)     the portion of each Employee's Phantom Share award for any
                  prior Class Year, which became vested at the close of the
                  Class Year then ended in accordance with Article VI(a), shall
                  be valued in accordance with Article IV(b) and paid.

VII.     Retirement and Other Termination of Employment

         (a) If the employment of an Employee to whom Phantom Share allocations
have been made shall be terminated by his Employer for any Reason denominated
below (which shall be determined by the Committee), his entire Account whether
or not to any extent otherwise vested shall be forfeited simultaneously with
such termination of employment.

         Such "Reason", for the sole purpose of determining whether an
Employee's otherwise vested benefits are to be forfeited, shall be deemed to
exist where -

         (i)      The Employee breaches any material written rules, regulations
                  or policies of the Employer now existing or hereafter arising
                  which are uniformly applied to all employees of the Employer
                  or which rules, regulations and policies are promulgated for
                  general application to executives, officers or directors of
                  the Employer; or

         (ii)     The Employee willfully and repeatedly fails to substantially
                  perform the duties of his employment (other than any such
                  failure resulting from his incapacity due to physical or
                  mental illness) after a written demand for substantial
                  performance is delivered to him by his immediate supervisor,
                  which demand specifically identifies the manner in which the
                  supervisor believes that the Employee has not substantially
                  performed his duties; or

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        (iii)     The Employee is repeatedly or habitually intoxicated or under
                  the influence of drugs while on the premises of the Employer
                  or while performing his employment duties, after receiving
                  written notice thereof from the Employer, such that the
                  Committee determines in good faith that the Employee is
                  impaired in performing the duties of his employment; or

        (iv)      The Employee is convicted of a felony under state or federal
                  law, or commits a crime involving moral turpitude; or

        (v)       The Employee embezzles any property belonging to the Employer
                  such that he may be subject to criminal prosecution therefor
                  or the Employee intentionally and materially injures the
                  Employer, its personnel or its property.

Nothing in this Plan shall alter the at-will nature of the Employee's employment
relationship with his Employer. Nothing in this Plan shall confer upon any
Employee the right to continue in the employ of any Employer.

         (b) Except as provided in Article VII(c) regarding retirement, if an
Employee to whom Phantom Share allocations have been made shall voluntarily
terminate his employment with the Employer or shall be terminated by the
Employer for no reason or for any reason whatsoever (other than for one or more
Reasons specified in Article VII(a) and otherwise than as provided for in
Article VIII hereof), then his Account shall be forfeited according to the
vesting schedule of Article VI(a), except for that portion (if any) which the
Committee, in its sole and absolute discretion, permits him to retain.
Additionally, in the event of termination of employment as described in the
preceding sentence, the Committee (in its sole and absolute discretion and upon
whatever conditions it determines appropriate) may make a Phantom Share
allocation to the terminating Employee for the calendar year which includes his
date of termination. Nothing in this Plan shall alter the at-will nature of the
Employee's employment relationship with his Employer. Nothing in this Plan shall
confer upon any Employee the right to continue in the employ of any Employer.

         (c) Notwithstanding Article VI(a), an Employee's Phantom Share
allocations shall be 100% vested as of the first day of the month that includes
his last day of active work immediately prior to commencing normal or early
retirement under the pension or retirement plan sponsored by his Employer.
However, such vested allocations shall only become payable following the date
they would have otherwise vested under Article VI, i.e. within 60 days after the
third and/or fifth December 31 following each Allocation Date.

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Additionally, in the event of retirement as described in the preceding sentence,
the Committee (in its sole and absolute discretion and upon whatever conditions
it determines appropriate) may make a Phantom Share allocation to the
terminating Employee for the calendar year which includes his last day of active
work immediately prior to retirement.

         (d) Prior to any payment pursuant to (b) or (c), above, the Employee's
Account shall be adjusted as provided in Article IV.

         (e) So long as the Employee shall continue to be an employee of the
Employer, his Account shall not be affected by any change of duties or position.
Nothing in the Plan shall confer upon any Employee any right to continue in the
employ of the Employer or to receive future Phantom Share allocations or
accruals thereon nor shall anything in the Plan interfere with the right of the
Employer to terminate an Employee's employment at any time whether or not for
cause. The adoption of the Plan shall not constitute a contract between the
Company or its subsidiaries and any Employee. No Employee shall receive any
right to be granted an award hereunder nor shall any such award be considered as
compensation under any other employee benefit plan of the Company except as
otherwise determined by the Committee.

         (f) Any payment or distribution to an Employee under this Plan which is
not claimed by the Employee, his beneficiary, or other person entitled thereto
within three years after becoming payable shall be forfeited and canceled and
shall remain with the Company, and no other person shall have any right thereto
or interest therein. The Company shall not have any duty to give notice that
amounts are payable under this Plan to any person other than the Employee and
his beneficiary (or contingent beneficiary) in the event there are benefits
payable after the Employee's death.

VIII.    Death, Disability or Incapacity of an Employee

         (a) Any payment or distribution due to an Employee under this plan on
account of death or on account of termination of employment for disability or
retirement where the terminated Employee dies before receiving the full amount
to which he is entitled hereunder, shall be made to the beneficiary and/or
contingent beneficiary designated by the Employee to receive such payments in
the event of his death, in a written designation of beneficiary filed with the
Company prior to his death. In the event of the Employee's failure to file such
a designation or its ineffectiveness for any reason such payments shall be made
to the Employee's surviving spouse, or if the Employee is not survived by a
spouse, in equal shares to his then surviving issue, per stirpes, or if he is
not survived by any issue, then to the Employee's estate.

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<PAGE>   9

         (b) Upon the total and permanent disability of an Employee to whom
Phantom Shares have been allocated, as determined solely by the Committee, his
Account shall become fully vested and payable, and shall be valued in accordance
with Article IV(b) as of the end of the year in which the Committee determines
that the Employee is totally and permanently disabled; payment shall be made
within 60 days after that year-end. Additionally, the Committee (in its sole and
absolute discretion and upon whatever conditions it determines appropriate) may
make a Phantom Share allocation to the Employee for the calendar year which
includes his date of termination of employment due to total and permanent
disability. For these purposes, "total and permanent disability" means an
impairment or illness of a physical or mental nature, or both, which results in
the Employee's being unable to perform the normal duties of his employment
consistent with the standards of his Employer for a period of at least ninety
(90) consecutive business days. An Employee who is "totally and permanently
disabled" within the meaning of the Company's Salaried Retirement Plan shall be
deemed to have a "total and permanent disability" under this Plan.

         (c) Upon the death of an active Employee, his Account shall become
fully vested and payable, and shall be valued in accordance with Article IV(b)
as of the end of the year in which the Employee's death occurs; payment shall be
made within 60 days after that year-end. Additionally, the Committee (in its
sole and absolute discretion and upon whatever conditions it determines
appropriate) may make a Phantom Share allocation to the Account of the deceased
Employee for the calendar year which includes his date of death. Upon the death
of a disabled or retired Employee who has not received payment of his entire
Account, the undistributed balance of such Account shall be valued in accordance
with Article IV(b) as of the end of the year in which the retired Employee's
death occurs; payment shall be made within 60 days after that year-end.

IX.      The Effect of a Company Change in Control

         (a) Rights under this Plan shall be affected as hereinafter described
by a Company Change in Control. A "Company Change in Control," solely for the
purposes of this Plan, shall mean one or more of the following events:

                  (i) The acquisition, after December 31, 1994, of beneficial
         ownership of 25% or more of the Company's Class A Common Stock or Class
         B Common Stock then outstanding by any person (including a group,
         within the meaning of Section 13(d)(3) of the Securities Exchange Act
         of 1934 (the "1934 Act")), other than:

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

                  (B) the Company or any of its subsidiaries,

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

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

                  (ii) The first purchase, after December 31, 1994, under a
         tender offer or exchange offer for 25% or more of the Company's Class A
         Common Stock or Class B Common Stock then outstanding, other than an
         offer by:

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

                  (B) the Company or any of its subsidiaries,

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

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

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

                  (iv) The effective date of a transaction (or a group of
         related transactions) in which more than 50 % in fair market value of
         the assets of the Company, or of the particular subsidiary for which a
         given Employee's services are principally performed, are disposed of
         pursuant to a partial or complete liquidation, a spin-off, a sale of
         assets or otherwise. In the event this provision applies to a
         particular subsidiary, only those Employees whose services are
         principally performed for that subsidiary shall be deemed to be
         affected by such Change in Control; or

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

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         combined voting power of the voting securities of the Company or such
         surviving entity outstanding immediately after such merger of
         consolidation.

         (b) For purposes of this Article IX, the following terms shall have the
following meanings:

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

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

                  (iii) "Excluded Acquisition" means any acquisition of shares
         of voting common stock from the Company (whether or not for
         consideration) or from any person by operation of law (including but
         not limited to the laws of descent and distribution), by will, by gift
         or by foreclosure of a security interest given to secure a bona fide
         loan, or any acquisition consummated prior to January 1, 1994.

         (c) At the time a Company Change in Control takes effect with respect
to an Employer, the Account of each affected Employee shall become fully vested
and immediately payable, and the provisions of Article VII(a)(i) and (ii) shall
not be effective for three months thereafter with respect to any affected
Employee. At the time a Company Change in Control takes effect with respect to
the Company,

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every Employee's Account shall become fully vested and immediately payable, and
the provisions of Article VII(a)(i) and (ii) shall not be effective for three
months thereafter.

         (d) If cash or other valuable consideration is paid to holders of Class
A Common Stock in connection with a Company Change in Control, then the Company
shall pay a like amount of cash for each Phantom Share (determined as set forth
in Article IV) held in an Employee's Account (or the cash value per share of
noncash consideration) as is received (per share) by the holders of Class A
Common Stock. If such payment to the holders of Class A Common Stock is by way
of purchase of their Class A Common Stock (or some portion thereof) then a
corresponding percentage of each Account shall be deemed to have been paid off
in consideration of the above-referenced payment by the Company to Employees.

         (e) It is this Plan's intent not to make "excess parachute payments,"
as defined in Section 280G of the Internal Revenue Code of 1986, as it may be
amended or superseded (the "Code"), which would be nondeductible for Federal
income tax purposes by the Company. Consequently, if payments resulting solely
from the operation of this Article would be nondeductible by the Company for
Federal income tax purposes due to Section 280G of the Code, as being in excess
of reasonable compensation or three times the base amount specified in Section
280G(b)(3), such payments shall be reduced by the smallest amount required so
that no payments are nondeductible under Section 280G of the Code. If any
payments previously made to or for the benefit of an Employee from this Plan or
any other plan or agreement are subsequently determined to be nondeductible
because of Section 280G of the Code, such Employee shall be required to promptly
repay the Company, at its request, the smallest amount necessary so that, after
giving effect to such repayments to the Company, no payments to or for the
benefit of the Employee (or the smallest amount possible) will be nondeductible
under said Section 280G; provided, however, that any such repayments, adjusted
for the time value of such amounts under the principles of Section 1274(b)(4) of
the Code, may not exceed the amount of payments originally made from this Plan
or any other plan or agreement. The Committee may establish procedures to carry
out the provisions of this paragraph.

         (f) The terms and provisions of this Article IX shall become effective
only in the event of a Company Change in Control as defined in this Article of
the Plan.

X.       The Committee As Plan Administrator

         The Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee shall make all decisions

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concerning Employees to be selected to receive allocations under the Plan, the
amount of the allocation to be made to each participating Employee and the time
when such allocations shall be made. The Committee's interpretation of the Plan
and any action it takes with respect to Phantom Share allocations pursuant
thereto shall be final and binding upon all affected parties. The Committee
shall have the authority, subject to the provisions of the Plan, to establish,
adopt, revise or repeal rules, regulations and procedures with respect to the
Plan.

XI.      Amendment, Suspension, or Termination of the Plan

         The Committee or the Board may amend this Plan at any time, provided
that any amendment by the Committee shall be consistent with the Plan's original
design and purpose. No such amendment shall impair rights under the Plan with
respect to Phantom Shares allocated prior to the date of such amendment. The
Board may at any time terminate or suspend this Plan; provided that no such
action shall impair rights under the Plan with respect to Phantom Shares
allocated prior to the date of such action; provided also that in the event of
termination of the Plan, the Committee (in its sole discretion) may accelerate
the time of vesting and/or date of payment applicable to outstanding Accounts.

XII.     No Guarantee

         The Company has only a contractual obligation to pay Accounts. The
satisfaction of payment obligations is to be made solely out of the general
corporate funds of the Company, which shall at all times remain subject to the
claims of its creditors. Further, amounts credited to an Employee's Account
shall neither be segregated for the purpose of securing the Company's liability
nor be held by the Company in trust for the Employee.

         The Board, upon the recommendation of the Committee, may authorize the
creation of trusts or other arrangements to facilitate or ensure payment of the
obligations under the Plan, provided that such trusts and arrangements are
consistent with the "unfunded" status of the Plan (unless the Committee
determines otherwise). An Employee shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations hereunder. Nothing contained in the Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
of any kind, or a fiduciary relationship between the Company and the Employee or
any other person. To the extent that any person acquires a right to receive
payments from the Company under this Plan, such right shall be no greater than
the right of an unsecured general creditor of

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<PAGE>   14

the Company. All payments to be made hereunder shall be paid in cash from the
general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payments of
such amounts.

XIII.    Restrictions on Transfer of Benefits

         Neither the Employee nor any other person shall have any right to
commute, sell, assign, transfer, alienate, pledge, anticipate, mortgage or
otherwise encumber, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, or interest therein
which are, and all rights to which are, expressly declared to be unassignable
and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to garnishment, attachment, seizure or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by the
Employee or any other person, nor be transferable by operation of law in the
event of the Employee's or any other person's bankruptcy or insolvency.

         Notwithstanding the above, the Company shall have the right to deduct
from all amounts paid to, or on behalf of, a Participant any taxes required by
law to be withheld in respect of Accounts under this Plan or any reductions
under Article XV of this Plan. If FICA taxes become payable due to vesting of an
award in circumstances where it is not practicable (or would create a hardship)
to withhold the employee's share of taxes from regular paychecks during the
remainder of the taxable year, the Committee (or its delegate) may direct the
Company to advance the employee's share of FICA taxes as an interest free loan,
to be withheld from benefit amounts at the time they first become payable under
this Plan.

XIV.     Protective Provisions

         An Employee shall cooperate with the Company by furnishing any and all
information requested by the Company, taking such physical examinations as the
Company may deem necessary, and taking such other relevant actions as may
reasonably be required by the Company or Committee for purposes of the Plan. If
an Employee neglects or refuses so to cooperate, the Company shall have no
further obligation to such Employee or his beneficiaries under the Plan.

XV.      Obligations to Company

         If an Employee becomes entitled to a distribution of benefits under the
Plan, and if at such time the Employee has outstanding any debt, obligation, or
other liability representing an amount

                                      -14-
<PAGE>   15

owing to the Company, then the Company may offset such amount owed to it against
the amount of benefits otherwise distributable. Such determination shall be made
by the Company.

XVI.     Release and Non-Disclosure/Non-Competition Agreements

         Any payment to an Employee or his beneficiary in accordance with the
provisions of the Plan shall, to the extent thereof, be in full satisfaction of
all claims against the Company with respect to such payment, and the Company may
require such Employee or his beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect. Additionally, as a
condition precedent to commencement of payments hereunder, and in consideration
of such payments, an Employee may be required to execute and acknowledge a
general release of all claims against the Company (and the Employer, if not the
Company) in such form as the Company may then require. Upon termination of the
Employee's employment, at retirement or otherwise, the Employee (if the Company
requires him to do so) shall execute and thereafter perform a
Non-competition/Non-disclosure Agreement in such form as the Company may then
require. In that event, five per cent (5%) of each payment to the Employee or
his beneficiary pursuant to the Plan shall be deemed a payment by the Company
for such agreement.

XVII.    General

         (a) Titles and headings to the Articles of this Plan are included for
convenience only and shall not control the meaning or interpretation of any
provision of this Plan. Wherever reasonably necessary in this Plan, pronouns of
any gender shall be deemed synonymous, as shall singular and plural pronouns.

         (b) This Plan shall be governed by and construed, enforced, and
administered in accordance with the laws of the State of Michigan excluding any
such laws which direct an application of the laws of any other jurisdiction.
Subject to Article XVIII, the Company, the Employers and the Committee shall be
subject to suit regarding the Plan only in the courts of the State of Michigan,
and the Company shall fully indemnify and defend the Board and the Committee
with respect to any actions relating to this Plan made in good faith by such
bodies or their members.

         (c) The provisions of this Plan shall be deemed severable and in the
event any provision of this Plan is held invalid, void, or unenforceable, the
same shall not affect, in any respect whatsoever, the validity of any other
provision of this Plan. Furthermore, the Committee shall have the power to
modify such provision to the extent reasonably necessary to make the provision,

                                      -15-
<PAGE>   16

as so changed, both legal, valid and enforceable as well as compatible with the
other provisions of the Plan.

         (d) Any notice or filing required or permitted to be given under this
Plan shall be sufficient if in writing and hand delivered, or sent by registered
or certified mail: (a) to the Company or the Committee at the principal office
of the Company, directed to the attention of the Chairman of the Committee, and
(b) to the Employee at his last known home address on file with the Company's
personnel office. Such notice shall be deemed given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification. It shall be the Employee's
responsibility to inform the Company's personnel office, in writing, of any
change in his home address.

XVIII.   Claims and Disputes

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

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

         (c) Unless otherwise required by law, any controversy or claim arising
out of or relating to this Plan or the breach thereof, including in particular
any controversy relating to Articles VII or IX, shall be settled by binding
arbitration in the City of Tecumseh in accordance with the laws of the State of
Michigan by three arbitrators, one of whom shall be appointed by the Company,
one by the Employee (or in the event of his prior death, his beneficiary(-ies)),
and the third of whom shall be

                                      -16-
<PAGE>   17

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

         (d) Any arbitration shall be conducted as follows:

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

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

                                      -17-
<PAGE>   18

         a timely basis, either party shall have the right to require a
         replacement and the appointment of new arbitrators.

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

                  (iv) The costs of the arbitration shall be borne equally by
         the parties to such arbitration, except that each party shall bear its
         own legal and accounting expenses relating to its participation in the
         arbitration.

XIX.     Limitations of Action

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

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

                                       TECUMSEH PRODUCTS COMPANY

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

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

                                      -18-

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