2004 LONG TERM INCENTIVE & SHARE AWARD PLAN



 





Exhibit 10.2




TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.

2004 LONG TERM INCENTIVE AND SHARE AWARD PLAN




          1. Purposes.



          The purposes of the 2004 Long Term Incentive and Share Award Plan are to
advance the interests of Transportation Technologies Industries, Inc. and its
shareholders by providing a means to attract, retain, and motivate employees,
consultants and directors of the Company, its subsidiaries and affiliates, to
provide for competitive compensation opportunities, to encourage long term
service, to recognize individual contributions and reward achievement of
performance goals, and to promote the creation of long term value for
stockholders by aligning the interests of such persons with those of
stockholders.



          2. Definitions.



          For purposes of the Plan, the following terms shall be defined as set
forth below:



          (a) “Affiliate” means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a
participating employer under the Plan; provided, however, that the Company
directly or indirectly owns at least 20% of the combined voting power of all
classes of stock of such entity or at least 20% of the ownership interests in
such entity.



          (b) “Award” means any Option, SAR, Restricted Share, Restricted Share
Unit, Performance Share, Performance Unit, Dividend Equivalent, or Other
Share-Based Award granted to an Eligible Person under the Plan.



          (c) “Award Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award.



          (d) “Beneficiary” means the person, persons, trust or trusts which have
been designated by an Eligible Person in his or her most recent written
beneficiary designation filed with the Company to receive the benefits
specified under this Plan upon the death of the Eligible Person, or, if there
is no designated Beneficiary or surviving designated Beneficiary, then the
person, persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.



          (e) “Board” means the Board of Directors of the Company.



 









 





          (f) “Code” means the Internal Revenue Code of 1986, as amended from time
to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.



          (g) “Committee” means the Compensation Committee of the Board, or such
other Board committee (which may include the entire Board) as may be designated
by the Board to administer the Plan; provided, however, that, unless otherwise
determined by the Board, the Committee shall consist of two or more directors
of the Company, each of whom is a “non-employee director” within the meaning of
Rule 16b-3 under the Exchange Act, to the extent applicable, and each of whom
is an “outside director” within the meaning of Section 162(m) of the Code, to
the extent applicable; provided, further, that the mere fact that the Committee
shall fail to qualify under either of the foregoing requirements shall not
invalidate any Award made by the Committee which Award is otherwise validly
made under the Plan.



          (h) “Company” means Transportation Technologies Industries, Inc., a
corporation organized under the laws of Delaware, or any successor corporation.



          (i) “Director” means a member of the Board who is not an employee of the
Company, a Subsidiary or an Affiliate.



          (j) “Dividend Equivalent” means a right, granted under Section 5(g), to
receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded
on a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.



          (k) “Effective Date” means                 , 2004 [date of consummation
of IPO].



          (l) “Eligible Person” means (i) an employee or consultant of the Company,
a Subsidiary or an Affiliate, including any director who is an employee, or
(ii) a Director. Notwithstanding any provisions of this Plan to the contrary,
an Award may be granted to an employee, consultant or Director, in connection
with his or her hiring or retention prior to the date the employee, consultant
or Director first performs services for the Company, a Subsidiary or an
Affiliate; provided, however, that any such Award shall not become vested or
exercisable prior to the date the employee, consultant or Director first
performs such services.



          (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.



          (n) “Fair Market Value” means, with respect to Shares or other property,
the fair market value of such Shares or other property determined by such
methods or proce-



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dures as shall be established from time to time by the Committee. If the
Shares are listed on any established stock exchange or a national market
system, unless otherwise determined by the Committee in good faith, the Fair
Market Value of Shares shall mean the mean between the high and low selling
prices per Share on the date (or, if the Shares were not traded on that day,
the next preceding day that the Shares were traded) on the principal exchange
or market system on which the Shares are traded, as such prices are officially
quoted on such exchange.



          (o) “ISO” means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.



          (p) “NQSO” means any Option that is not an ISO.



          (q) “Option” means a right, granted under Section 5(b), to purchase
Shares.



          (r) “Other Share-Based Award” means a right, granted under Section 5(h),
that relates to or is valued by reference to Shares.



          (s) “Participant” means an Eligible Person who has been granted an Award
under the Plan.



          (t) “Performance Share” means a performance share granted under Section
5(f).



          (u) “Performance Unit” means a performance unit granted under Section
5(f).



          (v) “Plan” means this 2004 Long Term Incentive and Share Award Plan.



          (w) “Restricted Shares” means an Award of Shares under Section 5(d) that
may be subject to certain restrictions and to a risk of forfeiture.



          (x) “Restricted Share Unit” means a right, granted under Section 5(e), to
receive Shares or cash at the end of a specified deferral period.



          (y) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.



          (z) “SAR” or “Share Appreciation Right” means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.



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          (aa) “Shares” means common stock, $.01 par value per share, of the
Company, and such other securities as may be substituted for Shares pursuant to
Section 4(c) hereof.



          (bb) “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns
shares possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.



          (cc) “Termination of Service” means the termination of the Participant’s
employment, consulting services or directorship with the Company, its
Subsidiaries and its Affiliates, as the case may be. A Participant employed by
a Subsidiary of the Company or one of its Affiliates shall also be deemed to
incur a Termination of Service if the Subsidiary of the Company or Affiliate
ceases to be such a Subsidiary or an Affiliate, as the case may be, and the
Participant does not immediately thereafter become an employee or director of,
or a consultant to, the Company, another Subsidiary of the Company or an
Affiliate. Temporary absences from employment because of illness, vacation or
leave of absence and transfers among the Company and its Subsidiaries and
Affiliates shall not be considered a Termination of Service.



          3. Administration.



          (a) Authority of the Committee. The Plan shall be administered by the
Committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions
of the Plan:




     (i) to select Eligible Persons to whom Awards may be granted;




     (ii) to designate Affiliates;




     (iii) to determine the type or types of Awards to be granted to each
Eligible Person;




     (iv) to determine the type and number of Awards to be granted, the
number of Shares to which an Award may relate, the terms and conditions
of any Award granted under the Plan (including, but not limited to, any
exercise price, grant price, or purchase price, any restriction or
condition, any schedule for lapse of restrictions or conditions relating
to transferability or forfeiture, exercisability, or settlement of an
Award, and waiver or accelerations thereof, and waivers of performance
conditions relating to an Award, based in each case on such
considerations as the Committee shall determine), and all other matters
to be determined in connection with an Award;



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     (v) to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Shares, other Awards, or other property, or an
Award may be canceled, forfeited, exchanged, or surrendered;




     (vi) to determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, or other property payable with
respect to an Award will be deferred either automatically, at the
election of the Committee, or at the election of the Eligible Person;




     (vii) to prescribe the form of each Award Agreement, which need not
be identical for each Eligible Person;




     (viii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;




     (ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement, or other instrument
hereunder;




     (x) to accelerate the exercisability or vesting of all or any
portion of any Award or to extend the period during which an Award is
exercisable;




     (xi) to determine whether uncertificated Shares may be used in
satisfying Awards and otherwise in connection with the Plan; and




     (xii) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.



          (b) Manner of Exercise of Committee Authority. The Committee shall have
sole discretion in exercising its authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, Subsidiaries, Affiliates, Eligible Persons,
any person claiming any rights under the Plan from or through any Eligible
Person, and shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee
may delegate to other members of the Board or officers or managers of the
Company or any Subsidiary or Affiliate the authority, subject to such terms as
the Committee shall determine, to perform administrative functions and, with
respect to Awards granted to persons not subject to Section



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16 of the Exchange Act, to perform such other functions as the Committee
may determine, to the extent permitted under Rule 16b-3 (if applicable) and
applicable law.



          (c) Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or other employee of the Company or any
Subsidiary or Affiliate, the Company’s independent certified public
accountants, or other professional retained by the Company to assist in the
administration of the Plan. No member of the Committee, and no officer or
employee of the Company acting on behalf of the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Committee and any
officer or employee of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company with
respect to any such action, determination, or interpretation.



          (d) Limitation on Committee’s Discretion. Anything in this Plan to the
contrary notwithstanding, in the case of any Award which provides that it is
intended to qualify as “performance-based compensation” within the meaning of
Section 162(m)(4)(C) of the Code, the Committee shall have no discretion to
increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as such
performance-based compensation.



          (e) Option or SAR Repricing. The Committee is authorized to reprice
outstanding Options and SARs, including without limitation by lowering their
exercise price or exchanging them for other Options or SARs with lower exercise
prices; provided, however, that, without the consent of a Participant, no such
repricing may materially and adversely affect the rights of the Participant
under any Option or SAR theretofore granted to him or her.



          4. Shares Subject to the Plan.



          (a) Subject to adjustment as provided in Section 4(c) hereof, the total
number of Shares reserved for issuance in connection with Awards under the Plan
shall be [10% of the outstanding shares on a fully diluted basis at the time of
consummation of IPO]. No Award may be granted if the number of Shares to which
such Award relates, when added to the number of Shares previously issued under
the Plan, exceeds the number of Shares reserved under the preceding sentence.
If any Awards are forfeited, canceled, terminated, exchanged or surrendered or
such Award is settled in cash or otherwise terminates without a distribution of
Shares to the Participant, any Shares counted against the number of Shares
reserved and available under the Plan with respect to such Award shall, to the
extent of any such forfeiture, settlement, termination, cancellation, exchange
or surrender, again be available for Awards under the Plan. Upon the exercise
of any Award granted in tandem with any other Awards, such related Awards shall
be canceled to the extent of the number of Shares as to which the Award is
exercised.



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          (b) Subject to adjustment as provided in Section 4(c) hereof, the maximum
number of Shares (i) with respect to which Options or SARs may be granted
during a calendar year to any Eligible Person under this Plan shall be [5% of
the outstanding shares on a fully diluted basis at the time of consummation of
IPO] Shares, and (ii) with respect to Performance Shares, Performance Units,
Restricted Shares or Restricted Share Units intended to qualify as
performance-based compensation within the meaning of Section 162(m)(4)(C) of
the Code shall be the equivalent of [5% of the outstanding shares on a fully
diluted basis at the time of consummation of IPO] Shares during a calendar year
to any Eligible Person under this Plan.



          (c) In the event that the Committee shall determine that any dividend in
Shares, recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Eligible Persons under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate and, in such manner as
it may deem equitable, adjust any or all of (i) the number and kind of shares
which may thereafter be issued under the Plan, (ii) the number and kind of
shares, other securities or other consideration issued or issuable in respect
of outstanding Awards, and (iii) the exercise price, grant price, or purchase
price relating to any Award; provided, however, in each case that, with respect
to ISOs, such adjustment shall be made in accordance with Section 424(a) of the
Code, unless the Committee determines otherwise. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
and performance objectives, if any, included in, Awards in recognition of
unusual or non-recurring events (including, without limitation, events
described in the preceding sentence) affecting the Company or any Subsidiary or
Affiliate or the financial statements of the Company or any Subsidiary or
Affiliate, or in response to changes in applicable laws, regulations, or
accounting principles; provided, however, that, if an Award provides that it is
intended to qualify as “performance-based compensation” within the meaning of
Section 162(m)(4)(C) of the Code, the Committee shall not have discretion to
increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of the Code
and the regulations thereunder.



          (d) Any Shares distributed pursuant to an Award may consist, in whole or
in part, of authorized and unissued Shares or treasury Shares including Shares
acquired by purchase in the open market or in private transactions.



          5. Specific Terms of Awards.



          (a) General. Awards may be granted on the terms and conditions set forth
in this Section 5. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 9(d)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine,



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including terms regarding forfeiture of Awards or continued exercisability
of Awards in the event of Termination of Service by the Eligible Person.



          (b) Options. The Committee is authorized to grant Options, which may be
NQSOs or ISOs, to Eligible Persons on the following terms and conditions:




     (i) Exercise Price. The exercise price per Share purchasable under
an Option shall be determined by the Committee. The Committee may,
without limitation, set an exercise price that is based upon achievement
of performance criteria if deemed appropriate by the Committee.




     (ii) Option Term. The term of each Option shall be determined by
the Committee.




     (iii) Time and Method of Exercise. The Committee shall determine at
the date of grant or thereafter the time or times at which an Option may
be exercised in whole or in part (including, without limitation, upon
achievement of performance criteria if deemed appropriate by the
Committee), the methods by which such exercise price may be paid or
deemed to be paid (including, without limitation, broker-assisted
exercise arrangements), the form of such payment (including, without
limitation, cash, Shares or other property), and the methods by which
Shares will be delivered or deemed to be delivered to Eligible Persons;
provided, however, that in no event may any portion of the exercise price
be paid with Shares acquired either under an Award granted pursuant to
this Plan, upon exercise of a stock option granted under another Company
plan or as a stock bonus or other stock award granted under another
Company plan unless, in any such case, the Shares were acquired and
vested more than six months in advance of the date of exercise.




     (iv) ISOs. The terms of any ISO granted under the Plan shall comply
in all respects with the provisions of Section 422 of the Code, including
but not limited to the requirement that the ISO shall be granted within
ten years from the earlier of the date of adoption or shareholder
approval of the Plan. ISOs may only be granted to employees of the
Company or a Subsidiary.



          (c) SARs. The Committee is authorized to grant SARs (Share Appreciation
Rights) to Eligible Persons on the following terms and conditions:




     (i) Right to Payment. A SAR shall confer on the Eligible Person to
whom it is granted a right to receive with respect to each Share subject
thereto, upon exercise thereof, the excess of (1) the Fair Market Value
of one Share on the date of exercise (or, if the Committee shall so
determine in the case of any such right, the Fair Market Value of one
Share at any time during a specified period before or after the date of
ex-



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ercise) over (2) the exercise price per Share of the SAR as
determined by the Committee as of the date of grant of the SAR (which, in
the case of a SAR granted in tandem with an Option, shall be equal to the
exercise price of the underlying Option).




     (ii) Other Terms. The Committee shall determine, at the time of
grant or thereafter, the time or times at which a SAR may be exercised in
whole or in part, the method of exercise, method of settlement, form of
consideration payable in settlement, method by which Shares will be
delivered or deemed to be delivered to Eligible Persons, whether or not a
SAR shall be in tandem with any other Award, and any other terms and
conditions of any SAR. Unless the Committee determines otherwise, a SAR
(1) granted in tandem with an NQSO may be granted at the time of grant of
the related NQSO or at any time thereafter and (2) granted in tandem with
an ISO may only be granted at the time of grant of the related ISO.



          (d) Restricted Shares. The Committee is authorized to grant Restricted
Shares to Eligible Persons on the following terms and conditions:




     (i) Issuance and Restrictions. Restricted Shares shall be subject
to such restrictions on transferability and other restrictions, if any,
as the Committee may impose at the date of grant or thereafter, which
restrictions may lapse separately or in combination at such times, under
such circumstances (including, without limitation, upon achievement of
performance criteria if deemed appropriate by the Committee), in such
installments, or otherwise, as the Committee may determine. Except to
the extent restricted under the Award Agreement relating to the
Restricted Shares, an Eligible Person granted Restricted Shares shall
have all of the rights of a shareholder including, without limitation,
the right to vote Restricted Shares and the right to receive dividends
thereon.




     (ii) Forfeiture. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon Termination of Service during
the applicable restriction period, Restricted Shares and any accrued but
unpaid dividends or Dividend Equivalents that are at that time subject to
restrictions shall be forfeited; provided, however, that the Committee
may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Shares will be waived in whole or in
part in the event of Termination of Service resulting from specified
causes, and the Committee may in other cases waive in whole or in part
the forfeiture of Restricted Shares.




     (iii) Certificates for Shares. Restricted Shares granted under the
Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Shares are registered in the name
of the Eligible Person, such certificates shall bear an appropriate
legend referring to the terms, conditions, and restric-



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tions applicable to such Restricted Shares, the Company shall retain
physical possession of the certificate and the Participant shall deliver
a stock power to the Company, endorsed in blank, relating to the
Restricted Shares.




     (iv) Dividends. Dividends paid on Restricted Shares shall be either
paid at the dividend payment date, or deferred for payment to such date
as determined by the Committee, in cash or in unrestricted Shares having
a Fair Market Value equal to the amount of such dividends. Shares
distributed in connection with a Share split or dividend in Shares, and
other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the
Restricted Shares with respect to which such Shares or other property has
been distributed.



          (e) Restricted Share Units. The Committee is authorized to grant
Restricted Share Units to Eligible Persons, subject to the following terms and
conditions:




     (i) Award and Restrictions. Delivery of Shares or cash, as the case
may be, will occur upon expiration of the deferral period specified for
Restricted Share Units by the Committee (or, if permitted by the
Committee, as elected by the Eligible Person). In addition, Restricted
Share Units shall be subject to such restrictions as the Committee may
impose, if any (including, without limitation, the achievement of
performance criteria if deemed appropriate by the Committee), at the date
of grant or thereafter, which restrictions may lapse at the expiration of
the deferral period or at earlier or later specified times, separately or
in combination, in installments or otherwise, as the Committee may
determine.




     (ii) Forfeiture. Except as otherwise determined by the Committee at
date of grant or thereafter, upon Termination of Service during the
applicable deferral period or portion thereof to which forfeiture
conditions apply (as provided in the Award Agreement evidencing the
Restricted Share Units), or upon failure to satisfy any other conditions
precedent to the delivery of Shares or cash to which such Restricted
Share Units relate, all Restricted Share Units that are at that time
subject to deferral or restriction shall be forfeited; provided, however,
that the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Share Units will be waived
in whole or in part in the event of Termination of Service resulting from
specified causes, and the Committee may in other cases waive in whole or
in part the forfeiture of Restricted Share Units.




     (iii) Dividend Equivalents. Unless otherwise determined by the
Committee at date of grant, Dividend Equivalents on the specified number
of Shares covered by a Restricted Share Unit shall be either (A) paid
with respect to such Restricted Share Unit at the dividend payment date
in cash or in unrestricted Shares having a Fair Mar-



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ket Value equal to the amount of such dividends, or (B) deferred
with respect to such Restricted Share Unit and the amount or value
thereof automatically deemed reinvested in additional Restricted Share
Units or other Awards, as the Committee shall determine or permit the
Participant to elect.



          (f) Performance Shares and Performance Units. The Committee is authorized
to grant Performance Shares or Performance Units or both to Eligible Persons on
the following terms and conditions:




     (i) Performance Period. The Committee shall determine a performance
period (the “Performance Period”) of one or more years and shall
determine the performance objectives for grants of Performance Shares and
Performance Units. Performance objectives may vary from Eligible Person
to Eligible Person and shall be based upon the performance criteria as
the Committee may deem appropriate. The performance objectives may be
determined by reference to the performance of the Company, or of a
Subsidiary or Affiliate, or of a division or unit of any of the
foregoing. Performance Periods may overlap and Eligible Persons may
participate simultaneously with respect to Performance Shares and
Performance Units for which different Performance Periods are prescribed.




     (ii) Award Value. At the beginning of a Performance Period, the
Committee shall determine for each Eligible Person or group of Eligible
Persons with respect to that Performance Period the range of number of
Shares, if any, in the case of Performance Shares, and the range of
dollar values, if any, in the case of Performance Units, which may be
fixed or may vary in accordance with such performance or other criteria
specified by the Committee, which shall be paid to an Eligible Person as
an Award if the relevant measure of Company performance for the
Performance Period is met.




     (iii) Significant Events. If during the course of a Performance
Period there shall occur significant events as determined by the
Committee which the Committee expects to have a substantial effect on a
performance objective during such period, the Committee may revise such
objective; provided, however, that, if an Award provides that it is
intended to qualify as “performance-based compensation” within the
meaning of Section 162(m)(4)(C) of the Code, the Committee shall not have
any discretion to increase the amount of compensation payable under the
Award to the extent such an increase would cause the Award to lose its
qualification as performance-based compensation for purposes of Section
162(m)(4)(C) of the Code and the regulations thereunder.




     (iv) Forfeiture. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon Termination of Service during
the applicable Per-



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formance Period, Performance Shares and Performance Units for which
the Performance Period was prescribed shall be forfeited; provided,
however, that the Committee may provide, by rule or regulation or in any
Award Agreement, or may determine in an individual case, that
restrictions or forfeiture conditions relating to Performance Shares and
Performance Units will be waived in whole or in part in the event of
Termination of Service resulting from specified causes, and the Committee
may in other cases waive in whole or in part the forfeiture of
Performance Shares and Performance Units.




     (v) Payment. Each Performance Share or Performance Unit may be paid
in whole Shares, or cash, or a combination of Shares and cash either as a
lump sum payment or in installments, all as the Committee shall
determine, at the time of grant of the Performance Share or Performance
Unit or otherwise, commencing as soon as practicable after the end of the
relevant Performance Period.



          (g) Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Eligible Persons. The Committee may provide, at the date of
grant or thereafter, that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Shares,
or other investment vehicles as the Committee may specify; provided, however,
that Dividend Equivalents (other than freestanding Dividend Equivalents) shall
be subject to all conditions and restrictions of the underlying Awards to which
they relate.



          (h) Other Share-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Eligible Persons such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including, without
limitation, unrestricted shares awarded purely as a “bonus” and not subject to
any restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash,
Shares, notes or other property, as the Committee shall determine. Cash
awards, as an element of or supplement to any other Award under the Plan, shall
also be authorized pursuant to this Section 5(h).



          6. Certain Provisions Applicable to Awards.



          (a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted to Eligible
Persons



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either alone or in addition to, in tandem with, or in exchange or
substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of an Eligible Person to receive payment from the
Company or any Subsidiary or Affiliate. Awards may be granted in addition to
or in tandem with such other Awards or awards, and may be granted either as of
the same time as or a different time from the grant of such other Awards or
awards. The per Share exercise price of any Option, grant price of any SAR, or
purchase price of any other Award conferring a right to purchase Shares which
is granted in connection with the substitution of awards granted under any
other plan or agreement of the Company or any Subsidiary or Affiliate or any
business entity to be acquired by the Company or any Subsidiary or Affiliate,
shall be determined by the Committee, in its discretion.



          (b) Term of Awards. The term of each Award granted to an Eligible Person
shall be for such period as may be determined by the Committee; provided,
however, that in no event shall the term of any ISO or a SAR granted in tandem
therewith exceed a period of ten years from the date of its grant (or such
shorter period as may be applicable under Section 422 of the Code).



          (c) Form of Payment Under Awards. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Company or a
Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award may
be made in such forms as the Committee shall determine at the date of grant or
thereafter, including, without limitation, cash, Shares, notes or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The Committee may make rules relating to installment or
deferred payments with respect to Awards, including the rate of interest to be
credited with respect to such payments, and the Committee may require deferral
of payment under an Award if, in the sole judgment of the Committee, it may be
necessary in order to avoid nondeductibility of the payment under Section
162(m) of the Code.



          (d) Nontransferability. Unless otherwise set forth by the Committee in an
Award Agreement, Awards shall not be transferable by an Eligible Person except
by will or the laws of descent and distribution (except pursuant to a
Beneficiary designation) and shall be exercisable during the lifetime of an
Eligible Person only by such Eligible Person or his or her guardian or legal
representative. An Eligible Person’s rights under the Plan may not be pledged,
mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to
claims of the Eligible Person’s creditors.



          (e) Other Conditions. The Committee may, by way of the Award Agreements
or otherwise, establish such other terms, conditions, restrictions and/or
limitations, if any, of any Award, provided they are not inconsistent with the
Plan.



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          7. Performance Awards.



          (a) Performance Awards Granted to Covered Employees. If the Committee
determines that an Award (other than an Option or SAR) to be granted to an
Eligible Person should qualify as “performance-based compensation” for purposes
of Section 162(m) of the Code, the grant, vesting, exercise and/or settlement
of such Award (each, a “Performance Award”) shall be contingent upon
achievement of preestablished performance goals and other terms set forth in
this Section 7(a).




     (i) Performance Goals Generally. The performance goals for such
Performance Awards shall consist of one or more business criteria and a
targeted level or levels of performance with respect to each of such
criteria, as specified by the Committee consistent with this Section
7(a). The performance goals shall be objective and shall otherwise meet
the requirements of Section 162(m) of the Code and regulations thereunder
(including Treasury Regulation 1.162-27 and successor regulations
thereto), including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of
performance goals being “substantially uncertain.” The Committee may
determine that such Performance Awards shall be granted, vested,
exercised and/or settled upon achievement of any one performance goal or
that two or more of the performance goals must be achieved as a condition
to grant, vesting, exercise and/or settlement of such Performance Awards.
Performance goals may differ for Performance Awards granted to any one
Participant or to different Participants.




     (ii) Business Criteria. One or more of the following business
criteria for the Company, on a consolidated basis, and/or for specified
Subsidiaries or Affiliates or other business units or lines of business
of the Company shall be used by the Committee in establishing performance
goals for such Performance Awards: (1) earnings per share (basic or fully
diluted); (2) revenues; (3) earnings, before or after taxes, from
operations (generally or specified operations), or before or after
interest expense, depreciation, amortization, incentives, or
extraordinary or special items; (4) cash flow, free cash flow, cash flow
return on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital; (5) return on net
assets, return on assets, return on investment, return on capital, return
on equity; (6) economic value added; (7) operating margin or operating
expense; (8) net income; (9) Share price or total stockholder return; and
(10) strategic business criteria, consisting of one or more objectives
based on meeting specified market penetration, geographic business
expansion goals, cost targets, customer satisfaction, supervision of
litigation and information technology, and goals relating to acquisitions
or divestitures of Subsidiaries, Affiliates or joint ventures. The
targeted level or levels of performance with respect to such business
criteria may be established at such levels and in such terms as the
Committee



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may determine, in its discretion, including in absolute terms, as a
goal relative to performance in prior periods, or as a goal compared to
the performance of one or more comparable companies or an index covering
multiple companies.




     (iii) Performance Period; Timing for Establishing Performance Goals;
Per-Person Limit. Achievement of performance goals in respect of such
Performance Awards shall be measured over a performance period, as
specified by the Committee. A performance goal shall be established not
later than the earlier of (A) 90 days after the beginning of any
performance period applicable to such Performance Award or (B) the time
25% of such performance period has elapsed. In all cases, the maximum
Performance Award of any Participant shall be subject to the limitation
set forth in Section 4(b).




     (iv) Settlement of Performance Awards; Other Terms. Settlement of
such Performance Awards shall be in cash, Shares, other Awards or other
property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in
connection with such Performance Awards, but may not exercise discretion
to increase any such amount payable to the Participant in respect of a
Performance Award subject to this Section 7(a). Any settlement which
changes the form of payment from that originally specified shall be
implemented in a manner such that the Performance Award and other related
Awards do not, solely for that reason, fail to qualify as
“performance-based compensation” for purposes of Section 162(m) of the
Code. The Committee shall specify the circumstances in which such
Performance Awards shall be paid or forfeited in the event of Termination
of Service of the Participant or other event (including a Change of
Control) prior to the end of a performance period or settlement of such
Performance Awards.



          (b) Written Determinations. Determinations by the Committee as to the
establishment of performance goals, the amount potentially payable in respect
of Performance Awards, the level of actual achievement of the specified
performance goals relating to Performance Awards and the amount of any final
Performance Award shall be recorded in writing in the case of Performance
Awards intended to qualify under Section 162(m) of the Code. Specifically, the
Committee shall certify in writing, in a manner conforming to applicable
regulations under Section 162(m), prior to settlement of each such Award, that
the performance objective relating to the Performance Award and other material
terms of the Award upon which settlement of the Award was conditioned have been
satisfied.



          8. Change of Control Provisions.



          (a) Acceleration of Exercisability and Lapse of Restrictions. Unless
otherwise provided by the Committee at the time of the Award grant, in the
event of a Change of Control, (i) all outstanding Awards pursuant to which the
Participant may have rights the ex-



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ercise of which is restricted or limited, shall become fully exercisable
at the time of the Change of Control, and (ii) unless the right to lapse of
restrictions or limitations is waived or deferred by a Participant prior to
such lapse, all restrictions or limitations (including risks of forfeiture and
deferrals) on outstanding Awards subject to restrictions or limitations under
the Plan shall lapse, and all performance criteria and other conditions to
payment of Awards under which payments of cash, Shares or other property are
subject to conditions shall be deemed to be achieved or fulfilled and shall be
waived by the Company at the time of the Change of Control.



          (b) Definitions of Certain Terms. For purposes of this Section 8, the
following definitions, in addition to those set forth in Section 2, shall
apply:




     (i) “Change of Control” means and shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall
have been satisfied:




     (a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates) representing
20 percent or more of the combined voting power of the Company’s
then outstanding securities; or




     (b) during any period of two consecutive years (not including
any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into
an agreement with the Company to effect a transaction described in
clause (a), (b) or (c) of this subsection) whose election by the
Board or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority of the members of the Board; or




     (c) a merger or consolidation of the Company with any other
corporation is consummated, other than (i) a merger or
consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, at least
75 percent of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (ii) a merger of consolidation
effected to implement a recapitalization of the Company (or similar
trans-



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action) in which no Person acquires more than 50 percent of
the combined voting power of the Company’s then outstanding
securities; or




     (d) a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets is consummated.




     (ii) “Beneficial Owner” shall have the meaning defined in Rule 13d-3
under the Exchange Act.




     (iii) “Person” shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used herein; however, a Person shall
not include (i) the Company or any of its Subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or any of its Subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of the
stock of the Company.



          9. General Provisions.



          (a) Compliance with Legal and Trading Requirements. The Plan, the
granting and exercising of Awards thereunder, and the other obligations of the
Company under the Plan and any Award Agreement, shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approvals by any stock exchange, regulatory or governmental agency as may be
required. The Company, in its discretion, may postpone the issuance or
delivery of Shares under any Award until completion of such stock exchange or
market system listing or registration or qualification of such Shares or other
required action under any state, federal or foreign law, rule or regulation as
the Company may consider appropriate, and may require any Participant to make
such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of Shares in compliance
with applicable laws, rules and regulations. No provisions of the Plan shall
be interpreted or construed to obligate the Company to register any Shares
under federal, state or foreign law. The Shares issued under the Plan may be
subject to such other restrictions on transfer as determined by the Committee.



          (b) No Right to Continued Employment or Service. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee, consultant
or director the right to be retained in the employ or service of the Company or
any of its Subsidiaries or Affiliates, nor shall it interfere in any way with
the right of the Company or any of its Subsidiaries or Affiliates to terminate
any employee’s, consultant’s or director’s employment or service at any time.



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          (c) Taxes. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to an Eligible Person, amounts of withholding and other taxes due in connection
with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company and Eligible Persons to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to
withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of an Eligible Person’s tax obligations;
provided, however, that the amount of tax withholding to be satisfied by
withholding Shares shall be limited to the minimum amount of taxes, including
employment taxes, required to be withheld under applicable Federal, state and
local law.



          (d) Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee’s authority to grant Awards
under the Plan without the consent of shareholders of the Company or
Participants, except that (i) any such amendment or alteration shall be subject
to shareholder approval to the extent such shareholder approval is required
under the rules of any stock exchange or automated quotation system on which
the Shares may then be listed or quoted and (ii) any such amendment or
alteration as it applies to ISOs shall be subject to the approval of the
Company’s shareholders to the extent such shareholder approval is required
under Section 422 of the Code; provided, however, that, without the consent of
an affected Participant, no amendment, alteration, suspension, discontinuation,
or termination of the Plan may materially and adversely affect the rights of
such Participant under any Award theretofore granted to him or her. The
Committee may waive any conditions or rights under, amend any terms of, or
amend, alter, suspend, discontinue or terminate, any Award theretofore granted,
prospectively or retrospectively; provided, however, that, without the consent
of a Participant, no amendment, alteration, suspension, discontinuation or
termination of any Award may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him or her.



          (e) No Rights to Awards; No Shareholder Rights. No Eligible Person or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Eligible Persons and employees.
No Award shall confer on any Eligible Person any of the rights of a
shareholder of the Company unless and until Shares are duly issued or
transferred to the Eligible Person in accordance with the terms of the Award.



          (f) Unfunded Status of Awards. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan
or any Award shall give any such Participant any rights that are greater than
those of a general creditor of the Company;



-18-









 





provided, however, that the Committee may authorize the creation of trusts
or make other arrangements to meet the Company’s obligations under the Plan to
deliver cash, Shares, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the “unfunded”
status of the Plan unless the Committee otherwise determines with the consent
of each affected Participant.



          (g) Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of options and other awards otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.



          (h) Not Compensation for Benefit Plans. No Award payable under this Plan
shall be deemed salary or compensation for the purpose of computing benefits
under any benefit plan or other arrangement of the Company for the benefit of
its employees, consultants or directors unless the Company shall determine
otherwise.



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



          (j) Governing Law. The validity, construction, and effect of the Plan,
any rules and regulations relating to the Plan, and any Award Agreement shall
be determined in accordance with the laws of Delaware without giving effect to
principles of conflict of laws thereof.



          (k) Effective Date; Plan Termination. The Plan shall become effective as
of               , 2004 [date of consummation of IPO] (the “Effective
Date”). The Plan shall terminate as to future awards on the date which is ten
(10) years after the Effective Date.



          (l) Titles and Headings. The titles and headings of the sections in the
Plan are for convenience of reference only. In the event of any conflict, the
text of the Plan, rather than such titles or headings, shall control.




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