AutoNation 2006 Annual Report Download - page 98

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Exhibit 10.5
AUTONATION, INC.
1998 EMPLOYEE STOCK OPTION PLAN
(As Amended and Restated on February 5, 2007)
AutoNation, Inc. (the “Company”) hereby adopts this AutoNation, Inc. 1998 Employee Stock Option Plan (the “Plan”), the terms of which shall be as
follows:
1. PURPOSE
The Plan is intended to advance the interests of the Company by providing eligible individuals (as designated pursuant to Section 4 below) with an
opportunity to acquire or increase a proprietary interest in the Company, which thereby will create a stronger incentive to expend maximum effort for the
growth and success of the Company and its subsidiaries, and will encourage such eligible individuals to remain in the employ of the Company or one or more
of its subsidiaries. Each stock option granted under the Plan (an “Option”) shall be an option that is not intended to constitute an “incentive stock option”
(“Incentive Stock Option”) within the meaning of Section 422 of the Internal Revenue Code of 1986, or the corresponding provision of any subsequently-
enacted tax statute, as amended from time to time (the “Code”) unless such Option is granted to an employee of the Company or a “subsidiary corporation” (a
“Subsidiary”) thereof within the meaning of Section 424(f) of the Code and is specifically designated at the time of grant as being an Incentive Stock Option.
Any Option so designated shall constitute an Incentive Stock Option only to the extent that it does not exceed the limitations set forth in Section 7 below.
2. ADMINISTRATION
(a) BOARD. The Plan shall be administered by the Board of Directors of the Company (the “Board”), which shall have the full power and authority to
take all actions, and to make all determinations required or provided for under the Plan or any Option granted or Option Agreement (as defined in Section 8
below) entered into under the Plan and all such other actions and determinations not inconsistent with the specific terms and provisions of the Plan deemed by
the Board to be necessary or appropriate to the administration of the Plan or any Option granted or Option Agreement entered into hereunder. All such actions
and determinations shall be by the affirmative vote of a majority of the members of the Board present at a meeting at which any issue relating to the Plan is
properly raised for consideration or without a meeting by written consent of the Board executed in accordance with the Company’s Certificate of Incorporation
and Bylaws, and with applicable law. The interpretation and construction by the Board of any provision of the Plan or of any Option granted or Option
Agreement entered into hereunder shall be final and conclusive.
(b) COMMITTEE. The Board may from time to time appoint a Stock Option Committee (the “Committee”) consisting of not less than two members of the
Board, none of whom shall be an officer or other salaried employee of the Company or any Subsidiary, and each of whom shall qualify in all respects as an
“outside director” for purposes of Section 162(m) of the Code. The Board, in its sole discretion, may provide that the role of the Committee shall be limited to
making recommendations to the Board concerning any determinations to be made and actions to be taken by the Board pursuant to or with respect to the Plan,
or the Board may delegate to the