# **EXHIBIT 10.31**

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# **AFTERMARKET TECHNOLOGY CORP.2002 STOCK INCENTIVE PLAN**

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**SECTION 1.****                            PURPOSEOF PLAN**

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The purpose of this 2002 Stock Incentive Plan (this“Plan”) of Aftermarket Technology Corp., a Delaware corporation (the“Company”), is to enable the Company to attract, retain and motivate itsemployees, non-employee directors and independent contractors, and to furtheralign the interests of such employees, non-employee directors and independentcontractors with those of the stockholders of the Company by providing for orincreasing the proprietary interest of such employees, non-employee directorsand independent contractors in the Company.

 

**SECTION2.****                            ADMINISTRATIONOF PLAN**

 

**2.1****                               Compositionof Committee.**  Subject toSection 2.04, this Plan shall be administered by the Compensation andHuman Resources Committee of the Board of Directors (the “Committee”), as appointed from time to time by the Board ofDirectors, *provided*, *however*, that with respect to anyAward  (as defined in Section 5.1)intended to qualify as “performance-based compensation” within the meaning ofSection 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”),the term “Committee” shall refer to a committee of two or more “outsidedirectors” as determined for purposes of applying Code Section 162(m).  TheBoard of Directors shall fill vacancies on, and from time to time may remove oradd members to, the Committee. The Committee shall act pursuant to a majorityvote or unanimous written consent.  TheCommittee may designate the Secretary of the Company or other Company employeesto assist the Committee in the administration of this Plan and may grantauthority to such persons to execute agreements or other documents evidencingAwards made under this Plan or other documents entered into under this Plan onbehalf of the Committee or the Company.

 

**2.2****                               Powersof the Committee.**  Subject tothe express provisions of this Plan, the Committee shall be authorized andempowered to do all things necessary or desirable, in its sole discretion, inconnection with the administration of this Plan, including, without limitation,the following:

 

(a)                                  toprescribe, amend and rescind rules and regulations relating to this Plan and todefine terms not otherwise defined herein; *provided* that, unless the Committee shallspecify otherwise, for purposes of this Plan (i) the term “fair market value”shall mean, as of any date, the closing price for a Share (as defined inSection 3.1) reported for that date by the Nasdaq National Market System (orsuch other stock exchange or quotation system on which Shares are then listedor quoted) or, if no Shares are traded on the Nasdaq National Market System (orsuch other stock exchange or quotation system) on the date in question, thenfor the next preceding date for which Shares are traded on the Nasdaq NationalMarket System (or such other stock exchange or quotation system); and (ii) theterm “Company” shall mean the Company and its subsidiaries and affiliatesunless the context otherwise requires;

 

(b)                                 todetermine which persons are Eligible Persons (as defined in Section 4), towhich of Eligible Persons, if any, Awards shall be granted hereunder and thetiming of any such Awards;

 

(c)                                  todetermine the number of Shares subject to Awards and the exercise or purchase priceof such Shares;

 

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(d)                                 toestablish and verify the extent of satisfaction of any performance goalsapplicable to Awards;

 

(e)                                  toprescribe and amend the terms of the agreements or other documents evidencingAwards made under this Plan (which need not be identical);

 

(f)                                    todetermine whether, and the extent to which, adjustments are required pursuantto Section 10;

 

(g)                                 tointerpret and construe this Plan, any rules and regulations under this Plan andthe terms and conditions of any Award granted hereunder and to make exceptionsto any such provisions in good faith and for the benefit of the Company;****and

 

(h)                                 tomake all other determinations deemed necessary or advisable for theadministration of this Plan.

 

**2.3****                               Determinationsof the Committee.**  All decisions,determinations and interpretations by the Committee regarding this Plan shallbe final and binding on all Eligible Persons and Participants (as defined inSection 4).  The Committee shallconsider such factors as it deems relevant to making such decisions,determinations and interpretations including, without limitation, therecommendations or advice of any director, officer or employee of the Companyand such attorneys, consultants and accountants as it may select.

 

**2.4.****                            Authorityof the Board of Directors.**  TheBoard of Directors, in its sole discretion, may exercise any authority of theCommittee under this Plan in lieu of the Committee’s exercise thereof.

 

**SECTION 3.****                            STOCKSUBJECT TO PLAN**

 

**3.1****                               AggregateLimits.**  At any time, theaggregate number of shares of the Company’s Common Stock, $.01 par value(“Shares”), issued and issuable pursuant to all Awards (including all ISOs (asdefined in Section 5.1)) granted under this Plan shall not exceed 1,000,000; *provided*that, notwithstanding Section 3.3, the aggregate number of Shares that maybe issued pursuant to the exercise of ISOs (as defined in Section 5.1(a))granted under this Plan shall not exceed 1,000,000.  The Shares subject to this Plan may be either Shares reacquiredby the Company, including Shares purchased in the open market, or authorizedbut unissued Shares.  Such limits shallbe subject to adjustment as provided in Section 10.

 

**3.2****                               CodeSection 162(m) Limits.**  Theaggregate number of Shares subject to Options (as defined in Section 5.1(a))granted under this Plan during any calendar year to any one employee of theCompany (an “Employee)” shall not exceed 400,000.  The aggregate number of Shares issued or issuable under allAwards granted under this Plan, other than Options, during any calendar year toany one Employee shall not exceed 400,000. Notwithstanding anything to the contrary in this Plan, the foregoinglimitations shall be subject to adjustment under Section 10 only to theextent that such adjustment will not affect the status of any Award intended toqualify as “performance-based compensation” under Code Section 162(m).

 

**3.3****                               Issuanceof Shares.**  For purposes ofSection 3.1, the aggregate number of Shares issued under this Plan at any timeshall equal only the number of Shares actually issued upon exercise orsettlement of an Award and not returned to the Company upon cancellation,expiration or forfeiture of an Award or in payment or satisfaction of thepurchase price, exercise price or tax withholding obligation of an Award.

 

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**SECTION 4.****                            PERSONSELIGIBLE UNDER PLAN**

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Any person who is an employee, prospective employee,consultant, director or advisor of the Company (an “Eligible Person”) shall beeligible to be considered for the grant of Awards hereunder.  A “Participant” is any current or formerEligible Person to whom an Award has been made and any person (including anyestate) to whom an Award has been assigned or transferred pursuant toSection 9.1.

 

**SECTION 5.****                            PLANAWARDS**

 

**5.1****                               AwardTypes.**  The Committee, on behalfof the Company, is authorized under this Plan to grant certain types ofarrangements to Eligible Persons and to confer certain benefits on them.  The following arrangements or benefits areauthorized under this Plan if their terms and conditions are not inconsistentwith the provisions of this Plan: Options, Incentive Bonuses and Incentive Stock.  Such arrangements and benefits are sometimesreferred to herein as “Awards.”  Theauthorized types of arrangements and benefits for which Awards may be grantedare defined as follows:

 

(a)                                  *Options:*  An Option is a right granted underSection 6 to purchase a number of Shares at such exercise price, at suchtimes and on such other terms and conditions as are specified in the agreementor other document evidencing the Award (the “Option Document “).  Options intended to qualify as IncentiveStock Options (“ISOs”) pursuant to Code Section 422 and Options notintended to qualify as ISOs (“Nonqualified Options”) may be granted underSection 6.

 

(b)                                 *IncentiveBonus:*  An Incentive Bonus isa bonus opportunity awarded under Section 7 pursuant to which aParticipant may become entitled to receive an amount based on satisfaction ofsuch performance criteria as are specified in the agreement or other documentevidencing the Award (the “Incentive Bonus Document”).

 

(c)                                  *IncentiveStock:*  Incentive Stock is anaward or issuance of Shares made under Section 8, the grant, issuance,retention, vesting and/or transferability of which is subject during specifiedperiods of time to such conditions (including performance conditions) and termsas are expressed in the agreement or other document evidencing the Award (the“Incentive Stock Document”).

 

**5.2****                               Grantsof Awards.**  An Award may consistof one such arrangement or benefit or two or more of them in tandem or in thealternative.

 

**SECTION 6.****                            OPTIONS**

 

The Committee may grant an Option or provide for thegrant of an Option, either from time to time in the discretion of the Committeeor automatically upon the occurrence of specified events, including, withoutlimitation, the achievement of performance goals, the satisfaction of an eventor condition within the control of the recipient of the Award or within thecontrol of others.

 

**6.1****                               OptionDocument.*** *Each OptionDocument shall contain provisions regarding (a) the number of Shares thatmay be issued upon exercise of the Option, (b) the purchase price of theShares and the means of payment for the Shares, (c) the term of theOption, (d) such terms and conditions of exercisability as may bedetermined from time to time by the Committee, (e) restrictions on thetransfer of the Option and forfeiture provisions, and (f) such furtherterms and conditions, in each case not inconsistent with this Plan, as may bedetermined from time to time by the Committee. Option Documents evidencing ISOs shall contain such terms and conditionsas may be necessary to comply with the applicable provisions of Section 422 ofthe Code.

 

**6.2****                               OptionPrice.**  The purchase price pershare of the Shares subject to each Option granted under this Plan shall equalor exceed 100% of the fair market value of such Shares on the date the Optionis granted except that (i) the exercise price of an Option may be higheror lower in the case of Options granted 

 

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toemployees of a company acquired by the Company in assumption and substitutionof options held by such employees at the time such company is acquired, (ii) inthe event an Employee is required to pay or forego the receipt of any cashamount in consideration of receipt of an Option, the exercise price plus suchcash amount shall equal or exceed 100% of the fair market value of such Stockon the date the Option is granted, and (iii) the exercise price of anOption granted to a director who is not an Employee may be lower.

 

**6.3****                               OptionTerm.*** *The “Term” of eachOption granted under this Plan, including any ISOs, shall be ten (10) yearsfrom the date of its grant unless the Committee shall provide otherwise.

 

**6.4****                               OptionVesting.** Options granted underthis Plan shall be exercisable at such time and in such installments during theperiod prior to the expiration of the Option’s Term as determined by theCommittee.  The Committee shall have theright to make the timing of the ability to exercise any Option granted underthis Plan subject to such performance requirements as deemed appropriate by theCommittee.  At any time after the grantof an Option the Committee may reduce or eliminate any restrictions surroundingany Participant’s right to exercise all or part of the Option.

 

**6.5****                               Terminationof Employment.*** *Subjectto Section 11, upon a termination of employment by a Participant prior tothe full exercise of an Option, the unexercised portion of the Option shall besubject to such procedures as the Committee may establish except, in the caseof an ISO, if and to the extent that other procedures are necessary to complywith the provisions of Section 421, 422 or 424 of the Code.

 

**6.6*****                              *Paymentof Exercise Price.**  The exerciseprice of an Option shall be paid in the form of one of more of the following,as the Committee shall specify, either through the terms of the Option Documentor at the time of exercise of an Option: (a) cash or certified or cashiers’ check, (b) shares of capitalstock of the Company that have been held by the Participant for such period oftime as the Committee may specify, (c) other property deemed acceptable bythe Committee, (d) a reduction in the number of Shares or other propertyotherwise issuable pursuant to such Option, (e) a promissory note of orother commitment to pay by the Participant or of a third party, the terms andconditions of which shall be determined by the Committee, or (f) anycombination of (a) through (e).

 

**SECTION7.****                            INCENTIVEBONUSES**

 

Each Incentive BonusAward will confer upon the Employee the opportunity to earn a future paymenttied to the level of achievement with respect to one or more performancecriteria established for a performance period.

 

**7.1****                               IncentiveBonus Document.****Each Incentive Bonus Document shallcontain provisions regarding (a) the target and maximum amount payable to theParticipant as an Incentive Bonus, (b) the performance criteria and level ofachievement versus these criteria that shall determine the amount of suchpayment, (c) the term of the performance period as to which performance shallbe measured for determining the amount of any payment, (d) the timing of anypayment earned by virtue of performance, (e) restrictions on the alienation ortransfer of the Incentive Bonus prior to actual payment, (f) forfeitureprovisions, and (g) such further terms and conditions, in each case notinconsistent with this Plan as may be determined from time to time by theCommittee.  The maximum amount payableas an Incentive Bonus may be a multiple of the target amount payable, but themaximum amount payable pursuant to that portion of an Incentive Bonus Awardgranted under this Plan for any fiscal year to any Participant that is intendedto satisfy the requirements for “performance-based compensation” under CodeSection 162(m) shall not exceed $3,000,000 in the case of any Awardpayable in cash.

 

**7.2****                               PerformanceCriteria.**  The Committee shallestablish the performance criteria and level of achievement versus thesecriteria that shall determine the target and maximum amount payable under anIncentive Bonus Award, which criteria may be based on financial performanceand/or personal performance evaluations. The Committee may specify the percentage of the target Incentive Bonusthat is intended to satisfy the requirements for “performance-basedcompensation” under Code Section 162(m).

 

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Notwithstandinganything to the contrary herein, the performance criteria for any portion of anIncentive Bonus that is intended by the Committee to satisfy the requirementsfor “performance-based compensation” under Code Section 162(m) shall be ameasure based on one or more Qualifying Performance Criteria (as defined in Section 9.2)selected by the Committee and specified within the time period required underCode Section 162(m).  The Committeeshall certify the extent to which any Qualifying Performance Criteria has beensatisfied and the amount payable as a result thereof prior to payment of anyIncentive Bonus that is intended to satisfy the requirements for“performance-based compensation” under Code Section 162(m).

 

**7.3****                               Timingand Form of Payment.****The Committee shall determine the timingof payment of any Incentive Bonus.  TheCommittee may provide for or, subject to such terms and conditions as theCommittee may specify, may permit a Participant to elect the payment of anyIncentive Bonus to be deferred to a specified date or event.

 

**7.4****                               DiscretionaryAdjustments.**  Notwithstandingsatisfaction of any performance goals, the amount paid under an Incentive BonusAward on account of either financial performance or personal performanceevaluations may be reduced by the Committee on the basis of such furtherconsiderations as the Committee shall determine.

 

**SECTION8.****                            INCENTIVESTOCK**

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Incentive Stock is anaward or issuance of Shares the grant, issuance, retention, vesting and/ortransferability of which is subject during specified periods of time to suchconditions (including performance conditions) and terms as the Committee deemsappropriate.

 

**8.1****                               IncentiveStock Document.*** *EachIncentive Stock Document shall contain provisions regarding (a) the number ofShares subject to such Award or a formula for determining such, (b) theperformance criteria, if any, and level of achievement versus these criteriathat shall determine the number of Shares granted, issued, retainable and/orvested, (c) the period, if any, as to which performance shall be measuredfor determining achievement of performance, (d) forfeiture,(e) transferability and (f) such further terms and conditions, notinconsistent with this Plan as may be determined from time to time by theCommittee.

 

**8.2****                               SalePrice.**  Subject to therequirements of applicable law, the Committee shall determine the price, ifany, at which Shares of Incentive Stock shall be sold or awarded to an EligiblePerson, which may vary from time to time and among Eligible Persons and whichmay be below the fair market value of such Shares at the date of grant orissuance.

 

**8.3****                               PerformanceCriteria.**  The grant, issuance,retention and/or vesting of Incentive Stock may but need not be subject to suchperformance criteria and level of achievement versus these criteria as theCommittee shall determine, which criteria may be based on financial performanceand/or personal performance evaluations. Notwithstanding anything to the contrary herein, the performancecriteria for any Incentive Stock that is intended to satisfy the requirementsfor “performance-based compensation” under Code Section 162(m) shall be ameasure based on one or more Qualifying Performance Criteria selected by theCommittee and specified within the time period required under CodeSection 162(m).

 

**8.4****                               DiscretionaryAdjustments.**  Notwithstandingsatisfaction of any performance goals, the number of Shares granted, issued,retainable and/or vested under an Incentive Stock Award on account of eitherfinancial performance or personal performance evaluations may be reduced by theCommittee on the basis of such further considerations as the Committee shalldetermine.

 

**8.5****                               Terminationof Employment.*** *Subjectto Section 11,**upon a termination of employment by aParticipant prior to the vesting of or the lapsing of restrictions on IncentiveStock, the Incentive Stock Awards granted to such Participant shall be subjectto such procedures as determined by the Committee.

 

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**SECTION9.****                            OTHERPROVISIONS APPLICABLE TO AWARDS**

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**9.1****                               Transferability.**  Unless the agreement or other documentevidencing an Award (or an amendment thereto authorized by the Committee)expressly states that the Award is transferable as provided hereunder, no Awardgranted under this Plan (nor any interest in such Award) may be sold, assigned,conveyed, gifted, pledged, hypothecated or otherwise transferred in any mannerprior to the vesting or lapse of any and all restrictions applicable thereto,other than by will or the laws of descent and distribution.  The Committee may grant an Award or amend anoutstanding Award to provide that the Award is transferable or assignable to amember or members of the Participant’s “immediate family,” as such term isdefined in Rule 16a-1(e) under the Securities Exchange Act of 1934, as amended(the “Exchange Act”), or to a trust for the benefit solely of a member ormembers of the Participant’s immediate family or to a partnership or otherentity whose only owners are members of the Participant’s immediate family, *provided*that (i) no consideration is given in connection with the transfer of suchAward, and (ii) following any such transfer or assignment the Award will remainsubject to substantially the same terms applicable to the Award while held bythe Participant, as modified as the Committee shall deem appropriate, and thetransferee shall execute an agreement agreeing to be bound by such terms.

 

**9.2****                               QualifyingPerformance Criteria.**  Forpurposes of this Plan, the term “Qualifying Performance Criteria” shall meanany one or more of the following performance criteria, either individually,alternatively or in any combination, applied to either the Company as a wholeor to a business unit or subsidiary, either individually, alternatively or inany combination, and measured either annually or cumulatively over a period ofyears, on an absolute basis or relative to a pre-established target, previousyears’ results or a designated comparison group, in each case as specified bythe Committee in the Award:  (a) cashflow, (b) earnings per share, (c) earnings before interest, taxes,depreciation and amortization, (d) earnings before interest, taxes andamortization, (e) earnings before interest and taxes, (f) return onequity, (g) total stockholder return, (h) return on capital, (i) returnon assets or net assets, (j) revenue, (k) income or net income,(l) operating income or net operating income, (m) operating profit ornet operating profit, (n) operating margin, (o) return on operatingrevenue, (p) market share, and (q) overhead or other expensereduction.  The Committee shallappropriately adjust any evaluation of performance under a QualifyingPerformance Criteria to exclude any of the following events that occurs duringa performance period:  (i) assetwrite-downs, (ii) litigation or claim judgments or settlements,(iii) the effect of changes in tax law, accounting principles or othersuch laws or provisions affecting reported results, (iv) accruals forreorganization and restructuring programs, (v) divestitures, and(vi) any extraordinary non-recurring items as described in AccountingPrinciples Board Opinion No. 30 and/or in management’s discussion and analysisof financial condition and results of operations appearing in the Company’sannual report to stockholders for the applicable year.

 

**9.3****                               Dividends.**  Unless otherwise provided by the Committee,no adjustment shall be made in Shares issuable under Awards on account of cashdividends that may be paid or other rights that may be issued to the holders ofShares prior to their issuance under any Award.  The Committee shall specify whether dividends or dividendequivalent amounts shall be paid to any Participant with respect to the Sharessubject to any Award that have not vested or been issued or that are subject toany restrictions or conditions on the record date for dividends.

 

**9.4****                               DocumentsEvidencing Awards.**  TheCommittee shall, subject to applicable law, determine the date an Award isdeemed to be granted, which, for purposes of this Plan, shall not be affectedby the fact that an Award is contingent on subsequent stockholder approval ofthis Plan.  The Committee or, except tothe extent prohibited under applicable law, its delegate(s) may establish theterms of agreements or other documents evidencing Awards under this Plan andmay, but need not, require as a condition to any such agreement’s or document’seffectiveness that such agreement or document be executed by the Participantand that such Participant agree to such further terms and conditions asspecified in such agreement or document. The grant of an Award under this Plan shall not confer any rights uponthe Participant holding such Award other than such terms, and subject to suchconditions, as are specified in this Plan as being applicable to such type ofAward (or to all Awards) or as are expressly set forth in the agreement orother document evidencing such Award.

 

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**9.5****                               TandemStock or Cash Rights.**  Either atthe time an Award is granted or by subsequent action, the Committee may, butneed not, provide that an Award shall contain as a term thereof, a right,either in tandem with the other rights under the Award or as an alternativethereto, of the Participant to receive, without payment to the Company, anumber of Shares, cash or a combination thereof, the amount of which isdetermined by reference to the value of the Award.

 

**9.6****                               Financing.**  The Committee may provide financing to aParticipant in a principal amount sufficient to pay the purchase price of anyAward and/or to pay the amount of taxes required by law to be withheld withrespect to any Award.  Any such loanshall be subject to all applicable legal requirements and restrictionspertinent thereto, including Regulation U promulgated by the FederalReserve Board.  The grant of an Award shallin no way obligate the Company or the Committee to provide any financingwhatsoever in connection therewith.

 

**SECTION10.****                     CHANGESIN CAPITAL STRUCTURE**

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If the outstanding securities of the class thensubject to this Plan are increased, decreased or exchanged for or convertedinto cash, property or a different number or kind of shares or securities, orif cash, property or shares or securities are distributed in respect of suchoutstanding securities, in either case as a result of a reorganization, merger,consolidation, recapitalization, restructuring, reclassification, dividend(other than a regular, quarterly cash dividend) or other distribution, stocksplit, reverse stock split, spin-off or the like, or if substantially all ofthe property and assets of the Company are sold, then, unless the terms of suchtransaction shall provide otherwise, the Committee shall make appropriate andproportionate adjustments in (i) the number and type of shares or othersecurities or cash or other property that may be acquired pursuant to Awardstheretofore granted under this Plan and the exercise or settlement price ofsuch Awards, *provided, however,* that such adjustment shall be made insuch a manner that will not affect the status of any Award intended to qualifyas an ISO under Code Section 422 or as “performance-based compensation”under Code Section 162(m), and (ii) the maximum number and type ofshares or other securities that may be issued pursuant to such Awardsthereafter granted under this Plan.

 

**SECTION11.****                     CHANGEOF CONTROL**

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**11.1****                        Effectof Change of Control.**  TheCommittee may, through the terms of the Award or otherwise, provide that any orall of the following shall occur in connection with a Change of Control or aChange of Control Transaction (as those terms are defined in Section 11.2)or upon termination of the Participant’s employment following a Change ofControl or a Change of Control Transaction: (a) in the case of an Option, the acceleration of the Participant’sability to exercise any portion of the Option not previously exercisable,(b) in the case of an Incentive Bonus, the acceleration of theParticipant’s right to receive a payment equal to the target amount payable or,if greater, a payment based on performance through a date determined by the Committeeprior to the Change of Control, and (c) in the case of Shares issued inpayment of any Incentive Bonus and/or in the case of Incentive Stock, the lapseand expiration of any conditions to the grant, issuance, retention, vesting ortransferability of, or any other restrictions applicable to, such Award.  The Committee also may, through the terms ofthe Award or otherwise, provide for an absolute or conditional exercise,payment or lapse of conditions or restrictions on an Award that shall only be effectiveif, upon the announcement of a Change of Control Transaction, no provision ismade in such Change of Control Transaction for the exercise, payment or lapseof conditions or restrictions on the Award or other procedure whereby theParticipant may realize the full benefit of the Award.

 

**11.2****                        Definitions.**  Unless the Committee shall provideotherwise,

 

“Change of Control” shall mean an occurrence of any ofthe following events:

 

(a)                                  anacquisition (other than directly from the Company) of any voting securities ofthe Company (the “Voting Securities”) by any “person or group” (within themeaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) immediately afterwhich such person or group has “Beneficial Ownership” (within the meaning ofRule 13d-3 under the Exchange Act) of more than 50% of the combined votingpower of the Company’s then outstanding Voting Securities, except 

 

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in the case of an acquisition by any person or groupthat immediately prior to such acquisition already had Beneficial Ownership ofmore than 50% of the combined voting power of the Company’s then outstandingVoting Securities;

 

(b)                                 consummationof (i) a merger, consolidation or reorganization involving the Companyunless the company resulting from such merger, consolidation or reorganization(the “Surviving Corporation”) shall adopt or assume this Plan and allParticipants’ Awards under this Plan and either (A) the stockholders ofthe Company immediately before such merger, consolidation or reorganizationown, directly or indirectly immediately following such merger, consolidation orreorganization, more than 50% of the combined voting power of the SurvivingCorporation in substantially the same proportion as their ownership immediatelybefore such merger, consolidation or reorganization, or (B) at least amajority of the members of the Board of Directors of the Surviving Corporationwere directors of the Company immediately prior to the execution of theagreement providing for such merger, consolidation or reorganization, or (ii) acomplete liquidation or dissolution of the Company; or

 

(c)                                  suchother events as the Committee from time to time may specify.

 

“Change of Control Transaction” shall mean any tenderoffer, offer, exchange offer, solicitation, merger, consolidation,reorganization or other transaction that is intended to or reasonably expectedto result in a Change of Control.

 

**SECTION12.****                     TAXES**

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**12.1****                        WithholdingRequirements.**  The Committee maymake such provisions or impose such conditions as it may deem appropriate forthe withholding or payment by a Participant of any taxes that the Committeedetermines are required in connection with any Award granted under this Plan,and a Participant’s rights in any Award are subject to satisfaction of suchconditions.

 

**12.2****                        Paymentof Withholding Taxes.** Notwithstanding the terms of Section 12.1, the Committee may provide inthe agreement or other document evidencing an Award or otherwise that all orany portion of the taxes required to be withheld by the Company or, ifpermitted by the Committee, desired to be paid by the Participant, inconnection with the exercise of a Nonqualified Option or the exercise, vesting,settlement or transfer of any other Award shall be paid or, at the election ofthe Participant, may be paid by the Company by withholding shares of theCompany’s capital stock otherwise issuable or subject to such Award or by theParticipant delivering previously owned shares of the Company’s capital stock,in each case having a fair market value equal to the amount required or electedto be withheld or paid.  Any suchelection is subject to such conditions or procedures as may be established bythe Committee and may be subject to disapproval by the Committee.

 

**SECTION13.****                     AMENDMENTSOR TERMINATION**

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The Board may amend,alter or discontinue this Plan or any agreement or other document evidencing anAward made under this Plan, but no such amendment shall be made which (i) wouldmaterially impair the rights of any Award holder, without such holder’sconsent, under any Award theretofore granted, provided that no such consentshall be required if the Committee determines in its sole discretion and priorto the date of any Change of Control that such amendment or alteration is notreasonably likely to significantly diminish the benefits provided under suchAward, or that any such diminution has been adequately compensated, or (ii)would have any of the following effects, unless approved by the stockholders ofthe Company:

 

(a)                                  materiallyincrease the maximum number of Shares for which Awards may be granted underthis Plan;

 

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(b)                                 reducethe price at which Options may be granted below the price provided for inSection 6.2;

 

(c)                                  reducethe exercise price of outstanding Options;

 

(d)                                 extendthe term of this Plan; or

 

(e)                                  changethe class of persons eligible to be Participants.

 

**SECTION14.****                     COMPLIANCEWITH OTHER LAWS AND REGULATIONS.**

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This Plan, the grant and exercise of Awards thereunder,and the obligation of the Company to sell, issue or deliver Shares under suchAwards, shall be subject to all applicable federal, state and foreign laws,rules and regulations and to such approvals by any governmental or regulatoryagency as may be required.  The Companyshall not be required to register in a Participant’s name or deliver any Sharesprior to the completion of any registration or qualification of such Sharesunder any federal, state or foreign law or any ruling or regulation of anygovernment body which the Committee shall determine to be necessary oradvisable.  This Plan is intended toconstitute an unfunded arrangement for a select group of management or otherkey employees, directors and consultants.

 

No Option shall be exercisable unless a registrationstatement with respect to the Option is effective or the Company has determinedthat such registration is unnecessary. Unless the Awards and Shares covered by this Plan have been registeredunder the Securities Act of 1933, as amended, or the Company has determinedthat such registration is unnecessary, each person receiving an Award and/orShares pursuant to any Award may be required by the Company to give arepresentation in writing that such person is acquiring such Shares for his or herown account for investment and not with a view to, or for sale in connectionwith, the distribution of any part thereof.

 

**SECTION15.****                     OPTIONGRANTS BY SUBSIDIARIES**

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Inthe case of a grant of an option to any Eligible Person employed by asubsidiary of the Company, such grant may, if the Committee so directs, beimplemented by the Company issuing any subject shares to the subsidiary forsuch lawful consideration as the Committee may determine, upon the condition orunderstanding that the subsidiary will transfer the shares to the optionholderin accordance with the terms of the option specified by the Committee pursuantto the provisions of this Plan. Notwithstanding any other provision hereof, such option may be issued byand in the name of the subsidiary and shall be deemed granted on such date asthe Committee shall determine.

 

**SECTION16.****                     NORIGHT TO COMPANY EMPLOYMENT**

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Nothing in this Plan or as a result of any Awardgranted pursuant to this Plan shall confer on any individual any right tocontinue in the employ of the Company or interfere in any way with the right ofthe Company to terminate an individual’s employment at any time.  The agreements or other documents evidencingAwards may contain such provisions as the Committee may approve with referenceto the effect of approved leaves of absence.

 

**SECTION17.****                     EFFECTIVENESSAND EXPIRATION OF PLAN**

 

This Plan shall be effective on the date the Boardadopts this Plan.  All Awards grantedunder this Plan are subject to, and may not be exercised before, the approvalof this Plan by the stockholders prior to the first anniversary date of theeffective date of this Plan, by the affirmative vote of the holders of amajority of the outstanding shares of the Company present, or represented byproxy, and entitled to vote at a meeting of the Company’s stockholders or bywritten consent in accordance with the laws of the State of Delaware; *provided*that if such approval by the stockholders of the Company is not forthcoming,all 

 

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Awardspreviously granted under this Plan shall be void.  No Awards shall be granted pursuant to this Plan more than ten(10) years after the effective date of this Plan.

 

**SECTION18.****                     NON-EXCLUSIVITYOF PLAN**

 

Neither the adoption of this Plan by the Board nor thesubmission of this Plan to the stockholders of the Company for approval shallbe construed as creating any limitations on the power of the Board or theCommittee to adopt such other incentive arrangements as either may deem desirable,including without limitation, the granting of restricted stock or stock optionsotherwise than under this Plan, and such arrangements may be either generallyapplicable or applicable only in specific cases.

 

**SECTION19.****                     GOVERNINGLAW**

 

This Plan and any agreementsor other documents hereunder shall be interpreted and construed in accordancewith the laws of the State of Delaware and applicable federal law.  The Committee may provide that any disputeas to any Award shall be presented and determined in such forum as theCommittee may specify, including through binding arbitration.  Any reference in this Plan or in theagreement or other document evidencing any Award to a provision of law or to arule or regulation shall be deemed to include any successor law, rule orregulation of similar effect or applicability.

 

**SECTION20.****                     SUCCESSORS**

 

Upona reorganization, merger or consolidation of the Company as a result of whichthe outstanding securities of the class then subject to Awards hereunder arechanged into or exchanged for securities issued by an entity (a “SurvivingCorporation”) other than the Company or as a result of which the Companybecomes a direct or indirect subsidiary of another entity whose equitysecurities are publicly traded (similarly, a “Surviving Corporation”) and theclass of securities subject to Awards under this Plan cease to be publiclytraded, then unless the Company specifies otherwise in the agreement providingfor such transaction, either (a) this Plan and the Awards then outstandingunder this Plan shall be assumed by the Surviving Corporation and the equitysecurities of the Surviving Corporation substituted for Shares issuable underthis Plan and such Awards, provided that the number of shares subject to thePlan and such Awards and the terms of such Awards shall be adjusted inaccordance with Section 10 hereof, or (b) the Surviving Corporation shallsubstitute equivalent awards for the Awards then outstanding under thisPlan, provided that the numberof shares subject to and the terms of such Awards shall be adjusted inaccordance with Section 10 hereof, or shall provide substantiallysimilar consideration to Participants for their Awards as was provided tostockholders of the Company (after taking into account the existing provisionsof the Awards).

 

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