AutoNation 2006 Annual Report Download - page 112

also be subject to the requirement that, if at any time the Company determines, in its discretion, that the listing, registration or qualification of the shares
subject to the Option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition or in connection with, the issue or purchase of shares thereunder, the Option may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company.
At the time of the exercise of any Option the Company may require, as a condition of the exercise of such Option, the Optionee to pay the Company an
amount equal to the amount of tax the Company is required to withhold to obtain a deduction for federal income tax purposes as a result of the exercise of such
Option by the Optionee.
9. TERMINATION OF BOARD MEMBERSHIP — EXERCISE THEREAFTER. Should an Optionee cease to be an outside member of the Board of
Directors of the Company for any reason other than Retirement (as defined below), death or permanent and total disability, such Optionee’s Options shall
expire and all rights to purchase shares pursuant thereto shall terminate thirty (30) days after the date the Optionee ceases to be an outside member of the Board
of Directors of the Company.
Should an Optionee cease to be an outside member of the Board of Directors of the Company because of Retirement, death or permanent and total disability
(as that term is defined in Section 22(e)(3) of the Code, as now in effect or as subsequently amended), the Option may be exercised in full by the Optionee or,
if he or she is not living, by his or her heirs, legatees, or legal representative, as the case may be, during its specified term prior to three years after the date of
Retirement, death or permanent and total disability, but in no event after the expiration date of the Option. For purposes of this Plan, “Retirement” shall mean
termination of Board service as a result of a Non-Employee Director’s retirement or resignation from the Board after having reached age 55 and having
provided at least six (6) years of Board service to the Company.
10. TRANSFERABILITY OF OPTIONS. No Option shall be assignable or transferable by the Optionee to whom it is granted, other than by will or the
laws of descent and distribution, except that, upon approval by the Board, the Optionee may transfer an Option (a) pursuant to a qualified domestic relations
order as defined for purposes of the Employee Retirement Income Security Act of 1974, as amended, or (b) by gift: to a member of the “Family” (as defined
below) of the Optionee, to or for the benefit of one or more organizations qualifying under Code Sections 501(c) (3) and 170(c) (2) (a “Charitable
Organization”) or to a trust for the exclusive benefit of the Optionee, one or more members of the Optionee’s Family, one or more Charitable Organizations, or
any combination of the foregoing, provided that any such transferee shall enter into a written agreement to be bound by the terms of this Plan. For this
purpose, “Family” shall mean the ancestors, spouse, siblings, spouses of siblings, lineal descendants and spouses of lineal descendants of the Optionee.
11. ADJUSTMENTS. The number of shares subject to this Plan and to Options granted under this Plan shall be adjusted as follows: (a) in the event that
the number of outstanding shares of Common Stock is changed by any stock dividend, stock split or
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