<TABLE>
<CAPTION>
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)
<S> <C>
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. 1997 STOCK OPTION 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
Title of Amount Proposed Maximum Proposed Maximum Amount
Securities to be Offering Price Aggregate Of
to be Registered Per Share(1) Offering Price Registration Fee
Registered
Class A Common Stock, 2,250,000 $12.90625 $29,039,063 $8,073
par value $0.01 per
share
</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 A REGISTRATION
STATEMENT FILED ON FORM S-8 (FILE NO. 333-65447) WAS FILED BY SONIC AUTOMOTIVE,
INC. WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1998. THE
CONTENTS OF THE OCTOBER 8, 1998 REGISTRATION STATEMENT ARE INCORPORATED HEREIN
BY THIS REFERENCE.
PART I
INFORMATION REQUIRED IN THE
SECTION 10(A) PROSPECTUS
The documents containing the information in Part I of Form S-8 (plan
information and registrant information) will be sent or given to employees as
specified by the 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.
<PAGE>
All documents subsequently filed by Sonic pursuant to sections 13(a), 13(c), 14
or 15(d) of the Exchange Act, prior tothe 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 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 Description
Number
4.1 Sonic Automotive, Inc. 1997 Stock Option Plan Amended
and Restated as of June 8, 1999 (the "Plan")
4.2* Form of Incentive Stock Option Agreement and Grant
pursuant to the Plan (incorporated by reference to Exhibit 4.2
to Sonic's Registration Statement on Form S-8 (Registration
No. 333-65447) filed October 8, 1998)
<PAGE>
4.3 Form of Nonstatutory Stock Option Agreement and Grant
pursuant to the Plan
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)
- ---------------------------------
* Filed previously
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
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
<PAGE>
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]
<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>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ O. BRUTON SMITH Chief Executive Officer (principle executive officer) and June 18, 1999
- --------------------------------- Chairman
O. Bruton Smith
/s/ B. SCOTT SMITH President, Chief Operating Officer and Director
- ---------------------------------
B. Scott Smith
/s/ THEODORE M. WRIGHT Chief Financial Officer, Vice President-Finance, Treasurer, June 18, 1999
- --------------------------------- Secretary (Principle Financial and Accounting Officer) and
Theodore M. Wright 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>
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
Number
4.1 Sonic Automotive, Inc. 1997 Stock Option Plan Amended
and Restated as of June 8, 1999 (the "Plan")
4.2* Form of Incentive Stock Option Agreement and Grant
pursuant to the Plan (incorporated by reference to Exhibit
4.2 to Sonic's Registration Statement on Form S-8
(Registration No. 333-65447) filed October 8, 1998)
4.3 Form of Nonstatutory Stock Option Agreement and Grant
pursuant to the Plan
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)
- --------------
*Filed previously
EXHIBIT 4.1
SONIC AUTOMOTIVE, INC.
1997 STOCK OPTION PLAN
AMENDED AND RESTATED AS OF JUNE 8, 1999
1. PURPOSES OF PLAN. The purposes of the Plan, which shall be known as
the Sonic Automotive, Inc. 1997 Stock Option Plan and is hereinafter referred to
as the "Plan", are (i) to provide incentives for key employees, directors,
consultants and other individuals providing services to Sonic Automotive, Inc.
(the "Company") and its subsidiaries and other related entities (each of which
is referred to herein as a "Subsidiary") by encouraging their ownership of the
Class A Common Stock, $.01 par value, of the Company (the "Stock") and (ii) to
aid the Company in retaining such key employees, directors, consultants and
other individuals upon whose efforts the Company's success and future growth
depends, and attracting other such employees, directors, consultants and other
individuals.
2. ADMINISTRATION. The Plan shall be administered by a committee of the
Board of Directors of the Company (the "Committee"). The Committee shall be
appointed from time to time by the Board of Directors of the Company (the "Board
of Directors") and shall consist of not fewer than two of its members. In the
event that no such Committee exists or is appointed, then the powers to be
exercised by the Committee hereunder shall be exercised by the Board of
Directors.
For purposes of administration, the Committee, subject to the terms of
the Plan, shall have plenary authority to establish such rules and regulations,
to make such determinations and interpretations, and to take such other
administrative actions, as it deems necessary or advisable. All determinations
and interpretations made by the Committee shall be final, conclusive and binding
on all persons, including those granted options hereunder ("Optionees") and
their legal representatives and beneficiaries.
Notwithstanding any other provisions of the Plan, the Committee may
impose such conditions on any options as may be required to satisfy the
requirements of Rule 16b-3 of the Securities Exchange Act of 1934, as amended
(the "Act") or Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code").
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). No member of the Committee shall be liable for any act 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 interests of
the Company.
3. STOCK AVAILABLE FOR OPTIONS. There shall be available for options
under the Plan a total of 4,500,000 shares of Stock, subject to any adjustments
which may be made pursuant to Section 5(f) hereof. Shares of 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 Stock
covered by options which have terminated or expired prior to exercise or which
have been tendered as payment upon exercise of other options pursuant to Section
5(c), shall be available for further option grants hereunder.
1
<PAGE>
4. ELIGIBILITY. Options under the Plan may be granted to key employees
of the Company or any Subsidiary, including officers or directors of the Company
or any Subsidiary, and to directors, consultants and other individuals providing
services to the Company or any Subsidiary. Options may be granted to eligible
employees whether or not they hold or have held options previously granted under
the Plan or otherwise granted or assumed by the Company. In selecting employees
for options, the Committee may take into consideration any factors it may deem
relevant, including its estimate of the employee's present and potential
contributions to the success of the Company and its Subsidiaries. Service as a
director, officer or consultant of or to the Company or any Subsidiary shall be
considered employment for purposes of the Plan (and the period of such service
shall be considered the period of employment for purposes of Section 5(d) of the
Plan); provided, however, that incentive stock options may be granted under the
Plan only to an individual who is an "employee" (as such term is used in Section
422 of the Code) of the Company or a Subsidiary which is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code.
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall, in its
discretion, prescribe the terms and conditions of the options to be granted
hereunder, which terms and conditions need not be the same in each case, subject
to the following:
(a) OPTION PRICE. The price at which each share of Stock
covered by an incentive option granted under the Plan may be purchased
shall not be less than the market value per share of Stock on the date
of grant of the option. In the case of any option intended to be an
incentive stock option granted to an individual owning (directly or by
attribution as provided in Section 424(d) of the Code), on the date of
grant, stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any Subsidiary (which
individual shall hereinafter be referred to as a "10% Stockholder"),
the price at which each share of Stock covered by the option may be
purchased shall not be less than 110% of the market value per share of
Stock on the date of grant of the option. The date of the grant of an
option shall be the date specified by the Committee in its grant of the
option. The price at which each share of Stock covered by an option
granted under the Plan (but not as an incentive stock option) may be
purchased shall be the price determined by the Committee, in its
absolute discretion, to be suitable to attain the purposes of this
Plan.
(b) OPTION PERIOD. The period for exercise of an option shall
in no event be more than ten years from the date of grant, or in the
case of an option intended to be an incentive stock option granted to a
10% Stockholder, more than five years from the date of grant. Options
may, in the discretion of the Committee, be made exercisable in
installments during the option period. Any shares not purchased on any
applicable installment date may be purchased thereafter at any time
before the expiration of the option period.
(c) EXERCISE OF OPTIONS. In order to exercise an option, the
Optionee shall deliver to the Company written notice specifying the
number of shares of Stock to be purchased, together with cash or a
certified or bank cashier's check payable to the order of the Company
in the full amount of the purchase price therefor; provided that, for
the purpose of assisting an Optionee to exercise an option, the Company
may make loans to the Optionee or guarantee loans made by third parties
to the Optionee, on such terms and conditions as the Board of Directors
may authorize; and provided further that such purchase price may be
paid in shares of Stock, or in nonstatutory options granted under the
Plan (provided, however, that the purchase price of Stock acquired
under an incentive stock option may not be paid in options), in either
case owned by the Optionee and
2
<PAGE>
having a market value on the date of exercise not less than the
aggregate purchase price, or in any combination of cash, Stock and such
options. For purposes of this Section 5, the market value per share of
Stock shall be the last sale price regular way on the date of
reference, or, in case no sales take place on such date, the average of
the closing high bid and low asked prices regular way, in either case
on the principal national securities exchange on which the Stock is
listed or admitted to trading, or if the 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 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
purpose. 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. For purposes of
this Section 5(c), the market value of an option granted under the Plan
shall be the market value of the underlying Stock, determined as
aforesaid, less the exercise price of the option. If the Optionee so
requests, shares of Stock purchased upon exercise of an option may be
issued in the name of the Optionee or another person. An Optionee shall
have none of the rights of a stockholder until the shares of Stock are
issued to him.
(d) EFFECT OF TERMINATION OF EMPLOYMENT.
(i) An option may not be exercised after the Optionee
has ceased to be in the employ of the Company or any
Subsidiary for any reason other than the Optionee's death,
Disability or Involuntary Termination Without Cause. Any
cessation of employment, for purposes of incentive stock
options only, shall include any leave of absence in excess of
90 days unless the Optionee's reemployment rights are
guaranteed by law or by contract. "CAUSE" shall mean any act,
action or series of acts or actions or any omission,
omissions, or series of omissions which result in, or which
have the effect of resulting in, (i) the commission of a crime
by the Optionee involving moral turpitude, which crime has a
material adverse impact on the Company or any Subsidiary, (ii)
gross negligence or willful misconduct which is continuous and
results in material damage to the Company or any Subsidiary,
or (iii) the continuous, willful failure of the person in
question to follow the reasonable directives of the Board of
Directors. "DISABILITY" shall mean the inability or failure of
a person to perform those duties for the Company or any
Subsidiary traditionally assigned to and performed by such
person because of the person's then-existing physical or
mental condition, impairment or incapacity. The fact of
disability shall be determined by the Committee, which may
consider such evidence as it considers desirable under the
circumstances, the determination of which shall be final and
binding upon all parties. "INVOLUNTARY TERMINATION WITHOUT
CAUSE" shall mean either (i) the dismissal of, or the request
for the resignation of, a person, by court order, order of any
court-appointed liquidator or trustee of the Company, or the
order or request of any creditors' committee of the Company
constituted under the federal bankruptcy laws, provided that
such order or request contains no specific reference to Cause;
or (ii) the dismissal of, or the request for the resignation
of, a person, by a duly constituted corporate officer of the
Company or any Subsidiary, or by the Board, for any reason
other than for Cause.
(ii) During the three months after the date of the
Optionee's Involuntary Termination Without Cause, the Optionee
shall have the right to exercise the options
3
<PAGE>
granted under the Plan, but only to the extent the options
were exercisable on the date of the cessation of the
Optionee's employment.
(iii) During the twelve months after Termination of
the Optionee's employment with the Company or any Subsidiary
as a result of the Optionee's Disability, the Optionee shall
have the right to exercise the options granted under the Plan,
but only to the extent the options were exercisable on the
date of the cessation of the Optionee's employment.
(iv) In the event of the death of the Optionee while
employed or, in the event of the death of the Optionee after
cessation of employment described in subparagraph (ii) or
(iii), above, but within the three-month or twelve-month
period described in subparagraph (ii) or (iii), above, the
option shall thereupon become exercisable in full until the
expiration of twelve months following the Optionee's death.
During such extended period, the option may be exercised by
the person or persons to whom the deceased Optionee's rights
under the Option Agreement shall pass by will or by the laws
of descent and distribution, but only to the extent the option
was exercisable on the date of the cessation of the Optionee's
employment. The provisions of the foregoing sentence shall
apply to any outstanding options which are incentive stock
options to the extent permitted by Sections 421 and 422(d) of
the Code and such outstanding options in excess thereof shall,
immediately upon the occurrence of the event described in the
preceding sentence, be treated for all purposes of the Plan as
nonstatutory stock options and shall be exercisable as such as
provided in the foregoing sentence.
In no event shall any option be exercisable beyond the
applicable exercise period provided in Section 5(b) of the Plan.
Nothing in the Plan or in any option granted pursuant to the Plan (in
the absence of an express provision to the contrary) shall confer on
any individual any right to continue in the employ of the Company or
any Subsidiary or interfere in any way with the right of the Company or
Subsidiary to terminate his employment at any time.
(e) NONTRANSFERABILITY OF OPTIONS. Except as otherwise set
forth herein, during the lifetime of an Optionee, options held by such
Optionee shall be exercisable only by him, and no option shall be
transferable other than by will or the laws of descent and
distribution. Notwithstanding the foregoing, the Committee, in its
absolute discretion, may grant nonstatutory stock options that may be
transferred without consideration, in whole or in part, by the Optionee
to (i) the Optionee's child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships, of
the Optionee or any person sharing the Optionee's household (other than
a tenant or employee) ("Family Members"); (ii) a trust in which Family
Members have more than 50% of the beneficial interest; (iii) a
foundation in which Family Members (or the Optionee) control the
management of assets; or (iv) any other entity in which Family Members
(or the Optionee) own more than 50% of the voting interests. In all
cases, the Committee must be notified in advance in writing of the
terms of any proposed transfer to a permitted transferee and such
transfers may occur only with the consent of and subject to the rules
and conditions imposed by the Committee. The transferee and the
transferred options shall continue to be subject to the same terms and
conditions as were applicable immediately prior to the transfer. The
provisions of the Plan, including, but not limited to, those set forth
in Section 5(b) and (d), shall continue to apply with respect to the
Optionee and the option shall be
4
<PAGE>
exercisable by the transferee only to the extent and for the periods
specified herein. The Optionee shall remain subject to withholding
taxes upon exercise of any transferred option by the transferee.
(f) ADJUSTMENTS FOR CHANGE IN STOCK SUBJECT TO PLAN. 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 available for issuance under this Plan, the number and kind of
shares 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.
(g) 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. The provisions of the foregoing sentence shall apply to any
outstanding options which are incentive stock options to the extent
permitted by Section 422(d) of the Code and such outstanding options in
excess thereof shall, immediately upon the occurrence of the event
described in clause (i) or (ii) of the foregoing sentence, be treated
for all purposes of the Plan as nonstatutory stock options and shall be
immediately exercisable as such as provided in the foregoing sentence.
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 Sections 5(b) and 5(d).
(h) 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 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 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
Company 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.
(i) OTHER TERMS AND CONDITIONS. The Committee may impose such
other terms and conditions, not inconsistent with the terms hereof, on
the grant or exercise of options, as it deems advisable.
(j) RELOAD OPTIONS. If upon the exercise of an option granted
under the Plan (the "Original Option") the Optionee pays the purchase
price for the Original Option pursuant to Section 5(c) in whole or in
part in shares of Stock owned by the Optionee for at least six months,
5
<PAGE>
the Company shall grant to the Optionee on the date of such exercise an
additional option under the Plan (the "Reload Option") to purchase that
number of shares of Stock equal to the number of shares of Stock so
held for at least six months transferred to the Company in payment of
the purchase price in the exercise of the Original Option. The price at
which each share of Stock covered by the Reload Option may be purchased
shall be the market value per share of Stock (as specified in Section
5(c)) on the date of exercise of the Original Option. The Reload Option
shall not be exercisable until one year after the date the Reload
Option is granted or after the expiration date of the Original Option.
Upon the payment of the purchase price for a Reload Option granted
hereunder in whole or in part in shares of Stock held for more than six
months pursuant to Section 5(c), the Optionee is entitled to receive a
further Reload Option in accordance with this Section 5(j). Shares of
Stock covered by a Reload Option shall not reduce the number of shares
of Stock available under the Plan pursuant to Section 3.
6. ADDITIONAL PROVISIONS APPLICABLE TO INCENTIVE STOCK OPTIONS. The
Committee may, in its discretion, grant options under the Plan which constitute
"incentive stock options" within the meaning of Section 422 of the Code to
eligible employees of the Company and its Subsidiaries which are "subsidiary
corporations" within the meaning of Section 424(f) of the Code, provided,
however, that (a) the aggregate market value of the Stock with respect to which
incentive stock options are exercisable for the first time by the Optionee
during any calendar year shall not exceed the limitation set forth in Section
422(d) of the Code and (b) Section 5(d)(ii) hereof shall not apply to any
incentive stock option.
7. EFFECTIVENESS OF PLAN. The Plan became effective when it was adopted
and approved by the Board of Directors and the stockholders of the Company on
October 9, 1997. The Plan was amended and restated effective as of December 3,
1998 and further amended thereafter. This amendment and restatement of the Plan
shall be effective as of June 8, 1999; provided, however, that the amendments to
Section 5(e) contained herein also shall apply to all outstanding nonstatutory
stock options under the Plan as of June 8, 1999.
8. AMENDMENT AND TERMINATION. The Board of Directors may at any time
amend the Plan or the term of any option outstanding under the Plan; provided,
however, that, except as contemplated in Section 5(f), the Board of Directors
shall not, without approval by a majority of the votes cast by the stockholders
of the Company at a meeting of stockholders at which a proposal to amend the
Plan is voted upon, (i) increase the maximum number of shares of Stock for which
options may be granted under the Plan, or (ii) except as otherwise provided in
the Plan, amend the requirements as to the class of employees eligible to
receive options. Unless the Plan shall theretofore have been terminated as
hereinafter provided, the Plan shall terminate, and no option shall be granted
hereunder after, ten years from the date the Plan is originally adopted by the
Board of Directors, which termination date shall be on or about October 10,
2007; provided, however, that the Board of Directors may at any time prior to
that date terminate the Plan. No amendment or termination of the Plan or any
option outstanding under the Plan may, without the consent of an Optionee,
adversely affect the rights of such Optionee under any option held by such
Optionee.
9. WITHHOLDING. It shall be a condition to the obligation of the
Company to issue shares of Stock upon exercise of an option that the Optionee
(or any beneficiary or person entitled to act under Section 5(d) hereof) pay to
the Company, upon its demand, such amount as may be requested by the Company for
the purpose of satisfying any other taxes. If the amount requested is not paid,
the Company may refuse to issue such shares of Stock.
10. 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
6
<PAGE>
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.
7
EXHIBIT 4.3
NONSTATUTORY STOCK OPTION AGREEMENT AND GRANT
PURSUANT TO THE
SONIC AUTOMOTIVE, INC. 1997 STOCK OPTION PLAN
This Nonstatutory Stock Option Agreement and Grant is entered into as
of the [DATE] between SONIC AUTOMOTIVE, INC., a Delaware corporation (the
"Company"), and [NAME] (the "Optionee").
WHEREAS, the Company and its stockholders have approved the Sonic
Automotive, Inc. 1997 Stock Option Plan (the "Plan"), pursuant to which the
Company may, from time to time, make awards of Options (as defined below) and
enter into Nonstatutory Stock Option Agreements with, eligible employees,
directors, consultants and other individuals providing services to the Company
or any Subsidiary (as defined below);
WHEREAS, pursuant to the Plan, the Company has determined to grant to
the Optionee an Option to purchase Common Stock (as defined below) of the
Company, which Option shall be subject to the terms and conditions of this
Nonstatutory Stock Option Agreement and Grant;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereby agree as
follows:
1. DEFINITIONS.
For purposes of this Nonstatutory Stock Option Agreement and Grant, the
following terms shall have the meanings indicated:
(a) "ACT" shall mean the Securities Act of 1933, as amended.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CAUSE" shall mean any act, action or series of acts or
actions or any omission, omissions, or series of omissions which result in, or
which have the effect of resulting in, (i) the commission of a crime by the
Optionee involving moral turpitude, which crime has a material adverse impact on
the Company or any Subsidiary, (ii) gross negligence or willful misconduct which
is continuous and results in material damage to the Company or any Subsidiary,
or (iii) the continuous, willful failure of the person in question to follow the
reasonable directives of the Board of Directors.
(d) "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.
1
<PAGE>
(e) "COMMITTEE" shall mean the committee of members of the
Board that is designated by the Board to administer the Plan. In the event that
no such Committee exists or is appointed, "COMMITTEE" shall mean the Board.
(f) "COMMON STOCK" shall mean the Class A Common Stock, par
value $.01 per share, of the Company.
(g) "DISABILITY" shall mean the inability or failure of a
person to perform those duties for the Company or any Subsidiary traditionally
assigned to and performed by such person because of the person's then-existing
physical or mental condition, impairment or incapacity. The fact of disability
shall be determined by the Committee, which may consider such evidence as it
considers desirable under the circumstances, the determination of which shall be
final and binding upon all parties.
(h) "EXERCISE DATE" shall mean the business day, during the
Option Period, upon which the Optionee delivers to the Company the written
notice and consideration contemplated by Section 5(c) of the Plan.
(i) "FAIR MARKET VALUE" shall mean, with respect to the Common
Stock on any day, its market value determined as provided in Section 5(c) of the
Plan.
(j) "FAMILY MEMBER" shall mean any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships, of the
Optionee or any person sharing the Optionee's household (other than a tenant or
employee).
(k) "INVOLUNTARY TERMINATION WITHOUT CAUSE" shall mean either
(i) the dismissal of, or the request for the resignation of, a person, by court
order, order of any court-appointed liquidator or trustee of the Company, or the
order or request of any creditors' committee of the Company constituted under
the federal bankruptcy laws, provided that such order or request contains no
specific reference to Cause; or (ii) the dismissal of, or the request for the
resignation of, a person, by a duly constituted corporate officer of the Company
or any Subsidiary, or by the Board, for any reason other than for Cause.
(l) "OPTION" shall mean the option to purchase shares of
Common Stock granted to the Optionee pursuant to this Option Agreement.
(m) "OPTION AGREEMENT" shall mean this Nonstatutory Stock
Option Agreement and Grant between the Company and the Optionee by which the
Option is granted to the Optionee pursuant to the Plan.
(n) "OPTION PERIOD" shall mean the period commencing [(DATE)
(__MONTHS/YEAR(S) FROM THE DATE OF THIS OPTION AGREEMENT)] and ending at the
close of business ten years from the date of this Option Agreement or such
earlier date as when this Option Agreement may be terminated by its terms.
2
<PAGE>
(o) "OPTION SHARES" shall mean the shares of Common Stock
purchased upon exercise of the Option.
(p) "OPTIONEE" shall mean the individual executing this Option
Agreement and, as applicable, the estate, personal representative, beneficiary
or Permitted Transferee to whom this Option may be transferred pursuant to this
Option Agreement by will, by the laws of descent and distribution, pursuant to a
qualified domestic relations order as defined in the Code, or as otherwise
permitted by paragraph 3(f) below.
(q) "PERMITTED TRANSFEREE" shall mean a Family Member, a trust
in which Family Members have more than fifty percent of the beneficial interest,
a foundation in which Family Members (or the Optionee) control the management of
assets, and any other entity in which Family Members (or the Optionee) own more
than fifty percent of the voting interests.
(r) "PLAN" shall mean the Sonic Automotive, Inc. 1997 Stock
Option Plan, amended and restated as of June 8, 1999, and any amendments
thereto.
(s) "RETIREMENT" shall mean, with respect to the Optionee,
retirement from the Company and any Subsidiary in accordance with the Company's
and/or Subsidiary's retirement policy as may be in effect from time to time.
(t) "SUBSIDIARY" shall mean any subsidiary corporation of the
Company as defined in Sections 424(f) and 424(g) of the Code and any other
subsidiary entity of the Company.
(u) "TERMINATION" shall mean the cessation, for any reason, of
the employer-employee relationship (within the meaning of Section 4 of the Plan)
between the Company and any Subsidiary and the Optionee.
(v) "TOTAL OPTION PRICE" shall mean the consideration payable
to the Company by the Optionee upon exercise of the Option pursuant to Section
5(c) of the Plan.
2. GRANT OF OPTION. Effective upon the date hereof, and subject to the
terms and conditions set forth herein, the Company hereby grants to the Optionee
the Option to purchase from the Company, at an exercise price of $[PRICE PER
SHARE] per share, up to but not exceeding in the aggregate [NUMBER OF SHARES]
shares of Common Stock.
3. EXERCISE OF OPTION. The Option granted in paragraph 2 above may be
exercised as follows:
(a) The Option shall be exercisable during the Option Period
[VESTING SCHEDULE -- example: in three equal annual installments, with the
Option becoming exercisable one year from the date hereof with respect to
one-third of the total number of shares covered by the Option, and the Option
becoming exercisable two years from the date hereof with respect to another
one-third of the total number of shares covered by the Option, and the Option
becoming exercisable three years from the date hereof with respect to the final
one-third of the total number of shares covered by the Option]. The Option shall
terminate on the expiration of the Option Period, if not earlier terminated;
provided that, in the event of the Optionee's Retirement, the Committee in its
sole
3
<PAGE>
and absolute discretion may accelerate the Exercise Date, which acceleration
may, in the sole discretion of the Committee, be subject to further terms and
conditions mandated by the Committee.
(b) No less than 100 shares of Common Stock may be purchased
on any Exercise Date unless the number of shares purchased at such time is the
total number of shares in respect of which the Option is then exercisable.
(c) If at any time and for any reason the Option covers a
fraction of a share, then, upon exercise of the Option, the Optionee shall
receive the Fair Market Value of such fractional share in cash.
(d) The Option shall be exercised by the Optionee in
accordance with the terms and conditions of Section 5(c) of the Plan.
(e) As soon as administratively practicable after the Exercise
Date, subject to the receipt of payment of the Total Option Price and of any
payment in cash of federal, state or local income tax withholding or other
employment tax that may be due upon the issuance of the Option Shares as
determined and computed by the Company pursuant to paragraph 6 below, the
Company shall issue to the Optionee the number of shares with respect to which
such Option shall be so exercised and shall deliver to the Optionee a
certificate or certificates therefor.
(f) The Option is not transferable by the Optionee otherwise
than (i) by will or the laws of descent and distribution; (ii) pursuant to a
qualified domestic relations order as defined in the Code; or (iii) by transfer
without consideration to a Permitted Transferee. In the case of a transfer
pursuant to (iii) above, the Committee must be notified in advance in writing of
the terms of any proposed transfer to a Permitted Transferee and such transfers
may occur only with the consent of and subject to the rules and conditions
imposed by the Committee. The Permitted Transferee and the Option shall continue
to be subject to the same terms and conditions as were applicable immediately
prior to the transfer. The provisions of the Plan and this Option Agreement
shall continue to apply with respect to the Optionee, and the Option shall be
exercisable by the Permitted Transferee only to the extent and for the periods
specified herein. The Optionee shall remain subject to withholding taxes upon
exercise of any transferred Option by the Permitted Transferee. No assignment or
transfer of the Option, or of the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise, except as described above,
shall vest in the assignee or transferee any interest or right herein
whatsoever; but immediately upon any attempt to assign or transfer this Option,
except as expressly permitted herein, the same shall terminate and be of no
force or effect.
4. TERMINATION. The Option granted hereby shall terminate and be of no
force or effect upon and following the occurrence of any of the following
events:
(a) The expiration of the Option Period.
(b) The Optionee's Termination for any reason other than the
Optionee's death, Disability or Involuntary Termination Without Cause.
4
<PAGE>
(c) The expiration of three months after the date of the
Optionee's Involuntary Termination Without Cause. During such three-month
period, the Optionee shall have the right to exercise the Option hereby granted
in accordance with the terms of this Option Agreement, but only to the extent
the Option was exercisable on the date of the Optionee's Involuntary Termination
Without Cause.
(d) The expiration of twelve months after the Optionee's
Termination as a result of the Optionee's Disability. During such twelve-month
period, the Optionee shall have the right to exercise the Option hereby granted
in accordance with the terms of this Option Agreement, but only to the extent
the Option was exercisable on the date of the Optionee's Termination.
(e) In the event of the Optionee's Termination as a result of
the Optionee's death, or, in the event of the death of the Optionee after
Termination described in subparagraph (c) or (d), above, but within the
three-month or twelve-month period described in subparagraph (c) or (d), above,
upon the expiration of twelve months following the Optionee's death. During such
extended period, the Option may be exercised by the person or persons to whom
the deceased Optionee's rights under the Option Agreement shall pass by will or
by the laws of descent and distribution, but only to the extent the Option was
exercisable on the date of the Optionee's Termination.
(f) To the extent set forth in paragraph 7 below, upon the
dissolution, liquidation, consolidation or merger of the Company, and, to the
extent set forth in subparagraph 3(f) above, upon an attempted assignment or
transfer of the Option otherwise than as expressly permitted herein.
Any determination made by the Committee with respect to any matter
referred to in this paragraph 4 shall be final and conclusive on all persons
affected thereby.
5. RIGHTS AS STOCKHOLDER. An Optionee shall have no rights as a
stockholder of the Company with respect to any shares underlying the Option
until the day of the issuance of a stock certificate to him or her for those
shares upon payment of the exercise price in accordance with the terms and
provisions hereof. Subject to paragraph 7 below, no adjustments shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such stock certificate is issued.
6. PAYMENT OF WITHHOLDING TAXES. Upon the Optionee's exercise of his or
her Option with respect to any of the Option Shares in accordance with the
provisions of paragraph 3 above, the Optionee shall pay to the Company upon
exercise of the Option the amount of any federal, state or local income tax
withholding or other employment tax that may be due upon such exercise. The
determination of the amount of any such federal, state or local income tax
withholding or other employment tax due in such event shall be made by the
Company and shall be binding upon the Optionee. If the amount requested is not
paid, the Company may refuse to issue the Common Stock. Nothing in this
paragraph shall be construed to impose on the Company a duty to withhold where
applicable law does not require such withholding.
7. RECAPITALIZATION; REORGANIZATION. The shares underlying this Option
are shares of Common Stock as constituted on the date of this Agreement, but if,
during the Option Period and prior to the delivery by the Company of all of the
shares of Common Stock with respect to which this Option is granted, the Company
shall effect a subdivision or consolidation of shares or other
5
<PAGE>
capital readjustment, the payment of a stock dividend or some other increase or
decrease in the number of shares of Common Stock outstanding, without receiving
compensation therefor in money, services or property, then, (a) in the event of
any increase in the number of such shares outstanding, the number of shares of
Common Stock then remaining subject to this Option shall be proportionately
increased (except that any fraction of a share resulting from any such
adjustment shall be excluded from the operation of this Option Agreement), and
the exercise price per share shall be proportionately reduced, and, (b) in the
event of a reduction in the number of such shares outstanding, the number of
shares of Common Stock then remaining subject to this Option shall be
proportionately reduced (except that any fractional share resulting from any
such adjustment shall be excluded from the operation of this Option Agreement),
and the exercise price per share shall be proportionately increased.
In the event of a merger of one or more corporations into the Company
with respect to which the Company shall be the surviving or resulting
corporation, the Optionee shall, at no additional cost, be entitled upon any
exercise of this Option to receive (subject to any required action by
shareholders), in lieu of the number of shares as to which this Option shall
then be so exercised, the number and class of shares of stock or other
securities to which the Optionee would have been entitled pursuant to the terms
of the agreement of merger if, immediately prior to such merger, the Optionee
had been the holder of record of a number of shares of Common Stock of the
Company equal to the number of shares as to which such Option shall be so
exercised; provided, however, that, anything herein contained to the contrary
notwithstanding, upon the occurrence of any event described in Section 5(g) of
the Plan, this Option shall be subject to acceleration as provided in such
Section 5(g).
In the event of a change in the Common Stock as presently constituted,
which change is limited to a change of all of the authorized shares with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.
The existence of this Option shall not affect in any way the right or
power of the Company or its shareholders to make or authorize any or all
adjustments, dividends, stock dividends, recapitalization, reorganizations or
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting, the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
8. NO REGISTRATION RIGHTS. Anything in this Option Agreement to the
contrary notwithstanding, if, at any time specified herein for the issuance of
Option Shares, any law, regulation or requirements of any governmental authority
having jurisdiction in the premises shall require either the Company or the
Optionee, in the opinion of the Company's counsel, to take any action in
connection with the shares then to be issued, the issuance of such shares shall
be deferred until such action shall have been taken. Nothing in this Option
Agreement shall be construed to obligate the Company at any time to file or
maintain the effectiveness of a registration statement under the Act, or under
the securities laws of any state or other jurisdiction, or to take or cause to
be taken any action which may be necessary in order to provide an exemption from
the registration
6
<PAGE>
requirements of the Act under Rule 144 or any other exemption with respect to
the Option Shares or otherwise for resale or other transfer by the Optionee (or
by the executor or administrator of such Optionee's estate or a person who is a
Permitted Transferee or who acquired the Option or any Option Shares or other
rights by bequest or inheritance or by reason of the death of the Optionee) as a
result of the exercise of an Option granted pursuant to this Option Agreement.
9. RESOLUTION OF DISPUTES. Any dispute or disagreement that arises
under, or as a result of, or pursuant to, this Option Agreement shall be
determined by the Committee in its absolute and uncontrolled discretion, and any
such determination or other determination by the Committee under or pursuant to
this Option Agreement, and any interpretation by the Committee of the terms of
this Option Agreement, shall be final, binding and conclusive on all parties
affected thereby.
10. COMPLIANCE WITH THE ACT. Notwithstanding any provision herein to
the contrary or in the Plan, the Company shall be under no obligation to issue
any shares of Common Stock to the Optionee upon exercise of the Option granted
hereby unless and until the Company has determined that such issuance is either
exempt from registration, or is registered, under the Act and is either exempt
from registration and qualification, or is registered or qualified, as
applicable, under all applicable state securities or "blue sky" laws.
11. MISCELLANEOUS.
(a) BINDING ON SUCCESSORS AND REPRESENTATIVES. This Option
Agreement shall be binding not only upon the parties, but also upon their heirs,
executors, administrators, personal representatives, successors and assigns
(including any transferee of a party to this Agreement); and the parties agree,
for themselves and their successors, assigns (including any transferee of a
party to this Agreement) and representatives, to execute any instrument which
may be necessary legally to effect the terms and conditions of this Option
Agreement.
(b) ENTIRE AGREEMENT. This Option Agreement, together with the
Plan, constitutes the entire agreement of the parties with respect to the Option
and supersedes any previous agreement, whether written or oral, with respect
thereto. This Option Agreement has been entered into in compliance with the
terms of the Plan; wherever a conflict may arise between the terms of this
Option Agreement and the terms of the Plan, the terms of the Plan shall control.
(c) AMENDMENT. Neither this Option Agreement nor any of the
terms and conditions herein set forth may be altered or amended orally, and any
such alteration or amendment shall be effective only when reduced to writing and
signed by each of the parties or their respective successors and assigns.
(d) CONSTRUCTION OF TERMS. Any reference herein to the
singular or plural shall be construed as plural or singular whenever the context
requires.
(e) NOTICES. All notices, requests and amendments under this
Option Agreement shall be in writing, and notices shall be deemed to have been
given when personally delivered or sent prepaid registered mail:
(i) if to the Company, at the following address:
7
<PAGE>
Sonic Automotive, Inc.
5401 East Independence Boulevard
P.O. Box 18747
Charlotte, North Carolina 28218
Attention: Chief Financial Officer
or at such other address as the Company shall designate by notice.
(ii) if to the Optionee, to the Optionee's
address appearing in the Company's
employment records, or at such other address
as the Optionee shall designate by notice.
(f) GOVERNING LAW. This Option Agreement shall be governed by,
and construed in accordance with, the laws of the State of North Carolina
(excluding the principles of conflict of laws thereof).
(g) SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Option Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provisions were omitted.
(h) NOT AN INCENTIVE STOCK OPTION. The Option granted
hereunder is not intended to be an "incentive stock option" under Section 422 of
the Code.
IN WITNESS WHEREOF, the parties hereto have executed this Option
Agreement as of the day and year first written above.
SONIC AUTOMOTIVE, INC.
By: _____________________________________
OPTIONEE: [NAME]
____________________________________(SEAL)
8
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
