Document:

<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) any of the following: (i) Participant's conviction of, or plea
of guilty or nolo contendere to, a 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 the
Company's 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 or the unlawful use, possession or sale of
illegal substances; (iv) an administrative or judicial determination that
Participant committed fraud or any other violation of law involving federal,
state or local government funds; (v) a finding by a majority of the Board of
Directors of Participant's knowing breach of any of Participant's fiduciary
duties to the 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; (vi)
Participant's alcohol or substance abuse, which materially interferes with
Participant's ability to discharge the duties, responsibilities and obligations
to or for the Company; provided, that Participant has been given notice and 30
days from such notice fails to cure such abuse; and (vii) Participant's personal
(as opposed to the Company's) material and knowing failure, to observe or comply
with applicable laws 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 ongoing business,
operations, conditions, other business relationship or properties.

                  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 50%
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) any person
or Group acquires sufficient shares of Voting Stock to elect a majority of the
members of the Board; or (v) 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.

                                       2
<PAGE>

                  (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.

                  (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)      "GOOD REASON" means when used with reference to a
voluntary termination by Participant of Participant's employment or service with
the Company, shall mean (i) a material reduction in Participant's authority,
perquisites, position or responsibilities (other than such a reduction which
affects all of the Company's senior executives on a substantially equal or
proportionate basis), or (ii) a requirement that Participant relocate greater
than 50 miles from Participant's primary work location.

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

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

                  (o)      "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.

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

                                       3
<PAGE>

                  (q)      "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.

                  (r)      "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.

                  (s)      "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.

                  (t)      "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.

                  (u)      "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.

                  (v)      "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.

                  (w)      "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.

                                       4
<PAGE>

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

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

                  (z)      "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.

                  (aa)     "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.

                  (bb)     "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,

                                       5
<PAGE>

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;

                  (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 5,600,000.

         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.

                                       6
<PAGE>

         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

                                   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.

                                       7
<PAGE>

                  (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.

                  (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.

                                       8
<PAGE>

                  (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.

                  (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

                                       9
<PAGE>

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.

                                   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.

                                       10
<PAGE>

         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 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").

                                       11
<PAGE>

                  (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
October 21, 2001, 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 October 21, 2001, will be entitled to receive an
Option to purchase 100 shares of Stock. Such Option will be designated as a
Non-Qualified Stock Option.

                  (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.

                                       12
<PAGE>

         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.

         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 and, within one year after the Change of Control, a Participant's
employment or service with the Company is terminated without Cause or, a
Participant terminates employment or services with the Company for Good Reason,
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

                                       13
<PAGE>

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, 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,

                                       14
<PAGE>

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 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.

                                       15
<PAGE>

         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 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<PAGE>

                                                                    EXHIBIT 10.7

                       UNIVERSAL TECHNICAL INSTITUTE, INC.
                        2003 EMPLOYEE STOCK PURCHASE PLAN

         1.       PURPOSE. The purpose of this Universal Technical Institute,
Inc. 2003 Employee Stock Purchase Plan (the "Plan") is to encourage stock
ownership by eligible employees of Universal Technical Institute, Inc. (the
"Company") and its Subsidiaries and to provide them with an incentive to
contribute to the profitability and success of the Company. The Plan is intended
to qualify as an "employee stock purchase plan" under Section 423 of the Code
and will be maintained for the exclusive benefit of eligible employees of the
Company and its Subsidiaries.

         2.       DEFINITIONS. For purposes of the Plan, in addition to the
terms defined in Section 1, the following terms are defined:

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

                  (b)      "CASH ACCOUNT" means the account maintained on behalf
of a Participant by the Company for the purpose of holding cash contributions
withheld from payroll pending investment in Stock.

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

                  (d)      "CUSTODIAN" means _____________ or any or replacement
appointed by the Board or its delagatee under Section 3(a).

                  (e)      "EARNINGS" means a Participant's salary or wages,
including overtime (but excluding bonuses) for services performed for the
Company and its Subsidiaries and received by a Participant for services rendered
during an Offering Period.

                  (f)      "FAIR MARKET VALUE" means the closing price of the
Stock on the relevant date as reported on New York Stock Exchange (or any
national securities exchange or quotation system on which the Stock is then
listed), or if there were no sales on that date the closing price on the next
preceding date for which a closing price was reported.

                  (g)      "IPO DATE" means the date on which the Company's
initial public offering of Stock is consummated.

                  (h)      "OFFERING PERIOD" means the six-month period
beginning on each January 1 and ending each June 30 and the six-month period
beginning on each July 1 and ending on each December 31. Notwithstanding the
above, the first Offering Period shall begin on the IPO Date and end on June 30,
2004.

                  (i)      "PARTICIPANT" means an employee of the Company or a
Subsidiary who is participating in the Plan.

<PAGE>

                  (j)      "PURCHASE RIGHT" means a Participant's option to
purchase Stock that is deemed to be outstanding during a Offering Period. A
Purchase Right represents an "option" under Section 423 of the Code.

                  (k)      "STOCK" means the common stock of the Company.

                  (l)      "STOCK ACCOUNT" means the account maintained on
behalf of the Participant by the Custodian for the purpose of holding Stock
acquired under the Plan.

                  (m)      "SUBSIDIARY" means any subsidiary corporation defined
in Code Section 424(f).

         3.       ADMINISTRATION.

                  (a)      BOARD ADMINISTRATION. The Plan will be administered
by the Board. The Board may delegate its administrative duties and authority
(other than its authority to amend or terminate the Plan) to any Board committee
or to any officers or employees or committee thereof as the Board may designate
(in which case references to the Board will be deemed to refer to the
administrator to which such duties and authority have been delegated). The Board
will have full authority to adopt, amend, suspend, waive, and rescind rules and
regulations and appoint agents as it deems necessary or advisable to administer
the Plan, to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and rules and
regulations thereunder, to furnish to the Custodian such information as the
Custodian may require, and to make all other decisions and determinations under
the Plan (including determinations relating to eligibility). No person acting in
connection with the administration of the Plan will, in that capacity,
participate in deciding any matter relating to his or her participation in the
Plan.

                  (b)      THE CUSTODIAN. The Custodian will act as custodian
under the Plan, and perform those duties specified in the Plan and in any
agreement between the Company and the Custodian. The Custodian will establish
and maintain Participants Stock Accounts and any subaccounts as may be necessary
or desirable to administer the Plan.

                  (c)      WAIVERS. The Board may waive or modify any
requirement that a notice or election be made or filed under the Plan a
specified period in advance on an individual case or by adopting a rule or
regulation under the Plan, without amending the Plan.

                  (d)      OTHER ADMINISTRATIVE PROVISIONS. The Company will
furnish information from its records as directed by the Board, and such records,
including a Participant's Earnings, will be conclusive on all persons unless
determined by the Board to be incorrect. Each Participant and other person
claiming benefits under the Plan must furnish to the Company in writing a
current mailing address and any other information as the Board or Custodian may
reasonably request. Any communication, statement, or notice mailed with postage
prepaid to any such Participant or other person at the last mailing address
filed with the Company will be deemed sufficiently given when mailed and will be
binding upon the named recipient. The Plan will be administered on a reasonable
and nondiscriminatory basis and uniform rules will apply to all persons
similarly situated. All Participants will have equal rights

                                       2
<PAGE>

and privileges (subject to the terms of the Plan) with respect to Purchase Right
outstanding during any given Offering Period in accordance with Code Section
423(b)(5).

         4.       STOCK SUBJECT TO PLAN. Subject to adjustment as provided
below, the total number of shares of Stock reserved and available for issuance
or which may be otherwise acquired upon exercise of Purchase Rights under the
Plan will be __________. Any shares of Stock delivered by the Company under the
Plan may consist, in whole or in part, of authorized and unissued shares or
treasury shares or shares of Stock purchased on the open market. The number and
kind of such shares of Stock subject to the Plan will be proportionately
adjusted, as determined by the Board, in the event of any extraordinary dividend
or other distribution, recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event affecting the
Stock. If, at the end of any Offering Period, the number of shares of Stock with
respect to which Purchase Rights are to be exercised exceeds the number of
shares of Stock then available under the Plan, the Board shall make a pro rata
allocation of the shares of Stock remaining available for purchase in as uniform
a manner as shall be practicable and as it shall determine to be equitable.

         5.       ENROLLMENT AND CONTRIBUTIONS.

                  (a)      ELIGIBILITY. An employee of the Company or any
Subsidiary designated by the Board may be enrolled in the Plan for any Offering
Period if such employee is employed by the Company or a Subsidiary authorized to
participate in the Plan on the first day of the Offering Period, unless one of
the following applies to the employee:

                           (i)      such person has been employed by the Company
                                    or a Subsidiary less than 90 days;

                           (ii)     such person is customarily employed by the
                                    Company or a Subsidiary for 20 hours or less
                                    a week;

                           (iii)    such person is customarily employed by the
                                    Company or a Subsidiary for not more than
                                    five months in any calendar year; or

                           (iv)     such person would, immediately upon
                                    enrollment, be deemed to own, for purposes
                                    of Section 423(b)(3) of the Code, an
                                    aggregate of five percent or more of the
                                    total combined voting power or value of all
                                    outstanding shares of all classes of the
                                    Stock of the Company or any Subsidiary.

                  The Company will notify an employee of the date as of which he
or she is eligible to enroll in the Plan, and will make available to each
eligible employee the necessary enrollment forms.

                  (b)      INITIAL ENROLLMENT. An employee who is eligible under
Section 5(a) (or who will become eligible on or before a given Offering Period)
may, after receiving current information about the Plan, initially enroll in the
Plan by executing and filing with the Company a properly completed enrollment
form, including the employee's election as to the rate

                                       3
<PAGE>

of payroll contributions for the Offering Period. To be effective for any
Offering Period, such properly executed enrollment form must be filed with the
Company at least two weeks (or such other period determined by the Board)
preceding such Offering Period.

                  (c)      AUTOMATIC RE-ENROLLMENT FOR SUBSEQUENT OFFERING
PERIODS. A Participant whose enrollment in, and payroll contributions under, the
Plan continues throughout a Offering Period will automatically be re-enrolled in
the Plan for the next Offering Period unless (i) the Participant terminates
enrollment before the next Offering Period in accordance with Section 7(a), or
(ii) the Participant is ineligible to participate under Section 5(a). The
initial rate of payroll contributions for a Participant who is automatically
re-enrolled for a Offering Period will be the same as the rate of payroll
contribution in effect at the end of the preceding Offering Period, unless the
Participant files a new properly executed enrollment form designating a
different rate of payroll contributions and such new enrollment form is filed
with the Company no later than two weeks (or such other period determined by the
Board) prior to the beginning of the next Offering Period.

                  (d)      PAYROLL CONTRIBUTIONS. A Participant will make
contributions under the Plan only by means of payroll deductions from each
payroll period which ends during the Offering Period, at the rate elected by the
Participant in his or her enrollment form in effect for that Offering Period
(except that such rate may be changed during the Offering Period to the extent
permitted below). The rate of payroll contributions elected by a Participant may
not be less than one percent (1%) nor more than ten percent (10%) of the
Participant's Earnings for each payroll period, and only whole percentages may
be elected; provided, however, that the Board may specify a lower minimum rate
and higher maximum rate, subject to Section 8(c). Notwithstanding the above, a
Participant's payroll contributions will be adjusted downward by the Company as
necessary to ensure that the limit on the amount of Stock purchased for an
Offering Period set forth in Section 6(a)(iii) is not exceeded. A Participant
may elect to increase, decrease, or discontinue payroll contributions for a
future Offering Period by filing a new enrollment form designating a different
rate of payroll contributions, which properly executed form must be filed with
the Company at least two weeks (or such other period determined by the Board)
prior to the beginning of an Offering Period to be effective for that Offering
Period. In addition, a Participant may elect to discontinue payroll
contributions during an Offering Period by filing a new properly executed
enrollment form, such change to be effective for the next payroll after the
Participant's new enrollment form is filed with the Company.

                  (e)      CREDITING PAYROLL CONTRIBUTIONS TO CASH ACCOUNTS. All
payroll contributions by a Participant under the Plan will be credited to a Cash
Account maintained by the Company on behalf of the Participant. The Company will
credit payroll contributions to each Participant's Cash Account as soon as
practicable after the contributions are withheld from the Participant's
Earnings.

                  (f)      NO INTEREST ON CASH ACCOUNTS. No interest will be
credited or paid on cash balances in Participant's Cash Accounts pending
investment in Stock.

                                       4
<PAGE>

         6.       PURCHASES OF STOCK.

                  (a)      PURCHASE RIGHTS. Enrollment in the Plan for any
Offering Period by a Participant will constitute a grant by the Company of a
Purchase Right to such Participant for such Offering Period. Each Purchase Right
will be subject to the following terms:

                           (i)      The purchase price of each share of Stock
                                    purchased for each Offering Period will
                                    equal 85% of the lesser of the Fair Market
                                    Value of a share of Stock on the first day
                                    of an Offering Period, or the Fair Market
                                    Value of a share of Stock on the last day of
                                    an Offering Period;.

                           (ii)     Except as limited in (iii) below, the number
                                    of shares of Stock that may be purchased
                                    upon exercise of the Purchase Right for a
                                    Offering Period will equal the number of
                                    shares (including fractional shares) that
                                    can be purchased at the purchase price
                                    specified in Section 6(a)(i) with the
                                    aggregate amount credited to the
                                    Participant's Cash Account as of the last
                                    day of an Offering Period.

                           (iii)    The number of shares of Stock subject to a
                                    Participant's Purchase Right for any
                                    Offering Period will not exceed the number
                                    derived by dividing $12,500 by 100% of the
                                    Fair Market Value of one share of Stock on
                                    the first day of the Offering Period;
                                    provided, however, that the above limitation
                                    for the first Offering Period will adjusted
                                    by the Board on a pro rata basis, if such
                                    Offering Period is less or more than a
                                    six-month period.

                           (iv)     The Purchase Right will be automatically
                                    exercised on the last day of the Offering
                                    Period.

                           (v)      Payments by a Participant for Stock
                                    purchased under a Purchase Right will be
                                    made only through payroll deduction in
                                    accordance with Section 5(d) and (e).

                           (vi)     The Purchase Right will expire on the
                                    earlier of the last day of the Offering
                                    Period or the date on which the
                                    Participant's enrollment in the Plan
                                    terminates.

                  (b)      PURCHASE OF STOCK. At or as promptly as practicable
after the last day of an Offering Period, amounts credited to each Participant's
Cash Account will be applied by the Company to purchase Stock, in accordance
with the terms of the Plan. Shares of Stock will be purchased from the Company
or in the open market, as the Board determines. The Company will aggregate the
amounts in all Cash Accounts when purchasing Stock, and shares purchased will be
allocated to each Participant's Stock Account in proportion to the cash amounts
withdrawn from such Participant's Cash Account. After completing purchases for
each Offering Period (which will be completed in not more than 15 calendar days
after the last day of

                                       5
<PAGE>

an Offering Period), all shares of Stock so purchased for a Participant will be
credited to the Participant's Stock Account.

                  (c)      DIVIDEND REINVESTMENT; OTHER DISTRIBUTIONS. Cash
dividends on any Stock credited to a Participant's Stock Account will be
automatically reinvested in additional shares of Stock and such amounts will not
be available in the form of cash to Participants. The Company will aggregate all
purchases of Stock in connection with dividend reinvestment for a given dividend
payment date. Purchases of Stock for purposes of dividend reinvestment will be
made as promptly as practicable (but not more than 15 calendar days) after a
dividend payment date. The purchases will be made directly from the Company at
100% of the Fair Market Value of a share of Stock on the dividend payment date
or on the open market. Any shares of Stock distributed as a dividend or
distribution in respect of shares of Stock or in connection with a split of the
Stock credited to a Participant's Stock Account will be credited to such
Account.

                  (d)      WITHDRAWALS AND TRANSFERS. Shares of Stock may be
withdrawn from a Participant's Stock Account, in which case one or more
certificates for whole shares may be issued in the name of, and delivered to,
the Participant, with such Participant receiving cash in lieu of fractional
shares based on the Fair Market Value of a share of Stock on the day preceding
the date of withdrawal. Alternatively, whole shares of Stock may be withdrawn
from a Participant's Stock Account by means of a transfer to a broker-dealer or
financial institution that maintains an account for the Participant, together
with the transfer of cash in lieu of fractional shares based on the Fair Market
Value of a share of Stock on the day preceding the date of withdrawal.
Participants may not designate any other person to receive shares of Stock
withdrawn or transferred under the Plan. A Participant seeking to withdraw or
transfer shares of Stock must give instructions to the Custodian in such manner
and form as may be prescribed by the Custodian, which instructions will be acted
upon as promptly as practicable. Withdrawals and transfers will be subject to
any fees imposed in accordance with Section 8(a).

                  (e)      EXCESS ACCOUNT BALANCES. If any amounts remain in a
Cash Account following the date on which the Company purchases Stock for an
Offering Period as a result of the limitation set forth in Section 6(a)(iii) or
for any other reason, such amounts will be returned to the Participant as
promptly as practicable.

                                       6
<PAGE>

         7.       TERMINATION AND DISTRIBUTIONS.

                  (a)      TERMINATION OF ENROLLMENT. A Participant's enrollment
in the Plan will terminate upon (i) the beginning of any payroll period or
Offering Period that begins after he or she files a written notice of
termination of enrollment with the Company, provided that such Participant will
continue to be deemed to be enrolled with respect to any completed Offering
Period for which purchases have not been completed, (ii) such time as the
Participant becomes ineligible to participate under Section 5(a) of the Plan, or
(iii) the termination of the Participant's employment by the Company and its
Subsidiaries. An employee whose enrollment in the Plan terminates may again
enroll in the Plan as of any subsequent Offering Period that is at least 90 days
after such termination of enrollment if he or she satisfies the eligibility
requirements of Section 5(a) as of such Offering Period. A Participant's
election to discontinue payroll contributions will not constitute a termination
of enrollment.

                  (b)      DISTRIBUTION. As soon as practicable after a
Participant's enrollment in the Plan terminates, amounts in the Participant's
Cash Account which resulted from payroll contributions will be repaid to the
Participant. The Custodian will continue to maintain the Participant's Stock
Account for the Participant until the earlier of such time as the Participant
directs the sale of all Stock in the Account, withdraws, or transfers all Stock
in the Account, or one year after the Participant ceases to be employed by the
Company and its Subsidiaries. If a Participant's termination of enrollment
results from his or her death, all amounts payable will be paid to his or her
designated beneficiary or beneficiaries and if no such designation is made, to
his or her estate.

         8.       GENERAL.

                  (a)      COSTS. Costs and expenses incurred in the
administration of the Plan and maintenance of Accounts will be paid by the
Company, to the extent provided in this Section 8(a). Any brokerage fees and
commissions for the purchase of Stock under the Plan (including Stock purchased
upon reinvestment of dividends and distributions) will be paid by the Company,
but any brokerage fees and commissions for the sale of Stock under the Plan by a
Participant will be borne by such Participant. The rate at which such fees and
commissions will be charged to Participants will be determined by the Custodian
or any broker-dealer used by the Custodian (including an affiliate of the
Custodian), and communicated from time to time to Participants. In addition, the
Custodian may impose or pass through a reasonable fee for the withdrawal of
Stock in the form of stock certificates (as permitted under Section 6(d)), and
reasonable fees for other services unrelated to the purchase of Stock under the
Plan, to the extent approved in writing by the Company and communicated to
Participants.

                  (b)      STATEMENTS TO PARTICIPANTS. The Participant's
statement will reflect payroll contributions, purchases, sales, and withdrawals
and transfers of shares of Stock and other Plan transactions by appropriate
adjustments to the Participant's Accounts. The Custodian will, not less
frequently than quarterly, provide or cause to be provided a written statement
to the Participant showing the transactions in his or her Stock Account and the
date thereof, the number of shares of Stock credited or sold, the aggregate
purchase price paid or sales price received, the purchase or sales price per
share, the brokerage fees and commissions paid (if

                                       7
<PAGE>

any), the total shares held for the Participant's Stock Account (computed to at
least three decimal places), and such other information as agreed to by the
Custodian and the Company.

                  (c)      COMPLIANCE WITH SECTION 423. It is the intent of the
Company that this Plan comply in all respects with applicable requirements of
Section 423 of the Code and regulations thereunder. Accordingly, if any
provision of this Plan does not comply with such requirements, such provision
will be construed or deemed amended to the extent necessary to conform to such
requirements.

         9.       GENERAL PROVISIONS.

                  (a)      COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS. The
Plan, the granting and exercising of Purchase Rights hereunder, and the other
obligations of the Company and the Custodian under the Plan will be subject to
all applicable federal and state laws, rules, and regulations, and to such
approvals by any regulatory or governmental agency as may be required. The
Company may, in its discretion, postpone the issuance or delivery of Stock upon
exercise of Purchase Rights until completion of such registration or
qualification of such Stock or other required action under any federal or state
law, rule, or regulation, or the laws of any country in which employees of the
Company and a Subsidiary who are nonresident aliens and who are eligible to
participate reside, or other required action with respect to any automated
quotation system or stock exchange upon which the Stock or other Company
securities are designated or listed, or compliance with any other contractual
obligation of the Company, as the Company may consider appropriate. In addition,
the Company may require any Participant to make such representations and furnish
such information as it may consider appropriate in connection with the issuance
or delivery of Stock in compliance with applicable laws, rules, and regulations,
designation or listing requirements, or other contractual obligations.

                  (b)      LIMITS ON ENCUMBERING RIGHTS. No right or interest of
a Participant under the Plan, including any Purchase Right, may be pledged,
encumbered, or hypothecated to or in favor of any party, subject to any lien,
obligation, or liability of such Participant, or otherwise assigned,
transferred, or disposed of except pursuant to the laws of descent or
distribution, and any right of a Participant under the Plan will be exercisable
during the Participant's lifetime only by the Participant.

                  (c)      NO RIGHT TO CONTINUED EMPLOYMENT. Neither the Plan
nor any action taken hereunder, including the grant of a Purchase Right, will be
construed as giving any employee the right to be retained in the employ of the
Company or any of its Subsidiaries, nor will it interfere in any way with the
right of the Company or any of its Subsidiaries to terminate any employee's
employment at any time.

                  (d)      TAXES. The Company or any Subsidiary is authorized to
withhold from any payment to be made to a Participant, including any payroll and
other payments not related to the Plan, amounts of withholding and other taxes
due in connection with any transaction under the Plan, and a Participant's
enrollment in the Plan will be deemed to constitute his or her consent to such
withholding. In addition, Participants may be required to advise the Company of
sales and other dispositions of Stock acquired under the plan in order to permit
the Company to comply with tax laws and to claim any tax deductions to which the
Company may be entitled

                                       8
<PAGE>

with respect to the Plan. This provision and other Plan provisions do not set
forth an explanation of the tax consequences to Participants under the Plan. A
brief summary of the tax consequences will be included in disclosure documents
to be separately furnished to Participants.

                  (e)      CHANGES TO THE PLAN. The Board may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of shareholders
or Participants, except that any such action will be subject to the approval of
the Company's shareholders within one year after such Board action if such
shareholder approval is required by any federal or state law or regulation or
the rules of any automated quotation system or stock exchange on which the Stock
may then be quoted or listed, or if such shareholder approval is necessary in
order for the Plan to continue to meet the requirements of Section 423 of the
Code, and the Board may otherwise, in its discretion, determine to submit other
such actions to shareholders for approval. However, without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant with respect to outstanding Purchase Rights relating to any Offering
Period that has been completed prior to such Board action. The foregoing
notwithstanding, upon termination of the Plan the Board may (i) elect to
terminate all outstanding Purchase Rights at such time as the Board may
designate, and all amounts contributed to the Plan which remain in a
Participant's Cash Account will be returned to the Participant (without
interest) as promptly as practicable, or (ii) shorten the Offering Period to
such period determined by the Board and use amounts credited to a Participant
Cash Account to purchase Stock.

                  (f)      NO RIGHTS TO PARTICIPATE; NO SHAREHOLDER RIGHTS. No
Participant or employee will have any claim to participate in the Plan with
respect to Offering Periods that have not commenced, and the Company will have
no obligation to continue the Plan. No Purchase Right will confer on any
Participant any of the rights of a shareholder of the Company unless and until
Stock is duly issued or transferred and delivered to the Participant (or
credited to the Participant's Stock Account).

                  (g)      FRACTIONAL SHARES. Unless otherwise determined by the
Board, purchases of Stock under the Plan executed by the Custodian may result in
the crediting of fractional shares of Stock to the Participant's Stock Account.
Such fractional shares will be computed to at least three decimal places.
Fractional shares will not, however, be issued by the Company, and certificates
representing fractional shares will not be delivered to Participants under any
circumstances.

                  (h)      PLAN YEAR. The Plan will operate on a plan year that
begins on January 1 and ends December 31 in each year, except for the first Plan
Year which shall begin on the IPO Date and end on December 31, 2003.

                  (i)      GOVERNING LAW. The validity, construction, and effect
of the Plan and any rules and regulations relating to the Plan will be
determined in accordance with the laws of the State of Arizona, without giving
effect to principles of conflicts of laws, and applicable federal law.

                  (j)      EFFECTIVE DATE. The Plan will become effective on the
IPO Date, subject to the Plan being approved by shareholders of the Company, at
a meeting by a vote

                                       9
<PAGE>

sufficient to meet the requirements of Section 423(b)(2) of the Code. If the
Plan is not approved in accordance with Section 423(b)(2) of the Code, each
Participant's Purchase Right shall be void and amounts credited to the
Participant's Cash Account shall be promptly returned to the Participant.

                                       10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]