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Exhibit 10.14  


 
 


  
  
  ADESA, INC.    
    
    2004 EQUITY AND INCENTIVE PLAN    
    







ADESA, INC.  


 2004 EQUITY AND INCENTIVE PLAN  



	Section
 
	 	 
	 	Page

	

1.	
 	

Purpose; Types of Awards; Construction.	
 	

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2.	
 	

Definitions.	
 	

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3.	
 	

Administration.	
 	

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4.	
 	

Eligibility.	
 	

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5.	
 	

Stock Subject to the Plan.	
 	

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6.	
 	

Specific Terms of Awards.	
 	

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7.	
 	

Change in Control Provisions.	
 	

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8.	
 	

General Provisions.	
 	

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ADESA, INC.  


 2004 EQUITY AND INCENTIVE PLAN  


1.     Purpose; Types of Awards; Construction.  


        The purpose of the ADESA, Inc. 2004 Equity and Incentive Plan (the "Plan") is to promote the interests of the Company and its Subsidiaries and the
stockholders of the Company by providing officers, employees, consultants and independent contractors (including non-employee directors) of the Company and its Subsidiaries with
appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company or its Subsidiaries, to acquire a proprietary interest in the
long-term success of the Company and to reward the performance of individuals in fulfilling their personal responsibilities for long-range and annual achievements. The Plan
provides for the grant of options (including "incentive stock options" and "nonqualified stock options"), stock appreciation rights, restricted stock, restricted stock units and other stock- or
cash-based awards. The Plan is designed so that Awards granted hereunder intended to comply with the requirements for "performance-based compensation" under Section 162(m) of the
Code may comply with such requirements, and the Plan and Awards shall be interpreted in a manner consistent with such requirements. 


2.     Definitions.  


        For purposes of the Plan, the following terms shall be defined as set forth below: 



        (a)   "Annual
Incentive Program" means the program described in Section 6(c) hereof. 


        (b)   "Award"
means any Option, SAR, Restricted Stock, Restricted Stock Unit or Other Stock-Based Award or Other Cash-Based Award granted under the Plan. 


        (c)   "Award
Agreement" means any written agreement, contract, or other instrument or document evidencing an Award. 


        (d)   "Board"
means the Board of Directors of the Company. 


        (e)   A
"Change in Control" shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred: 



          (i)  any
Person is or becomes the Beneficial Owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such Person any securities acquired directly from the Company or any of its affiliates) representing 25% or more of the combined voting power of
the Company's then outstanding securities; or 


         (ii)  the
following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, on the date hereof,
constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for
election was previously so approved or recommended; or; 


        (iii)  there
is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than a merger or
consolidation immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the Board, the entity surviving such merger or
consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof; or 









 





        (iv)  the
stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets, other than (a) a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least
60% of the combined voting power of the voting securities of which are owned by stockholders of the Company following the completion of such transaction in substantially the same proportions as their
ownership of the Company immediately prior to such sale or (b) other than a sale or disposition by the Company of all or substantially all of the Company's assets immediately following which
the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if such entity is
a subsidiary, the ultimate parent thereof. 





Notwithstanding
the foregoing, a "Change in Control" shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following
which the holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which
owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions. 



        (f)    "Code"
means the Internal Revenue Code of 1986, as amended from time to time. 


        (g)   "Committee"
shall mean, at the discretion of the Board, a Committee of the Board, which shall consist of two or more persons, each of whom, unless otherwise determined
by the Board, is an "outside director" within the meaning of Section 162(m) of the Code and a "nonemployee director" within the meaning of Rule 16b-3. 



        (h)   "Company"
means ADESA, Inc., a corporation organized under the laws of the State of Delaware, or any successor corporation. 


        (i)    "Covered
Employee" shall have the meaning set forth in Section 162(m)(3) of the Code. 


        (j)    "Effective
Date" means the effective date of the Initial Public Offering, provided that the Plan has been approved by the stockholders of the Company and the Board prior
to the Initial Public Offering. 


        (k)   "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time, and as now or hereafter construed, interpreted and applied by regulations,
rulings and cases. 


        (l)    "Fair
Market Value" means, with respect to Stock or other property, the fair market value of such Stock or other property determined by such methods or procedures as
shall be established from time to
time by the Committee. Unless otherwise determined by the Committee in good faith, the per share Fair Market Value of Stock as of a particular date shall mean (i) the mean between the highest
and lowest reported sales price per share of Stock on the national securities exchange on which the Stock is principally traded, for the last preceding date on which there was a sale of such Stock on
such exchange, or (ii) if the shares of Stock are then traded in an over-the-counter market, the average of the closing bid and asked prices for the shares of Stock in
such over-the-counter market for the last preceding date on which there was a sale of such Stock in such market, or (iii) if the shares of Stock are not then listed on a
national securities exchange or traded in an over-the-counter market, such value as the Committee, in its sole discretion, shall determine. 



        (m)  "Grantee"
means an employee, consultants or independent contractor (including non-employee director) of the Company or any Subsidiary of the Company that has
been granted an Award under the Plan. 



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        (n)   "Initial
Public Offering" means the initial public offering of the shares of Stock of the Company. 



        (o)   "ISO"
means any Option intended to be and designated as an incentive stock option within the meaning of Section 422 of the Code. 


        (p)   "Long
Term Incentive Program" means the program described in Section 6(b) hereof. 


        (q)   "NQSO"
means any Option that is not designated as an ISO. 


        (r)   "Option"
means a right, granted to a Grantee under Section 6(b)(i), to purchase shares of Stock. An Option may be either an ISO or an NQSO. 



        (s)   "Other
Cash-Based Award" means cash awarded under the Annual Incentive Program or the Long Term Incentive Program, including cash awarded as a bonus or upon
the attainment of Performance Goals or otherwise as permitted under the Plan. 


        (t)    "Other
Stock-Based Award" means a right or other interest granted to a Grantee under the Annual Incentive Program or the Long Term Incentive Program that may be
denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, including but not limited to (i) unrestricted Stock awarded as a bonus or
upon the attainment of Performance Goals or otherwise as permitted under the Plan, and (ii) a right granted to a Grantee to acquire Stock from the Company containing terms and conditions
prescribed by the Committee. 


        (u)   "Performance
Goals" means performance goals based on the attainment by the Company or any Subsidiary of the Company (or any division or business unit of such entity) of
performance goals pre-established by the Committee, based on one or more of the following criteria (as determined in accordance with generally accepted accounting principles):
(1) return on total stockholder equity; (2) earnings per share of Company Stock; (3) net income (before or after taxes); (4) earnings before any or all of interest, taxes,
depreciation and amortization; (5) sales or revenues; (6) return on assets, capital or investment; (7) market share; (8) cost reduction goals; (9) budget
comparisons; (10) implementation or completion of critical projects or processes; (11) the formation of joint ventures, research or development collaborations, or the completion of other
corporate transactions; and (12) any combination of, or a specified increase in, any of the foregoing. The performance goals may be based upon the attainment of specified levels of performance
under one or more of the measures described above relative to the performance of other entities. To the extent permitted under Section 162(m) of the Code (including, without limitation,
compliance with any requirements for stockholder approval), the Committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend the
aforementioned business criteria. Performance Goals may include a threshold level of performance below which no Award will be earned, a level of performance at which the target amount of an Award will
be earned and a level of performance at which the maximum amount of the Award will be earned. The Committee shall have the authority to make equitable adjustments to the Performance Goals in
recognition of unusual or non-recurring events affecting the Company or any Subsidiary of the Company or the financial statements of the Company or any Subsidiary of the Company, in
response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to
the disposal of a segment of a business or related to a change in accounting principles. 



        (v)   "Person"
shall have the meaning set forth in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (1) the Company or any Subsidiary Corporation, (2) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary
Corporation, (3) an underwriter temporarily holding securities pursuant to an offering of such securities, or (4) a corporation 



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owned,
directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 


        (w)  "Plan"
means this ADESA, Inc. 2004 Equity and Incentive Plan, as amended from time to time. 


        (x)   "Restricted
Stock" means an Award of shares of Stock to a Grantee under Section 6(b)(iii) that may be subject to certain restrictions and to a risk of
forfeiture. 


        (y)   "Restricted
Stock Unit" means a right granted to a Grantee under Section 6(b)(iv) to receive Stock or cash at the end of a specified deferral period, which
right may be conditioned on the satisfaction of specified performance or other criteria. 


        (z)   "Rule 16b-3"
means Rule 16b-3, as from time to time in effect promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act, including any successor to such Rule. 


        (aa) "Stock"
means shares of the common stock, par value $0.01 per share, of the Company. 


        (bb) "Stock
Appreciation Right" or "SAR" means the right, granted to a Grantee under Section 6(b)(ii), to be paid an amount measured by the appreciation in the Fair
Market Value of Stock from the date of grant to the date of exercise of the right. 


        (cc) "Subsidiary"
means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code. 





3.     Administration.  


        The Plan shall be administered by the Committee. The Committee shall have the authority in its discretion, subject to and not inconsistent with the express
provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the
Plan, including, without limitation, the authority to grant Awards; to determine the persons to whom and the time or times at which Awards shall be granted; to determine the type and number of Awards
to be granted, the number of shares of Stock to which an Award may relate and the terms, conditions, restrictions and performance criteria relating to any Award; to determine Performance Goals no
later than such time as required to ensure that an underlying Award which is intended to comply with the requirements of Section 162(m) of the Code so complies; and to determine whether, to
what extent, and under what circumstances an Award may be settled, cancelled, forfeited, exchanged, or surrendered; to make adjustments in the terms and conditions of, and the Performance Goals (if
any) included in, Awards; to construe and interpret the Plan and any Award; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the
Award Agreements (which need not be identical for each Grantee); and to make all other determinations deemed necessary or advisable for the administration of the Plan. Notwithstanding the foregoing,
neither the Board, the Committee nor their respective
delegates shall have the authority to reprice (or cancel and regrant) any Option or, if applicable, other Award at a lower exercise, base or purchase price without first obtaining the approval of the
Company's stockholders. 


        The
Nominating Committee and the Corporate Governance Committee of the Board may appoint a chairperson and a secretary and may make such rules and regulations for the conduct of its
business as it shall deem advisable, and shall keep minutes of its meetings. All determinations of the Committee shall be made by a majority of its members either present in person or participating by
conference telephone at a meeting or by written consent. The Committee may delegate to one or more of its members or to one or more agents such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may employ one or more 


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persons
to render advice with respect to any responsibility the Committee or such person may have under the Plan. All decisions, determinations and interpretations of the Committee shall be final and
binding on all persons, including but not limited to the Company, any Subsidiary of the Company, or Grantee (or any person claiming any rights under the Plan from or through any Grantee) and any
stockholder. 


        No
member of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award granted hereunder. 


4.     Eligibility.  


        Awards may be granted to executive officers and other key employees, consultants and independent contractors (including non-employee directors) of the
Company or its Subsidiaries, including officers and directors who are employees, and to key consultants to the Company or its Subsidiaries. In determining the persons to whom Awards shall be granted
and the number of shares to be covered by each Award, the Committee shall take into account the duties of the respective persons, their present and potential contributions to the success of the
Company or its Subsidiaries and such other factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan. 


5.     Stock Subject to the Plan.  


        The maximum number of shares of Stock reserved for the grant of Awards under the Plan shall be 8,500,000, subject to adjustment as provided herein. Subject to
adjustment as provided herein, no more
than (1) 3,000,000 shares may be awarded under the Plan in the aggregate in respect of Awards other than Options and SARs, (2) 800,000 shares of Stock may be made subject to Options
awarded to an individual in a single calendar year, and (3) 400,000 shares of Stock may be made subject to stock-based awards other than Options (including SARs, Restricted Stock and Restricted
Stock Units or Other Stock-Based Awards denominated in shares of Stock) to an individual in a single calendar year. Determinations made in respect of the limitations set forth in the immediately
preceding sentence shall be made in a manner consistent with Section 162(m) of the Code. Such shares may, in whole or in part, be authorized but unissued shares or shares that shall have been
or may be reacquired by the Company in the open market, in private transactions or otherwise. If any shares subject to an Award are forfeited, cancelled, exchanged or surrendered or if an Award
terminates or expires without a distribution of shares to the Grantee, or if shares of stock are surrendered or withheld as payment of either the exercise price of an Award and/or withholding taxes in
respect of an Award, the shares of stock with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, withholding, termination or expiration, again be
available for Awards under the Plan. Upon the exercise of any Award granted in tandem with any Awards such related Awards shall be cancelled to the extent of the number of shares of Stock as to which
the Award is exercised and, notwithstanding the foregoing, such number of shares shall no longer be available for Awards under the Plan. 


        In
the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Stock, or other property), recapitalization, Stock split, reverse
split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the rights of Grantees under the Plan, then the Committee shall make such equitable changes or adjustments as it deems
necessary or appropriate to any or all of (i) the number and kind of shares of Stock or other property (including cash) that may thereafter be issued in connection with Awards, (ii) the
number and kind of shares of Stock or other property (including cash) issued or issuable in respect of outstanding Awards, (iii) the exercise price, grant price, or purchase price relating to
any Award; provided, that, with respect to ISOs, such adjustment shall be made in 


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accordance
with Section 424(h) of the Code; and (iv) the Performance Goals applicable to outstanding Awards. 


6.     Specific Terms of Awards.  



        (a)    General.    The term of each Award shall be for such period as may be determined by the Committee. Subject to
the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or any Subsidiary of the Company upon the grant, maturation, or exercise of an Award may be made in such
forms as the Committee shall determine at the date of grant or thereafter, including, without limitation, cash, Stock, or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. The Committee may make rules relating to installment or deferred
payments with respect to Awards, including the rate of interest to be credited with respect to such payments. In addition to the foregoing, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter, such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine. 



        (b)    Long Term Incentive Program.    Under the Long Term Incentive Program, the Committee is authorized to grant the
Awards described in this Section 6(b), under such terms and conditions as deemed by the Committee to be consistent with the purposes of the Plan. Such Awards may be granted with value and
payment contingent upon Performance Goals. Each Award granted under the Long Term Incentive Program shall be evidenced by an Award Agreement containing such terms and conditions applicable to such
Award as the Committee shall determine at the date of grant or thereafter. 



        (i)    Options.    The Committee is authorized to grant Options to Grantees on the following terms and conditions: 



        (A)    Type of Award.    The Award Agreement evidencing the grant of an Option under the Plan shall designate the
Option as an ISO or an NQSO. 


        (B)    Exercise Price.    The exercise price per share of Stock purchasable under an Option shall be determined by the
Committee, but in no event shall the exercise price of any Option be less than the Fair Market Value of a share of Stock on the date of grant of such Option. The exercise price for Stock subject to an
Option may be paid in cash or by an exchange of Stock previously owned by the Grantee for at least six months (if acquired from the Company), through a "broker cashless exercise" procedure approved by
the Committee, or a combination of the above, in any case in an amount having a combined value equal to such exercise price. 


        (C)    Term and Exercisability of Options.    Unless the Committee determines otherwise, the date on which the
Committee adopts a resolution expressly granting an Option shall be considered the day on which such Option is granted. Options shall be exercisable over the exercise period (which shall not exceed
ten years from the date of grant), at such times and upon such conditions as the Committee may determine, as reflected in the Award Agreement; provided, that the Committee shall have the authority to
accelerate the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate. An Option may be exercised to the extent of any or
all full shares of Stock as to which the Option has become exercisable, by giving written notice of such exercise to the Committee or its designated agent. 





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        (D)    Termination of Employment, etc.    An Option may not be exercised unless the Grantee is then a director of, in
the employ of, or then maintains an independent contractor relationship with, the Company or a Subsidiary of the Company, and unless the Grantee has remained continuously so employed, or continuously
maintained such a relationship, since the date of grant of the Option; provided, that the Award Agreement may contain provisions extending the exercisability of Options, in the event of specified
terminations, to a date not later than the expiration date of such Option. 


        (E)    Other Provisions.    Options may be subject to such other conditions including, but not limited to,
restrictions on transferability of the shares acquired upon exercise of such Options, as the Committee may prescribe in its discretion or as may be required by applicable law. 




        (ii)    SARs.    The Committee is authorized to grant SARs to Grantees on the following terms and conditions: 



        (A)    In General.    SARs may be granted independently or in tandem with an Option. Unless the Committee determines
otherwise, a SAR (1) granted in tandem with an NQSO may be granted at the time of grant of the related NQSO or at any time thereafter or (2) granted in tandem with an ISO may only be
granted at the time of grant of the related ISO. A SAR granted in tandem with an Option shall be exercisable only to the extent the underlying Option is exercisable. Payment of an SAR may be made in
cash, Stock, or property as specified in the Award Agreement or determined by the Committee. 


        (B)    SARs.    A SAR shall confer on the Grantee a right to receive an amount with respect to each share subject
thereto, upon exercise thereof, equal to the excess of (1) the Fair Market Value of one share of Stock on the date of exercise over (2) the grant price of the SAR (which in the case of
an SAR granted in tandem with an Option shall be equal to the exercise price of the underlying Option, and which in the case of any other SAR shall be such price as the Committee may determine). 




        (iii)    Restricted Stock.    The Committee is authorized to grant Restricted Stock to Grantees on the following terms
and conditions: 



        (A)    Issuance and Restrictions.    Restricted Stock shall be subject to such restrictions on transferability and
other restrictions, if any, as the Committee may impose at the date of grant or thereafter, which restrictions may lapse separately or in combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee may determine; provided that, except as provided in Section 7, any such restrictions that are based only on continued employment for a specified
period of time shall not lapse less than one year after the date of grant of the Award. The Committee may place restrictions on Restricted Stock Units that shall lapse, in whole or in part, only upon
the attainment of Performance Goals. Except to the extent restricted under the Award Agreement relating to the Restricted Stock, a Grantee granted Restricted Stock shall have all of the rights of a
stockholder including, without limitation, the right to vote Restricted Stock and the right to receive dividends thereon. 



        (B)    Forfeiture.    Upon termination of employment with or service to the Company or any Subsidiary of the Company,
during the applicable restriction period, Restricted Stock shall be forfeited; provided, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock. 





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        (C)    Certificates for Stock.    Restricted Stock granted under the Plan may be evidenced in such manner as the
Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Grantee, such certificates shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock, and the Company shall retain physical possession of the certificate. 



        (D)    Dividends.    Dividends paid on Restricted Stock shall be either paid at the dividend payment date in cash or
in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends. Stock distributed in connection with a stock split or stock dividend, and other property distributed
as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed. 




        (iv)    Restricted Stock Units.    The Committee is authorized to grant Restricted Stock Units to Grantees, subject to
the following terms and conditions: 



        (A)    Award and Restrictions.    Delivery of Stock or cash, as determined by the Committee, will occur upon
expiration of the deferral period specified for Restricted Stock Units by the Committee. The Committee may place restrictions on Restricted Stock that shall lapse, in whole or in part, only upon the
attainment of Performance Goals; provided that, except as provided in Section 7, any such restrictions that are based only on continued employment for a specified period of time shall not lapse
less than one year after the date of grant of the Award. 


        (B)    Forfeiture.    Upon termination of employment with or service to the Company or any Subsidiary of the Company,
during the applicable deferral period or portion thereof to which forfeiture conditions apply, or upon failure to satisfy any other conditions precedent to the delivery of Stock or cash to which such
Restricted Stock Units relate, all Restricted Stock Units and any accrued but unpaid dividend equivalents that are then subject to deferral or restriction shall be forfeited; provided, that the
Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock Units will be
waived in whole or in part in the event of termination resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock Units. 




        (v)    Other Stock- or Cash-Based Awards.    The Committee is authorized to grant Awards to Grantees in
the form of Other Stock-Based Awards or Other Cash-Based Awards, as deemed by the Committee to be consistent with the purposes of the Plan. Awards granted pursuant to this paragraph may be
granted with value and payment contingent upon Performance Goals, so long as such goals relate to periods of performance in excess of one calendar year. The Committee shall determine the terms and
conditions of such Awards at the date of grant or thereafter. The maximum value of the aggregate payment that any Grantee may receive with respect to Other Cash-Based Awards pursuant to
this Section 6(b)(v) in respect of any annual performance period is $2,500,000 and for any other performance period in excess of one year, such amount multiplied by a fraction, the
numerator of which is the number of months in the performance period and the denominator of which is twelve. Payments earned hereunder may be decreased or, with respect to any Grantee who is not a
Covered Employee, increased in the sole discretion of the Committee based on such factors as it deems appropriate. No payment shall be made to a Covered Employee prior to the certification by the
Committee that the Performance Goals have been attained. The Committee may establish such other rules applicable to the Other Stock- or Cash-Based Awards to the extent not inconsistent
with Section 162(m) of the Code. 




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        (c)    Annual Incentive Program.    The Committee is authorized to grant Awards to Grantees pursuant to the Annual
Incentive Program, under such terms and conditions as deemed by the Committee to be consistent with the purposes of the Plan. The maximum value of the aggregate payment that any Grantee may receive
under the Annual Incentive Program in respect of any calendar year is $2,500,000. Payments earned hereunder may be decreased or, with respect to any Grantee who is not a Covered Employee, increased in
the sole discretion of the Committee based on such factors as it deems appropriate. No payment shall be made to a Covered Employee prior to the certification by the Committee that the Performance
Goals have been attained. The Committee may establish such other rules applicable to the Annual Incentive Program to the extent not inconsistent with Section 162(m) of the Code. 




7.     Change in Control Provisions.  


        Unless otherwise determined by the Committee and evidenced in an Award Agreement, in the event of a Change of Control: 



        (a)   any
Award carrying a right to exercise that was not previously vested and exercisable shall become fully vested and exercisable; and 


        (b)   the
restrictions, deferral limitations, payment conditions, and forfeiture conditions applicable to any other Award granted under the Plan shall lapse and such Awards
shall be deemed fully vested, and any performance conditions imposed with respect to Awards shall be deemed to be fully achieved. 




8.     General Provisions.  



        (a)    Nontransferability.    Unless otherwise determined by the Committee, Awards shall not be transferable by a
Grantee except by will or the laws of descent and distribution and shall be exercisable during the lifetime of a Grantee only by such Grantee or his guardian or legal representative. 


        (b)    No Right to Continued Employment, etc.    Nothing in the Plan or in any Award, any Award Agreement or other
agreement entered into pursuant hereto shall confer upon any Grantee the right to continue in the employ or service of the Company or Subsidiary of the Company or to be entitled to any remuneration or
benefits not set forth in the Plan or such Award Agreement or other agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary to terminate such Grantee's
employment or independent contractor relationship. 


        (c)    Taxes.    The Company or any Subsidiary of the Company is authorized to withhold from any Award granted, any
payment relating to an Award under the Plan, including from a distribution of Stock, or any other payment to a Grantee, amounts of withholding and other taxes due in connection with any transaction
involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Grantees to satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Grantee's tax
obligations. The Committee may provide in the Award Agreement that in the event that a Grantee is required to pay any amount to be withheld in connection with the issuance of shares of Stock in
settlement or exercise of an Award, the Grantee shall or may satisfy such obligation (in whole or in part) by electing to have a portion of the shares of Stock to be received upon settlement or
exercise of such Award equal to the minimum amount required to be withheld. 



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        (d)    Stockholder Approval; Amendment and Termination.    



          (i)  The
Plan shall take effect upon its adoption by the Board, but the Plan shall be subject to the requisite approval of the stockholder of the Company. 


         (ii)  The
Board may at any time and from time to time alter, amend, suspend, or terminate the Plan in whole or in part; provided, however, that unless otherwise determined by
the Board, an amendment that requires stockholder approval in order for the Plan to continue to comply with Section 162(m) or any other law, regulation or stock exchange requirement shall not
be effective unless approved by the requisite vote of stockholders. Notwithstanding the foregoing, no amendment to or termination of the Plan shall affect adversely any of the rights of any Grantee,
without such Grantee's consent, under any Award theretofore granted under the Plan. Moreover, the Company reserves the right to cancel, amend, terminate, suspend, or otherwise change outstanding
Awards under the Annual Incentive Program for any reason at any time before, during or after the calendar year to which an Award relates, upon authorization of the Board. The Committee may expand,
reduce or otherwise change any and all opportunities, Awards, and any and all financial factors, or financial measures used in outstanding Awards under the Annual Incentive Program for any reason at
any time before, during or after the calendar year to which an Award relates. All changes described in this paragraph are at the sole discretion of the Board and/or the Committee, may be made at any
time, and may have a retroactive effective date. 




        (e)    Expiration of Plan.    Unless earlier terminated by the Board pursuant to the provisions of the Plan, the Plan
shall expire on the tenth anniversary of the date of the Plan's adoption by the Board. No Awards shall be granted under the Plan after such expiration date. The expiration of the Plan shall not affect
adversely any of the rights of any Grantee, without such Grantee's consent, under any Award theretofore granted. 



        (f)    Deferrals.    The Committee shall have the authority to establish such procedures and programs that it deems
appropriate to provide Grantees with the ability to defer receipt of cash, Stock or other property payable with respect to Awards granted under the Plan. 


        (g)    No Rights to Awards; No Stockholder Rights.    No Grantee shall have any claim to be granted any Award under
the Plan, and there is no obligation for uniformity of treatment of Grantees. Except as provided specifically herein, a Grantee or a transferee of an Award shall have no rights as a stockholder with
respect to any shares covered by the Award until the date of the issuance of a stock certificate to him for such shares or the issuance of shares to him in book-entry form. 


        (h)    Unfunded Status of Awards.    The Plan is intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Grantee pursuant to an Award, nothing contained in the Plan or any Award shall give any such Grantee any rights that are greater than those
of a general creditor of the Company. 


        (i)    No Fractional Shares.    No fractional shares of Stock shall be required to be issued or delivered pursuant to
the Plan or any Award. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated. 


        (j)    Regulations and Other Approvals.    



          (i)  The
obligation of the Company to sell or deliver Stock with respect to any Award granted under the Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee. 




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         (ii)  Each
Award is subject to the requirement that, if at any time the Committee determines, in its absolute discretion, that the listing, registration or qualification of
Stock issuable pursuant to the Plan is required by 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 of, or in connection with, the grant of an Award or the issuance of Stock, no such Award shall be granted or payment made or Stock issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee. 


        (iii)  In
the event that the disposition of Stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act and is not
otherwise exempt from such registration, such Stock shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Committee may require a Grantee
receiving Stock pursuant to the Plan, as a condition precedent to receipt of such Stock, to represent to the Company in writing that the Stock acquired by such Grantee is acquired for investment only
and not with a view to distribution. 


        (iv)  The
Committee may require a Grantee receiving Stock pursuant to the Plan, as a condition precedent to receipt of such Stock, to enter into a stockholder agreement or
"lock-up" agreement in such form as the Committee shall determine is necessary or desirable to further the Company's interests. 




        (k)    Governing Law.    The Plan and all determinations made and actions taken pursuant hereto shall be governed by
the laws of the State of Delaware without giving effect to the conflict of laws principles thereof. 



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ADESA, INC. 2004 EQUITY AND INCENTIVE PLAN