AutoNation 1998 Annual Report Download - page 85

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Common Stock as of the Automatic Grant Date.
For purposes of establishing the Exercise Price, the "Closing Selling
Price" per share of the Common Stock on any relevant date shall be the closing
selling price per share of Common Stock on the date immediately prior to the
automatic grant date as quoted on the Nasdaq Stock Market or by the principal
U.S. stock exchange upon which the Company's Common Stock is listed (the
"Exchange"), or if there is no reported closing selling price of Common Stock on
the Exchange on the date in question, the closing selling price on the Exchange
on the last preceding date for which such quotation exists.
6. DURATION OF OPTIONS AND EXERCISABILITY. Subject to the provisions
of Section 8 hereof, each Option shall have a term of ten years measured from
the Automatic Grant Date. Each Option shall become exercisable for any or all of
the shares covered by such Option immediately upon the Automatic Grant Date. The
Option shall thereafter remain so exercisable until the expiration or sooner
termination of the Option term.
Notwithstanding any such provision in this Plan, during the period of
thirty (30) days after a Change of Control (as defined below), each Optionee
shall have the right to require the Company to purchase from Optionee any Option
granted under this Plan at a purchase price equal to (i) the excess of fair
market value per share over the Exercise Price (both of which as existing on the
date of such Change of Control), multiplied by (ii) the number of Option shares
specified by such individual for purchase by the Company, in a written notice to
the Company, attention of the Secretary. A "Change of Control" shall be deemed
to occur if any person shall (a) acquire direct or indirect beneficial ownership
of at least 50% of the issued and outstanding Common Stock of the Company, or
(b) has the power (whether such power arises as a result of the ownership of
capital stock, by contract or otherwise), or the ability to elect or cause the
election of directors consisting at the time of such election of a majority of
the Board of Directors of the Company. As used herein, "person" shall mean any
person, corporation, partnership, joint venture or other entity or any group (as
such term is defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules promulgated thereunder). For purposes of this paragraph,
"fair market value per share" shall mean the average of the highest sales price
per share of the Company's Common Stock as quoted on the Nasdaq Stock Market, or
by the principal exchange upon which the Company's Common Stock is listed, on
each of the five trading days immediately preceding the date on which such
individual so notifies the Company. The amount payable to each such individual
by the Company shall be in cash or by certified check and shall be reduced by
any taxes required to be withheld.
2
3
7. EXERCISE OF OPTION. As a condition to the exercise of any Option,
the "Quoted Price" (as defined below) per share of Common Stock on the date of
exercise must equal or exceed the Exercise Price. An Option may be exercised by
giving written notice to the Company, attention of the Secretary, specifying the
number of shares to be purchased, accompanied by the full purchase price for the
shares to be purchased either (i) in cash, (ii) by check, (iii) by shares of the
Common Stock, (iv) by a combination of these methods of payment. The "Quoted
Price" and the per share value of Common Stock for purposes of paying the
Exercise Price in accordance with the immediately preceding sentence shall be
determined pursuant to the definition of Closing Selling Price under Section 5
hereof, but determined with respect to the date of exercise. The Company may in
its discretion permit an Optionee to deliver a promissory note in a form
specified by the Company, and payable to the Company no later than the fifteenth
day of April in the year following the year of exercise of any Option, in
payment of any withholding tax requirements of the Company with respect to such
exercise.