Executive Severance and Retention Incentive Plan

EXHIBIT A - EXECUTIVE INCENTIVE PLAN

1. Purpose of the Plan

The purpose of this Executive Incentive plan (the "Plan") is to further the growth of Dayco Corporation and its subsidiaries by offering incentives in addition to current compensation to those executive officers and senior management personnel who will have significant responsibility for such growth.

2. Definitions

The following words and phrases, wherever capitalized, shall have the following respective meanings, unless the context otherwise requires:

(a) "Award" means an award of Restricted Stock or Units granted under the provisions of the Plan.

(b) "Board" means the Board of Directors of Dayco Corporation.

(c) "Book Value" means the figure computed by dividing the amount determined under (i) below by the amount determined under (ii) below, where:

(i) is the consolidated shareholders' equity of the Company attributable to Stock at the end of its most recent fiscal year, as reported in the Company's consolidated financial statements; and

(ii) is the number of shares of Stock outstanding as of the reporting date specified in (i) above. Book Value may be adjusted by the Board pursuant to Section 8.

(d) "Committee" means the Compensation Committee of the Board appointed to administer the Plan in accordance with Section 4.2.

(e) "Company" means Dayco Corporation, a Michigan corporation, and its subsidiaries.

(f) "Date of Grant" means (i) with respect to a Restricted Stock Award, the actual date on which the Award is made by the Board, and (ii) with respect to a Unit Award, November 1st of the Plan Year in which the Award is made.

(g) "Employee" means any person (including any officer) employed by the Company. No individual who otherwise qualifies as an Employee shall be excluded from this definition solely because he is also a member of the Board of Directors of the Company.

(h) "Fair Market Value" means the average of the closing market prices of a share of Stock reported in the New York Stock Exchange-Composite Transactions report on the five trading days immediately preceding the date of reference.

(i) "Plan Year" or "Plan Years" means a fiscal year or years of the Company commencing on or after November 1, 1983.

(j) "Retirement" means an Employee's Termination of Employment (other than by reason of Total Disability) pursuant to and in accordance with the regular retirement plan of his employer which is applicable to him and which does not occur prior to the normal retirement age provided for in such regular retirement plan.

(k) "Restricted Stock" means the Stock awarded upon the terms and conditions and subject to restrictions set forth in Section 6, which restrictions shall lapse at the time set forth in that Section.

(1) "Restricted Stock Award" means an Award of Restricted Stock.

(m) "Stock" means the Common Shares, $1.00 par value, of Dayco Corporation.

(n) "Termination of Employment" means the time when the employee-employer relationship between the Employee and the Company is terminated for any reason including, but not limited to, a termination by resignation, discharge, death, Total Disability, or Retirement, but excluding any such termination where there is a simultaneous reemployment by the Company.

(o) "Total Disability" means the inability of an Employee, by reason of illness or accident, to perform any and every duty of the occupation at which the Employee was employed by the Company when such illness or accident occurred. All determinations as of the date and extent of any Employee’s Total Disability shall be made by the Board upon the basis of such evidence as the Board deems necessary or desirable.

(p) "Unit" means the right to receive, upon the terms and conditions set forth in Section 7, an amount equal to the increase in shareholders' equity per share of Stock during an incentive period, calculated for each Unit as follows:

(a) an amount equal to the difference between (i) Book Value as of the last fiscal year end prior to the Date of Grant and (ii) Book Value for the last fiscal year end preceeding the Valuation Date, plus

(b) an amount equal to the sum of the cash dividends per share declared on Stock between the Date of Grant and the Valuation Date.

(q) "Unit Award" means an Award of Units.

(r) "Valuation Date" means the most recent anniversary date of the Date of Grant.

3. Effective Date of the Plan

The effective date of the Plan shall be February 27, 1984, and the Plan shall become effective as of that date upon the approval of Dayco shareholders.

4. Administration of the Plan

4.1 Powers and Duties of the Board. The Board shall have any and all power and authority with respect to the administration of the Plan except for such powers and authority which are specifically granted to the Committee pursuant to the Plan or which are delegated by the Board pursuant to Section 4.3 hereof. By way of illustration and not limitation, the Board shall have authority to:

(a) Select the Employees who are to participate in the Plan,

(b) Determine the Award to be granted to each Employee selected,

(c) Determine the time or times when Awards will be granted,

(d) Determine the time or times and the conditions subject to which any Awards will be payable or any restriction thereon will lapse,

(e) Interpret the Plan,

(f) Establish or revise rules and regulations relating to the Plan, and

(g) Make any other determination that it believes necessary or advisable for the administration of the Plan.

Decisions and determinations of the Board will be final and binding upon all persons including, but not limited to, the Company, participants in the Plan and other Employees. No director who is or has within one year been eligible to receive an Award under the Plan or to participate in any stock option or stock purchase plan of the Company (other than such a purchase plan that is qualified under Section 401 (a) of the Internal Revenue Code of 1954, as amended) will participate in any determinations.

4.2 Powers and Duties of the Committee. The Plan shall be administered by the Compensation Committee, subject to approval by the Board. The Committee shall have such powers and authority as are specifically granted under the plan or as are delegated to it by the Board.

4.3 Delegation of Authority by the Board or the Committee. The Board or Committee may allocate or delegate any or all of their rights, powers, authority and functions under the Plan to any individual or subcommittee. If the Board or the Committee allocates or delegates any of their rights, powers, authority or functions under the Plan pursuant to this Section 4.3, the Board or Committee, as the case may be, shall not be liable for the acts or omissions of the appointed individual or subcommittee.

4.4 Expenses. All expenses and liabilities incurred in the administration of the Plan shall be borne by the Company. The Board, Committee or individual or subcommittee appointed pursuant to Section 4.3 may (with the consent of the Board) employ attorneys, consultants, accountants and other persons.

The Company and its officers and directors, the Board, Committee or any individual or subcommittee appointed pursuant to Section 4.3 shall be entitled to rely on such advice, opinion or evaluations of any such persons. No member of the Board, Committee or individual or subcommittee member appointed pursuant to Section 4.3 shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all such persons shall be fully protected and indemnified by the Company in respect of any such action, determination or interpretation.

5. Plan Limitation; Stock Subject to the Plan

The maximum number of shares of Restricted Stock which may be issued or transferred under the Plan and the maximum number of Units which may be awarded under the Plan shall be established from time to time by the Board with the approval of the shareholders. Any shares of Restricted Stock which may have been awarded under the Plan but are later forfeited to the Company and any Units which have been awarded under the Plan but payment of the value which is never made, may again be made subject to Awards under the Plan. The Stock which may be issued or transferred under the Plan may be either authorized but unissued shares or "treasury shares".

6. Restricted Stock Awards

6.1 Grant of Restricted Stock Awards. The Board shall from time to time, in its absolute discretion, select from among the Employees those executive officers and other senior management personnel who have significant responsibility for the growth of the Company and to whom Restricted Stock Awards shall be granted and determine the number of shares of Stock to be covered by each Restricted Stock Award.

6.2 Award Agreements. Each Restricted Stock Award shall be evidenced by a written agreement, executed by the grantee of the Restricted Stock Award and the Company, which shall contain such terms and conditions as the Board may require.

6.3 Restrictions. Stock issued or transferred to a grantee of a Restricted Stock Award shall be subject to the following restrictions:

(a) None of the Restricted Stock may be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of; and

(b) All of the Restricted Stock shall be forfeited and shall be returned to the Company and all rights of the grantee to such Restricted Stock shall terminate without any payment of consideration by the Company unless the grantee remains in the continuous employment of the Company for such period as the Board shall designate in accordance with Section 6.5, except as provided in Sections 6.6 and 6.7. In the event of forfeiture of the Restricted Stock, the grantee shall forthwith deliver to the Company the certificate or certificates representing such Restricted Stock, accompanied by executed instruments of transfer.

6.4 Grantee's Rights as a Shareholder. Upon delivery of the Restricted Stock to the grantee as a Restricted Stock Award, such grantee shall (except as set forth in Section 6.3) have all of the rights of a shareholder with respect to the Restricted Stock, including the right to vote the shares of Restricted Stock and receive all dividends and other distributions paid or made with respect to the Restricted Stock.

6.5 Lapse of Restrictions. The restrictions set forth in Section 6.3 shall lapse at such time as the Board, in its sole discretion, shall designate at the time of grant of the Restricted Stock Award, which time, however, shall not be less than two years nor more than five years from the Date of Grant.

6.6 Lapse on Death, Total Disability or Retirement. In the event that the grantee of a Restricted Stock Award incurs a Termination of Employment prior to the lapse of restrictions on his Restricted Stock by reason of death, Total Disability, or Retirement, the restrictions shall lapse on the date of such Termination of Employment as to the number of full shares of Restricted Stock determined by multiplying the total number of shares of Stock subject to each Restricted Stock Award by a fraction, the numerator of which shall be the number of full calendar months between the Date of Grant of such Restricted Stock Award and the date of Termination of Employment and the denominator of which shall be the number of full calendar months between the Date of Grant of such Restricted Stock Award and the date on which the restrictions would, but for such Termination of Employment, have lapsed. Shares of Restricted Stock as to which restrictions have not lapsed shall be forfeited and returned to the Company as provided in Section 6.3.

6.7 Lapse at Discretion of the Board. The Board shall have the authority to accelerate the time at which the restrictions will lapse or to remove any such restrictions whenever it may decide, in its absolute discretion, that, by reason of changes in applicable tax or other laws or other changes and circumstances arising after the Date of Grant of the Award, such action is in the best interest of the Company and equitable to the Employee, his heirs, or designated beneficiaries.

7. Unit Awards

7.1 Grants of Units. The Board shall, from time to time, in its absolute discretion, select from among the Employees those executive officers and other senior management personnel who have responsibility for the growth of the Company and to whom Units shall be granted and the number of Units to be covered by each Unit Award. Upon the Award of Units, no fund will be set aside by the Company for the payment of any such Award, but rather the Company shall establish and maintain a separate written account for each grantee and shall record in such account the number of Units awarded to such grantee.

7.2 Award Agreements. Each Unit Award shall be evidenced by a written agreement, executed by the grantee of Units and the Company, which shall contain such terms and conditions as the Board may require.

7.3 Incentive Period. Except as provided in Section 7.4, the grantee of Units shall be entitled to payment in accordance with Sections 7.6 and 7.7 only if the grantee remains in the continuous employment of the Company for such period of time as the Board, in its sole discretion, shall designate in the grant, which time period, however, shall not be more than five years after the Date of Grant.

7.4 Death, Total Disability or Retirement. In the event that the employment of a grantee of a Unit Award is terminated prior to the expiration of the incentive period established in accordance with Section 7.3 by reason of death, Total Disability or Retirement, the incentive period applicable to each Unit award to such grantee shall be shortened to the full Plan Years and fraction of Plan Year between the Date of Grant and the end of the month immediately preceding the date of Termination of Employment.

7.5 Expiration at Discretion of the Board. The Board shall have the authority to accelerate the time at which the incentive period will expire or to declare any Units immediately payable whenever it may decide, in its absolute discretion, that, by reason of changes in applicable tax or other laws or other changes in circumstances arising after the date of the Award, such action is in the best interest of the Company and equitable to the Employee, his heirs, or designated beneficiaries.

7.6 Valuation of Units. As soon after the expiration of the incentive period established in accordance with Section 7.3 or as shortened by Section 7.4 or 7.5 as the audited financial statements of the Company for the preceding fiscal year are available in final form to the Board, the Board shall determine the value of the Units of each grantee for whom the incentive period has lapsed pursuant to Sections 7.3, 7.4 or 7.5. Such value shall be determined in accordance with the method set forth in Section 2(p) with the Valuation Date. In the event of Termination of Employment of a grantee by reason of death, Total Disability or Retirement which results in a shortened incentive period in accordance with Section 7.4, the Board shall determine the value of the grantee's Units as soon as practical after the date of such Termination of Employment. Such value shall be adjusted to reflect changes in consolidated shareholders' equity during the full fiscal quarters elapsed in a partial Plan Year.

7.7 Payment of Units. Payments of the value of Units shall be made as soon as practical after valuation thereof. Units may be paid in cash, in Stock, or partly in cash and partly in Stock, at the sole discretion of the Board; provided, however, that the total number of shares of Stock which may be issued or delivered in payment of Units shall not exceed 100,000 shares. To the extent that Units are to be paid in shares of Stock, the number of shares shall be determined by dividing the aggregate value of the Units to be paid in Stock by the Fair Market Value of the Stock. No fractional shares shall be issued, but, instead, the Company shall pay a cash adjustment equal to the same fraction of the Fair Market Value. Payment in cash shall be made by the delivery to the grantee of a check and payment in Stock by the issuance or delivery, as soon as practical, of a certificate representing such stock.

7.8 No Assignment. No Units may be assigned, transferred or disposed of in any way by the grantee thereof.

8. Dilution and Other Adjustments

8.1 In the event of any change in the outstanding shares of Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares, or other similar corporate change, the Board shall make such reasonable adjustment, if any, as it, in its sole discretion, deems equitable (a) in the aggregate number of or kind of shares of Stock which may be awarded under the Plan or issued or delivered in payment of Units, or (b) in the number of or kind of shares of Restricted Stock awarded under the Plan, or (c) in the number of Units which have been or may be awarded to any Employee, or (d) in Book Value and Unit valuation for any Plan Year or Years, such adjustments to be conclusive and binding upon all parties concerned.

8.2 The Board may also make adjustments, to the extent that it deems appropriate, in the calculation of Book Value and the valuation of Units to compensate for or reflect significant changes which may have occurred in accounting practices or policies, acquisitions, capitalization, or other extraordinary items or material events.

9. Acquisition for Investment

Each Employee to whom a distribution of Stock is made pursuant to the Plan may be required by the Company to furnish a representation that he is acquiring the shares so distributed as an investment and not with a view to distribution thereof if the Board shall, in its sole discretion, determine that such representation is required to insure that resale or other disposition of the shares would not involve a violation of the provisions of the Securities Act of 1933, as amended, or of applicable state blue sky laws. Any investment representation so furnished shall no longer apply at any time such representation is no longer necessary for such purpose. The Company also reserves the right to place any legend or other symbol on the share certificates issued or transferred pursuant to the Plan and to furnish any stop transfer or similar instructions to the transfer agent for its Stock or other shares which the Company, in its sole discretion, may deem necessary and proper to insure compliance with any such representation.

10. Compliance with Securities and Exchange Commission Requirements

No certificate for shares for Stock distributed pursuant to the Plan shall be executed and delivered until the Company shall have taken such action, if any, as is then required to comply with the provisions of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, any other applicable state blue sky laws and the requirements of any exchange on which the Stock may, at the time, be listed.

11. Designation of Beneficiary

An Employee may, with the consent of the Board, designate a person or persons to receive, in the event of his death, any Stock or payment of Units to which he would then be entitled. Such designation shall be made upon forms supplied by and delivered to the Company and may be revoked in writing. If an Employee fails effectively to designate a beneficiary, or if the designated beneficiary shall not survive the Employee, his estate shall be deemed to be his beneficiary.

12. Withholding of Taxes

There shall be deducted from each distribution under the Plan and from any dividends paid on Restricted Stock the amount of any tax required by any governmental authority to be withheld and paid over by the Company to such governmental authority for the account of the person entitled to such distribution or dividend. With respect to any distribution of Stock, the Company shall have the right to sell, without notice, such number of shares of Stock distributable to the person entitled to such distribution as will provide funds for the payment of any tax so required to be paid by the Company for his account unless, prior to such sale, he shall have paid to the Company the amount of such tax. Any balance of the proceeds of such sale shall be paid to such person. In effecting such sale, the Company shall be deemed to be acting on behalf, and for the account of such person.

13. Employment

Stock or cash shall be distributed or paid to Employees or their beneficiaries under the Plan only in consideration of services performed by the Employees or for the benefit of the Company; provided, however, that nothing in the Plan or in any Award shall confer upon any Employee the right to continue in the employ of the Company or shall it interfere or restrict in any way the rights of the Company to discharge any Employee at any time for any reason whatsoever, with or without cause.

14. Effect Upon Other Plans

The adoption of the Plan shall not affect any stock option or other compensation or incentive plan in effect for the Company, and the Plan shall not preclude the Board from establishing any other forms of incentive or compensation for Employees.

15. Amendment of the Plan

The Board may, at any time and from time to time, modify or amend the Plan in any respect, except that without shareholder approval the Board may not increase the maximum number of shares of Restricted Stock or Units which may be awarded under the Plan (other than increases due to adjustment in accordance with Section 8), extend the period during which Awards may be granted, or materially modify the requirements as to eligibility for participation in the Plan. Any modification or amendment of the Plan shall not, without the consent of an Employee, adversely affect his rights under an Award previously granted to him.

16. Termination of the Plan

The right to grant Awards under the Plan shall terminate upon the granting of Awards equaling the maximum number of shares which have been authorized by the shareholders. Thereafter, the administrative functions of the Board will be limited to the administration of Awards previously granted, subject to additional shares of Restricted Stock or number of Units becoming available for award by reason of forfeitures or terminations of earlier Awards. In addition, the Board shall have the right to suspend or terminate the Plan, at any time or from time to time, provided that no such action shall, without the consent of an Employee, adversely affect any rights or obligations under Awards previously granted to him.

17. Claims Procedure

(a) If a claim for benefits under the Plan is denied, in whole or in part, the claimant shall be notified within a reasonable time in writing of the denial, the specific reason for the denial and the provisions of the Plan on which the denial is based. Such claimant shall also be advised whether any additional material or information is necessary to perfect the claim and shall be provided with an explanation for the reasons why such material is necessary and with an explanation of the Plan's claim review procedure under paragraph (b) below.

(b) In the event a claim for benefits under the Plan is denied, in whole or in part:

(i) The claimant (or his duly authorized representative) shall be entitled to request in writing a review of the denial of claim by the Board within 60 days after the claimant receives notice of the denial of his claim.

(ii) The claimant (or his duly authorized representative) may review pertinent Plan documents and may submit issues and comments to the Board in writing.

(iii) All written claims that are neither granted nor denied in accordance with paragraph (a) above within 90 days after the filing thereof with the Board, shall be deemed denied and the claimant shall have to file a written request for review.

(iv) The decision of the Board on review shall be granted within 60 days after the request for review is received by the Board unless special circumstances require an extension of time in processing the claim, in which case a decision shall be rendered no later than 120 days after receipt of a request for review by the Board.

(v) In the event that special circumstances require an extension of time for processing a claim, the claimant shall be furnished with a written notice of any extension of time prior to the commencement of the extension.

(vi) The decision of the Board on review shall be in writing and shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based.

(vii) If the decision of the Board on review is not furnished within the time specified in (iv) above, the claim shall be deemed denied on review.

(viii) The decision of the Board on review is final and binding with respect to the claimant's claim for benefits.