Document:

Exhibit 10.19

 

ALTRA HOLDINGS, INC.

 

2004 EQUITY INCENTIVE PLAN

 

1.                                       Purpose.  The Altra Holdings, Inc. 2004 Equity
Incentive Plan (the “Plan”) is intended to attract, retain and motivate
officers and employees of, consultants to, and non-employee directors providing
services to the Altra Holdings, Inc. (the “Company”) and its
subsidiaries and affiliates by providing them with appropriate incentives and
rewards either through a proprietary interest in the long-term success of the
Company or compensation based on their performance in fulfilling their personal
responsibilities.

 

2.                                       Administration.

 

(a)                                  Committee.  The Plan will be administered by a committee
(the “Committee”) appointed by the Board of Directors of the Company
(the “Board”) from among its members and shall be comprised, unless
otherwise determined by the Board, of not less than two (2) members each
of whom shall be (i) a “Non-Employee Director” within the meaning
of Rule 16b-3(b)(3) (or any successor rule) promulgated under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
(ii) “outside directors” within the meaning of Treasury Regulation Section 1.162-27(e)(3) under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

(b)                                 Authority.  The Committee is authorized, subject to the
provisions of the Plan, to establish such rules as it deems necessary for
the proper administration of the Plan and to make such determinations and
interpretations in its sole discretion and to take such action in connection with
the Plan and any awards granted hereunder as it deems necessary or advisable,
including the right to accelerate the vesting or exerciseability of awards,
establish the terms and conditions of awards and cancel awards upon a Change of
Control.  All determinations and
interpretations made by the Committee shall be binding and conclusive on all
participants and their legal representatives.

 

(c)                                  Indemnification.  Except in circumstances involving bad faith
or willful misconduct of the person acting or failing to act, no member of the
Committee and no employee of the Company shall be liable for any act or failure
to act hereunder or for any act or failure to act hereunder by any other member
or employee or by any agent to whom duties in connection with the administration
of this Plan have been delegated.  The
Company shall indemnify members of the Committee and any agent of the Committee
who is an employee of the Company, a subsidiary or an affiliate against any and
all liabilities or expenses to which they may be subjected by reason of any act
or failure to act with respect to their duties on behalf of the Plan, except in
circumstances involving such person’s bad faith or willful misconduct.

 

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(d)                                 Delegation
and Advisers.  The Committee may
delegate to one or more of its members, or to one or more agents, such
administrative duties as it may deem advisable. 
Any person to whom it has delegated duties as aforesaid may employ one
or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan.  The Committee may employ such legal or other
counsel, consultants and agents as it may deem desirable for the administration
of the Plan and may rely upon any opinion or computation received from any such
counsel, consultant or agent.  Expenses
incurred by the Committee in the engagement of such counsel, consultant or
agent shall be paid by the Company, or the subsidiary or affiliate whose
employees have benefited from the Plan, as determined by the Committee.

 

3.                                       Participants. 
Participants will consist of such officers, employees, consultants, and
non-employee directors of the Company and its subsidiaries and affiliates as
the Committee in its sole discretion determines and whom the Committee may
designate from time to time to receive awards under the Plan.  Designation of a participant in any year
shall not require the Committee to designate such person to receive an award in
any other year or, once designated, to receive the same type or amount of award
as granted to the participant in any other year.  The Committee shall consider such factors as
it deems pertinent in selecting participants and in determining the type and
amount of their respective awards.

 

4.                                       Type of Awards. 
Awards under the Plan may be granted in any one or a combination
of:  (a) stock options, (b) stock
appreciation rights, (c) restricted stock, (d) stock units, and (e) cash.  Restricted stock, stock units and cash awards
may, as determined by the Committee in its discretion, constitute
performance-based awards, as described in Section 11 hereof.  Awards granted under the Plan shall be
evidenced by agreements (which need not be identical) that provide additional
terms and conditions associated with such awards, as determined by the
Committee in its sole discretion; provided, however, that in the event of any conflict between the
provisions of the Plan and any such agreement, the provisions of the Plan shall
prevail.

 

5.                                       Common Stock Available Under the Plan.

 

(a)                                  Maximum
Shares.  The aggregate number of
shares of common stock of the Company
par value $0.001 (“Shares”) that may be issued under this Plan shall be Four
Million (4,000,000) Shares, which may be authorized and unissued or treasury Shares,
subject to Section 5(c) hereof and Section 13 hereof (“Maximum
Shares”).  The maximum number of
shares that may be “incentive stock options”, within the meaning of Section 422
of the Code, is 3,500,000 shares (the “ISO Maximum”).

 

(b)                                 Counting
Shares.  Shares shall be
charged against the Maximum Shares and, if applicable, the ISO Maximum, upon
the grant of each award (other than cash awards, stock appreciation rights and
stock units to be settled only in cash and performance based awards which are
not denominated in common stock) regardless of the vested
status of the award, provided, however, that
in the case of a stock appreciation

 

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right
granted in tandem with a stock option, only the number of Shares subject to the
stock option shall be counted.

 

(c)                                  Additional
Shares.  Any Shares subject to an
outstanding award granted under the Plan which are, for any reason, forfeited,
expired, canceled or settled in cash without delivery to the award recipient of
Shares, shall again be available for awards under the Plan.

 

Any Shares
delivered to the Company as part or full payment for the exercise or purchase
price of an award granted under this Plan or, to the extent the Committee
determines that the availability of ISOs under the Plan will not be compromised
to satisfy the Company’s withholding obligation with respect to an award
granted under this Plan, shall again be available for awards under the Plan.

 

6.                                       Stock Options.

 

(a)                                  Generally.  Stock options will consist of awards from the
Company that will enable the holder to purchase a number of Shares at set
terms.  Options shall be either incentive
stock options or nonqualified stock options. 
The Committee shall have the authority to grant to any participant stock
options (with or without stock appreciation rights).  A stock option granted as an incentive stock
option shall, to the extent it fails to qualify as an incentive stock option,
be treated as a nonqualified option. 
Each stock option shall be subject to such terms and conditions,
including vesting, consistent with the Plan as the Committee may impose from
time to time, subject to the following limitations.

 

(b)                                 Exercise
Price.  Each stock option granted
hereunder shall have a per-Share exercise price of not less than the fair
market value (as defined in Section 17 of the Plan) of a Share on the date
of grant; provided, however, that if an award is retroactively granted in tandem
with or in substitution for other awards made by the Company, the exercise
price may be the price on the date of grant of such other award; and provided, further, that if a stock option is granted to a
participant upon assumption of or in substitution of an award granted by
another entity in connection with a corporate transaction between the Company
and the granting entity, such as a merger, consolidation or acquisition, the
exercise price may be less than fair market value of a Share on the date the
substitute stock option is granted if the aggregate fair market value of the Shares
subject to the substitute stock option over the aggregate exercise price of the
substitute stock option does not exceed the aggregate fair market value of the
shares of the predecessor entity subject to the award being assumed or
substituted as of the date immediately preceding the corporate transaction (as
determined by the Committee), over the aggregate grant price or exercise price of
any such award.  Notwithstanding the
above, any such grant shall be in accordance with the requirements of Section 409A
of the Code and the underlying regulations (hereinafter referred to as “Section 409A”).

 

(c)                                  Payment
of Exercise Price.  The option
exercise price may be paid in cash or, in the discretion of the Committee, by
the delivery of Shares.  In the
discretion of the

 

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Committee, payment
may also be made by delivering a properly executed exercise notice to the
Company together with a copy of irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds to pay the exercise
price.  The Committee may prescribe any
other method of paying the exercise price that it determines to be consistent
with applicable law and the purpose of the Plan.

 

(d)                                 Exercise
Period.  Stock options granted under
the Plan shall be exercisable to the extent vested, at such time or times and
subject to such terms and conditions as shall be determined by the Committee; provided, however, that no stock option shall be exercisable
later than ten (10) years after the date it is granted except in the event
of a participant’s death within six (6) months prior to such expiration
date, in which case, the exercise period of such participant’s stock options
may be extended beyond such period but no later than one (1) year after
the participant’s death.  All stock
options shall terminate at such earlier times and upon such conditions or
circumstances as the Committee shall in its discretion set forth in such option
agreement at the date of grant.

 

(e)                                  Limitations
on Incentive Stock Options. 
Incentive stock options may be granted only to participants who are
employees of the Company or of a “parent corporation” or “subsidiary
corporation” (as defined in Sections 424(e) and (f) of the Code,
respectively) at the date of grant.  The
aggregate fair market value (determined as of the time the stock option is
granted) of the Shares with respect to which incentive stock options are
exercisable for the first time by a participant during any calendar year (under
all option plans of the Company and of any parent corporation or subsidiary
corporation) shall not exceed one hundred thousand dollars ($100,000).  For purposes of the preceding sentence,
incentive stock options will be taken into account in the order in which they
are granted.  The per-Share exercise
price of an incentive stock option shall not be less than 100% of the fair
market value of the common stock on the date of grant, and no incentive stock
option may be exercised later than 10 years after the date it is granted or, in
the case of the death of a participant, such longer period as permitted by Section 6(d).

 

(f)                                    Additional
Limitations on Incentive Stock Options for Ten Percent Shareholders.  Incentive stock
options may not be granted to any participant who, at the time of grant, owns
stock possessing (after the application of the attribution rules of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any parent corporation or subsidiary corporation, unless
the exercise price of the option is fixed at not less than 110% of the fair
market value of the common stock on the date of grant and the exercise of such
option is prohibited by its terms after the expiration of five years from the
date of grant of such option or, in the case of the death of a participant,
such longer period as permitted by Section 6(d).

 

7.                                       Stock Appreciation Rights.

 

(a)                                  Generally.  The Committee may, in its discretion, grant
stock appreciation rights, including a concurrent grant of stock appreciation
rights in tandem with any stock

 

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option
grant.  A “stock appreciation right”
means a right to receive a payment in cash, Shares or a combination thereof, in
an amount equal to the excess of (i) the fair market value, or other
specified valuation, of a specified number of shares of common stock on the
date the right is exercised over (ii) the “grant price”.  Each stock appreciation right shall be
subject to such terms and conditions, including vesting, as the Committee shall
impose from time to time.

 

(b)                                 Grant
Price.  The grant price per Share
referenced in a stock appreciation right shall not be less than the fair market
value (as defined in Section 17 of the Plan) of a Share on the date of
grant; provided, however,
that if an award is retroactively granted in tandem with or in substitution for
other awards made by the Company, the grant price may be the price on the date
of grant of such other award; and provided, further, that
if a stock appreciation right is granted to a participant upon assumption of or
in substitution of an award granted by another entity in connection with a
corporate transaction between the Company and the granting entity, such as a
merger, consolidation or acquisition, the grant price may be less than fair
market value of a Share on the date the substitute stock appreciation right is
granted if the aggregate fair market value of the Shares subject to the
substitute stock appreciation right over the aggregate grant price of the
substitute stock appreciation right does not exceed the aggregate fair market
value of the Shares of the predecessor entity subject to the award being
assumed or substituted as of the date immediately preceding the corporate
transaction (as determined by the Committee), over the aggregate grant price or
exercise price of any of such award. 
Notwithstanding the above, any such grant shall be in accordance with
the requirements of Section 409A.

 

(c)                                  Exercise
Period.  Stock appreciation rights granted
under the Plan shall be exercisable at such time or times and subject to such
terms and conditions, including vesting, as shall be determined by the
Committee; provided, however, that no stock
appreciation right shall be exercisable later than ten (10) years after
the date it is granted except in the event of a participant’s death within six (6) months
prior to such expiration date, in which case, the exercise period of such
participant’s stock appreciation rights may be extended beyond such period but
no later than one (1) year after the participant’s death.  All stock appreciation rights shall terminate
at such earlier times and upon such conditions or circumstances as the
Committee shall in its discretion set forth in such right at the date of grant.

 

8.                                       Restricted Stock Awards.

 

(a)                                  Generally.  The Committee may, in its discretion, grant
restricted stock awards consisting of common stock issued or transferred to
participants with or without other payments therefor, which are subject to
transferability restrictions and/or a substantial risk of forfeiture.  Restricted stock awards shall be construed as
an offer by the Company to the participant to purchase the number of shares of
common stock subject to the restricted stock award at the purchase price, if
any, established therefor, and shall be subject to acceptance by a participant.

 

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(b)                                 Payment
of the Purchase Price.  If a
restricted stock award requires payment therefor, the purchase price of any shares
of common stock subject to a restricted stock award may be paid in any manner
authorized by the Committee, which may include any manner authorized under the
Plan for the payment of the exercise price of a stock option.  Restricted stock awards may also be made in
consideration of services rendered to the Company or its subsidiaries or
affiliates.

 

(c)                                  Additional
Terms.  Restricted stock awards may
be subject to such terms and conditions, including vesting, as the Committee
determines appropriate, including, without limitation, restrictions on the sale
or other disposition of such shares, the right of the Company to reacquire such
shares for no consideration upon termination of the participant’s employment
within specified periods, and may constitute performance-based awards, as
described in Section 11 hereof.  The
Committee may require the participant to deliver a duly signed stock power,
endorsed in blank, relating to the common stock covered by such an award.  The Committee may also require that the stock
certificates evidencing such shares be held in custody or bear restrictive
legends until the restrictions thereon shall have lapsed.

 

(d)                                 Rights
as a Shareholder.  Holders of
restricted stock awards have the right to receive dividends and to vote the shares;
provided, however, unless the Committee
or the award agreement provides otherwise, dividends on restricted stock awards
shall be held in escrow and shall be payable, at such time as the restrictions
on the shares lapse, in either cash, shares or if applicable the kind of
property distributed as a dividend or any combination thereof.

 

9.                                       Stock Units.  The
Committee may, in its discretion, grant stock units with each such stock unit
representing one share of common stock of the Company.  Stock units will be credited to a notional
account maintained by the Company. 
Unless the award agreement provides otherwise, each stock unit shall
also entitle the holder to an amount equal to the value of dividends paid in
respect of one share of common stock of the Company during the period the unit
is outstanding, which amount shall also be credited to the notional
account.  Stock units may be subject to
such terms and conditions, including vesting and the time and method of settlement,
as the Committee determines appropriate; provided, however,
that unless the Committee or the award agreement provides otherwise, stock
units shall be settled in shares of common stock.   Stock
units may constitute performance-based awards, as described in Section 11
hereof.

 

10.                                 Cash Awards.  The
Committee may grant awards to be settled in cash; provided,
however, that non-employee directors shall not be eligible for cash
awards.  Cash awards may be subject to
such terms and conditions, including vesting, as the Committee determines to be
appropriate.  Cash awards may constitute
performance-based awards, as described in Section 11 hereof.  The Company may, in its discretion, permit
participants to defer settlement of cash awards, in accordance with the
requirements of Section 409A.

 

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11.                                 Performance-Based Awards.

 

(a)                                  Generally.  Any awards granted under the Plan may be
granted in a manner such that the awards qualify for the performance-based
compensation exemption of Section 162(m) of the Code (“performance-based
awards”).  As determined by the
Committee in its sole discretion, either the granting or vesting of such
performance-based awards shall be based on achievement of hurdle rates, growth
rates, and/or reductions in one or more business criteria that apply to the
individual participant, one or more business units or the Company as a whole.

 

(b)                                 Business
Criteria.  The business criteria
shall be as follows, individually or in combination: (i) net earnings; (ii) earnings
per Share; (iii) net sales growth; (iv) market share; (v) operating
profit; (vi) earnings before interest and taxes (EBIT); (vii) earnings
before interest, taxes, depreciation and amortization (EBITDA); (viii) gross
margin; (ix) expense targets; (x) working capital targets relating to
inventory and/or accounts receivable; (xi) operating margin; (xii) return on
equity; (xiii) return on assets; (xiv) planning accuracy (as measured by
comparing planned results to actual results); (xv) market price per Share;
(xvi) total return to stockholders; (xvii) net income; (xviii) pro forma net
income; (xix) return on capital; (xx) revenues; (xxi) expenses;
(xxii) operating cash flow; (xxiii) net profit margin; (xxiv) employee
headcount; (xxv) employee turnover; (xxvi) labor costs; and (xxvii)
customer service.  In
addition, performance-based awards may include comparisons to the performance
of other companies, such performance to be measured by one or more of the
foregoing business criteria.

 

(c)                                  Establishment
of Performance Goals.  With respect
to performance-based awards, the Committee shall establish in writing (i) the
performance goals applicable to a given period, and such performance goals
shall state, in terms of an objective formula or standard, the method for
computing the amount of compensation payable to the participant if such
performance goals are obtained and (ii) the individual employees or class
of employees to which such performance goals apply no later than 90 days after
the commencement of such period (but in no event after 25% of such period has
elapsed).

 

(d)                                 Certification
of Performance.  No performance-based
awards shall be payable to or vest with respect to, as the case may be, any
participant for a given period until the Committee certifies in writing that
the objective performance goals (and any other material terms) applicable to
such period have been satisfied.

 

(e)                                  Modification
of Performance-Based Awards.  With
respect to any awards intended to qualify as performance-based awards, after
establishment of a performance goal, the Committee shall not revise such
performance goal or increase the amount of compensation payable thereunder (as
determined in accordance with Section 162(m) of the Code) upon the
attainment of such performance goal. 
However, the measurement of performance against goals shall exclude the
impact of charges for restructurings, discontinued operations, extraordinary
items and other unusual or non-recurring items, and the cumulative effects of
accounting changes, each as defined by generally accepted accounting principles
as identified in the financial statements, notes to the financial statements or
management’s discussion or analysis.  In
accordance with Section 162(m)

 

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of
the Code, the Committee may only exercise negative discretion with respect to
the amount of a performance-based award.

 

12.                                 Foreign Laws.  The
Committee may grant awards to individual participants who are subject to the
tax laws of nations other than the United States, which awards may have terms
and conditions as determined by the Committee as necessary to comply with
applicable foreign laws.  The Committee
may take any action which it deems advisable to obtain approval of such awards
by the appropriate foreign governmental entity; provided,
however, that no such awards may be granted pursuant to this Section 12
and no action may be taken which would result in a violation of the Exchange
Act, the Code or any other applicable law.

 

13.                                 Adjustment Provisions; Change of Control.

 

(a)                                  Adjustment
Generally.  If there shall be any
change in the common stock of the Company, through merger, consolidation,
reorganization, recapitalization, stock or special one-time cash dividend,
stock split, reverse stock split, split up, spin-off, combination of shares,
exchange of shares, dividend in kind or other like change in capital structure
or distribution (other than normal cash dividends) to stockholders of the
Company, an adjustment shall be made to each outstanding award such that each
such award shall thereafter be exercisable for such securities, cash and/or
other property as would have been received in respect of the common stock
subject to such award had such award been exercised in full immediately prior
to such change or distribution, and such an adjustment shall be made
successively each time any such change shall occur.

 

(b)                                 Modification
of Awards.  In the event of any
change or distribution described in subsection (a) above, in order to
prevent dilution or enlargement of participants’ rights under the Plan, the
Committee will have authority to adjust, in an equitable manner, the number and
kind of shares that may be issued under the Plan, the number and kind of shares
subject to outstanding awards, the exercise price applicable to outstanding
awards, and the fair market value of the common stock and other value
determinations applicable to outstanding awards; provided,
however, that any such arithmetic adjustment to a performance-based
award shall not cause the amount of compensation payable thereunder to be
increased from what otherwise would have been due upon attainment of the
unadjusted award.  Appropriate
adjustments may also be made by the Committee in the terms of any awards under
the Plan to reflect such changes or distributions and to modify any other terms
of outstanding awards on an equitable basis, including modifications of
performance targets and changes in the length of performance periods; provided, however, that any such arithmetic adjustment to a
performance-based award shall not cause the amount of compensation payable
thereunder to be increased from what otherwise would have been due upon
attainment of the unadjusted award.  In
addition, other than with respect to stock options, stock appreciation rights,
and other awards intended to constitute performance-based awards, the Committee
is authorized to make adjustments to the terms and conditions of, and the
criteria included in, awards in recognition of unusual or nonrecurring events
affecting the

 

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Company
or the financial statements of the Company, or in response to changes in
applicable laws, regulations, or accounting principles.

 

(c)                                  Effect
of a Change of Control. 
Notwithstanding any other provision of this Plan, if there is a Change
of Control (as defined in subsection (d) below) of the Company, the
Committee may provide at anytime prior to the Change of Control that all then
outstanding stock options, stock appreciation rights and stock units and
unvested cash awards shall immediately vest and become exercisable and any
restrictions on restricted stock awards or stock units shall immediately
lapse.  In addition, the Committee may provide
that all awards held by participants who are at the time of the Change of
Control in the service of the Company a subsidiary or affiliate shall remain
exercisable for the remainder of their terms notwithstanding any subsequent
termination of a participant’s service.  All
awards shall be subject to the terms of any agreement effecting the Change of
Control, which agreement may provide, without limitation, that in lieu of
continuing the awards, each stock option and stock appreciation right
outstanding hereunder shall terminate within a specified number of days after
notice to the holder, and that such holder shall receive, with respect to each
share of common stock subject to such stock option or stock appreciation right,
an amount equal to the excess of the fair market value of such shares of common
stock immediately prior to the occurrence of such Change of Control over the
exercise price (or base price) per Share underlying such stock option or stock
appreciation right with such amount payable in cash, in one or more kinds of
property (including the property, if any, payable in the transaction) or in a
combination thereof, as the Committee, in its discretion, shall determine.  A provision like the one contained in the
preceding sentence shall be inapplicable to a stock option or stock
appreciation right granted within 6 months before the occurrence of a Change of
Control if the holder of such stock option or stock appreciation right is
subject to the reporting requirements of Section 16(a) of the
Exchange Act and no exception from liability under Section 16(b) of
the Exchange Act is otherwise available to such holder.

 

(d)                                 Definitions.  For purposes of this Section 13, a “Change
of Control” of the Company shall be deemed to have occurred upon any of the
following events:

 

(i)                                     Any
person(s) acting together which would constitute a “group” for purposes
of Section 13(d) of the Exchange Act (other than the Company or any
subsidiary) shall “beneficially own” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, at least 25% of the total
voting power of all classes of capital stock of the Company entitled to vote
generally in the election of the Board;

 

(ii)                                  Consummation
of (A) a plan of complete liquidation of the Company, or (B) a merger
or consolidation of the Company (x) in which the Company is not the continuing
or surviving corporation (other than a consolidation or merger with a
wholly-owned subsidiary of the Company in which all shares of common stock
outstanding immediately prior to the effectiveness thereof are changed into or
exchanged for common stock of the subsidiary) or (y) pursuant to which the
common stock is converted into cash,

 

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securities or other property, except in either case, a
consolidation or merger of the Company in which the holders of the common stock
immediately prior to the consolidation or merger have, directly or indirectly,
at least a majority of the common stock of the continuing or surviving
corporation immediately after such consolidation or merger or in which the
Board immediately prior the merger or consolidation would, immediately after
the merger or consolidation, constitute a majority of the board of directors of
the continuing or surviving corporation; or

 

(iii)                               The
consummation of a sale or other disposition (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company.

 

14.                                 Termination of Service.

 

(a)                                  Termination
(other than for Cause).  Unless the
Committee or the applicable award agreement provides otherwise, if a
participant’s service with the Company or any subsidiary or affiliate
terminates for any reason other than for “cause” (which shall have the
meaning defined in the applicable award agreement or, in the absence of such
definition shall be defined by the Committee).

 

(i)                                     Stock
Options/Stock Appreciation Rights. 
Except as provided in Section 13(c) hereof, any outstanding
stock options and stock appreciation rights shall expire on the earlier of:

 

(A)                              the expiration of their term,

 

(B)                                90
days following termination of the participant’s service other than termination
of service on account of death or Disability.

 

provided, however,
that a participant (or in the case of the participant’s death or Disability,
the participant’s representative) may exercise all or part of the participant’s
stock options and stock appreciation rights at any time before the expiration
of such stock options following termination of service only to the extent that
the stock options and stock appreciation rights are vested on or before the
date participant’s service terminates. 
The balance of the stock options and stock appreciation rights (which
are not vested on the date participant’s service terminates) shall lapse when
the participant’s service terminates.

 

If by
virtue of this provision, an incentive stock option is not exercised within three
(3) months after a participant’s employment terminates, then unless such
participant’s employment termination is due to his or her death or Disability
(defined for this purpose only as described in Section 22(e)(3) of the Code), the incentive stock option shall be
treated as a nonqualified stock option.

 

(ii)                                  Restricted
Stock Awards/Stock Units.  All
unvested restricted stock awards and stock units shall expire upon termination
of service.

 

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(iii)                               Cash
Awards/Performance-Based Awards.  All
cash awards and performance-based awards shall be forfeited upon termination of
service.

 

(b)                                 Termination
of Service (for Cause).  All of a
participant’s awards (including any exercised stock options for which shares or
cash have not been delivered to the participant) shall be cancelled and
forfeited immediately on the date of the participant’s termination of service
with the Company or any subsidiary if such termination is for cause or cause
exists on such date, and the Company shall return to the participant the price
(if any) paid for any undelivered shares. 
Should a participant die at a time when cause exists, all of the
participant’s awards (including any exercised stock options for which shares
have not been delivered to the participant) shall be cancelled and forfeited
immediately as of the date of the participant’s death.

 

(c)                                  Leave
of Absence.  For purposes of this Section 14,
service shall be deemed to continue while the participant is on a bona fide
leave of absence, if such leave was approved by the Company in writing or if
continued crediting of service for this purpose is expressly required by the
terms of such leave or by applicable law (as determined by the Committee).

 

15.                                 Nontransferability. 
Each award granted under the Plan to a participant shall not be
transferable except by will or the laws of descent and distribution or as
permitted by the Committee to a participant’s spouse, lineal descendants,
siblings, parents, heirs, executors, administrators, testamentary trustees,
legatees, beneficiaries or a trust for the exclusive benefit of any of the
foregoing persons, or to any charitable organizations described in Section 501(c)(3) of
the Code, which shall have discretion to permit transferability to third
parties under such terms and conditions as it shall determine.  In the event of the death of a participant
(which for this purpose only shall include any transferee), each stock option
or stock appreciation right theretofore granted to him or her shall be
exercisable during such period after his or her death as described in Section 14
hereof but unless the Committee or the award agreement provides otherwise, such
award shall only be exercisable by the executor or administrator of the estate
of the deceased participant or the person or persons to whom the deceased
participant’s rights under the stock option or stock appreciation right shall
pass by will or the laws of descent and distribution.

 

16.                                 Other Provisions.  The
granting of or distribution under any award under the Plan may also be subject
to such other provisions (whether or not applicable to the awards of any other
participant) as the Committee determines appropriate, including, without
limitation, for the forfeiture of, or restrictions on resale or other
disposition of, common stock acquired under any form of award, for the
acceleration of exercisability or vesting of awards in the event of a Change of
Control, for the payment of the value of awards to participants in the event of
a Change of Control, or to comply with federal and state securities laws, or
understandings or conditions as to the participant’s employment in addition to
those specifically provided for under the Plan.

 

11

 

17.                                 Fair Market Value. 
For purposes of this Plan and any awards awarded hereunder, fair market
value per Share as of a particular date
shall mean (i) if shares are then listed on a national stock exchange, the
closing price per Share on the exchange for the last preceding date on which
there was a sale of shares on such exchange, as determined by the Committee, (ii) if
shares are not then listed on a national stock exchange but are then traded on
an over-the-counter market, the average of the closing bid and asked prices for
such shares in such over-the-counter market for the last preceding date on
which there was a sale of such shares in such market, as determined by the
Committee, or (iii) if shares are not then listed on a national exchange or
traded on an over-the-counter market, such value as the Committee in its
discretion may in good faith determine; provided that, where such shares are so
listed or traded, the Committee may make discretionary determinations where the
shares have not been traded for 10 trading days.

 

18.                                 Withholding.  All
payments or distributions of awards made pursuant to the Plan shall be net of
any amounts required to be withheld pursuant to applicable federal, state and
local tax withholding requirements at the minimum statutory withholding
rates.  If the Company proposes or is
required to distribute common stock pursuant to the Plan, it may require the
recipient to remit to it or to the corporation that employs such recipient an amount
sufficient to satisfy such tax withholding requirements prior to the delivery
of any certificates for such common stock. 
In lieu thereof, the Company or the employing corporation shall have the
right to withhold the amount of such taxes from any other sums due or to become
due from such corporation to the recipient as the Committee shall
prescribe.  The Committee may, in its
discretion and subject to such rules as it may adopt (including any as may
be required to satisfy applicable tax and/or non-tax regulatory requirements),
permit an optionee or award or right holder to pay all or a portion of the
federal, state and local withholding taxes arising in connection with any award
consisting of shares of common stock by electing to have the Company withhold
shares of common stock having a fair market value equal to the amount of tax to
be withheld, such tax calculated at minimum statutory withholding rates.

 

19.                                 Tenure.  A participant’s
right, if any, to continue to serve the Company or any of its subsidiaries or
affiliates as an officer, employee, or otherwise, shall not be enlarged or
otherwise affected by his or her designation as a participant under the Plan.

 

20.                                 Unfunded Plan. 
Participants shall have no right, title, or interest whatsoever in or to
any investments which the Company may make to aid it in meeting its obligations
under the Plan.  Nothing contained in the
Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between
the Company and any participant, beneficiary, legal representative or any other
person.  To the extent that any person
acquires a right to receive payments from the Company under the Plan, such
right shall be no greater than the right of an unsecured general creditor of
the Company.  All payments to be made
hereunder shall be paid from the general funds of the Company and no special or
separate fund shall be established and no segregation of assets shall be made
to assure payment of

 

12

 

such
amounts except as expressly set forth in the Plan.  The Plan is not intended to be subject to the
Employee Retirement Income Security Act of 1974, as amended.

 

21.                                 No Fractional Shares. 
No fractional shares of common stock shall be issued or delivered
pursuant to the Plan or any award.  The
Committee shall determine whether cash, or awards, or other property shall be
issued or paid in lieu of fractional shares or whether such fractional shares
or any rights thereto shall be forfeited or otherwise eliminated.

 

22.                                 Duration, Amendment and Termination.  No award shall be granted more than 10 years
after the Effective Date.  The Committee
may amend the Plan from time to time or suspend or terminate the Plan at any
time.  No amendment of the Plan may be
made without approval of the stockholders of the Company if the amendment will:
(i)  increase the aggregate number of shares of common stock that may
be delivered through stock options under the Plan; (ii) permit the
re-pricing of an award to a lower exercise price, base price or purchase price,
as applicable, (including, without limitation, the cancellation of an award
followed by a re-grant of that award six (6) months later); (iii) change
the types of business criteria on which performance-based awards are to be
based under the Plan; (iv) modify the requirements as to eligibility for participation
in the Plan; or (v) change the legal entity authorized to make awards
under the Plan.  Notwithstanding anything
contained in this Section 22 or the Plan, the terms of the Plan and any
awards granted hereunder may be amended (retrospectively or prospectively) as
may be required to comply with the requirements of Section 409A.

 

23.                                 Governing Law.  This
Plan, awards granted hereunder and actions taken in connection herewith shall
be governed and construed in accordance with the laws of the State of Delaware
(regardless of the law that might otherwise govern under applicable Delaware
principles of conflict of laws).

 

24.                                 Effective Date.  The
Plan shall be effective as of November 21, 2004 (the “Effective Date”),
provided that the Plan is approved by the stockholders of the Company at an
annual meeting or any special meeting of stockholders of the Company within 12
months of the Effective Date, and such approval of stockholders shall be a
condition to the right of each participant to receive any awards
hereunder.  Any awards granted under the
Plan prior to such approval of stockholders shall be effective as of the date
of grant (unless, with respect to any award, the Committee specifies otherwise
at the time of grant), but no such award may be exercised or settled and no
restrictions relating to any award may lapse prior to such stockholder
approval, and if stockholders fail to approve the Plan as specified hereunder, any
such award shall be cancelled.

 

13

 

Section Where
Important Terms First Defined or Used

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Board

  	
   

  	
  2(a)

  
	
   

  	
   

  	
   

  
	
  Cash Award

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  Cause

  	
   

  	
  14(a)

  
	
   

  	
   

  	
   

  
	
  Change of
  Control

  	
   

  	
  13(d)

  
	
   

  	
   

  	
   

  
	
  Code

  	
   

  	
  2(a)

  
	
   

  	
   

  	
   

  
	
  Committee

  	
   

  	
  2(a)

  
	
   

  	
   

  	
   

  
	
  Common Stock

  	
   

  	
  5(a)

  
	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Effective Date

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Exchange Act

  	
   

  	
  2(a)

  
	
   

  	
   

  	
   

  
	
  Fair Market
  Value

  	
   

  	
  17

  
	
   

  	
   

  	
   

  
	
  Grant Price

  	
   

  	
  7(a)

  
	
   

  	
   

  	
   

  
	
  Independent
  Director

  	
   

  	
  2(a)

  
	
   

  	
   

  	
   

  
	
  ISO Maximum

  	
   

  	
  5(a)

  
	
   

  	
   

  	
   

  
	
  Maximum Shares

  	
   

  	
  5(a)

  
	
   

  	
   

  	
   

  
	
  Non-Employee
  Director

  	
   

  	
  2(a)

  
	
   

  	
   

  	
   

  
	
  Parent
  Corporation

  	
   

  	
  6(e)

  
	
   

  	
   

  	
   

  
	
  Performance-Based
  Awards

  	
   

  	
  11(a)

  
	
   

  	
   

  	
   

  
	
  Plan

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Restricted Stock
  Award

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  Share

  	
   

  	
  5(a)

  
	
   

  	
   

  	
   

  
	
  Stock
  Appreciation Rights

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Stock Options

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Stock Unit

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  Subsidiary
  Corporation

  	
   

  	
  6(e)

  

 

14Exhibit 10.20

 

ALTRA
HOLDINGS, INC

 

2004
EQUITY INCENTIVE PLAN

 

RESTRICTED
STOCK AWARD AGREEMENT

 

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”)
is made as of                                        ,
by and between Altra Holdings, Inc., a Delaware corporation (the “Company”),
and                                  (the
“Participant”).  This Agreement is
subject to all of the terms and conditions as set forth herein and in the
Company’s 2004 Equity Incentive Plan (the “Plan”), which is incorporated
herein by reference.

 

The parties agree as follows:

 

1.                                       Definitions. 
Each of the following terms used herein shall have the following
meanings:

 

“Affiliate”
means, with respect to a specified Person, any other Person, directly or
indirectly, controlling, controlled by or under common control with such
specified Person.  For purposes of this
definition, the term “control,” including the terms “controlling,” “controlled
by” and “under common control,” means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities or otherwise.

 

“Applicable
Percentage” shall be the percentage equal to (i) the number of shares of
the capital stock of the Company being Transferred by the Genstar Parties in
the Drag-Along Sale (as defined in Section 7 hereof) divided by (ii) the
aggregate number of shares of the capital stock of the Company then owned by
the Genstar Parties.

 

“Board”
means the board of directors of the Company.

 

“Cause”
shall mean each of: (i) the Participant’s material breach of the terms of any
agreement between the Participant and the Company; (ii) the Participant’s
willful failure or refusal to perform any of its material duties to the Company;
(iii) the Participant’s willful insubordination or disregard of the legal
directives of the Board which are not inconsistent with the scope, ethics and
nature of the Participant’s duties and responsibilities to the Company; (iv)
the Participant’s engaging in misconduct which has a material adverse impact on
the reputation, business, business relationships or financial condition of the
Company; (v) the Participant’s commission of an act of fraud or embezzlement
against the Company; or (vi) any conviction of, or plea of guilty or nolo
contendere by, the Participant with respect to a felony (other than a traffic
violation), a crime involving moral turpitude, fraud or misrepresentation; provided,
however, that Cause shall not be deemed to exist under any of clauses
(i), (ii) or (iii) above unless the Participant has been given reasonably
detailed written notice of the grounds for such Cause and the Participant has
not effected a cure within twenty (20) days of the date of receipt of such
notice.

 

“Change
of Control” means, whether in a single transaction or a series of related
transactions (i) a sale of all or substantially all of the consolidated assets
of the Company and its

 

 

Subsidiaries taken as a whole, (ii) a
sale of Securities by the Company or the Genstar Parties resulting in more than
50% of the total voting power of all securityholders of the Company
beneficially owned by a Person other than the Genstar Parties, or (iii) a
merger or consolidation of the Company with or into another Person, if and only
if, after such merger or consolidation, the Genstar Parties and its Affiliates
do not have the ability to elect a majority of the board of directors of the
surviving or resulting company.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time.

 

“Fair
Market Value” means an amount determined in good faith by the Board
(without discount for lack of marketability or minority interest).

 

“Genstar
Parties” means, collectively, Genstar Capital Partners III, L.P. and
Stargen III, L.P.

 

“Independent Party” shall mean
any person who is a bona fide
purchaser and who, directly or indirectly, immediately prior to the proposed
transaction, (i) holds less than 5% of the outstanding securities of the
Company (on an as-converted to common stock basis) and (ii) is not an Affiliate
of the Company or the Genstar Parties.

 

“Permitted
Transfer” means a Transfer by the Participant of Shares made (i) to the
Company, (ii) by way of gratuitous donation to any trust exclusively for
the benefit of the Participant’s spouse, direct descendants (including legally
adopted children) or direct ascendants or (iii) by way of bequest or
inheritance upon the death of the Participant to his or her executors,
administrators, testamentary trustees, legatees or beneficiaries; provided
that, in the event of any Transfer made pursuant to one of the exemptions
provided by clauses (ii) or (iii) above, the transferee, assignee or donee
shall have become a party to this Agreement in the capacity of Participant and
such Participant shall have furnished the Company with an executed copy of this
Agreement.

 

“Person”
shall mean any individual, partnership, limited liability company, corporation,
trust, joint venture, unincorporated organization, other legal entity,
government or agency or political subdivision thereof.

 

“Public
Offering” means the issuance and sale of shares of common stock of the
Company to the public pursuant to a registration statement under the Securities
Act which has been declared effective by the Securities and Exchange Commission
(other than a registration statement on Form S-4, Form S-8 or any other similar
form).

 

“Qualified
Public Offering” means an underwritten Public Offering (which may be the
initial Public Offering) resulting in gross proceeds to the Company of at least
$50,000,000.

 

“Released
Shares” means any of the Shares which, from time to time, have been
released from the Forfeiture Restrictions set forth in Section 3 hereof.

 

2

 

“Securities
Act” means the Securities Act of 1933, as amended from time to time.

 

“Subsidiary”
means any and all corporations, partnerships, limited liability companies and
other entities with respect to which the Company directly or indirectly owns
more than 50% of (i) the securities having the power to elect members of the
board of directors or similar body governing the affairs of such entity or (ii)
the equity interests of such entity.

 

“Transfer”
means, with respect to any Shares, any direct or indirect, voluntary or involuntary,
offer to sell, transfer, sale, assignment, pledge, hypothecation, short sales,
loan, grant of an option to purchase or other disposition of any of the Shares,
or the entering of any contract or agreement to do any of the foregoing.

 

“Unreleased
Shares” means any of the Shares which, from time to time, have not yet been
released from the Forfeiture Restrictions set forth in Section 3 hereof.

 

2.                                       Sale of Stock.

 

(a)                                  Subject
to the terms and conditions of this Agreement and the Plan, the Company hereby
agrees to issue to the Participant                                            shares
of the Company’s common stock par value $0.001 (the “Shares”) for good
and valuable consideration which the Company has determined to exceed the par
value of the Company’s common stock.

 

(b)                                 The
issuance of the Shares under this Agreement shall occur at the principal office
of the Company simultaneously with the execution of this Agreement by the
Company and the Participant or on such other date as the Company and the Participant
shall agree (the “Issuance Date”). 
Subject to the provisions of Section 4 below, on the Issuance Date,
the Company will deliver to the Participant a certificate representing the
Shares to be issued to the Participant (which shall be issued in the
Participant’s name).

 

3.                                       Forfeiture Restriction.

 

(a)                                  Subject
to the provisions of Section 3(b) and Section 8 below, if the
Participant ceases to be an Employee, director or consultant of the Company and
each Subsidiary for any or no reason, all of the Unreleased Shares shall
thereupon be forfeited immediately and without any further action by the
Company (the “Forfeiture Restriction”). 
Upon the occurrence of such a forfeiture, the Company shall become the
legal and beneficial owner of the Shares being forfeited and all rights and
interests therein or relating thereto, and the Company shall have the right to
retain and transfer to its own name the number of Shares being forfeited by the
Participant.

 

(b)                                 Provided
that the Participant continues to be an employee, director or consultant of the
Company or a Subsidiary on such date, the Shares shall be released from the
Forfeiture Restriction as follows:

 

3

 

	
  Release Date

  	
   

  	
  Percentage of Shares Released
  From Forfeiture

  Restriction

  	
   

  
	
  First anniversary of Issuance Date

  	
   

  	
  20%

  	
   

  
	
  Second anniversary of Issuance Date

  	
   

  	
  40%

  	
   

  
	
  Third anniversary of Issuance Date

  	
   

  	
  60%

  	
   

  
	
  Fourth anniversary of Issuance Date

  	
   

  	
  80%

  	
   

  
	
  Fifth anniversary of Issuance Date

  	
   

  	
  100%

  	
   

  

 

(c)                                  Notwithstanding
anything to the contrary in this Agreement, no Unreleased Shares or any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Participant or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect.

 

4.                                       Escrow of Shares.

 

(a)                                  The
Participant hereby authorizes and directs the secretary of the Company, or such
other person designated by the Board, to transfer any Unreleased Shares which
have been forfeited by the Participant to the Company.

 

(b)                                 To
insure the availability for delivery of the Participant’s Unreleased Shares in
the event of forfeiture of such Shares by the Participant pursuant to Section 3,
the Participant hereby appoints the secretary, or any other person designated
by the Board as escrow agent, as its attorney-in-fact to assign and transfer
unto the Company, any Unreleased Shares forfeited by the Participant pursuant
to Section 3 and shall, upon execution of this Agreement, deliver and
deposit with the secretary of the Company, or such other person designated by
the Board, the share certificate or certificates representing the Unreleased
Shares, together with the stock assignment duly endorsed in blank, attached
hereto as Exhibit A.  The
Unreleased Shares and stock assignment shall be held by the secretary in
escrow, pursuant to the Joint Escrow Instructions of the Company and the
Participant attached as Exhibit B hereto, until (i) the Shares are
forfeited by the Participant as provided in Section 3, (ii) such
Unreleased Shares are released from the Forfeiture Restriction or (iii) until
such time as this Agreement no longer is in effect.  Upon release of the Unreleased Shares, the
escrow agent shall deliver to the Participant the certificate or certificates
representing such Shares in the escrow agent’s possession belonging to the
Participant in accordance with the terms of the Joint Escrow Instructions and
the escrow agent shall be discharged of all further obligations hereunder; provided,
however, that the escrow agent shall nevertheless retain such
certificate or certificates as escrow agent if so required pursuant to other
restrictions imposed pursuant to this Agreement.

 

(c)                                  The
Company, or its designee, shall not be liable for any act it may do or omit to
do with respect to holding the Shares in escrow and while acting in good faith.

 

4

 

5.                                       Restrictions on Transfer.

 

(a)                                  General
Restriction.  Without the prior
written consent of the Company, which the Company may withhold in its sole
discretion, the Participant hereby agrees not to Transfer any Shares, except
for (i) Permitted Transfers made in compliance with this Agreement, (ii)
Transfers pursuant to Sections 6, 7 or 8 of this Agreement and (iii) Transfers
as part of a Public Offering and, after the Company’s initial Public Offering,
in accordance with Rule 144 under the Securities Act.  Any attempt by a Participant to Transfer any
Shares other than in compliance with this Agreement shall be null and void and
the Company shall not, and shall not permit, any transfer agent to give any
effect in the Company’s stock records to such attempted Transfer.

 

(b)                                 Market
Standoff Agreement.  The Participant hereby
agrees in connection with an underwritten Public Offering, not to Transfer any
Shares, including a sale pursuant to Rule 144 under the Securities Act
(except as part of such underwritten Public Offering), during the seven day
period prior to, and during the thirty (30) day period (or such longer period
of up to 180 days as may be required by the Board or such underwriter)
beginning on, the effective date of any registration statement with respect to
such Public Offering (except as part of such registration) or the commencement
of the public distribution of securities. 
In order to enforce the foregoing covenants, the Company may impose
stop-transfer instructions with respect to the securities of the
Participant.  The Participant hereby agrees
to enter into a separate agreement providing for the foregoing, as may be
requested by the managing underwriter(s) of any such Public Offering.

 

(c)                                  Securities
Laws Compliance.  The Participant
hereby agrees and acknowledges that to the extent the Participant is permitted
pursuant to this Agreement to Transfer Shares, the Participant will not
Transfer any Shares unless (i) the Transfer is pursuant to an effective
registration statement under the Securities Act, or the rules and regulations
in effect thereunder, or pursuant to Rule 144 under the Securities Act or (ii)
counsel for the Participant (which counsel shall be reasonably acceptable to
the Company) shall have furnished the Company with an opinion (reasonably
satisfactory in form and substance to the Company) that no such registration is
required because of the availability of an exemption from registration under
the Securities Act; provided, however, that the Company may waive
the requirement of such opinion in its sole discretion.  Notwithstanding the foregoing, the Company
acknowledges and agrees that a Permitted Transfer shall be deemed to be in
compliance with this Section 5(c) and that no opinion of counsel is required
in connection therewith.

 

6.                                       Right of First Refusal on Sale of
Shares by Participant.

 

(a)                                  General. 
Subject to the provisions of this Section 6, the Participant hereby
grants, first, to the Company, and second, to the Genstar Parties, a right of
first refusal (the “Right of First Refusal”) to purchase all of the
Shares held by the Participant which such Participant proposes to Transfer, in
compliance with the restrictions set forth herein, to a person other than the
Company.

 

(b)                                 Right of First Refusal. 
Subject to the limitations imposed by, and only upon compliance with, Section 5
hereof, in the event that the Participant receives a bona fide

 

5

 

offer (the “Offer”) to
Transfer any or all of its Shares (the “Offer Shares”) from a Person
other than the Company (the “Offeror”) which the Participant wishes to
accept, the Participant shall cause the Offer to be put in writing and shall
give the Company and the Genstar Parties written notice (the “Offer Notice”)
of such Offer.  The Offer Notice shall
contain an irrevocable offer to sell the Offer Shares to the Company and the
Genstar Parties, on the same terms and conditions as the Offer, and such Offer
Notice shall be accompanied by a true copy of the Offer (which shall identify
the Offeror).  The Company shall have
thirty (30) days from the delivery date of any Offer Notice to agree to
purchase all of the Offer Shares either (i) at the same price and on the same
terms and conditions as the Offer or (ii) if the Offer includes any
consideration other than cash, then at the sole option of the Company, on the
same terms and conditions as the Offer except at the equivalent all cash price,
determined in good faith by the Board. 
If the Company fails to agree to purchase all of the Offer Shares within
such thirty (30) day period, the Genstar Parties shall have fifteen (15) days
from the expiration of the Company’s above-mentioned 30 day period to agree to
purchase, or arrange for an Affiliate of the Genstar Parties to purchase all of
the Offer Shares either (i) at the same price and on the same terms and conditions
as the Offer, or (ii) if the Offer includes any consideration other than cash,
then at the sole option of the Genstar Parties, on the same terms and
conditions as the Offer except at the equivalent all cash price, determined in
good faith by the Board.

 

(c)                                  Failure to Exercise Right. 
If the Company and the Genstar Parties collectively fail to purchase all
of the Offer Shares pursuant to Section 6(b), the Participant shall have
sixty (60) days after the last date on which the Genstar Parties’ right to
purchase the Offer Shares lapsed to Transfer the Offer Shares to the Offeror
identified in the initial Offer Notice at a price equal to or above, and upon
terms not more favorable to such Offeror than, the price and terms specified in
the Offer given in connection with such Transfer; provided, however,
that the Participant shall not be entitled to Transfer such Offer Shares (i) if
the Offeror is a competitor, supplier or customer of the Company or any
Subsidiary or if the Offeror is not reasonably acceptable to the Board, such
determination to be made in good faith by the Board or (ii) if the Transfer
occurs prior to the Qualified Public Offering, unless the Offeror agrees in
writing to be bound by the provisions of this Agreement as if such Offeror were
the Participant.  In the event that the Participant
has not Transferred the Offer Shares within such sixty (60) day period, the Participant
shall not thereafter Transfer (except in a manner otherwise permitted under
this Agreement) any of such Offer Shares without again complying with the
provisions of this Agreement, including, if applicable, this Section 6.

 

(d)                                 Exercise of Right of First Refusal. 
If the Company and/or the Genstar Parties exercises its Right of First
Refusal, the closing of the purchase of the Offer Shares shall take place
within thirty (30) days after the Company and/or the Genstar Parties gives
notice of such exercise, which period of time shall be extended in order to
comply with applicable laws and regulations. 
Upon exercise of such Right of First Refusal, the Company and/or the
Genstar Parties and the Participant shall be legally obligated to consummate
the purchase contemplated thereby and shall use their reasonable efforts to
secure any approvals required in connection therewith.

 

(e)                                  Exceptions to Right of First Refusal. 
The Right of First Refusal shall not apply to (i) Permitted Transfers
made in compliance with this Agreement, (ii) Transfers pursuant

 

6

 

to Sections 7 or 8 of this Agreement,
or (iii) any registered Public Offering in which such Offer Shares are included.

 

(f)                                    Termination. 
The covenants and agreements set forth in this Section 6 shall
terminate upon the consummation of a Qualified Public Offering.

 

7.                                       Drag-Along Right.

 

(a)                                  Sales by the Genstar Parties. 
Notwithstanding anything else herein to the contrary, if the Genstar
Parties determine to sell or otherwise transfer any securities of the Company then
held by the Genstar Parties to an Independent Party and such sale or transfer
results in a Change of Control (a “Drag-Along Sale”), then upon the Genstar
Parties’ request, the Participant shall sell to such proposed purchaser the
Applicable Percentage of the Shares held by such Participant.  The terms and conditions of such Drag-Along
Sale shall be on the same terms and conditions (or no less favorable terms and
conditions) as such sale or transfer by the Genstar Parties, including without
limitation sale price with respect to the same type of securities,
representations and warranties, covenants and indemnification obligations; provided,
however, that if the holders of a class of securities of the Company are
given an option under the agreement of sale to elect the form and amount of the
consideration to be received in consideration for the sale or transfer of such securities,
then each holder of such class of securities shall be given the same option.

 

(b)                                 Notice. 
Prior to making any Drag-Along Sale, the Genstar Parties shall, if they
determine that the Participant should participate in such sale or transfer,
provide the Participant with written notice (the “Drag-Along Notice”)
not less than ten (10) business days prior to the proposed date of the
Drag-Along Sale (the “Drag-Along Sale Date”).  The Drag-Along Notice shall set forth: (i)
the name of the proposed purchaser; (ii) the proposed amount and form of
consideration to be paid and the material terms and conditions of the sale or transfer
and (iii) the Drag-Along Sale Date and the date upon which the Participant shall
deliver to the Genstar Parties the certificates or instruments representing the
Shares owned by the Participant, duly endorsed, and the limited power of
attorney referred to below.  The Participant
shall deliver to the Genstar Parties the certificate(s) or instrument(s)
representing its Shares, duly endorsed for transfer with signatures guaranteed,
on or before the date set forth in the Drag-Along Notice for such delivery,
together with a limited power of attorney authorizing the Genstar Parties to
sell or otherwise dispose of such Shares pursuant to the term of such
Drag-Along Sale and to execute on behalf of the Participant any purchase
agreement or other documentation required to consummate such Drag-Along Sale.

 

(c)                                  Effect of Drag-Along Sale. 
If a Participant receives the applicable purchase price from a
Drag-Along Sale, but has failed to deliver certificates or instruments
representing its Shares as described in this Section 7, it shall for all
purposes no longer be deemed to be a securityholder of the Company with respect
to the Shares for which the purchase price has been received, and with respect
to such Shares it shall have no voting rights, shall not be entitled to any
dividends or other distributions with respect to such Shares and shall have no
other rights or privileges granted to securityholders with respect to such Shares
under law or this Agreement.

 

7

 

(d)                                 Sale of the Company. 
If a Drag-Along Sale is to be effected in the form of a merger or other
corporate reorganization which requires stockholder approval, and if the Board
approves the Drag-Along Sale (an “Approved Sale”), the Participant shall
vote for, consent to and raise no objections against such Approved Sale and the
Participant shall waive any dissenters’ rights, appraisal rights or similar
rights in connection with such Approved Sale. 
The Participant shall take all necessary or desirable actions in
connection with the consummation of the Approved Sale and the distribution of
the aggregate consideration from such Approved Sale as reasonably requested by
the Company.

 

(e)                                  Termination. 
The covenants and agreements set forth in this Section 7 shall
terminate upon the consummation of a Qualified Public Offering.

 

8.                                       Right to Repurchase Shares.

 

(a)                                  Right of Repurchase Upon Termination
of Employment.  If a Participant’s employment with the
Company and its Subsidiaries is terminated, voluntarily or involuntarily, for
any reason, first, the Company, and second, the Genstar Parties, shall have the
exclusive and irrevocable right (which shall not be an obligation) to
repurchase (the “Right of Repurchase”), for a period of ninety (90) days
from the effective date of termination, all or any portion of the Released Shares
held by the Participant, free and clear of all liens, pledges, security
interests and other encumbrances and restrictions, at a purchase price per
share equal to the purchase price as determined in accordance with Section 8(c)
below (the “Repurchase Price”).

 

(b)                                 Repurchase Procedure. 
If the Company or the Genstar Parties, as the case may be, elect to
exercise the Right of Repurchase with respect to a Participant’s Released Shares
pursuant to this Section 8, it shall deliver written notice to such Participant
within such 90-day period setting forth the terms of the repurchase pursuant to
which such repurchase is being made.  The
Company or the Genstar Parties, as the case may be, shall pay the Repurchase
Price in cash upon the closing of the transaction (which shall occur within
such 90-day period, which period of time shall be extended in order to comply
with applicable laws and regulations), and the Participant shall promptly, upon
receipt of such repurchase price, (i) endorse and deliver to the Company or the
Genstar Parties, as the case may be, the certificate(s) or instrument(s)
representing the Released Shares so repurchased, free and clear of all liens,
pledges, security interests and other encumbrances and restrictions, and (ii)
represent and warrant to the Company or the Genstar Parties, as the case may
be, to its title and ownership of such Shares, free and clear of liens or
encumbrances, and its authority to sell such Shares.

 

(c)                                  Purchase Price.  In the event that a Participant’s employment
with the Company and any Subsidiary is terminated for Cause, the Repurchase
Price shall equal the lower of (i) the amount paid by such Participant to
acquire the Released Shares, or if no cash consideration was paid, $0.01 per
share and (ii) the then current Fair Market Value of such Released Shares.  In the event that a Participant’s employment
with the Company and its Subsidiaries is terminated for any reason other than
for Cause, the Repurchase Price shall be the then current Fair Market Value of
the Released Shares subject to repurchase.

 

(d)                                 Rights as Stockholders. 
Once the Company or the Genstar Parties, as the case may be, has
exercised its Right of Repurchase with respect to a Participant’s Released

 

8

 

Shares, the Participant shall have no
rights with respect to such Released Shares except to receive the Repurchase
Price.  If the Company has exercised its
Right of Repurchase it shall not consider such Released Shares outstanding for
purposes of paying dividends, taking votes, or for any other purposes.

 

(e)                                  Termination. 
The covenants and agreements set forth in this Section 8 shall
terminate upon the consummation of a Qualified Public Offering.

 

9.                                       Representations, Warranties,
Covenants, and Acknowledgments.  The
Participant hereby represents, warrants, covenants, acknowledges and agrees
that:

 

(a)                                  The
Participant is holding the Shares for his or her own account, and not for the
account of any other person.  The
Participant is holding the Shares for investment and not with a view to distribution
or resale thereof except in compliance with applicable laws regulating
securities.

 

(b)                                 The
Participant is presently an employee of, or consultant to, the Company and/or a
Subsidiary and in such capacity has become personally familiar with the business
of the Company and its Subsidiaries.

 

(c)                                  The
Participant has had the opportunity to ask questions of, and to receive answers
from, the Company with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
conditions, and results of operations of the Company and its Subsidiaries.

 

(d)                                 The
Participant understands that the Shares have not been registered under the
Securities Act and the Shares cannot be transferred by the Participant unless
such transfer is registered under the Securities Act or an exemption from such
registration is available.  The Company
has made no agreements, covenants or undertakings whatsoever to register the
transfer of the Shares under the Securities Act.  The Company has made no representations,
warranties, or covenants whatsoever as to whether any exemption from the
Securities Act, including, without limitation, any exemption for limited sales
in routine brokers’ transactions pursuant to Rule 144 of the Securities Act,
will be available.

 

(e)                                  None
of the Company’s securities is presently publicly traded, and the Company has
made no representations, covenants or agreements as to whether there will be a
public market for any of its securities.

 

(f)                                    The
Company has made no warranties or representations to the Participant with
respect to the income tax consequences of the transactions contemplated by this
Agreement, and the Participant is in no manner relying on the Company or its
representatives for an assessment of such tax consequences.

 

(g)                                 The
representations, warranties and covenants contained in this Section 9
shall survive the later of the date of execution and delivery of this Agreement
or the issuance of the Shares.

 

9

 

10.                                 Stock Certificate Legends. 
The share certificate(s) evidencing the Shares issued hereunder shall be
endorsed with the following legends and any other legend required by any
applicable state securities laws:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  EXCEPT AS OTHERWISE PROVIDED IN THE ACT, NO
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OPTION, LOAN OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT
(A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (B) IF
THE COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL TO THE
HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
OR THE RULES AND REGULATIONS IN EFFECT THEREUNDER, AND IN COMPLIANCE WITH
APPLICABLE PROVISIONS OF STATE SECURITIES LAWS.”

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO FORFEITURE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE
COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.”

 

11.                                 Adjustment for Stock Split. 
All references to the number of Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, reverse stock split or stock
dividend or other similar change in the Shares which may be made by the Company
after the date of this Agreement.

 

12.                                 Taxes. 
Notwithstanding anything to the contrary in this Agreement, the Company
shall be entitled to require payment in cash or deduction from other
compensation payable to the Participant of any sums required by federal, state
or local tax law to be withheld with respect to the issuance or lapsing of
restrictions on the Shares.   The Company
shall not be obligated to deliver any new certificate representing vested
Shares to the Participant or his legal representative unless and until the
Participant or his legal representative shall have paid or otherwise satisfied
in full the amount of all federal, state and local taxes applicable to the
taxable income of the Participant resulting from the grant of the Shares or the
lapse or removal of the Forfeiture Restriction. 

 

13.                                 General Provisions.

 

(a)                                  This
Agreement shall be governed by the laws of the State of New York.  This Agreement represents the entire
agreement between the parties with respect to the issuance of the Shares to the
Participant and may only be modified or amended in a writing signed by Participant
and the Company.

 

(b)                                 This
Agreement and the Plan constitute the entire agreement between the Company and
the Participant concerning the subject matter hereof.  Any previous agreement

 

10

 

between
the Company and the Participant concerning the subject matter hereof is hereby
terminated and superseded by this Agreement. 
This Agreement may not be assigned by the Participant except as required
in connection with a permitted transfer thereunder.  Subject to the foregoing, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
permitted assigns, heirs, executors and administrators of the parties
hereto.  Any attempted transfer of this
Agreement not in compliance with the terms hereof shall be null and void.

 

(c)                                  Either
party’s failure to enforce any provision or provisions of this Agreement shall
not in any way be construed as a waiver of any such provision or provisions,
nor prevent that party thereafter from enforcing each and every other provision
of this Agreement.  The rights granted
both parties herein are cumulative and shall not constitute a waiver of either
party’s right to assert all other legal remedies available to it under the
circumstances.

 

(d)                                 THE
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE LAPSING OF THE FORFEITURE
RESTRICTION PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING
SERVICE TO THE COMPANY (OR A SUBSIDIARY) AS AN “AT WILL” EMPLOYEE, CONSULTANT
OR DIRECTOR OF THE COMPANY (OR A SUBSIDIARY) AND NOT THROUGH THE ACT OF BEING
HIRED OR ACQUIRING SHARES HEREUNDER.  THE
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE FORFEITURE RESTRICTION SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR SUCH PERIOD, FOR ANY PERIOD, OR AT
ALL, AND SHALL NOT INTERFERE WITH THE COMPANY’S RIGHT TO TERMINATE THE
PARTICIPANT’S EMPLOYMENT OR SERVICE TO THE COMPANY AT ANY TIME, WITH OR WITHOUT
CAUSE.

 

(e)                                  Any
notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally or sent by facsimile transmission,
overnight air courier, or first class certified or registered mail, postage
prepaid, and addressed to the parties at the addresses of the parties set forth
at the end of this Agreement or such other address as a party may designate by
five (5) days’ advance written notice to the other parties hereto.  All notices and communications shall be
deemed to have been received unless otherwise set forth herein:  (i) in the case of personal delivery, on
the date of such delivery; (ii) in the case of facsimile transmission, on
the date on which the sender receives electronic confirmation that such notice
was received by the addressee; (iii) in the case of overnight air courier,
on the second business day following the day sent, with receipt confirmed by the
courier; and (iv) in the case of mailing by first class certified or registered
mail, postage prepaid, return receipt requested, on the fifth business day
following such mailing.

 

(f)                                    If
any term or provision of this Agreement or the application thereof to any
person, property or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to persons, property or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected

 

11

 

thereby,
and each term and provision of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.

 

(g)                                 The
provisions of this Agreement shall apply, to the full extent set forth herein
with respect to the Shares, to any and all shares of capital stock or other
securities of the Company or a subsidiary which may be issued in respect of, in
exchange for, in substitution of the Shares, and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof.

 

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

 

(i)                                     The
headings of the sections of this Agreement are for convenience and shall not by
themselves determine the interpretation of this Agreement.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rule of strict construction will be applied against any party.

 

(j)                                     This
Agreement will not confer any rights or remedies upon any person other than the
parties hereto and their respective successors and permitted assigns; provided,
however, that each of the Genstar Parties are third party beneficiaries
of Sections 6, 7, and 8 hereof.

 

(k)                                  By
his or her signature below, the Participant agrees to be bound by the terms and
conditions of the Plan.  The Participant
has reviewed the Plan in its entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement and fully understands all
provisions of the this Agreement and the Plan. 
The Participant hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the administrator of the Plan upon any
questions arising under the Plan or this Agreement.

 

(Signature Page
Follows)

 

12

 

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

 

	
  ALTRA HOLDINGS, INC.:

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  [Name]

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Address:

  
	
   

  	
   

  
	
  Altra Holdings, Inc.

  14 Hayward Street

  Quincy, MA 02171

  Attention: Michael L. Hurt

  Telecopy No.: (617) 689-6202

  	
   

  
					

 

13

 

CONSENT OF SPOUSE

 

I,                                      ,
spouse of                         ,
have read and approve the foregoing Agreement. 
In consideration of issuing to my spouse to shares of the common stock
of Altra Holdings, Inc. set forth in the Agreement, I hereby appoint my spouse
as my attorney-in-fact in respect to the exercise of any rights under the Agreement
and agree to be bound by the provisions of the Agreement insofar as I may have
any rights in said Agreement or any shares issued pursuant thereto under the
community property laws or similar laws relating to marital property in effect
in the state of our residence as of the date of the signing of the foregoing
Agreement.

 

 

	
  Dated:                           ,
  2005

  	
   

  	
   

  
	
   

  	
  Signature of
  Spouse

  

 

14

 

EXHIBIT
A

 

STOCK
ASSIGNMENT

 

FOR VALUE RECEIVED,                       hereby
sells, assigns and transfers unto ALTRA HOLDINGS, INC., a Delaware corporation,                                                 shares
of the Common Stock of ALTRA HOLDINGS, INC., a Delaware corporation, standing
in its name of the books of said corporation represented by Certificate No.              herewith
and do hereby irrevocably constitute and appoint                                          to
transfer the said stock on the books of the within named corporation with full
power of substitution in the premises.

 

This Stock Assignment may be used only in accordance
with the Restricted Stock Award Agreement between ALTRA HOLDINGS, INC. and                 dated                 ,
2005.

 

 

	
  Dated:                           ,
  2005

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name]

  

 

 

INSTRUCTIONS:  Please do not fill in the blanks other than
the signature line.  The purpose of this
assignment is to enable the Company to enforce the Forfeiture Restriction as
set forth in the Agreement, without requiring additional signatures on the part
of the Participant.

 

 

EXHIBIT
B

 

JOINT
ESCROW INSTRUCTIONS

 

January 6, 2005

 

Secretary

Altra Holdings, Inc.

c/o Genstar Capital Partners III, L.P.

Four Embarcadero Center

Suite 1900

San Francisco, CA  94111-4191

Attention:  Jean-Pierre L. Conte

Telecopy No.: (415) 834-2383

 

Ladies and Gentlemen:

 

As escrow agent (the “Escrow Agent”) for both Altra
Holdings, Inc., a Delaware corporation (the “Company”), and the
undersigned recipient of stock of the Company (the “Participant”), you
are hereby authorized and directed to hold the documents delivered to you
pursuant to the terms of that certain Restricted Stock Award Agreement (“Agreement”)
between the Company and the undersigned (the “Escrow”), in accordance
with the following instructions:

 

1.                                       In
the event of forfeiture by the Participant of any of the shares owned by the
Participant pursuant to the Forfeiture Restriction set forth in the Agreement,
the Company and/or any assignee of the Company (referred to collectively for
convenience herein as the “Company”) shall give to the Participant and
you a written notice specifying the number of shares of stock forfeited and the
date of forfeiture.  The Participant and
the Company hereby irrevocably authorize and direct you to effect the
forfeiture contemplated by such notice in accordance with the terms of said
notice.

 

2.                                       As
of the date of forfeiture indicated in such notice, you are directed
(a) to date the stock assignments necessary for the forfeiture and
transfer in question, (b) to fill in the number of shares being forfeited
and transferred, and (c) to deliver the same, together with the
certificate evidencing the shares of stock to be forfeited and transferred, to
the Company or its assignee.

 

3.                                       The
Participant irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.  The Participant does hereby irrevocably constitute
and appoint you as the Participant’s attorney-in-fact and agent for the term of
this escrow to execute with respect to such securities all documents necessary
or appropriate to make such securities negotiable and to complete any
transaction herein contemplated, including but not limited to the filing with
any applicable state blue sky authority of any required applications for
consent to, or notice of transfer of, the securities.  Subject to the provisions of this
paragraph 3, the Participant shall exercise all rights and privileges of a
stockholder of the Company while the stock is held by you.

 

 

4.                                       Upon
written request of the Participant, but no more than once per calendar year,
unless the Forfeiture Restriction has been enforced, you will deliver to the
Participant a certificate or certificates representing so many shares of stock
as are not then subject to the Forfeiture Restriction.  Within one hundred twenty (120) days after
any voluntary or involuntary termination of the Participant’s services to the
Company for any or no reason, you will deliver to the Participant a certificate
or certificates representing the aggregate number of shares held or issued
pursuant to the Agreement and not forfeited pursuant to the Forfeiture
Restriction set forth in Section 3 of the Agreement.

 

5.                                       If
at the time of termination of this escrow you should have in your possession
any documents, securities, or other property belonging to the Participant, you
shall deliver all of the same to the Participant and shall be discharged of all
further obligations hereunder.

 

6.                                       Your
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.

 

7.                                       You
shall be obligated only for the performance of such duties as are specifically
set forth herein and may rely and shall be protected in relying or refraining
from acting on any instrument reasonably believed by you to be genuine and to
have been signed or presented by the proper party or parties.  You shall not be personally liable for any
act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact
for the Participant while acting in good faith, and any act done or omitted by
you pursuant to the advice of your own attorneys shall be conclusive evidence
of such good faith.

 

8.                                       You
are hereby expressly authorized to disregard any and all warnings given by any of
the parties hereto or by any other person or corporation, excepting only orders
or process of courts of law and are hereby expressly authorized to comply with
and obey orders, judgments or decrees of any court.  In case you obey or comply with any such
order, judgment or decree, you shall not be liable to any of the parties hereto
or to any other person, firm or corporation by reason of such compliance, notwithstanding
any such order, judgment or decree being subsequently reversed, modified,
annulled, set aside, vacated or found to have been entered without
jurisdiction.

 

9.                                       You
shall not be liable in any respect on account of the identity, authorities or
rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder.

 

10.                                 You
shall not be liable for the expiration of any rights under any applicable
state, federal or local statute of limitations or similar statute or regulation
with respect to these Joint Escrow Instructions or any documents deposited with
you.

 

11.                                 You
shall be entitled to employ such legal counsel and other experts as you may
deem necessary properly to advise you in connection with your obligations
hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor.

 

3

 

12.                                 Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease
to be an officer or agent of the Company or if you shall resign by written
notice to each party.  In the event of
any such termination, the Company shall appoint a successor Escrow Agent.

 

13.                                 If
you reasonably require other or further instruments in connection with these
Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

 

14.                                 It
is understood and agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the securities held by you
hereunder, you are authorized and directed to retain in your possession without
liability to anyone all or any part of said securities until such disputes
shall have been settled either by mutual written agreement of the parties
concerned or by a final order, decree or judgment of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but you shall be under no duty whatsoever to institute or defend any
such proceedings.

 

15.                                 Any
notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally or sent by facsimile transmission,
overnight air courier, or first class certified or registered mail, postage
prepaid, and addressed to the parties at the addresses of the parties set forth
at the end of these Joint Escrow Instructions or such other address as a party
may designate by five (5) days’ advance written notice to the other parties
hereto.  All notices and communications
shall be deemed to have been received unless otherwise set forth herein:  (i) in the case of personal delivery, on
the date of such delivery; (ii) in the case of facsimile transmission, on
the date on which the sender receives electronic confirmation that such notice
was received by the addressee; (iii) in the case of overnight air courier,
on the second business day following the day sent, with receipt confirmed by
the courier; and (iv) in the case of mailing by first class certified or
registered mail, postage prepaid, return receipt requested, on the fifth
business day following such mailing.

 

16.                                 By
signing these Joint Escrow Instructions, you become a party hereto only for the
purpose of said Joint Escrow Instructions; you do not become a party to the
Agreement.

 

17.                                 This
instrument shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and permitted assigns.

 

18.                                 These
Joint Escrow Instructions shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, excluding that body of law
pertaining to conflicts of law.

 

(Signature Page
Follows)

 

4

 

IN WITNESS WHEREOF, the parties have executed these
Joint Escrow Instructions as of the date first written above.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  ALTRA HOLDINGS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  Altra Holdings,
  Inc.

  
	
   

  	
   

  	
  14 Hayward
  Street

  
	
   

  	
   

  	
  Quincy, MA 02171

  
	
   

  	
   

  	
  Attention:
  Michael L. Hurt

  
	
   

  	
   

  	
  Telecopy No.:
  (617) 689-6202

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  ESCROW AGENT:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:
  Secretary, Altra Holdings, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Altra Holdings,
  Inc.

  	
   

  
	
   

  	
  14 Hayward
  Street

  	
   

  
	
   

  	
  Quincy, MA 02171

  	
   

  
	
   

  	
  Attention:
  Michael L. Hurt

  	
   

  
	
   

  	
  Telecopy No.:
  (617) 689-6202

  	
   

  
								

 

 

5

 

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL
REVENUE CODE OF 1986

 

The undersigned taxpayer hereby elects, pursuant to
the above-referenced Federal Tax Code, to include in taxpayer’s gross income
for the current taxable year, the amount of any compensation taxable to
taxpayer in connection with his receipt of the property described below

 

1.                                       The
name, address, taxpayer identification number and taxable year of the undersigned
are as follows:

 

	
  NAME: TAXPAYER: [Name]

  	
  SPOUSE:

  	
   

  	
   

  
	
   

  
	
  ADDRESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  IDENTIFICATION NO.:

  	
   

  	
   

  	
  SPOUSE:

  	
   

  	
   

  
	
   

  
	
  TAXABLE YEAR: 2005

  
										

 

2.                                       The
property with respect to which the election is made is described as follows:                          (the
“Shares”) of the Common Stock of Altra Holdings, Inc.  (the “Company”).

 

3.                                       The
date on which the property was transferred is:                        .

 

4.                                       The
property is subject to the following restrictions:

 

The Shares may be repurchased by the Company, or its assignee, on
certain events.  This right lapses with
regard to a portion of the Shares over time.

 

5.                                       The
fair market value at the time of transfer, determined without regard to any
restriction other than a restriction which by its terms will never lapse, of
such property is approximately:                 .

 

6.                                       The
amount (if any) paid for such property is: 
$                   per
share.

 

The undersigned has submitted a copy of this statement
to the person for whom the services were performed in connection with the
undersigned’s receipt of the above-described property.  The transferee of such property is the person
performing the services in connection with the transfer of said property.

 

The undersigned
understands that the foregoing election may not be revoked except with the
consent of the Commissioner.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Taxpayer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]