FORM OF STOCK OPTION AGREEMENT



 





Exhibit 10.4


[Form of]

Transportation Technologies Industries, Inc.

Stock Option Agreement




          THIS
STOCK OPTION AGREEMENT (this “Agreement”) is made and entered into
this    day of August, 2004 by and between Transportation Technologies
Industries, Inc., a Delaware corporation (the “Company”), and [
] (the “Option Holder”).



          WHEREAS, the Option Holder has been designated by the Compensation
Committee of the Board of Directors of the Company (the “Committee”) to
participate in the 2004 Long Term Incentive and Share Award Plan (the
“Plan”)
(capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Plan);



          NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the Company
and the Option Holder agree as follows:



          (a) Grant. Pursuant to the provisions of the Plan, all of the terms of
which are incorporated herein by reference unless otherwise provided herein,
the Company hereby grants to the Option Holder an option (the “Option”) to
purchase [ ] shares of the Company’s common stock (the “Common
Stock”). The Option is granted as of August [17],
2004 (the “Date of Grant”),
and such grant is subject to all of the terms and conditions herein and to all
of the terms and the conditions of the Plan, provided that, in the event of a
conflict between the Plan and this Agreement, the terms of this Agreement shall
govern. The Option is intended to be non-qualified, and is not intended to be
an incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended.



          (b) Exercise Price. The exercise price of the shares subject to the
Option shall be equal to the per share price at the time of the consummation of
the Company’s initial public offering, subject to adjustment as provided in the
Plan.



          (c) Term of Option. The Option may, subject to the vesting and
termination provisions of paragraphs (d) and (e) below, be exercised only
during the period commencing on the Date of Grant and continuing until the
close of business on tenth anniversary of the Date of Grant (the “Option
Period”). At the end of the Option Period, the Option shall terminate, unless
sooner terminated pursuant to paragraph (e) below.



          (d) Vesting. The Option Holder’s right to purchase shares of Common Stock
under the Option shall be exercisable only to the extent that the Option has
vested. Subject to subparagraph (g) below, the Option shall vest and become
exercisable upon the following schedule (provided the Option Holder remains in
the employ of the Company on the applicable vesting date):





	 	(i)	 	one-third (1/3) of the shares
subject to the Option vest on the first anniversary of
the Date of Grant;




 









 












 2 






	 	(ii)	 	an additional one-third (1/3) of
the shares subject to the Option vest on the second
anniversary of the Date of Grant; and
	 
	 	(iii)	 	the final one-third (1/3) of the
            shares subject to the Option vest on the third
anniversary of the Date of Grant.
	 
	 	(iv)	 	In addition, the Option shall vest
and become exercisable upon a termination by the
Company without Cause (as defined in Appendix A) or a
termination by the Option Holder for Good Reason (as
defined in Appendix A).1





          (e) Termination of Employment. If the employment of the Option Holder
terminates for any reason other than a Qualifying Termination (as defined
below) during the Option Period, the Option shall immediately terminate. If
the employment of the Option Holder terminates by reason of a Qualifying
Termination during the Option Period, the Option shall be exercisable only to
the extent that it was exercisable on the date of the Option Holder’s
termination of employment and shall terminate on the earlier of (i) the first
anniversary of the date of the Option Holder’s termination of employment or
(ii) the end of the Option Period. For purposes of this Agreement, the term
“Qualifying Termination” shall mean a termination of the Option Holder’s
employment by reason of the Option Holder’s death, Disability (as defined in
Appendix A) or Retirement (as defined in Appendix A), a termination by the
Company without Cause (as defined in Appendix A) or a termination by the Option
Holder for Good Reason (as defined in Appendix A).2



          (f) Exercise of Option. In order to exercise the Option, the Option
Holder shall submit to the Secretary of the Company an instrument in writing
specifying the number of shares of Common Stock in respect of which the Option
is being exercised, accompanied by payment, in a manner acceptable to the
Committee, of the exercise price of the shares in respect of which the Option
is being exercised. Shares shall then be issued by the Company and a share
certificate delivered to the Option Holder; provided, however, that the Company
shall not be obligated to issue any Shares hereunder if the issuance of such
Shares would violate the provisions of any applicable law.



          (g) Change of Control. In the event of a Change of Control (as defined in
the Plan), the Option shall become fully vested and exercisable.











	1	 	This sub-provision shall not be included in the option agreements of Option
Holders who are not party to employment agreements with the Company.
	 
	2	 	For Option Holders (a) other than Begel, Weller, Cirar, Mueller and Tallering
and (b) who are not party to an employment agreement with the Company, the
definition of “Qualifying Termination” shall be limited to a termination of the
Option Holder’s employment by reason of the Option Holder’s death or Retirement
(as defined in Appendix A).



 









 










 3 




          (h) Non-Transferable. The Option may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the laws of
descent.



          (i) References. References herein to rights and obligations of the Option
Holder shall apply, where appropriate, to the Option Holder’s legal
representative or guardian without regard to whether specific reference to such
legal representative or guardian is contained in a particular provision of this
Agreement or the Plan.



          (j) Taxes. The Option Holder shall be responsible for all taxes required
to be paid under applicable tax laws with respect to the Option.



          (k) Entire Agreement. This Agreement contains all the understandings
between the parties hereto pertaining to the matters referred to herein, and
supersedes all undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto. The Option Holder
represents that, in executing this Agreement, he does not rely and has not
relied upon any representation or statement not set forth herein made by the
Company with regard to the subject matter, bases or effect of this Agreement or
otherwise.



          (l) Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing,
and is signed by both the Option Holder and a duly authorized officer of the
Company. No waiver by any party hereto of any breach by another party hereto
of any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same time, any prior time or any subsequent time.



          (m) Notices. Any notice to be given hereunder shall be in writing and
shall be deemed given hereunder when delivered personally, sent by courier or
telecopy or registered or certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or
to such other address as such party may subsequently give notice of hereunder
in writing:



          To Option Holder at:




[                    ]

c/o Transportation Technologies Industries, Inc.

980 North Michigan Avenue

Suite 1000

Chicago, IL 60611



          To the Company at:




Transportation Technologies Industries, Inc.

980 North Michigan Ave.

Suite 1000

Chicago, IL 60611

Attention: Secretary



 









 





 4 




          Any notice delivered personally or by courier under this paragraph (m)
shall be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.



          (n) Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable, shall not be affected thereby, and each provision
hereof shall be validated and shall be enforced to the fullest extent
permitted by law.



          (o) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
conflicts of laws principles.



          (p) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.



 









 





 5 




          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year set forth above.



	 	 	 	 	 
	 	 	TRANSPORTATION TECHNOLOGIES
INDUSTRIES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	OPTION HOLDER:
	 
	 	 	 	 
	 	 	
 
	 	 	Name: [                    ]







 









 






APPENDIX A3



For purposes of this Agreement:



1. “Disability” means that, in the written opinion of a qualified physician
selected by the Company, the Option Holder shall become unable to perform his
duties hereunder due to physical or mental illness that continues for one year.



2. “Cause” means






	 	(i)	 	the willful and continuous neglect
or refusal to perform the Option Holder’s duties or
responsibilities, or the willful taking of actions (or
willful failures to take actions) that materially
impair the Option Holder’s ability to perform his
duties or responsibilities that in each case continues
after being communicated in writing to the Option
Holder (other than any such failure resulting from the
Option Holder’s incapacity due to physical or mental
illness or any such actual or anticipated failure after
the issuance of a written notice of termination of the
Option Holder’s employment by the Company; or
	 
	 	(ii)	 	any act by the Option Holder that
constitutes gross negligence or willful misconduct in
the performance of his duties hereunder, or the
conviction of the Option Holder for any felony, in each
case which is materially and manifestly injurious to
the Company and which is brought to the attention of
the Option Holder in writing not more than thirty days
from the date of its discovery by the Company or the
Board of Directors of the Company (the “Board”).





          For purposes of this definition, no act, or failure to act, on the Option
Holder’s part shall be considered “willful,” unless done, or omitted to be
done, by him not in good faith or without reasonable belief that his action or
omission was in the best interest of the Company. Any act, or fail-











	3	 	The definitions of the terms
“Disability,” “Cause,” and
“Good Reason” in this
Appendix A may differ for Option Holders (a) other than Begel, Weller,
Cirar, Mueller and Tallering and (ii) who are party to an employment
agreement with the Company, depending on the definitions of such terms in
each Option Holder’s respective employment agreement. The definitions of
the terms “Disability,” “Cause,”
and “Good Reason” in this Appendix A
shall not be included in the option agreements of Option Holders who are
not party to employment agreements with the Company.




 









 










 2 



ure to act, based upon the direction or instruction of the Board pursuant
to a resolution duly adopted by the Board or based upon the advice of counsel
for the Company shall be presumed to be done, or omitted to be done, in good
faith and in the best interests of the Company absent knowledge by the Option
Holder the contrary. Notwithstanding the foregoing, the Option Holder shall
not be deemed to have been terminated for Cause without (1) written notice to
the Option Holder specifying in detail the specific reasons for the Company’s
intention to terminate for Cause, (2) an opportunity for the Option Holder,
together with his counsel, to be heard before the Board, (3) with respect to
actions or inaction specified in paragraph (i) above, a reasonable opportunity
for the Option Holder to cure the action or inaction specified by the Company
and (4) delivery to the Option Holder of a written notice of termination of the
Option Holder’s employment by the Company.



3. “Good Reason” means, without the Option Holder’s express written consent,
the occurrence of any of the following circumstances unless such circumstances
are fully corrected prior to the date of termination of employment (which date
shall not be less than twenty (20) nor more than thirty (30) days from the date
of the issuance of a written notice of termination of the Option Holder’s
employment by the Company) specified in such written notice of termination
given in respect thereof: (A) a material change in the Option Holder’s
position, duties, responsibilities (including reporting responsibilities) or
authority (except during periods when the Option Holder is unable to perform
all or substantially all of the Option Holder’s duties and/or responsibilities
on account of the Option Holder’s illness (either physical or mental) or other
incapacity), which, in the Option Holder’s reasonable judgment, represent an
adverse change, (B) a reduction in either the Option Holder’s annual rate of
base salary or level of participation in any bonus plans for which he is
eligible, (C) failure to provide facilities or services that are suitable as
determined by the Board to the Option Holder’s position and adequate for the
performance of the Option Holder’s duties and responsibilities, including the
failure to maintain the Chicago office (or comparable office facilities so long
as the Option Holder does not have to relocate outside the city of Chicago,
Illinois), without the prior written consent of the Option Holder, (D) any
purported termination by the Company of the Option Holder’s employment that is
not effected pursuant to a written notice of termination of the Option Holder’s
employment by the Company or (E) failure of any successor (by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to become liable for the performance of the Option
Holder’s employment agreement with the Company by assumption or by operation of
law or otherwise. The Option Holder’s right to terminate employment pursuant
to this definition shall not be affected by the Option Holder’s incapacity due
to physical or mental illness.



4. “Retirement” shall have the same meaning ascribed to such term in the
corporate policy and/or relevant document of the Option Holder’s employment
entity.