ALTRA HOLDINGS, INC. EXECUTIVE SEVERANCE POLICY

Exhibit 10.3

Altra Holdings, Inc.
Executive Severance Policy
Effective November 1, 2008

Plan Document and Summary Plan Description

1. Purpose and Administration .

          The Altra Holdings, Inc. Executive Severance Policy (the “ Policy ” or “ Plan ”) became effective November 1, 2008 (the “ Effective Date ”) following approval by the Personnel and Compensation Committee (the “ Committee ”) of the Board of Directors (the “ Board ”) of Altra Holdings, Inc. (the “ Company ”). The Policy is intended to provide certain executives of the Company who are in a position to contribute materially to the success of the Company with Severance Benefits if they are separated from employment with the Company as set forth herein.

          The Company shall have sole authority in its sole and absolute discretion to interpret, apply and administer the terms of the Plan and to determine eligibility for and the amounts of benefits under the Plan, including the interpretation of ambiguous Plan provisions, determination of disputed facts or application of Plan provisions to anticipated circumstances, in each case, in its sole and absolute discretion. The Company’s decision on any such matter in its sole and absolute discretion shall be final and binding. The Company is both the Plan Sponsor and Plan Administrator of the Plan for purposes of ERISA and shall have responsibility for complying with any ERISA reporting and disclosure rules applicable to the Plan. The Plan Administrator may at any time delegate any other named person or body, or reassume therefrom, any of its fiduciary responsibilities or administrative duties with respect to the Plan. The Company is also the named fiduciary of the Plan within the meaning of ERISA, with the power to act in its sole and absolute discretion with respect to the review of claims for benefits under the Plan that are denied. The Company may contract with one or more persons to render advice or services with respect to any responsibility it has under the Plan. Subject to the limitations of the Plan, the Company shall from time to time establish such rules, regulations or guidelines as it may determine are necessary or appropriate for the operation and administration of the Plan.

2. Definitions .

          As used in this Policy, the following terms shall have the respective meanings set forth below:

a. “Cause” means (i) Participant’s material breach of the terms of any agreement between Participant and the Company; (ii) Participant’s willful failure or refusal to perform his or her material duties required pursuant to his or her employment; (iii) Participant’s willful insubordination or disregard of the legal directives of the Board, or any senior executive to whom Participant reports, which are not inconsistent with the scope, ethics and nature of Participant’s duties and responsibilities; (iv) Participant’s engaging in misconduct which has a material adverse impact on the reputation, business, business relationships or financial condition of the Company; (v) Participant’s commission of an act of fraud or embezzlement against the Company or any of its subsidiaries; or (vi) any conviction of, or plea of guilty or nolo contendere by, Participant with respect to a felony (other than a traffic violation), a crime involving moral turpitude, fraud or misrepresentation; provided, however, that Cause shall not be deemed to exist under any of clauses (i), (ii) or (iii) unless Participant has been given reasonably detailed written notice of the grounds for such Cause and Participant has not effected a cure within twenty (20) days of the date of receipt of such notice.

b. “Code” means the Internal Revenue Code of 1986, as amended.

c. “Company” means Altra Holdings, Inc. and its affiliates including its wholly owned subsidiary Altra Industrial Motion, Inc., or any successor to those entities. For purposes of this Policy, the term “affiliate” means any entity controlling, controlled by, or under common control with the Company.

d. “Date of Termination” means (i) the effective date on which the Participant’s employment by the Company terminates pursuant to a Qualifying Separation as specified in a prior written notice by the Company or the Participant, as the case may be, to the other, or (ii) if the Participant’s employment by the Company terminates by reason of death, the date of death of the Participant.

e. “Disability” means that at the time the Participant’s employment is terminated, he or she has been unable to perform the duties of his/her position for a period of six consecutive months as a result of the Participant’s inability due to physical or mental illness.

f. “Participant” means each of the senior executives of the Company who are selected by the Committee for coverage by this Policy. As of the adoption date of the Policy, Participants shall include the officers and executives set forth on Appendix A. The Committee and/or the Board shall have the ability to amend Appendix A to add or remove Participants at its discretion.

g. “Plan” means the Altra Holdings, Inc. Executive Severance Policy, effective November 1, 2008.

h. “Plan Administrator” means Altra Holdings, Inc.

i. “Qualifying Separation” means a termination of employment (within the meaning of “separation from service,” as defined in Section 1.409A-1(h) of the Final Treasury Regulations) from the Company (and its affiliates) but specifically excludes, without limitation, termination of employment due to Cause, death, Disability, or termination by the Participant.

j. “Separation Agreement” means an effective agreement prepared by the Company, executed by the Participant and returned to the Company within the time period requested by the Company. It shall contain (a) typical provisions concerning termination of employment (including, without limitation, provisions regarding noncompetition, nonsolicitation, nondisparagement and confidential and proprietary information), (b) a statement that Severance Benefits under this Policy are conditioned upon the Company’s receipt of such agreement, and (c) a release (in a form to be determined by the Company) by the Participant of the Company from any liability or obligation (excluding any indemnification to which the Participant may be entitled pursuant to the Company’s Amended and Restated Certificate of Incorporation, By-Laws and any coverage under directors and officers, professional, fiduciary or errors or omissions policies that benefit the Participant) to the Participant. To be effective, the Separation Agreement shall not have been revoked by the Participant within the time permitted under applicable state and federal laws.

k. “Severance Benefits” mean the benefits set forth in Section 4.

l. “Severance Pay” means the salary continuation payments under Section 4 of this Policy.

3. Eligibility .

          This Policy applies to the Participants as defined herein and supersedes and replaces all other policies and plans with respect to severance. Notwithstanding the foregoing, in the event a Participant enters into a written agreement with the Company regarding severance, including without limitation a change in control agreement, the terms and conditions of such written agreement shall control with respect to the circumstances covered by such agreement. For avoidance of doubt, in the event a Participant incurs a Qualifying Separation not covered by the express terms of any written agreement with the Company (e.g., a Qualifying Separation not covered by a Change in Control Agreement), Participant shall continue to be eligible to receive benefits under this Policy.

4. Severance Benefits .

          The Company will, subject to the terms of the Policy, provide severance benefits as set forth in this Section 4 to all Participants who have experienced a Qualifying Separation from the Company

5. Non-Exclusivity of Rights .

          The terms of this Policy shall not prevent or limit the right of a Participant to receive, prior to a Qualifying Separation, any base salary, retirement or welfare benefit, perquisite, bonus or other payment provided by the Company to the Participant, except for such rights as the Participant may have specifically waived in writing. Amounts that are vested benefits or which the Participant is otherwise entitled to receive under any other benefit, policy or program provided by the Company shall be payable in accordance with the terms of such policy or program.

6. Amendment; Termination .

          This Policy, including the designation of those who qualify as Participants, may be amended or terminated by the Committee at any time. No such termination or amendment shall affect the rights of any Participant whose employment has been terminated as a result of a Qualifying Separation, or who is then receiving Severance Benefits at the time of such amendment or termination. If a Participant dies after signing the Separation Agreement and prior to receiving all of the Severance Pay to which he or she is entitled pursuant to the Policy, payment shall be made to the beneficiary designated by the Participant to the Company or, in the event of no designation of beneficiary or the death of the beneficiary, then to the estate of the deceased Participant.

7. 409A Compliance .

          Each payment under the Plan shall be treated as a separate payment under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the treasury regulations and other guidance promulgated or issued thereunder (“Section 409A”). Notwithstanding the foregoing, if all or any portion of the severance payment and/or benefits due under the Plan are determined to be “non-qualified deferred compensation” subject to Section 409A and the Company determines that the Participant is a “specified employee” (as defined in Section 409A(a)(2)(B)(i) of the Code and the other guidance promulgated thereunder), then such severance payment and/or benefits shall commence no earlier than the first day of the seventh month following Participant’s termination of employment. Any payment or benefit delayed by reason of the prior sentence shall be paid in a single lump sum on the first day immediately following the end of such required delay period in order to catch up to the original payment schedule.

8. Non-Assignability .

          Severance Benefits pursuant to the Policy shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge prior to actual receipt thereof by a Participant; and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber or charge prior to such receipt shall be void; and the Company shall not be liable in any manner for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to any Severance Benefits under this Policy.

9. No Employment Rights .

          This Policy does not constitute a contract of employment for a particular term or length between any Participant and the Company, nor does it in any way alter any Participant’s status as an employee-at-will who may be terminated with or without cause for any reason or no reason at all except a reason prohibited by law.

10. Governing Law .

          The terms of the Policy, to the extent not preempted by federal law, shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts (without regard to its conflict of laws principles) including all matters of construction, validity and performance.

11. ERISA Rights .

          The Plan is an “employee welfare benefit plan” subject to the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”). Any employee or former employee of the Company who believes that he or she has not been provided with benefits otherwise due under the Plan are “participants” of the Plan. Participants in the Severance Plan are entitled to certain rights and protections under ERISA. ERISA provides that all employee welfare benefit plan participants shall be entitled to: