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EXHIBIT 10.3
AUTONATION ENTERPRISES INCORPORATED
1995 EMPLOYEE STOCK OPTION PLAN
(As Amended and Restated on April 17, 2000)
1. STATEMENT OF PURPOSE. This Employee Stock Option Plan (the Plan") is
to benefit AutoNation Enterprises Incorporated, a Florida corporation (the
"Company"), and its subsidiaries through the maintenance and development of
their respective businesses by offering certain present and future key employees
and officers, and independent contractors providing services to the Company and
its subsidiaries, a favorable opportunity to become holders of stock in the
Company over a period of years, thereby giving them a permanent stake in the
growth and prosperity of the Company and its subsidiaries and encouraging the
continuance of their involvement with the Company and its subsidiaries.
2. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board"), whose construction and interpretation of
the terms and provisions of the Plan shall be final and conclusive. The
selection of employees, officers and consultants for participation in the Plan
and all decisions concerning the timing, pricing and amount of any grant or
award under the Plan shall be made by the Board. The Board may in its sole
discretion grant options to purchase shares of the Company's $.001 per share
par value common stock ("Common Stock") and issue shares upon exercise of such
options as provided in the Plan. The Board shall have authority, subject to the
express provisions of the Plan, to construe the respective option agreements and
the Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the respective option agreements,
which need not be identical, and to make all other determinations in the
judgment of the Board necessary or desirable for the administration of the
Plan. The Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option agreement in the manner and to the
extent it shall deem expedient to carry the Plan into effect and it shall be the
sole and final judge of such expediency. No director shall be liable for any
action or determination made in good faith. The Board may, to the full extent
permitted by law, delegate any or all of its powers under the Plan to a
committee (the "Committee") appointed by the Board, and if the Committee is so
appointed, all references to the Board in the Plan shall mean and relate to such
Committee.
From and after the registration of the Common Stock of the Company
under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"),
the selection of an officer or director as a participant in the Plan and the
timing, price and number of shares for which an option or options may be granted
to such officer or director shall be determined either (i) by the Board or (ii)
by a committee of two or more directors having full authority to act in the
matter, each of which members shall be a "nonemployee director" (within the
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meaning of Rule 16b-3 under the Exchange Act (or any successor rule)) and an
"outside director" (as defined under Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code") (or any successor rule)), as such terms are
interpreted from time to time.
3. ELIGIBILITY. Options shall be granted only to key employees of the
Company and its subsidiaries (including officers and directors of the Company
and its subsidiaries) and independent contractors performing services for the
Company and its subsidiaries selected initially and from time to time by the
Board on the basis of their importance and contribution to the business of the
Company or its subsidiaries.
As a condition to the grant of an option under the Plan, each recipient
of an option shall execute an option agreement not inconsistent with the Plan as
may be determined by the Board.
4. GRANTING OF OPTIONS. The Board may grant options under which a total
of not in excess of 3,200,000 shares of the Common Stock may be purchased from
the Company, subject to adjustment as provided in Section 10. Options granted
under the Plan are intended not to be treated as incentive stock options as
defined in Section 422 of the Code. The maximum number of shares subject to
options that can be granted under the Plan to any executive officer of the
Company or its subsidiaries, or to any other person eligible for a grant of an
option under Section 3, is 1,000,000 during the first ten years after the
effective date of the Plan and 500,000 shares per year thereafter (in each case,
subject to adjustment as provided in Section 10 hereof).
In the event that an option expires or is terminated or canceled
unexercised as to any shares, such released shares may again be optioned
(including a grant in substitution for a canceled option). With respect to any
individual, however, in the case of an option that is terminated or canceled
unexercised as to any shares, such released shares shall continue to count
against the maximum number of shares that may be offered such individual under
the Plan. Shares subject to options may be made available from unissued or
reacquired shares of Common Stock.
5. OPTION PRICE. The option price shall be determined by the Board in
its sole discretion, subject to the provisions of Section 10 hereof, but shall
not be less than the fair market value, at the time the option is granted, of
the shares of Common Stock subject to the option.
6. DURATION OF OPTIONS, INCREMENTS AND EXTENSIONS. Subject to the
provisions of Section 8 hereof, each option shall be for such term of not less
than five (5) years nor more than ten (10) years, as shall be determined by the
Board. Each option shall become exercisable with respect to 25% of the total
number of shares subject to the option twelve (12) months after the date of its
grant and with respect to an additional 25% at the end of each twelve-month
period thereafter during the succeeding three (3) years. Notwithstanding the
foregoing, the Board may in its discretion (i) specifically provide for another
time or times of vesting or exercise; (ii) accelerate the exercisability of any
option subject to such terms and conditions as the Board deems necessary and
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appropriate; or (iii) at any time prior to the expiration or termination of any
option previously granted, extend the term of any option (including such
options held by officers or directors) for such additional period as the Board
in its discretion shall determine. In no event, however, shall the aggregate
option period with respect to any option, including the original term of the
option and any extensions thereof, exceed ten (10) years. Subject to the
foregoing, all or any part of the option which has become exercisable may be
exercised at any time during the option period prior to its expiration.
From and after the registration of the Common Stock under Section 12 of
the Exchange Act, in the event of a Change in Control (as defined below), all
outstanding options shall became immediately exercisable. Notwithstanding any
other provision in the Plan, during the period of thirty (30) days after such
Change of Control each optionee who is an officer or a director (or an employee
or consultant) of the Company shall have the right to require the Company to
purchase from him any option granted under the Plan at a purchase price equal to
(i) the excess of fair market value per share over the option price (ii)
multiplied by the number of option shares specified by such individual for
purchase in a written notice to the Company, attention of the Secretary. For
purposes of this Plan, a "Change in 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, or (b) has the power (whether
such power arises as a result of the ownership of capital stock, by contract or
otherwise), to elect or cause the election of directors consisting at the time
of such election of a majority of the Board. 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 Exchange Act and the rules
promulgated thereunder). For purposes of this paragraph, "fair market value per
share" shall mean the average of the highest sales price per share of the Common
Stock as quoted on the NASD National Market or by the principal exchange upon
which the Common Stock is listed on each of the five trading days immediately
preceding the date on which such individual so notifies the Company. 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.
7. EXERCISE OF OPTION. From and after the registration of the Common
Stock under Section 12 of the Exchange Act, as a condition to the exercise of
any option, the "Quoted Price" (as defined below) per share of Common Stock on
the date of exercise must equal or exceed the option price referred to in
Section 5 hereof. An option may be exercised 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
either in cash, by check by a promissory note in a form specified by the Company
and payable (or delivered, in the case a note) to the Company no later than ten
business, days after the date of exercise of the option or, if so approved by
the Board, by shares of the Common Stock or by a combination of these methods of
payment. The "Quoted Price" and the per share value of Common Stock for purposes
of paying the option price in accordance with the immediately preceding
sentence shall equal the closing selling price per share of Common Stock on the
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date in question on the NASD National Market or the principal stock exchange
upon which the Common Stock is listed. From and after the registration of the
Common Stock under Section 12 of the Exchange Act., the right to pay the
purchase price of shares by delivery of a promissory note shall not be available
to any optionee who is a person described in Section 16(a) of the Exchange Act.
At the 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
heirs, legatees, or legal representative, as the case may be), as a condition
upon the exercise thereof, to deliver to the Company a written representation of
present intention to purchase the shares for investment and not for
distribution. In the event such representation is required to be delivered, an
appropriate legend may be placed upon each certificate delivered to the optionee
upon his exercise of part or all of the option and a stop transfer order may be
placed with the transfer agent. Each option shall also be subject to the
requirement that, if at any time the Company determines, in its discretion, that
the listing, registration or qualification of the shares subject to the option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body is necessary or desirable as a
condition of or in connection with, the issuance 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 Board may require, as a
condition of the exercise of such option, the optionee to (x) pay the Company
an amount equal to the amount of tax the Company may be required to withhold in
respect of any applicable federal, state or local tax as a result of the
exercise of such option by the optionee, or (y) make such other arrangements
with the Company which would enable the Company to pay such withholding tax,
including, without limitation, holding back a number of shares issuable upon
exercise of the option equal to the amount of such withholding tax, or
permitting the optionee to deliver a promissory note in a form specified by the
Board, or (z) a combination of the foregoing.
8. TERMINATION OF RELATIONSHIP-EXERCISE THEREAFTER. Except as provided
below or as may otherwise be provided by the Board, upon the termination of
employment or other service of an optionee with the Company for any reason, all
options held by such optionee at the time of such termination shall immediately
terminate and such optionee shall have no further right to purchase shares of
Common Stock pursuant to such option; provided, however, that, unless such
termination is by the Company for "Cause," all such options, to the extent
exercisable on the date of such termination, shall remain exercisable until the
earlier of (a) the expiration date of such option as fixed by the Board pursuant
to Section 6 and (b) the 60th day following the date of such termination. For
purposes of the foregoing, "Cause" shall mean (1) the optionee's conviction for
commission of a felony or other crime; (2) the commission by the optionee of any
act against the Company constituting willful misconduct, dishonesty, fraud,
theft or embezzlement; (3) the optionee's failure, inability or refusal to
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perform any of the material services, duties or responsibilities required of him
by the Company, or to materially comply with the policies or procedures
established from time to time by the Company, for any reason other than his
illness or physical or mental incapacity; (4) the optionee's dependence, as
determined in good faith by the Company, on any addictive substance, including,
but not limited to, alcohol or any illegal or narcotic drugs; (5) the
destruction of or material damage to Company property caused by the optionee's
willful or grossly negligent conduct; and (6) the willful engaging by the
optionee in any other conduct which is demonstrably injurious to the Company or
its subsidiaries, monetarily or otherwise. Determination of Cause shall be made
by the Board in its sole discretion. Notwithstanding the foregoing, if the
optionee is a party to an employment agreement with the Company, "Cause" with
respect to such optionee shall have the meaning set forth therein.
Except as otherwise provided by the Board and notwithstanding anything
in this Section 8 to the contrary, if an optionee's termination of employment is
by reason of the death, "permanent and total disability" (within the meaning of
Section 22(e)(3) of the Code) or "Retirement"of such optionee, all options held
by such optionee at the time of such termination shall become immediately vested
and exercisable in full and shall remain exercisable until the earlier of (a)
the expiration date of such option as fixed by the Board pursuant to Section 6
and (b) the 3rd anniversary of the date of such termination. Whether a
termination of employment or service is to be considered by reason of "permanent
and total disability" for purposes of this Plan shall be determined by the
Board, which determination shall be final and conclusive. For purposes of the
foregoing, "Retirement" shall mean the optionee's termination of employment or
other service from the Company after attainment of age 55 and completion of at
least 6 years of service with the Company. For purposes of the preceding
sentence, employment or other service with an entity prior to its becoming a
subsidiary or after its ceasing to be a subsidiary shall be disregarded.
9. NON-TRANSFERABILITY OF OPTIONS. During the lifetime of the optionee,
options shall be exercisable only by the optionee, and options shall not be
assignable or transferable by the optionee otherwise than by will or by the laws
of descent and distribution. Following the optionee's death, options held by
such optionee, to the extent exercisable, may be exercised by the executors or
administrators or legatees or distributees of such optionee's estate.
10. ADJUSTMENT. The number of shares subject to the Plan and to options
granted under the Plan shall be adjusted as follows: (a) in the event that the
number of outstanding shares of Common Stock is changed by any stock dividend,
stock split or combination of shares the number of shares subject to the Plan
and to options granted hereunder shall be proportionately adjusted; (b) in the
event of any merger, consolidation or reorganization of the Company with any
other corporation of corporations, there shall be substituted, on an equitable
basis as determined by the Board, for each share of Common Stock then subject to
the Plan, whether or not at the time subject to outstanding options, the number
and kind of shares of stock or other securities to which the holders of shares
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of Common Stock will be entitled pursuant to the transaction; and (c) in the
event of any other relevant change in the capitalization of the Company, the
Board shall provide for an equitable adjustment in the number of shares of
Common Stock then subject to the Plan, whether or not then subject to
outstanding options. In the event of any such adjustment, the purchase price per
share shall be proportionately adjusted.
11. NO IMPAIRMENT OF RIGHTS. Nothing contained in the Plan or any
option granted pursuant to the Plan shall confer upon any optionee any right to
be continued in the employment of the Company or any subsidiary of the Company
or to be continued as a consultant to the Company or any subsidiary of the
Company or interfere in any way with the right of the Company or its
subsidiaries to terminate such employment or consulting relationship and/or to
remove any optionee who is a director from service on the Board or any of it's
subsidiaries at any time in accordance with the provisions of applicable law.
12. AMENDMENT OF PLAN. The Board may amend or discontinue the Plan at
any time. However, no such amendments or discontinuance shall be made without
the requisite approval of the stockholders of the Company if stockholder
approval is required as a condition to the Plan continuing to comply with the
provisions of Rule 16b-3 or Section 162(m) of the Code.
13. GOVERNANCE BY RULE 16B-3. The Plan is intended to comply with all
applicable conditions of Rule 16b-3 and its successors promulgated under the
Exchange Act, regardless of whether such conditions are set forth in the Plan.
To the extent any provision of the Plan or action of the Plan administrators
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Plan administrators.
14. HOLDING PERIOD. From and after the registration of the Common Stock
under Section 12 of the Exchange Act, anything contained in the Plan to the
contrary notwithstanding, any disposition of an option otherwise permitted by
the terms of the Plan, or of the Common Stock acquired upon exercise of an
option, shall be subject to compliance with the requirements of Rule 16b-3 or
its successors promulgated under the Exchange Act, applicable to such
disposition, and any date, period or procedure specified or referred to in the
Plan with respect to any such disposition shall be adjusted, if necessary so as
to give effect to this Section 1.4.
15. EFFECTIVE DATE. On November 22, 1995, this Plan was adopted and
authorized by the Board and approved by the stockholders of the Company, This
plan shall be deemed to have become effective on November 22, 1995.
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