Exhibit 10.5


 


LKQ
CORPORATION


 


AMENDED AND
RESTATED

STOCK OPTION AND
COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS


 


The Board of Directors of LKQ Corporation
adopted on June 5, 2003 the Stock Option and Compensation Plan for
Non-Employee Directors (the “Plan”), and the stockholders of LKQ Corporation
approved the Plan on September 10, 2003. 
The Plan was subsequently amended on March 3, 2005; December 15,
2005; March 5, 2007; October 12, 2007; and November 5, 2008.


 


1.                                       Statement of Purpose.  The purpose of this Stock Option and
Compensation Plan for Non-Employee Directors (the “Plan”) is to benefit LKQ
Corporation (the “Company”) and its subsidiaries by offering its non-employee
directors a favorable opportunity to become holders of stock in the Company
over a period of years, thereby giving them a stake in the growth and
prosperity of the Company and encouraging the continuance of their services
with the Company.


 


2.                                       Administration.  The Plan shall be administered by the board
of directors of the Company (the “Board of Directors”), whose interpretation of
the terms and provisions of the Plan and whose determination of matters
pertaining to options granted under the Plan shall be final and conclusive.


 


3.                                       Eligibility.  Only current directors of the Company who are
not officers or employees of the Company shall be entitled to receive options
or compensation under the Plan (each such individual receiving options granted
or compensation paid under the Plan is referred to herein as a “Director” and
each person entitled to exercise an option granted under the Plan is referred
to herein as an “Optionee”).


 


4.                                       Granting of Options; Annual Compensation.


 


(a)(i)        [intentionally left blank]


 


(ii)           [intentionally left blank]


 


(iii)          Each Director shall receive annual compensation of $110,000
payable (at the election of such Director) in cash, in shares of the Common
Stock (rounded up to the nearest whole share), or in a combination of cash and
such shares, in equal quarterly installments of $27,500 on the last day of each
quarter (March 31, June 30, September 30 and December 31),
provided such Director continues to be eligible at the time of such payment
under the terms of Paragraph 3 of this Plan. 
In addition, each Director who serves as a member of the Audit
Committee, Compensation Committee or Governance/Nominating Committee of the
Board of Directors shall receive annual compensation of $6,000 for each
committee on which such Director serves payable (at the election of such
Director) in cash, in shares of the Common Stock (rounded up to the nearest
whole share), or in a combination of cash and such shares,  in equal quarterly installments of $1,500 on
the last day of each quarter (March 


 

















 


31, June 30,
September 30 and December 31), 
provided such Director continues to be eligible at the time of such
payment under the terms of Paragraph 3 of this Plan and continues to serve as a
member of the Audit Committee, Compensation Committee or Governance/Nominating
Committee of the Board of Directors.  If
such Director elects to receive the Common Stock as described in this Paragraph
4(a)(iii), the per share value of Common Stock shall equal the fair market
value on the respective payment date (or, if the payment date is not a trading
date, on the first trading date immediately preceding the payment date), which
shall be the average of the highest and lowest sales prices of the Common Stock
reported on the principal national stock exchange on which it is listed or
quotation service on which it is listed (as reported in The Wall
Street Journal) on the respective payment date.  Such election must be made prior to the start
of the calendar year in which the compensation described in this Paragraph 4(a)(iii) is
to be paid.


 


The aggregate number of shares
which shall be available to be so optioned or otherwise issued under the Plan
shall be 1,000,000 shares.  Such number
of shares, and the number of shares subject to options outstanding under the
Plan, shall be subject in all cases to adjustment as provided in
Paragraph 10 hereof.  Options granted
under the Plan are intended not be treated as incentive stock options as
defined in Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”).


 


(b)           No options shall be granted under the Plan subsequent to
the tenth anniversary of the adoption of the Plan.  In the event that an option expires or is
terminated or cancelled unexercised as to any shares, such released shares may
again be optioned (including a grant in substitution for a cancelled option).  Shares subject to options may be made
available from unissued or reacquired shares of Common Stock.


 


(c)           Nothing contained in the Plan or in any option granted
pursuant thereto shall confer upon any Director any right to continue serving
as a director of the Company or interfere in any way with the right of the
Board of Directors or stockholders of the Company to remove such Director
pursuant to the certificate of incorporation or bylaws of the Company or
pursuant to applicable law.


 


5.                                       Option Price.  Except with respect to those options granted
under the terms of Paragraph 4(a)(i) hereof and subject to the adjustment
in Paragraph 10 hereof, the option price for all options granted under
this Plan shall be the fair market value of the shares of Common Stock subject
to the option on the date of the grant of such option.  For purposes of this Paragraph 5, “fair
market value” shall be the average of the highest and lowest sales prices of
the Common Stock reported on the Nasdaq National Market (or on the principal
national stock exchange on which it is listed or quotation service on which it
is listed) (as reported in The Wall Street
Journal) on the date the option is granted (or, if the date of grant
is not a trading date, on the first trading date immediately preceding the date
of grant).  In the event that the Common
Stock is not listed or quoted on the Nasdaq National Market or any other
national stock exchange, the fair market value of the shares of Common Stock
for all purposes of this Plan shall be reasonably determined by the Board of
Directors.


 

















 


6.                                       Duration of Options and Increments.  Subject to the provisions of Paragraph 8
hereof, each option shall be for a term of ten years.  Each option shall become exercisable with
respect to all of the shares subject to the option six months after the date of
its grant.


 


7.                                       Exercise of Option.


 


(a)           An option may be exercised by giving written notice to the
Secretary of the Company, specifying the number of shares to be purchased.  The option price for the number of shares of
Common Stock for which the option is exercised shall become immediately due and
payable; provided, however, that in lieu of cash an Optionee may, with the
approval of the Board of Directors, exercise his or her option by (i) delivering
a promissory note in accordance with the terms of the Plan and in a form
specified by the Company; (ii) tendering to the Company shares of Common
Stock owned by him or her and with the certificates therefor registered in his
or her name, having a fair market value equal to the cash exercise price of the
shares being purchased; or (iii) delivery of an irrevocable written notice
instructing the Company to deliver the shares of Common Stock being purchased
to a broker selected by the Company, subject to the broker’s written guarantee
to deliver the cash to the Company, in each case equal to the full
consideration of the exercise price of the shares being purchased.  For this purpose, the per share value of
Common Stock shall be the fair market value on the date of exercise (or, if the
date of exercise is not a trading date, on the first trading date immediately
preceding the date of exercise), which shall be the average of the highest and
lowest sales prices of the Common Stock reported on the Nasdaq National Market
(or on the principal national stock exchange on which it is listed or quotation
service on which it is listed) (as reported in The
Wall Street Journal) on such date.


 


(b)           If at any time an Optionee is required to pay an amount
required to be withheld under applicable income tax or other laws in connection
with the exercise of an option in order for the Company to obtain a deduction
for federal and state income tax purposes, the Company shall withhold shares of
Common Stock having a value equal to the amount required to be withheld.  The value of the shares to be withheld or
delivered shall be based on the fair market value of the shares of Common Stock
on the date of exercise, which shall be the average of the highest and lowest
sales prices of the Common Stock reported on the Nasdaq National Market (or on
the principal stock exchange on which it is listed or quotation service on
which it is listed) (as reported in The Wall
Street Journal) on the date of exercise.


 


(c)           At the time of any exercise of any option, the Company
may, if the Company 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
upon his or her exercise of part or all of the option and a stop order may be
placed with the transfer agent for the Common Stock.  Each option shall 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, federal
or foreign law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, 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.


 


8.                                       Cessation of Board Membership - Exercise Thereafter.  In the event that an Optionee ceases to be a
director of the Company for any reason, such Optionee shall have five years
from the date such Optionee ceased to be a director of the Company to exercise
those options owned by such Optionee which were exercisable as of the date of
such cessation, but in no event shall such options be exercisable after the
initial term of such options as set forth in Paragraph 6 hereof shall have
expired.


 


9.                                       Non-Transferability
of Options.  No option shall be
transferable by the Optionee otherwise than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order, and each
option shall be exercisable during an Optionee’s lifetime only by the Optionee
or by the Optionee’s legal representative.


 


10.                                 Adjustment. 
The number of shares subject to the Plan and to options granted under
the 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 combination of shares, the number of shares
subject to the Plan and to options granted thereunder shall be proportionately
adjusted; (b) in the event of any merger, consolidation or reorganization
of the Company with any other corporation or legal entity there shall be
substituted, on an equitable basis as determined by the Board of Directors, for
each share of Common Stock then subject to the Plan and for each share of
Common Stock then subject to an option granted under the Plan, the number and
kind of shares of stock or other securities to which the holders of shares of
Common Stock will be entitled pursuant to the transaction; and (c) in the
event of any other relevant change in the capitalization of the Company, the
Board of Directors shall provide for an equitable adjustment in the number of
shares of Common Stock then subject to the Plan and to each share of Common
Stock then subject to an option granted under the Plan.  In the event of any such adjustment, the
option price per share of Common Stock shall be proportionately adjusted.


 


11.                                 Amendment of the Plan.  The Board of Directors of the Company or any
authorized committee thereof may amend or discontinue the Plan at any time,
provided, however, that the Plan may not be amended more than once every six
months except to comport with changes in the Code, the Employee Retirement
Income Security Act, or the rules and regulations under each, and provided
further, that no such amendment or discontinuance shall (a) without the
consent of the Optionee change or impair any option previously granted, or (b) without
the approval of the holders of a majority of the shares of Common Stock which
vote in person or by proxy at a duly held stockholders’ meeting, (i) increase
the maximum number of shares which may be purchased by all eligible 


 

















 


directors
pursuant to the Plan, (ii) change the purchase price of any option, or (iii) change
the option period or increase the time limitations on the grant of options.


 


12.                                 Effective Date.  The Plan is effective as of September 10,
2003.