TECUMSEH PRODUCTS COMPANY LONG-TERM INCENTIVE EQUITY AWARD PLAN

<PAGE>

Exhibit 10.3

TECUMSEH PRODUCTS COMPANY

LONG-TERM INCENTIVE EQUITY AWARD PLAN

(AS AMENDED AND RESTATED ON AUGUST 7, 2007)

Tecumseh Products Company, a Michigan corporation (the "Company"), has

adopted this Long-Term Incentive Equity Award Plan (this "Plan") for the benefit

of its eligible employees. This Plan is effective as of July 31, 2007.

The purposes of this Plan are as follows:

A. To join the interests of management and other employees with the

interests of shareholders by providing an additional incentive for selected

management and other Employees to further the growth, development, and financial

success of the Company by personally benefiting through the ownership of Company

stock and/or stock rights that recognize such growth, development, and financial

success.

B. To enable the Company to obtain and retain the services of Employees

considered essential to the long-term success of the Company by offering them an

opportunity to own stock in the Company and/or stock rights that will reflect

the growth, development, and financial success of the Company.

C. This Plan is intended to constitute an unfunded, nonqualified plan of

deferred compensation for a select group of management or highly compensated

employees, within the meaning of Section 201(2) of the Employee Retirement

Income Security Act of 1974, as amended ("ERISA"), that is exempt from the

requirements of Title 1 of ERISA.

1. DEFINITIONS

Wherever the following terms are used in this Plan they have the meanings

specified below unless the context clearly indicates otherwise. The singular

pronoun includes the plural where the context so indicates.

"Administrator" means the Committee, unless the Committee has delegated its

authority to administer this Plan as provided in Section 9.5, in which events

"Administrator" means the delegated sub-committee.

"Award" means an Option, a Restricted Stock award, or a Performance Award

awarded or granted under this Plan.

"Award Agreement" means a written agreement executed by an authorized

officer of the Company and the Holder containing such terms and conditions with

respect to an Award as the Administrator determines, consistent with this Plan.

<PAGE>

"Award Limit" means 300,000 shares of Class A Stock, as adjusted pursuant

to Section 10.3.

"Board" means the Board of Directors of the Company.

"Change in Control" means any change that occurs after the date this Plan

is first approved by the Company's shareholders and that qualifies as a change

of control event pursuant to Section 409A of the Code, Proposed Treasury

Regulation Section 1.409A-3(g)(5), and all subsequent relevant authority,

including any one or more of the following events::

(a) a change in the ownership of the Company in compliance with

Proposed Treasury Regulation Section 1.409A-3(g)(5)(v) pursuant to which

any person or group acquires ownership of stock of the Company that,

together with stock held by that person or group, constitutes more than 50%

of the total fair market value or total voting power of the stock of the

Company;

(b) a change in the effective control of the Company pursuant to

Proposed Treasury Regulation Section 1.409A-3(g)(5)(vi), pursuant to which

either:

(1) any one person, or more than one person acting as a group,

acquires (or has acquired during the twelve-month period ending on the

date of the most recent acquisition by that person or group) ownership

(including acquisition of beneficial ownership) of stock of the

Company possessing 35% or more of the total voting power of the stock

of the Company; or

(2) a majority of members of the Company's board of directors is

replaced during any twelve-month period by directors whose appointment

or election is not endorsed by a majority of the members of the

Company's board of directors before the date of the appointment or

election; or

(c) a change in the ownership of a substantial portion of the

Company's assets pursuant to Proposed Treasury Regulation Section

1.409A-3(g)(5)(vii) pursuant to which any one person or group acquires (or

has acquired during the twelve-month period ending on the date of the most

recent acquisition by that person or group) assets from the Company that

have a total gross fair market value (as defined in Proposed Treasury

Regulation Section 1.409A-3(g)(5)(vii)) equal to or more than 40% of the

total gross fair market value of all of the assets of the Company

immediately before the acquisition or acquisitions by that person or group.

For purposes of this definition:

<PAGE>

(A) "person" means a person as defined in Section 3(a)(9) of the

Exchange Act;

(B) "beneficial ownership" is to be determined in accordance with Rule

13d-3 promulgated under the Exchange Act or any successor regulation;

(C) "group" means a group as described in Rule 13d-5 promulgated under

the Exchange Act or any successor regulation provided the group falls

within the purview of Proposed Treasury Regulation Sections

1.409A-3(g)(v)(B), 1.409A-3(g)(5)(vi)(D), or 1.409A-3(g)(5)(vii)(C), as

applicable; and

(D) the formation of a group under this definition will have the

effect described in paragraph (b) of Rule 13d-5 promulgated under the

Exchange Act or any successor regulation.

In addition, if an Employment Contract provides that a Holder is to receive

severance pay or other rights or benefits if his or her employment terminates

following a "change in control, "change of control," or other similar defined

event, then the occurrence of that event will be a Change in Control for

purposes of this Agreement with respect to that Holder.

"Class A Stock" means the Company's Class A Common Stock.

"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" means the Governance, Compensation, and Nominating Committee of

the Board, or another committee or subcommittee of the Board, appointed as

provided in Section 9.1.

"Company" means Tecumseh Products Company, a Michigan corporation.

"Corporate Transaction" means:

(a) the shareholders of the Company approve a merger, consolidation,

or share exchange of the Company with any other corporation (or other

entity), other than a merger, consolidation, or share exchange that would

result in the voting securities of the Company outstanding immediately

before the transaction continuing to represent (either by remaining

outstanding or by being converted into voting securities of the surviving

entity) more than 50% of the combined voting power of the voting securities

of the Company or the surviving entity outstanding immediately after the

merger, consolidation, or share exchange; or

(b) the shareholders of the Company approve a plan of complete

liquidation of the Company or an agreement for the sale or

<PAGE>

disposition by the Company of all or substantially all of the Company's

assets.

"DRO" means a domestic relations order as defined by the Code or Title I of

the Employee Retirement Income Security Act of 1974, as amended, or the rules

either.

"Effective Date" means July 31, 2007.

"Employment Contract" means a written employment contract between a Holder

and the Company or a Subsidiary.

"Employee" means any officer or other employee (as defined in accordance

with Section 3401(c) of the Code) of the Company or any Subsidiary.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Fair Market Value" of a share of Class A Stock as of a given date means:

(a) the closing price of a share of Class A Stock on the principal

exchange on which shares of Class A Stock are then trading, if any (or as

reported on any composite index which includes that principal exchange), on

that date, or if shares were not traded on that date, then on the next

preceding date on which a trade occurred; or

(b) if Class A Stock is not traded on an exchange but is quoted on

Nasdaq or a successor quotation system, the average of the closing

representative bid and asked prices for the Class A Stock on such date as

reported by Nasdaq or the successor quotation system; or

(c) if Class A Stock is not publicly traded on an exchange and not

quoted on Nasdaq or a successor quotation system, the fair market value of

a share of Class A Stock as established by the Administrator acting in good

faith.

"Holder" means a person who has been granted or awarded an Award.

"Option" means a stock option granted under Section 4 of this Plan. Any

Option granted under this Plan will be a non-qualified stock option and not an

incentive stock option within the meaning of Section 422 of the Code.

"Performance Award" means an award of the opportunity to receive shares of

Class A Stock made under Section 8 of this Plan.

"Performance Criteria" means the following business criteria with respect

to the Company, any Subsidiary, or any division or operating unit:

(a) net income;

(b) pre-tax income;

(c) operating income or margin;

<PAGE>

(d) cash flow;

(e) earnings per share;

(f) return on equity;

(g) return on invested capital or assets;

(h) cost reductions or savings;

(i) sales or revenue growth;

(j) appreciation in the fair market value of Class A Stock; and

(k) earnings before any one or more of the following items: interest,

taxes, depreciation, or amortization;

each as determined in accordance with generally accepted accounting principles

and subject to any adjustments that may be specified by the Committee with

respect to a Performance Award.

"Permanent Disability" means the inability of the Holder to perform his

usual duties as an Employee by reason of any medically determinable physical or

mental impairment expected to result in death or to be of continuous duration of

twelve months or more.

"Plan" means this Long-Term Incentive Equity Award Plan, as amended and/or

restated from time to time.

"Restricted Stock" means Class A Stock subject to restrictions and awarded

under Section 7 of this Plan.

"Retirement" means a separation from service with the Company or a

Subsidiary at a time when the Holder is eligible for immediate commencement of a

defined benefit pension (other than a disability pension).

"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, as

amended from time to time, or any successor rule.

"Section 162(m) Participant" means any Senior Management Employee whose

compensation for the fiscal year in which the Employee is so designated or a

future fiscal year may be subject to the limit on deductible compensation

imposed by Section 162(m) of the Code. Unless the Administrator determines

otherwise in regard to particular Senior Management Employees whose compensation

is unlikely to be subject to such limit, all Senior Management Employees will be

treated as Section 162(m) Participants.

"Securities Act" means the Securities Act of 1933, as amended.

"Senior Management Employee" means any Employee designated by the

Administrator as a Senior Management Employee for purposes of this Plan.

<PAGE>

"Subsidiary" means any corporation or limited liability company in an

unbroken chain of corporations or limited liability companies beginning with the

Company if each of the corporations and limited liabilities other than the last

one in the unbroken chain then owns stock or other equity interests possessing

50% or more of the total combined voting power of all classes of stock or equity

interests in one of the other corporations or limited liability companies in the

chain.

"Termination of Employment" means the time when the employee-employer

relationship between a Holder and the Company or any Subsidiary is terminated

for any reason, with or without cause, including but not limited to a

termination by resignation, discharge, death, Permanent Disability, or

Retirement; but excluding:

(a) terminations where there is a simultaneous reemployment or

continuing employment of a Holder by the Company or any Subsidiary; and

(b) at the discretion of the Administrator, terminations which result

in a temporary severance of the employee-employer relationship.

2. SHARES SUBJECT TO PLAN

2.1 Shares Subject to Plan.

(a) The shares of stock subject to Awards will be Class A Stock.

Subject to adjustment as provided in Section 10.3, the aggregate number of

shares that may be issued upon exercise of Options and under all other

Awards under this Plan may not exceed 1,850,000 shares. The shares of Class

A Stock issuable upon exercise of Options under other Awards will be

previously authorized but unissued shares.

(b) The maximum number of shares that may be subject to Awards granted

under this Plan to any individual in any fiscal year of the Company may not

exceed the Award Limit. For purposes of this limitation, where a

Performance Award is based on performance criteria measured over more than

one fiscal year, the entire potential Performance Award will be treated as

part of the Award Limit for the first year of the entire performance cycle

and not as part of the Award Limit for any other year.

2.2 Add-back of Options and Other Awards. If any Option or Performance

Award expires or is canceled without having been fully exercised or paid, the

number of shares subject to that Option or Performance Award but as to which the

Option or Performance Award was not exercised or paid before its expiration or

cancellation may again be optioned, granted, or awarded under this Plan, subject

to the limitations of Section 2.1. Any shares subject to Awards that are

adjusted under Section 10.3 and become exercisable with respect to shares of

<PAGE>

stock of another corporation are to be considered canceled and may again be

optioned, granted, or awarded under this Plan, subject to the limitations of

Section 2.1. Shares of Class A Stock delivered by the Holder or withheld by the

Company upon the exercise or payment of any Award under this Plan, in payment of

the exercise price or tax withholding, may again be optioned, granted, or

awarded under this Plan, subject to the limitations of Section 2.1. If any

shares of Restricted Stock are surrendered by the Holder under Section 7.4,

those shares may again be optioned, granted, or awarded under this Plan, subject

to the limitations of Section 2.1.

3. GRANTING OF AWARDS

3.1 Award Agreement. Each Award will be evidenced by an Award Agreement.

Award Agreements evidencing Awards intended to qualify as performance-based

compensation as described in Section 162(m)(4)(C) of the Code will contain those

terms and conditions necessary to meet the applicable provisions of Section

162(m) of the Code.

3.2 Provisions Applicable to Section 162(m) Participants.

(a) The Administrator, in its discretion, may determine whether an

Award is to qualify as performance-based compensation as described in

Section 162(m)(4)(C) of the Code.

(b) Notwithstanding anything in this Plan to the contrary, the

Administrator may grant any Award to a Section 162(m) Participant,

including:

(1) Restricted Stock, the restrictions with respect to which

lapse upon the attainment of performance goals related to one or more

of the Performance Criteria; and

(2) any Performance Award that becomes payable upon the

attainment of performance goals which are related to one or more of

the Performance Criteria.

(c) To the extent necessary to comply with the performance-based

compensation requirements of Section 162(m)(4)(C) of the Code, with respect

to any Award of Restricted Stock or any Performance Award granted to

Section 162(m) Participants that is intended to qualify as

performance-based compensation, no later than 90 days following the

commencement of the fiscal year in question or any other designated fiscal

period or period of service (or such other time as may be required or

permitted by Section 162(m) of the Code), the Administrator will, in

writing:

<PAGE>

(1) select the Performance Criteria applicable to the fiscal year

or other designated fiscal period or period of service;

(2) establish the various performance targets, in terms of an

objective formula or standard, and amounts of the Awards, as

applicable, that may be earned for the fiscal year or other designated

fiscal period or period of service; and

(3) specify the relationship among the Performance Criteria, the

performance targets, and the amounts of the Awards, as applicable, to

be earned by each Section 162(m) Participant for that fiscal year or

other designated fiscal period or period of service.

Following the completion of each fiscal year or other designated fiscal

period or period of service, the Administrator will certify in writing

whether the applicable performance targets have been achieved for the

fiscal year or other designated fiscal period or period of service. In

determining the amount earned by a Section 162(m) Participant, the

Administrator will have the right to reduce (but not to increase) the

amount payable at a given level of performance to take into account

additional factors that the Administrator may deem relevant to the

assessment of individual or corporate performance for the fiscal year or

other designated fiscal period or period of service.

(d) Furthermore, notwithstanding any other provision of this Plan or

any Award Agreement, any Award granted to a Section 162(m) Participant that

is intended to qualify as performance-based compensation as described in

Section 162(m)(4)(C) of the Code will be subject to any additional

limitations set forth in Section 162(m) of the Code (including any

amendment to Section 162(m) of the Code) or any regulations or rulings

issued under Section 162(m) of the Code that are requirements for

qualification as performance-based compensation as described in Section

162(m)(4)(C) of the Code, and this Plan will be deemed amended to the

extent necessary to conform to those requirements.

3.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other

provision of this Plan, this Plan, and any Award granted or awarded to any

individual who is then subject to Section 16 of the Exchange Act, will be

subject to any additional limitations set forth in Rule 16b-3 that are

requirements for the application of the exemption provided by Rule 16b-3. To the

extent permitted by applicable law, this Plan and Awards granted or awarded

under this Plan will be deemed amended to the extent necessary to conform to

Rule 16b-3.

<PAGE>

3.4 Consideration. In consideration of the granting of an Award under this

Plan, the Holder must agree, in the Award Agreement, to remain in the employ of

the Company or any Subsidiary for a period of at least one year (or such shorter

period as may be fixed in the Award Agreement or by action of the Administrator

following grant of the Award) after the Award is granted.

3.5 At-Will Employment. Nothing in this Plan or in any Award Agreement will

confer on any Holder any right to continue in the employ of the Company or any

Subsidiary or interfere with or restrict in any way the right of the Company or

any Subsidiary, all of which the Company expressly reserves, to discharge any

Holder at any time for any reason whatsoever, with or without cause, except to

the extent expressly provided otherwise in an Employment Contract.

3.6 Prohibition on Repricing. The Administrator may not, without prior

approval by the Company's shareholders, reprice, replace, or re-grant through

cancellation or lowering of the exercise price any Options issued under this

Plan. Notwithstanding shareholder approval, to the extent that the Company

reasonably determines that any repriced, replaced, or re-granted Option may

constitute a deferral of compensation under Section 409A of the Code, the Option

must be accompanied by a written agreement setting forth the terms and

conditions required to comply with the provisions of Section 409A of the Code.

4. OPTION GRANTS

4.1 Eligibility. Any Senior Management Employee selected by the

Administrator is eligible for the grant of an Option to purchase a number of

shares of Class A Stock determined by the Administrator, subject to the Award

Limit.

4.2 Granting of Options.

(a) The Administrator will from time to time, in its absolute

discretion, and subject to applicable limitations of this Plan:

(1) determine which Senior Management Employees (including but

not limited to Employees who have previously received Awards under

this Plan) are to be granted Options; and

(2) subject to the Award Limit, determine the number of shares to

be subject to the Options.

(b) Upon the selection of an Employee to be granted an Option, the

Administrator will instruct the Secretary of the Company to issue the

Option. The Administrator may impose such conditions on the grant of the

Option as it deems appropriate.

<PAGE>

4.3 Options in Lieu of Cash Compensation. Options may be granted under this

Plan to Employees in lieu of cash bonuses that would otherwise be payable to

them, pursuant to policies adopted by the Administrator from time to time.

5. OPTION TERMS

5.1 Exercise Price.

(a) Subject to Section 5.1(b), the exercise price per share for each

Option will be set by the Administrator.

(b) The exercise price may not be less than 100% of the Fair Market

Value of a share of Class A Stock on the date the Option is granted. For

purposes of applying this limitation to any Option granted before this Plan

is approved by the Company's shareholders and where the grant is made

subject to shareholder approval of this Plan, the date the Option is

granted will be determined without regard to the requirement for

shareholder approval.

5.2 Option Term. The term of each Option will be set by the Administrator

but may not exceed ten years from the date the Option is granted.

5.3 Option Vesting. Each Option will vest and become exercisable as

determined by the Administrator and set forth in the Award Agreement evidencing

the Option. No portion of an Option that is unexercisable at Termination of

Employment will become exercisable, except as may be otherwise provided by the

express terms of an Employment Contract.

6. EXERCISE OF OPTIONS

6.1 Partial Exercise. An exercisable Option may be exercised in whole or in

part. However, an Option may not be exercised with respect to fractional shares,

and the Administrator may, by the terms of the Option, require that a partial

exercise be with respect to a minimum number of shares.

6.2 Manner of Exercise. All or a portion of an exercisable Option will be

deemed exercised upon delivery of all of the following to the Secretary of the

Company or his or her office:

(a) a written notice complying with the applicable rules established

by the Administrator stating that the Option or portion of the Option is

exercised, signed by the Holder or other person then entitled to exercise

the Option or portion of the Option;

(b) such representations and documents as the Administrator, in its

absolute discretion, deems necessary or advisable to effect

<PAGE>

compliance with all applicable provisions of the Securities Act and any

other applicable federal or state securities laws or regulations;

(c) if the Option is being exercised under Section 10.1 by any person

or persons other than the Holder, appropriate proof of the right of such

person or persons to exercise the Option; and

(d) full cash payment for the shares with respect to which the Option

or portion of the Option is exercised, except that the Administrator may,

in its discretion:

(1) allow payment, in whole or in part, through delivery of

shares of Class A Stock which have been owned by the Holder for at

least six months, duly endorsed for transfer to the Company, with a

Fair Market Value on the date of delivery equal to the aggregate

exercise price;

(2) allow payment, in whole or in part, through surrender of

shares of Class A Stock then issuable upon exercise of the Option

having a Fair Market Value on the date of Option exercise equal to the

aggregate exercise price;

(3) allow payment, in whole or in part, through delivery of a

notice that the Holder has placed a market sell order with a broker

with respect to shares of Class A Stock issuable upon exercise of the

Option and has irrevocably instructed the broker to pay a sufficient

portion of the net proceeds of the sale to the Company to satisfy the

exercise price;

(4) allow payment through any combination of the methods allowed

by subsections (1), (2), and (3) of this Section 6.2(d).

The Administrator may, in its absolute discretion, take whatever actions it

deems appropriate to effect compliance with the Securities Act and any other

applicable federal or state securities laws or regulations including, without

limitation, placing legends on share certificates and issuing stop-transfer

notices to transfer agen