Exhibit 10.1


AFTERMARKET TECHNOLOGY CORP.


2004
Stock Incentive Plan


 


	
  Article
  1. Establishment, Purpose, and Duration

  	
   

  
	
  Article
  2. Definitions

  	
   

  
	
  Article 3. Administration

  	
   

  
	
  Article
  4. Shares Subject to this Plan and Maximum Awards

  	
   

  
	
  Article 5.
  Eligibility and Participation

  	
   

  
	
  Article
  6. Stock Options

  	
   

  
	
  Article 7. Stock
  Appreciation Rights

  	
   

  
	
  Article
  8. Restricted Stock and Restricted Stock Units

  	
   

  
	
  Article
  9. Performance Units/Performance Shares

  	
   

  
	
  Article
  10. Cash-Based Awards and Other Stock-Based Awards

  	
   

  
	
  Article 11.
  Performance Measures

  	
   

  
	
  Article 12.
  Nonemployee Director Awards

  	
   

  
	
  Article 13. Dividend
  Equivalents

  	
   

  
	
  Article 14.
  Beneficiary Designation

  	
   

  
	
  Article
  15. Deferrals

  	
   

  
	
  Article 16. Rights
  of Participants

  	
   

  
	
  Article 17. Change of
  Control

  	
   

  
	
  Article
  18. Amendment, Modification, Suspension, and Termination

  	
   

  
	
  Article
  19. Withholding

  	
   

  
	
  Article
  20. Successors

  	
   

  
	
  Article 21. General
  Provisions

  	
   

  



 





















 


Aftermarket
Technology Corp.

2004 Stock Incentive Plan


ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION


1.1          Establishment. 
Aftermarket Technology Corp., a Delaware corporation (hereinafter
referred to as the “Company”), establishes an incentive compensation plan to be
known as the 2004 Stock Incentive Plan (hereinafter referred to as this “Plan”),
as set forth in this document.


This Plan permits the grant of Cash-Based Awards,
nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units, Covered Employee
Annual Incentive Awards, and Other Stock-Based Awards.


This Plan shall become effective upon shareholder
approval (the “Effective Date”) and shall remain in effect as provided in
Section 1.3.


1.2          Purpose of this Plan.  The purpose
of this Plan is to promote the interests of the Company and its shareholders by
strengthening the Company’s ability to attract, motivate, and retain Employees
and Directors of the Company upon whose
judgment, initiative, and efforts the financial success and growth of the
business of the Company largely depend, and to provide an additional incentive
for such individuals through stock ownership and other rights that promote and
recognize the financial success and growth of the Company and create value for
shareholders.


1.3          Duration of this Plan.  Unless sooner
terminated as provided herein, this Plan shall terminate ten years from the
Effective Date.  After this Plan is
terminated, no Awards may be granted but Awards previously granted shall remain
outstanding in accordance with their applicable terms and conditions and this
Plan’s terms and conditions.


ARTICLE
2.  DEFINITIONS


Whenever used in this Plan, the following
terms shall have the meanings set forth below, and when the meaning is
intended, the initial letter of the word shall be capitalized.


2.1          “Affiliate” shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations of the Exchange
Act.


2.2          “Annual Award Limit” or “Annual Award
Limits” have the
meaning set forth in Section 3.3.


2.3          “Award” means, individually or collectively, a grant
under this Plan of Cash-Based Awards, Stock Options, SARs, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units, Covered Employee
Annual Incentive Awards, or Other Stock-Based Awards, in each case subject to
the terms of this Plan.


2.4          “Award Agreement” means either (a) a written agreement
entered into by the Company and a Participant setting forth the terms and
provisions applicable to an Award granted under this Plan, or (b) a written
statement issued by the Company to a Participant describing the terms and
provisions of such Award.


2.5          “Beneficial Owner” or “Beneficial Ownership”
shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules
and Regulations under the Exchange Act.


2.6          “Board” or “Board of Directors”
means the Board of Directors of the Company.


2.7          “Cash-Based Award” means an Award granted to a Participant
as described in Article 10.


 


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2.8          “Change of Control” means the first to occur of the
following events:


(a)       any sale or transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets of the
Company, on a consolidated basis, in one transaction or a series of related
transactions, unless, immediately after giving effect to such transaction, at
least 85% of the total voting power normally entitled to vote in the election
of directors, managers or trustees, as applicable, of the transferee is “beneficially
owned” by persons who, immediately prior to the transaction, beneficially owned
100% of the total voting power normally entitled to vote in the election of
directors of the Company;


(b)       any Person or Group (as defined in
Sections 13(d) and 14(d) of the Exchange Act) other than an Excluded Person (as
defined in that certain Indenture dated as of August 2, 1994 by and among
the Company, the Guarantors named therein and American Bank National
Association) is or becomes the “beneficial owner,” directly or indirectly, of
more than 35% of the total voting power in the aggregate of all classes of
capital stock of the Company then outstanding normally entitled to vote in
elections of directors, unless the percentage so owned by an Excluded Person is
greater;


(c)       during any period of 12 consecutive
months, individuals who at the beginning of such 12-month period constituted
the Board (together with any new directors whose election by the Board or whose
nomination for election by the shareholders of the Company was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board then in office; or


(d)       a reorganization, merger or consolidation
of the Company the consummation of which results in the outstanding securities
of the same class as the shares covered by an outstanding Award being exchanged
for or converted into cash, property and/or a different kind of securities,
unless, immediately after giving effect to such transaction, at least 85% of
the total voting power normally entitled to vote in the election of directors,
managers or trustees, as applicable, of the entity surviving or resulting from
such reorganization, merger or consolidation is “beneficially owned” by persons
who, immediately prior to the transaction, beneficially owned 100% of the total
voting power normally entitled to vote in the election of directors of the
Company.


2.9          “Code” means the U.S. 
Internal Revenue Code of 1986, as amended from time to time.


2.10        “Committee” means the compensation and human
resources committee of the Board, or any other committee designated by the
Board to administer this Plan.  The
members of the Committee shall be appointed from time to time by and shall
serve at the discretion of the Board.


2.11        “Company” means Aftermarket Technology Corp., a Delaware
corporation, and any successor thereto as provided in Article 20.


2.12        “Consolidated Operating Earnings” means the consolidated earnings before
income taxes of the Company, computed in accordance with generally accepted
accounting principles, but shall exclude the effects of Extraordinary Items.


2.13        “Covered Employee” means a Participant who is a “covered
employee,” as defined in Code Section 162(m) and the regulations promulgated
under Code Section 162(m), or any successor statute.


2.14        “Director” means any individual who is a member of
the Board of Directors of the Company.


2.15        “Effective Date” has the meaning set forth in Section
1.1.


2.16        “Employee” means any employee of the Company, its
Affiliates, and/or Subsidiaries.


2.17        “Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, or any successor act thereto.


 


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2.18        “Extraordinary Items” means (a) extraordinary, unusual, and/or
nonrecurring items of gain or loss; (b) gains or losses on the disposition of a
business; (c) changes in tax or accounting regulations or laws; or (d) the
effect of a merger or acquisition, all of which must be identified in the
audited financial statements, including footnotes, or Management Discussion and
Analysis section of the Company’s annual report.


2.19        “Fair Market Value” or “FMV” means a
price that is based on the opening, closing, actual, high, low, or average
selling prices of a Share on the Nasdaq National Market System or other
established stock exchange (or exchanges) or quotation system on the applicable
date, the preceding trading days, the next succeeding trading day, or an
average of trading days, as determined by the Committee in its discretion.  If the Committee makes no such determination,
then FMV as of any date shall be the closing price for a Share reported for
that date by the Nasdaq National Market System or other established stock
exchange (or exchanges) or quotation system. 
Such definition(s) of FMV shall be specified in each Award Agreement and
may differ depending on whether FMV is in reference to the grant, exercise, vesting,
settlement, or payout of an Award.  If,
however, the required accounting standards used to account for equity Awards
granted to Participants are substantially modified subsequent to the Effective
Date of this Plan such that fair value accounting for such Awards becomes
required, the Committee shall have the ability to determine an Award’s FMV
based on the relevant facts and circumstances. 
If Shares are not traded on an established stock exchange, FMV shall be
determined by the Committee based on objective criteria.


2.20        “Full Value Award” means an Award other than in the form of
an Option or SAR, and which is settled by the issuance of Shares.


2.21        “Freestanding SAR” means a SAR that is granted
independently of any Options, as described in Article 7.


2.22        “Grant Price” means the price established at the time
of grant of a SAR pursuant to Article 7, used to determine whether there is any
payment due upon exercise of the SAR.


2.23        “Insider” shall mean an individual who is, on the relevant
date, an officer, Director, or more than ten percent (10%) Beneficial
Owner of any class of the Company’s equity securities that is registered
pursuant to Section 12 of the Exchange Act, as determined by the Board in
accordance with Section 16 of the Exchange Act.


2.24        “Net Income” means the consolidated net income before
taxes for this Plan Year, as reported in the Company’s annual report to
shareholders or as otherwise reported to shareholders.


2.25        “Nonemployee Director” has the same meaning set forth in Rule
16b-3 promulgated under the Exchange Act, or any successor definition adopted
by the United States Securities and Exchange Commission.


2.26        “Nonemployee Director Award” means any Option, SAR, or Full Value
Award granted, whether singly, in combination, or in tandem, to a Participant
who is a Nonemployee Director pursuant to such applicable terms, conditions,
and limitations as the Board or Committee may establish in accordance with this
Plan.


2.27        “Operating Cash Flow” means cash flow from operating
activities as defined in SFAS Number 95, Statement of Cash Flows.


2.28        “Option” means a nonqualified Stock Option, as described
in Article 6.


2.29        “Option Price” means the price at which a Share may be
purchased by a Participant pursuant to an Option.


2.30        “Other Stock-Based Award” means an equity-based or equity-related
Award not otherwise described by the terms of this Plan, granted pursuant to
Article 10.


2.31        “Participant” means any eligible person as set forth
in Article 5 to whom an Award is granted.


2.32        “Performance-Based Compensation” means compensation under an Award that
satisfies the requirements of Section 162(m) of the Code for deductibility of
remuneration paid to Covered Employees.


 


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2.33        “Performance Measures” means measures as described in Article
11 on which the performance goals are based and which are approved by the
Company’s shareholders pursuant to this Plan in order to qualify Awards as
Performance-Based Compensation.


2.34        “Performance Period” means the period of time during which
the performance goals must be met in order to determine the degree of payout
and/or vesting with respect to an Award.


2.35        “Performance Share” means an Award granted to a Participant,
as described in Article 9.


2.36        “Performance Unit” means an Award granted to a Participant,
as described in Article 9.


2.37        “Period of Restriction” means the period when Restricted Stock
or Restricted Stock Units are subject to a substantial risk of forfeiture
(based on the passage of time, the achievement of performance goals, or upon
the occurrence of other events as determined by the Committee, in its
discretion), as provided in Article 8.


2.38        “Person” shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a “group” as defined in Section 13(d) thereof.


2.39        “Plan” means the Aftermarket Technology Corp.  2004 Stock
Incentive Plan.


2.40        “Plan Year” means the calendar year.


2.41        “Restricted Stock” means an Award granted to a Participant
pursuant to Article 8.


2.42        “Restricted Stock Unit” means an Award granted to a Participant
pursuant to Article 8, except no Shares are actually awarded to the Participant
on the date of grant.


2.43        “Share” means a share of common stock of the Company, $.01
par value per share.


2.44        “Stock Appreciation Right” or “SAR” means an
Award, designated as a SAR, pursuant to the terms of Article 7.


2.45        “Subsidiary” means any corporation or other entity,
whether domestic or foreign, in which the Company has or obtains, directly or
indirectly, a proprietary interest of more than fifty percent (50%) by reason of stock ownership or otherwise.


2.46        “Tandem SAR” means a SAR that is granted in
connection with a related Option pursuant to Article 7, the exercise of
which shall require forfeiture of the right to purchase a Share under the
related Option (and when a Share is purchased under the Option, the Tandem SAR
shall similarly be canceled).


2.47        “Third Party Service Provider” means any consultant, agent, advisor, or
independent contractor who renders services to the Company, a Subsidiary, or an
Affiliate that (a) are not in connection with the offer and sale of the Company’s
securities in a capital raising transaction, and (b) do not directly or
indirectly promote or maintain a market for the Company’s securities.


ARTICLE 3. 
ADMINISTRATION


3.1          General.  The Committee
shall be responsible for administering this Plan, subject to this Article 3 and
the other provisions of this Plan.  The
Committee may employ attorneys, consultants, accountants, agents, and other
persons, any of whom may be an Employee, and the Committee, the Company, and
its officers and Directors shall be entitled to rely upon the advice, opinions,
or valuations of any such persons.  All
actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Participants, the Company, and all other
interested persons.


 


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3.2          Authority of the Committee.  The Committee
shall have full and exclusive discretionary power to interpret the terms and
the intent of this Plan and any Award Agreement or other agreement or document
ancillary to or in connection with this Plan, to determine eligibility for
Awards and to adopt such rules, regulations, forms, instruments, and guidelines
for administering this Plan as the Committee may deem necessary or proper;
provided, however, that the Board, in its sole discretion, may exercise any
authority of the Committee under this Plan, except in regard to Awards that are
intended to qualify as Performance-Based Compensation, in lieu of the Committee’s
exercise thereof.  Such authority shall
include, but not be limited to, selecting Award recipients, establishing all
Award terms and conditions, including the terms and conditions set forth in
Award Agreements, and, subject to Article 18, adopting modifications and
amendments to this Plan or any Award Agreement, including without limitation,
any that are necessary to comply with the laws of the countries and other
jurisdictions in which the Company, its Affiliates, and/or its Subsidiaries
operate.


3.3          Delegation.  The Committee
may delegate to one or more of its members or to one or more officers of the
Company, and/or its Subsidiaries and Affiliates or to one or more agents or
advisors such administrative duties or powers as it may deem advisable, and the
Committee or any person to whom it has delegated duties or powers as aforesaid
may employ one or more persons to render advice with respect to any responsibility
the Committee or such person may have under this Plan.  The Committee may, by resolution, authorize
one or more officers of the Company to do one or both of the following on the
same basis as can the Committee: (a) designate Employees to be recipients of
Awards; (b) designate Third Party Service Providers to be recipients of Awards;
and (c) determine the size of any such Awards; provided, however, (i) the
Committee shall not delegate such responsibilities to any such officer for
Awards granted to an Employee that is considered an Insider; (ii) the
resolution providing such authorization sets forth the total number of Awards
such officer(s) may grant; and (iii) the officer(s) shall report periodically
to the Committee regarding the nature and scope of the Awards granted pursuant
to the authority delegated.


ARTICLE 4.  SHARES SUBJECT TO THIS PLAN AND MAXIMUM
AWARDS


4.1          Number
of Shares Available for Awards.


(a)       Subject to adjustment as provided in
Section 4.4, the maximum number of Shares available for issuance to
Participants under this Plan (the “Share Authorization”) shall be one million
(1,000,000).


(b)       Of the Shares reserved for issuance under
Section 4.1(a), no more than seven
hundred fifty thousand (750,000) of the reserved Shares may be issued
pursuant to Full Value Awards.


(c)       Subject to the limit set forth in Section
4.1(a) on the number of Shares that may be issued in the aggregate under this
Plan, the maximum number of shares that may be issued to Nonemployee Directors
shall be five hundred thousand (500,000) Shares, and no Nonemployee Director
may receive more than fifty thousand (50,000) Shares in any Plan Year.


4.2          Share Usage.  Shares covered by an Award shall only be
counted as used to the extent they are actually issued.  Any Shares related to Awards which terminate
by expiration, forfeiture, cancellation, or otherwise without the issuance of
such Shares, are settled in cash in lieu of Shares, or are exchanged with the
Committee’s permission, prior to the issuance of Shares, for Awards not involving
Shares, shall be available again for grant under this Plan.  Moreover, if the Option Price of any Option
granted under this Plan or the tax withholding requirements with respect to any
Award granted under this Plan are satisfied by tendering Shares to the Company
(by either actual delivery or by attestation), or if a SAR is exercised, only
the number of Shares issued, net of the Shares tendered, if any, will be deemed
delivered for purposes of determining the maximum number of Shares available
for delivery under this Plan.  The
maximum number of Shares available for issuance under this Plan shall not be
reduced to reflect any dividends or dividend equivalents that are reinvested
into additional Shares or credited as additional Restricted Stock, Restricted
Stock Units, Performance Shares, or Stock-Based Awards.  The Shares available for issuance under this
Plan may be authorized and unissued Shares or treasury Shares.


 


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4.3          Annual Award Limits. 
Unless and
until the Committee determines that an Award to a Covered Employee shall not be
designed to qualify as Performance-Based Compensation, the following limits
(each an “Annual Award Limit” and, collectively, “Annual Award Limits”) shall
apply to grants of such Awards under this Plan:


(a)       Options: The maximum aggregate number of
Shares subject to Options granted in any one Plan Year to any one Participant
shall be three hundred thousand (300,000).


(b)       SARs: The maximum number of Shares subject
to Stock Appreciation Rights granted in any one Plan Year to any one
Participant shall be three hundred thousand (300,000).


(c)       Restricted Stock or Restricted Stock Units:
The maximum aggregate grant with respect to Awards of Restricted Stock or
Restricted Stock Units in any one Plan Year to any one Participant shall be one
hundred fifty thousand (150,000).


(d)       Performance Units or Performance Shares: The
maximum aggregate Award of Performance Units or Performance Shares that a
Participant may receive in any one Plan Year shall be one hundred fifty
thousand (150,000) Shares, or equal to the value of one hundred fifty thousand
(150,000) Shares determined as of the date of vesting or payout, as applicable.


(e)       Cash-Based Awards: The maximum aggregate
amount awarded or credited with respect to Cash-Based Awards to any one
Participant in any one Plan Year may not exceed the value of three million
dollars ($3,000,000) or three hundred thousand (300,000) Shares determined as
of the date of vesting or payout, as applicable.


(f)        Other Stock-Based Awards:  The maximum aggregate grant with
respect to other Stock-Based Awards pursuant to Section 10.2 in any one Plan
Year to any one Participant shall be one hundred fifty thousand (150,000).


4.4          Adjustments in Authorized Shares. 
In the event of any corporate event or transaction (including, but not
limited to, a change in the shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the Company,
combination of Shares, exchange of Shares, dividend in kind, or other like
change in capital structure or distribution (other than normal cash dividends)
to shareholders of the Company, or any similar corporate event or transaction,
the Committee, in its sole discretion, in order to prevent dilution or
enlargement of Participants’ rights under this Plan, shall substitute or
adjust, as applicable, the number and kind of Shares that may be issued under
this Plan or under particular forms of Awards, the number and kind of Shares
subject to outstanding Awards, the Option Price or Grant Price applicable to
outstanding Awards, the Annual Award Limits, and other value determinations
applicable to outstanding Awards.


The Committee, in its sole discretion, may also make
appropriate adjustments in the terms of any Awards under this Plan to reflect
or related to such changes or distributions and to modify any other terms of
outstanding Awards, including modifications of performance goals and changes in
the length of Performance Periods.  The
determination of the Committee as to the foregoing adjustments, if any, shall
be conclusive and binding on Participants under this Plan.


Subject to the provisions of Article 18, without
affecting the number of Shares reserved or available hereunder, the Committee
may authorize the issuance or assumption of benefits under this Plan in
connection with any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem appropriate.


ARTICLE 5.  ELIGIBILITY AND
PARTICIPATION


5.1          Eligibility. 
Individuals eligible to participate in this Plan include all Employees
and Directors.  Third Party Service
Providers are also eligible to participate in this Plan.


 


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5.2          Actual Participation.  Subject to
the provisions of this Plan, the Committee may, from time to time, select from
all eligible individuals, those to whom Awards shall be granted and shall
determine, in its sole discretion, the nature of, any and all terms permissible
by law, and the amount of each Award.


ARTICLE
6.  STOCK OPTIONS


6.1          Grant of Options.  Subject to the terms and provisions of this
Plan, Options may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee, in its sole discretion; provided that incentive stock options (i.e.,
options intended to meet the requirements of Code Section 422 or any successor
provision) may not be granted under this Plan.


6.2          Award Agreement.  Each Option
grant shall be evidenced by an Award Agreement that shall specify the Option
Price, the maximum duration of the Option, the number of Shares to which the
Option pertains, the conditions upon which an Option shall become vested and
exercisable, and such other provisions as the Committee shall determine which
are not inconsistent with the terms of this Plan.


6.3          Option Price.  The Option Price for each grant of an
Option under this Plan shall be as determined by the Committee and shall be
specified in the Award Agreement; provided, however, the Option Price must be
at least equal to one hundred percent (100%) of the FMV of the Shares on the
date of grant except in the case of an Option that is granted in connection
with a merger, stock exchange, or other acquisition as a substitute or
replacement award for options held by optionees of the acquired entity, in
which case the Option Price may be less than 100% of FMV of the Shares on the
date of grant.


6.4          Duration of Options.  Each Option
granted to a Participant shall expire at such time as the Committee shall
determine at the time of grant; provided, however, no Option shall be
exercisable later than the tenth (10th) anniversary date of
its grant.  Notwithstanding the
foregoing, for Options granted to Participants outside the United States, the
Committee has the authority to grant Options that have a term greater than ten
(10) years.


6.5          Exercise of Options.  Options
granted under this Article 6 shall be exercisable at such times and be
subject to such restric­tions and conditions as the Committee shall in each
instance approve, which terms and restrictions need not be the same for each
grant or for each Participant.


6.6          Payment.  Options
granted under this Article 6 shall be exercised by the delivery of a notice of
exercise to the Company or an agent designated by the Company in a form
specified or accepted by the Committee, or by complying with any alternative
procedures which may be authorized by the Committee, setting forth the number
of Shares with respect to which the Option is to be exercised, accompanied by
full payment for the Shares.


A condition of the issuance of the Shares as to which
an Option shall be exercised shall be the payment of the Option Price.  The Option Price of any Option shall be
payable to the Company in full either: (a) in cash or its equivalent; (b)
if the Committee so determines, by tendering (either by actual delivery or
attestation) previously acquired Shares having an aggregate Fair Market Value
at the time of exercise equal to the Option Price (provided that except as
otherwise determined by the Committee, the Shares that are tendered must have
been held by the Participant for at least six (6) months prior to their tender
to satisfy the Option Price or have been purchased on the open market); (c) if
the Committee so determines, by a combination of (a) and (b); or (d) any
other method approved or accepted by the Committee in its sole discretion,
including, without limitation, if the Committee so determines, a cashless
(broker-assisted) exercise.  If the
Committee makes no determination regarding payment of the Option Price, it will
be payable only in cash or its equivalent.


Subject to any governing rules or regulations, as soon
as practicable after receipt of written notification of exercise and full
payment (including satisfaction of any applicable tax withholding), the Company
shall deliver to the Participant evidence of book entry Shares, or upon the
Participant’s request, Share certificates in an appropriate amount based upon
the number of Shares purchased under the Option(s).


 


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Unless otherwise determined by the Committee, all
payments under all of the methods indicated above shall be paid in United
States dollars.


6.7          Restrictions on Share Transferability. 
The Committee may impose such restrictions on any Shares acquired
pursuant to the exercise of an Option granted under this Article 6 as it may
deem advisable, including, without limitation, minimum holding period
requirements, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, or under any blue sky or state securities laws
applicable to such Shares.


6.8          Termination of Employment.  Each
Participant’s Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise the Option following termination
of the Participant’s employment or provision of services to the Company, its
Affiliates, its Subsidiaries, as the case may be.  Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Options
issued pursuant to this Article 6, and may reflect distinctions based on the
reasons for termination.  If nothing is
provided in the Award Agreement, then all Options that are unvested at the time
of termination of the Participant’s employment or provision of services will
terminate as of such time and all Options that are then vested will expire
thirty (30) days thereafter.


6.9          Transferability of Options. 
Except as otherwise provided in a Participant’s Award Agreement or
otherwise at any time by the Committee, no Option granted under this
Article 6 may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution; provided that the Board or Committee may permit further
transferability, on a general or a specific basis, and may impose conditions and
limitations on any permitted transferability. 
Further, except as otherwise provided in a Participant’s Award Agreement
or otherwise at any time by the Committee, or unless the Board or Committee
decides to permit further transferability, all Options granted to a Participant
under this Article 6 shall be exercisable during his or her lifetime only by
such Participant.  With respect to those
Options, if any, that are permitted to be transferred to another person, references
in this Plan to exercise or payment of the Option Price by the Participant
shall be deemed to include, as determined by the Committee, the Participant’s
permitted transferee.


6.10.       Substituting SARs.  In the event the Company no longer uses APB Opinion 25
to account for equity compensation and is required to or elects to expense the
cost of Options pursuant to FAS 123 (or a successor standard), the Committee
shall have the ability to substitute, without receiving Participant permission,
SARs paid only in Stock (or SARs paid in Stock or cash if provided for in the
Award Agreement) for outstanding Options; provided, the terms of the
substituted Stock SARs are the same as the terms for the Options and the
difference between the Fair Market Value of the underlying Shares and the Grant
Price of the SARs is equivalent to the difference between the Fair Market Value
of the underlying Shares and the Option Price of the Options.  If, in the opinion of the Company’s auditors,
this provision creates adverse accounting consequences for the Company, it shall
be considered null and void.


ARTICLE 7.  STOCK APPRECIATION RIGHTS


7.1          Grant of SARs. 
Subject to the terms and conditions of this Plan, SARs may be granted to
Participants at any time and from time to time as shall be determined by the
Committee.  The Committee may grant
Freestanding SARs, Tandem SARs, or any combination of these forms of SARs.


Subject to the terms and conditions of this Plan, the
Committee shall have complete discretion in determining the number of SARs
granted to each Participant and, consistent with the provisions of this Plan,
in determining the terms and conditions pertaining to such SARs.


The Grant Price for each grant of a Freestanding SAR
shall be determined by the Committee and shall be specified in the Award Agreement;
provided, however, the Grant Price must be at least equal to one hundred
percent (100%) of the FMV of the Shares on the date of grant.  The Grant Price of Tandem SARs shall be equal
to the Option Price of the related Option.


 


8





















 


7.2          SAR Agreement.  Each SAR
Award shall be evidenced by an Award Agreement that shall specify the grant
price, the term of the SAR, and such other provisions as the Committee shall
determine.


7.3          Term of SAR.  The term of a
SAR granted under this Plan shall be determined by the Committee, in its sole
discretion, and except as determined otherwise by the Committee and specified
in the SAR Award Agreement, no SAR shall be exercisable later than the tenth
(10th) anniversary date of its grant.  Notwithstanding the foregoing, for SARs
granted to Participants outside the United States, the Committee has the
authority to grant SARs that have a term greater than ten (10) years.


7.4          Exercise of Freestanding SARs. 
Freestanding SARs may be exercised upon whatever terms and conditions
the Committee, in its sole discretion, imposes.


7.5.         Exercise of Tandem SARs.  Tandem SARs
may be exercised for all or part of the Shares subject to the related Option
upon the surrender of the right to exercise the equivalent portion of the
related Option.  A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.


7.6          Payment of SAR Amount.  Upon the
exercise of a SAR, a Participant shall be entitled to receive payment from the
Company in an amount determined by multiplying (a) the excess of the Fair
Market Value of a Share on the date of exercise over the Grant Price by
(b) the number of Shares with respect to which the SAR is exercised.  At the discretion of the Committee, the
payment upon SAR exercise may be in cash, Shares, or any combination thereof,
or in any other manner approved by the Committee in its sole discretion.  The Committee’s determination regarding the
form of SAR payout shall be set forth in the Award Agreement pertaining to the
grant of the SAR.


7.7          Termination of Employment.  Each Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the SAR following termination of the Participant’s employment
with or provision of services to the Company, its Affiliates, and/or its
Subsidiaries, as the case may be.  Such
provisions shall be determined in the sole discretion of the Committee, shall
be included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to this Plan, and may reflect
distinctions based on the reasons for termination.  If nothing is provided in the Award
Agreement, then all SARs that are unvested at the time of termination of the
Participant’s employment or provision of services will terminate as of such
time.


7.8          Nontransferability of SARs.  Except as
otherwise provided in a Participant’s Award Agreement or otherwise at any time
by the Committee, no SAR granted under this Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution. 
Further, except as otherwise provided in a Participant’s Award Agreement
or otherwise at any time by the Committee, all SARs granted to a Participant
under this Plan shall be exercisable during his or her lifetime only by such
Participant.  With respect to those SARs,
if any, that are permitted to be transferred to another person, references in
this Plan to exercise of the SAR by the Participant or payment of any amount to
the Participant shall be deemed to include, as determined by the Committee, the
Participant’s permitted transferee.


7.9          Other Restrictions.  The Committee shall impose such other
conditions and/or restrictions on any Shares received upon exercise of a SAR
granted pursuant to this Plan as it may deem advisable or desirable.  These restrictions may include, but shall not
be limited to, a requirement that the Participant hold the Shares received upon
exercise of a SAR for a specified period of time.


ARTICLE 8.  RESTRICTED STOCK AND RESTRICTED STOCK UNITS


8.1          Grant of Restricted
Stock or Restricted Stock Units.  Subject to the terms and
provisions of this Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock and/or Restricted Stock Units to Participants
in such amounts as the Committee shall determine.  Restricted Stock Units shall be similar to
Restricted Stock except that no Shares are actually awarded to the Participant
on the date of grant.


8.2          Restricted Stock or Restricted Stock Unit Agreement. 
Each Restricted Stock and/or Restricted Stock Unit grant shall be
evidenced by an Award Agreement that shall specify the Period(s) of
Restriction, the number of


 


9





















 


Shares of Restricted
Stock or the number of Restricted Stock Units granted, and such other
provisions as the Committee shall determine.


8.3          Transferability.  Except as
provided in this Plan or an Award Agreement, the Shares of Restricted Stock
and/or Restricted Stock Units granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction established by the Committee and specified in
the Award Agreement (and in the case of Restricted Stock Units until the date
of delivery or other payment), or upon earlier satisfaction of any other
conditions, as specified by the Committee, in its sole discretion, and set forth
in the Award Agreement or otherwise at any time by the Committee.  All rights with respect to the Restricted
Stock and/or Restricted Stock Units granted to a Participant under this Plan
shall be available during his or her lifetime only to such Participant, except
as otherwise provided in an Award Agreement or at any time by the Committee.


8.4          Other Restrictions.  The Committee shall impose such other
conditions and/or restrictions on any Shares of Restricted Stock or Restricted
Stock Units granted pursuant to this Plan as it may deem advisable including,
without limitation, a requirement that Participants pay a stipulated purchase
price for each Share of Restricted Stock or each Restricted Stock Unit,
restrictions based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of the performance
goals, time-based restrictions, and/or restrictions under applicable laws or
under the requirements of any stock exchange or market upon which such Shares
are listed or traded, or holding requirements or sale restrictions placed on
the Shares by the Company upon vesting of such Restricted Stock or Restricted
Stock Units.


Except with respect to a maximum
of five percent (5%) of the Shares authorized in Section 4.1(a), any Awards of
Restricted Stock or Restricted Stock Units which vest on the basis of the
Participant’s continued employment with or provision of service to the Company
shall not provide for vesting which is any more rapid than annual pro rata
vesting over a three (3) year period and any Awards of Restricted Stock or
Restricted Stock Units which vest upon the attainment of performance goals
shall provide for a performance period of at least twelve (12) months.


To the extent deemed appropriate by the Committee, the Company may retain
the certificates representing Shares of Restricted Stock in the Company’s
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied or lapse.


Except as otherwise provided in this Article 8, Shares of
Restricted Stock covered by each Restricted Stock Award shall become freely
transferable by the Participant after all conditions and restrictions
applicable to such Shares have been satisfied or lapse (including satisfaction
of any applicable tax withholding obligations), and Restricted Stock Units
shall be paid in cash, Shares, or a combination of cash and Shares as the
Committee, in its sole discretion shall determine.


8.5          Certificate Legend.  In addition to any legends placed on certificates
pursuant to Section 8.4, each certificate representing Shares of
Restricted Stock granted pursuant to this Plan may bear a legend such as the
following or as otherwise determined by the Committee in its sole discretion:


The sale or
transfer of Shares of stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain restrictions on
transfer as set forth in the Aftermarket Technology Corp.  2004 Stock
Incentive Plan, and in the associated Award Agreement.  A copy of this Plan and such Award Agreement
may be obtained from Aftermarket Technology Corp.


8.6          Voting Rights.  Unless otherwise determined by the Committee
and set forth in a Participant’s Award Agreement, to the extent permitted or
required by law, as determined by the Committee, Participants holding Shares of
Restricted Stock granted hereunder may be granted the right to exercise full
voting rights with respect to those Shares during the Period of Restriction.  A Participant shall have no voting rights
with respect to any Restricted Stock Units granted hereunder.


 


10





















 


8.7          Termination of Employment.  Each Award
Agreement shall set forth the extent to which the Participant shall have the
right to retain Restricted Stock and/or Restricted Stock Units following
termination of the Participant’s employment with or provision of services to
the Company, its Affiliates, and/or its Subsidiaries, as the case may be.  Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Shares of
Restricted Stock or Restricted Stock Units issued pursuant to this Plan, and
may reflect distinctions based on the reasons for termination.  If nothing is provided in the Award
Agreement, then all Restricted Stock and Restricted Stock Units that are
unvested at the time of termination of the Participant’s employment or
provision of services will terminate as of such time.


8.8          Section 83(b) Election. 
The Committee may provide in an Award Agreement that the Award of
Restricted Stock is conditioned upon the Participant making or refraining from
making an election with respect to the Award under Section 83(b) of the
Code.  If a Participant makes an election
pursuant to Section 83(b) of the Code concerning a Restricted Stock Award, the
Participant shall be required to file promptly a copy of such election with the
Company.


ARTICLE 9.  PERFORMANCE UNITS/PERFORMANCE SHARES


9.1          Grant of Performance Units/Performance
Shares.  Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant Performance
Units and/or Performance Shares to Participants in such amounts and upon such
terms as the Committee shall determine.


9.2          Value of Performance Units/Performance Shares. 
Each Performance Unit shall have an initial value that is
established by the Committee at the time of grant.  Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant.  The Committee shall set performance goals in
its discretion which, depending on the extent to which they are met, will
determine the value and/or number of Performance Units/Performance Shares that
will be paid out to the Participant.


9.3          Earning of Performance Units/Performance Shares. 
Subject to the terms of this Plan, after the applicable Performance
Period has ended, the holder of Performance Units/Performance Shares shall be
entitled to receive payout on the value and number of Performance
Units/Performance Shares earned by the Participant over the Performance Period,
to be determined as a function of the extent to which the corresponding
performance goals have been achieved.


9.4          Form and Timing of Payment of Performance Units/Performance
Shares.  Payment of earned Performance
Units/Performance Shares shall be as determined by the Committee and as
evidenced in the Award Agreement. 
Subject to the terms of this Plan, the Committee, in its sole
discretion, may pay earned Performance Units/Performance Shares in the form of
cash or in Shares (or in a combination thereof) equal to the value of the
earned Performance Units/Performance Shares at the close of the applicable
Performance Period, or as soon as practicable after the end of the Performance
Period.  Any Shares may be granted
subject to any restrictions deemed appropriate by the Committee.  The determination of the Committee with
respect to the form of payout of such Awards shall be set forth in the Award
Agreement pertaining to the grant of the Award.


9.5          Termination of Employment.  Each Award
Agreement shall set forth the extent to which the Participant shall have the
right to retain Performance Units and/or Performance Shares following
termination of the Participant’s employment with or provision of services to
the Company, its Affiliates, and/or its Subsidiaries, as the case may be.  Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Awards of
Performance Units or Performance Shares issued pursuant to this Plan, and may
reflect distinctions based on the reasons for termination.


9.6          Nontransferability.  Except as
otherwise provided in a Participant’s Award Agreement or otherwise at any time
by the Committee, Performance Units/Performance Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution.  Further, except as


 


11





















 


otherwise provided in a
Participant’s Award Agreement or otherwise at any time by the Committee, a
Participant’s rights under this Plan shall be exercisable during his or her
lifetime only by such Participant.


ARTICLE 10.  CASH-BASED AWARDS AND OTHER STOCK-BASED
AWARDS


10.1        Grant of Cash-Based Awards. 
Subject to the terms and provisions of this Plan, the Committee, at any
time and from time to time, may grant Cash-Based Awards to Participants in such
amounts and upon such terms as the Committee may determine.


10.2        Other Stock-Based Awards.  The Committee
may grant other types of equity-based or equity-related Awards not otherwise
described by the terms of this Plan (including the grant or offer for sale of
unrestricted Shares) in such amounts and subject to such terms and conditions,
as the Committee shall determine.  Such
Awards may involve the transfer of actual Shares to Participants, or payment in
cash or otherwise of amounts based on the value of Shares and may include,
without limitation, Awards designed to comply with or take advantage of the
applicable local laws of jurisdictions other than the United States.  Any such Award will be subject to a minimum
12-month vesting period, subject to Section 10.5 and Article 17.


10.3        Value of Cash-Based and Other Stock-Based Awards. 
Each Cash-Based Award shall specify a payment amount or payment range as
determined by the Committee.  Each Other
Stock-Based Award shall be expressed in terms of Shares or units based on
Shares, as determined by the Committee. 
The Committee may establish performance goals in its discretion.  If the Committee exercises its discretion to
establish performance goals, the number and/or value of Cash-Based Awards or
Other Stock-Based Awards that will be paid out to the Participant will depend
on the extent to which the performance goals are met.


10.4        Payment of Cash-Based Awards and Other Stock-Based Awards. 
Payment, if any, with respect to a Cash-Based Award or an Other
Stock-Based Award shall be made in accordance with the terms of the Award, in
cash or Shares as the Committee determines.


10.5        Termination of Employment.  The Committee
shall determine the extent to which the Participant shall have the right to
receive Cash-Based Awards following termination of the Participant’s employment
with or provision of services to the Company, its Affiliates, and/or its
Subsidiaries, as the case may be.  Such
provisions shall be determined in the sole discretion of the Committee, such
provisions may be included in an agreement entered into with each Participant,
but need not be uniform among all Awards of Cash-Based Awards issued pursuant
to this Plan, and may reflect distinctions based on the reasons for
termination.  If the Committee makes no
such determination, then the Participant shall have no right to receive
Cash-Based Awards that are paid out after the time of termination of the
Participant’s employment or provision of services.


10.6        Nontransferability.  Except as
otherwise determined by the Committee, neither Cash-Based Awards nor Other
Stock-Based Awards may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of descent
and distribution.  Further, except as
otherwise provided by the Committee, a Participant’s rights under this Plan, if
exercisable, shall be exercisable during his or her lifetime only by such
Participant.  With respect to those
Cash-Based Awards or Other Stock-Based Awards, if any, that are permitted to be
transferred to another person, references in this Plan to exercise or payment
of such Awards by or to the Participant shall be deemed to include, as
determined by the Committee, the Participant’s permitted transferee.


ARTICLE 11.  PERFORMANCE MEASURES


11.1        Performance Measures.  Unless and until the Committee
proposes for shareholder vote and the shareholders approve a change in the
general Performance Measures set forth in this Article 11, the performance
goals upon which the payment or vesting of an Award to a Covered Employee that
is intended to qualify as Performance-Based Compensation shall be limited to
the following Performance Measures:


(a)                      Net earnings or net income (before or
after taxes);


(b)                     Earnings per share;


 


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(c)                      Net sales growth;


(d)                     Net operating profit;


(e)                      Return measures (including, but not
limited to, return on assets, capital, equity, or sales);


(f)                        Cash flow (including, but not limited to,
operating cash flow, free cash flow, and cash flow return on capital);


(g)                     Earnings before or after taxes, interest,
depreciation, and/or amortization;


(h)                     Gross or operating margins;


(i)                         Productivity ratios;


(j)                         Share price (including, but not limited
to, growth measures and total shareholder return);


(k)                      Expense targets;


(l)                         Margins;


(m)                   Operating efficiency;


(n)                     Customer satisfaction;


(o)                     Working capital targets; and


(p)                     EVA®.


Any
Performance Measure(s) may be used to measure the performance of the Company,
Subsidiary, and/or Affiliate as a whole or any business unit of the Company,
Subsidiary, and/or Affiliate or any combination thereof, as the Committee may
deem appropriate, or any of the above Performance Measures as compared to the
performance of a group of comparator companies, or published or special index
that the Committee, in its sole discretion, deems appropriate, or the Company
may select Performance Measure (j) above as compared to various stock market
indices.  The Committee also has the
authority to provide for accelerated vesting of any Award based on the
achievement of performance goals pursuant to the Performance Measures specified
in this Article 11.


11.2        Award Agreement.  Each Award Agreement for an Award to a Covered
Employee that is intended to qualify as Performance-Based Compensation shall
contain provisions regarding (a) the target and maximum amount payable to
the Covered Employee as an Award, (b) the Performance Measure and level of
achievement versus these criteria that shall determine the amount of such
Award, (c) the term of the performance period as to which performance
shall be measured for determining the amount of the Award, (d) the timing
of any payment earned by virtue of performance, (e) restrictions on the
alienation or transfer of the Award prior to actual payment,
(f) forfeiture provisions and (g) such further terms and conditions,
in each case not inconsistent with this Plan, as may be determined from time to
time by the Committee.


11.3        Payment. 
The
Committee shall certify the extent to which any Performance Measure has been
satisfied, and the amount payable as a result thereof, prior to payment of any
Award to a Covered Employee that is intended to qualify as Performance-Based
Compensation.  The
Committee shall determine the timing of payment of any Award and may provide
for or, subject to such terms and conditions as the Committee may specify, may
permit a Participant to elect for the payment of any such Award to be deferred
to a specified date or event.  An Award
may be payable in Shares or in cash.  Any
such Award that is paid in cash shall not affect the number of Shares otherwise
available for issuance under this Plan.


11.4        Evaluation of Performance.  The Committee may provide in any
such Award that is
intended to qualify as Performance-Based Compensation that any evaluation of performance may include or exclude any of the
following events that occurs during a Performance Period: (a) asset
write-downs, (b) litigation or claim judgments or settlements,
(c) the effect of changes in tax laws, accounting principles, or other
laws or provisions affecting reported results, (d) any reorganization and
restructuring programs, (e) extraordinary nonrecurring items as described
in Accounting Principles Board Opinion No. 
30 and/or in management’s discussion and analysis of financial condition
and results of operations appearing in the Company’s annual report to
shareholders for the applicable year, (f) acquisitions or divestitures,
and (g) foreign exchange gains and losses. 
To the extent such inclusions or exclusions affect Awards to Covered
Employees, they shall be prescribed in a form that meets the requirements of
Code Section 162(m) for deductibility.


11.5        Adjustment of Performance-Based Compensation.  Awards that are designed to qualify as
Performance-Based Compensation, and that are held by Covered Employees, may not
be adjusted upward.  The Committee shall


 


13





















 


retain the discretion to
adjust such Awards downward, either on a formula or discretionary basis or any
combination, as the Committee determines.


11.6        Committee Discretion.  In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing
Performance Measures without obtaining shareholder approval of such changes,
the Committee shall have sole discretion to make such changes without obtaining
shareholder approval.  In addition, in
the event that the Committee determines that it is advisable to grant Awards
that shall not qualify as Performance-Based Compensation, the Committee may
make such grants without satisfying the requirements of Code Section 162(m) and
may base vesting on Performance Measures other than those set forth in
Section 11.1.


ARTICLE 12.  NONEMPLOYEE DIRECTOR AWARDS


All Awards to Nonemployee
Directors shall be determined by the Board; provided, however, that
(a) the Option Price or the Grant Price must be equal to one hundred
percent (100%) of the FMV of the Shares on the date of grant, (b) the
vesting period for any Award may not be less than eleven (11) months, subject
to Article 17, and (c) if at any time a Nonemployee Director ceases
to be a director of the Company, then (i) his Options, SARs and Restricted
Stock that are unvested at such time shall expire at such time and
(ii) his Options that are vested at such time shall expire on the first
anniversary of such time.


ARTICLE 13.  DIVIDEND EQUIVALENTS


Any Participant selected
by the Committee may be granted dividend equivalents based on the dividends
declared on Shares that are subject to any Award, to be credited as of dividend
payment dates, during the period between the date the Award is granted and the
date the Award is exercised, vests or expires, as determined by the Committee.  Such dividend equivalents shall be converted
to cash or additional Shares by such formula and at such time and subject to
such limitations as may be determined by the Committee.


ARTICLE 14.  BENEFICIARY DESIGNATION


Each Participant under
this Plan may, from time to time, name any beneficiary or beneficiaries (who
may be named contingently or successively) to whom any benefit under this Plan
is to be paid in case of his or her death before he or she receives any or all
of such benefit.  Each such designation
shall revoke all prior designations by the same Participant, shall be in a
form prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Company during the Participant’s lifetime.  In the absence of any such designation,
benefits remaining unpaid at the Participant’s death shall be paid to the
Participant’s estate.


ARTICLE 15. 
DEFERRALS


The Committee may permit or require a
Participant to defer such Participant’s receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant by virtue of
the exercise of an Option or SAR, the lapse or waiver of restrictions with
respect to Restricted Stock or Restricted Stock Units, or the satisfaction of
any requirements or performance goals with respect to Performance Shares,
Performance Units, Cash-Based Awards, and Covered Employee Annual Incentive
Award, Other Stock-Based Awards, or Cash-Based Awards.  If any such deferral election is required or
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.


ARTICLE 16.  RIGHTS OF PARTICIPANTS


16.1        Employment.  Nothing in this Plan or an Award Agreement
shall interfere with or limit in any way the right of the Company, its
Affiliates, and/or its Subsidiaries, to terminate any Participant’s employment
or service on the Board at any time or for any reason not prohibited by law,
nor confer upon any Participant any right to continue his or her employment or
service as a Director for any specified period of time.


 


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Neither an Award nor any benefits arising under this
Plan shall constitute an employment contract with the Company, its Affiliates,
and/or its Subsidiaries and, accordingly, subject to Articles 3 and 18, this
Plan and the benefits hereunder may be terminated at any time in the sole and
exclusive discretion of the Committee without giving rise to any liability on
the part of the Company, its Affiliates, and/or its Subsidiaries.


16.2        Participation.  No individual
shall have the right to be selected to receive an Award under this Plan, or,
having been so selected, to be selected to receive a future Award.


16.3        Rights as a Shareholder.  Except as
otherwise provided herein, a Participant shall have none of the rights of a
shareholder with respect to Shares covered by any Award until the Participant
becomes the record holder of such Shares.


ARTICLE 17. 
CHANGE OF CONTROL


Upon the
occurrence of a Change of Control, unless otherwise specifically prohibited
under applicable laws or by the rules and regulations of any governing
governmental agencies or national securities exchanges, or unless the Committee
shall determine otherwise in the Award Agreement, (a) any vesting
provision or other restriction on any outstanding Awards shall lapse and such
Awards shall be fully exercisable or payable, as the case may be, and
(b) the target payout opportunities attainable under all outstanding
Awards of performance-based Restricted Stock, performance-based Restricted
Stock Units, Performance Units, and Performance Shares, shall be deemed to have
been fully earned based on targeted performance being attained as of the
effective date of the Change of Control.


ARTICLE 18.  AMENDMENT, MODIFICATION, SUSPENSION, AND
TERMINATION


18.1        Amendment, Modification, Suspension, and
Termination.  The Board may
amend, alter, suspend or discontinue this Plan at any time and the Committee
may, to the extent permitted by this Plan, amend any Award Agreement but,
except as provided pursuant to Section 18.2, no such amendment shall, without
the approval of the shareholders of the Company:


(a)       increase the maximum number of Shares for
which Awards may be granted under this Plan;


(b)       reduce (i) the Option Price at which
Options may be granted below the price provided for in Section 6.3 or
Article 12 or (ii) the Grant Price at which SARs may be granted below the
price provided for in Section 7.1 or Article 12;


(c)       reduce
the Option Price of outstanding Options or the Grant Price of outstanding SARs;


(d)       extend
the term of this Plan;


(e)       change
the class of persons eligible to be Participants;


(f)        increase
the individual maximum limits in Sections 4.1(c) or 4.3; and/or.


(g)       make
any other amendment where shareholder approval is required by applicable law or
regulation or the rules of the exchange or quotation system on which the Shares
are then traded or listed.


18.2        Adjustment of Awards Upon the Occurrence
of Certain Unusual or Nonrecurring Events.  The Committee
may make adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4.4) affecting the Company or the
financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent unintended dilution or
enlargement of the benefits or potential benefits intended to be made available
under this Plan.  The determination of
the Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under this Plan.


 


15





















 


18.3        Awards Previously Granted.  The Committee
may to the extent permitted by this Plan amend any outstanding Award Agreement
but no amendment or alteration shall be made that would impair the rights of a
Participant, without such Participant’s consent, under any Award theretofore
granted, provided that no such consent shall be required if the Committee
determines in its sole discretion and prior to the date of any Change of
Control that such amendment or alteration either (a) is required or
advisable in order for the Company, this Plan or the Award to satisfy any law
or regulation or to meet the requirements of any accounting standard, or
(b) is not reasonably likely to significantly diminish the benefits
provided under such Award, or that any such diminishment has been adequately
compensated.


ARTICLE 19. 
WITHHOLDING


19.1        Tax Withholding.  The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
the minimum statutory amount to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of this Plan.


19.2        Share Withholding.  With respect
to withholding required upon the exercise of Options or SARs, upon the lapse of
restrictions on Restricted Stock and Restricted Stock Units, or upon the
achievement of performance goals related to Performance Shares, or any other
taxable event arising as a result of an Award granted hereunder, Participants
may elect, subject to the approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares having
a Fair Market Value on the date the tax is to be determined equal to the
minimum statutory total tax that could be imposed on the transaction.  All such elections shall be irrevocable, made
in writing, and signed by the Participant, and shall be subject to any
restrictions or limitations that the Committee, in its sole discretion, deems
appropriate.


ARTICLE 20. 
SUCCESSORS


All obligations of the Company under this
Plan with respect to Awards granted hereunder shall be binding on any successor
to the Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.


ARTICLE 21. 
GENERAL PROVISIONS


21.1        Forfeiture Events.


(a)       The Committee may specify in an Award
Agreement that the Participant’s rights, payments, and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture, or recoupment
upon the occurrence of certain specified events, in addition to any otherwise
applicable vesting or performance conditions of an Award.  Such events may include, but shall not be
limited to, termination of employment for cause, termination of the Participant’s
provision of services to the Company, Affiliate, and/or Subsidiary, violation
of material Company, Affiliate, and/or Subsidiary policies, breach of
noncompetition, confidentiality, or other restrictive covenants that may apply
to the Participant, or other conduct by the Participant that is detrimental to
the business or reputation of the Company, its Affiliates, and/or its
Subsidiaries.


(b)       If the Company is required to prepare an
accounting restatement due to the material noncompliance of the Company, as a
result of misconduct, with any financial reporting requirement under the
securities laws, if the Participant
knowingly or grossly negligently engaged in the misconduct, or knowingly or
grossly negligently failed to prevent the misconduct, or if the Participant
is one of the persons subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the
amount of any payment in settlement of an Award earned or accrued during the
twelve-month period following the first public issuance or filing with the
United States Securities and Exchange Commission (whichever just occurred) of
the financial document embodying such financial reporting requirement.


 


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21.2        Legend.  The
certificates for Shares may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer of such Shares.


21.3        Gender and Number.  Except where
otherwise indicated by the context, any masculine term used herein also shall
include the feminine, the plural shall include the singular, and the singular
shall include the plural.


21.4        Severability.  In the event
any provision of this Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of this Plan, and
this Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.


21.5        Requirements of Law.  The granting
of Awards and the issuance of Shares under this Plan shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required.


21.6        Delivery of Title.  The Company
shall have no obligation to issue or deliver evidence of title for Shares
issued under this Plan prior to:


(a)       Obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable; and


(b)       Completion of any registration or other
qualification of the Shares under any applicable national or foreign law or
ruling of any governmental body that the Company determines to be necessary or
advisable.


21.7        Inability to Obtain Authority.  The inability
of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.


21.8        Investment Representations.  The Committee
may require any person receiving Shares pursuant to an Award under this Plan to
represent and warrant in writing that the person is acquiring the Shares for
investment and without any present intention to sell or distribute such Shares.


21.9        Employees Based Outside of the United States. 
Notwithstanding any provision of this Plan to the contrary, in order to
comply with the laws in other countries in which the Company, its Affiliates,
and/or its Subsidiaries operate or have Employees, Directors, or Third Party
Service Providers, the Committee, in its sole discretion, shall have the power
and authority to:


(a)       Determine which Affiliates and
Subsidiaries shall be covered by this Plan;


(b)       Determine which Employees and/or
Directors or Third Party Service Providers outside the United States are
eligible to participate in this Plan;


(c)       Modify the terms and conditions of any
Award granted to Employees and/or Directors or Third Party Service Providers
outside the United States to comply with applicable foreign laws;


(d)       Establish subplans and modify exercise
procedures and other terms and procedures, to the extent such actions may be
necessary or advisable.  Any subplans and
modifications to Plan terms and procedures established under this
Section 21.9 by the Committee shall be attached to this Plan document as
appendices; and


(e)       Take any action, before or after an Award
is made, that it deems advisable to obtain approval or comply with any
necessary local government regulatory exemptions or approvals.


Notwithstanding the above,
the Committee may not take any actions hereunder, and no Awards shall be
granted, that would violate applicable law.


 


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21.10      Uncertificated Shares.  To the extent
that this Plan provides for issuance of certificates to reflect the transfer of
Shares, the transfer of such Shares may be effected on a noncertificated basis,
to the extent not prohibited by applicable law or the rules of any stock
exchange.


21.11      Unfunded Plan.  Participants
shall have no right, title, or interest whatsoever in or to any investments
that the Company, and/or its Subsidiaries, and/or Affiliates may make to aid it
in meeting its obligations under this Plan. 
Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary,
legal representative, or any other person. 
To the extent that any person acquires a right to receive payments from
the Company, and/or its Subsidiaries, and/or Affiliates under this Plan, such
right shall be no greater than the right of an unsecured general creditor of
the Company, a Subsidiary, or an Affiliate, as the case may be.  All payments to be made hereunder shall be
paid from the general funds of the Company, a Subsidiary, or an Affiliate, as
the case may be and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts except as
expressly set forth in this Plan.  This
Plan is not subject to ERISA.


21.12      No Fractional Shares. 
No fractional Shares shall be issued or delivered pursuant to this Plan
or any Award.  The Committee shall
determine whether cash, Awards, or other property shall be issued or paid in
lieu of fractional Shares or whether such fractional Shares or any rights
thereto shall be forfeited or otherwise eliminated.


21.13      Retirement and Welfare Plans.  Neither Awards made under this Plan nor
Shares or cash paid pursuant to such Awards, except pursuant to Covered
Employee Annual Incentive Awards, will be included as “compensation” for
purposes of computing the benefits payable to any Participant under the Company’s
or any Subsidiary’s or Affiliate’s retirement plans (both qualified and
non-qualified) or welfare benefit plans unless such other plan expressly
provides that such compensation shall be taken into account in computing a
participant’s benefit.


21.14      Nonexclusivity of this Plan. 
The adoption of this Plan shall not be construed as creating any
limitations on the power of the Board or Committee to adopt such other
compensation arrangements as it may deem desirable for any Participant.


21.15      No Constraint on Corporate Action.  Nothing in this Plan shall be construed to: (a) limit,
impair, or otherwise affect the Company’s or a Subsidiary’s or an Affiliate’s
right or power to make adjustments, reclassifications, reorganizations, or
changes of its capital or business structure, or to merge or consolidate, or
dissolve, liquidate, sell, or transfer all or any part of its business or
assets; or, (b) limit the right or power of the Company or a Subsidiary or
an Affiliate to take any action which such entity deems to be necessary or
appropriate.


21.16      Governing Law.  This Plan and
each Award Agreement shall be governed by the laws of the State of Delaware,
excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of this Plan to the substantive law of
another jurisdiction.  Unless otherwise
provided in the Award Agreement, recipients of an Award under this Plan are
deemed to submit to the exclusive jurisdiction and venue of the federal or
state courts of Delaware, to resolve any and all issues that may arise out of
or relate to this Plan or any related Award Agreement.


 


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