Document:

Exhibit 10.1

 

COPART, INC.

 

2007 EQUITY INCENTIVE PLAN

 

1.             Purposes of the Plan.  The purposes
of this Plan are:

 

·              to attract and retain the best available
personnel for positions of substantial responsibility,

 

·              to provide incentives to individuals who perform
services to the Company, and

 

·              to promote the success of the Company’s
business.

 

The Plan permits the grant of Incentive Stock Options, Nonstatutory
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Units, Performance Shares and other stock or cash awards as
the Administrator may determine.

 

2.             Definitions.  As used
herein, the following definitions will apply:

 

(a)           “Administrator” means the Board or any of its
Committees as will be administering the Plan, in accordance with Section 4
of the Plan.

 

(b)           “Applicable Laws” means the requirements
relating to the administration of equity-based awards under U.S. state
corporate laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted and
the applicable laws of any foreign country or jurisdiction where Awards are, or
will be, granted under the Plan.

 

(c)           “Award” means, individually or collectively, a
grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units, Performance Units, Performance Shares and other stock or cash
awards as the Administrator may determine.

 

(d)           “Award Agreement” means the written or
electronic agreement setting forth the terms and provisions applicable to each
Award granted under the Plan.  The Award
Agreement is subject to the terms and conditions of the Plan.

 

(e)           “Board” means the Board of Directors of the
Company.

 

(f)            “Change in Control” means the occurrence of any
of the following events:

 

(i)            A change in the
ownership of the Company  which
occurs on the date that any one person, or more than one person acting as a
group, (“Person”) acquires ownership of the stock of the Company that,
together with the stock held by such Person, constitutes more than 50% of the
total voting power of the stock of the Company; provided, however, that for
purposes of this subsection (i), the acquisition of additional stock by any one
Person, who is considered to own more 

 

 

than
50% of the total voting power of the stock of the Company will not be
considered a Change in Control; or

 

(ii)           A change in the
effective control of the Company which occurs on the date that a majority of
members of the Board is replaced during any twelve (12) month period by
Directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election.  For purposes of this clause (ii), if any
Person is considered to effectively control the Company, the acquisition of
additional control of the Company by the same Person will not be considered a
Change in Control; or

 

(iii)          A change in the
ownership of a substantial portion of the Company’s assets which occurs on the
date that any Person acquires (or has acquired during the twelve (12) month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value
equal to or more than 50% of the total gross fair market value of all of the
assets of the Company immediately prior to such acquisition or acquisitions;
provided, however, that for purposes of this subsection (iii), the following
will not constitute a change in the ownership of a substantial portion of the Company’s
assets: (A) a transfer to an entity that is controlled by the Company’s
stockholders immediately after the transfer, or (B) a transfer of assets
by the Company to: (1) a stockholder of the Company (immediately before
the asset transfer) in exchange for or with respect to the Company’s stock, (2) an
entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the Company, (3) a Person, that owns, directly
or indirectly, 50% or more of the total value or voting power of all the
outstanding stock of the Company, or (4) an entity, at least 50% of the
total value or voting power of which is owned, directly or indirectly, by a
Person described in this subsection (iii)(B)(3).  For purposes of this subsection (iii), gross
fair market value means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets.

 

For purposes of this Section 2(f),
persons will be considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition
of stock, or similar business transaction with the Company.

 

(g)           “Code” means the Internal Revenue Code of 1986,
as amended.  Any reference to a section
of the Code herein will be a reference to any successor or amended section of
the Code.

 

(h)           “Committee” means a committee of
Directors or of other individuals satisfying Applicable Laws appointed by the
Board in accordance with Section 4 hereof.

 

(i)            “Common Stock” means the common stock of the
Company.

 

(j)            “Company” means Copart, Inc., a California
corporation, or any successor thereto.

 

(k)           “Consultant” means any person, including an
advisor, engaged by the Company or a Parent or Subsidiary to render services to
such entity.

 

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(l)            “Determination Date” means the latest possible
date that will not jeopardize the qualification of an Award granted under the
Plan as “performance-based compensation” under Section 162(m) of the
Code.

 

(m)          “Director” means a member of the Board.

 

(n)           “Disability” means total and permanent
disability as defined in Section 22(e)(3) of the Code, provided that
in the case of Awards other than Incentive Stock Options, the Administrator in
its discretion may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by the
Administrator from time to time.

 

(o)           “Earnings Per Share” means as to any performance
period, the Company’s or a business unit’s Profit After-Tax, divided by a
weighted average number of Shares outstanding and dilutive common equivalent
Shares deemed outstanding, determined in accordance with generally accepted
accounting principles.

 

(p)           “Employee” means any person, including Officers
and Directors, employed by the Company or any Parent or Subsidiary of the
Company.  Neither service as a Director
nor payment of a director’s fee by the Company will be sufficient to constitute
“employment” by the Company.

 

(q)           “Exchange Act” means the Securities Exchange
Act of 1934, as amended.

 

(r)            “Exchange Program”
means a program under which (i) outstanding Awards are surrendered or
cancelled in exchange for Awards of the same type (which may have lower
exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants
would have the opportunity to transfer any outstanding Awards to a financial
institution or other person or entity selected by the Administrator, and/or (iii) the
exercise price of an outstanding Award is reduced.  The Administrator will determine the terms
and conditions of any Exchange Program in its sole discretion.

 

(s)           “Fair Market Value” means, as of any date, the
value of the Common Stock as the Administrator may determine in good faith by
reference to the price of such stock on any established stock exchange or a
national market system on the day of determination if the Common Stock is so
listed on any established stock exchange or a national market system.  If the Common Stock is not listed on any
established stock exchange or a national market system, the value of the Common
Stock will be determined as the Administrator may determine in good faith.

 

(t)            “Fiscal Year” means
the fiscal year of the Company.

 

(u)           “Incentive Stock Option” means an Option that
by its terms qualifies and is otherwise intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

 

(v)           “Nonstatutory Stock Option” means an Option
that by its terms does not qualify or is not intended to qualify as an
Incentive Stock Option.

 

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(w)          “Officer” means a person who is an officer of
the Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

 

(x)            “Operating Cash Flow”  means as to any performance period, the
Company’s or a business unit’s sum of Profit After-Tax plus depreciation and
amortization less capital expenditures plus changes in working capital
comprised of accounts receivable, inventories, other current assets, trade
accounts payable, accrued expenses, product warranty, advance payments from
customers and long-term accrued expenses, determined in accordance with
generally acceptable accounting principles.”Operating Income” means as
to any performance period, the Company’s or a business unit’s income from
operations but excluding any unusual items, determined in accordance with
generally accepted accounting principles.(z)         “Option”
means a stock option granted pursuant to Section 6 of the Plan.

 

(aa)         “Parent” means a “parent corporation,” whether
now or hereafter existing, as defined in Section 424(e) of the Code.

 

(bb)         “Participant” means
the holder of an outstanding Award.

 

(cc)         “Performance Goals” will have the meaning set
forth in Section 11 of the Plan.

 

(dd)         “Performance Period” means any Fiscal Year of
the Company or such other period as determined by the Administrator in its sole
discretion.

 

(ee)         “Performance Share” means an Award denominated
in Shares which may be earned in whole or in part upon attainment of
Performance Goals or other vesting criteria as the Administrator may determine pursuant
to Section 10.

 

(ff)           “Performance Unit” means an Award which may be
earned in whole or in part upon attainment of Performance Goals or other
vesting criteria as the Administrator may determine and which may be settled
for cash, Shares or other securities or a combination of the foregoing pursuant
to Section 10.

 

(gg)         “Period of Restriction” means the period during
which the transfer of Shares of Restricted Stock are subject to restrictions
and therefore, the Shares are subject to a substantial risk of forfeiture.  Such restrictions may be based on the passage
of time, the achievement of target levels of performance, or the occurrence of
other events as determined by the Administrator.

 

(hh)         “Plan” means this 2007 Equity Incentive Plan.

 

(ii)           “Profit After-Tax” means as to
any performance period, the Company’s or a business unit’s income after taxes,
determined in accordance with generally accepted accounting principles. 

 

(jj)           “Profit Before-Tax” means as
to any performance period, the Company’s or a business unit’s income before
taxes, determined in accordance with generally accepted accounting principles.

 

4

 

(kk)         “Restricted Stock” means Shares issued pursuant
to an Award of Restricted Stock under Section 8 of the Plan, or issued
pursuant to the early exercise of an Option.

 

(ll)           “Restricted Stock Unit”
means a bookkeeping entry representing an amount equal to the Fair Market Value
of one Share, granted pursuant to Section 9.  Each Restricted Stock Unit represents an
unfunded and unsecured obligation of the Company.

 

(mm)       “Return on Assets” means as to any performance
period, the percentage equal to the Company’s or a business unit’s Operating
Income before incentive compensation, divided by average net Company or
business unit, as applicable, assets, determined in accordance with generally
accepted accounting principles.

 

(nn)         “Return on Equity” means as to any performance
period, the percentage equal to the Company’s Profit After-Tax divided by
average stockholder’s equity, determined in accordance with generally accepted
accounting principles.

 

(oo)         “Return on Sales” means as to any performance
period, the percentage equal to the Company’s or a business unit’s Operating
Income before incentive compensation, divided by the Company’s or the business
unit’s, as applicable, Revenue, determined in accordance with generally
accepted accounting principles.

 

(pp)         “Revenue” means as to any performance period,
the Company’s or business unit’s net sales, determined in accordance with
generally accepted accounting principles.

 

(qq)         “Rule 16b-3” means Rule 16b-3 of the
Exchange Act or any successor to Rule 16b-3, as in effect when discretion
is being exercised with respect to the Plan.

 

(rr)           “Section 16(b)” means Section 16(b) of
the Exchange Act.

 

(ss)         “Service Provider” means an Employee, Director,
or Consultant.

 

(tt)           “Share” means a share of the Common Stock, as
adjusted in accordance with Section 14 of the Plan.

 

(uu)         “Stock Appreciation Right” means an Award,
granted alone or in connection with an Option, that pursuant to Section 7
is designated as a Stock Appreciation Right.

 

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

 

“Total Shareholder
Return” means as to any performance period, the total return (change in
share price plus reinvestment of any dividends) of a Share.

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3.             Stock Subject to the Plan.

 

(a)           Subject to the provisions of Section 14 of the Plan, the maximum aggregate
number of Shares that may be awarded and sold under the Plan is 4,000,000
Shares.  The Shares may be authorized,
but unissued, or reacquired Common Stock.

 

(b)           Full Value Awards.  Any Shares
subject to Awards granted with an exercise price less than the Fair Market
Value on the date of grant of such Awards will be counted against the numerical
limits of this Section 3 as two (2) Shares for every one (1) Share
subject thereto.  Further, if Shares
acquired pursuant to any such Award are forfeited or repurchased by the Company
and would otherwise return to the Plan pursuant to Section 3(c), two (2) times
the number of Shares so forfeited or repurchased will return to the Plan and
will again become available for issuance.

 

(c)           Lapsed Awards.  If an Award
expires or becomes unexercisable without having been exercised in full, or,
with respect to Restricted Stock, Restricted Stock Units, Performance Shares or
Performance Units, is forfeited to or repurchased by the Company, the
unpurchased Shares (or for Awards other than Options and Stock Appreciation
Rights, the forfeited or repurchased Shares) which were subject thereto will
become available for future grant or sale under the Plan (unless the Plan has
terminated).  Upon exercise of a Stock
Appreciation Right settled in Shares, the gross number of Shares covered by the
portion of the Award so exercised will cease to be available under the Plan. 
Shares that have actually been issued under the Plan under any Award will
not be returned to the Plan and will not become available for future
distribution under the Plan; provided, however, that if unvested Shares of
Restricted Stock, Restricted Stock Units, Performance Shares or Performance
Units are repurchased by the Company or are forfeited to the Company, such
Shares will become available for future grant under the Plan.  Shares used to pay the tax and/or exercise
price of an Award will not become available for future grant or sale under the
Plan.  To the extent an Award under the
Plan is paid out in cash rather than Shares, such cash payment will not result
in reducing the number of Shares available for issuance under the Plan.  Notwithstanding the foregoing provisions of
this Section 3(c), subject to adjustment provided in Section 14, the
maximum number of Shares that may be issued upon the exercise of Incentive
Stock Options will equal the aggregate Share number stated in Section 3(a),
plus, to the extent allowable under Section 422 of the Code, any Shares
that become available for issuance under the Plan under this Section 3(c).

 

(d)           Share Reserve.  The Company,
during the term of this Plan, will at all times reserve and keep available such
number of Shares as will be sufficient to satisfy the requirements of the Plan.

 

4.             Administration of the Plan.

 

(a)           Procedure.

 

(i)            Multiple Administrative Bodies. 
Different Committees with respect to different groups of Service
Providers may administer the Plan.

 

6

 

(ii)           Section 162(m).  To the extent
that the Administrator determines it to be desirable to qualify Awards granted
hereunder as “performance-based compensation” within the meaning of Section 162(m) of
the Code, the Plan will be administered by a Committee of two (2) or more “outside
directors” within the meaning of Section 162(m) of the Code.

 

(iii)          Rule 16b-3.  To the extent
desirable to qualify transactions hereunder as exempt under Rule 16b-3,
the transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.

 

(iv)          Other Administration.  Other than as
provided above, the Plan will be administered by (A) the Board or (B) a
Committee, which committee will be constituted to satisfy Applicable Laws.

 

(b)           Powers of the Administrator. 
Subject to the provisions of the Plan, and in the case of a Committee,
subject to the specific duties delegated by the Board to such Committee, the
Administrator will have the authority, in its discretion:

 

(i)            to determine the Fair Market Value;

 

(ii)           to select the Service Providers to whom Awards may be
granted hereunder;

 

(iii)          to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award granted hereunder;

 

(iv)          to determine the terms and
conditions of any, and with the approval of the Company’s stockholders, to institute
an Exchange Program;

 

(v)           to construe and interpret the terms of the Plan and
Awards granted pursuant to the Plan;

 

(vi)          to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of satisfying applicable foreign laws;

 

(vii)         to modify or amend each Award (subject to Section 19(c) of the Plan).  Notwithstanding the previous
sentence, the Administrator may not, without the approval of the Company’s
stockholders: (A) modify or amend an Option or Stock Appreciation Right to
reduce the exercise price of such Option or Stock Appreciation Right after it
has been granted (except for adjustments made pursuant to Section 14), or (B) cancel
any outstanding Option or Stock Appreciation Right and immediately replace it
with a new Option or Stock Appreciation Right with a lower exercise price;

 

(viii)        to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Award previously
granted by the Administrator;

 

7

 

(ix)           to allow a Participant to defer the receipt of the
payment of cash or the delivery of Shares that would otherwise be due to such
Participant under an Award pursuant to such procedures as the Administrator may
determine; and

 

(x)            to make all other determinations deemed necessary or
advisable for administering the Plan.

 

(c)           Effect of Administrator’s Decision. 
The Administrator’s decisions, determinations, and interpretations will
be final and binding on all Participants and any other holders of Awards.

 

5.             Eligibility.  Nonstatutory
Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation
Rights, Performance Units, Performance Shares, and such other cash or stock
awards as the Administrator determines may be granted to Service
Providers.  Incentive Stock Options may
be granted only to Employees.

 

6.             Stock Options.

 

(a)           Limitations.

 

(i)            Each Option will be designated in the Award Agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option.  However, notwithstanding such designation, to
the extent that the aggregate Fair Market Value of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by the
Participant during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000 (U.S.), such Options will be treated as
Nonstatutory Stock Options.  For purposes
of this Section 6(a), Incentive Stock Options will be taken into account
in the order in which they were granted. 
The Fair Market Value of the Shares will be determined as of the time
the Option with respect to such Shares is granted.

 

(ii)           The Administrator will have complete discretion to
determine the number of Shares subject to an Option granted to any Participant,
provided that during any Fiscal Year, no Participant will be granted an Option
covering more than 1,000,000 Shares. 
Notwithstanding the limitation in the previous sentence, in connection
with his or her initial service as an Employee, an Employee may be granted
Options covering up to an additional 1,000,000 Shares.

 

(b)           Term of Option.  The
Administrator will determine the term of each Option in its sole discretion;  provided,
however, that the term will be no more than ten (10) years from the date
of grant thereof.  Moreover, in the case of an Incentive Stock
Option granted to a Participant who, at the time the Incentive Stock Option is
granted, owns stock representing more than 10% of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option will be five (5) years from the date of
grant or such shorter term as may be provided in the Award Agreement.

 

8

 

(c)           Option Exercise Price and Consideration.

 

(i)            Exercise Price.  The per share
exercise price for the Shares to be issued pursuant to exercise of an Option
will be determined by the Administrator, but will be no less than
100% of the Fair Market Value per Share on the date of grant.  In addition, in the case of an Incentive Stock Option granted to an
Employee who, at the time the Incentive Stock Option is granted, owns stock
representing more than 10% of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price will be no
less than 110% of the Fair Market Value per Share on the date of grant.  Notwithstanding the
foregoing provisions of this Section 6(c), Options may be granted with a
per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a transaction described in, and in a manner
consistent with, Section 424(a) of the Code.

 

(ii)           Waiting Period and Exercise Dates. 
At the time an Option is granted, the Administrator will fix the period
within which the Option may be exercised and will determine any conditions that
must be satisfied before the Option may be exercised.

 

(iii)          Form of Consideration. 
The Administrator will determine the acceptable form(s) of
consideration for exercising an Option, including the method of payment, to the
extent permitted by Applicable Laws.

 

(d)           Exercise of Option.

 

(i)            Procedure for Exercise; Rights as a Stockholder. 
Any Option granted hereunder will be exercisable according to the terms
of the Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Award Agreement.  An Option may not be exercised for a fraction
of a Share.

 

An Option will be
deemed exercised when the Company receives: (i) notice of exercise (in
such form as the Administrator specifies from time to time) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised (together with any applicable
withholding taxes).  No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the Shares are issued, except as provided in Section 14 of the Plan.

 

(ii)   Termination of Relationship as a Service Provider. 
If a Participant ceases to be a Service Provider, other than upon the
Participant’s termination as the result of the Participant’s death or
Disability, the Participant may exercise his or her Option within such period
of time as is specified in the Award Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Award Agreement).  In the absence of a specified time in the
Award Agreement, the Option will remain exercisable for three (3) months
following the Participant’s termination. 
Unless otherwise provided by the Administrator, if on the date of
termination the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option will revert to the
Plan.  If after termination the
Participant does not exercise his or her Option within the time specified by
the Administrator, the Option will terminate, and the Shares covered by such
Option will revert to the Plan.

 

9

 

(iii)          Disability of Participant. 
If a Participant ceases to be a Service Provider as a result of the
Participant’s Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Award Agreement to the extent the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement).  In the absence of a specified time in the
Award Agreement, the Option will remain exercisable for twelve (12) months
following the Participant’s termination. Unless otherwise provided by the
Administrator, if on the date of termination the Participant is not vested as
to his or her entire Option, the Shares covered by the unvested portion of the
Option will revert to the Plan.  If after
termination the Participant does not exercise his or her Option within the time
specified herein, the Option will terminate, and the Shares covered by such
Option will revert to the Plan.

 

(iv)          Death of Participant.  If a
Participant dies while a Service Provider, the Option may be exercised
following the Participant’s death within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of
death (but in no event may the option be exercised later than the expiration of
the term of such Option as set forth in the Award Agreement), by the
Participant’s designated beneficiary, provided such beneficiary has been
designated prior to Participant’s death in a form acceptable to the
Administrator.  If no such beneficiary
has been designated by the Participant, then such Option may be exercised by
the personal representative of the Participant’s estate or by the person(s) to
whom the Option is transferred pursuant to the Participant’s will or in
accordance with the laws of descent and distribution.  In the absence of a specified time in the
Award Agreement, the Option will remain exercisable for twelve (12) months
following Participant’s death.  Unless
otherwise provided by the Administrator, if at the time of death Participant is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will immediately revert to the Plan.  If the Option is not so exercised within the
time specified herein, the Option will terminate, and the Shares covered by
such Option will revert to the Plan.

 

(v)           Other Termination.  A Participant’s
Award Agreement may also provide that if the exercise of the Option following
the termination of Participant’s status as a Service Provider (other than upon
the Participant’s death or Disability) would result in liability under Section 16(b),
then the Option will terminate on the earlier of (A) the expiration of the
term of the Option set forth in the Award Agreement, or (B) the 10th day
after the last date on which such exercise would result in such liability under
Section 16(b).  Finally, a
Participant’s Award Agreement may also provide that if the exercise of the
Option following the termination of the Participant’s status as a Service
Provider (other than upon the Participant’s death or Disability) would be
prohibited at any time solely because the issuance of Shares would violate the
registration requirements under the Securities Act, then the Option will
terminate on the earlier of (A) the expiration of the term of the Option,
or (B) the expiration of a period of three (3) months after the
termination of the Participant’s status as a Service Provider during which the
exercise of the Option would not be in violation of such registration
requirements.

 

7.             Stock Appreciation Rights.

 

(a)           Grant of Stock Appreciation Rights. 
Subject to the terms and conditions of the Plan, a Stock Appreciation
Right may be granted to Service Providers at any time and from time to time as
will be determined by the Administrator, in its sole discretion.

 

10

 

(b)           Number of Shares.  The
Administrator will have complete discretion to determine the number of Stock
Appreciation Rights granted to any Participant, provided that during any Fiscal
Year, no Participant will be granted Stock Appreciation Rights covering more
than 1,000,000 Shares.  Notwithstanding the
limitation in the previous sentence, in connection with his or her initial
service as an Employee, an Employee may be granted Stock Appreciation Rights
covering up to an additional 1,000,000 Shares.

(c)           Exercise Price and Other Terms. 
The Administrator, subject to the provisions of the Plan, will have
complete discretion to determine the terms and conditions of Stock Appreciation
Rights granted under the Plan, provided, however, that the exercise
price will be not less than 100% of the Fair Market Value of a Share on the
date of grant.

 

(d)           Stock Appreciation Right Agreement. 
Each Stock Appreciation Right grant will be evidenced by an Award
Agreement that will specify the exercise price, the term of the Stock
Appreciation Right, the conditions of exercise, and such other terms and
conditions as the Administrator, in its sole discretion, will determine.

 

(e)           Expiration of Stock Appreciation Rights. 
A Stock Appreciation Right granted under the Plan will expire upon the
date determined by the Administrator, in its sole discretion, and set forth in
the Award Agreement; provided, however, that the term will be no more
than ten (10) years from the date of grant thereof. 
Notwithstanding the foregoing, the rules of Section 6(d) also
will apply to Stock Appreciation Rights.

 

(f)            Payment of Stock Appreciation Right Amount. 
Upon exercise of a Stock Appreciation Right, a Participant will be
entitled to receive payment from the Company in an amount determined by
multiplying:

 

(i)    The difference between the Fair Market Value of a
Share on the date of exercise over the exercise price; times

 

(ii)   The number of Shares with respect to which the Stock
Appreciation Right is exercised.

 

At the discretion
of the Administrator, the payment upon Stock Appreciation Right exercise may be
in cash, in Shares of equivalent value, or in some combination thereof.

 

8.             Restricted Stock.

 

(a)           Grant of Restricted Stock. 
Subject to the terms and provisions of the Plan, the Administrator, at
any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will
determine.

 

(b)           Restricted Stock Agreement. 
Each Award of Restricted Stock will be evidenced by an Award Agreement
that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion,
will determine.  Notwithstanding the
foregoing sentence, for restricted stock intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, during
any Fiscal Year no Participant will receive more than an aggregate of 300,000 Shares
of Restricted

 

11

 

Stock.  Notwithstanding the foregoing limitation, in
connection with his or her initial service as an Employee, for restricted stock
intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of
the Code, an Employee may be granted an aggregate of up to an additional 300,000
Shares of Restricted Stock.  Unless the
Administrator determines otherwise, Shares of Restricted Stock will be held by
the Company as escrow agent until the restrictions on such Shares have lapsed.

 

(c)           Transferability.  Except as
provided in this Section 8, Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until
the end of the applicable Period of Restriction.

 

(d)           Other Restrictions.  The
Administrator, in its sole discretion, may impose such other restrictions on
Shares of Restricted Stock as it may deem advisable or appropriate.

 

(e)           Removal of Restrictions.  Except as
otherwise provided in this Section 8, Shares of Restricted Stock covered
by each Restricted Stock grant made under the Plan will be released from escrow
as soon as practicable after the last day of the Period of Restriction.  The Administrator, in its
discretion, may accelerate the time at which any restrictions will lapse or be
removed.

 

(f)            Voting Rights.  During the
Period of Restriction, Service Providers holding Shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.

 

(g)           Dividends and Other Distributions. 
During the Period of Restriction, Service Providers holding Shares of
Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares unless otherwise provided in the
Award Agreement.  If any such dividends
or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

 

(h)           Return of Restricted Stock to Company. 
On the date set forth in the Award Agreement, the Restricted Stock for
which restrictions have not lapsed will revert to the Company and again will
become available for grant under the Plan.

 

(i)            Section 162(m) Performance
Restrictions.  For
purposes of qualifying grants of Restricted Stock as “performance-based
compensation” under Section 162(m) of the Code, the Administrator, in
its discretion, may set restrictions based upon the achievement of Performance
Goals.  The Performance Goals will be set
by the Administrator on or before the Determination Date.  In granting Restricted Stock which is
intended to qualify under Section 162(m) of the Code, the
Administrator will follow any procedures determined by it from time to time to
be necessary or appropriate to ensure qualification of the Award under Section 162(m) of
the Code (e.g., in determining the Performance Goals).

 

9.             Restricted Stock Units.

 

(a)           Grant.  Restricted Stock Units may be granted at any
time and from time to time as determined by the Administrator.  Each Restricted Stock Unit grant will be
evidenced by an

 

12

 

Award
Agreement that will specify such other terms and conditions as the
Administrator, in its sole discretion, will determine, including all terms,
conditions, and restrictions related to the grant, the number of Restricted
Stock Units and the form of payout, which, subject to Section 9(d), may be
left to the discretion of the Administrator. 
Notwithstanding anything to the contrary in this 

subsection (a),
for Restricted Stock Units intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code,
during any Fiscal Year of the Company, no Participant will receive more than an
aggregate of 300,000 Restricted
Stock Units.  Notwithstanding the limitation in the previous
sentence, for Restricted Stock Units intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, in
connection with his or her initial service as an Employee, an Employee may be granted
an aggregate of up to an additional 300,000 Restricted Stock Units.

 

(b)           Vesting Criteria and Other Terms. 
The Administrator will set vesting criteria in its discretion, which,
depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant.  After the grant of
Restricted Stock Units, the Administrator, in its sole discretion, may reduce
or waive any restrictions for such Restricted Stock Units.  Each Award of Restricted Stock Units will be evidenced
by an Award Agreement that will specify the vesting criteria, and such other
terms and conditions as the Administrator, in its sole discretion will
determine.

 

(c)           Earning Restricted Stock
Units.  Upon meeting the applicable
vesting criteria, the Participant will be entitled to receive a payout as specified
in the Award Agreement.

 

(d)           Form and Timing of
Payment.  Payment of earned Restricted
Stock Units will be made as soon as practicable after the date(s) set
forth in the Award Agreement.  The
Administrator, in its sole discretion, may pay earned Restricted Stock Units in
cash, Shares, or a combination thereof. 
Shares represented by Restricted Stock Units that are fully paid in cash
again will be available for grant under the Plan.

 

(e)           Cancellation.  On the date set forth in the Award Agreement,
all unearned Restricted Stock Units will be forfeited to the Company.

 

(f)            Section 162(m) Performance
Restrictions.  For
purposes of qualifying grants of Restricted Stock Units as “performance-based
compensation” under Section 162(m) of the Code, the Administrator, in
its discretion, may set restrictions based upon the achievement of Performance
Goals.  The Performance Goals will be set
by the Administrator on or before the Determination Date.  In granting Restricted Stock Units which are
intended to qualify under Section 162(m) of the Code, the
Administrator will follow any procedures determined by it from time to time to
be necessary or appropriate to ensure qualification of the Award under Section 162(m) of
the Code (e.g., in determining the Performance Goals).

 

10.           Performance Units and Performance Shares.

 

(a)           Grant of Performance Units/Shares. 
Performance Units and Performance Shares may be granted to Service
Providers at any time and from time to time, as will be determined by the
Administrator, in its sole discretion. 
The Administrator will have complete discretion in determining the
number of Performance Units/Shares granted to each Participant provided that

 

13

 

during any Fiscal Year, for
Performance Units or Performance Shares intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, (i) no
Participant will receive Performance Units having an initial value greater than
$2,000,000, and (ii) no Participant will receive more than 300,000
Performance Shares.  Notwithstanding the
foregoing limitation, for Performance Shares intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, in
connection with his or her initial service, a Service Provider may be granted
up to an additional 300,000 Performance Shares.

 

(b)           Value of Performance Units/Shares. 
Each Performance Unit will have an initial value that is established by
the Administrator on or before the date of grant.  Each Performance Share will have an initial
value equal to the Fair Market Value of a Share on the date of grant.

 

(c)           Performance Objectives and Other Terms. 
The Administrator will set performance objectives or other vesting
provisions.  The Administrator may set
vesting criteria based upon the achievement of Company-wide, business unit, or
individual goals (including, but not limited to, continued employment), or any
other basis determined by the Administrator in its discretion.  Each Award of Performance Units/Shares will
be evidenced by an Award Agreement that will specify the Performance Period,
and such other terms and conditions as the Administrator, in its sole
discretion, will determine.  The
Administrator, in its sole discretion, may provide at the time of or following
the date of grant for accelerated vesting for an Award of Performance
Units/Shares.

 

(d)           Earning of Performance Units/Shares. 
After the applicable Performance Period has ended, the holder of
Performance Units/Shares will be entitled to receive a payout of the number of
Performance Units/Shares earned by the Participant over the Performance Period,
to be determined as a function of the extent to which the corresponding
performance objectives or other vesting provisions have been achieved.  After the grant of a Performance Unit/Share,
the Administrator, in its sole discretion, may reduce or waive any performance
objectives or other vesting provisions for such Performance Unit/Share.

 

(e)           Form and Timing of Payment of Performance
Units/Shares.  Payment of earned Performance Units/Shares
will be made as soon as practicable after the expiration of the applicable
Performance Period.  The Administrator,
in its sole discretion, may pay earned Performance Units/Shares in the form of
cash, in Shares (which have an aggregate Fair Market Value equal to the value
of the earned Performance Units/Shares at the close of the applicable
Performance Period) or in a combination thereof.

 

(f)            Cancellation of Performance Units/Shares. 
On the date set forth in the Award Agreement, all unearned or unvested
Performance Units/Shares will be forfeited to the Company, and again will be
available for grant under the Plan.

 

(g)           Section 162(m) Performance
Restrictions.  For
purposes of qualifying grants of Performance Units/Shares as “performance-based
compensation” under Section 162(m) of the Code, the Administrator, in
its discretion, may set restrictions based upon the achievement of Performance
Goals.  The Performance Goals will be set
by the Administrator on or before the Determination Date. In granting
Performance Units/Shares which are intended to qualify under

 

14

 

Section 162(m) of
the Code, the Administrator will follow any procedures determined by it from
time to time to be necessary or appropriate to ensure qualification of the
Award under Section 162(m) of the Code (e.g., in determining the
Performance Goals).

 

11.           Performance Goals.  The granting
and/or vesting of Awards of Restricted Stock, Restricted Stock Units,
Performance Shares and Performance Units and other incentives under the Plan
may be made subject to the attainment of performance goals relating to one or
more business criteria within the meaning of Section 162(m) of the
Code and may provide for a targeted level or levels of achievement (“Performance
Goals”) including (a) Earnings per Share, (b) Operating Cash
Flow, (c) Operating Income, (d) Profit After-Tax, (e) Profit
Before-Tax, (f) Return on Assets, (g) Return on Equity, (h) Return
on Sales, (i)  Revenue, and (j) Total Shareholder Return.  Any Performance Goals may be used to measure
the performance of the Company as a whole or a business unit of the Company and
may be measured relative to a peer group or index.  The Performance Goals may differ from
Participant to Participant and from Award to Award.  Prior to the Determination Date, the
Administrator will determine whether any significant element(s) will be
included in or excluded from the calculation of any Performance Goal with
respect to any Participant.  In all other
respects, Performance Goals will be calculated in accordance with the Company’s
financial statements, generally accepted accounting principles, or under a
methodology established by the Administrator prior to the issuance of an Award,
which is consistently applied and identified in the financial statements,
including footnotes, or the management discussion and analysis section of the
Company’s annual report.

 

12.           Leaves of Absence.  Unless the
Administrator provides otherwise, vesting of Awards granted hereunder will be
suspended during any unpaid leave of absence. 
A Service Provider will not cease to be an Employee in the case of (i) any
leave of absence approved by the Company, or (ii) transfers between
locations of the Company or between the Company, its Parent, or any
Subsidiary.  For purposes of Incentive
Stock Options, no such leave may exceed three (3) months, unless reemployment
upon expiration of such leave is guaranteed by statute or contract.  If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, then six (6) months and
one day following the commencement of such leave any Incentive Stock Option
held by the Participant will cease to be treated as an Incentive Stock Option
and will be treated for tax purposes as a Nonstatutory Stock Option.

 

13.           Transferability of Awards. 
Unless determined otherwise by the Administrator, an Award may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Participant, only by the Participant.  If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as
the Administrator deems appropriate.

 

14.           Adjustments; Dissolution or Liquidation; Merger or
Change in Control.

 

(a)           Adjustments.  In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator, in
order to prevent diminution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, will 

 

15

 

 

adjust
the number and class of Shares that may be delivered under the Plan and/or the
number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits set forth
in Sections 3, 6, 7, 8, 9, and 10.

 

(b)           Dissolution or Liquidation. 
In the event of the proposed dissolution or liquidation of the Company,
the Administrator will notify each Participant as soon as practicable prior to
the effective date of such proposed transaction.  To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of
such proposed action.

 

(c)           Change in Control.  In the event of
a merger or Change in Control, each outstanding Award will be treated as the
Administrator determines, including, without limitation, that each Award will
be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation (the “Successor
Corporation”).  The Administrator
will not be required to treat all Awards similarly in the transaction.

 

In the event that the Successor Corporation does not assume or
substitute for the Award, the Participant will fully vest in and have the right
to exercise all of his or her outstanding Options and Stock Appreciation
Rights, including Shares as to which such Awards would not otherwise be vested
or exercisable, all restrictions on Restricted Stock will lapse, and, with
respect to Restricted Stock Units, Performance Shares and Performance Units,
all Performance Goals or other vesting criteria will be deemed achieved at
target levels and all other terms and conditions met.  In addition, if an Option or Stock
Appreciation Right is not assumed or substituted for in the event of a Change
in Control, the Administrator will notify the Participant in writing or
electronically that the Option or Stock Appreciation Right will be fully vested
and exercisable for a period of time determined by the Administrator in its
sole discretion, and the Option or Stock Appreciation Right will terminate upon
the expiration of such period.

 

For the purposes
of this subsection (c), an Award will be considered assumed if, following the
Change in Control, the Award confers the right to purchase or receive, for each
Share subject to the Award immediately prior to the Change in Control, the
consideration (whether stock, cash, or other securities or property) or, in the
case of a Stock Appreciation Right upon the exercise of which the Administrator
determines to pay cash or a Performance Share or Performance Unit which the
Administrator can determine to pay in cash, the fair market value of the
consideration received in the merger or Change in Control by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the Change in Control is not
solely common stock of the Successor Corporation, the Administrator may, with
the consent of the Successor Corporation, provide for the consideration to be
received upon the exercise of an Option or Stock Appreciation Right or upon the
payout of a Performance Share or Performance Unit, for each Share subject to
such Award (or in the case of Performance Units, the number of implied shares
determined by dividing the value of the Performance Units by the per share consideration
received by holders of Common Stock in the Change in Control), to be solely
common stock of the Successor Corporation equal in fair market value to the per
share consideration received by holders of Common Stock in the Change in
Control.

 

Notwithstanding anything
in this Section 14(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more Performance Goals will not be
considered 

 

16

 

assumed if the Company or
its successor modifies any of such Performance Goals without the Participant’s
consent; provided, however, a modification to such Performance Goals only to
reflect the Successor Corporation’s post-Change in Control corporate structure
will not be deemed to invalidate an otherwise valid Award assumption.

 

15.           Tax Withholding

 

(a)           Withholding Requirements. 
Prior to the delivery of any Shares or cash pursuant to an Award (or
exercise thereof), the Company will have the power and the right to deduct or withhold,
or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, local, foreign or other taxes (including the
Participant’s FICA obligation) required to be withheld with respect to such
Award (or exercise thereof).

 

(b)           Withholding Arrangements. 
The Administrator, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may permit a Participant to
satisfy such tax withholding obligation, in whole or in part by (without
limitation) (i) paying cash, (ii) electing to have the Company
withhold otherwise deliverable cash or Shares having a Fair Market Value equal
to the minimum amount required to be withheld, (iii) delivering to the
Company already-owned Shares having a Fair Market Value equal to the amount
required to be withheld, or (iv) selling a sufficient number of
Shares otherwise deliverable to the Participant through such means as the
Administrator may determine in its sole discretion (whether through a broker or
otherwise) equal to the amount required to be withheld. 
The amount of the withholding requirement will be deemed to include any
amount which the Administrator agrees may be withheld at the time the election
is made, not to exceed the amount determined by using the maximum federal,
state or local marginal income tax rates applicable to the Participant with
respect to the Award on the date that the amount of tax to be withheld is to be
determined.  The Fair Market Value of the
Shares to be withheld or delivered will be determined as of the date that the
taxes are required to be withheld.

 

16.           No Effect on Employment or Service. 
Neither the Plan nor any Award will confer upon a Participant any right
with respect to continuing the Participant’s relationship as a Service Provider
with the Company, nor will they interfere in any way with the Participant’s
right or the Company’s right to terminate such relationship at any time, with
or without cause, to the extent permitted by Applicable Laws.

 

17.           Date of Grant.  The date of
grant of an Award will be, for all purposes, the date on which the
Administrator makes the determination granting such Award, or such other later
date as is determined by the Administrator. 
Notice of the determination will be provided to each Participant within
a reasonable time after the date of such grant.

 

18.           Term of Plan.  Subject to Section 22  of the Plan, the Plan will become effective upon its
adoption by the Board.  It will continue
in effect for a term of ten (10) years unless terminated earlier under Section 19  of the Plan.

 

19.           Amendment and Termination of the Plan.

 

(a)           Amendment and Termination. 
The Administrator may at any time amend, alter, suspend or terminate the
Plan.

 

17

 

(b)           Stockholder Approval.  The Company
will obtain stockholder approval of any Plan amendment to the extent necessary
and desirable to comply with Applicable Laws.

 

(c)           Effect of Amendment or Termination. 
No amendment, alteration, suspension, or termination of the Plan will impair
the rights of any Participant, unless mutually agreed otherwise 

 

between the Participant
and the Administrator, which agreement must be in writing and signed by the
Participant and the Company.  Termination
of the Plan will not affect the Administrator’s ability to exercise the powers
granted to it hereunder with respect to Awards granted under the Plan prior to
the date of such termination.

 

20.           Conditions Upon Issuance of Shares.

 

(a)           Legal Compliance.  Shares will
not be issued pursuant to the exercise of an Award unless the exercise of such
Award and the issuance and delivery of such Shares will comply with Applicable
Laws and will be further subject to the approval of counsel for the Company
with respect to such compliance.

 

(b)           Investment Representations. 
As a condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required.

 

21.           Inability to Obtain Authority. 
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, will
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority will not have been obtained.

 

22.           Stockholder Approval.  The Plan will
be subject to approval by the stockholders of the Company within twelve (12)
months after the date the Plan is adopted. 
Such stockholder approval will be obtained in the manner and to the
degree required under Applicable Laws.

 

18Exhibit 10.2

COPART, INC.

 

2007 EQUITY INCENTIVE PLAN

 

PERFORMANCE SHARE AWARD AGREEMENT

 

Unless otherwise
defined herein, the terms defined in the 2007 Equity Incentive Plan (the “Plan”)
will have the same defined meanings in this Performance Share Award Agreement
(the “Award Agreement”).

 

I.              NOTICE OF GRANT
OF PERFORMANCE SHARES

 

Participant Name:

 

Address:

 

You have been
granted the right to receive Performance Shares, subject to the terms and
conditions of the Plan and this Award Agreement, as follows:

 

	
  Date of Grant

  	
   

  	
                                                          

  
	
   

  	
   

  	
   

  
	
  Target
  Number of Performance Shares

  	
   

  	
  [                                                             ]

  
	
   

  	
   

  	
   

  
	
  Performance Period

  	
   

  	
  [                                                             ]

  
	
   

  	
   

  	
   

  
	
  Performance
  Matrix

  	
   

  	
  The
  number of Performance Shares in which you may vest in accordance with the
  Vesting Schedule below will depend upon achievement [Insert
  Description of Performance Goal(s)] and will be determined in
  accordance with the Performance Matrix, attached hereto as Exhibit B. [Insert Performance Target(s)].

  
					

 

Vesting
Schedule:

 

The Performance Shares will vest as follows:

 

[INSERT VESTING SCHEDULE.]

 

In the event Participant ceases to be a Service Provider for any or no
reason before Participant vests in the Performance Shares, the Performance
Shares and Participant’s right to acquire any Shares hereunder will immediately
terminate.

 

By
Participant’s signature and the signature of the representative of Copart, Inc.
(the “Company”) below, Participant and the Company agree that this Award of
Performance Shares is granted under and governed by the terms and conditions of
the Plan and this Award Agreement, including the Terms and Conditions of
Performance Share Grant, attached hereto as Exhibit A, all of which
are made a part of this document. 
Participant has reviewed the Plan and this Award  Agreement in their entirety,
has had an opportunity to obtain the advice of counsel 

 

 

1

 

prior
to executing this Award Agreement and fully understands all provisions of the
Plan and Award Agreement.  Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions relating to the Plan
and Award  Agreement.  Participant further agrees to notify the
Company upon any change in the residence address indicated below.

 

	
  PARTICIPANT:

  	
  COPART, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
  By

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
  Title

  
	
   

  	
   

  
	
  Residence
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2

 

EXHIBIT A

 

TERMS AND CONDITIONS OF PERFORMANCE SHARE GRANT

 

1.             Grant.  The Company hereby grants to the Participant
named in the Notice of Grant  attached as Part I of this Award  Agreement (the “Participant”) under the Plan
an Award of Performance Shares, subject to all of the terms and conditions in
this Award  Agreement and
the Plan, which is incorporated herein by reference.  Subject to Section 19(c) of the
Plan, in the event of a conflict between the terms and conditions of the Plan
and the terms and conditions of this Award  Agreement, the terms and conditions of the
Plan will prevail.

 

2.             Company’s Obligation to Pay.  Each Performance Share represents the right
to receive a Share on the date it vests. 
Unless and until the Performance Shares will have vested in the manner
set forth in Section 3, Participant will have no right to payment of any
such Performance Shares.  Prior to actual
payment of any vested Performance Shares, such Performance Share will represent
an unsecured obligation of the Company, payable (if at all) only from the
general assets of the Company.  Any
Performance Shares that vest in accordance with Sections 3 or 4 will be paid to
Participant (or in the event of Participant’s death, to his or her estate) in
whole Shares, subject to Participant satisfying any applicable tax withholding
obligations as set forth in Section 7. 
Subject to the provisions of Section 4, such vested Performance
Shares shall be paid in Shares as soon as practicable after vesting, but in
each such case within the period ending no later than the date that is two and
one half (21⁄2) months from the end of the Company’s tax year that includes the
vesting date.

 

3.             Vesting Schedule.  Except as provided in Section 4, and subject
to Section 5, the Performance Shares awarded by this Award Agreement will
vest in accordance with the vesting provisions set forth in the Notice of
Grant.  Performance Shares  scheduled to vest on a
certain date or upon the occurrence of a certain condition will not vest in
Participant in accordance with any of the provisions of this Award  Agreement, unless
Participant will have been continuously a Service Provider from the Date of
Grant until the date such vesting occurs.

 

4.             Administrator Discretion.  The Administrator, in its discretion, may
accelerate the vesting of the balance, or some lesser portion of the balance,
of the unvested Performance Shares at any time, subject to the terms of the
Plan.  If so accelerated, such
Performance Shares will be considered as having vested as of the date specified
by the Administrator.

 

Notwithstanding
anything in the Plan or this Award Agreement to the contrary, if the vesting of
the balance, or some lesser portion of the balance, of the Performance Shares
is accelerated in connection with Participant’s termination as a Service
Provider (provided that such termination is a “separation from service” within
the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) Participant
is a “specified employee” within the meaning of Section 409A at the time
of such termination as a Service Provider and (y) the payment of such
accelerated Performance Shares will result in the imposition of additional tax
under Section 409A if paid to Participant on or within the six (6) month
period following Participant’s termination as a Service Provider, then the
payment of such accelerated Performance Shares will not be made until the date
six (6) months and one (1) day following the date of Participant’s
termination as a Service Provider, unless the Participant dies 

 

3

 

following
his or her termination as a Service Provider, in which case, the Performance
Shares will be paid in Shares to the Participant’s estate as soon as
practicable following his or her death. 
It is the intent of this Award Agreement to comply with the requirements
of Section 409A so that none of the Performance Shares provided under this
Award Agreement or Shares issuable thereunder will be subject to the additional
tax imposed under Section 409A, and any ambiguities herein will be
interpreted to so comply.  For purposes
of this Award Agreement, “Section 409A” means Section 409A of the
Code, and any proposed, temporary or final Treasury Regulations and Internal
Revenue Service guidance thereunder, as each may be amended from time to time.

 

5.             Forfeiture upon Termination of
Status as a Service Provider.  Notwithstanding
any contrary provision of this Award Agreement, the balance of the Performance
Shares that have not vested as of the time of Participant’s termination as a
Service Provider for any or no reason and Participant’s right to acquire any
Shares hereunder will immediately terminate.

 

6.             Death of Participant.  Any distribution or delivery to be made to Participant
under this Award Agreement will, if Participant is then deceased, be made to
Participant’s designated beneficiary, or if no beneficiary survives Participant, the
administrator or executor of Participant’s estate.  Any such transferee must furnish the Company
with (a) written notice of his or her status as transferee, and (b) evidence
satisfactory to the Company to establish the validity of the transfer and
compliance with any laws or regulations pertaining to said transfer.

 

7.             Withholding of Taxes.  Notwithstanding any contrary provision of
this Award  Agreement, no
certificate representing the Shares will be issued to Participant, unless and
until satisfactory arrangements (as determined by the Administrator) will have
been made by Participant with respect to the payment of income, employment and
other taxes which the Company determines must be withheld with respect to such
Shares.  The Administrator, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit Participant to satisfy such tax withholding obligation, in whole or
in part (without limitation) by (a) paying cash, (b) electing to have
the Company withhold otherwise deliverable Shares having a Fair Market Value
equal to the minimum amount required to be withheld, (c) delivering to the
Company already vested and owned Shares having a Fair Market Value equal to the
amount required to be withheld, or (d) selling a sufficient number of such
Shares otherwise deliverable to Participant through such means as the Company
may determine in its sole discretion (whether through a broker or otherwise)
equal to the amount required to be withheld.  To the extent
determined appropriate by the Company in its discretion, it shall have the right
(but not the obligation) to satisfy any tax withholding obligations by reducing
the number of Shares otherwise deliverable to Participant.  If Participant fails to make satisfactory
arrangements for the payment of any required tax withholding obligations
hereunder at the time any applicable Performance Shares otherwise are scheduled
to vest pursuant to Sections 3 or 4, Participant will permanently forfeit such
Performance Shares and any right to receive Shares thereunder and the
Performance Shares will be returned to the Company at no cost to the Company.

 

8.             Rights as Stockholder.  Neither Participant nor any person claiming
under or through Participant will have any of the rights or privileges of a
stockholder of the Company in respect of any Shares deliverable hereunder
unless and until certificates representing such Shares will have been issued,
recorded on the records of the Company or its transfer agents or registrars, 

 

4

 

and
delivered to Participant.  After such
issuance, recordation and delivery, Participant will have all the rights of a
stockholder of the Company with respect to voting such Shares and receipt of
dividends and distributions on such Shares.

 

9.             No Guarantee of Continued
Service.  PARTICIPANT ACKNOWLEDGES
AND AGREES THAT THE VESTING OF THE PERFORMANCE SHARES PURSUANT TO THE VESTING
SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL
OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT)
AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OF PERFORMANCE
SHARES OR ACQUIRING SHARES HEREUNDER. 
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT,
THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT
AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE
COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO
TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

 

10.           Address for Notices.  Any notice to be given to the Company under
the terms of this Award Agreement will be addressed to the Company, in care of
its General Counsel at Copart, Inc., 4665 Business Center Drive,
Fairfield, California, 94534, or at such other address as the Company may
hereafter designate in writing.

 

11.           Grant is Not Transferable.  Except to the limited extent provided in Section 6,
this grant and the rights and privileges conferred hereby will not be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and will not be subject to sale under execution,
attachment or similar process.  Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
grant, or any right or privilege conferred hereby, or upon any attempted sale
under any execution, attachment or similar process, this grant and the rights
and privileges conferred hereby immediately will become null and void.

 

12.           Binding Agreement.  Subject to the limitation on the
transferability of this grant contained herein, this Award  Agreement will be binding
upon and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.

 

13.           Additional Conditions to Issuance
of Stock.  If at any time the Company
will determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory
authority is necessary or desirable as a condition to the issuance of Shares to
Participant (or his or her estate), such issuance will not occur unless and
until such listing, registration, qualification, consent or approval will have
been effected or obtained free of any conditions not acceptable to the
Company.  Where the Company determines
that the delivery of the payment of any Shares will violate federal securities
laws or other applicable laws, the Company will defer delivery until the
earliest date at which the Company reasonably anticipates 

 

5

 

that
the delivery of Shares will no longer cause such violation.  The Company will make all reasonable efforts
to meet the requirements of any such state or federal law or securities
exchange and to obtain any such consent or approval of any such governmental authority.

 

14.           Plan Governs.  This Award Agreement is subject to all terms
and provisions of the Plan.  In the event
of a conflict between one or more provisions of this Award Agreement and one or
more provisions of the Plan, the provisions of the Plan will govern.  Capitalized terms used and not defined in
this Award Agreement will have the meaning set forth in the Plan.

 

15.           Administrator
Authority.  The Administrator will
have the power to interpret the Plan and this Award Agreement and to adopt such
rules for the administration, interpretation and application of the Plan
as are consistent therewith and to interpret or revoke any such rules (including,
but not limited to, the determination of whether or not any Performance Shares
have vested).  All actions taken and all
interpretations and determinations made by the Administrator in good faith will
be final and binding upon Participant, the Company and all other interested
persons.  No member of the Administrator
will be personally liable for any action, determination or interpretation made
in good faith with respect to the Plan or this Award  Agreement.

 

16.           Electronic Delivery.  The Company may, in its sole discretion,
decide to deliver any documents related to Performance Shares awarded under the
Plan or future Performance Shares that may be awarded under the Plan by
electronic means or request Participant’s consent to participate in the Plan by
electronic means.  Participant hereby
consents to receive such documents by electronic delivery and agrees to participate
in the Plan through any on-line or electronic system established and maintained
by the Company or another third party designated by the Company.

 

17.           Captions.  Captions provided herein are for convenience
only and are not to serve as a basis for interpretation or construction of this
Award Agreement.

 

18.           Agreement Severable.  In the event that any provision in this Award  Agreement will be held
invalid or unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any effect on, the
remaining provisions of this Award Agreement.

 

19.           Modifications to the Agreement.  This Award  Agreement constitutes the entire
understanding of the parties on the subjects covered.  Participant expressly warrants that he or she
is not accepting this Award  Agreement in reliance on any promises, representations, or inducements
other than those contained herein. 
Modifications to this Award Agreement or the Plan can be made only in an
express written contract executed by a duly authorized officer of the
Company.  Notwithstanding anything to the
contrary in the Plan or this Award  Agreement, the Company reserves the right to
revise this Award Agreement as it deems necessary or advisable, in its sole
discretion and without the consent of Participant, to comply with Section 409A
or to otherwise avoid imposition of any additional tax or income recognition
under Section 409A in connection to this Award of Performance Shares.

 

20.           Amendment, Suspension or
Termination of the Plan.  By
accepting this Award, Participant expressly warrants that he or she has
received an Award of Performance Shares under 

 

6

 

the
Plan, and has received, read and understood a description of the Plan.  Participant understands that the Plan is
discretionary in nature and may be amended, suspended or terminated by the
Company at any time.

 

21.           Governing Law.  This Award Agreement shall be governed by the
laws of the State of California, without giving effect to the conflict of law
principles thereof.  For purposes of
litigating any dispute that arises under this Award of Performance Shares or
this Award Agreement, the parties hereby submit to and consent to the
jurisdiction of the State of California, and agree
that such litigation shall be conducted in the courts of Solano County,
California, or the federal courts for the United
States for the Northern District of California, and no other courts, where this
Award of Performance Shares is made and/or to be performed.

 

7

 

EXHIBIT B

 

PERFORMANCE MATRIX

 

[INSERT PERFORMANCE MATRIX]

 

8

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