Document:

<PAGE>

                                                                   EXHIBIT 10.5

                         MANAGEMENT 2002 OPTION PROGRAM

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----
<S>                                                                                                        <C>
SECTION 1      GENERAL...................................................................................    2

     1.1.  Purpose.......................................................................................    2
     1.2.  Participation.................................................................................    2

SECTION 2      OPTIONS...................................................................................    3

     2.1.  Definitions...................................................................................    3
     2.2.  Eligibility...................................................................................    3
     2.3.  Price.........................................................................................    3
     2.4.  Exercise......................................................................................    4
     2.5.  Post-Exercise Limitations.....................................................................    5
     2.6.  Expiration Date...............................................................................    5
     2.7.  Stock Certificates............................................................................    5

SECTION 3      OPERATION AND ADMINISTRATION..............................................................    5

     3.1.  Effective Date................................................................................    5
     3.2.  Shares Subject to Plan........................................................................    5
     3.3.  Adjustments to Shares.........................................................................    6
     3.4.  Limit on Distribution.........................................................................    8
     3.5.  Withholding...................................................................................    8
     3.6.  Transferability...............................................................................    8
     3.7.  Notices.......................................................................................    9
     3.8.  Form and Time of Elections....................................................................    9
     3.9.  Agreement With Company........................................................................    9
     3.10. Limitation of Implied Rights..................................................................    9
     3.11. Evidence......................................................................................   10
     3.12. Action by Company or Related Company..........................................................   10
     3.13. Gender and Number.............................................................................   10
     3.14. Applicable Law................................................................................   10

SECTION 4      COMMITTEE.................................................................................   10

     4.1.  Administration................................................................................   10
     4.2.  Selection of Committee........................................................................   10
     4.3.  Powers of Committee...........................................................................   10
     4.4.  Delegation by Committee.......................................................................   11
     4.5.  Information to be Furnished to Committee......................................................   11
     4.6.  Liability and Indemnification of Committee....................................................   11

SECTION 5      AMENDMENT AND TERMINATION.................................................................   12
</TABLE>

                                       -i-

<PAGE>

                          UTI MANAGEMENT OPTION PROGRAM

                                    SECTION 1

                                     GENERAL

         1.1. Purpose. The UTI Management Option Program (the "Plan") has been
established by Universal Technical Institute, Inc. (the "Company") to:

         (a)      attract and retain employees and other persons providing
                  services to the Company and the Related Companies (as defined
                  below);

         (b)      motivate Participants (as defined in subsection 1.2), by means
                  of appropriate incentives, to achieve long-range goals;

         (c)      provide incentive compensation opportunities that are
                  competitive with those of other corporations; and

         (d)      further identify Participants' interests with those of the
                  Company's other stockholders through compensation that is
                  based on the value of the Company's common shares;

and thereby promote the long-term financial interest of the Company and the
Related Companies, including the growth in value of the Company's equity and
enhancement of long-term stockholder return. The term "Related Company" means
any company during any period in which it is a "subsidiary corporation" (as that
term is defined in section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code")), with respect to the Company or any affiliate of the
Company which is designated as a Related Company by the Committee.

         1.2. Participation. Subject to the terms and conditions of the Plan,
the Committee (as described in Section 4) shall determine and designate, from
time to time, from among the Eligible Individuals (as defined below), those
persons who will be granted one or more awards under Section 2 of the Plan (an
"Award"), and thereby become "Participants" in the Plan. In the discretion of
the Committee, and subject to the terms of the Plan, a Participant may be
granted any Award permitted under the provisions of the Plan, and more than one
Award may be granted to a Participant. Except as otherwise agreed by the Company
and the Participant, or except as otherwise provided in the Plan, an Award under
the Plan shall not affect any previous Award under the Plan or an award under
any other plan maintained by the Company or the Related Companies. For purposes
of the Plan, the term "Eligible Individual" shall mean any employee of the
Company or a Related Company or other person providing services thereto;
provided, however, that a member of the Board of Directors of the Company (the
"Board") who is not an employee of the Company or a Related Company shall not be
an "Eligible Individual".

<PAGE>

                                    SECTION 2

                                     OPTIONS

         2.1. Definitions. The grant of an "Option" under this Section 2
entitles the Participant to purchase shares of common stock of the Company
("Shares") at a price fixed at the time the Option is granted, subject to the
terms of this Section. Options granted under this Section may be either
Incentive Stock Options or Non-Qualified Stock Options, as determined in the
discretion of the Committee. An "Incentive Stock Option" is an Option that is
intended to satisfy the requirements applicable to an "incentive stock option"
described in section 422 of the Code. A "Non-Qualified Stock Option" is an
Option that is not intended to be an Incentive Stock Option.

         2.2. Eligibility. The Committee shall designate the Participants to
whom Options or Shares are to be granted under this Section and shall determine
the number of Shares subject to each such Option. If the Committee grants
Incentive Stock Options, to the extent that the aggregate fair market value of
Shares with respect to which Incentive Stock Options are exercisable for the
first time by any individual during any calendar year (under all plans of the
Company and all related companies within the meaning of section 424(f) of the
Code) exceeds $100,000, such options shall be treated as Non-Qualified Stock
Options, to the extent required by section 422 of the Code.

         2.3. Price. The determination and payment of the purchase price of a
Share under each Option granted under this Section shall be subject to the
following:

         (a)      The purchase price shall be established by the Committee at
                  the time the Option is granted; provided, however, that in no
                  event shall such price be less than the par value of a Share.

         (b)      Subject to the following provisions of this subsection, the
                  full purchase price of each Share purchased upon the exercise
                  of any Option shall be paid at the time of such exercise (or
                  such later date as may be permitted by the Committee in the
                  case of a cashless exercise) and, as soon as practicable
                  thereafter (subject to an election under subsection 2.4), a
                  certificate representing the Shares so purchased shall be
                  delivered to the person entitled thereto.

         (c)      The purchase price shall be payable in cash or by tendering
                  Shares by actual delivery or attestation (valued at Fair
                  Market Value as of the day of exercise) that have been held by
                  the Participant at least six months, or in any combination
                  thereof, as determined by the Committee.

         (d)      The "Fair Market Value" of a Share as of any date shall be
                  determined in accordance with the following rules:

                  (i)      If the Shares are at the time listed or admitted to
                           trading on any stock exchange, then the Fair Market
                           Value shall be the closing price per Share on such
                           date on the principal exchange on which the Shares
                           are then listed

                                       2

<PAGE>

                           or admitted to trading or, if no such sale is
                           reported on that date, on the last preceding date on
                           which a sale was so reported.

                  (ii)     If the Shares are not at the time listed or admitted
                           to trading on a stock exchange, the Fair Market Value
                           shall be the average of the closing reported bid and
                           asked prices regular way of the Shares on the date in
                           question in the over-the-counter market, as such
                           prices are reported in a publication of general
                           circulation selected by the Committee and regularly
                           reporting the market price of Shares in such market.

                  (iii)    If the Shares are not listed or admitted to trading
                           on any stock exchange or traded in the
                           over-the-counter market, the Fair Market Value shall
                           be as determined by the Committee in good faith.

                  (iv)     For purposes of determining the Fair Market Value of
                           Shares that are sold pursuant to a cashless exercise
                           program, if applicable, Fair Market Value shall be
                           the price at which such Shares are sold.

         2.4. Exercise. Except as otherwise expressly provided in the Plan, an
Option granted under this Section shall be exercisable in accordance with the
following terms of this subsection:

         (a)      The terms and conditions relating to exercise of an Option
                  shall be established by the Committee, and may include,
                  without limitation, conditions relating to completion of a
                  specified period of service (subject to paragraph (b) below),
                  achievement of performance standards prior to exercise of the
                  Option or the achievement of Share ownership objectives by the
                  Participant. The Committee, in its sole discretion, may
                  accelerate the vesting of any Option under circumstances
                  designated by it at the time the Option is granted or
                  thereafter.

         (b)      No Option may be exercised by a Participant after the
                  Expiration Date (as defined in subsection 2.6) applicable to
                  that Option.

         (c)      Prior to the date the Shares would otherwise be transferred
                  pursuant to the exercise of an Option, to the extent permitted
                  by the Committee, a Participant may irrevocably elect to defer
                  receipt of such Shares until the last date of a later calendar
                  year, but in no event later than the Participant's Date of
                  Termination (as defined in subsection 2.6).

         2.5. Post-Exercise Limitations. The Committee, in its discretion, may
impose such restrictions on Shares acquired pursuant to the exercise of an
Option or Shares granted under this Section as it determines to be desirable,
including, without limitation, a requirement that the Participant and any
transferee thereof execute and become party to the Company's Stockholders
Agreement (as defined in Section 7.1 hereof) and restrictions relating to
disposition of the Shares and forfeiture restrictions based on service,
performance, share ownership by the Participant and such other factors as the
Committee determines to be appropriate.

         2.6. Expiration Date. The "Expiration Date" with respect to an Option
means the date established as the Expiration Date by the Committee at the time
of the grant; provided, however,

                                       3

<PAGE>

that unless determined otherwise by the Committee, the Expiration Date with
respect to any Option shall not be later than the earliest to occur of:

         (a)      the ten-year anniversary of the date on which the Option is
                  granted; or

         (b)      the Participant's Date of Termination.

For purposes of the Plan, a Participant's "Date of Termination" shall be the
date on which he both ceases to be an employee of the Company and the Related
Companies and ceases to perform material services for the Company and the
Related Companies, regardless of the reason for the cessation; provided, that a
"Date of Termination" shall not be considered to have occurred during the period
in which the reason for the cessation of services is a leave of absence approved
by the Company or the Related Company which was the recipient of the
Participant's services.

         2.7. Stock Certificates. Shares to be granted under this Section shall
be evidenced by stock certificates, provided that the Committee may provide by
resolution that some or all of the Shares be uncertificated shares.

                                    SECTION 3

                          OPERATION AND ADMINISTRATION

         3.1. Effective Date. The Plan shall be effective as of the date it is
approved by the Board, subject to the approval of the Company's stockholders.
The Plan shall be unlimited in duration and, in the event of Plan termination,
shall remain in effect as long as any Awards awarded under it are outstanding
and not fully vested; provided, however, that no new Awards shall be made under
the Plan on or after the tenth anniversary of the date on which the Plan is
adopted by the Board.

         3.2. Shares Subject to Plan. The Shares with respect to which Awards
may be made under the Plan shall be shares currently authorized but unissued or
currently held or subsequently acquired by the Company as treasury shares,
including shares purchased in the open market or in private transactions.
Subject to the provisions of subsection 3.3, the number of Shares which may be
issued with respect to Awards under the Company's Management 1999 Option Program
and Awards under the Plan shall not exceed [279.49936] Shares in the aggregate.
Except as otherwise provided herein, any Shares subject to an Award which for
any reason expires or is terminated without issuance of Shares (including Shares
that are not issued because Shares are tendered pursuant to subsection 2.3(c) or
3.5) shall again be available under the Plan.

         3.3. Adjustments to Shares.

         (a)      If the Company shall effect any subdivision or consolidation
                  of Shares or other capital readjustment, payment of stock
                  dividend, stock split, combination of shares or
                  recapitalization or other increase or reduction of the number
                  of Shares outstanding without receiving compensation therefor
                  in money, services or property, then the Committee shall
                  equitably adjust (i) the number of Shares available under the
                  Plan; (ii) the number of shares available under any individual
                  or other limits; (iii) the number of Shares subject to
                  outstanding Awards; and (iv)

                                       4

<PAGE>

                  the per-share price under any outstanding Award to the extent
                  that the Participant is required to pay a purchase price per
                  Share with respect to the Award.

         (b)      If the Company is reorganized, merged or consolidated or is
                  party to a plan of exchange with another corporation, pursuant
                  to which reorganization, merger, consolidation or plan of
                  exchange, the stockholders of the Company receive any shares
                  of stock or other securities or property, or the Company shall
                  distribute securities of another corporation to its
                  stockholders, there shall be substituted for the Shares
                  subject to outstanding Awards an appropriate number of shares
                  of each class of stock or amount of other securities or
                  property which were distributed to the stockholders of the
                  Company in respect of such Shares, subject to the following:

                  (i)      If the Committee determines that the substitution
                           described in accordance with the foregoing provisions
                           of this paragraph would not be fully consistent with
                           the purposes of the Plan or the purposes of the
                           outstanding Awards under the Plan, the Committee may
                           make such other adjustments to the Awards to the
                           extent that the Committee determines such adjustments
                           are consistent with the purposes of the Plan and of
                           the affected Awards.

                  (ii)     All or any of the Awards may be cancelled by the
                           Committee on or immediately prior to the effective
                           date of the applicable transaction, but only if the
                           Committee gives reasonable advance notice of the
                           cancellation to each affected Participant, and only
                           if either: (A) the Participant is permitted to
                           exercise all Awards that will be cancelled (without
                           regard to whether such Awards would otherwise be
                           exercisable) for a reasonable period prior to the
                           effective date of the cancellation; or (B) the
                           Participant receives payment or other benefits that
                           the Committee determines to be reasonable
                           compensation for the value of all cancelled Awards
                           (without regard to whether such Awards would
                           otherwise be vested).

                  (iii)    Upon the occurrence of a reorganization of the
                           Company or any other event described in this
                           paragraph (b), any successor to the Company shall be
                           substituted for the Company to the extent that the
                           Company and the successor agree to such substitution.

         (c)      Upon (or, in the discretion of the Committee, immediately
                  prior to) the sale to (or exchange with) a third party
                  unrelated to the Company of all or substantially all of the
                  assets of the Company, all Awards shall be cancelled. If
                  Awards are cancelled under this paragraph, then, with respect
                  to any affected Participant, either:

                  (i)      the Participant shall be provided with reasonable
                           advance notice of the cancellation, and the
                           Participant shall be permitted to exercise all Awards
                           that will be cancelled (without regard to whether
                           such Awards would otherwise be exercisable) for a
                           reasonable period prior to the effective date of the
                           cancellation; or

                                       5

<PAGE>

                  (ii)     the Participant shall receive payment or other
                           benefits that the Committee determines to be
                           reasonable compensation for the value of all
                           cancelled Awards (without regard to whether such
                           cancelled Awards would otherwise be vested).

                  The foregoing provisions of this paragraph shall also apply to
                  the sale of all or substantially all of the assets of the
                  Company to a related party, if the Committee determines such
                  application is appropriate. Notwithstanding the foregoing
                  provisions of this paragraph (c), in lieu of cancellation of
                  outstanding Awards, the Committee and the purchaser of all or
                  substantially all of the Company's assets may provide that an
                  appropriate number of shares or securities of the purchaser or
                  its affiliates shall be substituted for Shares with respect to
                  outstanding Awards under the Plan, provided that such
                  substituted awards shall be comparable in value and contain
                  terms and conditions similar to the Awards.

         (d)      In determining what action, if any, is necessary or
                  appropriate under the foregoing provisions of this subsection,
                  the Committee shall act in a manner that it determines to be
                  consistent with the purposes of the Plan and of the affected
                  Awards and, where applicable or otherwise appropriate, in a
                  manner that it determines to be necessary to preserve the
                  benefits and potential benefits of the affected Awards for the
                  Participants and the Company.

         (e)      The existence of this Plan and the Awards granted hereunder
                  shall not affect in any way the right or power of the Company
                  or its stockholders to make or authorize any or all
                  adjustments, recapitalizations, reorganizations or other
                  changes in the Company's capital structure or its business,
                  any merger or consolidation of the Company, any issue of
                  bonds, debentures, preferred or prior preference stocks ahead
                  of or affecting the Company's Shares or the rights thereof,
                  the dissolution or liquidation of the Company, any sale or
                  transfer of all or any part of its assets or business, or any
                  other corporate act or proceeding, whether of a similar
                  character or otherwise.

         (f)      Except as expressly provided by the terms of this Plan, the
                  issue by the Company of shares of stock of any class, or
                  securities convertible into shares of stock of any class, for
                  cash or property or for labor or services, either upon direct
                  sale, upon the exercise of rights or warrants to subscribe
                  therefor or upon conversion of shares or obligations of the
                  Company convertible into such shares or other securities,
                  shall not affect, and no adjustment by reason thereof, shall
                  be made with respect to Awards then outstanding hereunder.

         (g)      Awards under the Plan are subject to adjustment under this
                  subsection only during the period in which they are considered
                  to be outstanding under the Plan. For purposes of this
                  subsection, an Award is considered "outstanding" on any date
                  if the Participant's ability to obtain all benefits with
                  respect to the Award is subject to limits imposed by the Plan
                  (including any limits imposed by the Agreement reflecting the
                  Award). The determination of whether an Award is outstanding
                  shall be made by the Committee.

                                       6

<PAGE>

         3.4. Limit on Distribution. Distribution of Shares or other amounts
under the Plan shall be subject to the following:

         (a)      Notwithstanding any other provision of the Plan, the Company
                  shall have no liability to deliver any Shares under the Plan
                  or make any other distribution of benefits under the Plan
                  unless such delivery or distribution would comply with all
                  applicable laws.

         (b)      To the extent that the Plan provides for issuance of
                  certificates to reflect the transfer of Shares, the transfer
                  of such Shares may be effected on a non-certificated basis.

         3.5. Withholding. All Awards and other payments under the Plan are
subject to withholding of all applicable taxes, which withholding obligations
may be satisfied, with the consent of the Committee, through the surrender of
Shares which the Participant already owns or to which a Participant is otherwise
entitled under the Plan; provided, however, except to the extent permitted by
the Committee, previously-owned Shares that have been held by the Participant
less than six months or Shares to which the Participant is entitled under the
Plan may only be used to satisfy the minimum tax withholding required by
applicable law.

         3.6. Transferability. Awards under the Plan are not transferable except
as designated by the Participant by will or by the laws of descent and
distribution. To the extent that the Participant who receives an Award under the
Plan has the right to exercise such Award, the Award may be exercised during the
lifetime of the Participant only by the Participant. Notwithstanding the
foregoing provisions of this subsection, Awards under the Plan may be
transferred to or for the benefit of the Participant's family, subject to such
procedures as the Committee may establish. In no event shall an Incentive Stock
Option be transferable to the extent that such transferability would violate the
requirements applicable to such option under Code section 422.

         3.7. Notices. Any notice or document required to be filed with the
Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Committee, in care of the Company, at
its principal executive offices. The Committee may, by advance written notice to
affected persons, revise such notice procedure from time to time. Any notice
required under the Plan (other than a notice of election) may be waived by the
person entitled to notice.

         3.8. Form and Time of Elections. Unless otherwise specified herein,
each election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.

         3.9. Agreement With Company. At the time of an Award to a Participant
under the Plan, the Committee may require a Participant to enter into an
agreement with the Company (the "Agreement") in a form specified by the
Committee, agreeing to the terms and conditions of the

                                       7

<PAGE>

Plan and to such additional terms and conditions, not inconsistent with the
Plan, as the Committee may, in its sole discretion, prescribe.

         3.10. Limitation of Implied Rights.

         (a)      Neither a Participant nor any other person shall, by reason of
                  the Plan, acquire any right in or title to any assets, funds
                  or property of the Company or any Related Company whatsoever,
                  including, without limitation, any specific funds, assets, or
                  other property which the Company or any Related Company, in
                  its sole discretion, may set aside in anticipation of a
                  liability under the Plan. A Participant shall have only a
                  contractual right to the amounts, if any, payable under the
                  Plan, unsecured by any assets of the Company and any Related
                  Company. Nothing contained in the Plan shall constitute a
                  guarantee by the Company or any Related Company that the
                  assets of such companies shall be sufficient to pay any
                  benefits to any person.

         (b)      The Plan does not constitute a contract of employment, and
                  selection as a Participant will not give any employee the
                  right to be retained in the employ of the Company or any
                  Related Company, nor any right or claim to any benefit under
                  the Plan, unless such right or claim has specifically accrued
                  under the terms of the Plan. Except as otherwise provided in
                  the Plan, no Award under the Plan shall confer upon the holder
                  thereof any right as a stockholder of the Company prior to the
                  date on which he fulfills all service requirements and other
                  conditions for receipt of such rights and Shares are
                  registered in his name.

         3.11. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

         3.12. Action by Company or Related Company. Any action required or
permitted to be taken by the Company or any Related Company shall be by
resolution of its board of directors or trustees, as applicable, or by action of
one or more members of the board (including a committee of the board) who are
duly authorized to act for the board or (except to the extent prohibited by
applicable law or the rules of any stock exchange) by a duly authorized officer
of the Company.

         3.13. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.

                                    SECTION 4

                                    COMMITTEE

         4.1. Administration. The authority to control and manage the operation
and administration of the Plan shall be vested in the Compensation Committee of
the Board (the "Committee") in accordance with this Section 4.

                                       8

<PAGE>

         4.2. Selection of Committee. The Committee shall be selected by the
Board and shall consist of not fewer than two members of the Board, none of whom
shall be eligible to receive Awards under the Plan.

         4.3. Powers of Committee. The authority to manage and control the
operation and administration of the Plan shall be vested in the Committee,
subject to the following:

         (a)      Subject to the provisions of the Plan, the Committee will have
                  the authority and discretion to select individuals to receive
                  Awards, to determine the time or times of receipt, to
                  determine the types of Awards and the number of Shares covered
                  by the Awards, to establish the terms, conditions, performance
                  criteria, restrictions, and other provisions of such Awards,
                  and to cancel or suspend Awards. In making such Award
                  determinations, the Committee may take into account the nature
                  of services rendered by the respective employee, the
                  individual's present and potential contribution to the
                  Company's success and such other factors as the Committee
                  deems relevant.

         (b)      The Committee will have the authority and discretion to
                  interpret the Plan, to establish, amend and rescind any rules
                  and regulations relating to the Plan, to determine the terms
                  and provisions of any agreements made pursuant to the Plan and
                  to make all other determinations that may be necessary or
                  advisable for the administration of the Plan.

         (c)      Any interpretation of the Plan by the Committee and any
                  decision made by it under the Plan is final and binding on all
                  persons.

         (d)      Except as otherwise expressly provided in the Plan, where the
                  Committee is authorized to make a determination with respect
                  to any Award, such determination shall be made at the time the
                  Award is made, except that the Committee may reserve the
                  authority to have such determination made by the Committee in
                  the future (but only if such reservation is made at the time
                  the Award is granted and is expressly stated in the Agreement
                  reflecting the Award).

         4.4. Delegation by Committee. The Committee may allocate all or any
portion of its responsibilities and powers to any one or more of its members and
may delegate all or any part of its responsibilities and powers to any person or
persons selected by it. Any such allocation or delegation may be revoked by the
Committee at any time.

         4.5. Information to be Furnished to Committee. The Company and Related
Companies shall furnish the Committee such data and information as may be
required for it to discharge its duties. The records of the Company and Related
Companies as to an employee's or Participant's employment (or other provision of
services), termination of employment (or cessation of the provision of
services), leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
data or information as the Committee considers desirable to carry out the terms
of the Plan.

                                       9

<PAGE>

         4.6. Liability and Indemnification of Committee. No member or
authorized delegate of the Committee shall be liable to any person for any
action taken or omitted in connection with the administration of the Plan unless
attributable to his own fraud or willful misconduct; nor shall the Company or
any Related Company be liable to any person for any such action unless
attributable to fraud or willful misconduct on the part of a Director or
employee of the Company or Related Company. The Committee, the individual
members thereof, and persons acting as the authorized delegates of the Committee
under the Plan, shall be indemnified by the Company against any and all
liabilities, losses, costs and expenses (including legal fees and expenses) of
whatsoever kind and nature which may be imposed on, incurred by or asserted
against the Committee or its members or authorized delegates by reason of the
performance of a Committee function if the Committee or its members or
authorized delegates did not act dishonestly or in willful violation of the law
or regulation under which such liability, loss, cost or expense arises. This
indemnification shall not duplicate but may supplement any coverage available
under any applicable insurance.

                                    SECTION 5

                            AMENDMENT AND TERMINATION

         Subject to obtaining such approvals as may be required under the Code
or Delaware corporate law, the Board may, at any time, amend or terminate the
Plan; provided, that subject to subsection 3.3 (relating to certain adjustments
to shares), no amendment or termination may materially adversely affect the
rights of any Participant or beneficiary under any Award made under the Plan
prior to the date such amendment is adopted by the Board.

                                    SECTION 6

                                  DEFINED TERMS

         6.1. In addition to the other definitions contained herein, the
following definitions shall apply:

         (a)      "Cause" means any of the following:

                  (i)      Participant's conviction of, or plea of guilty or
                           nolo contendere to, a serious felony or a crime
                           involving embezzlement, conversion of property or
                           moral turpitude;

                  (ii)     a finding by a majority of the Board of Directors of
                           Participant's fraud, embezzlement or conversion of
                           property;

                  (iii)    Participant's conviction of, or plea of guilty or
                           nolo contendere to, a crime involving the
                           acquisition, use or expenditure of federal, state or
                           local government funds;

                  (iv)     an administrative or judicial determination that
                           Participant committed fraud or any other violation of
                           law involving federal, state or local government
                           funds;

                                       10

<PAGE>

                  (v)      a finding by a majority of the Board of Participant's
                           knowing breach of any of his fiduciary duties to the
                           Company or any Related Company or the Company's
                           stockholders or making of a misrepresentation or
                           omission which breach, misrepresentation or omission
                           would reasonably be expected to materially adversely
                           affect the business, properties, assets, condition
                           (financial or other) or prospects of the Company or
                           any Related Company; provided, that the Participant
                           has been given notice and 30 days from such notice
                           fails to cure the breach, misrepresentation or
                           omission;

                  (vi)     Participant's willful and continual neglect or
                           failure to discharge his material duties,
                           responsibilities or obligations prescribed by this
                           Agreement or any other agreement between the
                           Participant and the Company or any Related Company;
                           provided, that the Participant has been given notice
                           and 30 days from such notice fails to cure the
                           neglect or failure;

                  (vii)    Participant's alcohol or substance abuse, which
                           materially interferes with Participant's ability to
                           discharge his duties, responsibilities and
                           obligations of employment (as prescribed by
                           Participant's employment agreement with the Company
                           or otherwise); provided, that Participant has been
                           given notice and 30 days from such notice fails to
                           cure such abuse;

                  (viii)   Any material violation, with the actual knowledge of
                           Participant, of any obligations imposed upon
                           Participant, personally, as opposed to upon the
                           Company, whether as a stockholder or otherwise, under
                           any material agreement or instrument relating to the
                           Company or any Related Company, or the Certificate of
                           Incorporation or By-Laws of the Company; provided,
                           that the Participant has been given notice and 30
                           days from such notice fails to cure the violation; or

                  (ix)     Participant's personal (as opposed to the Company's)
                           material and knowing failure, to observe or comply
                           with Regulations whether as an officer, stockholder
                           or otherwise, in any material respect or in any
                           manner which would reasonably be expected to have a
                           material adverse effect in respect of the Company's
                           or any Related Company's ongoing business,
                           operations, conditions, other business relationships
                           or properties; provided, that the Participant has
                           been given notice and 30 days from such notice fails
                           to cure the failure. For purposes of this paragraph,
                           "Regulations" means any laws, statutes, regulations,
                           rulings, rules, orders or permits of, administered or
                           enforced by or on behalf of any Authority, and the
                           Certificate of Incorporation and By-laws of the
                           Company, as applicable and "Authority" means any
                           governmental, regulatory or administrative body,
                           agency or authority, any court or judicial authority,
                           any public, private or industry regulatory authority,
                           whether national, Federal, state or local or
                           otherwise, or any Person lawfully empowered by any of
                           the foregoing to enforce or seek compliance with any
                           applicable law, statute, regulation, order or decree.

                                       11

<PAGE>

         6.2. "Disability" means due to physical or mental disability the
Executive is unable to perform, and does not perform, as certified by a mutually
agreeable competent medical physician, his material duties hereunder for 180
days in any continuous 210 day period. The final determination of Disability
shall be made in the reasonable judgment of the Board of Directors. In the event
of any inconsistency between the definition of disability herein and the
definition of such term in any employment agreement between the Participant and
the Company then in effect, the definition of such term in such employment
agreement shall control for purposes of the Plan.

         6.3. "Material Breach" means:

         (a)      Participant's breach of any of such Participant's fiduciary
                  duties to the Company, its subsidiaries or its stockholders or
                  making of a willful misrepresentation or omission which
                  breach, misrepresentation or omission would reasonably be
                  expected to materially adversely affect the business,
                  properties, assets, condition (financial or other) or
                  prospects of the Company or its subsidiaries;

         (b)      Participant's willful, continual and material neglect or
                  failure to discharge such Participant's duties,
                  responsibilities or obligations prescribed by the Award or of
                  any other agreement between the Company or its subsidiaries or
                  by the Company (other than arising solely due to physical or
                  mental disability);

         (c)      Participant's habitual drunkenness or substance abuse which
                  materially interferes with such Participant's ability to
                  discharge such Participant's duties, responsibilities or
                  obligations prescribed by the Company or its subsidiaries;

         (d)      Participant's violation of any non-competition,
                  non-disparagement or confidentiality agreement with the
                  Company or its subsidiaries, or any other agreements with the
                  Company or its subsidiaries; and

         (e)      Participant's gross neglect of such Participant's duties and
                  responsibilities, as determined by the Company's Board of
                  Directors;

         in each case, for purposes of clauses (a) through (d), after the
Company or the Board of Directors has provided such Participant with 60 days'
written notice of such circumstances and the possibility of a Material Breach in
reasonable detail, and such Participant fails to cure such circumstances and
Material Breach within those 60 days. No act or omission shall be deemed gross
neglect if done, or omitted to be done, in good faith by such Participant based
upon a resolution duly adopted by the Company's Board of Directors.

         6.4. "Retirement" shall mean any voluntary termination of employment by
a Participant for any reason other than Death, Disability, Cause, Material
Breach or Unsatisfactory Performance after such Participant reaches age 65.

         6.5. "Unsatisfactory Performance" means a Participant's failure to
perform Participant's duties to the standards set by the Board of Directors
(such determination to be made in good faith by the Board of Directors);
provided, that Participant has been given notice and 30 days from such notice
fails to cure such unsatisfactory performance.

                                       12

<PAGE>

                                    SECTION 7

                             STOCKHOLDERS AGREEMENT

         7.1. Upon Participant's exercise of an Option in accordance with the
terms of this Plan, Participant agrees that he will execute and become a party
to the Company's Amended and Restated Stockholders Agreement, dated April 1,
2002, as amended, restated, supplemented or modified (the "Stockholders
Agreement") which will bind Participant beyond the period of time that he owns
any Shares or Options.

                                       13<PAGE>

                                                                   EXHIBIT 10.6

                       UNIVERSAL TECHNICAL INSTITUTE, INC.
                            2003 STOCK INCENTIVE PLAN

                                    ARTICLE 1
                                     PURPOSE

         1.1      GENERAL. The purpose of the Universal Technical Institute,
Inc. 2003 Stock Incentive Plan (the "Plan") is to promote the success and
enhance the value of Universal Technical Institute, Inc. (the "Company") by
linking the personal interests of its Board members, employees, officers, and
executives of, and consultants and advisors to, the Company to those of Company
shareholders and by providing such individuals with an incentive for outstanding
performance to generate superior returns to shareholders of the Company. The
Plan is also intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of Board members, employees,
officers, and executives of, and consultants and advisors to, the Company upon
whose judgment, interest, and special effort the successful conduct of the
Company's operation is largely dependent.

                                    ARTICLE 2
                                 EFFECTIVE DATE

         2.1      EFFECTIVE DATE. The Plan is effective as of the date the Plan
is approved by the Board (the "Effective Date"). The Plan must be approved by
the Company's shareholders within 12 months after the Effective Date. The Plan
will be considered approved by the Company's shareholders if it receives the
affirmative vote of the holders of a majority of the shares of Company's stock
present or represented and entitled to vote at a meeting duly held in accordance
with the Company's Bylaws or by written consent of a majority of the Company's
shareholders in lieu of a meeting. Any Awards granted under the Plan prior to
shareholder approval are effective when made (unless the Committee specifies
otherwise at the time of grant), but no Award may be exercised or settled and no
restrictions relating to any Award may lapse before the Plan is approved by the
Company's shareholders. If the Company's shareholders do not approve the Plan
within 12 months after the Effective Date, any Award previously made is
automatically canceled without any further act.

                                    ARTICLE 3
                                   DEFINITIONS

         3.1      DEFINITIONS. When a word or phrase appears in this Plan with
the initial letter capitalized, and the word or phrase does not begin a
sentence, the word or phrase will be given the meaning in this Section or in
Sections 1.1 or 2.1 unless otherwise indicated. The following words and phrases
will have the following meanings:

                  (a)      "AWARD" means any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share Award, Performance-Based Award, or IPO
Award granted to a Participant under the Plan.

                  (b)      "AWARD AGREEMENT" means any written agreement,
contract, or other instrument or document evidencing an Award.

<PAGE>

                  (c)      "BOARD" means the Board of Directors of the Company.

                  (d)      "CAUSE" means (except as otherwise provided in an
Award Agreement) if the Committee, in its reasonable and good faith discretion,
determines that the Participant (i) fails to substantially perform his duties
(other than as a result of Disability), after the Board or the individual to
whom the Participant reports delivers to the Participant a written demand for
substantial performance that specifically identifies the manner in which the
Participant has not substantially performed his or her duties; (ii) engages in
willful misconduct or gross negligence that is materially injurious to the
Company or a Subsidiary; (iii) breaches his or her duty of loyalty to the
Company or a Subsidiary; or (iv) commits a felony or a serious crime involving
moral turpitude.

                  Any rights the Company or any of its Subsidiaries has to
determine the existence of events giving rise to Cause are in addition to the
rights the Company or any of its Subsidiaries may have under any other agreement
with the Participant or at law or in equity. If, after a Participant's
termination of employment or services, the Company discovers that the
Participant's employment or services could have been terminated for Cause, the
Participant's employment or services will, in the Board's sole discretion, be
deemed to have been terminated for Cause retroactively to the date the events
giving rise to Cause occurred.

                  (e)      "CHANGE OF CONTROL" means: (i) any sale, lease,
exchange, or other transfer (in one transaction or series of related
transactions) of all or substantially all the Company's assets to any person or
group of related persons under Section 13(d) of the Exchange Act ("Group"); (ii)
the Company's shareholders approve and complete any plan or proposal for the
liquidation or dissolution of the Company; (iii) any person or Group becomes the
beneficial owner, directly or indirectly, of shares representing more than 25%
of the aggregate voting power of the issued and outstanding stock entitled to
vote in the election of directors of the Company ("Voting Stock") and such
person or Group has the power and authority to vote such shares; (iv) if a
majority of the individual Board members are replaced over a two-year period and
such replacement is not approved by a vote of majority of the Board then still
in office who either were members of such Board at the beginning of such
two-year period or were appointed by such Board members; (v) any person or Group
acquires sufficient shares of Voting Stock to elect a majority of the members of
the Board; or (vi) the completion of a merger or consolidation of the Company
with another entity in which holders of the Stock immediately before the
completion of the transaction hold, directly or indirectly, immediately after
the transaction, 50% or less of the common equity interest in the surviving
corporation in the transaction. Notwithstanding the foregoing, in no event will
a Change of Control be deemed to have occurred as a result of an initial public
offering of the Stock.

                  (f)      "CODE" means the Internal Revenue Code of 1986, as
amended.

                  (g)      "COMMITTEE" means the committee of the Board
described in Article 4.

                  (h)      "COVERED EMPLOYEE" means an Employee who is a
"covered employee" within the meaning of Section 162(m) of the Code.

                                       2
<PAGE>

                  (i)      "DISABILITY" means (unless otherwise defined in an
employment agreement between the Company or any of its Subsidiaries and the
Participant or in the Participant's Award Agreement) any illness or other
physical or mental condition of a Participant that renders the Participant
incapable of performing his customary and usual duties for the Company or
Subsidiary, or any medically determinable illness or other physical or mental
condition resulting from a bodily injury, disease or mental disorder, which in
the Committee's sole judgment is permanent and continuous in nature. The
Committee may require such medical or other evidence as it deems necessary to
judge the nature and permanency of the Participant's condition.

                  (j)      "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

                  (k)      "FAIR MARKET VALUE" means, as of any given date, the
fair market value of Stock on a particular date determined by such methods or
procedures established by the Committee. Unless otherwise determined by the
Committee the Fair Market Value of Stock as of any date is the closing price for
the Stock as reported on the New York Stock Exchange (or on any national
securities exchange on which the Stock is then listed) for that date or, if no
closing price is reported for that date, the closing price on the next preceding
date for which a closing price was reported. For purposes of IPO Awards and
Awards effective as of the effective date of the Company's initial public
offering, fair market value of Stock shall be the price at which the Company's
Stock is offered to the public in its initial public offering.

                  (l)      "INCENTIVE STOCK OPTION" means an Option that is
intended to meet the requirements of Section 422 of the Code or any successor
provision.

                  (m)      "IPO AWARD" means the Option granted to each eligible
Participant pursuant to Article 12.

                  (n)      "NON-EMPLOYEE DIRECTOR" means a member of the Board
who qualifies as a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the
Exchange Act, or any successor provision.

                  (o)      "NON-QUALIFIED STOCK OPTION" means an Option that is
not intended to be an Incentive Stock Option.

                  (p)      "OPTION" means a right granted to a Participant under
Article 7 or Article 12 of the Plan to purchase Stock at a specified price
during specified time periods. An Option may be either an Incentive Stock Option
or a Non-Qualified Stock Option.

                  (q)      "PARTICIPANT" means a person who, as a Board member,
employee, officer, or executive of, or consultant or advisor providing services
to, the Company or any Subsidiary, has been granted an Award under the Plan.

                  (r)      "PERFORMANCE-BASED AWARDS" means the Performance
Share Awards and Restricted Stock Awards granted to select Covered Employees
pursuant to Articles 9 and 10, and are subject to the terms and conditions in
Article 11. All Performance-Based Awards are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code.

                                       3
<PAGE>

                  (s)      "PERFORMANCE CRITERIA" means the criteria that the
Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period. The Performance
Criteria used to establish Performance Goals are limited to: pre- or after-tax
net earnings, sales growth, operating earnings, operating cash flow, return on
net assets, return on stockholders' equity, return on assets, return on capital,
Stock price growth, stockholder returns, gross or net profit margin, earnings
per share, price per share of Stock, and market share, any of which may be
measured either in absolute terms or as compared to any incremental increase or
as compared to results of a peer group. The Committee will, within the time
prescribed by Section 162(m) of the Code, objectively define the manner of
calculating the Performance Criteria it selects to use for such Performance
Period for such Participant.

                  (t)      "PERFORMANCE GOALS" means, for a Performance Period,
the written goals established by the Committee for the Performance Period based
upon the Performance Criteria. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, Subsidiary, or an individual. The Committee, in its discretion, may,
within the time prescribed by Section 162(m) of the Code, adjust or modify the
calculation of Performance Goals for such Performance Period to prevent the
dilution or enlargement of the rights of Participants (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (ii) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business conditions.

                  (u)      "PERFORMANCE PERIOD" means the one or more periods of
time, which may be of varying and overlapping durations, selected by the
Committee, over which the attainment of one or more Performance Goals will be
measured for purposes of determining a Participant's right to, and the payment
of, a Performance-Based Award.

                  (v)      "PERFORMANCE SHARE" means a right granted to a
Participant under Article 9, to receive cash, Stock, or other Awards, the
payment of which is contingent on achieving certain Performance Goals
established by the Committee.

                  (w)      "PLAN" means the Universal Technical Institute, Inc.
2003 Stock Incentive Plan, as amended.

                  (x)      "RESTRICTED STOCK AWARD" means Stock granted to a
Participant under Article 10 that is subject to certain restrictions and to risk
of forfeiture.

                  (y)      "STOCK" means the common stock of the Company and
such other securities of the Company that may be substituted for Stock pursuant
to Article 14.

                  (z)      "STOCK APPRECIATION RIGHT" or "SAR" means a right
granted to a Participant under Article 8 to receive a cash, Stock, or other
Awards, , all as determined pursuant to Article 8.

                                       4
<PAGE>

                  (aa)     "SUBSIDIARY" means any corporation or other entity of
which the Company owns, directly or indirectly, a majority of the outstanding
voting stock or voting power.

                                    ARTICLE 4
                                 ADMINISTRATION

         4.1      COMMITTEE. The Plan will be administered by the Board or a
Committee appointed by, and which serves at the discretion of, the Board. If the
Board appoints a Committee, the Committee will consist of at least two
individuals, each of whom qualifies as (i) a Non-Employee Director, and (ii) an
"outside director" under Code Section 162(m) and the regulations issued
thereunder. Reference to the Committee in this Plan will refer to the Board if
the Board does not appoint a Committee.

         4.2      ACTION BY THE COMMITTEE. A majority of the Committee will
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present, and acts approved in writing by a majority
of the Committee in lieu of a meeting, will be deemed the acts of the Committee.
Each member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company or any Subsidiary, the Company's independent certified
public accountants, any executive compensation consultant or other professional
retained by the Company to assist in the Plan's administration.

         4.3      AUTHORITY OF COMMITTEE. Subject to any specific designation in
the Plan, the Committee has the exclusive power, authority and discretion to:

                  (a)      Designate Participants to receive Awards;

                  (b)      Determine the type of Awards granted to each
Participant;

                  (c)      Determine the number of Awards granted and the number
of shares of Stock to which an Award will relate;

                  (d)      Except as otherwise provided in the Plan, determine
the terms and conditions of any Award granted under the Plan including but not
limited to, the exercise price, grant price, or purchase price, any restrictions
or limitations on the Award, any schedule for lapse of forfeiture restrictions
or restrictions on the exercisability of an Award, and accelerations or waivers
thereof, based in each case on such considerations as the Committee in its sole
discretion determines; provided, however, that the Committee will not have the
authority to accelerate the vesting or waive the forfeiture of any
Performance-Based Awards;

                  (e)      Amend, modify, or terminate any outstanding Award,
with the Participant's consent unless the Committee has the authority to amend,
modify, or terminate an Award without the Participant's consent under any other
provision of the Plan;

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

                                       5
<PAGE>

                  (g)      Prescribe the form of each Award Agreement, which
need not be identical for each Participant;

                  (h)      Decide all other matters that must be determined in
connection with an Award;

                  (i)      Establish, adopt, or revise any rules and regulations
as it may deem necessary or advisable to administer the Plan;

                  (j)      Interpret the terms of, and any matter arising under,
the Plan or any Award Agreement; and

                  (k)      Make all other decisions and determinations that may
be required under the Plan or as the Committee deems necessary or advisable to
administer the Plan.

         4.4      DECISIONS BINDING. The Committee's interpretation of the Plan,
any Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.

                                    ARTICLE 5
                           SHARES SUBJECT TO THE PLAN

         5.1      NUMBER OF SHARES. Subject to adjustment provided in Section
14.1, the aggregate number of shares of Stock reserved and available for grant
under the Plan will be 5,250,000.

         5.2      LAPSED AWARDS. To the extent that an Award terminates,
expires, or lapses for any reason, any shares of Stock subject to the Award will
again be available to the Committee to grant Awards under the Plan.

         5.3      STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award
may consist, in whole or in part, of authorized and unissued Stock, treasury
Stock or Stock purchased on the open market.

         5.4      LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS.
Notwithstanding any provision in the Plan to the contrary, and subject to the
adjustment in Section 14.1, the maximum number of shares of Stock with respect
to one or more Awards that may be granted to any one Participant during any
fiscal year of the Company is 1,000,000

                                       6
<PAGE>

                                    ARTICLE 6
                          ELIGIBILITY AND PARTICIPATION

         6.1      ELIGIBILITY.

                  (a)      GENERAL. Persons eligible to participate in this Plan
include all Board members, employees, officers, and executives of, and
consultants and advisors to, the Company or a Subsidiary, as determined by the
Committee.

                  (b)      FOREIGN PARTICIPANTS. To assure the viability of
Awards granted to Participants employed in foreign countries, the Committee is
authorized to provide for any special terms it considers necessary or
appropriate to accommodate differences in local law, tax policy, or custom.
Moreover, the Committee may approve any supplements to, or amendments,
restatements, or alternative versions of the Plan as it considers necessary or
appropriate for such purposes without affecting the terms of the Plan as in
effect for any other purpose; provided, however, that no such supplements,
amendments, restatements, or alternative versions may increase the share
limitations contained in Section 5.1 of the Plan.

         6.2      ACTUAL PARTICIPATION. Subject to the provisions of the Plan,
the Committee may, from time to time, select from among all eligible
individuals, those to whom Awards will be granted and will determine the nature
and amount of each Award. No individual will have any right to be granted an
Award under this Plan.

                                    ARTICLE 7
                                  STOCK OPTIONS

         7.1      GENERAL. The Committee is authorized to grant Options to
Participants on the following terms and conditions:

                  (a)      EXERCISE PRICE. The exercise price per share of Stock
under an Option will be determined by the Committee and set forth in the Award
Agreement. The Committee may, in its discretion, grant Options (other than
Options that are intended to be Incentive Stock Options or Options that are
intended to qualify as "performance-based compensation" under Code Section
162(m)) with an exercise price of less than Fair Market Value on the date of
grant.

                  (b)      TIME AND CONDITIONS OF EXERCISE. The Committee will
determine the time or times at which an Option may be exercised in whole or in
part. The Committee will also determine the performance or other conditions, if
any, that must be satisfied before all or part of an Option may be exercised.
Unless otherwise provided in an Award Agreement, an Option will lapse
immediately if a Participant's employment or services are terminated for Cause.

                  (c)      PAYMENT. The Committee will determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, promissory note, shares of Stock (through
actual tender or by attestation), or other property (including broker-assisted
"cashless exercise" arrangements), and the methods by which shares of Stock will
be delivered or deemed to be delivered to Participants.

                                       7
<PAGE>

                  (d)      EVIDENCE OF GRANT. All Options will be evidenced by a
written Award Agreement, which Agreement will include such provisions as
determined by the Committee.

         7.2      INCENTIVE STOCK OPTIONS. Incentive Stock Options will be
granted only to employees and the terms of any Incentive Stock Options granted
under the Plan must comply with the following additional rules:

                  (a)      EXERCISE PRICE. The per share exercise price for any
Incentive Stock Option may not be less than the Fair Market Value as of the date
of the grant.

                  (b)      EXERCISE. No Incentive Stock Option may be
exercisable for more than ten years after the date of its grant.

                  (c)      LAPSE OF OPTION. An Incentive Stock Option will lapse
under the following circumstances.

                           (1)      The Incentive Stock Option will lapse ten
years from the date it is granted, unless it lapses earlier under the Award
Agreement.

                           (2)      Unless otherwise provided in the Award
Agreement, an Incentive Stock Option will lapse upon a Participant's termination
of employment for Cause or for any other reason (other than the death or
Disability).

                           (3)      If the Participant terminates employment
because of Disability or death before the Option lapses pursuant to paragraph
(1) or (2) above, the Incentive Stock Option will lapse, unless it is sooner
exercised, on the earlier of (i) the date on which the Option would have lapsed
had the Participant not become Disabled or lived and had remain employed; or
(ii) 12 months after the date of the Participant's termination of employment
because of Disability or death. Upon the Participant's Disability or death, any
Incentive Stock Option exercisable at the Participant's Disability or death may
be exercised by the Participant's legal representative, by the person or persons
entitled to do so under the Participant's last will and testament, or, if the
Participant fails to make testamentary disposition of such Incentive Stock
Option or dies intestate, by the person or persons entitled to receive the
Incentive Stock Option under the applicable laws of descent and distribution.

                  (d)      INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair
Market Value (determined as of the grant date) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a Participant
in any calendar year may not exceed $100,000.00 or such other limitation as
imposed by Section 422(d) of the Code, or any successor provision. To the extent
that Incentive Stock Options are first exercisable by a Participant in excess of
such limitation, the excess will be considered Non-Qualified Stock Options.

                  (e)      TEN PERCENT OWNERS. An Incentive Stock Option will be
granted to any individual who, at the date of grant, owns stock possessing more
than ten percent of the total combined voting power of all classes of Stock only
if such Option is granted at a price that is not less than 110% of Fair Market
Value on the grant date and the Option is exercisable for no more than five
years from the grant date.

                                       8
<PAGE>

                  (f)      EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an
Incentive Stock Option may be made pursuant to this Plan after the tenth
anniversary of the Effective Date.

                  (g)      RIGHT TO EXERCISE. An Incentive Stock Option may be
exercised only by the Participant during his or her lifetime,.

                                    ARTICLE 8
                            STOCK APPRECIATION RIGHTS

         8.1      GRANT OF SARs. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:

                  (a)      RIGHT TO PAYMENT. Upon the exercise of a SAR, the
Participant to whom it is granted has the right to receive the excess, if any,
of:

                           (1)      The Fair Market Value of a share of Stock on
the date of exercise; over

                           (2)      The grant price of the SAR as determined by
the Committee, which will not be less than the Fair Market Value of a share of
Stock on the date of grant in the case of any SAR related to any Incentive Stock
Option.

                  (b)      OTHER TERMS. All SARs grants will be evidenced by an
Award Agreement. The terms, methods of exercise, methods of settlement, form of
consideration payable in settlement, and any other terms and conditions of any
SAR will be determined by the Committee at the time of the grant of the Award
and as set forth in the Award Agreement.

                                    ARTICLE 9
                               PERFORMANCE SHARES

         9.1      GRANT OF PERFORMANCE SHARES. The Committee is authorized to
grant Performance Shares to Participants on such terms and conditions as
determined by the Committee. The Committee has the discretion to determine the
number of Performance Shares granted to each Participant and such other terms
and conditions of such grant, all as set forth in the Award Agreement.

         9.2      RIGHT TO PAYMENT. A grant of Performance Shares gives the
Participant rights, valued as determined by the Committee, and payable to, or
exercisable by, the Participant to whom the Performance Shares are granted, in
whole or in part, as the Committee will establishes at grant or thereafter.
Subject to the terms of the Plan, the Committee will set performance goals and
other terms or conditions to payment of the Performance Shares in its discretion
which, depending on the extent to which they are met, will determine the number
and value of Performance Shares that will be paid to the Participant.

         9.3      OTHER TERMS. Performance Shares may be payable in cash, Stock,
or other property, and have such other terms and conditions as determined by the
Committee and as set forth in the Award Agreement.

                                       9
<PAGE>

                                   ARTICLE 10
                             RESTRICTED STOCK AWARDS

         10.1     GRANT OF RESTRICTED STOCK. The Committee is authorized to make
Awards of Restricted Stock to Participants in such amounts and subject to such
terms and conditions as determined by the Committee, all as set forth in the
Award Agreement.

         10.2     ISSUANCE AND RESTRICTIONS. Restricted Stock will be subject to
such restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.

         10.3     FORFEITURE. Except as otherwise determined by the Committee at
the time of the grant of the Award or thereafter, upon termination of employment
or service during the applicable restriction period, Restricted Stock that is at
that time subject to restrictions will be forfeited, provided, however, that the
Committee may provide in any Restricted Stock Award Agreement that restrictions
or forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.

         10.4     CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted
under the Plan may be evidenced as determined by the Committee. If certificates
representing shares of Restricted Stock are registered in the name of the
Participant, the certificates must bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Stock, and the
Company may, at its discretion, retain physical possession of the certificate
until such time as all applicable restrictions lapse.

                                   ARTICLE 11
                            PERFORMANCE-BASED AWARDS

         11.1     PURPOSE. The purpose of this Article 11 is to provide the
Committee the ability to qualify the Performance Share Awards under Article 9
and the Restricted Stock Awards under Article 10 as "performance-based
compensation" under Section 162(m) of the Code. If the Committee, in its
discretion, decides to grant a Performance-Based Award to a Covered Employee,
the provisions of this Article 11 will control over any contrary provision
contained in Articles 9 or 10.

         11.2     APPLICABILITY. This Article 11 will apply only to those
Covered Employees selected by the Committee to receive Performance-Based Awards.
The Committee may, in its discretion, grant Restricted Stock Awards or
Performance Share Awards to Covered Employees that do not satisfy the
requirements of this Article 11. The designation of a Covered Employee as a
Participant for a Performance Period does not entitle the Participant to receive
an Award for the period. Moreover, designation of a Covered Employee as a
Participant for a particular Performance Period will not require designation of
such Covered Employee as a Participant in

                                       10
<PAGE>

any subsequent Performance Period and designation of one Covered Employee as a
Participant will not require designation of any other Covered Employees as a
Participant in such period or in any other Performance Period.

         11.3     DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS.
With regard to a particular Performance Period, the Committee will have full
discretion to select the length of such Performance Period, the type of
Performance-Based Awards to be issued, the kind and/or level of the Performance
Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary
or any division or business unit or to the individual.

         11.4     PAYMENT OF PERFORMANCE AWARDS. Unless otherwise provided in
the Award Agreement, a Participant must be employed by the Company or a
Subsidiary on the last day of the Performance Period to be eligible for a
Performance Award for such Performance Period. Furthermore, a Participant will
be eligible to receive payment under a Performance-Based Award for a Performance
Period only if the Performance Goals for such period are achieved. In
determining the actual size of an individual Performance-Based Award, the
Committee may reduce or eliminate the amount of the Performance-Based Award
earned for the Performance Period, if in its sole and absolute discretion, such
reduction or elimination is appropriate.

         11.5     MAXIMUM AWARD PAYABLE. The maximum Performance-Based Award
payable to any one Participant under the Plan for a Performance Period is
1,000,000 shares of Stock, or if the Performance-Based Award is paid in cash,
the maximum Performance-Based Award is determined by multiplying 1,000,000 by
the Fair Market Value of the Stock as of the date the Performance-Based Award is
granted.

                                   ARTICLE 12
                                   IPO AWARDS

         12.1     IPO AWARDS. IPO Awards will be awarded to Participants
selected by the Committee and will be subject to the following terms and
conditions:

                  (a)      EFFECTIVE DATE OF AWARDS. The effective date of the
IPO Awards will be the date of the Company's initial public offering of Stock.

                  (b)      EXERCISE PRICE FOR AWARDS. Notwithstanding anything
in the Plan to the contrary, the exercise price per share of Stock under the IPO
Awards will be the price at which the Company's Stock is offered to the public
in its initial public offering of Stock ("IPO Price").

                  (c)      AMOUNT OF THE IPO AWARDS. Each Participant selected
to receive an IPO Award and who became an employee by the Company on or after
_______, 1999, will be entitled to receive an Option to purchase 50 shares of
Stock. Each Participant selected to receive an IPO Award and who became an
employee by the Company before _______, 1999, will be entitled to receive an
Option to purchase 100 shares of Stock. Such Option will be designated as a
Non-Qualified Stock Option.

                                       11
<PAGE>

                  (d)      TIME AND CONDITIONS OF EXERCISE. The IPO Awards will
become fully exercisable on the first anniversary of the date of grant. Unless
otherwise provided in the Award Agreement, the IPO Award will lapse upon a
Participant's termination of employment or service with the Company or a
Subsidiary for any reason, and will include such other provisions as may be
specified by the Committee.

                  (e)      PAYMENT. The Committee will determine the methods by
which the exercise price of the IPO Awards may be paid, the form of payment,
including, without limitation, cash, promissory note, shares of Stock (through
actual tender or by attestation), or other property (including broker-assisted
"cashless exercise" arrangements), and the methods by which shares of Stock will
be delivered or deemed to be delivered to Participants.

                  (f)      EVIDENCE OF GRANT. All IPO Awards will be evidenced
by an Award Agreement.

                                   ARTICLE 13
                         PROVISIONS APPLICABLE TO AWARDS

         13.1     STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan
may, in the discretion of the Committee, be granted either alone, in addition
to, or in tandem with, any other Award granted under the Plan. Awards granted in
addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.

         13.2     EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Stock,
or another Award, based on the terms and conditions the Committee determines and
communicates to the Participant at the time the offer is made.

         13.3     TERM OF AWARD. The term of each Award will be for the period
as determined by the Committee, provided that in no event will the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant.

         13.4     FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan
and any applicable law or Award Agreement, payments or transfers to be made by
the Company or a Subsidiary on the grant or exercise of an Award may be made in
such forms as the Committee determines at or after the time of grant, including
without limitation, cash, promissory note, Stock, other Awards, or other
property, or any combination, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee.

         13.5     LIMITS ON TRANSFER. No right or interest of a Participant in
any Award may be pledged, encumbered, or hypothecated to or in favor of any
party other than the Company or a Subsidiary, or will be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided by the Committee, no Award
will be assignable or transferable by a Participant other than by will or the
laws of descent and distribution.

                                       12
<PAGE>

         13.6     BENEFICIARIES. Notwithstanding Section 13.5, a Participant
may, in the manner determined by the Committee, designate a beneficiary to
exercise the rights of the Participant and to receive any distribution with
respect to any Award upon the Participant's death. A beneficiary, legal
guardian, legal representative, or other person claiming any rights under the
Plan is subject to all terms and conditions of the Plan and any Award Agreement
applicable to the Participant, except to the extent the Plan and Award Agreement
otherwise provide, and to any additional restrictions deemed necessary or
appropriate by the Committee. If the Participant is married, a designation of a
person other than the Participant's spouse as his beneficiary with respect to
more than 50% of the Participant's interest in the Award will not be effective
without the written consent of the Participant's spouse. If no beneficiary has
been designated or survives the Participant, payment will be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.

         13.7     STOCK CERTIFICATES. Notwithstanding anything herein to the
contrary, the Company will not be required to issue or deliver any certificates
evidencing shares of Stock pursuant to the exercise of any Awards, unless and
until the Board has determined, with advice of counsel, that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the shares of Stock are listed or traded. All Stock
certificates delivered under the Plan are subject to any stop-transfer orders
and other restrictions as the Committee deems necessary or advisable to comply
with Federal, state, or foreign jurisdiction, securities or other laws, rules
and regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate to reference restrictions applicable
to the Stock. In addition to the terms and conditions provided herein, the Board
may require that a Participant make such reasonable covenants, agreements, and
representations as the Board, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements.

         13.8     ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control
occurs, all outstanding Options, Stock Appreciation Rights, and other Awards
will become fully exercisable and all restrictions on outstanding Awards will
lapse. To the extent that this provision causes Incentive Stock Options to
exceed the dollar limitation set forth in Section 7.2(d), the excess Options
will be deemed to be Non-Qualified Stock Options. Upon, or in anticipation of,
such an event, the Committee may cause every Award outstanding hereunder to
terminate at a specific time in the future and will give each Participant the
right to exercise Awards during a period of time as the Committee, in its sole
and absolute discretion, will determine.

                                   ARTICLE 14
                          CHANGES IN CAPITAL STRUCTURE

         14.1     GENERAL.

                  (a)      SHARES AVAILABLE FOR GRANT. If there is any change in
the number of shares of Stock outstanding by reason of any stock dividend or
split, recapitalization,

                                       13
<PAGE>

merger, consolidation, combination or exchange of shares or similar corporate
change, the maximum aggregate number of shares of Stock with respect to which
the Committee may grant Awards will be appropriately adjusted by the Committee.
If there is any change in the number of shares of Stock outstanding by reason of
any other event or transaction, the Committee may, but need not, make such
adjustments in the number and class of shares of Stock with respect to which
Awards may be granted as the Committee may deem appropriate.

                  (b)      OUTSTANDING AWARDS - INCREASE OR DECREASE IN ISSUED
SHARES WITHOUT CONSIDERATION. Subject to any required action by the shareholders
of the Company, if there is any increase or decrease in the number of issued
shares of Stock resulting from a subdivision or consolidation of shares of Stock
or the payment of a stock dividend (but only on the shares of Stock), or any
other increase or decrease in the number of such shares effected without receipt
or payment of consideration by the Company, the Committee will proportionally
adjust the number of shares of Stock subject to each outstanding Award and the
exercise price per share of Stock of each such Award.

                  (c)      OUTSTANDING AWARDS - CERTAIN MERGERS. Subject to any
required action by the shareholders of the Company, if the Company is the
surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Stock receive
securities of another corporation), each Award outstanding on the date of such
merger or consolidation will pertain to and apply to the securities which a
holder of the number of shares of Stock subject to such Award would have
received in such merger or consolidation.

                  (d)      OUTSTANDING AWARDS - OTHER CHANGES. If any other
change in the capitalization of the Company or corporate change other than those
specifically referred to in Article 14, the Committee may, in its absolute
discretion, make such adjustments in the number and class of shares subject to
Awards outstanding on the date on which such change occurs and in the per share
exercise price of each Award as the Committee may consider appropriate to
prevent dilution or enlargement of rights.

                  (e)      NO OTHER RIGHTS. Except as expressly provided in the
Plan, no Participant will have any rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend, any
increase or decrease in the number of shares of stock of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other
corporation. Except as expressly provided in the Plan, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, will affect, and no adjustment by reason thereof will be
made with respect to, the number of shares of Stock subject to an Award or the
exercise price of any Award.

                                   ARTICLE 15
                    AMENDMENT, MODIFICATION, AND TERMINATION

         15.1     AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of
the Board, at any time and from time to time, the Committee may terminate, amend
or modify the Plan; provided, however, that to the extent necessary and
desirable to comply with

                                       14
<PAGE>

any applicable law, regulation, or stock exchange rule, the Company will obtain
shareholder approval of any Plan amendment in such a manner and to such a degree
as required.

         15.2     AWARDS PREVIOUSLY GRANTED. Except as otherwise provided in the
Plan, including without limitation, the provisions of Article 14, no
termination, amendment, or modification of the Plan will adversely affect in any
material way any Award previously granted under the Plan, without the written
consent of the Participant.

                                   ARTICLE 16
                               GENERAL PROVISIONS

         16.1     NO RIGHTS TO AWARDS. No Participant, employee, or other person
will have any claim to be granted any Award under the Plan, and neither the
Company nor the Committee is obligated to treat Participants, employees, and
other persons uniformly.

         16.2     NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of
the rights of a stockholder of the Company unless and until shares of Stock are
in fact issued to such person in connection with such Award.

         16.3     WITHHOLDING. The Company or any Subsidiary has the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan. With the
Committee's consent, a Participant may elect to have the Company withhold from
those shares of Stock that would otherwise be received upon the exercise of any
Option, a number of shares having a Fair Market Value equal to the minimum
statutory amount necessary to satisfy the Company's applicable federal, state,
local and foreign income and employment tax withholding obligations.

         16.4     NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any
Award Agreement will interfere with or limit in any way the right of the Company
or any Subsidiary to terminate any Participant's employment or services at any
time, nor confer upon any Participant any right to continue in the employ or
service of the Company or any Subsidiary.

         16.5     UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award Agreement will give the Participant any rights that are greater than those
of a general creditor of the Company or any Subsidiary.

         16.6     INDEMNIFICATION. To the extent allowable under applicable law,
each member of the Committee or the Board will be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action or failure to act under
the Plan and against and from any and all amounts paid by him or her in
satisfaction of judgment in such action, suit, or proceeding against him or her
provided he or she gives the Company an opportunity, at its own expense, to
handle and defend the same before he or she

                                       15
<PAGE>

undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification is in addition to any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or Bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.

         16.7     RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan will
be taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.

         16.8     EXPENSES. The Company and its Subsidiaries will pay the
expenses of administering the Plan.

         16.9     TITLES AND HEADINGS. The titles and headings of the Sections
in the Plan are for convenience of reference only, and if there is any conflict,
the text of the Plan, rather than such titles or headings, will control.

         16.10    FRACTIONAL SHARES. No fractional shares of stock will be
issued and the Committee will determine, in its discretion, whether cash will be
given in lieu of fractional shares or whether such fractional shares will be
eliminated by rounding up or down as appropriate.

         16.11    SECURITIES LAW COMPLIANCE. With respect to any person who is,
on the relevant date, obligated to file reports under Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it will
be void to the extent permitted by law and voidable as deemed advisable by the
Committee.

         16.12    GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Company to make payment of awards in Stock or otherwise will be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Company will be under no obligation to register
under the Securities Act of 1933, as amended, any of the shares of Stock paid
under the Plan. If the shares paid under the Plan may in certain circumstances
be exempt from registration under the Securities Act of 1933, as amended, the
Company may restrict the transfer of such shares in such manner as it deems
advisable to ensure the availability of any such exemption.

         16.13    GOVERNING LAW. The Plan and all Award Agreements will be
construed in accordance with and governed by the laws of the State of Arizona.

                                       16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}]]