As Filed with the Securities and Exchange Commission on June 18, 1999
Registration No. 333-
---------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SONIC AUTOMOTIVE, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 56-2010790
(State or Other Jurisdiction (I.R.S. Employer
Of Incorporation or Organization) Identification No.)
5401 EAST INDEPENDENCE BOULEVARD 28212
P.O. BOX 18747 (Zip Code)
CHARLOTTE, NORTH CAROLINA
(Address of Principal Executive Offices)
SONIC AUTOMOTIVE, INC. EMPLOYEE STOCK PURCHASE PLAN
AMENDED AND RESTATED AS OF JUNE 8, 1999
(Full Title of Plan)
MR. O. BRUTON SMITH
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SONIC AUTOMOTIVE, INC.
5401 E. INDEPENDENCE BOULEVARD
P.O. BOX 18747
CHARLOTTE, NORTH CAROLINA 28212
(704) 532-3320
(Name, Address and Telephone Number, including Area Code, of Agent for Service)
COPIES TO:
PETER J. SHEA, ESQ.
PARKER, POE, ADAMS & BERNSTEIN L.L.P.
2500 CHARLOTTE PLAZA, CHARLOTTE, NORTH CAROLINA 28244
TELEPHONE (704) 372-9000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of
Securities Amount Proposed Maximum Proposed Maximum Amount
to be to be Offering Price Aggregate Of
Registered Registered Per Share(1) Offering Price Registration Fee
<S> <C> <C> <C> <C>
Class A Common Stock, par
value $0.01 per share 600,000 $12.90625 $7,743,750 $2,153
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 (h) under the Securities Act of 1933, based upon
the average of the high and low prices of the Registrant's Class A
Common Stock reported on the New York Stock Exchange on June 16, 1999
which prices were $ 13.1875 and $ 12.625, respectively.
<PAGE>
THIS REGISTRATION STATEMENT RELATES TO THE REGISTRATION OF ADDITIONAL
SECURITIES RELATING TO AN EMPLOYEE BENEFIT PLAN FOR WHICH REGISTRATION
STATEMENTS FILED ON FORM S-8 (FILE NOS. 333-49113 AND 333-69907) WERE FILED BY
SONIC AUTOMOTIVE, INC. WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1,
1998 AND DECEMBER 30, 1998, RESPECTIVELY. THE CONTENTS OF THE APRIL 1, 1998 AND
DECEMBER 30, 1998 REGISTRATION STATEMENTS ARE INCORPORATED HEREIN BY THIS
REFERENCE.
PART I
INFORMATION REQUIRED IN THE
SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I of Form
S-8 (plan information and registrant information) will be sent or given to
employees as specified by Securities and Exchange Commission Rule 428(b)(1).
Such documents need not be filed with the Securities and Exchange Commission
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. These documents, which include the statement
of availability required by Item 2 of Form S-8, and the documents incorporated
by reference in this Registration Statement pursuant to Item 3 of Form S-8 (Part
II hereof), taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act of 1933, as amended (the "Securities
Act").
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring to those documents. The information
incorporated by reference is considered to be part of this Registration
Statement, and information that we file later with the Securities and Exchange
Commission will automatically update and supersede this information. Sonic
Automotive, Inc. ("Sonic", and sometimes referred to herein as the "Registrant")
incorporates by reference the documents listed below and any future filings made
with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"):
(i) Sonic's Annual Report on Form 10-K for its fiscal year ended
December 31, 1998 (File No. 1-13395);
(ii) Sonic's Quarterly Report on Form 10-Q for its fiscal quarter ended
March 31, 1999;
(iii) Sonic's Definitive Proxy Materials dated May 19, 1999;
(iv) The unaudited pro forma consolidated financial data of Sonic
Automotive, Inc., the combined financial statements of
Williams Automotive Group, the financial statements of Economy
Cars, Inc., the financial statements of Global Imports, Inc.,
the combined financial statements of Newsome Automotive Group,
the combined financial statements of Lloyd Automotive Group
and the financial statements of Lute Riley Motors, Inc.,
included in Sonic's Registration Statement on Form S-3
(Registration No. 333-71803);
(v) The combined financial statements of Hatfield Automotive
Group, the financial statements of Casa Ford of Houston, Inc.
and the combined financial statements of Higginbotham
Automotive Group, included in Sonic's Registration Statement
on Form S-4 (Registration Nos. 333-64397 and 333-64397-001
through 333-64397-044); and
(vi) The description of Sonic's Class A common stock contained in
Sonic's Registration Statement on Form 8-A, as amended, filed
with the Commission pursuant to Section 12 of the Exchange Act.
All documents subsequently filed by Sonic pursuant to sections 13(a), 13(c), 14
or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in a document, all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent
2
<PAGE>
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or amended, to constitute a part of this
Registration Statement.
Item 6. Indemnification of Officers and Directors
-----------------------------------------
Sonic's Bylaws effectively provide that Sonic shall, to the full extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time ("Section 145"), indemnify all persons
whom it may indemnify pursuant thereto. In addition, Sonic's Certificate of
Incorporation eliminates personal liability of its directors to the full extent
permitted by Section 102(b)(7) of the General Corporation Law of the State of
Delaware, as amended from time to time ("Section 102(b)(7)").
Section 145 permits a corporation to indemnify its directors and
officers against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlements actually and reasonably incurred by them in
connection with any action, suit or proceeding brought by a third party if such
directors or officers acted in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reason to believe
their conduct was unlawful. In a derivative action, indemnification may be made
only for expenses actually and reasonably incurred by directors and officers in
connection with the defense or settlement of an action or suit and only with
respect to a matter as to which they shall have acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation, except that no indemnification shall be made if such person
shall have been adjudged liable to the corporation, unless and only to the
extent that the court in which the action or suit was brought shall determine
upon application that the defendant officers or directors are reasonably
entitled to indemnity for such expenses despite such adjudication of liability.
Section 102(b)(7) provides that a corporation may eliminate or limit
the personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for willful or negligent conduct
in paying dividends or repurchasing stock out of other than lawfully available
funds, or (iv) for any transaction from which the director derived an improper
personal benefit. No such provision shall eliminate or limit the liability of a
director for any act or omission occurring prior to the date when such provision
becomes effective.
Sonic maintains insurance against liabilities under the Securities Act
for the benefit of its officers and directors.
Item 8. Exhibits
--------
Exhibit
Number Description
------- -----------
4.1 Sonic Automotive, Inc. Employee Stock Purchase Plan
Amended and Restated as of June 8, 1999
5.1 Opinion of Parker, Poe, Adams & Bernstein L.L.P.
regarding the legality of securities registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Parker, Poe, Adams & Bernstein L.L.P.
(included in Exhibit 5.1 to this Registration Statement)
Item 9. Undertakings
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
3
<PAGE>
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent
a fundamental change in the information set
forth in the Registration Statement.
Notwithstanding the foregoing, any increase
or decrease in the volume of securities
offered (if the total dollar value of
securities offered would not exceed that
which was registered), any deviation from
the high or low end of the estimated maximum
offering range may be reflected in the form
of prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume
and price represent no more that 20% change
in the maximum aggregate offering price set
forth in the "Calculation of Registration
Fee" table in the effective registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering
thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
[Signatures begin on next page]
4
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Charlotte, State of North Carolina, on June 18, 1999.
Sonic Automotive, Inc.
BY: /S/ O. BRUTON SMITH
----------------------------------
O. Bruton Smith
Chairman and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Sonic Automotive, Inc.,
do hereby constitute and appoint Messrs. O. Bruton Smith, Bryan Scott Smith, and
Theodore M. Wright, each with full power of substitution, our true and lawful
attorney-in-fact and agent to do any and all acts and things in our names and in
our behalf in our capacities stated below, which acts and things any of them may
deem necessary or advisable to enable Sonic Automotive, Inc. to comply with the
Securities Act, and any rules, regulations and requirements of the Securities
and Exchange Commission, in connection with this Registration Statement,
including specifically, but not limited to, power and authority to sign for any
and all of us in our names, in the capacities stated below, any and all
amendments (including post-effective amendments) hereto and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission; and we do
hereby ratify and confirm all that they shall do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ O. BRUTON SMITH Chief Executive Officer (principle executive officer) and
- -------------------------------------------- Chairman June 18, 1999
O. Bruton Smith
/s/ B. SCOTT SMITH President, Chief Operating Officer and Director June 18, 1999
- --------------------------------------------
B. Scott Smith
/s/ THEODORE M. WRIGHT Chief Financial Officer, Vice President-Finance, June 18, 1999
- -------------------------------------------- Treasurer, Secretary (Principle Financial and Accounting
Theodore M. Wright Officer) and Director
/s/ DENNIS D. HIGGINBOTHAM President -- Retail Operations and Director June 18, 1999
- ---------------------------------------------
Dennis D. Higginbotham
/s/ JEFFREY C. RACHOR Vice President of Retail Operations and Director June 18, 1999
- ---------------------------------------------
Jeffrey C. Rachor
/s/ WILLIAM R. BROOKS Director June 18, 1999
- ---------------------------------------------
William R. Brooks
/s/ WILLIAM P. BENTON Director June 18, 1999
- ---------------------------------------------
William P. Benton
/s/ WILLIAM I. BELK Director June 18, 1999
- ---------------------------------------------
William I. Belk
</TABLE>
5
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------
4.1 Sonic Automotive, Inc. Employee Stock Purchase Plan Amended
and Restated as of June 8, 1999
5.1 Opinion of Parker, Poe, Adams & Bernstein L.L.P. regarding
the legality of securities registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Parker, Poe, Adams & Bernstein L.L.P. (included
in Exhibit 5.1 to this Registration Statement)
EXHIBIT 4.1
SONIC AUTOMOTIVE, INC.
EMPLOYEE STOCK PURCHASE PLAN
AMENDED AND RESTATED
AS OF
JUNE 8, 1999
<PAGE>
SONIC AUTOMOTIVE, INC.
EMPLOYEE STOCK PURCHASE PLAN
AMENDED AND RESTATED
AS OF
JUNE 8, 1999
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C> <C>
ARTICLE I PURPOSE; EFFECTIVE DATE; DEFINITIONS; CONSTRUCTION..............................................1
1.1 Purpose of Plan; Effective Date.................................................................1
1.2 Definitions.....................................................................................1
(a) "Account"..............................................................................1
(b) "Base Pay".............................................................................1
(c) "Board of Directors"...................................................................1
(d) "Business Day".........................................................................1
(e) "Cause"................................................................................1
(f) "Code".................................................................................2
(g) "Committee"............................................................................2
(h) "Company"..............................................................................2
(i) "Company Stock"........................................................................2
(j) "Contributions"........................................................................2
(k) "Employee".............................................................................2
(l) "Employer".............................................................................2
(m) "Exercise Date"........................................................................2
(n) "Grant Date"...........................................................................2
(o) "Option"...............................................................................2
(p) "Participant"..........................................................................2
(q) "Plan".................................................................................2
1.3 Construction....................................................................................3
ARTICLE II ADMINISTRATION..................................................................................3
2.1 Appointment and Procedures of Committee.........................................................3
2.2 Authority of Committee..........................................................................3
ARTICLE III PARTICIPATION...................................................................................3
3.1 Eligibility to Participate......................................................................3
3.2 Restrictions on Participation...................................................................4
3.3 Leave of Absence................................................................................4
ARTICLE IV CONTRIBUTIONS...................................................................................4
4.1 Payroll Deductions..............................................................................4
4.2 Direct Payment..................................................................................4
4.3 Leave of Absence................................................................................5
4.4 Contributions to Accounts.......................................................................5
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
4.5 Withdrawal of Contributions from Plan...........................................................5
4.6 Termination of Employment.......................................................................5
ARTICLE V OPTIONS.........................................................................................5
5.1 Company Stock Available for Options.............................................................5
5.2 Granting of Options.............................................................................5
5.3 Option Price....................................................................................6
5.4 Option Period...................................................................................6
5.5 Exercise of Options.............................................................................6
(a) Automatic Exercise.....................................................................6
(b) Nontransferability of Options..........................................................7
(c) Effect of Termination of Employment....................................................7
(i) Termination of Employment Related to Cause....................................7
(ii) Termination of Employment Due to Death........................................7
(iii) Other Termination of Employment...............................................7
(d) Leave of Absence.......................................................................8
(e) Delivery of Stock......................................................................8
(f) Acceleration of Exercisability of Options Upon Occurrence of
Certain Events.........................................................................8
(g) Registration, Listing and Qualification of Shares of Stock.............................8
ARTICLE VI MISCELLANEOUS...................................................................................9
6.1 Adjustments Upon Changes in Capitalization......................................................9
6.2 Approval of Shareholders........................................................................9
6.3 Amendment, Suspension and Termination...........................................................9
6.4 Intent to Comply With Code Section 423..........................................................9
6.5 Equal Rights and Privileges.....................................................................9
6.6 Use of Funds...................................................................................10
6.7 Withholding....................................................................................10
6.8 Effect of Plan.................................................................................10
6.9 No Employment Rights...........................................................................10
6.10 Governing Law..................................................................................10
6.11 Other Actions..................................................................................10
</TABLE>
ii
<PAGE>
SONIC AUTOMOTIVE, INC.
EMPLOYEE STOCK PURCHASE PLAN
AMENDED AND RESTATED
AS OF
JUNE 8, 1999
ARTICLE I
PURPOSE; EFFECTIVE DATE; DEFINITIONS; CONSTRUCTION
1.1 Purpose of Plan; Effective Date. The purpose of the Plan, which
shall be known as the Sonic Automotive, Inc. Employee Stock Purchase Plan (the
"Plan"), is to provide employees of Sonic Automotive, Inc. (the "Company") and
its participating subsidiaries, within the meaning of Section 424(f) of the
Internal Revenue Code of 1986, as amended (the "Code") (which hereinafter shall
be referred to collectively with the Company as the "Employer"), an opportunity
to acquire a proprietary interest in the Company through the purchase of the
Class A Common Stock, $.01 par value, of the Company. This Plan is intended to
qualify as an "employee stock purchase plan" within the meaning of Section 423
of the Code.
The Plan became effective when it was adopted and approved by the Board
of Directors and the shareholders of the Company on October 9, 1997. The Plan
was subsequently amended and restated as of December 3, 1998 and further amended
thereafter. The Company hereby again amends and restates the Plan as of June 8,
1999 as set forth herein.
1.2 Definitions. Throughout this Plan, the following terms shall have
the meanings indicated:
(a) "Account" shall mean a memorandum account maintained to
record each Participant's Contributions pending purchase of Company Stock.
(b) "Base Pay" shall mean the Participant's regular cash
compensation (excluding overtime pay, bonuses, shift premiums, commissions,
fringe benefits, other special payments and imputed income) determined without
reduction for Contributions made under this Plan or contributions to any Code
Section 401(k) or Section 125 Plan.
(c) "Board of Directors" shall mean the Board of Directors of
the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or holiday.
(e) "Cause" shall mean any act, action or series of acts or
actions or any omission, omissions or series of omissions which, in the opinion
of the Committee, result in, or which have the effect of resulting in, (i) the
commission of a crime by the Participant involving moral turpitude, which crime
has a material adverse impact on the Employer, (ii) gross negligence or willful
misconduct which is continuous and results in material damage to the
1
<PAGE>
Employer, or (iii) the continuous, willful failure of the person in question to
follow the reasonable directives of the Employer.
(f) "Code" shall mean the Internal Revenue Code of 1986, as
amended, any successor revenue laws of the United States, and the rules and
regulations promulgated thereunder.
(g) "Committee" shall mean the committee of directors of the
Company appointed by the Board of Directors in accordance with Section 2.1 to
administer this Plan, or in the event that no such committee exists or is
appointed, "Committee" shall mean the Board of Directors.
(h) "Company" shall mean Sonic Automotive, Inc., a corporation
organized and existing under the laws of the State of Delaware.
(i) "Company Stock" shall mean the Class A Common Stock, $.01
par value, of the Company.
(j) "Contributions" shall mean the after-tax payroll
deductions or other permissible contributions made by Participants to the Plan
pursuant to Article IV.
(k) "Employee" shall mean any person who (i) is employed on a
full-time or part-time basis by a participating Employer, (ii) is regularly
scheduled to work more than twenty hours per week, and (iii) is customarily
employed more than five months in any calendar year. Independent contractors and
outside directors shall not be included in the definition of Employee for
purposes of this Plan.
(l) "Employer" shall mean the Company and any of its present
or future subsidiaries (within the meaning of Section 424(f) of the Code) which
the Committee may designate from time to time as participating Employers under
this Plan.
(m) "Exercise Date" shall mean the last Business Day of March,
June, September and December on which the principal trading market for Company
Stock is open for trading, plus any other interim dates during the year which
the Committee designates as Exercise Dates.
(n) "Grant Date" shall mean (i) initially, January 1, 1998,
and (ii) each January 1 thereafter during the term of the Plan.
(o) "Option" shall mean an option to purchase shares of
Company Stock granted by the Committee to a Participant pursuant to this Plan.
(p) "Participant" shall mean an Employee participating in this
Plan in accordance with Article III.
(q) "Plan" shall mean this Sonic Automotive, Inc. Employee
Stock Purchase Plan, as amended from time to time.
2
<PAGE>
1.3 Construction. The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. The words "hereof," "herein," "hereunder" and other
similar compounds of the word "here" shall mean and refer to the entire Plan and
not to any particular provision or Section.
ARTICLE II
ADMINISTRATION
2.1 Appointment and Procedures of Committee. The Plan shall be
administered by the Committee as appointed from time to time by the Board of
Directors. The Committee shall consist of not fewer than two members of the
Board of Directors. No member of the Board of Directors who serves on the
Committee shall be eligible to participate in the Plan. The Committee shall hold
its meetings at such times and places as it may determine. A majority of its
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination reduced to
writing and signed by all members shall be as effective as if it had been made
by a majority vote at a meeting duly called and held. The Committee may appoint
a secretary (who need not be a member of the Committee).
2.2 Authority of Committee. The Committee, subject to the terms of the
Plan, shall have plenary authority in its discretion to interpret and construe
the Plan (including, without limitation, any of its terms which are uncertain,
doubtful or disputed); to decide all questions of Employee eligibility
hereunder; to establish, amend and rescind rules and regulations pertaining to
the administration of the Plan; and to make determinations and interpretations
and take such other administrative actions as it deems necessary or advisable
for the administration of this Plan; provided, however, that the Option grants
under this Plan shall be made by the Board of Directors. The express grant in
the Plan of any specific power to the Committee shall not be construed as
limiting any power or authority of the Committee. No member of the Committee
shall be liable for any act, determination or omission with respect to his
service on the Committee, if he acts in good faith and in a manner he reasonably
believes to be in or not opposed to the best interest of the Employer. All
expenses of administering this Plan shall be borne by the Employer.
ARTICLE III
PARTICIPATION
3.1 Eligibility to Participate. Subject to the restrictions of Section
3.2 below, any Employee employed on the date of the closing of the Company's
initial public offering shall be eligible to participate in this Plan as of the
initial Grant Date under the Plan (provided that the Employee is still employed
on such Grant Date). Each other Employee shall be eligible to participate in the
Plan as of the Grant Date coincident with or next following the first
anniversary of his date of employment with the Employer (provided that the
Employee is still employed on such Grant Date). For purposes of the preceding
sentence, with respect to the acquisition of a controlling interest in or
substantially all of the assets of an entity, years of employment with
3
<PAGE>
such entity prior to such acquisition by the Company or a subsidiary of the
Company will be recognized.
3.2 Restrictions on Participation. Notwithstanding the foregoing
Section 3.1, no Employee shall be eligible to participate in the Plan if such
Employee owns or holds options to purchase (or upon participation in this Plan
would own or hold options to purchase) stock possessing an aggregate of 5% or
more of the total combined voting power or value of all classes of stock of the
Company or any other Employer (as determined in accordance with the rules of
Section 424(d) of the Code relating to attribution of stock ownership).
3.3 Leave of Absence. For purposes of becoming a participant in the
Plan, a person on a leave of absence shall be deemed to be an Employee for the
first ninety days of such leave of absence and such Employee's employment shall
be deemed to have terminated at the close of business on the ninetieth day of
such leave of absence unless such Employee shall have returned to regular
full-time or part-time employment prior to the close of business on such
ninetieth day. Termination by the Company of any Employee's leave of absence,
other than termination of such leave of absence on return to regular full-time
or part-time employment, shall terminate an Employee's employment for all
purposes of the Plan.
ARTICLE IV
CONTRIBUTIONS
4.1 Payroll Deductions. By written election, made and filed with the
Committee pursuant to the Committee's rules and procedures, a Participant may
elect to designate a whole percentage between one percent and ten percent (or
such higher or lower percentage as may be allowed by the Committee's rules and
procedures) of his Base Pay to be deferred by payroll deduction as a
Contribution to the Plan. Payroll deductions shall commence as soon as
administratively practicable following the filing of such written election with
the Committee. The Committee in its discretion may develop additional rules and
procedures regarding payroll deduction elections.
A Participant may change or revoke his payroll deduction amount by
filing, on such forms and in accordance with such rules and procedures as the
Committee in its discretion may prescribe, a revised written election with the
Committee. Such modification or revocation shall take effect as soon as
administratively practicable after the Committee's receipt of such revised
election. Notwithstanding the foregoing, a Participant may change his payroll
deduction election only once each calendar quarter, or as otherwise specifically
allowed by the Committee's rules and procedures. If payroll deductions are
discontinued, payroll deductions may not be resumed by the Participant until the
payroll period which begins on or after the next Exercise Date, or as otherwise
specifically allowed by the Committee's rules and procedures. Under no
circumstances may a Participant's payroll deduction election be made, modified
or revoked retroactively.
4.2 Direct Payment. In accordance with such rules and procedures as the
Committee may prescribe in its discretion and in lieu of payroll deductions
pursuant to Section 4.1, a Participant may elect to make Contributions by direct
cash payment (including by check, subject to the Committee's rules and
procedures) to the Plan rather than by payroll deduction. Such
4
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direct payments must be received by the Plan at least ten Business Days prior to
an Exercise Date in order for such payments to be applied in the exercise of an
Option for the purchase of Company Stock on such Exercise Date.
4.3 Leave of Absence. If a Participant is on a leave of absence, such
Participant shall have the right to elect to (a) withdraw from the Plan and
receive a distribution of the balance in his Account pursuant to Section 4.5,
(b) discontinue Contributions to the Plan but remain a Participant in the Plan,
or (c) remain a Participant in the Plan during such leave of absence,
authorizing deductions to be made from payments by the Company to the
Participant during such leave of absence, or making direct cash payments to the
Plan pursuant to Section 4.2.
4.4 Contributions to Accounts. A memorandum Account shall be
established by the Committee for each Participant for the purpose of accounting
for Contributions. Contributions shall be credited to Accounts as soon as
administratively practicable following payroll withholding or receipt of other
permissible direct cash payment. Amounts credited to Accounts will not accrue
interest.
4.5 Withdrawal of Contributions from Plan. Prior to the end of a
calendar quarter, a Participant may elect to withdraw the Contributions credited
to his Account for that quarter by filing written notice thereof with the
Committee on such forms and in accordance with such procedures as the Committee
may prescribe. The Participant's Contributions shall be distributed to him as
soon as administratively practicable after the Committee's receipt of his notice
of withdrawal and, if applicable, no further payroll deductions shall be made
from his Base Pay.
4.6 Termination of Employment. Upon termination of a Participant's
employment for any reason, such Participant may no longer make Contributions to
the Plan or be granted Options under the Plan. A Participant's right, if any, to
exercise any unexpired Option he holds as of his termination of employment shall
be determined in accordance with Section 5.5(c).
ARTICLE V
OPTIONS
5.1 Company Stock Available for Options. There shall be available for
Options under the Plan an aggregate maximum of 1,200,000 shares of Company
Stock, subject to any adjustments which may be made pursuant to Section 6.1 of
the Plan in connection with changes in capitalization of the Company. Shares of
Company Stock used for purposes of the Plan may be either authorized and
unissued shares, or previously issued shares held in the treasury of the
Company, or both. Shares of Company Stock covered by Options which have expired
prior to exercise shall be available for further Options granted hereunder.
5.2 Granting of Options. The Plan shall be implemented by annual
offerings of approximately twelve months duration (except as otherwise provided
in Section 5.4). As of each Grant Date, all eligible Employees shall be granted
an Option to purchase shares of Company Stock. The Board of Directors shall
determine the number of shares of Company Stock available for purchase under
each Option to be granted as of such Grant Date; provided that, the same number
of shares must be available under each Option granted as of such Grant Date. No
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Participant may be granted an Option which permits his rights to purchase stock
under this Plan and all other employee stock purchase plans of the Company or
Employer to accrue at a rate which exceeds $25,000 of the fair market value of
such stock (determined at the time such Option is granted) for each calendar
year in which such Option is outstanding at any time.
5.3 Option Price. The purchase price at which shares of Company Stock
may be acquired pursuant to the exercise of all or any portion of an Option
granted under this Plan shall be eighty-five percent of the lesser of (i) the
fair market value of the Company Stock on the applicable Grant Date, and (ii)
the fair market value of the Company Stock on the applicable Exercise Date. For
purposes of this Section 5.3, the fair market value per share of Company Stock
shall be the closing price on the last Business Day prior to the date of
reference, or in the event that no sales take place on such date, the average of
the closing high bid and low asked prices, in either case on the principal
national securities exchange on which the Company Stock is listed or admitted to
trading, or if the Company Stock is not listed or admitted to trading on any
national securities exchange, the last sale price reported on the National
Market System of the National Association of Securities Dealers Automated
Quotation system ("NASDAQ") on such date, or the average of the closing high bid
and low asked prices of the Company Stock in the over-the-counter market
reported on NASDAQ on such date, as furnished to the Committee by any New York
Stock Exchange member selected from time to time by the Committee for such
purposes. If there is no bid or asked price reported on any such date, the
market value shall be determined by the Committee in accordance with the
regulations promulgated under Section 2031 of the Code, or by any other
appropriate method selected by the Committee.
5.4 Option Period. Each Option granted to a Participant under the Plan
shall expire on the earliest of (a) the last Exercise Date of the calendar year
in which the Option was granted, (b) the Participant's voluntary withdrawal from
the Plan following termination of employment, and (c) the date of the
Participant's termination of employment related to Cause, or the Exercise Date
immediately following the Participant's termination of employment for any reason
unrelated to Cause. In no event will the duration of an Option period exceed
twenty-seven months (or such other applicable period permitted under Section
423(b)(7) of the Code) from the date on which such Option is granted.
5.5 Exercise of Options.
(a) Automatic Exercise. Any Option granted to a Participant
shall be exercised automatically on each Exercise Date during the calendar year
of the Option's Grant Date in whole or in part such that the Participant's
accumulated Contributions as of such Exercise Date shall be applied to the
purchase of the maximum number of whole shares of Company Stock that his
Contributions will allow at the applicable Option price (determined in
accordance with Section 5.3), limited to the number of shares subject to such
Option. In the event that the number of shares of Company Stock that may be
purchased by all Participants in the Plan exceeds the number of shares then
available for issuance under the Plan, the Committee shall make a pro rata
allocation of the available shares in as uniform a manner as it determines to be
practicable and equitable. Any remaining Contributions in the Participant's
Account amounting to less than the Option price of a whole share of Company
Stock shall be carried forward and applied on the next Exercise Date; provided
that, Contributions remaining after the last Exercise Date of the calendar year
may be distributed to the Participant at his election.
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(b) Nontransferability of Options. During a Participant's
lifetime, Options held by such Participant shall be exercisable only by that
Participant. No Option shall be transferable other than by will or the laws of
descent and distribution.
(c) Effect of Termination of Employment.
(i) Termination of Employment Related to Cause. Upon
termination of a Participant's employment related to Cause, the Participant's
participation in the Plan also shall terminate. Any unexpired Option he holds
will expire as of the date of his termination of employment. Remaining
contributions credited to his Account shall be distributed to the Participant as
soon as administratively practicable following termination of employment.
(ii) Termination of Employment Due to Death. In the
event of the death of the Participant while employed, or during the period
following his termination of employment for any reason unrelated to Cause but
prior to the next Exercise Date, the Participant's estate shall have the right
to elect by written notice to the Committee prior to the earlier of the
expiration of sixty days commencing with the date of the Participant's death and
the Exercise Date next following the date of the Participant's death:
(A) To withdraw all of the Contributions
credited to the Participant's Account under the Plan, or
(B) To exercise any unexercised Option held
by the Participant as of the date of his death for the purchase of Company Stock
on the Exercise Date next following the date of the Participant's death in
accordance with Section 5.5(a) but only to the extent such Option was
exercisable on the date of the Participant's death, with any remaining
Contributions credited to the Participant's Account being distributed to the
Participant's estate as soon as administratively practicable after such Exercise
Date.
In the event that no such written election is timely and properly received by
the Committee, all Contributions credited to the Participant's Account shall be
distributed to the Participant's estate. In no event shall any Option be
exercisable beyond the applicable exercise period specified in Section 5.4 of
the Plan.
(iii) Other Termination of Employment. Upon
termination of a Participant's employment for any reason unrelated to Cause or
death, the Participant may at his election:
(A) Withdraw from the Plan pursuant to
Section 4.5 and request the return of the remaining Contributions then credited
to his Account, or
(B) Continue participation in the Plan,
subject to the provisions of Section 4.6, until the Exercise Date next following
his date of termination of employment for the limited purpose of allowing any
unexpired Option he holds as of his termination of employment to be exercised
automatically in accordance with Section 5.5(a) on the Exercise Date next
following his termination of employment but only to the extent such Option was
exercisable
7
<PAGE>
on the date of the Participant's termination of employment, with any remaining
Contributions credited to the Participant's Account being distributed to the
Participant as soon as administratively practicable after such Exercise Date.
(d) Leave of Absence. A Participant on a leave of absence
shall, subject to the election made by such Participant pursuant to Section 4.3,
continue to be a Participant in the Plan so long as such Participant is on
continuous leave of absence. A Participant who has been on leave of absence for
more than ninety days and who therefore is not an Employee for the purpose of
the Plan shall not be entitled to participate in any offering commencing on any
Grant Date following the ninetieth day of such leave of absence. Notwithstanding
any other provisions of the Plan, unless a Participant on a leave of absence
returns to eligible regular full-time or part-time employment with the Employer
at the earlier of (i) the termination of such leave of absence, or (ii) the day
after the ninetieth day of such leave of absence, such Participant's employment
shall be deemed to have terminated for purposes of the Plan on whichever of such
dates first occurs (unless the Participant's right to reemployment is guaranteed
by statute or contract).
(e) Delivery of Stock. As soon as administratively practicable
after each Exercise Date, the Company or the Committee will deliver to each
Participant, as applicable, certificates evidencing shares of Company Stock
purchased under this Plan.
(f) Acceleration of Exercisability of Options Upon Occurrence
of Certain Events. In connection with any merger or consolidation in which the
Company is not the surviving corporation and which results in the holders of the
outstanding voting securities of the Company (determined immediately prior to
such merger or consolidation) owning less than a majority of the outstanding
voting securities of the surviving corporation (determined immediately following
such merger or consolidation), or any sale or transfer by the Company of all or
substantially all of its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of all or a majority
of the then-outstanding voting securities of the Company, all outstanding
Options under the Plan shall become exercisable in full, notwithstanding any
other provision of the Plan or of any outstanding Options granted thereunder, on
and after (i) the fifteenth day prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of commencement of
such tender offer or exchange offer, as the case may be. Notwithstanding the
foregoing, in no event shall any Option be exercisable after the date of
termination of the exercise period of such Option specified in Section 5.4.
(g) Registration, Listing and Qualification of Shares of
Stock. Each Option shall be subject to the requirement that if at any time the
Board of Directors shall determine that the registration, listing or
qualification of shares of Company Stock covered thereby upon any securities
exchange or under any federal or state law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the granting of such option or the purchase of shares of
Company Stock thereunder, no such Option may be exercised unless and until such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors. The Employer may require that any person exercising an Option shall
make such representations and agreements and furnish such information as it
deems appropriate to assure compliance with the foregoing or any other
applicable legal requirement.
8
<PAGE>
ARTICLE VI
MISCELLANEOUS
6.1 Adjustments Upon Changes in Capitalization. In the event of a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering or any other change in the
corporate structure or shares of the Company, unless the Committee should
determine otherwise, corresponding adjustments automatically shall be made to
the number and kind of shares of Company Stock available for issuance under this
Plan, the number and kind of shares of Company Stock covered by outstanding
Options under this Plan, and the exercise price per share for outstanding
options. In addition, the Committee may make such other adjustments as it
determines to be equitable. Any adjustments made pursuant to this Section 6.1
remain subject to the limitations of Section 423 of the Code (including its
$25,000 annual limitations).
6.2 Approval of Shareholders. The original adoption of the Plan was
subject to the approval, within twelve months before or after the adoption of
the Plan by the Board of Directors, by a majority of the votes cast thereon by
the stockholders of the Company at a meeting of stockholders duly called and
held for such purpose or by unanimous written consent of such stockholders, and
no Option granted hereunder was exercisable prior to such approval.
Such approval was obtained on October 9, 1997.
6.3 Amendment, Suspension and Termination. The Board of Directors may
at any time amend, suspend or terminate this Plan; provided, however, that the
Board of Directors shall not increase the maximum number of shares of Company
Stock for which Options may be granted under the Plan except as provided in
Section 6.1 without obtaining approval of the stockholders in the manner
described in Section 6.2. The Plan will continue until terminated by the Board
of Directors or until all of the shares of Company Stock reserved for issuance
under the Plan have been issued, whichever first occurs. No amendment,
suspension or termination of the Plan may, without the consent of the
Participants then holding Options to purchase Company Stock, adversely affect
the rights of such Participants under such Options.
6.4 Intent to Comply With Code Section 423. It is intended that this
Plan qualify as an "employee stock purchase plan" under Section 423 of the Code.
The provisions of this Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that Section of
the Code. In the event of an inconsistency between the Plan and Section 423 of
the Code, the Plan shall be interpreted in a manner which complies with the
requirements of Section 423 of the Code and the regulations thereunder, without
further act or amendment by the Company or the Board of Directors unless
otherwise required pursuant to Section 6.3 of this Plan.
6.5 Equal Rights and Privileges. All Participants granted Options under
this Plan shall have equal rights and privileges within the meaning of Section
423(b)(5) of the Code and the regulations thereunder. The provisions applying to
one Option granted on a Grant Date must apply in the same manner to all other
Options granted on such Grant Date.
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<PAGE>
6.6 Use of Funds. All Contributions received and held by the Employer
under this Plan may be used by the Employer for any corporate purpose and the
Employer shall not be obligated to segregate such Contributions.
6.7 Withholding. An Employee granted Options under this Plan shall be
conclusively deemed to have authorized the Company and his Employer to withhold
from the salary, commissions or other compensation of such Employee funds in
amounts or property (including Company Stock) in value equal to any federal,
state and local income, employment or other withholding taxes applicable to the
income recognized by such Employee and attributable to the Options as, when and
to the extent, if any, required by law; provided; however, that, in lieu of the
withholding of federal, state and local taxes as herein provided, the Company
may require the Participant (or his estate pursuant to Section 5.5(c)(ii)) to
pay to the Company, upon its demand, such amount as may be requested by the
Company for the purpose of satisfying taxes, including taxes owed by the
Participant due to the disposition of Company Stock by the Participant prior to
the expiration of the holding periods described in Section 423(a) of the Code.
If the amount requested is not paid, the Company may refuse to issue the shares
of Company Stock attributable to the Option's exercise.
6.8 Effect of Plan. This Plan shall be binding upon each Participant
and his successors, including, without limitation, such Participant's estate and
the executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.
6.9 No Employment Rights. Nothing in this Plan or in any Option granted
pursuant to the Plan shall be construed as a contract of employment between the
Employer and any employee, or as a right of any employee to continue in the
employ of the Employer, or as a limitation of the right of the Employer to
discharge any of its employees, with or without cause.
6.10 Governing Law. This Plan and all rights and obligations hereunder
shall be construed in accordance with and governed by the laws of the State of
North Carolina, except to the extent such laws are preempted by the laws of the
United States.
6.11 Other Actions. Nothing contained in the Plan shall be construed to
limit the authority of the Company to exercise its corporate rights and powers,
including, but not by way of limitation, the right of the Company to grant or
assume options for proper corporate purposes other than under the Plan with
respect to any employee or other person, firm, corporation or association.
10
EXHIBIT 5.1
June 18, 1999
Board of Directors
Sonic Automotive, Inc.
5401 East Independence Blvd.
Charlotte, North Carolina 28212
Dear Sirs:
We are acting as counsel to Sonic Automotive, Inc., a Delaware
corporation (the "COMPANY"), in connection with the preparation, execution,
filing and processing with the Securities and Exchange Commission (the
"COMMISSION"), pursuant to the Securities Act of 1933, as amended (the "ACT"),
of a Registration Statement on Form S-8 (the "REGISTRATION STATEMENT") relating
to the issuance and sale of up to 2,250,000 shares (the "SHARES") of common
stock, par value $.01 per share (the "COMMON STOCK"), reserved for issuance
under the Company's 1997 Stock Option Plan Amended and Restated as of June 8,
1999 (the "PLAN"), in addition to the 2,250,000 shares of Common Stock
originally reserved under the Plan and previously registered on the Company's
Registration Statement on Form S-8 (Registration No. 333-65447). This opinion is
furnished to you for filing with the Commission pursuant to Item 601(b)(5) of
Regulation S-K promulgated under the Act.
In our representation of the Company, we have examined the Registration
Statement, the Plan, and the Company's Amended and Restated Certificate of
Incorporation and Bylaws, each as amended to date, all pertinent actions of the
Company's Board of Directors recorded in the Company's minute book, the form of
certificate evidencing the Shares and such other documents as we have considered
necessary for purposes of rendering the opinions expressed below.
Based upon the foregoing, we are of the following opinion:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware.
2. The Shares proposed to be offered and sold by the Company
under the Plan have been duly authorized for issuance and,
subject to the Registration Statement becoming effective under
the Act and to compliance with any applicable state securities
laws and to the issuance of such Shares in accordance with the
provisions of the Plan, the Shares will be, when so issued,
legally issued, fully paid and non-assessable shares of Common
Stock of the Company.
The opinions expressed herein are limited to the General Corporation
Law of the State of
<PAGE>
Delaware and the Act.
We hereby consent to the use of this opinion letter as Exhibit 5.1 to
the Registration Statement. In giving this consent, we do not admit that we are
in the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ PARKER POE ADAMS & BERNSTEIN LLP
------------------------------------
Parker Poe Adams & Bernstein LLP
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Stockholders of
Sonic Automotive, Inc.:
We consent to the incorporation by reference in this Registration Statement of
Sonic Automotive, Inc. on Form S-8 of (i) our report dated February 16, 1999 on
the consolidated financial statements of Sonic Automotive, Inc. and Subsidiaries
as of December 31, 1997 and 1998 and for each of the three years in the period
ended December 31, 1998; (ii) our report dated March 26, 1999 on the combined
financial statements of Williams Automotive Group as of and for the year ended
December 31, 1998; (iii) our report dated March 16, 1999 on the financial
statements of Economy Cars, Inc. as of and for the year ended December 31, 1998;
(iv) our report dated March 26, 1999 on the financial statements of Global
Imports, Inc. as of and for the year ended December 31, 1998; (v) our report
dated March 12, 1999 on the combined financial statements of Newsome Automotive
Group as of and for the year ended December 31, 1998; (vi) our report dated
March 15, 1999 on the combined financial statements of Lloyd Automotive Group as
of and for the year ended December 31, 1998; and (vii) our report dated March
24, 1999 on the financial statements of Lute Riley Motors, Inc. as of and for
the year ended December 31, 1998, all appearing in the Prospectus dated April
29, 1999 that was included in Sonic Automotive, Inc.'s Registration Statement on
Form S-3 (Registration No. 333-71803). We also consent to the incorporation by
reference in this Registration Statement of Sonic Automotive, Inc. on Form S-8
of our report dated May 22, 1998 on the combined financial statements of
Hatfield Automotive Group as of December 31, 1996 and 1997 and for each of the
three years in the period ended December 31, 1997, our report dated June 4, 1998
on the financial statements of Casa Ford of Houston, Inc. as of and for the year
ended December 31, 1997 and our report dated August 21, 1998 on the financial
statements of Higginbotham Automotive Group as of and for the year ended
December 31, 1997, all appearing in the Prospectus dated November 5, 1998 that
was included in Sonic Automotive, Inc.'s Registration Statement on Form S-4
(Registration Nos. 333-64397 and 333-64397-001 through 333-64397-044).
/s/ DELOITTE & TOUCHE LLP
- ---------------------------------
Charlotte, North Carolina
June 18, 1999
