<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ X ]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SONIC CORP.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Notes:
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 20, 1999
[Sonic - America's Drive-In Logo]
SONIC CORP.
101 PARK AVENUE
OKLAHOMA CITY, OKLAHOMA 73102
To the Stockholders of Sonic Corp.
The annual meeting of the stockholders of Sonic Corp. (the "Company")
will take place in the 20th Century Ballroom of the Westin Hotel, One North
Broadway, Oklahoma City, Oklahoma, on Wednesday, January 20, 1999, at 1:30
p.m., for the purpose of considering and acting upon the following matters:
(1) The election of three nominees to the Board of Directors.
(2) The approval and ratification of an amendment to the 1991 Sonic
Corp. Stock Option Plan.
(3) The approval and ratification of an amendment to the 1991 Sonic
Corp. Directors' Stock Option Plan.
(4) The approval and ratification of the selection of independent
auditors.
(5) Any other business which properly may come before the meeting or
any adjournment of the meeting.
The Board of Directors has fixed the close of business on November 30,
1998, as the record date for the determination of the holders of the
Company's voting common stock entitled to receive notice of the annual
meeting and to vote at the meeting.
To ensure the presence of a quorum at the annual meeting, please sign
and promptly return the enclosed proxy card in the accompanying
self-addressed envelope, which requires no postage if mailed in the United
States.
By order of the Board of Directors,
Ronald L. Matlock, Secretary
Oklahoma City, Oklahoma
December 18, 1998
<PAGE>
PROXY STATEMENT
FOR THE ANNUAL MEETING OF THE STOCKHOLDERS OF
SONIC CORP.
TO BE HELD WEDNESDAY, JANUARY 20, 1999
SOLICITATION OF PROXIES
SOLICITATION
Sonic Corp. (the "Company") is furnishing this proxy statement to the
stockholders of the Company to solicit their proxies for use at the annual
meeting of stockholders to take place on Wednesday, January 20, 1999, and at
any adjournment of the meeting. The Company also may use the services of the
Company's directors, officers and employees to solicit proxies personally or
by telephone. The Company regularly retains the services of Corporate
Communications, Inc., 523 Third Avenue South, Nashville, Tennessee, to assist
with the Company's investor relations and other stockholder communications
issues. Corporate Communications, Inc. may assist in the solicitation of the
proxies and will not receive any additional compensation for those services.
The Company will bear all of the costs of preparing, printing, assembling and
mailing this proxy statement and the proxy card and all of the costs of the
solicitation of the proxies.
REIMBURSEMENT OF NOMINEES
The Company will reimburse any bank, broker-dealer, or other custodian,
nominee or fiduciary for its reasonable expenses incurred in completing the
mailing of proxy materials to the beneficial owners of the Company's voting
common stock.
REVOCATION OF PROXY
Any stockholder giving his proxy may revoke it at any time before its
exercise by notifying Ronald L. Matlock, Secretary of the Company, by
telecopy or in writing. The persons named on the proxy card will vote the
proxies at the annual meeting, if received in time and not revoked.
MAILING OF PROXY STATEMENT AND PROXY CARD
The Company has had this proxy statement and the proxy card mailed to
its stockholders on or about December 18, 1998.
STOCKHOLDER PROPOSALS
In order for the Company to include a stockholder proposal in the proxy
materials for the next annual meeting of stockholders, a stockholder must
deliver the proposal to the Secretary of the Company no later than August 16,
1999.
VOTING RIGHTS AND PROCEDURE
Only the record holders of shares of the voting common stock of the
Company as of the close of business on November 30, 1998, will have the right
to vote at the annual meeting. As of the close of business on that date, the
Company had 18,944,831 shares of common stock issued and outstanding
(excluding 1,692,370 shares of common stock held as treasury stock). Each
stockholder of record will have one vote for each share of common stock of
the Company that the stockholder owned as of the record date. All shares of
common stock may vote on all matters coming before the annual meeting, and a
majority of all of the outstanding shares of common stock of the Company
entitled to vote at the meeting, represented in person or by proxy, will
constitute a quorum for the meeting. The Company will treat all abstentions
and nominee non-votes as present or represented at the meeting for the
purposes of determining whether a quorum exists for the meeting.
<PAGE>
ELECTION OF DIRECTORS
GENERAL
The Board of Directors proposes the election of three directors. Each
of the nominees, if elected, will hold office for a term of three years and
until the stockholders elect his qualified successor. Two of the nominees,
Messrs. Rainbolt and Werries, currently serve as directors of the Company.
If any of the nominees become unable or unwilling to accept the election or
to serve as a director (an event which the Board of Directors does not
anticipate), the person or persons named in the proxy will vote for the
election of the person or persons recommended by the Board of Directors.
The certificate of incorporation and bylaws of the Company provide for
the division of the Board of Directors into three classes, each class
consisting (as nearly as possible) of one-third of the whole. The term of
office of one class of directors expires each year, with each class of
directors being elected for a term of three years and until the stockholders
elect their qualified successors. The Company's bylaws provide that the Board
of Directors by resolution from time to time may fix the number of directors
that shall constitute the whole Board of Directors. The Board of Directors
currently has set the number of directors at no more than nine.
Unless the context indicates otherwise, the term "Company," when used in
this proxy statement, refers to Sonic Corp. and its subsidiaries.
NOMINEES
The following table sets forth the name, principal occupation, age, year
in which the individual first became a director, and year in which the
director's term will expire (if elected) for each nominee for election as a
director at the annual meeting of stockholders.
<TABLE>
<CAPTION>
NAME AND FIRST BECAME TERM
PRINCIPAL OCCUPATION A DIRECTOR EXPIRES AGE
-------------------- ------------ ------- ---
<S> <C> <C> <C>
Kenneth L. Keymer(1) -- 2002 50
H.E. "Gene" Rainbolt(2) January, 1996 2002 69
E. Dean Werries(3) March, 1991 2002 69
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
THREE NOMINEES FOR ELECTION AS A DIRECTOR.
- --------------------
(1) Kenneth L. Keymer has served as President and a director of Sonic
Industries Inc., the Company's franchise operations subsidiary, since August
of 1996, and as the Executive Vice President and Chief Operating Officer of
the Company since January of 1998. From June of 1994 to August of 1996, Mr.
Keymer served as Executive Vice President of Operations for the Memphis,
Tennessee region of Perkins Family Restaurants, a subsidiary of Tennessee
Restaurant Corporation of Itasca, Illinois. From March of 1993 to June of
1994, Mr. Keymer served as Senior Vice President of Operations for the then
Chicago-based Boston Chicken, Inc. From August of 1990 to March of 1993, he
served as the Zone Vice President in Chicago, Illinois, for Taco Bell.
(2) Mr. Rainbolt has served as Chairman of the Board of BancFirst Corp.
of Oklahoma City, Oklahoma, since 1989. From 1985 to 1989, Mr. Rainbolt
served as Chairman of the Board of United Community Corp., a bank holding
company in Oklahoma City, Oklahoma, and a predecessor of BancFirst Corp.
From 1974 to 1985, he served as Chairman of the Board of Federal National
Bank of Shawnee, Oklahoma.
(3) Mr. Werries has served as Chairman of the Board of the Company since
April of 1995 and as a director of the Company since March of 1991. From
1988 through October of 1993, he served as the Chief Executive
2
<PAGE>
Officer of Fleming Companies, Inc. ("Fleming"), a wholesale food distribution
company, and served as Chairman of the Board of Directors of Fleming from
1989 through April of 1994. Mr. Werries is a past Chairman of the Food
Marketing Institute in Washington, D.C. He is a director of Carr-Gottstein
Foods Co., a retail grocery company.
OTHER DIRECTORS
The following table sets forth the name, principal occupation, age, year
in which the individual first became a director, and year in which the
director's term will expire for each director who will continue as a director
after the annual meeting of stockholders.
<TABLE>
<CAPTION>
NAME AND FIRST BECAME TERM
PRINCIPAL OCCUPATION A DIRECTOR EXPIRES AGE
-------------------- ------------ ------- ---
<S> <C> <C> <C>
Dennis H. Clark(1) April, 1992 2000 51
J. Clifford Hudson(2) August, 1993 2001 44
Leonard Lieberman(3) December, 1988 2000 69
Frank E. Richardson(4) March, 1991 2000 58
Robert M. Rosenberg(5) April, 1993 2001 60
</TABLE>
- --------------------
(1) Mr. Clark has served as President of Encore Restaurants, Inc., a
franchisee of the Company, since November of 1992. Mr. Clark served as
President of Sonic Restaurants, Inc., the Company's restaurant operations
subsidiary, from March of 1987 until October of 1994.
(2) Mr. Hudson has served as President and Chief Executive Officer of
the Company since April of 1995 and has served as a director of the Company
since August of 1993. He served as President and Chief Operating Officer of
the Company from August of 1994 until April of 1995, and he served as
Executive Vice President and Chief Operating Officer from August of 1993
until August of 1994. From August of 1992 until August of 1993, Mr. Hudson
served as Senior Vice President and Chief Financial Officer of the Company.
Since October of 1994, Mr. Hudson has served as Chairman of the Board of the
Securities Investor Protection Corporation, the federally-chartered
organization which serves as the insurer of customer accounts with brokerage
firms.
(3) Mr. Lieberman served as the Chief Executive Officer and a director
of Supermarkets General Corporation from 1983 to 1987. From 1987 to the
present, Mr. Lieberman has devoted his time to private investments. From
January through April of 1991, Mr. Lieberman served as Chairman, President
and Chief Executive Officer of Outlet Communications, Inc. Mr. Lieberman
serves as a director of Celestial Seasonings, Inc.; Republic National Bank of
New York; and Republic New York Corporation.
(4) Mr. Richardson has served as Chairman of F. E. Richardson & Co.,
Inc. of New York City, a firm specializing in acquisitions and investments in
growth companies, since June of 1995. From 1986 to June of 1995, Mr.
Richardson served as President of Wesray Capital, a firm which also
specialized in acquisitions and investments in growth companies.
(5) Mr. Rosenberg served as President and Chief Executive Officer of
Allied Domecq Retailing USA ("Allied") from May of 1993 until his retirement
in August of 1998. Allied is the parent of Dunkin' Donuts, Inc. and
Baskin-Robbins, Inc. Mr. Rosenberg served as President and Chief Executive
Officer of Dunkin' Donuts, Inc. from 1963 until May of 1993, and he served as
President and Chief Executive Officer of Baskin-Robbins, Inc. from December
of 1992 until May of 1993. Mr. Rosenberg currently serves as an honorary
director of the National Restaurant Association, as well as a trustee of the
educational foundation of the International Franchise Association ("IFA").
Mr. Rosenberg is a past president of the IFA.
3
<PAGE>
CHAIRMAN EMERITUS OF THE BOARD OF DIRECTORS
Troy Smith, Sr., founder of the Company, has served as Chairman Emeritus
of the Board of Directors since May of 1991. As Chairman Emeritus, Mr. Smith
has the right to attend and participate on a non-voting basis at all meetings
of the Board of Directors and receives the same director fees as the
directors.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company has a Nominating Committee, an Audit Committee, a
Compensation Committee, and a Stock Plan Committee.
NOMINATING COMMITTEE. The Nominating Committee's function consists of
nominating individuals to serve as directors of the Company. On November 17,
1998, the Nominating Committee met and nominated the three individuals named
above for election as directors at the annual meeting of stockholders. The
members of the Nominating Committee consist of all of the directors of the
Company. The Nominating Committee held one meeting during the Company's last
fiscal year. The Nominating Committee will consider nominees recommended by
the Company's stockholders. In order to recommend a nominee for the next
annual meeting, stockholders must deliver the recommendation in writing to
the Company on or before August 16, 1999, addressed to the attention of
Ronald L. Matlock, Secretary of the Company, and must provide the full name,
address, and business history of the recommended nominee.
AUDIT COMMITTEE. The Audit Committee's functions include (a) reviewing
and recommending to the Board of Directors (subject to stockholder approval)
the independent auditors selected to audit the Company's financial
statements, including the review and approval of the fees charged for all
services by the independent auditors; (b) reviewing the scope of the annual
audit plan; (c) reviewing the audited financial statements of the Company;
(d) reviewing the management letter comments from the Company's independent
auditors, including management's responses and plans of action; (e) reviewing
the proposed annual audit plan and objectives, quarterly reports of audit
activity, and adequacy of staff; (f) reviewing from time to time the
Company's general policies and procedures with respect to auditing,
accounting, and the application of financial resources; (g) reviewing any
other matters and making special inquiries and investigations referred to it
by the Board of Directors; and (h) making other recommendations to the Board
of Directors as the committee may deem appropriate. The members of the Audit
Committee are H. E. Rainbolt (Chairman), Robert M. Rosenberg, and E. Dean
Werries. W. Scott McLain, Vice President, Chief Financial Officer, and
Treasurer of the Company, serves as a non-voting, ex-officio member of the
committee. The Audit Committee held four meetings during the Company's last
fiscal year.
COMPENSATION COMMITTEE. The Compensation Committee's functions include
reviewing and making recommendations to the Board of Directors concerning the
base salary, annual incentive bonus awards, and other compensation awards to
the executive officers of the Company. The members of the Compensation
Committee are Leonard Lieberman (Chairman), Frank E. Richardson, and J.
Clifford Hudson. The Compensation Committee held two meetings during the
Company's last fiscal year.
STOCK PLAN COMMITTEE. The Stock Plan Committee's functions include
administering the Company's various stock option, stock incentive, and stock
purchase plans. The members of the Stock Plan Committee are Leonard
Lieberman (Chairman), Frank E. Richardson, and E. Dean Werries. The Stock
Plan Committee held four meetings during the Company's last fiscal year.
MEETINGS OF THE BOARD OF DIRECTORS. The Board of Directors of the
Company held five meetings during the Company's last fiscal year. During
that period, no incumbent director attended fewer than 75% of the aggregate
number of meetings of the Board of Directors and of all committees on which
he served.
4
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the
compensation paid for the last three fiscal years to the Company's chief
executive officer and the Company's four other most highly compensated
executive officers for all services rendered in all capacities to the Company
and its subsidiaries.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- ---------------------------
OTHER SECURITIES ALL
NAME AND ANNUAL UNDERLYING OTHER
PRINCIPAL COMPEN- STOCK COMPEN-
POSITION YEAR SALARY($) BONUS($)(1) SATION($)(2) OPTIONS(#)(3) SATION($)(4)
--------- ---- --------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. Clifford Hudson 1998 308,333 175,095 -- 22,675 5,437
President and Chief 1997 264,583 111,438 -- 34,376 5,328
Executive Officer 1996 241,667 59,375 -- 50,481 4,779
Kenneth L. Keymer 1998 213,333 118,775 -- 38,198 10,206
President of Sonic 1997 188,750 61,849 -- 32,063 106,105
Industries Inc. 1996 10,669 -- -- 30,000 0
Pattye L. Moore 1998 166,667 67,929 -- 10,989 5,467
Senior Vice President 1997 137,500 45,571 -- 16,875 4,941
of Marketing and 1996 113,333 29,367 -- 20,194 4,249
Brand Development
Ronald L. Matlock 1998 155,467 61,899 -- 10,047 8,173
Vice President, General 1997 143,733 42,332 -- 24,705 1,524
Counsel and Secretary 1996 64,167 9,290 -- 30,000 0
W. Scott McLain 1998 135,266 53,572 -- 8,791 5,473
Chief Financial 1997 99,668 27,596 -- 27,876 2,024
Officer 1996 34,372 -- -- 18,269 --
</TABLE>
(1) The amounts include incentive bonus awards granted pursuant to the
incentive bonus program described under "Report on Executive Compensation,"
as well as a Christmas bonus equal to one-half month's base salary.
(2) The amount of other annual compensation did not exceed the lesser of
$50,000 or 10% of the annual salary and bonus reported for the named
individual.
(3) The amounts reflect adjustments made to the number of shares of
common stock underlying the options pursuant to the antidilution provisions
of the 1991 Sonic Corp. Stock Option Plan as a result of a three-for-two
stock split in the form of a stock dividend effective May 11, 1998.
(4) The amounts include the Company's matching contribution to the
Company's defined contribution plan, premiums for life insurance, and moving
expenses paid on behalf of the named individuals. During the last fiscal
year, the Company made matching contributions to the Company's 401(k) defined
contribution plan in the amount of $4,469 for Mr. Hudson, $8,165 for Mr.
Keymer, $5,280 for Ms. Moore, $5,793 for Mr. Matlock, and $4,845 for Mr.
McLain. During the last fiscal year, the Company paid life insurance
premiums in the amount of $968 for Mr. Hudson, $2,041 for Mr. Keymer, $187
for Ms. Moore, $2,380 for Mr. Matlock, and $628 for Mr. McLain. The Company
reimbursed Mr. Keymer for $105,505 in moving and relocation expenses incurred
in connection with his relocation to Oklahoma City during the fiscal year
ended August 31, 1997.
5
<PAGE>
STOCK OPTION TABLE. The following table sets forth information
regarding the stock options granted during the last fiscal year to the
Company's chief executive officer and the other executive officers named
above.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/Sh) DATE 5%($) 10%($)
---- ------------- ------------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
J. Clifford Hudson 22,675 5.84% $21.50 4/30/2008 $306,594 $776,969
Kenneth L. Keymer 22,500 5.79% 18.08 1/27/2008 255,881 648,453
15,698 4.04% 21.50 4/30/2008 212,256 537,899
Pattye L. Moore 10,989 2.83% 21.50 4/30/2008 148,585 376,543
Ronald L. Matlock 10,047 2.59% 21.50 4/30/2008 135,848 344,265
W. Scott McLain 8,791 2.26% 21.50 4/30/2008 118,865 301,228
</TABLE>
- --------------------
(1) Each option becomes exercisable with regard to one-third of the
shares of common stock underlying the option on each of the three anniversary
dates of the grant of the option.
(2) The assumed annual rates of 5% and 10% would result in the Company's
common stock price increasing during the 10-year term of the option from the
$18.08 per share exercise price to $29.45 and $46.90, respectively, and from
the $21.50 per share exercise price to $35.02 and $55.77, respectively.
OPTION EXERCISES AND YEAR END VALUE TABLE. The following table sets
forth information regarding stock options exercised during the last fiscal
year by the Company's chief executive officer and the other individuals named
above and the value of unexercised stock options as of the end of the last
fiscal year.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AS OF OPTIONS AS OF
FISCAL YEAR END FISCAL YEAR END
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) VALUE REALIZED($) UNEXERCISABLE(#) UNEXERCISABLE($)
---- --------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
J. Clifford Hudson 0 0 204,536 $1,003,678
62,420 141,234
Kenneth L. Keymer 0 0 30,687 58,207
69,574 91,731
Pattye L. Moore 0 0 100,175 528,084
28,970 64,630
Ronald L. Matlock 0 0 28,234 93,624
36,518 95,071
W. Scott McLain 0 0 21,471 56,470
33,465 56,809
</TABLE>
COMPENSATION OF DIRECTORS. During the last fiscal year, the Company
compensated the non-management directors for their services in the amount of
$10,000 per year, plus $2,000 for every meeting of the Board of Directors
attended. The Company also paid Mr. Werries $2,500 a month for his services
as Chairman of the Board of Directors. The Company did not pay any additional
fees to directors for serving on its standing committees. The Company does
not compensate directors who also serve as an officer or employee of the
Company or its subsidiaries
6
<PAGE>
for their services as a director. The 1991 Sonic Corp. Directors' Stock
Option Plan provides for the grant of 10-year, non-qualified stock options to
purchase 22,500 shares of common stock of the Company to each non-management
director of the Company upon the individual's initial election as a director.
The exercise price of the stock options equals the market value of the
common stock at the date of the grant, and the stock options become
exercisable with regard to one-third of the shares of common stock underlying
the option on each of the first three anniversary dates of the grant of the
stock option. Pursuant to that plan, the Company previously granted options
to purchase 22,500 shares of common stock of the Company at $6.6667 per share
to Messrs. Lieberman, Richardson and Werries; options to purchase 22,500
shares of common stock at $9.2222 per share to Robert M. Rosenberg; and
options to purchase 22,500 shares of common stock at $11.50 per share to
Messrs. Clark and Rainbolt.
TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS. The Company has
employment contracts with J. Clifford Hudson, its President and Chief
Executive Officer, and the other members of its senior management. Mr.
Hudson's contract, which expires in August of 1999 (and which automatically
extends each year for one additional year to maintain successive terms of two
years unless specifically terminated or not renewed by the Company), provides
that, if the Company terminates Mr. Hudson's employment other than for cause
or fails to renew his contract, he will receive his base compensation for a
24-month period after termination (at an annualized base of $325,000 as of
August 31, 1998). Mr. Hudson's contract defines "cause" as (1) the willful
and intentional failure substantially to perform his duties (other than
because of physical or mental incapacity), (2) the commission of an illegal
act in connection with his employment, or (3) the commission of any act which
falls outside the ordinary course of his responsibilities and which exposes
the Company to a significant level of undue liability. A determination of
"cause" requires the affirmative vote of at least two-thirds of all members
of the Board of Directors. The contracts for Messrs. Keymer, Matlock and
McLain, for Ms. Moore, and for the other officers of the Company expire in
August of 1999 (and automatically renew for successive one-year terms unless
specifically terminated or not renewed by the Company). Those contracts
provide for six to 12 months' salary upon termination of employment other
than for cause. The contracts for all of the foregoing officers contain the
same definition of "cause" as Mr. Hudson's contract.
The contracts for all of the foregoing officers also provide that, upon
a change in control of the Company, if the Company terminates the officer's
employment other than for cause or violates any term of the contract, the
Company must pay the officer a lump sum equal to a specified multiple of the
officer's then current salary, not to exceed the maximum payable without a
loss of the deduction under Section 280(g) of the Internal Revenue Code. The
specified multiple equals two times the amount of their annual salary for all
of the officers of the Company, except for Mr. Hudson (who would receive
three times his annual salary). The same lump sum provision applies if the
officer should resign for "good reason," which includes (without limitation)
the occurrence without the officer's consent after a change in control of the
Company of (1) the assignment to the officer of duties inconsistent with the
officer's office with the Company, (2) a change in the officer's title or
office with the Company, or (3) a reduction in the officer's salary. The
officers' contracts generally define a "change in control" to include any
consolidation or merger of the Company in which the Company does not continue
or survive or pursuant to which the shares of capital stock of the Company
convert into cash, securities or other property; any sale, lease, exchange or
transfer of all or substantially all of the assets of the Company; the
acquisition of 50% or more of the outstanding capital stock of the Company by
any person; or, a change in the make-up of the Board of Directors of the
Company during any period of two consecutive years, pursuant to which
individuals who at the beginning of the period made up the entire Board of
Directors of the Company cease for any reason to constitute a majority of the
Board of Directors, unless at least two-thirds of the directors then and
still in office approved the nomination of the new directors.
Other than the foregoing agreements, the Company has no compensatory
plan or arrangement with respect to its executive officers which would result
from the resignation, retirement or termination of any executive officer's
employment with the Company, from a change in control of the Company, or from
a change in an executive officer's responsibilities following a change in
control of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. Leonard
Lieberman, Frank E. Richardson, and J. Clifford Hudson served on the
Company's Compensation Committee during the last fiscal year. Other than
7
<PAGE>
Mr. Hudson, who serves as the Company's President and Chief Executive
Officer, no person who served on the Compensation Committee during the last
fiscal year had any relationship with the Company requiring disclosure under
this heading.
REPORT ON EXECUTIVE COMPENSATION
The following joint report of the Compensation Committee and Stock Plan
Committee of the Board of Directors describes the committees' compensation
policies with regard to the Company's executive officers for the last fiscal
year, including the specific relationship of corporate performance to
executive compensation. The report also discusses the committees' bases for
the chief executive officer's compensation for the last fiscal year,
including the factors and criteria upon which the committees based that
compensation. As described above under "Committees and Meetings of the Board
of Directors," the Compensation Committee's functions include reviewing and
making recommendations to the Board of Directors concerning the base salary,
annual incentive bonus awards, and other compensation awards to the Company's
chief executive officer and other executive officers of the Company. The
Stock Plan Committee's functions include the administration of the Company's
employee stock option plan and the granting of stock options under that plan
and the administration of the Company's employee stock incentive plan and the
granting of stock under that plan.
The following report shall not constitute a document deemed incorporated
by reference by any general statement incorporating this proxy statement by
reference into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates the information by reference, and the report shall
not constitute information otherwise deemed filed under either of those acts.
INDEPENDENT COMPENSATION CONSULTANT REPORT
The Company for several years has retained an independent compensation
consultant to advise the Company on the structure and competitiveness of the
Company's executive compensation program and to recommend programs
appropriate for the Company in the areas of salary, annual incentive
programs, long-term incentives, and benefits and employment contract
provisions. In conducting its initial review, the consultant interviewed the
senior executive officers of the Company, as well as the members of the
Compensation Committee; identified a peer group of 11 comparable multi-outlet
restaurant companies; and analyzed the cash compensation, stock option and
long-term incentive programs, and employment contract provisions available in
that peer group according to available proxy statement information, as well
as compensation data from other published surveys. Since the initial review,
the Company has obtained annual updates of the review and report to the
Company. The results of the original and updated reviews showed and continue
to show that the total compensation of the Company's executive officers falls
below the average level of total compensation of the peer group executive
officers. The Company and the Compensation Committee intend to continue to
work with the consultant to develop appropriate changes to the Company's
executive compensation program.
COMPENSATION POLICY AND OVERALL OBJECTIVES
In order to attract, retain and motivate superior executive talent, the
Compensation Committee seeks to maintain compensation programs competitive
with those provided by leading companies in the multi-unit restaurant
business with similar size and business focus as the Company. The committee
has adopted a compensation strategy to provide (1) base salaries which are
competitive but not above industry averages, (2) average or above-average
total annual cash opportunities, through incentives based on operating
results, (3) above-average long-term incentives based on stock appreciation,
and (4) other benefits for executives which are competitive but not above
industry norms.
The primary components of the Company's executive compensation package
consist of base salary, annual incentive bonus awards, stock option awards,
and restricted stock awards.
8
<PAGE>
In connection with making decisions with respect to executive
compensation, the Compensation Committee will take into account as one of the
factors which it considers, the provisions of Section 162(m) of the Internal
Revenue Code which limits the deductibility by the Company of certain
categories of compensation in excess of $1,000,000 paid to certain executive
officers. It may, however, determine to authorize compensation arrangements
that exceed the $1,000,000 deductibility cap imposed by Section 162(m). No
executive officer's total compensation for the fiscal year ending August 31,
1998 exceeded the $1,000,000 deductibility cap.
DISCUSSION OF COMPENSATION COMPONENTS
BASE SALARY. In reviewing each executive officer's base salary, the
Compensation Committee takes into consideration the executive officer's
responsibilities and performance, salaries for comparable positions at other
companies, and fairness issues relating to pay for other Company executives.
In making salary recommendations or decisions, the committee exercises its
discretion and judgment based on those factors. The committee does not apply
any specific formula to determine the weight of each factor.
INCENTIVE BONUS AWARDS. The Company has adopted an incentive bonus
plan, which covers all of the Company's executive officers, as well as other
mid-level management personnel. Under the plan, the Compensation Committee
measures the performance of the Company against an annual business plan
prepared by management and reviewed and approved by the Board of Directors.
Achievement of the net income target set forth in the annual business plan
may result in the payment of incentive payments equal to a percentage of the
base salary of the covered officer (50% for Messrs. Hudson and Keymer, and
35% for Messrs. Matlock and McLain and Ms. Moore). Under the plan, the
committee may award up to 50% of the incentive payments if the Company
achieves 85% of the annual business plan and may award up to 100% of the
incentive payments as the percentage of net income achieved increases from
85% to 100%. The plan also allows the committee to increase the incentive
payments ratably to the extent the Company exceeds the net income target.
The committee has the discretion whether and in what amounts to award any
incentive bonuses.
STOCK OPTION GRANTS. The 1991 Sonic Corp. Stock Option Plan is a
stock-based incentive compensation plan under which employees selected by the
Stock Plan Committee may receive awards in the form of stock options. Under
that plan, selected employees may receive an annual grant of stock options to
purchase a number of shares of common stock computed by (1) dividing the
employee's annual salary and bonus by the current market price of the common
stock and (2) multiplying that amount by a factor ranging from zero to two.
The Stock Plan Committee grants special stock option awards to new members of
management whose position with the Company qualifies them for participation
in the plan and for existing members of management who may have received a
promotion. In selecting the multiplier for an award of stock options to a
specific individual, the committee takes into account the existing number of
options and shares of common stock already owned by the individual and,
therefore, may use a lower multiplier for an individual already owning a
substantial number of options or shares of common stock.
STOCK INCENTIVE PLAN. In November of 1995, the Stock Plan Committee
adopted and the Board of Directors approved the Stock Incentive Plan. Under
that plan, the Company may issue up to 180,000 shares of common stock of the
Company to key employees selected for participation in the plan by the Stock
Plan Committee, which administers the plan. Participants in the Stock
Incentive Plan receive awards of shares of restricted common stock (the
"Restricted Stock"), subject to not vesting if the Company fails to achieve
certain annual performance criteria. As the Company achieves the performance
criteria, the portion of the award tied to the criteria will vest. Until the
Restricted Stock vests, an escrow agent will hold the Restricted Stock.
However, the participant will have the right to vote the Restricted Stock and
receive any dividends on the stock. If the Company does not achieve the
performance criteria, the portion of the award tied to that criteria will not
vest and the right to receive dividends and to vote that portion of the
Restricted Stock will terminate. Upon vesting, all restrictions on the
vested portion will terminate and the participant will have the right to
receive certificates representing the shares of vested Restricted Stock.
9
<PAGE>
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Hudson has served as President and Chief Executive Officer of the
Company since April 11, 1995. On January 27, 1998, the Compensation
Committee met and set Mr. Hudson's annual compensation at $325,000. The
committee considered the results of the most recent update of the Company's
independent compensation consultant regarding the range of compensation for
the chief executive officers of the Company's competitive peer group and set
Mr. Hudson's level of compensation below the average of that group. On April
30, 1998, the Stock Plan Committee granted Mr. Hudson options to purchase
22,675 shares of common stock, consistent with the standard formula described
above. Effective October 21, 1998, the Compensation Committee approved the
award of 101% of Mr. Hudson's potential incentive bonus for the fiscal year
ended August 31, 1998, pursuant to the terms of the Company's incentive bonus
plan, which percentage is consistent with the percentages approved for the
other executive officers of the Company, after taking into account the
performance of the Company for that year.
Respectfully Submitted,
The Compensation Committee The Stock Plan Committee
/s/ Leonard Lieberman, Chairman /s/ Leonard Lieberman, Chairman
/s/ J. Clifford Hudson /s/ Frank E. Richardson
/s/ Frank E. Richardson /s/ E. Dean Werries
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the
Company's common stock with the cumulative total returns on two published
indices - the Center for Research in Securities Prices ("CRSP") Total Return
Index for The Nasdaq Stock Market (U.S. Companies) ("Nasdaq U.S. Stocks") and
the CRSP Index for Nasdaq Retail Trade Stocks ("Nasdaq Retail Stocks"), since
the Company became public in February of 1991. The graph assumes a $100
investment on February 28, 1991, in the Company's common stock and in the
stocks comprising the two identified indices. "Cumulative total return"
means the appreciation in stock price, plus dividends paid, assuming the
reinvestment of all dividends.
The following graph shall not constitute a document deemed incorporated
by reference by any general statement incorporating this proxy statement by
reference into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates the information by reference, and the graph shall
not constitute information otherwise deemed filed under either of those acts.
[GRAPH]
<TABLE>
<CAPTION>
02/28/91 08/30/91 08/31/92 08/31/93 08/31/94 08/31/95 08/30/96 08/29/97 08/31/98
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sonic Corp. 100.000 183.000 176.000 210.000 152.000 246.000 282.000 265.500 286.875
NASDAQ Stocks (U.S.) 100.000 117.254 127.164 167.754 174.615 235.158 265.178 369.968 351.491
NASDAQ Retail Stocks 100.000 129.270 125.336 147.705 147.095 161.716 187.926 211.995 183.888
</TABLE>
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS. The following table shows the total number
and percentage of the outstanding shares of the Company's voting common stock
beneficially owned as of November 30, 1998, with respect to each person
(including any "group" as used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended) the Company knows to have beneficial ownership of
more than 5% of the Company's common stock. The Company computed the
percentage ownership amounts in accordance with the provisions of Rule
13d-3(d), which includes as beneficially owned all shares of common stock
which the person or group has the right to acquire within the next 60 days.
Unless indicated otherwise, each stockholder holds sole voting and investment
power with regard to the shares of common stock. The Company has obtained
the information set forth below from the Schedule 13G's filed by the
indicated persons with the Company.
<TABLE>
<CAPTION>
NUMBER
BENEFICIAL OWNER OF SHARES PERCENT
---------------- --------- -------
<S> <C> <C>
FMR Corp.(1) 1,696,500 13.24%
82 Devonshire Street
Boston, Massachusetts 02109
Massachusetts Financial Services Company(2) 825,485 6.4%
500 Boylston Street
Boston, Massachusetts 02116
T. Rowe Price Associates, Inc.(3) 702,500 5.4%
100 E. Pratt Street
Baltimore, Maryland 21202
</TABLE>
(1) Fidelity Management & Research Company ("Fidelity), a wholly-owned
subsidiary of FMR Corp. and a registered investment adviser, beneficially
owns 1,290,000 shares (or 10.07% of the Company's outstanding common stock)
as a result of its role as an investment adviser to Fidelity Low-Priced Stock
Fund (the "Fund"). The Fund has sole voting power with regard to those
1,290,000 shares of common stock. Fidelity Management Trust Company
("Fidelity Management"), another wholly-owned subsidiary of FMR Corp. and a
bank, beneficially owns and has sole voting power with regard to the
remaining 406,500 shares (or 3.17% of the Company's outstanding common stock)
as a result of its role as an investment manager for certain institutional
accounts. Fidelity, the Fund, and Fidelity Management have the same address
as FMR Corp.
(2) Of the amount shown, the reporting person has sole voting power for
817,185 shares of common stock.
(3) T. Rowe Price Associates, Inc. ("Price Associates") beneficially
owns 702,500 shares (or 5.4% of the Company's outstanding common stock) as a
result of its role as an investment adviser to T. Rowe Price New Horizons
Fund, Inc. ("Price Fund"). Price Fund has sole voting power with regard to
those 702,500 shares of common stock. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates is
deemed to be a beneficial owner of such securities; however, Price Associates
expressly disclaims that it is the beneficial owner of such securities.
Price Fund has the same address as Price Associates.
11
<PAGE>
MANAGEMENT. The following table sets forth information obtained from
the directors and executive officers of the Company as to their beneficial
ownership of the Company's voting common stock as of November 30, 1998. The
Company computed the percentage ownership amounts in accordance with the
provisions of Rule 13d-3(d), which rule includes as beneficially owned all
shares of common stock which the person or group has the right to acquire
pursuant to stock options exercisable within the next 60 days ("Currently
Exercisable Options"). Unless indicated otherwise, each stockholder holds
sole voting and investment power with regard to the shares of common stock.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
BENEFICIAL OWNER SHARES OPTIONS PERCENT(1)
---------------- --------- --------- ----------
<S> <C> <C> <C>
J. Clifford Hudson(2) 412,394 204,536 3.22%
Kenneth L. Keymer(3) 9,750 38,187 (4)
Pattye L. Moore(5) 720 100,175 (4)
Ronald L. Matlock(6) 6,590 28,234 (4)
W. Scott McLain(7) 132 21,471
Dennis H. Clark(8) 323,637 22,500 1.82%
Leonard Lieberman 553 22,500 (4)
H. E. Rainbolt 22,500 22,500 (4)
Frank E. Richardson 478,084 22,500 2.64%
Robert M. Rosenberg 31,500 22,500 (4)
E. Dean Werries 27,450 3,000 (4)
Directors and executive officers
as a group (22 persons)(9) 1,315,583 707,860 10.30%
</TABLE>
- -----------------------
(1) Pursuant to Rule 13(d)(3), the Company includes the shares of common
stock underlying the Currently Exercisable Options as outstanding for the
purposes of computing the percentage ownership of the person or group holding
those options but not for the purposes of computing the percentage ownership
of any other person.
(2) The amount shown includes (a) 199,154 shares of common stock held by
Mr. Hudson in trust for himself, (b) 196,800 shares of common stock held by
Mr. Hudson's wife in trust for herself (of which Mr. Hudson disclaims
beneficial ownership), and (c) 16,440 shares of common stock held by Mr.
Hudson in trust for his two minor children (of which Mr. Hudson disclaims
beneficial ownership).
(3) The amount shown includes 7,500 shares of restricted common stock
subject to not vesting if the Company fails to achieve either $256,711,000 in
revenues or $1.47 in earnings per share during the fiscal year ending August
31, 1999.
(4) The amount represents less than 1% of the Company's outstanding
shares of common stock.
(5) The amount shown includes 495 shares of common stock held for Ms.
Moore in the Company's 401(k) plan.
(6) The amount shown includes (a) 590 shares of common stock held for
Mr. Matlock in the Company's 401(k) plan and (b) 6,000 shares of restricted
common stock subject to not vesting if the Company fails to achieve either
$256,711,000 in revenues or $1.47 in earnings per share during the fiscal
year ending August 31, 1999.
(7) All of such shares are held for Mr. McLain in the Company's 401(k)
plan.
(8) The amount shown includes 67,515 shares of common stock owned by Mr.
Clark's wife.
12
<PAGE>
(9) The amount includes (a) 1,217 shares of common stock held for
certain executive officers in the Company's 401(k) plan and (b) 2,123 shares
of common stock held for certain executive officers in the Company's employee
stock purchase plan.
CHANGES IN CONTROL. The Company knows of no arrangements (including the
pledge by any person of securities of the Company), the operation of which
may result at a subsequent date in a change in control of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases two parcels of real estate, upon which it operates
two Company-owned restaurants, from Plains Realty Corp. ("Plains"), a
corporation owned in part by J. Clifford Hudson, President, Chief Executive
Officer, and a director of the Company, and Dennis H. Clark, a director of
the Company. The Company is leasing both parcels pursuant to 15-year leases
entered into in 1988 and 1989. One of the leases expires in June of 2004 and
the other in June of 2005. During the last fiscal year, the Company paid
Plains a total of $86,271 in rent pursuant to those two leases. The Company
believes that the terms and conditions of the leases are no less favorable
than those it could have obtained from third parties in arm's length
transactions.
In March of 1994, the Company entered into an agreement with Dennis H.
Clark, a director of the Company and then President of Sonic Restaurants,
Inc., relating to his leaving the Company's employment and returning to his
previous career as a Sonic franchisee. Under his employment agreement, Mr.
Clark had the right to receive an amount equal to 12 months' salary and to
purchase six Sonic drive-in restaurants in Monroe, Louisiana. In exchange
for Mr. Clark's foregoing those rights, the Company sold its interest in two
Sonic drive-in restaurants to Mr. Clark and provided him with the financing
necessary to purchase the interests pursuant to two promissory notes, having
terms of 10 and 15 years, each at 7% interest, and secured by Mr. Clark's
interest in the restaurants. Pursuant to the agreement, the Company also
issued an area development agreement to Encore Restaurants, Inc. ("Encore")
for the city of Plano, Texas, and a portion of the southwest corner of Collin
County, Texas (the "Development Area"), calling for the development of seven
restaurants over five years and the waiver of the initial franchise fee for
three of those restaurants. Mr. Clark is the president and a principal
stockholder of Encore. The Company also committed to assist Encore with
obtaining financing for up to six Sonic drive-in restaurants upon terms
comparable to those which the Company could obtain. Pursuant to this
agreement, the Company has entered into asset repurchase agreements with the
lender relating to approximately $4.2 million of financing for the
development of the six Sonic drive-in restaurants. Those agreements
obligate the Company to purchase the collateral securing the financing at
their fair market value in the event of a default under the terms of the
financing documents. The collateral consists of 105,024 shares of common
stock of the Company and the real estate and operating assets of the Sonic
drive-in restaurants. As of August 31, 1998, the outstanding principal
balance of the financing equaled approximately $3.2 million. The
outstanding principal balance of the secured loans made to Mr. Clark by the
Company as of August 31, 1998 equaled approximately $598,000.
In January of 1998, the Company and Encore amended the area development
agreement for the city of Plano and Collin County, Texas to allow the Company
the right to develop up to five Company-owned restaurants within certain
portions of the Development Area for a period of three years. In exchange
for such waiver by Encore of its exclusive development rights in the
Development Area, the Company agreed to extend the term of Encore's
development rights in the Development Area for an additional year through
October of 2002, and arrange financing for Encore's development of five
additional restaurants. In addition, the Company agreed to enter into sale
and leaseback transactions for each of the five additional restaurants to be
developed by the Company on terms generally available from independent third
parties with payment of up to 3.5% of annual gross sales to Encore from the
operations of the Company-owned restaurants developed in the Development Area
as additional percentage rent. The terms of the January 1998 amendment
transaction with Encore are consistent with the terms of a simultaneous
agreement entered into with a non-affiliated franchise restaurant developer
for similar development rights by the Company.
13
<PAGE>
H. E. Rainbolt, a director of the Company, is Chairman of the Board and
a principal stockholder of BancFirst Corp., the holding company of BancFirst
of Oklahoma City ("BancFirst"). BancFirst is a participant in the Company's
$60 million revolving line of credit. During the last fiscal year, the
largest amount outstanding under that line of credit was approximately $43.6
million, in which BancFirst participated in approximately $5.4 million.
SECTION 16 COMPLIANCE
Based upon a review of the original and amended Forms 3 and 4 furnished
to the Company during its last fiscal year and the original and amended Forms
5 furnished to the Company with regard to its last fiscal year, the Company
does not know of any person who failed to file on a timely basis any reports
required by Section 16(a) of the Securities Exchange Act of 1934, as amended.
AMENDMENT OF 1991 SONIC CORP. STOCK OPTION PLAN
GENERAL
ADOPTION OF AMENDMENT. On November 17, 1998, the Stock Plan Committee
adopted and the Board of Directors approved an amendment to the 1991 Sonic
Corp. Stock Option Plan (the "Stock Option Plan") to increase the number of
shares of common stock reserved for issuance pursuant to the Stock Option
Plan by 935,000 shares of common stock to a total of 3,740,000 shares of
common stock of the Company, subject to the approval of the Company's
stockholders at its next annual meeting of stockholders. When it originally
adopted the Stock Option Plan, the Company reserved 1,208,838 shares of
common stock for issuance pursuant to stock options granted under the plan
and increased that amount by an amendment in August of 1993 to 1,867,500
shares of common stock, by an amendment in November of 1995 to 2,010,000
shares of common stock, and by an amendment in January of 1997 to 2,805,000
shares of common stock. As of November 30, 1998, the Company had 1,568,977
options outstanding and 264,160 remaining options available for issuance
pursuant to the Stock Option Plan. As of November 30, 1998, 971,863 options
granted by the Company pursuant to the Stock Option Plan had been exercised.
PURPOSE OF AMENDMENT. The stockholders of the Company approved the
Stock Option Plan in 1991 as a key element of the Company's executive
compensation program because stock-based incentive compensation ties
executive compensation directly to the performance of the Company's common
stock. The Stock Option Plan enables the Company to attract and retain the
services of its eligible employees and to provide them with increased
motivation and incentive to exert their best efforts on behalf of the Company
by increasing their personal stake in the Company. In order that the plan
may continue to serve its intended purposes, the proposed amendment would
increase the number of shares of common stock available for issuance under
the Stock Option Plan. TOWERS PERRIN, THE COMPANY'S INDEPENDENT COMPENSATION
CONSULTANT, HAS REVIEWED THE PROPOSED INCREASE AND HAS CONFIRMED THAT THE
INCREASE WOULD PLACE THE TOTAL NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR
ISSUANCE PURSUANT TO THE PLAN BELOW THE MEDIAN AMOUNT SIMILARLY RESERVED BY
THE COMPANY'S PEER GROUP OF COMPANIES, WHICH IS APPROXIMATELY 17.7%. UNDER
THE COMPANY'S PLAN, IF AMENDED, THE TOTAL NUMBER OF SHARES AVAILABLE FOR
ISSUANCE PURSUANT TO THE PLAN AND THE STOCK INCENTIVE PLAN WILL EQUAL
APPROXIMATELY 15.6%. Because the Board of Directors views the continued
operation of the Plan to be in the best interests of the Company, the Board
of Directors is requesting that the stockholders approve and ratify the
amendment of the Stock Option Plan.
AMENDMENT
The text of the amendment to the 1991 Sonic Corp. Stock Option Plan as
approved by the Stock Plan Committee and the Board of Directors on November
17, 1998, is as follows:
6. STOCK SUBJECT TO THE PLAN. Subject to the adjustment as
provided in Section 13 hereof, Options may be issued pursuant to the
Plan with respect to a number of Shares that, in the aggregate, does
not exceed 3,740,000 Shares.
14
<PAGE>
SUMMARY OF THE PLAN
ADMINISTRATION. A committee consisting of not less than three directors
of the Company appointed by the Board of Directors administers the plan. In
that regard, the Board of Directors has appointed the Stock Plan Committee to
administer the plan. The committee has sole and final authority to interpret
the provisions of the plan and the terms of any option issued under it and to
promulgate and interpret the rules and regulations relating to the plan and
options which it deems necessary or desirable. Members of the committee do
not receive any additional compensation for their services in connection with
their administration of the Stock Option Plan.
ELIGIBILITY AND PARTICIPATION. The plan provides for the granting of
options to qualified employees of the Company. Key employees (as determined
by the Stock Plan Committee), who do not own 10% or more of the outstanding
shares of common stock of the Company, may receive stock options under the
plan. Currently, 55 employees hold stock options under the plan.
TERMS AND CONDITIONS OF OPTIONS. An option certificate, in the form
adopted by the committee, evidences each option granted under the Stock
Option Plan and sets forth the terms and conditions governing the option,
including the number of shares of common stock to which it relates, the price
at which the holder may purchase the underlying shares of common stock, when
the holder may exercise the option, and when the option expires.
NUMBER OF SHARES. The Stock Plan Committee determines the number
of shares of common stock covered by each stock option granted under
the plan.
EXERCISE OF THE OPTIONS. The holder may exercise an option by
the delivery to the Company of a written notice signed by the holder,
which specifies the number of shares of common stock as to which the
holder is exercising the option and the date of the proposed exercise.
The holder may pay for the shares of common stock owned by the holder
and valued at their fair market value on the date of exercise, or in a
combination of cash and shares of common stock.
RIGHTS AS A STOCKHOLDER. The holder of an option under the Stock
Option Plan will not have any rights with respect to the shares of
common stock underlying the option until exercised in the manner
provided by the plan and the Company actually issues the shares of
common stock to the holder. Accordingly, the Company will not make
any adjustment for dividends or other rights for which the record date
precedes the date of issuance of shares of common stock under the
option. However, the Company will adjust the number of shares of
common stock underlying an option under certain other circumstances.
See "Adjustments Upon Changes in Capitalization," below.
EXERCISE PRICE OF THE OPTIONS. The exercise price of the options
will equal the fair market value of the Company's common stock on the
date of the grant of the options. The fair market value will equal
the average of the closing bid and ask price for the Company's common
stock, as reported on the Nasdaq National Market. On November 30,
1998, the average of the closing bid and ask price for the Company's
common stock equaled $19.75 per share.
VESTING AND TERMINATION OF THE OPTIONS. Unless the Stock Plan
Committee specifies otherwise, each option granted under the plan
becomes exercisable with regard to one-third of the shares of common
stock underlying the option on each of the three anniversary dates of
the grant of the option. The holder of the option may exercise it,
once exercisable, at any time prior to its expiration, cancellation or
termination. The options terminate upon the termination of the
employee's employment with the Company. The holder may make partial
exercises of the option as long as the partial exercise covers a whole
number of shares of common stock having a purchase price of at least
$1,000. The options granted under the plan become fully exercisable
upon an employee's retirement, disability, or death and upon a change
in control of the Company.
15
<PAGE>
A change in control of the Company takes place for the purposes of
the plan if any one or more of the following events occur:
(1) Any person acquires direct or indirect beneficial
ownership of 25% or more of the combined voting power of the
Company's then outstanding securities.
(2) Any person acquires direct or indirect beneficial
ownership of 10% or more of the combined voting power of the
Company's then outstanding securities and, during the two-year
period beginning at that time, persons who at the beginning of
the period made up the Board of Directors cease for any reason
to constitute at least a majority of the Board of Directors.
(3) The Company's stockholders approve an agreement to
merge or consolidate the Company with another corporation
and, during the period beginning six months before the
approval and ending two years after the approval, persons
who at the beginning of the period made up the Board of
Directors cease for any reason to constitute at least a
majority of the Board of Directors.
(4) During any two-year period, persons who at the
date on which the period begins made up a majority of the
Board of Directors cease for any reason to constitute at
least a majority of the Board of Directors.
EXPIRATION OF OPTIONS. An option granted under the Stock Option
Plan expires 10 years after the date of its grant, unless terminated
earlier as described above.
NON-TRANSFERABILITY OF THE OPTIONS. The holder of an option
granted under the Stock Option Plan does not have the right to
transfer the option, except by will or the laws of descent and
distribution. Only the holder of an option may exercise the option
during his or her lifetime.
OTHER PROVISIONS. Nothing in the Stock Option Plan confers upon
any holder any right with regard to the continuation of his or her
employment with the Company or interferes in any way with the right of
the Company, at any time, to terminate the option holder's employment
with the Company.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the Company subdivides
or combines its common stock, whether by reclassification, stock dividend,
stock split, reverse stock split, or other similar transaction, the number of
shares of common stock authorized under the plan, the number of shares of
common stock then subject or relating to unexercised options granted under
the plan, and the exercise price per share will adjust proportionately. In
the event of any capital reorganization or reclassification of the Company's
common stock other than as described above, the Stock Plan Committee may make
an appropriate adjustment in the number and class of shares of capital stock
authorized under the plan and the number of shares of common stock then
subject or relating to unexercised options granted under the plan.
AMENDMENT OR TERMINATION. The Stock Plan Committee, at any time and
from time to time, may suspend, discontinue, modify or amend the plan in any
respect. However, the Stock Plan Committee may not suspend, discontinue,
modify or amend the plan to affect adversely the rights of an option holder
with regard to any grants previously made without the option holder's
approval, and the Stock Plan Committee may not amend the provisions relating
to eligibility, number or exercise price of the options, duration of the
options, or conditions relating to the exercise of the options more than once
every six months, other than to comply with changes in federal tax laws. No
amendment or modification which (1) materially increases the benefits
accruing to the option holders, (2) increases the number of shares of common
stock authorized by the plan (except as set forth under "Adjustments
16
<PAGE>
Upon Changes in Capitalization," above), or (3) modifies the requirements as
to eligibility for participation under the plan will become effective without
stockholder approval. The plan will continue for 10 years after the original
date of its adoption.
FEDERAL TAX ASPECTS. The following material provides only a brief
summary of the federal income tax aspects of the Stock Option Plan based on
the tax laws in effect as of the mailing date of this proxy statement. The
summary is not exhaustive and does not describe a number of special tax
rules, including the alternative minimum tax and various elections which may
apply under certain circumstances.
TAXABLE INCOME UPON GRANT. An employee will not recognize
federal taxable income upon the grant of an option under the Stock
Option Plan.
INCENTIVE STOCK OPTIONS. A holder who exercises an incentive
stock option will not recognize any taxable income at the time of
exercise, nor will the Company receive a deduction. However, the
difference between the exercise price and the fair market value of the
shares of common stock on the exercise date constitutes a tax
preference item for purposes of determining a participant's
alternative minimum tax. A disposition of the purchased shares after
the expiration of the required holding periods will subject the holder
to taxation at long-term capital gains rates in the year of
disposition in an amount determined under the Internal Revenue Code
and the Company will not have the right to a deduction for federal
income tax purposes. A disposition of the purchased shares prior to
the expiration of the applicable holding periods will subject the
holder to taxation at ordinary income rates in the year of disposition
in an amount determined under the Internal Revenue Code and the
Company generally will have the right to a corresponding deduction.
NON-QUALIFIED STOCK OPTIONS. A holder who exercises a non-
qualified stock option will recognize ordinary income in the year the
holder exercises the option equal to the amount by which the fair
market value of the purchased shares of common stock exceeds the
option exercise price, and the Company generally will have the right
to a corresponding deduction for federal income tax purposes. If the
holder pays the exercise price under a non-qualified stock option in
the form of shares of common stock of the Company, the holder will not
recognize any taxable income to the extent that the shares of common
stock received upon the exercise of the option equal the number of
shares of common stock delivered in payment of the option exercise
price. For federal income tax purposes, those newly acquired shares
of common stock will have the same basis and holding period as the
delivered shares of common stock. The holder generally will have to
report all additional shares of common stock received upon the
exercise as ordinary income for the year of exercise in an amount
equal to the fair market value of the additional shares of common
stock as of the date of the exercise. Those additional shares of
common stock will have a tax basis equal to their fair market value
and their holding period for tax purposes will begin on the date of
their transfer to the holder.
WITHHOLDING TAXES. The Company will have the right to require
the holder to remit to the Company in cash an amount sufficient to
satisfy federal, state and local withholding requirements, if any,
prior to the delivery of any certificate for shares of common stock
acquired pursuant to the exercise of the options. Notwithstanding the
foregoing but subject to the approval of the Stock Plan Committee, a
holder may tender to the Company a number of shares of common stock or
the Company may withhold a number of shares of common stock, the fair
market value of which will satisfy the federal, state, and local tax
requirements.
ANTI-TAKEOVER EFFECT
The provisions of the Stock Option Plan which make the options
immediately exercisable upon a change in control of the Company may have an
anti-takeover effect and may constitute a factor in delaying, deferring or
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preventing a tender offer or takeover attempt that a stockholder otherwise
might consider in the stockholder's best interest, including attempts that
might result in a premium over the market price for the shares of common
stock held by the stockholder. Management of the Company believes, however,
that the benefits of the plan as described under "Purpose of the Amendment,"
above, more than outweigh the anti-takeover effect, if any, of the plan.
REQUIRED VOTE
The amendment to the Stock Option Plan requires approval by the
affirmative vote of the holders of a majority of the Company's outstanding
shares of common stock present in person or by proxy and voting at the
meeting. If the stockholders do not vote a sufficient number of shares of
common stock in favor of the amendment, the amendment will not take effect.
The Stock Plan Committee has not decided what action, if any, it may take if
that happens.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL AND
RATIFICATION OF THE ADOPTION OF THE AMENDMENT TO THE STOCK OPTION PLAN.
AMENDMENT OF 1991 SONIC CORP. DIRECTORS' STOCK OPTION PLAN
GENERAL
ADOPTION OF AMENDMENT. The Stock Plan Committee adopted and the Board
of Directors approved an amendment to the 1991 Sonic Corp. Directors' Stock
Option Plan (the "Directors' Stock Option Plan") to change the number of
stock options to be granted to directors. The Directors' Stock Option Plan
currently provides for the grant of 10-year, non-qualified stock options to
purchase 22,500 shares of common stock of the Company to each non-management
director of the Company upon the individual's initial election as a director.
The amendment would reduce the number of stock options granted to each
non-management director of the Company upon the director's initial election
from 22,500 to 15,000 shares of common stock of the Company, but would
provide that annual grants of options to purchase an additional 2,000 shares
of common stock would be made to each director beginning with the first year
of the director's second three-year term and continuing annually for so long
as the individual serves on the Board. The amendment would also cause the
annual grant of options to purchase 2,000 shares to be made effective as of
the inception of the Directors' Stock Option Plan in 1991 so that each
director would receive options to purchase 2,000 shares for each year
beginning with the later of 1994 or the first year of the director's second
three-year term on the Board and continuing for each year of service by the
director on the Board thereafter. As a result, upon approval of the
amendment, options to purchase an aggregate of 48,000 shares would be granted
to directors entitled to receive annual grants of options for prior service
on the Board. The options to be issued pursuant to the amendment for a
director's prior service on the Board would be granted as of the date of the
annual meeting of shareholders in 1999 for the purpose of determining the
exercise price and vesting schedule of the options. Future annual grants of
options pursuant to the amendment would be made as of the date of each future
annual meeting of shareholders.
PURPOSE OF AMENDMENT. The stockholders of the Company approved the
Directors' Stock Option Plan in 1991 to attract and retain the services of
members of the Board and to provide them with increased motivation and
incentive to exert their best efforts on behalf of the Company by enlarging
their personal stake in the Company. In order that the Directors' Stock
Option Plan may continue to serve its intended purpose and to provide
increased motivation for a director to serve additional terms, the proposed
amendment would reduce the number of options initially granted to a director,
but would provide for additional options to be granted annually during a
director's tenure of service on the Board beginning with the first year of
the director's second three-year term on the Board. Because the Board views
the amendment of the Directors' Stock Option Plan to be in the best interests
of the Company, the Board is requesting that the stockholders approve and
ratify the amendment.
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AMENDMENT
The text of the amendment to the Directors' Stock Option Plan as
approved by the Stock Option Committee and the Board of Directors, is as
follows:
7. OPTIONS.
A. Each Participant shall be granted an Option to purchase 15,000
Shares upon the Participant's initial election to the Board.
Effective January 20, 1999, each Participant will be granted an Option
to purchase 2,000 shares for each year of service on the Board
beginning with the later of 1994 or the first year of the
Participant's second three-year term on the Board and continuing for
each additional year of service by the Participant on the Board. The
Options shall be granted each year on the date of the annual meeting
of shareholders of the Company (the "Date of Grant"). The price per
share at which Shares may be purchased pursuant to any Option granted
under the Plan shall be the Fair Market Value of a Share on the Date
of Grant of the Option.
SUMMARY OF THE PLAN
ADMINISTRATION. A committee consisting of not less than three directors
of the Company appointed by the Board of Directors administers the Directors'
Stock Option Plan. In that regard, the Board has appointed the Stock Plan
Committee to administer the plan. The committee has sole and final authority
to interpret the provisions of the Directors' Stock Option Plan and the terms
of any option issued under it and to promulgate and interpret the rules and
regulations relating to the Directors' Stock Option Plan and options which it
deems necessary or desirable. Members of the committee do not receive any
additional compensation for their services in connection with their
administration of the Directors' Stock Option Plan.
ELIGIBILITY AND PARTICIPATION. The Directors' Stock Option Plan
currently provides for the granting of options to each non-management
director of the Company upon their election to the Board. Currently, six
directors hold stock options under the Directors' Stock Option Plan.
TERMS AND CONDITIONS OF OPTIONS. An option certificate, in the form
adopted by the committee, evidences each option granted under the Directors'
Stock Option Plan and sets forth the terms and conditions governing the
option, including the number of shares of common stock to which it relates,
the price at which the holder may purchase the underlying shares of common
stock, when the holder may exercise the option, and when the option expires.
NUMBER OF SHARES. The plan currently provides that each director
is granted an option to purchase 22,500 shares of common stock upon
the director's initial election to the Board.
EXERCISE OF THE OPTIONS. The holder may exercise an option by
the delivery to the Company of a written notice signed by the holder,
which specifies the number of shares of common stock as to which the
holder is exercising the option and the date of the proposed exercise.
The holder may pay for the shares of common stock owned by the holder
and valued at their fair market value on the date of exercise, or in a
combination of cash and shares of common stock.
RIGHTS AS A STOCKHOLDER. The holder of an option under the
Directors' Stock Option Plan will not have any rights with respect to
the shares of common stock underlying the option until exercised in
the manner provided by the plan and the Company actually issues the
shares of common stock to the holder. Accordingly, the Company will
not make any adjustment for dividends or other rights for which the
record date precedes the date of issuance of shares of common stock
under the option. However, the Company will adjust the number of
shares of
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common stock underlying an option under certain other circumstances.
See "Adjustments Upon Changes in Capitalization," below.
EXERCISE PRICE OF THE OPTIONS. The exercise price of the options
will equal the fair market value of the Company's common stock on the
date of the grant of the options. The fair market value will equal
the average of the closing bid and ask price for the Company's common
stock, as reported on the Nasdaq National Market. On November 30,
1998, the average of the closing bid and ask price for the Company's
common stock equaled $19.75 per share.
VESTING AND TERMINATION OF THE OPTIONS. Unless the Stock Plan
Committee specifies otherwise, each option granted under the plan
becomes exercisable with regard to one-third of the shares of common
stock underlying the option on each of the three anniversary dates of
the grant of the option. The holder of the option may exercise it,
once exercisable, at any time prior to its expiration, cancellation or
termination. The holder may make partial exercises of the option as
long as the partial exercise covers a whole number of shares of common
stock having a purchase price of at least $1,000. The options granted
under the plan become fully exercisable upon a director's retirement
from the Board, disability, or death and upon a change in control of
the Company. A change in control of the Company takes place for the
purposes of the plan if any one or more of the following events occur:
(1) Any person acquires direct or indirect beneficial
ownership of 25% or more of the combined voting power of the
Company's then outstanding securities.
(2) Any person acquires direct or indirect beneficial
ownership of 10% or more of the combined voting power of the
Company's then outstanding securities and, during the two-year
period beginning at that time, persons who at the beginning of
the period made up the Board of Directors cease for any reason
to constitute at least a majority of the Board of Directors.
(3) The Company's stockholders approve an agreement to
merge or consolidate the Company with another corporation
and, during the period beginning six months before the
approval and ending two years after the approval, persons
who at the beginning of the period made up the Board of
Directors cease for any reason to constitute at least a
majority of the Board of Directors.
(4) During any two-year period, persons who at the
date on which the period begins made up a majority of the
Board of Directors cease for any reason to constitute at
least a majority of the Board of Directors.
EXPIRATION OF OPTIONS. An option granted under the Directors'
Stock Option Plan expires 10 years after the date of its grant, unless
terminated earlier as described above.
NON-TRANSFERABILITY OF THE OPTIONS. The holder of an option
granted under the Directors' Stock Option Plan does not have the right
to transfer the option, except by will or the laws of descent and
distribution. Only the holder of an option may exercise the option
during his or her lifetime.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the Company
subdivides or combines its common stock, whether by reclassification,
stock dividend, stock split, reverse stock split, or other similar
transaction, the number of shares of common stock authorized under the
plan, the number of shares of common stock then subject or relating to
unexercised options granted under
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the plan, and the exercise price per share will adjust proportionately.
In the event of any capital reorganization or reclassification of the
Company's common stock other than as described above, the Stock Plan
Committee may make an appropriate adjustment in the number and class of
shares of capital stock authorized under the plan and the number of shares
of common stock then subject or relating to unexercised options granted
under the plan.
AMENDMENT OR TERMINATION. The Stock Plan Committee, at any time
and from time to time, may suspend, discontinue, modify or amend the
plan in any respect. However, the Stock Plan Committee may not
suspend, discontinue, modify or amend the plan to affect adversely the
rights of an option holder with regard to any grants previously made
without the option holder's approval. No amendment or modification
which (1) materially increases the benefits accruing to the option
holders, (2) increases the number of shares of common stock authorized
by the plan (except as set forth under "Adjustments Upon Changes in
Capitalization," above), or (3) modifies the requirements as to
eligibility for participation under the plan will become effective
without stockholder approval. The plan will continue for 10 years
after the original date of its adoption.
FEDERAL TAX ASPECTS. The following material provides only a brief
summary of the federal income tax aspects of the Directors' Stock Option Plan
based on the tax laws in effect as of the mailing date of this proxy
statement. The summary is not exhaustive and does not describe a number of
special tax rules, including the alternative minimum tax and various
elections which may apply under certain circumstances.
TAXABLE INCOME UPON GRANT. A director will not recognize federal
taxable income upon the grant of an option under the Directors' Stock
Option Plan.
NON-QUALIFIED STOCK OPTIONS. The options granted under the
Directors' Stock Option Plan are non-qualified stock options. A
holder who exercises a non-qualified stock option will recognize
ordinary income in the year the holder exercises the option equal to
the amount by which the fair market value of the purchased shares of
common stock exceeds the option exercise price, and the Company
generally will have the right to a corresponding deduction for federal
income tax purposes. If the holder pays the exercise price under a
non-qualified stock option in the form of shares of common stock of
the Company, the holder will not recognize any taxable income to the
extent that the shares of common stock received upon the exercise of
the option equal the number of shares of common stock delivered in
payment of the option exercise price. For federal income tax
purposes, those newly acquired shares of common stock will have the
same basis and holding period as the delivered shares of common stock.
The holder generally will have to report all additional shares of
common stock received upon the exercise as ordinary income for the
year of exercise in an amount equal to the fair market value of the
additional shares of common stock as of the date of the exercise.
Those additional shares of common stock will have a tax basis equal to
their fair market value and their holding period for tax purposes will
begin on the date of their transfer to the holder.
WITHHOLDING TAXES. The Company will have the right to require
the holder to remit to the Company in cash an amount sufficient to
satisfy federal, state and local withholding requirements, if any,
prior to the delivery of any certificate for shares of common stock
acquired pursuant to the exercise of the options. Notwithstanding the
foregoing but subject to the approval of the Stock Plan Committee, a
holder may tender to the Company a number of shares of common stock or
the Company may withhold a number of shares of common stock, the fair
market value of which will satisfy the federal, state, and local tax
requirements.
ANTI-TAKEOVER EFFECT
The provisions of the Directors' Stock Option Plan which make the
options immediately exercisable upon a change in control of the Company may
have an anti-takeover effect and may constitute a factor in delaying,
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deferring or preventing a tender offer or takeover attempt that a stockholder
otherwise might consider in the stockholder's best interest, including
attempts that might result in a premium over the market price for the shares
of common stock held by the stockholder. Management of the Company believes,
however, that the benefits of the plan as described under "Purpose of the
Amendment," above, more than outweigh the anti-takeover effect, if any, of
the plan.
REQUIRED VOTE
The amendment to the Directors' Stock Option Plan requires approval by
the affirmative vote of the holders of a majority of the Company's
outstanding shares of common stock present in person or by proxy and voting
at the meeting. If the stockholders do not vote a sufficient number of shares
of common stock in favor of the amendment, the amendment will not take
effect. The Stock Plan Committee has not decided what action, if any, it may
take if that happens.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL AND
RATIFICATION OF THE ADOPTION OF THE AMENDMENT TO THE DIRECTORS' STOCK OPTION
PLAN.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, based on the recommendation of the Audit
Committee, has re-appointed the firm of Ernst & Young LLP, independent
auditors, as the Company's auditors for the fiscal year ending August 31,
1999, subject to the approval and ratification by the stockholders. Ernst &
Young LLP has served as the Company's auditors since 1984. The Company
expects one or more representatives of Ernst & Young LLP to attend the annual
meeting in order to respond to any appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL AND
RATIFICATION OF THE RE-APPOINTMENT OF ERNST & YOUNG LLP.
OTHER MATTERS
The Board of Directors knows of no other matters which may come before
the annual meeting. If any other business properly comes before the meeting,
the persons named in the proxy will vote with respect to that matter in
accordance with their best judgment.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH STOCKHOLDER SOLICITED
TO VOTE AT THE ANNUAL MEETING, ON THE WRITTEN REQUEST OF THE STOCKHOLDER, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED AUGUST
31, 1998, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. EACH WRITTEN REQUEST MUST SET FORTH A
GOOD FAITH REPRESENTATION THAT AS OF THE RECORD DATE, THE PERSON MAKING THE
REQUEST WAS A BENEFICIAL OWNER OF THE COMPANY'S COMMON STOCK ENTITLED TO VOTE
AT THE ANNUAL MEETING. STOCKHOLDERS SHOULD DIRECT THE WRITTEN REQUEST TO THE
COMPANY TO RONALD L. MATLOCK, SECRETARY, 101 PARK AVENUE, OKLAHOMA CITY,
OKLAHOMA 73102.
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PROXY
FOR THE ANNUAL MEETING
OF THE STOCKHOLDERS OF
SONIC CORP.
THE BOARD OF DIRECTORS OF SONIC CORP. IS SOLICITING THIS PROXY
The undersigned hereby appoints J. Clifford Hudson and Ronald L.
Matlock, and each of them, the undersigned's proxy, with full power of
substitution, to attend the annual meeting of the stockholders of Sonic Corp.
(the "Company") on Wednesday, January 20, 1999, at 1:30 p.m., in the 20th
Century Ballroom of the Westin Hotel, One North Broadway, Oklahoma City,
Oklahoma, and at any adjournment of that meeting, and to vote the
undersigned's shares of common stock as designated below.
(1) ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote
(except as marked to the contrary for all nominees listed
below) below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE THROUGH THE NOMINEE'S NAME BELOW.)
Kenneth L. Keymer H.E. "Gene" Rainbolt E. Dean Werries
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF
THE ABOVE-NAMED NOMINEES.
(2) Approval and Ratification of the Amendment to the 1991 Sonic Corp. Stock
Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL AND
RATIFICATION OF THE AMENDMENT OF THE STOCK OPTION PLAN.
(3) Approval and Ratification of the Amendment to the 1991 Sonic Corp.
Directors' Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL AND
RATIFICATION OF THE AMENDMENT OF THE DIRECTORS' STOCK OPTION PLAN.
(4) Approval and Ratification of the Selection of Independent Auditors.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL AND
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS.
(over)
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(5) Any other matter properly coming before the meeting, upon which the persons
named above will vote for or against, in their sole discretion, or upon
which the persons named above will abstain from voting, in their sole
discretion.
/ / To Grant Authority / / To Withhold Authority
THE PERSONS NAMED ABOVE WILL VOTE THE SHARES OF COMMON STOCK REPRESENTED
BY THIS PROXY CARD IN ACCORDANCE WITH THE SPECIFICATIONS MADE IN ITEMS 1, 2,
3 AND 4. IF THE UNDERSIGNED MAKES NO SPECIFICATION, THE PERSONS NAMED ABOVE
WILL VOTE THE SHARES IN FAVOR OF ITEMS 1, 2, 3 AND 4 AND WILL VOTE THE SHARES
AS IF THE UNDERSIGNED HAD GRANTED THE AUTHORITY IN ITEM 5.
Please sign exactly as your name appears below, date and return this
proxy card promptly, using the self-addressed, prepaid envelope enclosed for
your convenience. Please correct your address before returning this proxy
card. Persons signing in a fiduciary capacity should indicate that fact and
give their full title. If a corporation, please sign in the full corporate
name by the president or other authorized officer. If a partnership, please
sign in the partnership name by an authorized person. If joint tenants, both
persons should sign.
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Name of Stockholder (Please Print)
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New Address (Street, City, State, Zip Code)
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Signature and Title
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Signature and Title
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Date
