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U.s. Franchise Systems, Inc 1996 Stock Option Plan

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EXHIBIT 10.14


U.S. FRANCHISE SYSTEMS, INC.


AMENDED AND RESTATED 1996 STOCK OPTION PLAN


SECTION 1. Purpose. The purposes of this U.S. Franchise Systems, Inc. 1996 Stock Option Plan are to promote the interests of U.S. Franchise Systems, Inc. ("USFS" or the "Company") and its stockholders by (i) attracting and retaining exceptional officers and other key employees of the Company and its Subsidiaries, and consultants, advisors and others whom the Committee determines possess skills that would be an asset to the Company or any of its Subsidiaries; (ii) motivating such individuals by means of performance-related incentives to achieve longer-range performance goals; and (iii) enabling such individuals to participate in the long-term growth and financial success of the Company.


SECTION 2. Definitions. As used in the Plan, the following terms shall have the meanings set forth below:


"Affiliate" shall mean (i) any entity that, directly or indirectly, is controlled by or controls the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Committee.


"Board" shall mean the Board of Directors of the Company.


"Change of Control" shall mean the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any "person" or "group" (as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Permitted Holders, (ii) any person or group, other than the Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (together with any new directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board.


"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.


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"Committee" shall mean (i) a committee of the Board designated by the Board to administer the Plan and composed of not less two directors, each of whom is intended to be a "Non-Employee Director" (within the meaning of Rule 16b-3) and an "outside director" (within the meaning of Code section 162(m)) to the extent Rule 16b-3 and Code section 162(m), respectively, are applicable to the Company or (ii) if at any time such a committee has not been so designated by the Board, the Board or any authorized committee thereof.


"Company" shall mean U.S. Franchise Systems, Inc., together with any successor thereto.


"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.


"Fair Market Value" shall mean, (A) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee and (B) with respect to the Shares, as of any date, (i) the mean between the high and low sales prices of the Shares as reported on the composite tape for securities traded on the New York Stock Exchange for such date (or if not then trading on the New York Stock Exchange, the mean between the high and low sales price of the Shares on the stock exchange or over-the-counter market on which the Shares are principally trading on such date), or if, there were no sales on such date, on the closest preceding date on which there were sales of Shares or (ii) in the event there shall be no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Committee.


"Incentive Stock Option" shall mean a right to purchase Shares from the Company that is granted under Section 6 of the Plan and that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.


"Non-Qualified Stock Option" shall mean a right to purchase Shares from the Company that is granted under Section 6 of the Plan and that is not intended to be an Incentive Stock Option.


"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock Option.


"Option Agreement" shall mean any written agreement, contract, or other instrument or document evidencing any Option, which may, but need not, be executed or acknowledged by a Participant.


"Participant" shall mean any officer or other key employee (including any prospective officer or key employee) of the Company or its Subsidiaries, and any consultant, advisor or other person whom the Committee determines possesses skills that would be an asset to the Company or any of its Subsidiaries, in each case who is


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"Permitted Holders" shall mean, as of the date of determination, any and all of Neal K. Aronson and Michael A. Leven, their spouses, their siblings and their siblings' spouses, their parents and descendants of any of them (whether natural or adopted) (collectively, the "Family Group") and (iii) any trust established and maintained primarily for the benefit of any member of the Family Group and any entity controlled by any member of the Family Group.


"Person" shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity.


"Plan" shall mean this U.S. Franchise Systems, Inc. 1996 Stock Option Plan.


"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time.


"SEC" shall mean the Securities and Exchange Commission or any successor thereto and shall include the Staff thereof.


"Shares" shall mean shares of the Class A Common Stock of the Company, $.01 par value, or such other securities of the Company (i) into which such common shares shall be changed by reason of a recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar transaction or (ii) as may be determined by the Committee pursuant to Section 4(b).


"Subsidiary" shall mean (i) any entity that, directly or indirectly, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Committee


"Substitute Awards" shall have the meaning specified in Section 4(c).


SECTION 3. Administration. (a) The Plan shall be administered by the Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Options to be granted to a Participant; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights, or other


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matters are to be calculated in connection with, Options; (iv) determine the terms and conditions of any Option; (v) determine whether, to what extent, and under what circumstances Options may be settled or exercised in cash, Shares, other securities, or other property, or canceled, forfeited, or suspended and the method or methods by which Options may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other property, and other amounts payable with respect to an Option shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret, administer reconcile any inconsistency, correct any default and/or supply any omission in the Plan and any instrument or agreement relating to, or Option made under, the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determi
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