DEFERRED COMPENSATION PLAN

 

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                                                                      FINAL COPY

 

                              NORTEK HOLDINGS, INC.

 

                       (F/K/A "THL BUILDCOHOLDINGS, INC.")

 

                           DEFERRED COMPENSATION PLAN

 

      WHEREAS, the Board of Directors of Nortek Holdings, Inc., a Delaware

corporation formerly known as THL Buildco Holdings, Inc. (together with its

successors, the "Company"), has adopted resolutions approving the establishment

of a deferred compensation plan with the terms set forth herein; and

 

      WHEREAS, each Participant has agreed to the terms set forth herein;

 

      NOW, THEREFORE, in consideration of the promises, covenants and agreements

set forth herein, the Company hereby adopts the following deferred compensation

plan.

 

1.    PURPOSE. The Company by means of this nonqualified deferred compensation

      plan (the "Plan") desires to grant certain employees, directors and

      consultants of the Company or of one or more subsidiaries of the Company

      (the "Participants") the right to participate in a deemed investment in

      Class A Units of THL - Nortek Investors, LLC ("Investors LLC") in exchange

      for the cancellation of certain stock options granted to Participants

      under the Nortek Holdings, Inc. 2002 Stock Option Plan ("Options") as

      contemplated by that certain Stock Purchase Agreement dated as of July 15,

      2004, as amended (the "Stock Purchase Agreement") and reflected in those

      certain Option Cancellation Agreements, dated as of August 27, 2004. The

      Plan shall be effective as of August 27, 2004 (the "Effective Date").

 

2.    DEFINITIONS.

 

The following terms shall have the following meanings unless the context

indicates otherwise:

 

      2.1.  "Affiliate" shall mean, as to any Person, a person that directly, or

            indirectly through one or more intermediaries, controls, or is

            controlled by, or is under common control with, such Person.

 

      2.2.  "Board" shall mean the Board of Directors of the Company.

 

      2.3.  "Change in Control" shall mean the consummation of a transaction,

            whether in a single transaction or in a series of related

            transactions that are consummated contemporaneously (or consummated

            pursuant to contemporaneous agreements), with any other party or

            parties on an arm's-length basis, pursuant to which (a) such party

            or parties, directly or

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            indirectly, acquire (whether by merger, stock purchase,

            recapitalization, reorganization, redemption, issuance of capital

            stock or otherwise) more than 50% of the voting stock of the

            Company, (b) such party or parties, directly or indirectly, acquire

            assets constituting all or substantially all of the assets of the

            Company and its subsidiaries on a consolidated basis, or (c) prior

            to an initial public offering of the Company common stock pursuant

            to an offering registered under the 1933 Act, Thomas H. Lee Equity

            Fund V, L.P., a Delaware limited partnership, and its affiliates

            cease to have the ability to elect, directly or indirectly, a

            majority of the Board of Directors of the Company.

 

      2.4.  "Committee" shall mean, as the case may be, the Board of Directors

            of the Company or a committee appointed by the Board of Directors of

            the Company.

 

      2.5.  "Covered Sale" shall have the meaning set forth for such term in the

            Securityholders Agreement.

 

      2.6.  "Debited Units" shall have the meaning set forth in Section 4.2(b).

 

      2.7.  "Deferred Compensation Account" shall mean a notional account

            established and maintained by the Company for a Participant which

            shall record the deemed investment in LLC Class A Units with respect

            to each Participant under Section 4.1 below. This notional account

            shall be established by the Company for bookkeeping purposes only,

            and no separate funds shall be segregated by the Company for the

            benefit of the Participant.

 

      2.8.  "Excluded Permitted Transferee" shall have the meaning set forth for

            such term in the Securityholders Agreement.

 

      2.9.  "Exit Event" shall have the meaning set forth for such term in the

            LLC Agreement.

 

      2.10. "Fraction" shall have the meaning set forth in Section 4.2(b).

 

      2.11. "Holdings Shares" shall mean shares of common stock of the Company

            or any successor parent corporation of the Company.

 

      2.12. "Investors LLC" shall have the meaning set forth in Section 1.

 

      2.13. "LLC Agreement" shall have the meaning set forth in Section 4.2(b).

 

      2.14. "LLC Class A Units" shall mean the Class A Units of Investors LLC.

 

      2.15. "Notional Class A Units" shall mean notional units credited under

            the Plan and pursuant to the Option Cancellation Agreements.

 

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      2.16. "Option" shall have the meaning set forth in Section 1.

 

      2.17. "Option Cancellation Agreement" shall mean an agreement between a

            Participant, THL Buildco, Inc., the Company and Investors LLC or any

            of their respective successors canceling Options pursuant to, or as

            contemplated by, the Stock Purchase Agreement, and providing for the

            establishment of deferred compensation amounts resulting from the

            cancellation of Options.

 

      2.18. "Option Cancellation Deferred Amount" shall mean, with respect to

            each Participant, the amount specified as such in such Participant's

            Option Cancellation Agreement.

 

      2.19. "Permitted Transferee" shall have the meaning set forth for such

            term in the Securityholders Agreement.

 

      2.20. "Person" shall mean any person or entity of any nature whatsoever,

            specifically including an individual, a firm, a company, a

            corporation, a partnership, or a trust.

 

      2.21. "Securityholders Agreement" shall mean the Securityholders Agreement

            by and among Investors LLC, Thomas H. Lee Equity Fund V, L.P. and

            certain of its affiliates and co-investors and certain Management

            Securityholders (as defined therein), dated as of August 27, 2004.

 

      2.22. "Subsidiary" shall mean a corporation of which the Company directly

            or indirectly owns more than 50 percent of the voting stock or any

            other business entity in which the Company directly or indirectly

            has an ownership interest of more than 50 percent.

 

3.    ELIGIBILITY AND PARTICIPATION. Any employee,