AutoNation 2006 Annual Report Download - page 111

Download and view the complete annual report

Please find page 111 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

available shares shall be allocated proportionately among all the automatic grants to be made at that time.
6. EXERCISE PRICE. The price per share payable upon exercise of an Option (“Exercise Price”) shall be the composite closing price of a share of
Common Stock on the New York Stock Exchange or the principal U.S. stock exchange upon which the Company’s Common Stock is listed (the “Closing
Price”) on the trading day immediately preceding the Automatic Grant Date.
7. DURATION OF OPTIONS AND EXERCISABILITY. Subject to the provisions of Section 9 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, no later than thirty (30) days after a Change of Control (as defined below), each Optionee shall have the
right to require the Company to purchase from the Optionee any Option granted under this Plan at a purchase price equal to (i) the excess of the Closing Price
(determined on the trading day preceding the day on which the Optionee provides the written notice described below or, if later, the date preceding the date of
the Change of Control) over the Exercise Price, 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). 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.
8. EXERCISE OF OPTION. An Option may be exercised (i) 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 in cash or (ii) in such other manner permitted by the Company,
whether through the Company or the Company’s stock option administrator.
At any time of any exercise of any Option, the Company may, if it shall determine it necessary or desirable for any reason, require the Optionee (or his or
her heirs, legatees, or legal representative, as the case may be), as a condition upon the exercise thereof, to deliver to the Company a written representation of
present intention to purchase the shares for investment and not for distribution. In the event such representation is required to be delivered, an appropriate
legend may be placed upon each certificate delivered to the Optionee (or his or her heirs, legatees or legal representative, as the case may be) upon his or her
exercise of part or all of the Option and a stop transfer order may be placed with the transfer agent. Each Option shall
3