EXHIBIT 10.9

NORTEK HOLDINGS, INC.

2002 Stock Option Plan

           1.       Purpose. The purpose of this 2002 Stock Option Plan (the
“Plan”) is to advance the interests of Nortek Holdings, Inc., a Delaware
corporation (the “Company”), by affording certain officers, directors,
consultants and key employees of the Company and its Affiliates an ownership
interest in the Company and thus to stimulate in such persons increased personal
interest in the success and future growth of the Company.

           2.     Definitions.

                "Acquiring Person” shall mean, with reference to the
transactions referred to in Section 12, (a) the continuing or surviving entity
of a consolidation or merger with the Company in connection with which the
Company Stock is changed into or exchanged for stock or other securities of any
other Person or cash or any other property, (b) the transferee of all or
substantially all of the assets of the Company, (c) the parent entity of any
corporation consolidating with or merging into the Company in a consolidation or
merger in connection with which the Company Stock is changed into or exchanged
for stock or other securities of any other Person or cash or any other property
if the Company becomes a subsidiary of such entity and the parent entity of any
entity acquiring all or substantially all of the assets of the Company, or (d)
in the case of a capital reorganization or reclassification or in any case in
which the Company is a surviving corporation in a merger not described in clause
(a) or (c) above, the Company.

                 "Affiliate” shall mean, with respect to a specified person, a
person that directly or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, the person specified.

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

                 "Business Day” shall mean any day other than a Saturday or a
Sunday or a day on which commercial banking institutions in the City of New York
are authorized by law to be closed. Any reference herein to "days" (unless
Business Days are specified) shall mean calendar days.

                 "Cause” shall have the meaning ascribed to such term in the
Stockholders Agreement.

                 "Class A Option” shall mean an option to purchase a number of
shares of Common Stock, as specified in an option agreement, identified as a
"Class A Option," which shall be subject to the exercise and termination
provisions set forth in Section 8(a) hereof and, if applicable, in such option
agreement.

                 "Class B Option” shall mean an option to purchase a number of
shares of Common Stock, as specified in an option agreement, identified as a
"Class B Option," which shall be subject to the exercise and termination
provisions set forth in Section 8(b) hereof and, if applicable, in such option
agreement.

                "Committee” shall mean compensation committee of the Board.

               "Common Stock” shall mean the Class A Common Stock, par value
$1.00 per share, of the Company.

               "Company” shall have the meaning ascribed to it in Section 1
hereof.

                "Company Stock” shall mean (i) the Common Stock, (ii) the Series
B Preference Stock and (iii) any stock issued, after the date hereof, in respect
of, in exchange for or in substitution for such Company Stock by reason of any
stock dividend, split, reverse split, combination, recapitalization,
reclassification, merger, consolidation or otherwise.

                "Disability” shall have the meaning ascribed to such term in the
Stockholders Agreement.

                "Eligible Person” shall have the meaning ascribed to such term
in Section 5 hereof.

               "Exercise Notice” shall have the meaning ascribed to such term in
Section 8(a) hereof.

               "Exchange Options” shall have the meaning ascribed to such term
in the Recapitalization Agreement.

               "Exchange Agreements” shall have the meaning ascribed to such
term in the Recapitalization Agreement.

               "Exit Event” shall mean a sale, disposition or transfer of
Company Stock after which the Kelso Entities will have sold, disposed of or
transferred at least 90% of their aggregate Company Stock investment in the
Company for cash or Marketable Securities.

               "Exit Value” shall mean, with respect to each share of Company
Stock, the aggregate amount of cash and Marketable Securities received by the
Kelso Entities (after giving effect to all payments under the Plan). Exit Value
shall (a) be determined in good faith by the Committee on the date of each
Liquidity Event and (b) include any cash or Marketable Securities received by
the Kelso Entities as a result of any prior Liquidity Event. Subject to the
foregoing criteria, any determination made in good faith by the Committee as to
Exit Value of each share of Company Stock shall be binding on the Company and
all Holders. For all purposes of this definition, the value of any Marketable
Securities shall be determined on the date of receipt.

               "Fair Market Value” shall have the meaning ascribed to such term
in the Stockholders Agreement, provided that, with respect to any Marketable
Security, "fair market value" shall mean the average of the closing price of
such Marketable Security on the national exchange (or NASDAQ) on which such
Marketable Security is listed over the five days most recently preceding the
date of the valuation.

               "Holder” shall mean a person to whom an Option is granted
pursuant to the Plan.

               "Investor Return” shall mean the aggregate amount in cash and
Marketable Securities necessary for the Kelso Entities to receive an investment
rate of return, compounded annually, on their investment in the Company Stock,
of at least 17%, calculated from the time of each respective investment in the
Company, taking into account the cash and Marketable Securities which have been
received by the Kelso Entities (a) as dividends on the Company Stock and (b) in
consideration for the sale or transfer of the Company Stock (which amount shall
exclude any fees that Kelso & Company may receive from the Company) beneficially
owned, whether directly or indirectly, by the Kelso Entities and the time when
such cash and Marketable Securities are received. Investor Return shall be
calculated in good faith by the Committee on the date of each Liquidity Event
and take into account all payments that are made under the Plan and the value of
all Common Stock subject to Options that have become exercisable pursuant to the
Plan. Subject to the foregoing, any determination made in good faith by the
Committee as to Investor Return realized as of any date shall be binding on the
Company and all Holders. For all purposes of this definition, the value of any
Marketable Securities shall be determined on the date of receipt.

               "IPO” shall have the meaning ascribed to such term in the
Stockholders Agreement.

               "Kelso & Company” shall mean Kelso & Company L.P.

               "Kelso Entities” shall mean KIA VI and its Affiliates, jointly.

               "KIA VI” shall mean Kelso Investment Associates VI, L.P., a
Delaware limited partnership.

               "Liquidity Event” shall mean the receipt of cash or Marketable
Securities by the Kelso Entities arising from and directly related to the Kelso
Entities' ownership of Company Stock, including, but not limited to, any Kelso
Entities' receipt of cash or Marketable Securities in consideration for the sale
of Company Stock or receipt of any cash dividend with respect to Company Stock
by the Kelso Entities.

               "Marketable Securities” shall mean any securities of a class
listed on a national exchange or on NASDAQ that are freely tradable and for
which registration rights are available.

               "Options” shall mean, collectively, Class A Options, Class B
Options and Rolled Over Options.

               "Option Price” shall mean, with respect to any Option, the price
per share for which shares of Common Stock may be purchased pursuant to such
Option, which initially shall be $46.00 per share for Class A Options and Class
B Options.

               "Other Securities” shall mean any stock (other than Common Stock)
and other securities of the Company or any other Person (corporate or otherwise)
which the Holders of the Options at any time shall be entitled to receive, or
shall have received, upon the exercise of the Options, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities.

               "Permitted Transferee” of a Holder shall mean the Company and (a)
the spouses, family members, heirs, executors, administrators, testamentary
trustees or legatees or beneficiaries of the Holder and (b) any trust, the
beneficiaries of which, or a corporation or partnership, the stockholders or
general and limited partners of which, include only the Holder or the spouse or
family members of the Holder; provided that each such transferor has obtained
the prior written consent of the Company; provided further that the transfer to
any such person is in compliance with all applicable federal, state and foreign
securities laws.

               "Person” shall mean a corporation, an association, a partnership,
an organization, a business, an individual, a government or political
subdivision thereof or a governmental agency.

               "Plan” shall have the meaning ascribed to such term in Section 1
hereof.

               "Recapitalization Agreement” shall mean the Agreement and Plan of
Recapitalization by and among Nortek, Inc., the Company and K Holdings, Inc.
dated June 20, 2002.

               "Retirement” shall have the meaning ascribed to such term in the
Stockholders Agreement.

               Rolled Over Options” shall mean options granted in exchange for
Exchange Options pursuant to the Exchange Agreements.

               Series B Preference Stock” shall mean the series B convertible
preference stock, par value $1.00 per share, of the Company.

          "Stockholders Agreement” shall mean the Stockholders Agreement entered
into (or to be entered into) by the Company, K Holdings, Third Party Investors
and the Management Stockholders (as such term is defined therein).

               "Third Party Investors” shall have the meaning ascribed to such
term in the Stockholders Agreement.

          3.     Options Available for Grant Pursuant to the Plan. The Options
available for grant pursuant to the Plan shall in no case exceed, in the
aggregate, the following quantities:

          (a)      in the case of Class A Options, options to purchase 470,300
shares of Common Stock;

          (b)      in the case of Class B Options, options to purchase 940,600
shares of Common Stock; and

          (c)      in the case of Rolled Over Options, options to purchase
1,868,320 shares of Common Stock.

          4.     Reservation of Shares. The Company has reserved, solely for
issuance and delivery upon exercise of the Options pursuant to this Plan,
3,279,220 shares of Common Stock. All shares of Common Stock (or Other
Securities) issuable upon exercise of any Options shall be duly authorized and,
when issued upon such exercise, shall be validly issued and, in the case of
shares, fully paid and nonassessable with no liability on the part of the
Holders thereof.

          5.     Eligibility. Options may be granted to officers, directors,
consultants or employees of the Company or any of its Affiliates, from time to
time, as determined by the Committee (each, an "Eligible Person"). In
determining (a) who shall be an Eligible Person or (b) grants under the Plan,
the Committee shall take into account such factors as it shall deem relevant in
connection with accomplishing the purposes of the Plan.

          6.     No Right to Employment or Continued Service. Nothing in the
Plan or in any Option shall confer any right on any Eligible Person to continue
in the employ or service of the Company or any of its Affiliates or shall
interfere in any way with the right of the stockholders of the Company or any of
its Affiliates to terminate such Eligible Person's employment or service at any
time.

          7.     Administration of the Plan. The Plan shall be administered by
the Committee, provided, however, that the Board may act on behalf of the
Committee as it deems appropriate. To the extent that the Board takes any action
pursuant to this Plan, all applicable references to the Committee shall be to
the Board. The Committee shall have full power to construe and interpret the
Plan, to establish rules for its administration and to grant Options to Eligible
Persons, in each case in accordance with the provisions of the Plan. In
addition, the Committee may delegate such of its duties under the Plan as may be
deemed by the Committee to be clerical or ministerial to such delegates as the
Committee deems appropriate. All actions taken and decisions made by the
Committee pursuant to the Plan shall be binding and conclusive on all persons
interested in the Plan.

          8.     Exercisability of Options.

          (a)     Class A Options.

  (i)

Subject to the acceleration and forfeiture provisions set forth in this Section
8(a), Class A Options shall become exercisable in equal proportions with respect
to the Common Stock subject thereto on a quarterly basis over a period of three
years immediately following the date of grant of such option. Notwithstanding
the foregoing, subject to Section 10, all Class A Options shall become
exercisable in full upon the occurrence of a Liquidity Event that results in all
Class B Options becoming exercisable in full pursuant to the terms of Section
8(b)(i) hereof.

  (ii)

Subject to Section 10 hereof, Class A Options shall become exercisable in full
upon the occurrence of an Exit Event and the right to exercise such Option shall
terminate at the close of the day on the date of the Exit Event, but in no event
later than the expiration of such Class A Option. In the event that any Exit
Event is contemplated, the Company will mail or deliver to each Holder of such
Option at least ten days prior to the date of such Exit Event a notice (an
"Exercise Notice") specifying that (x) an Exit Event is contemplated and that
upon such Exit Event such Option will become exercisable pursuant to its terms,
(y) the date of the contemplated Exit Event and the terms thereof, and (z) such
Option shall expire at the close of the day on the date of the Exit Event if not
exercised prior thereto.

  (iii)

In the event that a Holder's employment or service with the Company or any of
its Affiliates is terminated for any reason other than by the Company or any of
its Affiliates for Cause, any portion of any Class A Option held by such Holder,
that has become exercisable by virtue of Section 8(a)(i) will remain
exercisable; provided, however, that any such Option shall expire on the 90th
day after termination of employment or service of the Holder, unless such
termination is by reason of death, Disability or Retirement. In the event of a
termination of employment or service by reason of the Holder's death, any
portion of any Class A Option held by such Holder, that has become exercisable
by virtue of Section 8(a)(i) may be exercised by the Holder's executor,
administrator or the person to whom the Class A Option is transferred by will or
the applicable laws of descent and distribution, at any time within the one year
period ending with the first anniversary of the Holder's death, and shall
thereupon terminate. If the termination of employment or service is on account
of the Holder's Retirement with the consent of the Committee (after attainment
of age 65) or Disability, any portion of any Class A Option held by such Holder,
that has become exercisable by virtue of Section 8(a)(i) may be exercised by the
Holder for the remainder of the term of such Option or until such Option
otherwise expires or is terminated in accordance with the terms of the Plan. Any
unexercisable portion of any Class A Option held by a Holder shall expire
immediately prior to a Holder's termination of service or employment for any
reason.

  (iv)

Notwithstanding anything to the contrary herein, in the event that the
employment or service of a Holder with the Company or any of its Affiliates is
terminated by the Company or any of its Affiliates for Cause, each Class A
Option held by such Holder shall expire immediately prior to such termination.

  (v)

Notwithstanding anything to the contrary herein, the Committee may accelerate
the exercisability or delay or postpone the expiration of any outstanding Class
A Option at such time and under such circumstances as the Committee, in its sole
discretion, deems appropriate.

          (b)     Class B Options.

  (i)

Class B Options shall be exercisable for that number of shares as calculated
pursuant to Schedule I; provided, that, and as a condition to such exercise, (w)
one or more Liquidity Event shall have occurred, (x) a minimum Exit Value per
share in excess of $92.00 shall have been achieved, (y) the Kelso Entities shall
have achieved the Investor Return and (z) unless otherwise provided by the
Committee, the Holder is a director, officer, consultant or employee of the
Company or any of its Affiliates on the date of the Exit Event or the Liquidity
Event, as appropriate.

  (ii)

In the event that a Holder's employment or service with the Company or any of
its Affiliates is terminated for any reason other than by the Company or any of
its Affiliates for Cause, any portion of any Class B Option that has become
exercisable by virtue of Section 8(b)(i) will remain exercisable; provided,
however, that, unless otherwise provided by the Committee, any such Class B
Option shall expire on the 90th day after termination of employment or service
of the Holder. Unless otherwise provided by the Committee, any unexercisable
portion of any Class B Option held by a Holder shall expire immediately prior to
a Holder's termination of service or employment for any reason.

  (iii)

Notwithstanding anything to the contrary herein, in the event that the
employment or service of a Holder with the Company or any of its Affiliates is
terminated by the Company or any of its Affiliates for Cause, each Class B
Option held by such Holder shall expire immediately prior to such termination.

  (iv)

In the event that any Liquidity Event is contemplated and that the conditions in
clauses (x), (y) and (z) of Section 8(b)(i) will be satisfied, the Company will
mail or deliver to each Holder of a Class B Option at least 10 days prior to the
date of such Liquidity Event an Exercise Notice specifying that (x) a Liquidity
Event is contemplated and the extent to which the Class B Option will be
exercisable pursuant to its terms at the time of such Liquidity Event and (y)
the date of the contemplated Liquidity Event and the terms thereof.

  (v)

The right to exercise any Class B Option shall terminate at the close of the day
on the date of the Exit Event, but in no event later than the expiration of such
Class B Option. In the event that any Exit Event is contemplated and the
conditions in clauses (x), (y) and (z) of Section 8(b)(i) will be satisfied, the
Company will mail or deliver to each Holder of such Class B Option at least ten
days prior to the date of such Exit Event an Exercise Notice specifying (x) that
an Exit Event is contemplated and the extent to which the Class B Option will be
exercisable pursuant to its terms at the time of such Exit Event, (y) the date
of the contemplated Exit Event and the terms thereof, and (z) that such Class B
Option shall expire at the close of the day on the date of the Exit Event if not
exercised prior thereto.

  (vi)

Notwithstanding anything to the contrary herein, the Committee may accelerate
the exercisability or delay or postpone the expiration of any outstanding Class
B Option at such time and under such circumstances as the Committee, in its sole
discretion, deems appropriate.

          (c)     Rolled Over Options.

  (i)

Rolled Over Options shall be fully exercisable on the date of grant.

  (ii)

Subject to Section 10 hereof, the right to exercise any Rolled Over Option shall
terminate at the close of the day on the date of the Exit Event, but in no event
later than the expiration of such Rolled Over Option. In the event that any Exit
Event is contemplated, the Company will mail or deliver to each Holder of a
Rolled Over Option at least ten days prior to the date of such Exit Event a
notice (an "Exercise Notice") specifying that (x) the date of the contemplated
Exit Event and the terms thereof, and (y) such Option shall expire at the close
of the day on the date of the Exit Event if not exercised prior thereto.

  (iii)

In the event that a Holder's employment or service with the Company or any of
its Affiliates is terminated for any reason, the Rolled Over Option may be
exercised by the Holder at any time, subject to Section 10 hereof.

          (d)     Deemed Termination of Employment. If the entity that employs
or engages the Holder ceases to be an Affiliate of the Company (whether by sale
or other corporate transaction), then such sale or other corporate transaction
shall be deemed a termination of the Holder's employment or service for other
than Cause for purposes of this Plan.

          9.     Manner of Exercise.

          (a)      Each Option shall further state the terms and conditions of
the Option (including the conditions to exercisability thereof to the extent
such conditions are in addition to or different from those set forth in the
Plan) and the Option Price. An Option may be exercised, subject to this Section
9, for any or all whole number of shares that have become purchasable under such
Option. To the extent necessary upon the exercise of an Option, the Company
shall round each fractional share issuable upon such exercise up to the next
whole number.

          (b)      Subject to the terms and conditions set forth in this Plan
(including the conditions to exercisability thereof), an Option may be exercised
by the Holder during normal business hours on any Business Day, by surrender of
the Option to the Company at its principal office, accompanied by a
subscription, in cash or by certified or official bank check payable to the
order of the Company, in the amount obtained by multiplying (i) the number of
shares of Common Stock designated in such subscription (up to the amount of
shares which such Holder is entitled to receive at such time upon exercise of
the Option) by (ii) the Option Price. A Holder may elect to pay all or a portion
of the aggregate subscription price by tendering shares of Common Stock with a
Fair Market Value equal to aggregate subscription price; provided, however, that
such Holder must have owned such tendered shares of Common Stock continuously
through such exercise date for a period of at least six months.

          (c)      Each exercise of an Option shall be deemed to have been
effected immediately prior to the close of business on the Business Day on which
an Option shall have been surrendered to the Company, and at such time the
Person or Persons in whose name or names any certificate or certificates for
shares of Common Stock (or Other Securities) shall be issuable upon such
exercise shall be deemed to have become the Holder or Holders of record thereof.

          (d)      The Company at its expense shall deliver to the relevant
Holder (or as such Holder may direct pursuant to the Option) a certificate or
certificates representing shares of the Common Stock so purchased as soon as
reasonably practicable, but in any event within five Business Days, after
receipt of such notice. Each such certificate shall bear the legend required by
the Stockholders Agreement to the effect that there are restrictions on the
transfer of shares of Common Stock.

          (e)      In the event that such exercise is in part only, the Company
shall deliver a new Option of the same Class and tenor, calling in the aggregate
on the face thereof for the number of shares of Common Stock equal to the number
of such shares which such Holder would be entitled to receive at such time upon
exercise of such Option, after giving effect to such recent exercise.

          (f)      Notwithstanding anything to the contrary in the Plan, in no
event may any Option be exercised prior to the time at which the Option becomes
exercisable (as set forth in the Option) or after the expiration of such Option,
and each Option shall terminate upon the terms set forth in Sections 8 and 10
hereof.

          (g)      If, at any time, the Committee shall determine, in its sole
discretion, that the listing, registration or qualification of the shares of
Common Stock upon any securities exchange or under any applicable securities
laws, or the consent or approval of any governmental or self-regulatory agency
or body, is necessary or reasonably desirable as a condition of, or in
connection with, the issue or purchase of the shares of Common Stock under any
Option, such Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions unacceptable to the Committee, in
the Committee's reasonable discretion. The Company agrees to use its reasonable
efforts to obtain any such listing, registration, qualification, consent or
approval.

          10.     Expiration of Options. Notwithstanding the provisions of
Section 8 above, the Class A Options, Class B Options and Rolled Over Options
will expire on the tenth anniversary of the date of grant. Any outstanding
unexercised Option, or portion thereof, shall be forfeited, whether or not
exercisable, upon the expiration of such Option.

          11.     Adjustment of Number of Shares of Common Stock Issuable Upon
Exercise. The number and kind of shares of Common Stock purchasable upon the
exercise of Options, numbers set forth in Section 3, the numbers and dollar
amounts set forth in Schedule I and Section 8(b)(i)(x), and the Option Price
shall be subject to adjustment from time to time as follows:

          (a)     Stock Dividends; Stock Splits; Reverse Stock Splits. In case
the Company shall (i) pay a dividend or make any other distribution with respect
to its Common Stock in shares of its capital stock, (ii) subdivide its
outstanding Common Stock, or (iii) combine its outstanding Common Stock into a
smaller number of shares, the number of shares of Common Stock issuable upon
exercise of the Options immediately prior to the record date for such dividend
or distribution or the effective date of such subdivision or combination shall
be adjusted so that the Holder of the Options shall thereafter be entitled to
receive the kind and number of shares of Common Stock or other securities of the
Company that such Holder would have owned or have been entitled to receive after
the happening of any of the events described above, had such Options been
exercised immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this Section 11 shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event.

          (b)     Ordinary and Extraordinary Dividend. No adjustment in respect
of any ordinary dividends or extraordinary dividends (except as provided below)
declared and paid on Company Stock, or on any other capital stock of the Company
shall be made during the term of an Option or upon the exercise of an Option. In
the event an extraordinary dividend is declared and paid on Company Stock, or on
any other capital stock of the Company, the Committee shall adjust the Option
Price of any unvested Option, and adjust the Option Price of any vested Option
with an Option Price that is less than the amount of the extraordinary dividend
on a per share basis, in each case in a manner determined by the Committee to
reflect the proportionate decrease in value of Common Stock subject to such
Option as a result of such extraordinary dividend.

          (c)     Other Adjustments. In the event that at any time, as a result
of an adjustment made pursuant to this Section 11, the registered Holders shall
become entitled to receive any securities of the Company other than shares of
Common Stock, thereafter the number of such Other Securities so receivable upon
exercise of the Options shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Common Stock contained in this Section 11.

          (d)     Notice of Adjustment. Whenever the number of shares of Common
Stock purchasable upon the exercise of an Option is adjusted, as herein
provided, the Company shall give Notice to each Holder of such adjustment or
adjustments.

          12.     Purchase Rights Upon Merger, Consolidation, etc. Upon an Exit
Event, in conjunction with the expiration of all outstanding Options under the
Plan, the Company may, with respect to any Option (whether vested or unvested)
held by a Holder, make a cash payment to the Holder (with or without the
Holder's consent) of an amount equal to (A) the highest value per share received
with respect to any share of Company Stock on the date of the Exit Event in the
transaction which results in such Exit Event less the Option Price of such
Option, multiplied by (B) the number of shares of Common Stock subject to
purchase under such Option (including any shares which will become subject to
purchase in connection with such Exit Event). In the event of any consolidation
of the Company with or merger of the Company with or into another corporation,
any reorganization or reclassification of the Company or any sale, transfer or
lease to another entity of all or substantially all of the assets of the
Company, the Acquiring Person shall execute an agreement under which the
Acquiring Person shall assume each Option and each such assumed Option shall
continue to vest and become exercisable in accordance with its terms (adjusted,
in the reasonable discretion of the Committee, to reflect the effect of such
transaction) and shall thereafter become exercisable, subject to the conditions
and other terms of such Options, for the number and/or kind of capital stock,
securities and/or other property into which the Common Stock subject to the
Option would have been changed or exchanged had the Option been exercised in
full prior to such transaction, provided that, if necessary, the provisions of
the Option shall be appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any shares of capital stock, securities and/or other
property thereafter issuable or deliverable upon exercise of the Option. The
Company shall mail by first class mail, postage prepaid, to each Holder, notice
of the execution of any such agreement (including a copy thereof). Such
agreement shall provide for adjustments, which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 12. The
provisions of this Section 12 shall similarly apply to successive
consolidations, mergers, reorganizations, reclassifications and sales. The
Acquiring Person shall mail to Holders a notice describing any supplemental
Option Agreement. In the event that this Section 12 shall be applicable, the
provisions of Section 11(a) shall not be applicable.

          13.     Stockholders Agreement. Notwithstanding anything in the Plan
to the contrary, all shares of Common Stock issued upon the exercise of Options
shall be subject to all terms and conditions set forth in the Stockholders
Agreement. As a condition to the exercise of any Option, each Holder may be
required to execute and deliver to the Company (a) an executed copy of the
Stockholders Agreement, in the form in effect at the time of such exercise, if
such Holder had not previously done so and (b) such written representations and
other documents as may be necessary or reasonably desirable, in the opinion of
the Committee, for purposes of compliance with federal or state securities or
other laws. For purposes of the Stockholders Agreement, each Holder shall be
deemed to be a "Management Stockholder".

          14.     Restrictions on Transfer of Certain Options and Common Stock
Acquired upon Exercise. Each Holder, by acceptance of an Option, shall
acknowledge and agree that (a) such Option may not be sold, assigned,
transferred, exchanged, mortgaged, pledged or granted a security interest in, or
otherwise disposed of or encumbered by or to any party other than by or to a
Permitted Transferee and (b) any shares of Common Stock acquired upon the
exercise of Options may not, prior to the occurrence of an Exit Event, be sold,
assigned, transferred, exchanged, mortgaged, pledged or granted a security
interest in, or otherwise disposed of or encumbered by or to any party other
than by or to a Permitted Transferee.

          15.     Registration and Transfer of Options, etc.

          (a)     Option Register; Ownership of Options. The Company will keep
at its principal office a register in which the Company will provide for the
registration of Options and the registration of transfers of Options. The
Company may treat the Person in whose name any Option is registered on such
register as the owner thereof for all other purposes, and the Company shall not
be affected by any notice to the contrary, except that, if and when any Option
is accompanied by an instrument of assignment in a form acceptable to the
Company, the Company may (but shall not be obligated to) treat the bearer
thereof as the owner of such Option for all purposes. Subject to Section 15(b)
hereof, an Option, if properly assigned, may be exercised by a new Holder
without a new Option first having been issued.

          (b)     Transfer and Exchange of Options. Upon surrender of any Option
for registration of transfer or for exchange to the Company at its principal
office, the Company at its expense will (subject to compliance with Section 14
hereof, if applicable) execute and deliver in exchange therefor a new Option or
Options of the same Class and tenor, in the name of such Holder or as such
Holder (upon payment by such holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock called for on the face or faces of the Option or Options
so surrendered.

          (c)     Replacement of Options. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Option and, in the case of any such loss, theft or destruction of any Option,
upon delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, at the sole option of the Company, of an indemnity agreement
reasonably satisfactory to the Company), or, in the case of any such mutilation,
upon the surrender of such Option for cancellation to the Company at its
principal office, the Company at its expense will execute and deliver, in lieu
thereof, a new Option of the same Class and tenor.

          16.     Rights as Option Holders of Shares. Neither the Holder of an
Option nor any Permitted Transferees shall have any rights as a stockholder of
the Company (including, without limitation, any right to vote or to receive
dividends or to consent or to receive notice as a stockholder in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, or any right whatsoever as a stockholder of the Company (except
for those notices and other matters expressly set forth under the Plan or in the
Option)). An Option does not impose any obligation on a Holder or any of its
Permitted Transferees to purchase any securities or impose any liabilities on a
Holder as a stockholder of the Company, whether such obligation or liabilities
are asserted by the Company or by creditors of the Company.

          17.     Withholding. The Company shall have the right to require a
Holder or other person entitled to receive shares of Common Stock upon the
exercise of Options under the Plan to pay to the Company, as a condition to
receiving such shares, the amount which the Company is or will be required to
withhold with respect to the issuance of such shares in order for the Company to
pay taxes or to claim an income tax deduction with respect to the issuance of
such shares. In lieu of such payment, the Company may retain, at the discretion
of the Committee, a sufficient number of such shares (valued at the Fair Market
Value thereof) to cover the amount equal to the statutorily required tax
withholding. A Holder, however, may elect to pay to the Company all or a portion
of the total amount the Company is required to withhold by tendering shares of
Common Stock with a Fair Market Value equal to the amount the Company is
required to withhold; provided, however, that such Holder must have owned such
tendered shares of Common Stock continuously through the date of issuance (or
lapse) for a period of a least six months.

          18.     Liability. The Company, and not the Committee, or any member
thereof, shall be liable for any and all claims made against the Company or the
Committee in connection with the Plan or any Option.

          19.     Nonqualified Options. Options granted under the Plan shall be
nonqualified stock options.

          20.     Legal Requirements. The Company shall be responsible and shall
pay for any transfer, revenue or documentary stamps with respect to shares of
Common Stock issued upon the exercise of Options granted under the Plan (other
than any transfer tax applicable to a transfer to a Permitted Transferee which
shall be payable by a Holder).

          21.     Amendment and Termination of the Plan.

          (a)      The Committee may at its discretion at any time and from time
to time alter, amend, suspend, or terminate the Plan and any unvested Options
(but not any previously granted vested Options) in whole or in part, including,
without limitation, amending the criteria for vesting and exercisability set
forth in Section 8 hereof, substituting alternative vesting and exercisability
criteria and imposing certain blackout periods on Options, provided, however,
that (i) such alteration, amendment, suspension or termination shall preserve
the economic value, as determined by the Committee in its sole good faith
discretion, of any previously granted Option and (ii) the Committee shall only
be permitted to alter, amend, suspend or terminate previously granted unvested
Options with the consent of the Holders of a majority of such Options.

          (b)      Unless otherwise determined by the Committee, in the event of
an IPO, the Committee shall amend the Plan and all Class B Options to provide
for (i) subject to Section 21(a) above, the substitution of the vesting and
exercisability criteria set forth in Schedule I with criteria based on stock
price and (ii) the imposition of certain blackout periods, in each case, as the
Committee shall determine to be appropriate; provided, however that such
amendments shall preserve the economic value, as determined by the Committee in
its sole good faith discretion.

          22.     Effective Date. The Plan shall take effect upon its approval
by Company shareholders.

          23.     Interpretations. Except as otherwise expressly provided in the
Plan, the following rules of interpretation apply to the Plan and each Option:
(a) the singular includes the plural and the plural includes the singular; (b)
"include" and "including" are not limiting and "or" is not exclusive; (c) a
reference to any agreement or other contract includes permitted supplements and
amendments; (d) a reference to a law includes any amendment or modification to
such law and any rules or regulations issued thereunder; and (e) a reference to
any person, corporation or other entity includes its permitted successors and
assigns.

          24.     GOVERNING LAW. THE PLAN AND ANY AND ALL OPTIONS AND OPTION
AGREEMENTS SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF
THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF DELAWARE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

          25.     Company Stock. All references herein to a number or percentage
of shares of Common Stock or Company Stock held by a Person shall be calculated
by treating the shares of Common Stock underlying all shares of Series B
Preference Stock as being outstanding (regardless of whether such shares could
be converted into Common Stock at such time).

Schedule I

Exit Value Triggers for Class B

Cumulative Number of % of Class B Options

Exit Value per Share

Class B Options which which become

become Exercisable Exercisable

0 _

$92.00

940,600 100%

$184.00

          Upon the occurrence of each Liquidity Event in which, in each case,
all of the conditions of Section 8(b)(i) of the Plan are satisfied, the number
of Class B Options that shall become exercisable will be determined in the
following manner: No Class B Option shall become exercisable unless an Exit
Value per Share in excess of $92.00 is achieved. All Class B Options shall
become exercisable if an Exit Value per Share of $184.00 (or such greater value)
is achieved. Where an Exit Value per Share is greater than $92.00 but less than
$184.00, a ratable number of Class B Options shall become exercisable (i.e., a
linear increase of approximately 1.087% per dollar in excess of the minimum Exit
Value per Share of $92.00). Notwithstanding the foregoing, the number of Class B
Options that shall become exercisable due to any Liquidity Event shall be
reduced (but not below zero) by the total number of Class B Options that have
previously become exercisable due to any prior Liquidity Event.