EXHIBIT 10.2





STANDARD
TERMS AND CONDITIONS GOVERNING

NONEMPLOYEE DIRECTOR STOCK OPTIONS

GRANTED ON OR AFTER MAY 12, 2004 UNDER THE 

1998, 2000, 2002 AND 2004 STOCK INCENTIVE PLANS


The following constitute the
standard terms and conditions (these “Terms and Conditions”) governing any “non-qualified”
option (an “Option”) to purchase shares (“Option Shares”) of the Common Stock,
par value $.01 per share (“Common Stock”), of Aftermarket Technology Corp. (the
“Company”) granted on or after May 12, 2004 under the Company’s 1998, 2000,
2002 or 2004 Stock Incentive Plans, as amended from time to time (the relevant
stock incentive plan being referred to herein as the “Plan”), to any optionee
(an “Optionee”) who is a member of the Company’s Board of Directors (the “Board”)
who is not an employee of the Company or any of its subsidiaries (a “Nonemployee
Director”), unless and to the extent otherwise provided by the Board (or a duly
authorized committee of the Board) at the time an Option is granted.  A non-qualified Option is an Option not
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code.  These Terms and
Conditions are promulgated by the Board’s Committee on Independent Director
Compensation pursuant to the Plan.


1.         Vesting;
Expiration.  On each anniversary
of the date on which the grant of an Option is effective (the “Date of Grant”),
the Option shall become exercisable to purchase, and shall vest with respect
to, the following portion of the Option Shares:


(a)       one-third
of the Option Shares if this is the initial Option grant to Optionee so that
the Option shall vest on the first, second and third anniversaries of the Date
of Grant; or


(b)       one-half
of the Option Shares if this is a subsequent Option grant to Optionee so that
the Option shall vest on the first and second anniversaries of the Date of
Grant.


The Option shall expire at 5:00 p.m., central time, on the tenth
anniversary of the Date of Grant (the “Expiration Date”).


2.         Duration
of Option.


(a)       Termination of Director
Status.


(i)        Generally.  If Optionee ceases to be a Nonemployee
Director for any reason other than death, Permanent Disability (as defined in
Section 2(d)(iv)) or Termination Without Cause (as defined in
Section 2(d)(vii)), then (A) the portion of the Option that has not
vested on or prior to the Termination Date (as defined in
Section 2(d)(vi)) shall terminate on the Termination Date and (B) the
remaining vested portion of the Option shall terminate upon the earlier of the
Expiration Date or the first anniversary of the Termination Date.


(ii)       Death or Permanent Disability.  If Optionee ceases
to be a Nonemployee Director due to his death or Permanent Disability, then
(A) the portion of the Option that has not vested on or prior to the
Termination Date shall fully vest on the Termination Date and (B) the
Option shall terminate upon the earlier of the Expiration Date or the third
anniversary of the Termination Date.


 





















(iii)      Termination
Without Cause.


(A)      If
Optionee is Terminated Without Cause other than within 18 months after a
Change of Control (as defined in Section 2(d)(ii)), then (x) the
portion of the Option that has not vested on or prior to the Termination Date
shall terminate on the Termination Date and (y) the remaining vested
portion of the Option shall terminate upon the earlier of the Expiration Date
or the first anniversary of the Termination Date.


(B)       If
Optionee is Terminated Without Cause within 18 months after a Change of
Control, then (x) the portion of the Option that has not vested on or
prior to the Termination Date shall fully vest on the Termination Date and
(y) the Option shall terminate upon the earlier of the Expiration Date or
the first anniversary of the Termination Date.


(b)       Death Following Termination Date.  Notwithstanding anything to the contrary in
this Certificate, if Optionee shall die at any time after he ceases to be a
Nonemployee Director and prior to the Expiration Date or earlier termination of
the Option, the vested portion of the Option shall terminate on the earlier of
the Expiration Date or the first anniversary of the date of death.


(c)       Other Events Causing Termination of Option.  Notwithstanding anything to the contrary in
this Certificate, the Option shall terminate upon the consummation of any of
the following events, or, if later, the 30th day following the first
date upon which such event shall have been approved by both the Board and the
stockholders of the Company: (i) the dissolution or liquidation of the
Company; (ii) a sale of substantially all of the property and assets of
the Company, unless the terms of such sale shall provide otherwise; or
(iii) a Change of Control, if the Board (or a committee of the Board duly
authorized by the Board) elects to terminate the Option in connection
therewith.


(d)       Certain Definitions.


(i)        “Cause” means the occurrence or existence of
any of the following with respect to Optionee, as determined by the Board in
its sole discretion:


(A)      a
material breach by Optionee of his duty not to engage in any transaction that
represents, directly or indirectly, self-dealing with the Company or any of its
affiliates that has not been approved by the Board;


(B)       any act
of dishonesty, misappropriation, embezzlement, intentional fraud or similar
conduct involving the Company or any of its affiliates;


(C)       the
conviction or the plea of nolo contendere or the equivalent in respect of a
felony involving moral turpitude;


(D)      any
intentional damage of a material nature to any property of the Company or any
of its affiliates; or


(E)       the
repeated non-prescription use of any controlled substance or the repeated use
of alcohol or any other non-controlled substance that, in the determination of
the Board renders Optionee unfit to serve in his capacity as a Nonemployee
Director.


 


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(ii)       “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 Section 2(d)(iv)) other than an Excluded
Person (as defined in Section 2(d)(ii)) 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 any class then subject to the
Option 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.


The foregoing
definition supercedes Section 11.2 of the 1998, 2000 and 2002 Plans.


(iii)      “Excluded Person” has the
meaning set forth in that certain Indenture dated as of August 2, 1994 by and
among the Company, the Guarantors named therein and American Bank National
Association.


(iv)      “Permanent Disability” means
the inability to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than 12 months.  Optionee shall
not be deemed to have a Permanent Disability until proof of the existence
thereof shall have been furnished to the Board in such form and manner, and at
such times, as the Board may require. 
Any determination by the Board that Optionee does 


 


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or does not have a Permanent Disability shall be final
and binding upon the Company and Optionee.


(v)       “Person” and “Group” have the
meanings used for purposes of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended, whether or not such sections apply to the
transaction in question.


(vi)      “Termination Date” means the
date on which Optionee ceases to be a Nonemployee Director.


(vii)     “Termination Without Cause” means
that Optionee ceases to be a Nonemployee Director for any of the following
reasons:


(A)      Optionee is removed from the Board without Cause (as defined in
Section 2(d)(i));


(B)       Optionee is not nominated for reelection to the Board, unless
the Board has Cause not to nominate him; or


(C)       Optionee is nominated for reelection to the Board but does not
receive sufficient votes for reelection.


3.         Adjustments. 
In the event that the outstanding securities of the class then subject
to the Option are increased, decreased or exchanged for or converted into cash,
property and/or a different number or kind of securities, or cash, property
and/or securities are distributed in respect of such outstanding securities, in
either case as a result of a reorganization, merger, consolidation,
recapitalization, reclassification, dividend (other than a regular, quarterly
cash dividend) or other distribution, stock split, reverse stock split or the
like, or in the event that substantially all of the property and assets of the
Company are sold, then, unless such event shall cause the Option to terminate
pursuant to Section 2(c) or the terms of such transaction provide
otherwise, the Board (or a duly authorized committee of the Board) may make
appropriate and proportionate adjustments in the number and type of shares or
other securities or cash or other property that may thereafter be acquired upon
the exercise of the Option, and such adjustment shall be in the Board’s (or
such committee’s) sole discretion and be final and binding on Optionee; provided, however, that any such adjustments in the Option
shall be made without changing the aggregate Exercise Price of the then
unexercised portion of the Option.


4.         Exercise. 
The Option shall be exercisable during Optionee’s lifetime only by
Optionee or by his guardian or legal representative, and after Optionee’s death
only by the person or entity entitled to do so under Optionee’s last will and
testament or applicable intestate law. 
The Option may only be exercised by the delivery to the Company of
(i) a written notice of such exercise, which shall specify the number of
Option Shares to be purchased (the “Purchased Shares”) and the aggregate
Exercise Price for such Purchased Shares, and (ii) payment in full of such
aggregate Exercise Price in cash or by check payable to the Company; provided, however, that payment of such aggregate Exercise
Price may instead be made promptly after the exercise date if on or before the
exercise date the Company receives a commitment from a broker, acceptable to
the Company, to pay the required amount out of the proceeds of a sale of Option
Shares on behalf of Optionee.


 


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5.         Payment
of Withholding Taxes.  If the Company becomes
obligated to withhold an amount on account of any tax imposed as a result of
the exercise of the Option, including, without limitation, any federal, state,
local or other income tax, or any F.I.C.A., state disability insurance tax or
other employment tax, then Optionee shall, on the first day upon which the
Company becomes obligated to pay such amount to the appropriate taxing
authority, pay such amount to the Company in cash or by check payable to the
Company, provided that if Optionee fails to pay
such amount, the Company may deduct the amount from other compensation payable
to Optionee or withhold from Optionee a number of Option Shares having a Fair
Market Value equal to such amount.


6.         Notices. 
All notices and other communications required or permitted to be given
pursuant to the Option Document shall be in writing and shall be deemed given
(i) five days after mailing by certified or registered mail, postage
prepaid, return receipt requested, (ii) the next business day after being
sent through an overnight delivery service under circumstances in which such
service guarantees next day delivery, or (iii) when actually received if
sent by any other method.  All notices
shall be sent to the Company at One Oak Hill Center, Suite 400, Westmont,
Illinois 60559 (or such other address as is then the Company’s headquarters),
attention General Counsel, and to Optionee at the address set forth in the
payroll records of the Company, or at such other addresses as the Company or
Optionee may designate by written notice in the manner aforesaid.


7.         Stock
Exchange Requirements; Applicable Laws. 
Notwithstanding anything to the contrary in the Option Document, no
shares of stock purchased upon exercise of the Option, and no certificate
representing all or any part of such shares, shall be issued or delivered if
(i) such shares have not been admitted to listing upon official notice of
issuance on each stock exchange or interdealer quotation system upon which
shares of that class are then listed or (ii) in the opinion of counsel to
the Company, such issuance or delivery would cause the Company to be in
violation of or to incur liability under any federal, state or other securities
law, or any requirement of any stock exchange or interdealer quotation system
listing agreement to which the Company is a party, or any other requirement of
law or of any administrative or regulatory body having jurisdiction over the
Company.


8.         Nontransferability. 
Neither the Option nor any interest therein may be transferred,
conveyed, assigned, pledged, encumbered, mortgaged, hypothecated, gifted or
disposed of in any manner other than by will or the laws of descent and
distribution.


9.         Plan;
Option Document; Amendment.


(a)       The Option is granted
pursuant to the Plan and is subject to all the terms and conditions of the
Plan, as the same may be amended from time to time by the Board in its sole
discretion, and these Terms and Conditions, as they may be amended from time to
time by the Board (or a duly authorized committee of the Board) in its sole
discretion.


(b)       The terms of the Plan,
these Terms and Conditions and a certificate issued to evidence the Option
together constitute the “Option Document” contemplated by the 1998, 2000 or
2002 Plan or the Award Agreement contemplated by the 2004 Plan (such Option
Document or Award Agreement being referred to herein as the “Award Document”),
and the interpretation and 


 


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construction of the Award Document by the Board (or a duly authorized
committee of the Board) shall be final and binding upon Optionee.


(c)       To the extent permitted
by the Plan, the Board (or a duly authorized committee of the Board) may amend
the Award Document without the consent of Optionee.


(d)       Until the Option shall
expire, terminate or be exercised in full, the Company shall, upon written
request therefor, send a copy of the Plan and these Terms and Conditions, in
their then-current form, to Optionee or any other person or entity then
entitled to exercise the Option.


10.      Stockholder
Rights.  Optionee shall not be entitled to vote,
receive dividends or be deemed for any purpose the holder of any Option Shares
until such Option Shares have been issued following the exercise of the Option
in accordance with the terms of the Option Document.


11.      Governing
Law.  The Option Document shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
without reference to choice or conflict of law principles.


AFTERMARKET TECHNOLOGY CORP.

COMMITTEE ON INDEPENDENT DIRECTOR COMPENSATION


Michael T. DuBose

Donald T. Johnson, Jr., Chairman

Gerald L. Parsky


 


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