2005 Stock Incentive Plan

EXHIBIT 10.16 AFFINIA GROUP HOLDINGS INC. 2005 STOCK INCENTIVE PLAN1. Purpose of the Plan ------------------- The purpose of the Plan (as defined below) is to aid theCompany (as defined below) and its Affiliates (as defined below) in recruitingand retaining key employees, directors or consultants of outstanding ability andto motivate such employees, directors or consultants to exert their best effortson behalf of the Company and its Affiliates by providing incentives through thegranting of Awards (as defined below). The Company expects that it will benefitfrom the added interest which such key employees, directors or consultants willhave in the welfare of the Company as a result of their proprietary interest inthe Company's success.2. Definitions ----------- The following capitalized terms used in the Plan have therespective meanings set forth in this Section: (a) Act: The Securities Exchange Act of 1934, as amended, orany successor thereto. (b) Affiliate: With respect to any Person, any other Person,directly or indirectly, controlling, controlled by or under common control withsuch Person or any other Person designated by the Committee in which any Personhas an interest. (c) Award: Any Option, Stock Appreciation Right, or OtherStock-Based Award granted pursuant to the Plan. (d) Award Agreement: Any written agreement, contract, or otherinstrument or document evidencing any Award, which may, but need not, beexecuted or acknowledged by a Participant. (e) Board: The Board of Directors of the Company. (f) Change in Control: The occurrence of any of the followingevents (i) the sale or disposition, in one or a series of related transactions,of all or substantially all of the assets of the Company to any "person" or"group" (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Act)other than Cypress or its controlled affiliates, (ii) any person or group, otherthan Cypress or its controlled affiliates, is or becomes the "beneficial owner"(as defined in Rules 13d-3 and 13d-5 under the Act), directly or indirectly, ofmore than 50% of the total voting power of the voting stock of the Company,including by way of merger, consolidation or otherwise and Cypress does not havethe power (by contract or otherwise) to appoint a majority of the members of theBoard, or (iii) any person or group, other than Cypress or its controlledaffiliates, is or becomes the "beneficial owner", directly or indirectly, ofmore than 20% of the total voting power of the voting stock of the Companydirectly or indirectly, such person or group acquires more voting power in theCompany than Cypress or its controlled affiliates combined (including votingpower held by contract) and Cypress does not have the power (by contract orotherwise) to appoint a majority of the members of the Board. 2 (g) Code: The Internal Revenue Code of 1986, as amended, orany successor thereto. (h) Committee: A committee of the Board designated by theBoard. (i) Company: Affinia Group Holdings Inc. (j) Cypress: Cypress Merchant Banking Partners II L.P.,Cypress Merchant Banking II C.V., 55th Street Partners II L.P. and CypressSide-By-Side LLC. (k) Effective Date: The date the Board adopts the Plan. (l) Employment: (i) a Participant's employment if theParticipant is an employee of the Company or any of its Affiliates, (ii) aParticipant's services as a consultant, if the Participant is a consultant tothe Company or any of its Affiliates and (iii) a Participant's services as annon-employee director, if the Participant is a non-employee member of the Boardor the board of directors of an Affiliate; provided however that unlessotherwise determined by the Committee, a change in a Participant's status fromemployee to non-employee (other than a director of the Company or an Affiliate)shall constitute a termination of employment hereunder. (m) Fair Market Value: On a given date, (a) if there is apublic market for the Shares on such date, the average of the high and lowclosing bid prices of the Shares on such stock exchange on which the Shares areprincipally trading on the date in question, or, if there were no sales on suchdate, on the closest preceding date on which there were sales of Shares or (ii)if there is no public market for the Shares on such date, the fair market valueof the Shares as determined in good faith by the Board. (n) ISO: An Option that is also an incentive stock optiongranted pursuant to Section 6(d) of the Plan. (o) Operating Company. Affinia Group Inc. (p) Option: A stock option granted pursuant to Section 6 ofthe Plan. (q) Option Price: The purchase price per Share of an Option,as determined pursuant to Section 6(a) of the Plan. (r) Other Stock-Based Award: Any award granted under Section 8of the Plan. (s) Participant: An employee, director or consultant of theCompany or its Affiliates who is selected by the Committee to participate in thePlan. (t) Person: Any individual, firm, corporation, partnership,limited liability company, trust, incorporated or unincorporated association,joint venture, joint stock company, governmental body or other entity of anykind. (u) Plan: Affinia Group Holdings Inc. 2005 Stock IncentivePlan. 3 (v) Restrictive Covenant Agreement. A Confidentiality,Non-Competition and Proprietary Information Agreement in form approved by theBoard which, unless otherwise determined by the Board, shall be entered into byeach Participant who is issued an Award hereunder. (w) Shares: Shares of common stock of the Company. (x) Stock Appreciation Right: Any right granted under Section7 of the Plan. (y) Stockholders Agreement. A Management Stockholder'sAgreement in form approved by the Board which, unless otherwise determined bythe Board, shall be entered into by each Participant who is issued an Awardhereunder. (z) Subsidiary: A subsidiary corporation, as defined inSection 424(f) of the Code (or any successor section thereto), of the Company.3. Shares Subject to the Plan -------------------------- The total number of Shares which may be issued under the Planis 227,000. The Shares may consist, in whole or in part, of unissued Shares ortreasury Shares. The issuance of Shares or the payment of cash upon the exerciseof an Award shall reduce the total number of Shares available under the Plan, asapplicable. Shares which are (i) subject to Awards (or portion thereof) thatterminate or lapse or (ii) delivered by the Participant or withheld by theCompany to pay the minimum statutory withholding rate in accordance with Section4(d), in each case, may be granted again under the Plan.4. Administration -------------- (a) The Plan shall be administered by the Committee, which maydelegate its duties and powers in whole or in part as it determines; provided,however, that the Board may, in its sole discretion, take any action designatedto the Committee under this Plan as it may deem necessary. (b) The Committee shall have the full power and authority tomake, and establish the terms and conditions of, any Award to any personeligible to be a Participant, consistent with the provisions of the Plan and towaive any such terms and conditions at any time (including, without limitation,accelerating or waiving any vesting conditions or payment dates). Awards may, inthe discretion of the Committee, be made under the Plan in assumption of, or insubstitution for, outstanding awards previously granted by the Company or itsAffiliates or a company acquired by the Company or with which the Companycombines. The number of Shares underlying such substitute awards shall becounted against the aggregate number of Shares available for Awards under thePlan. (c) The Committee is authorized to interpret the Plan, toestablish, amend and rescind any rules and regulations relating to the Plan, andto make any other determinations that it, in good faith, deems necessary ordesirable for the administration of the Plan, and may delegate such authority,as it deems appropriate. The Committee may correct any defect or supply anyomission or reconcile any inconsistency in the Plan in the manner and to theextent 4the Committee deems necessary or desirable. Any decision of the Committee in theinterpretation and administration of the Plan, as described herein, shall liewithin its sole and absolute good faith discretion and shall be final,conclusive and binding on all parties concerned (including, but not limited to,Participants and their beneficiaries or successors). (d) The Committee shall require payment of any amount it maydetermine to be necessary to withhold for federal, state, local, or other taxesas a result of the exercise, grant or vesting of an Award. Unless ...