UNITED INDUSTRIAL CORP /DE/
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>e9390988ex102.txt
<TEXT>


                                                                    Exhibit 10.2


                         UNITED INDUSTRIAL CORPORATION
                         2006 LONG TERM INCENTIVE PLAN


Name of Optionee:
                 ---------------------------

Grant Date:
           ------------------------------------------

Number of Shares:
                 ---------------------------

Exercise Price:
               -----------------------------


         Re:   GRANT OF INCENTIVE STOCK OPTION

Dear            :
     -----------

     On May 18, 2006, the  shareholders of United  Industrial  Corporation  (the
"Company")  authorized  and approved the Company's 2006 Long Term Incentive Plan
(the "Plan"),  which was previously adopted by the Board of Directors. A copy of
the Plan is  annexed  hereto  and shall be deemed a part  hereof as if fully set
forth herein.  Unless the context  otherwise  requires,  capitalized  terms used
herein but not defined shall have the meanings set forth in the Plan.

     1. GRANT OF OPTION.  Effective  [GRANT DATE],  the  Compensation  and Stock
Option  Committee (the  "COMMITTEE")  of the Board of Directors  authorized this
grant,  as  incentive  compensation  and  not in  lieu of any  salary  or  other
compensation  for your  services,  of an option (the  "OPTION") to purchase,  in
accordance  with the terms and  conditions set forth in the Plan, but subject to
the terms and conditions set forth in this agreement (this  "AGREEMENT")  and in
the Plan, an aggregate of ________ shares of common stock of the Company,  $1.00
par value per share (the "COMMON  STOCK"),  at a price of  $________  per share,
which is the fair market  value of a share of Common Stock on [GRANT  DATE],  as
determined under the Plan.

     2. TAX MATTERS.  The Option is intended to qualify as an  "incentive  stock
option" within the meaning of section 422 of the Internal  Revenue Code of 1986,
as amended (the "Code"),  but it is specifically  understood that no warranty is
made to you as to such qualification.  Notwithstanding the foregoing, the Option
shall not qualify as an "incentive stock option," among other events, (i) if you
dispose of the shares of Common  Stock  acquired  pursuant  to the Option at any
time  during the two (2) year period  following  the grant date of the Option or
the one (1) year  period  following  the date on which the Option is  exercised;
(ii)  except in the event of your  death or  disability  (as  defined in section
22(e)(3)  of the  Code),  if you are not  employed  by the  Company at all times
during  the period  beginning  on the grant date of the Option and ending on the
day three (3) months before the date of exercise of the Option;  or (iii) to the
extent that the  aggregate  fair  market  value  (determined  as of the time the
Option is granted) of the shares of Common  Stock  subject to  "incentive  stock
options"  which  become  exercisable  for the first  time in any  calendar  year
exceeds  $100,000.  To the  extent  that  the  Option  does  not  qualify  as an
"incentive  stock  option,"  it shall not affect the  validity of the Option and
shall constitute a separate non-qualified stock option.
<PAGE>


     3. VESTING AND  EXERCISABILITY;  OPTION TERM. Subject to the condition that
you do not  experience a Termination of Employment and subject to the provisions
of Section 4 hereof,  the Option may be exercised by you, on a cumulative basis,
during a period of five (5) years  commencing on the date of grant of the Option
and terminating at the close of business on [EXPIRATION DATE], as follows:

     (a) up to _____ of the total number of shares  subject to the Option may be
purchased by you commencing _____ year(s) after the grant date;

     (b) up to an additional  _____ of the total number of shares subject to the
Option may be purchased by you commencing _____ years after the grant date; and

     (c) the balance of the total number of shares  subject to the Option may be
purchased by you commencing _____ years after the grant date.

In no event shall the Option be exercised for a fraction of a share or for less
than one hundred (100) shares (unless the number purchased is the total balance
for which the Option is then exercisable). The unexercised portion of the Option
granted herein shall automatically and without notice terminate and become null
and void upon the expiration of five (5) years from the date of the grant of the
Option.

     4. TERMINATION OF EMPLOYMENT. If, prior to the expiration of five (5) years
from  the  date  of  grant  of the  Option,  you  experience  a  Termination  of
Employment,  the Option shall terminate on the applicable date specified in this
Section 4; provided,  however, that none of the events described in this Section
4 shall extend the period of  exercisability of the Option beyond five (5) years
from the date of grant of the Option.


     (a) TERMINATION FOR CAUSE; RESIGNATION. The Option shall terminate upon the
date of your  Termination  of  Employment,  if you  experience a Termination  of
Employment by the Company for Cause, by you as a result of your  resignation for
any reason  (other than  Retirement),  or by you as a result of your  Retirement
after the occurrence of an event that would constitute grounds for a termination
by the Company for Cause.

     (b)  TERMINATION  BY REASON OF DEATH.  The Option shall  terminate upon the
expiration  of one (1) year after your death if your death occurs  either during
your employment or within the one-year or three-month period after a Termination
of Employment specified in Sections 4(c) and 4(d) hereof, except that the Option
shall be  exercisable  during the  one-year  period after your death only to the
extent that it would have been exercisable on the date of your death.

     (c)  TERMINATION BY REASON OF DISABILITY.  The Option shall  terminate upon
the expiration of one (1) year after your Termination of Employment by reason of
your  Disability,  except  that the  Option  shall be  exercisable  during  such
one-year  period  only  to the  extent  that  it  would  have  been  exercisable
immediately prior to such Termination of Employment.

     (d) TERMINATION WITHOUT CAUSE; RETIREMENT.  The Option shall terminate upon
the  expiration  of  three  (3)  months  from the  date of your  Termination  of
Employment, if you experience a Termination of Employment by the Company without
Cause or by you as a result  of your  Retirement  (other  than as  described  in
Section 4(a) hereof),  except that the Option shall be  exercisable  during such
three-month  period  only to the  extent  that it would  have  been  exercisable
immediately prior to such Termination of Employment.




<PAGE>

     (e) UNVESTED PORTION OF THE OPTION. In addition,  any portion of the Option
that is not  vested  and  exercisable  as of the  date of  your  Termination  of
Employment  for any  reason  shall  terminate  and expire as of the date of such
termination.

     5. METHOD OF EXERCISE. The Option may be exercised by notice to the Company
in a form required by the  Committee  addressed to the Director of Fiscal or the
Accounting  Manager of the  Company at the  principal  place of  business of the
Company,  together with payment of the aggregate exercise price.  Payment of the
exercise  price shall be made,  in  accordance  with the  provisions  of Section
6.3(d) of the Plan, (i) in cash or by check,  (ii) to the extent permitted under
applicable law, through an open market,  broker-assisted  transaction authorized
by the Committee and consistent with the provisions of Section 6.3(d)(ii) of the
Plan,  or (iii) on such other terms and  conditions  as may be acceptable to the
Committee.

     6.  RESTRICTIONS  ON  TRANSFER.  The  Option  is  not  transferable  by you
otherwise  than  by  will  or the  laws  of  descent  and  distribution,  and is
exercisable,  during your lifetime, only by you. The Option may not be assigned,
transferred (except by will or the laws of descent and distribution), pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to  execution,  attachment or similar  proceeding.  Any attempt to so
assign,  transfer,  pledge or  hypothecate  the Option or subject  the Option to
execution,  attachment or similar proceeding  contrary to the provisions hereof,
shall be null and void and without any force or effect.

     7.  LIMITATION  OF  RIGHTS.  The  Option  shall  not  confer  upon  you any
privileges of a shareholder  of the Company with respect to any shares of Common
Stock issuable upon exercise hereof,  including without  limitation any right to
vote such shares of Common Stock or to receive dividends or other  distributions
in respect thereof, until the date of the issuance to you of a stock certificate
evidencing  the shares of Common Stock.  In addition,  nothing in this Agreement
shall confer upon you any right to continued  employment with the Company or any
Subsidiary or to interfere in any way with the right of the Company to terminate
your employment with the Company or any Subsidiary at any time.

     8. LEGENDS. If the Company, in its sole discretion, shall determine that it
is necessary in order to comply with applicable securities laws, the certificate
or certificates  representing the shares  purchased  pursuant to the exercise of
the Option shall bear an appropriate legend in form and substance, as determined
by the Company, giving notice of applicable restrictions on transfer under or in
respect of such laws.

     9. INVESTMENT  REPRESENTATIONS.  It shall be a condition of the exercise of
the Option that if, at the time of exercise of the Option,  there does not exist
a  registration  statement on an  appropriate  form under the  Securities Act of
1933,  as mended (the "Act"),  which  registration  statement  shall have become
effective  and shall  include a prospectus  which is current with respect to the
shares  subject to the  Option,  you shall  execute and deliver to the Company a
written  statement,  in a form  satisfactory  to the  Committee,  in  which  you
represent  and  warrant  (i) that you are  purchasing  the  shares  for your own
account and not with a view to the resale or distribution  thereof and (ii) that
any  subsequent  offer for sale or sale of any such shares  shall be made either
pursuant to (x) a registration  statement on an appropriate  form under the Act,
which  registration  statement shall have become  effective and shall be current
with respect to the shares being offered and sold,  or (y) a specific  exemption
from the  registration  requirements of the Act, but in claiming such exemption,
you  shall,  prior  to any  offer  for  sale or sale of such  shares,  obtain  a
favorable  written opinion from counsel for or approved by the Company as to the
applicability of such exemption.

     10.  WITHHOLDING  TAXES.  As provided in the Plan, the Company may withhold
from sums due or to become due to you from the  Company an amount  necessary  to
satisfy its obligation to withhold  taxes incurred by reason of the  disposition
of the shares acquired by exercise of the Option in a disqualifying  disposition
(within  the  meaning of  Section  421(b) of the Code),  or may  require  you to
reimburse the Company in such amount. The Company may hold the stock certificate
to which you are  entitled  upon the  exercise  of the  Option as  security  for
payment of the  withholding  tax  liability,  until cash  sufficient to pay such
liability has been accumulated.


<PAGE>

     11. DISQUALIFYING DISPOSITIONS. In the event that you dispose of the shares
issued upon  exercise of the Option  within  either two (2) years  following the
date of grant or one year following the date of exercise of the Option, you must
deliver to the Company,  within seven (7) days  following  such  disposition,  a
written  notice  specifying  the date on which the shares were  disposed of, the
number of shares  disposed,  and, if such disposition was by a sale or exchange,
the amount of consideration received.

     12.  PROHIBITED  ACTIVITIES.  It shall be a  condition  of the grant of the
Option  that,  and upon  exercise  of the  Option  you  shall be  deemed to have
certified that:

     (a) Non-Solicitation. For a period of _____ (___) years from and after your
Termination of Employment, you shall not:

     (i)  directly or indirectly  solicit,  entice or induce any employee of the
          Company or of any of its  Subsidiaries  or affiliated  companies to be
          employed  by any person,  firm or  corporation  which is,  directly or
          indirectly,  in  competition  with the business or  activities  of the
          Company or any of its Subsidiaries or affiliated companies; or

     (ii) directly or indirectly  approach any such employee for these purposes;
          or

     (iii)authorize  or  knowingly  approve the taking of such  actions by other
          persons on behalf of any such person,  firm or corporation,  or assist
          any such person, firm or corporation in taking such action; or

     (iv) directly or  indirectly  solicit,  raid,  entice or induce any person,
          firm or corporation  (other than the U.S.  Government or its agencies)
          who or which on the date  hereof is, or at any time  during the period
          hereunder  shall  be,  a  customer  of  the  Company  or of any of its
          Subsidiaries or affiliated companies to become a customer for the same
          or similar  products which it purchased from the Company or any of its
          Subsidiaries  or affiliated  companies,  or any other person,  firm or
          corporation,  and you shall not  approach  any such  customer for such
          purpose or authorize  or knowingly  approve the taking of such actions
          by any other person.

     (b)  NON-DISCLOSURE.  You shall not divulge,  furnish or make  available to
anyone at any time,  except as part of your  employment by the Company or any of
its  Subsidiaries  or affiliated  companies  either during or subsequent to such
employment,  any  knowledge  or  information  with  respect to  confidential  or
proprietary information,  methods,  processes, plans or materials of the Company
or any of its Subsidiaries or affiliated companies, or with respect to any other
confidential or proprietary aspects of the business of the Company or any of its
Subsidiaries or affiliated companies (the activities prohibited by Section 12(a)
hereof  and this  Section  12(b)  are  collectively  referred  to  herein as the
"PROHIBITED ACTIVITIES").

     (c) FORFEITURE; REMEDIES; ENFORCEMENT.

     (i)  Upon the exercise of the Option, you shall be deemed to have certified
          and agreed that you are in compliance with the terms and conditions of
          the Plan and that you have not  engaged in and do not intend to engage
          in any of the Prohibited  Activities.  In the event that you engage in
          any of the  Prohibited  Activities  (i) prior to any  exercise  of the
          Option,  the Committee  shall have the right to immediately  terminate
          the Option  (whether  or not vested and  exercisable),  and the Option
          shall thereupon  immediately  terminate and expire, and/or (ii) during
          the one-year  period  following the later of (x) your  Termination  of
          Employment  and (y) the date on which the  Option was  exercised,  the
          Committee  shall  have  the  right,  as  applicable,   to  immediately
          terminate the Option (whether or not vested and exercisable),  and the
          Company  shall be entitled to recover  from you at any time within one
          year  after  the  later of (x) and (y),  and you shall pay over to the
          Company,  an  amount  equal to any gain  realized  as a result  of the
          exercise   of  the  Option   (whether  at  the  time  of  exercise  or
          thereafter).

<PAGE>

     (ii) You  acknowledge  and agree  that the  Committee's  and the  Company's
          remedies  at law for a breach or  threatened  breach of the  foregoing
          provisions of the Option in respect of the Prohibited Activities would
          be inadequate and, in recognition of this fact, you agree that, in the
          event  of such a breach  or  threatened  breach,  in  addition  to any
          remedies at law, the Committee and/or the Company, without posting any
          bond,  shall be  entitled  to obtain  equitable  relief in the form of
          specific  performance,  a temporary  restraining order, a temporary or
          permanent  injunction or any other equitable  remedy which may then be
          available.

     (iii)If it is determined by a court of competent  jurisdiction in any state
          that any  restriction  in this  Agreement in respect of the Prohibited
          Activities  is  excessive in duration or scope or is  unreasonable  or
          unenforceable under the laws of that state, it is the intention of the
          parties that such  restriction may be modified or amended by the court
          to render it enforceable  to the maximum extent  permitted by the laws
          of that state.

     (d)  SURVIVAL.  The terms and  provisions  of this Section 12 shall survive
your  Termination  of  Employment  and the  expiration  of the  Option  and this
Agreement as set forth herein.

     13.  PROVISIONS  OF THE PLAN  CONTROL.  This  Agreement  and the Option are
subject to all of the terms, conditions,  limitations and restrictions contained
in the Plan,  which  shall be  controlling  in the event of any  conflicting  or
inconsistent provisions.

     14. ENTIRE  AGREEMENT.  This  Agreement and the Plan  constitute the entire
agreement  between you and the Company with respect to the subject matter hereof
and thereof, merging any and all prior agreements.

                         [SIGNATURES ON FOLLOWING PAGE]


<PAGE>




     Please  indicate your  acceptance of all of the terms and conditions of the
Option,  this  Agreement and the Plan by signing in the space provided below and
returning    the   original   of   this   letter   to    _________________    by
_________________________.




                                Very truly yours,
                                UNITED INDUSTRIAL CORPORATION



                                By:
                                   --------------------------------------------
                                Name:   Jonathan A. Greenberg
                                Title:  Vice President, General Counsel
                                         and Secretary


ACCEPTED

------------------------
Signature:


Date: ------------------



</TEXT>
</DOCUMENT>
