AutoNation 2006 Annual Report Download - page 107

Download and view the complete annual report

Please find page 107 of the 2006 AutoNation annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 139

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139

17. EFFECT OF CHANGES IN CAPITALIZATION
(a) ADJUSTMENT FOR CORPORATE TRANSACTIONS. The Board may determine that a corporate transaction has affected the price of the Stock
such that an adjustment or adjustments to outstanding awards are required to preserve (or prevent enlargement of) the benefits or potential benefits intended at
time of grant. For this purpose a corporate transaction may include, but is not limited to, any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares of Stock, or other similar occurrence. In the event
of such a corporate transaction, the Board shall, in such manner as the Board deems equitable, adjust (i) the number and kind shares of Stock which may be
delivered under the Plan pursuant to Section 3; (ii) the number and kind of shares of Stock subject to outstanding awards; and (iii) the exercise price of
outstanding stock options.
(b) DISSOLUTION OR LIQUIDATION; REORGANIZATION IN WHICH THE COMPANY IS NOT THE SURVIVING CORPORATION OR SALE
OF ASSETS OR STOCK. Upon the dissolution or liquidation of the Company the Plan and all Options outstanding hereunder shall terminate. In the event of
any termination of the Plan under this Section 17 (b), each individual holding an Option shall have the right, immediately prior to the occurrence of such
termination and during such reasonable period as the Board in its sole discretion shall determine and designate, to exercise such Option in whole or in part,
whether or not such Option was otherwise exercisable at the time such termination occurs and without regard to any vesting or other limitation on exercise
imposed pursuant to Section 10(b) above. In connection with a merger, consolidation, reorganization or other business combination of the Company with one
or more other entities in which the Company is not the surviving entity, or upon a sale of all or substantially all of the assets of the Company to another entity,
or upon any transaction (including, without limitation, a merger or reorganization in which the Company is the surviving corporation) that results in any
person or entity (or persons or entities acting as a group or otherwise in concert) owning more than 50 percent of the combined voting power of all classes of
stock of the Company, the Company and the acquiring or surviving entity shall provide for the continuation of the Plan and the assumption of the Options
theretofore granted, or for the substitution for such Options of new options covering the stock of a successor entity, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kinds of shares and exercise prices. The Board shall send prior written notice of the occurrence of an event
described in this Section 17(b) to all individuals who hold Options not later than the time at which the Company gives notice to its stockholders that such
event is proposed.
(c) NO LIMITATIONS ON CORPORATION. The grant of an Option pursuant to the Plan shall not affect or limit in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve or liquidate,
or to sell or transfer all or any part of its business or assets.
18. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Option granted or Option Agreement entered into pursuant to the Plan shall be construed to confer upon any individual
the right to remain in the
10