Document:

Ex-10.17 2007 Non-Employee Director Stock Option P

 

Exhibit 10.17

2007 NON-EMPLOYEE

DIRECTOR STOCK OPTION PLAN

     1. STATEMENT OF PURPOSE. This 2007 Non-Employee Director Stock Option Plan (this
“Plan”) is intended to promote the interests of AutoNation, Inc., a Delaware corporation (the
“Company”), by offering non-employee members of the Board of Directors of the Company
(individually, a “Non-Employee Director,” and collectively, “Non-Employee Directors”) the
opportunity to participate in a stock option program designed to provide them with significant
incentives to remain in the service of the Company.

     2. ELIGIBILITY. Each Non-Employee Director shall be eligible to receive grants of
nonstatutory options under this Plan (individually, an “Option,” collectively, “Options”) pursuant
to the provisions of Section 5 hereof.

     Except for the automatic grants of Options to be made pursuant to the provisions of Section 5
hereof, Non-Employee Directors shall not be eligible to receive any additional Option grants or
stock issuances under this Plan.

     3. ADMINISTRATION.

     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 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 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 hereunder shall be final and conclusive.

     The Board may from time to time appoint a committee or subcommittee (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. 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 Committee such powers and authorities related to the
administration of the Plan as the Board shall determine, consistent with the Certificate of
Incorporation and Bylaws of the Company and applicable law. The Board may remove members, add
members, and fill vacancies on the Committee from time to time, all in accordance with the
Company’s Certificate of Incorporation and Bylaws, and with applicable law. The majority vote of
the Committee, or acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee.

 

 

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

     In the event that the Plan or any Option granted hereunder provides for any action to be taken
by or determination to be made by the Board, such action may be taken by or such determination may
be made by the Committee if the power and authority to do so has been delegated to the Committee by
the Board as provided above. Unless otherwise expressly determined by the Board, any such action or
determination by the Committee shall be final and conclusive.

     4. STOCK SUBJECT TO PLAN. The stock issuable under this Plan shall be the shares of
the Company’s common stock, par value of $.01 per share (“Common Stock”). Such shares may be made
available from authorized but unissued shares of Common Stock or shares of Common Stock reacquired
by the Company. The aggregate number of shares of Common Stock issuable under exercise of Options
upon this Plan shall not exceed 2,000,000 shares, subject to adjustment from time to time in
accordance with Section 11 hereof.

     5. AUTOMATIC GRANTING OF OPTIONS. Each individual who is a Non-Employee Director on
the Effective Date (as defined in Section 16 hereof) (except a director not standing for
re-election on such date) shall be automatically granted, on such date, an Option to purchase
20,000 shares of Common Stock. In addition, each individual who is a Non-Employee Director on the
Effective Date and who was not granted an option to purchase at least 50,000 shares of Common Stock
under the Company’s 1995 Amended and Restated Non-Employee Director Stock Option Plan (the “1995
Plan”) upon such individual’s prior election or appointment as a Non-Employee Director shall be
automatically granted, on the Effective Date, an Option to purchase 50,000 shares of Common Stock
less the number of shares of Common Stock subject to an option to purchase shares of Common Stock
previously granted to such Non-Employee Director under the 1995 Plan upon such prior election or
appointment as a Non-Employee Director. Commencing with the first business day of calendar year
2008 and on the first business day of each subsequent calendar year while the Plan is in effect,
each individual who is at the time serving as a Non-Employee Director shall receive an additional
automatic grant of an Option to purchase 20,000 shares of Common Stock. Each individual who is
initially elected or appointed as a Non-Employee Director on or after the Effective Date shall be
automatically granted, on the date of such initial election or appointment, an Option to purchase
50,000 shares of Common Stock. The foregoing dates are herein referred to individually as an
“Automatic Grant Date” and collectively as “Automatic Grant Dates” and the Non-Employee Directors
receiving Options are herein referred to individually as an “Optionee” and collectively as
“Optionees.” Options granted under the Plan are not intended to be treated as incentive stock
options as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

     In the event that an Option expires or is terminated or canceled and is unexercised as to any
shares of Common Stock, the shares subject to the Option, or the portion thereof not so exercised,
shall be available for subsequent automatic Option grants under this Plan.

     Should the total number of shares of Common Stock at the time available under this Plan not be
sufficient for the automatic grants to be made at that particular time, the

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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

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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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combination of shares, the number of shares subject to this Plan and to Options granted
hereunder shall be proportionately adjusted; (b) in the event of any merger, consolidation or
reorganization of the Company with any other corporation or corporations, there shall be
substituted, on an equitable basis, for each share of Common Stock then subject to this Plan,
whether or not at the time subject to outstanding Options, the number and kind of shares of stock
or other securities or property 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, an equitable adjustment shall be made in the number and kind of
shares of stock or other securities or property then subject to this Plan, whether or not then
subject to outstanding Options. In the event of any such adjustment, the Exercise Price per share
shall be proportionately adjusted.

     12. AMENDMENT OF PLAN. This Plan may from time to time be amended or discontinued by
action of the Board of Directors of the Company, provided that (i) no such amendment or
discontinuance shall change or impair any Options previously granted without the consent of the
Optionee, and (ii) any amendment which would (A) materially increase the benefits accruing to the
participants under this Plan, (B) materially increase the number of securities which may be issued
under this Plan, and/or (C) materially modify the requirements as to the eligibility for
participation in this Plan shall require the approval of the stockholders of the Company, unless
such approval is not required by Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the “1934 Act”), or any other applicable law.

     13. CASH PROCEEDS. Any cash proceeds received by the Company from the sale of shares
pursuant to the Options granted under this Plan shall be used for general corporate purposes.

     14. NO IMPAIRMENT OF RIGHTS. Nothing in this Plan or any automatic grant made
pursuant to this Plan shall be construed or interpreted so as to affect adversely or otherwise
impair the Company’s right to remove any Optionee from service on the Board of Directors of the
Company at any time in accordance with the Company’s Bylaws or any provisions of applicable law.

     15. COMPLIANCE WITH RULE 16b-3. This Plan is intended to comply with all applicable
conditions of Rule 16b-3 or its successors promulgated under the 1934 Act, regardless of whether
such conditions are set forth in this Plan.

     16. EFFECTIVE DATE. This Plan shall take effect on the date it is approved by the
stockholders of the Company (the “Effective Date”) and shall expire on the 10th
anniversary of the date of such approval; provided that the expiration of the Plan shall not affect
Options outstanding on the date of such expiration, which Options shall continue to remain
outstanding in accordance with their terms.

5Ex-10.18 Senior Executive Incentive Bonus Plan

 

Exhibit 10.18

AUTONATION, INC.

SENIOR EXECUTIVE INCENTIVE BONUS PLAN

1.      Purpose. The purpose of the AutoNation, Inc. Senior Executive Incentive Bonus Plan is
to align the interests of Company management with those of the shareholders of the Company by
encouraging management to achieve goals intended to increase shareholder value.

2.      Definitions. The following terms, as used herein, shall have the following meanings:

     (a) “Award” shall mean an incentive compensation award, granted pursuant to the Plan, which is
contingent upon the attainment of Performance Factors with respect to a Performance Period.

     (b) “Board” shall mean the Board of Directors of the Company.

     (c) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (d) “Committee” shall mean the Executive Compensation Subcommittee of the Board or such other
committee or subcommittee as may be appointed by the Board to administer the Plan in accordance
with Section 3 of the Plan.

     (e) “Common Stock” shall mean the common stock of the Company, par value $.01 per share.

     (f) “Company” shall mean AutoNation, Inc., a Delaware corporation, or any successor
corporation.

     (g) “Disability” shall mean permanent disability as determined pursuant to the long-term
disability plan or policy of the Company or its Subsidiaries in effect at the time of such
disability and applicable to a Participant.

     (h) “Effective Date” shall mean January 1, 2007.

     (i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     (j) “Executive Officer” shall mean an officer of the Company or its Subsidiaries who is an
“executive officer” within the meaning of Rule 3b-7 promulgated under the Exchange Act.

     (k) “Participant” shall mean an Executive Officer or other key employee who is, pursuant to
Section 4 of the Plan, selected to participate herein.

     (l) “Performance Factors” shall mean the criteria and objectives, determined by the Committee,
which must be met during the applicable Performance Period as a condition of the Participant’s
receipt of payment with respect to an Award. Performance Factors may include any or all of the
following or any combination thereof: net income (before or after taxes); operating income; gross
margin; earnings before all or any of interest, taxes, depreciation and/or amortization (“EBIT”,
“EBITA” or “EBITDA”); revenue; unit sales; cash flow; return on equity; return on assets; return on
capital; asset management (e.g., inventory and receivable levels);

 

 

earnings from continuing operations; cost reduction goals or levels of expenses, costs or
liabilities; market share; customer satisfaction or any increase or decrease of one or more of the
foregoing over a specified period. Such Performance Factors may relate to the performance of the
Company, a Subsidiary, any portion of the business (including one or more stores or franchises),
product line or any combination thereof and may be expressed on an aggregate, per share
(outstanding or fully diluted) or per unit basis. Where applicable, the Performance Factors may be
expressed in terms of attaining a specified level of the particular criteria, the attainment of a
percentage increase or decrease in the particular criteria, or may be applied to the performance of
the Company, a Subsidiary, any portion of the business (including one or more stores or
franchises), product line, or any combination thereof, relative to a market index, a group of other
companies (or their subsidiaries, any portion of their businesses (including one or more stores or
franchises) or product lines), or a combination thereof, all as determined by the Committee.
Performance Factors may include a threshold level of performance below which no payment shall be
made, levels of performance below the target level but above the threshold level at which specified
percentages of the Award shall be paid, a target level of performance at which the full Award shall
be paid, levels of performance above the target level but below the maximum level at which
specified multiples of the Award shall be paid, and a maximum level of performance above which no
additional payment shall be made. Performance Factors may also specify that payments for levels of
performances between specified levels will be interpolated. The Committee shall have the sole
discretion to determine whether, or to what extent, Performance Factors are achieved; provided,
however, that the Committee shall have the authority to make appropriate adjustments in Performance
Factors under an Award to reflect the impact of extraordinary items not reflected in such goals.
For purposes of the Plan, extraordinary items shall be defined as (1) any profit or loss
attributable to acquisitions or dispositions of stock or assets, (2) any changes in accounting
standards or treatments that may be required or permitted by the Financial Accounting Standards
Board or adopted by the Company or its Subsidiaries after the goal is established, (3) all items of
gain, loss or expense for the year related to restructuring charges for the Company or its
Subsidiaries, (4) all items of gain, loss or expense for the year determined to be extraordinary or
unusual in nature or infrequent in occurrence or related to the disposal of a segment of a
business, (5) all items of gain, loss or expense for the year related to discontinued operations
that do not qualify as a segment of a business as defined in APB Opinion No. 30 (or successor
literature), (6) the impact of capital expenditures, (7) the impact of share repurchases and other
changes in the number of outstanding shares, and (8) such other items as may be prescribed by
Section 162(m) of the Code and the Treasury Regulations thereunder as may be in effect from time to
time, and any amendments, revisions or successor provisions and any changes thereto.

     (m) “Performance Period” shall mean the twelve-month periods commencing on January 1, 2007 and
each January 1 thereafter, or such other periods as the Committee shall determine; provided
that a Performance Period for a Participant who becomes employed by the Company or its Subsidiaries
following the commencement of a Performance Period may be a shorter period that commences with the
date of the commencement of such employment.

     (n) “Person” shall have the meaning given 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 (i) the
Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Subsidiaries or affiliates, (iii) an

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underwriter temporarily holding securities pursuant to an offering of such securities, or (iv)
a corporation owned, directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company.

     (o) “Plan” shall mean this AutoNation, Inc. Senior Executive Incentive Bonus Plan.

     (p) “Subsidiary” shall mean any company, partnership, limited liability company, business or
entity (other than the Company) of which at least 50% of the combined voting power of its voting
securities is, or the operations and management are, directly or indirectly controlled by the
Company.

3.      Administration. The Plan shall be administered by a Committee or Subcommittee (in
either case, hereinafter referred to as a “Committee”) of the Board. The Committee shall have the
authority in its sole 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 terms, conditions,
restrictions and performance criteria, including Performance Factors, relating to any Award; to
determine whether, to what extent, and under what circumstances an Award may be settled, cancelled,
forfeited, or surrendered; to make adjustments in the Performance Factors in recognition of unusual
or non-recurring events affecting the Company or its Subsidiaries or the financial statements of
the Company or its Subsidiaries, or in response to changes in applicable laws, regulations or
accounting principles; 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
Awards; and to make all other determinations deemed necessary or advisable for the administration
of the Plan.

     The Committee shall consist of two or more persons each of whom shall be an “outside director”
within the meaning of Section 162(m) of the Code. All decisions, determinations and
interpretations of the Committee shall be final and binding on all persons, including the Company
and the Participant (or any person claiming any rights under the Plan from or through any
Participant).

     Subject to Section 162(m) of the Code or as otherwise required for compliance with other
applicable law, the Committee may delegate all or any part of its authority under the Plan to an
employee, employees or committee of employees.

4.      Eligibility. Awards may be granted to Participants in the sole discretion of the
Committee. In determining the persons to whom Awards shall be granted and the Performance Factors
relating to each Award, the Committee shall take into account such factors as the Committee shall
deem relevant in connection with accomplishing the purposes of the Plan.

5.      Terms of Awards. Awards granted pursuant to the Plan shall be communicated to
Participants in such form as the Committee shall from time to time approve and the terms and
conditions of such Awards shall be set forth therein.

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     (a) In General. On or prior to the date on which 25% of a Performance Period has
elapsed, the Committee shall specify in writing, by resolution of the Committee or other
appropriate action, the Participants for such Performance Period and the Performance Factors
applicable to each Award for each Participant with respect to such Performance Period. Unless
otherwise provided by the Committee in connection with specified terminations of employment,
payment in respect of Awards shall be made only if and to the extent the Performance Factors with
respect to such Performance Period are attained.

     (b) Special Provisions Regarding Awards. Notwithstanding anything to the contrary
contained herein, in no event shall payment in respect of Awards granted hereunder exceed
$5,000,000 to any one Participant in any one year. The Committee may at its discretion decrease
the amount of an Award payable upon attainment of the specified Performance Factors, but in no
event may the Committee increase at its discretion the amount of an Award payable upon attainment
of the specified Performance Factors.

     (c) Time and Form of Payment. Unless otherwise determined by the Committee, all
payments in respect of Awards granted under this Plan shall be made in cash within ninety (90) days
after the end of the Performance Period.

6.      Term. Subject to the approval of the Plan by the holders of a majority of the Common
Stock represented and voting on the proposal at the annual meeting of Company stockholders to be
held in 2007 (or any adjournment thereof), the Plan shall be effective as of January 1, 2007 and
shall continue in effect until all awards for Performance Periods ending on or before December 31,
2011 have been paid, unless earlier terminated as provided below.

7.      General Provisions.

     (a) Compliance with Legal Requirements. The Plan and the granting and payment of
Awards, and the other obligations of the Company under the Plan shall be subject to all applicable
federal and state laws, rules and regulations, and to such approvals by any regulatory or
governmental agency as may be required.

     (b) Nontransferability. Awards shall not be transferable by a Participant except upon
the Participant’s death following the end of the Performance Period but prior to the date payment
is made, in which case the Award shall be transferable in accordance with any beneficiary
designation made by the Participant in accordance with Section 7(k) below or, in the
absence thereof, by will or the laws of descent and distribution.

     (c) No Right To Continued Employment. Nothing in the Plan or in any Award granted
pursuant hereto shall confer upon any Participant the right to continue in the employ of the
Company or any of its Subsidiaries or to be entitled to any remuneration or benefits not set forth
in the Plan or to interfere with or limit in any way whatever rights otherwise exist of the Company
or its Subsidiaries to terminate such Participant’s employment or change such Participant’s
remuneration.

     (d) Withholding Taxes. Where a Participant or other person is entitled to receive a
payment pursuant to an Award hereunder, the Company shall have the right either to deduct from

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the payment, or to require the Participant or such other person to pay to the Company prior to
delivery of such payment, an amount sufficient to satisfy any federal, state, local or other
withholding tax requirements related thereto.

     (e) Amendment and Termination of the Plan. The Board or the Committee may at any time
and from time to time alter, amend, suspend, or terminate the Plan in whole or in part;
provided that no amendment that requires stockholder approval in order for the Plan to
continue to comply with Code Section 162(m) shall be effective unless the same shall be approved by
the requisite vote of the stockholders of the Company. Notwithstanding the foregoing, no amendment
shall affect adversely any of the rights of any Participant under any Award following the end of
the Performance Period to which such Award relates, provided that the exercise of the Committee’s
discretion pursuant to Section 5(b) to reduce the amount of an Award shall not be deemed an
amendment of the Plan.

     (f) Participant Rights. No Participant shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of treatment for Participants.

     (g) Termination of Employment.

	 	(i)	 	Unless otherwise provided by the Committee, except as set forth
in subparagraph (ii) of this subsection (g), a Participant must
be actively employed by the Company or its Subsidiaries at the end of the
Performance Period (although such Participant need not be actively employed on
the date of payment of the related Award) in order to be eligible to receive
payment in respect of such Award.	 
	 
	 	(ii)	 	Unless otherwise provided by the Committee, if a Participant’s
employment is terminated as result of death, Disability or voluntary retirement
with the consent of the Company prior to the end of the Performance Period,
such Participant shall receive a pro rata portion of the Award that he or she
would have received with respect to the applicable Performance Period, which
shall be payable at the time payment is made to other Participants in respect
of such Performance Period.	 

     (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
Participant pursuant to an Award, nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general creditor of the Company.

     (i) 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.

     (j) Effective Date. The Plan shall take effect upon its adoption by the Board;
provided, however, that the Plan shall be subject to the requisite approval of the
stockholders of the Company in order to comply with Section 162(m) of the Code. In the absence of
such approval, the Plan (and any Awards made pursuant to the Plan prior to the date of such
approval) shall be null and void.

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     (k) Beneficiary. A Participant may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or
revoke such designation. If no designated beneficiary survives the Participant and an Award is
payable to the Participant’s beneficiary pursuant to Section 7(b), the executor or
administrator of the Participant’s estate shall be deemed to be the grantee’s beneficiary.

     (l) Interpretation. The Plan is designed and intended to comply, to the extent
applicable, with Section 162(m) of the Code, and all provisions hereof shall be construed in a
manner to so comply.

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