Document:

Exhibit 10.2

 

TIER II

 

	
                             
         , 200     

  	
   

  

 

 

 

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                           
     , 200    .  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
Severance and Retention Agreement dated                           
     , 200    ).

 

1.                                      TERM
OF AGREEMENT.

 

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

 

 

may be, shall
be extended for a term ending on the 18-month anniversary of the Change in
Control.  The expiration of the term of
this Agreement will not reduce or diminish any liabilities that have accrued
prior to the expiration.

 

2.                                      BASIC
SEVERANCE BENEFIT.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)                                                 Change
in Control Severance Payment.  If you
are entitled to receive Change in Control Benefits, you will receive a “Change
in Control Severance Payment.”  The “Change
in Control Severance Payment” is a lump sum payment equal to the sum of: (i) 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 Code, as described in Treas. Reg. § 1.409A-1(b)(4).  The Company also intends that the Change in
Control Severance Payment provided by Section 3(b), 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 at the
times stated in Section 2 or Section 3 and in no event later than March 15
of the year following the year in which your Separation from Service
occurs.  Payments may be delayed only in
accordance with regulations issued pursuant to Section 409A.  The Company intends that the Welfare Benefits
provided by Section 3(d), the Outplacement Services provided by Section 3(e) and
the right to continued participation in the Mayo Executive Physical Program
provided by Section 3(g) will comply with the exception to Section 409A
for reimbursements and certain other separation payments, as described in
Treas. Reg. § 1.409A-1(b)(9)(v)(B).  The
Company has concluded that the reimbursement payments the Company has agreed to
make pursuant to Section 20 may be subject to the requirements of Section 409A.  To ensure that the payments under Section 20
comply with Section 409A, the payments are payable at a specified time or
pursuant to a fixed schedule within the meaning of Treas. Reg. §
1.409A-3(i)(1)(iv).

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

5.                                      CHANGE IN CONTROL DEFINED.

 

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

 

6

 

(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.

 

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.

 

7

 

6.                                      GOOD
REASON DEFINED.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7.                                      CAUSE
DEFINED.

 

For purposes
of this Agreement, “Cause” shall mean (a) your continued willful failure,
neglect or refusal to perform your duties with respect to the Company or its
Affiliates which continues beyond ten days after a written demand for
substantial performance is delivered to you by the Company; (b) conduct by
you involving (i) dishonesty, fraud, or breach of trust in connection with
your employment or (ii) conduct which would be a reasonable basis for an
indictment for a felony or for a misdemeanor involving moral turpitude; (c) your
willful and continued failure or refusal to follow material directions of the
Board or any other act of insubordination by you; or (d) willful
malfeasance or willful misconduct by you which is injurious to the Company,
monetarily or otherwise.

 

8.                                      RELEASE
AGREEMENT.

 

In order to
receive the Basic Severance Benefit or any Change in Control Benefits, you must
execute, in a timely manner, a release of any known or unknown claims that you
may have against the Company.  The
release shall be in a form reasonably requested by the Company.  If you are not yet 40 years old on the date
on which the Release Agreement must be signed, you will be given 21 days to
consider whether to sign the Release Agreement. If you are 40 or over, in
accordance with federal law, you will be given 21 or 45 days, depending on the
circumstances, to consider whether to sign the Release Agreement.  In any event, you may 

 

8

 

revoke the
Release Agreement during the seven day period following your delivery of a
signed Release Agreement.  These rules will
be described in greater detail at the appropriate time.  If you fail to sign the Release Agreement
within the prescribed time period, or if you revoke the Release Agreement, you
will not be entitled to receive any Basic Severance Benefit or any Change in
Control Benefits.

 

9.                                      COMPETITION.

 

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

 

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

 

(c)                                                  Restriction
Period.  For this purpose, the “Restriction
Period” begins on the effective date of your termination of employment for
whatever reason and ends at the end of the 24th month thereafter, or if a court
of competent jurisdiction concludes that 24 months is longer than necessary to
protect the Company’s business interests, then the parties agree that the
restriction period will end at the end of the longest of the following number of
months that the court determines to be reasonable:  23, 22, 21, 20, 19, 18, 17, 16, 15, 14, 13,
12, 11, 10, 9, 8, 7, 6, 5, 4, or 3.

 

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

 

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

 

9

 

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

 

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

 

10.          CAP ON PAYMENTS.

 

(a)           General Rules. The Code places significant tax
burdens on you and the Company if the total payments made to you due to a
Change in Control exceed prescribed limits. For example, if your “Base Period
Income” (as defined below) is $100,000, your limit or “Cap” is $299,999. If
your “Basic Payments” exceed the Cap by even $1.00, you are subject to an
excise tax under Section 4999 of the Code of 20% of all amounts paid to
you in excess of $100,000. In other words, if your Cap is $299,999, you will
not be subject to an excise tax if you receive exactly $299,999. If you receive
$300,000, you will be subject to an excise tax of $40,000 (20% of $200,000). In
order to avoid this excise tax and the related adverse tax consequences for the
Company, by signing this Agreement you agree that your Basic Payments will not
exceed an amount equal to your Cap.

 

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

 

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

 

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

 

10

 

the receipt of which is contingent on a
Change in Control and to which Section 280G of the Code applies.

 

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

 

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

 

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

 

If the Determination states that there would be an excess parachute
payment, your 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 

 

11

 

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.

 

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.

 

12

 

(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.

 

(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.

 

13

 

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 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.

 

14

 

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 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 

 

15

 

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.

 

20.          EXPENSES AND INTEREST.

 

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

 

16

 

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 final regulations issued pursuant
to Section 409A shall be deemed also to refer to any successor provisions
of such regulations or rulings or other guidance that clarify such regulations.

 

24.          DEFINITIONS.

 

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

 

25.          PARTIES.

 

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

 

17

 

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

 

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

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  John R. Murphy

  
	
   

  	
  President and Chief Executive Officer

  
	
   

  	
  Accuride Corporation

  

 

18

 

ACCEPTANCE

 

I hereby accept the offer to participate in
this special benefit program and I agree to be bound by all of the provisions
noted above.Exhibit 10.3

 

TIER
III

 

                                      ,
200

 

 

 

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                    ,
200   . 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 Severance
and Retention Agreement dated                     ,
20     .)

 

1.            TERM
OF AGREEMENT.

 

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

 

 

may be, shall be extended for a term ending
on the 18-month anniversary of the Change in Control. The expiration of the
term of this Agreement will not reduce or diminish any liabilities that have
accrued prior to the expiration.

 

2.            BASIC
SEVERANCE BENEFIT.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)           Welfare Benefits. If you are entitled to receive
Change in Control Benefits, the Company shall arrange to provide you, for a
12-month period following your termination of employment, with disability,
accident, dental and group health insurance benefits substantially similar to
those which you were receiving immediately prior to your termination. The cost
to you of a particular type of benefit (e.g.,
dental insurance) shall be not more than the 

 

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

 

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

 

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

 

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

 

4

 

agreed to make pursuant to Section 20
may be subject to the requirements of Section 409A. To ensure that the
payments under Section 20 comply with Section 409A, the payments are
payable at a specified time or pursuant to a fixed schedule within the meaning
of Treas. Reg. § 1.409A-3(i)(1)(iv).

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

5.            CHANGE IN CONTROL
DEFINED.

 

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

 

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

 

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

 

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

 

6

 

(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.

 

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

 

6.            GOOD
REASON DEFINED.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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, in a timely manner, a release of any known
or unknown claims that you may have against the Company. The release shall be
in a form reasonably requested by the Company. If you are not yet 40 years old
on the date on which the Release Agreement must be signed, you will be given 21
days to consider whether to sign the Release Agreement. If you are 40 or over,
in accordance with federal law, you will be given 21 or 45 days, depending on
the circumstances, to consider whether to sign the Release Agreement. In any
event, you may revoke the Release Agreement during the seven day period
following your delivery of a signed Release Agreement. These rules will be
described in greater detail at the appropriate time. If you fail to sign the
Release Agreement within the prescribed time period, or if you revoke the
Release Agreement, you will not be entitled to receive any Basic Severance
Benefit or any Change in Control Benefits.

 

9.            COMPETITION.

 

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

 

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

 

8

 

(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. You will not be considered to be competing with the Company
for purposes of this Section 9 if you acquire stock representing less than
1% of the outstanding stock of any publicly traded corporation.

 

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

 

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

 

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

 

10.         CAP
ON PAYMENTS.

 

(a)           General Rules. The Code places significant tax
burdens on you and the Company if the total payments made to you due to a
Change in Control exceed prescribed limits. For example, if your “Base Period
Income” (as defined below) is $100,000, your limit or “Cap” 

 

9

 

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

 

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

 

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

 

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

 

If the Determination states that there would be an excess parachute
payment, your 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, 

 

10

 

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.

 

11

 

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 

 

12

 

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

 

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 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 

 

14

 

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 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 

 

15

 

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.

 

20.         EXPENSES AND INTEREST.

 

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

 

21.         PAYMENT OBLIGATIONS ABSOLUTE.

 

Accuride’s obligation to pay you the compensation and to make the
arrangements in accordance with the provisions herein shall be absolute and
unconditional and shall not be 

 

16

 

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 final regulations issued pursuant
to Section 409A shall be deemed also to refer to any successor provisions
of such regulations or rulings or other guidance that clarify such regulations.

 

24.         DEFINITIONS.

 

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

 

25.         PARTIES.

 

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

 

26.         NO RIGHTS IN ANY PROPERTY OF COMPANY.

 

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

 

17

 

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

 

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

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  John R. Murphy

  
	
   

  	
  President and Chief Executive Officer

  
	
   

  	
  Accuride Corporation

  

 

18

 

ACCEPTANCE

 

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

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