SONIC AUTOMOTIVE, INC.
FORMULA STOCK OPTION PLAN
FOR INDEPENDENT DIRECTORS
ARTICLE I
PURPOSE; EFFECTIVE DATE; DEFINITIONS
1.1 Purpose. The Sonic Automotive, Inc. Formula Stock Option Plan for
Independent Directors is intended to secure for Sonic Automotive, Inc. (the
"Company") and its stockholders the benefits of the incentive inherent in common
stock ownership by the Independent Directors of the Company, who are responsible
in part for the Company's growth and financial success, and to afford such
persons the opportunity to obtain and thereafter increase a proprietary interest
in the Company on a favorable basis and thereby share in its success. This Plan
is intended to constitute a "formula plan" under note 3 to Rule 16b-3 of the
Securities and Exchange Commission under the Exchange Act and shall be construed
accordingly.
1.2 Effective Date. Subject to ratification of this Plan by the
Company's stockholders as provided in Section 5.9, this Plan shall be effective
on and as of March 31, 1998.
1.3 Definitions. Capitalized terms used in this Plan but not defined
herein shall have the meanings indicated in the Option Agreement. In addition,
throughout this Plan, the following terms shall have the meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
(c) "Committee" shall mean the Board, constituted as a
committee composed of all Directors other than the Independent Directors.
(d) "Common Stock" shall mean the Class A Common Stock, par
value $.01 per share, of the Company.
(e) "Company" shall mean Sonic Automotive, Inc., a Delaware
corporation.
(f) "Director" shall mean any member of the Board.
(g) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(h) "Fair Market Value" shall mean, with respect to the Common
Stock on any day, the closing sales price of a share of Common Stock on the last
business day immediately preceding such day for which a closing price is
available from the principal trading market for the Common Stock. A "business
day" is any day, other than a Saturday or Sunday, on which the relevant market
is open for trading.
(i) "Independent Director" shall mean any Director other than
a Director who, at the time of an Option award to such Director hereunder, is a
full-time employee of the Company or a subsidiary of the Company.
(j) "Option" shall mean an option to purchase shares of Common
Stock awarded to an Independent Director pursuant to this Plan.
(k) "Option Agreement" shall mean an agreement between the
Company and an Independent Director, in substantially the form of Annex A to
this Plan, evidencing the award of an Option.
(l) "Option Period" shall mean the period during which an
Option awarded under the Plan may be exercised, as specified in the Option
Agreement.
(m) "Option Shares" shall mean the shares of Common Stock
purchased upon exercise of an Option.
(n) "Plan" shall mean this Sonic Automotive, Inc. Formula
Stock Option Plan for Independent Directors, as the same may be amended from
time to time.
ARTICLE II
COMMITTEE
2.1 Authority of Committee. This Plan and the Options shall be
interpreted, construed and administered by the Committee in its sole discretion
such that the interpretation, construction and administration by the Committee
of any provision of this Plan or of any Option shall be conclusive and binding
on all parties. A majority of the entire Committee shall constitute a quorum,
and the action of a majority of the members present at any meeting at which a
quorum is present shall be deemed the action of the Committee. In addition, any
decision or determination reduced to writing and signed by all members of the
Committee shall be fully as effective as if it had been made by a majority vote
at a meeting duly called and held. Subject to the provisions of the Plan and the
Company's bylaws, the Committee may make such additional rules and regulations
for the conduct of its business as it shall deem advisable and shall hold
meetings at such times and places as it may determine.
2.2 Limitation on Receipt of Options by Committee Members. No person,
while a member of the Committee, shall be eligible to receive Options under the
Plan, but a member of the Committee may exercise Options granted prior to his or
her becoming a member of the Committee.
2.3 Good Faith Determinations. No member of the Committee or other
member of the Board shall be liable for any action or determination made in good
faith with respect to this Plan or any Option granted hereunder.
ARTICLE III
ELIGIBILITY; SHARES SUBJECT TO THE PLAN
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3.1 Eligibility. Only Independent Directors shall be eligible to
receive Option awards under this Plan.
3.2 Shares Subject to the Plan. Subject to the provisions of Section
4.2(d) (relating to adjustment for changes in the Common Stock), the maximum
number of shares that may be issued under this Plan shall not exceed in the
aggregate 300,000 shares of Common Stock. Such shares may be authorized and
unissued shares or, in the alternative, authorized and issued shares that have
been reacquired by the Company as treasury stock. If any Option awarded under
this Plan shall for any reason terminate or expire or be surrendered without
having been exercised in full, then the underlying shares not acquired by Option
exercise shall be available again for grant hereunder.
ARTICLE IV
FORMULA AWARDS
4.1 Formula. On or before March 31 of each year during the term of this
Plan (commencing after the effective date hereof), each person who is then an
Independent Director shall be awarded an Option to purchase 10,000 shares of
Common Stock, in each case at an exercise price per share equal to the Fair
Market Value per share of Common Stock as of the date of such award. All of the
Option awards referred to in this Section 4.1 shall be made by operation of the
provisions of this Plan and shall require no further action by the Company, the
Board, the Committee or any other person except as specifically provided for
elsewhere in this Plan. Each Option shall be exercisable, in whole or in part,
at any time and from time to time during the Option Period. Each Option shall
terminate on the expiration of its Option Period, if not earlier terminated.
4.2 Other Terms and Conditions. Each Option award under this Plan shall
be evidenced by an Option Agreement as established, from time to time, by the
Committee. The Option Agreements need not be identical with one another, but
each one shall include the substance of, and shall be governed by, all of the
following terms and conditions:
(a) Numbers of Shares and Option Exercise Price. Each Option
Agreement shall state the number of shares of Common Stock to which it
pertains and the Option exercise price, all in accordance with this
Plan.
(b) Medium and Time of Payment. In order to exercise the
Option, the Optionee shall deliver to the Company written notice
specifying the number of shares of Common Stock to be purchased,
together with the Option exercise price for such number of shares. The
Option exercise price shall be payable in United States dollars, either
in cash (including by check) or in shares of Common Stock owned by the
Optionee or in a combination of cash and Common Stock. If all or any
portion of the Option exercise price is paid in Common Stock, then such
Common Stock shall be valued at its Fair Market Value as of the
exercise date.
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(c) Minimum Exercise; No Transfers. No less than 100 shares of
Common Stock may be purchased by Option exercise at any one time unless
the number purchased is the total number of shares in respect of which
the Option is then exercisable. No Option shall be assignable or
transferable by an Optionee, and no other person shall acquire any
rights therein, except that, subject to the provisions of Section
4.2(f), the Option may be transferred by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income
Security Act, or the rules thereunder.
(d) Recapitalization; Reorganization. Subject to any action
required by the stockholders of the Company, the maximum number of
shares of Common Stock that may be issued under this Plan pursuant to
Section 3.2, the number of shares of Common Stock covered by each
outstanding Option and the per share exercise price applicable to each
outstanding Option shall, in each case, be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a subdivision or consolidation of shares or the payment
of a stock dividend on the Common Stock or any other increase or
decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company.
Subject to any action required by the stockholders, if the
Company is the surviving corporation in any merger, then each Option
outstanding shall pertain to and apply to the securities or other
consideration that a holder of the number of shares of Common Stock
underlying the Option would have been entitled to receive in the
merger. A dissolution, liquidation or consolidation of the Company or a
merger in which the Company is not the surviving corporation, other
than a merger effected solely for the purpose of changing the Company's
domicile, shall cause each outstanding Option not exercised prior to
the effective date of such transaction to terminate. In the case of a
merger effected for the purpose of changing the Company's domicile,
each outstanding Option shall continue in effect in accordance with its
terms and shall apply to the same number of shares of common stock of
such surviving corporation as the number of shares of Common Stock to
which it applied immediately prior to such merger, adjusted for any
increase or decrease in the number of outstanding shares of common
stock of the surviving corporation effected without receipt of
consideration.
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 Common Stock within the contemplation
of this Plan.
The foregoing adjustments shall be made by the Committee,
whose determination shall be conclusive.
Except as expressly provided in this subsection, the Optionee
shall have no rights by reason of (i) any subdivision or consolidation
of shares of any class, (ii) any
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stock dividend, (iii) any other increase or decrease in the number of
shares of stock of any class, (iv) any dissolution, liquidation, merger
or consolidation or spin-off, split-off or split-up of assets of the
Company or stock of another corporation or (v) any issuance by the
Company of shares of stock of any class or securities convertible into
shares of stock of any class. Moreover, except as expressly provided in
this subsection, the occurrence of one or more of the above-listed
events shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number of, or the exercise price relative to,
the shares of Common Stock underlying an Option.
The grant of an Option pursuant to this Plan shall not affect
in any way the right or power of the Company to issue securities of any
class, to make adjustments, reclassifications, reorganizations or
changes to, of or in its capital or business structure, to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any
part of its business or assets.
(e) Rights as a Stockholder. An Optionee or a transferee of an
Option shall have no rights as a stockholder with respect to any shares
underlying his or her Option until the date of the issuance of a stock
certificate for those shares upon payment of the exercise price. 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, except as expressly provided in subsection
4.2(d).
(f) Option Termination. Each Option Agreement shall provide
that, if the Optionee's status as an Independent Director terminates
incidental to conduct that, in the judgment of the Committee, involves
a breach of fiduciary duty by such Independent Director or other
conduct detrimental to the Company, then his or her Option shall
terminate immediately and thereafter be of no force or effect. Each
Option Agreement also shall provide that, if the Optionee dies or if
the Option is transferred pursuant to a qualified domestic relations
order as provided in Section 4.2(c), prior to the exercise in full of
an Option, then such Option may be exercised not later than the
expiration of twelve months following such death or transfer, as the
case may be, by the person or persons to whom his or her rights under
the Option shall have been transferred by reason thereof (but only to
the extent that such Option was exercisable on the date of such death
or transfer). Notwithstanding anything to the contrary in this
subsection, an Option may not be exercised by anyone after the
expiration of its term.
ARTICLE V
MISCELLANEOUS
5.1 Withholding Taxes. An Independent Director awarded an Option
hereunder shall be deemed conclusively to have authorized the Company to
withhold from the fees, commissions or other compensation of such Independent
Director funds in amounts, or property (including Common Stock) in value, equal
to any federal, state or local income, employment or other withholding taxes
applicable to the income recognized by such
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Independent Director and attributable to the Options or Option Shares acquired
pursuant to this Plan as, when and to the extent, if any, required by law;
provided, however, that, in lieu of the withholding of federal, state and local
taxes as herein provided, the Company may require that the Independent Director
(or other person exercising such Option) pay the Company an amount equal to any
federal, state and local withholding taxes on such income at the time such
withholding is required, if it is ever required, or at such other time as shall
be satisfactory to the Company. Nothing in this Section shall be construed to
impose on the Company a duty to withhold, where applicable law does not require
such withholding, or to imply that an Independent Director is an employee or
anything other than an independent contractor with respect to the Company.
5.2 Amendment, Suspension, Discontinuance and Termination of Plan. The
Committee may from time to time amend, suspend or discontinue this Plan or
revise it in any respect whatsoever for the purpose of maintaining or improving
its effectiveness as an incentive device, for the purpose of conforming it to
applicable governmental regulations or to any change in applicable law or
regulations, or for any other purpose permitted by law; provided, however, that
no such action by the Committee shall adversely affect any Option theretofore
awarded hereunder without the consent of the holder so affected; provided
further that any amendment to this Plan that would materially increase the
benefits accruing to participants hereunder, materially increase the number of
shares of Common Stock that may be issued upon exercise of Options granted
hereunder or materially modify this Plan's requirements as to eligibility for
participation herein must be approved by the stockholders of the Company. This
Plan will terminate on the date when all shares of the Common Stock reserved for
issuance under the Plan have been acquired upon exercise of Options granted
hereunder or on such earlier date as the Committee may determine.
5.3 Governing Law. This Plan and all rights and obligations hereunder
shall be construed in accordance with and governed by the laws of the State of
North Carolina.
5.4 Designation. This Plan may be referred to in other documents and
instruments as the "Sonic Automotive, Inc. Formula Stock Option Plan for
Independent Directors."
5.5 Indemnification of Committee. In addition to such other rights of
indemnification as they may have as Directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including legal fees actually and necessarily incurred in
connection with the defense of any investigation, action, suit or proceeding, or
in connection with any appeal therefrom, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with this Plan or any Option granted hereunder, and against all amounts paid by
them in settlement thereof or paid by them in satisfaction of a judgment in or
dismissal or other discontinuance of any such investigation, action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such investigation, action, suit or proceeding that such Committee member acted
in bad faith in the performance of his or her duties, and without reasonable
belief that such performance was in the best interest of the Company.
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5.6 Reservation of Shares. The Company shall, at all times during the
term of this Plan and so long as any Option shall be outstanding, reserve and
keep available such number of shares of Common Stock as shall be sufficient to
satisfy the requirements hereof. Notwithstanding the foregoing, the inability of
the Company to obtain, from any regulatory body of appropriate jurisdiction,
authority considered by the Company to be necessary or desirable to the lawful
issuance of any shares of its Common Stock hereunder shall relieve the Company
of any liability in respect of the non-issuance or sale of such Common Stock as
to which such requisite authority shall not have been obtained.
5.7 Application of Funds. The proceeds received by the Company from the
sale of Common Stock upon the exercise of Options will be used for general
corporate purposes.
5.8 No Obligation to Exercise. The award of an Option under this Plan
shall impose no obligation upon the Optionee to exercise that Option.
5.9 Approval of Stockholders. No options awarded pursuant to this Plan
shall be exercisable by an Optionee or enforceable against the Company unless
and until the Plan shall have been ratified by the stockholders of the Company
so as to comply with the requirements of the New York Stock Exchange.
* * * * *
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ANNEX A
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FORMULA STOCK OPTION AGREEMENT AND GRANT
PURSUANT TO
THE SONIC AUTOMOTIVE, INC. FORMULA STOCK OPTION PLAN
FOR INDEPENDENT DIRECTORS
This Formula Stock Option Agreement and Grant is entered into as of
this 31st day of March, ___________ between Sonic Automotive, Inc., a Delaware
corporation (the "Company"), and_______________________________________________
(the "Optionee").
WHEREAS, the Company has adopted the Sonic Automotive, Inc. Formula
Stock Option Plan For Independent Directors (the "Plan"), pursuant to which the
Company may from time to time, make awards of Options (as defined below) and
enter into Formula Stock Option Agreements with Independent Directors (as
defined below) of the Company;
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
Formula 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 the purposes of this Formula 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) "Code" shall mean the Internal Revenue Code of 1986, as
amended, any successor revenue laws of the United States, and the rules and
regulations thereunder.
(d) "Committee" shall mean the Board, constituted as a
committee composed of all Directors other than the Independent Directors.
(e) "Common Stock" shall mean the Class A Common Stock, par
value $.01 per share, of the Company.
(f) "Company" shall mean Sonic Automotive, Inc., a Delaware
corporation.
(g) "Director" shall mean any member of the Board.
(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 4.2(b) 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 1.3(h) of
Plan.
(j) "Independent Director" shall mean any Director other than
a Director who, at the time of an Option award to such Director hereunder, is a
full-time employee of the Company or a Subsidiary of the Company.
(k) "Option" shall mean the option to purchase shares of
Common Stock granted to the Optionee pursuant to this Option Agreement.
(l) "Option Agreement" shall mean this Formula Stock Option
Agreement and Grant between the Company and the Optionee by which the Option is
granted to the Optionee pursuant to the Plan.
(m) "Option Period" shall mean the period commencing on the
date that is six months after the date of this Option Agreement and ending at
the close of business ten years from the date hereof or such earlier date as
when this Option Agreement may be terminated by its terms.
(n) "Option Shares" shall mean the shares of Common Stock
purchased upon exercise of the Option.
(o) "Optionee" shall mean the individual executing this Option
Agreement and, as applicable, the estate, personal representatives or
beneficiary to whom this Option may be transferred pursuant to this Option
Agreement by will, by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code.
(p) "Plan" shall mean the Sonic Automotive, Inc. Formula Stock
Option Plan For Independent Directors and any amendments thereto.
(q) "Retirement" shall mean, with respect to the Optionee,
retirement from the Board of the Company in accordance with the Company's
retirement policy as may be in effect from time to time.
(r) "Subsidiary" shall mean any subsidiary corporation of
Sonic Automotive, Inc. as defined in Sections 424(f) and 424(g) of the Code.
(s) "Total Option Price" shall mean the consideration payable
to the Company by the Optionee upon exercise of the Option pursuant to Section
4.2(b) 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 $ per share
(the per share Fair
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Market Value of the Common Stock on the date hereof), up to but not exceeding in
the aggregate 10,000 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 at any time and from time
to time during the Option Period. The Option shall terminate on the expiration
of the Option Period, if not earlier terminated, provided that, in event of the
Optionee's Retirement, the Committee in its sole 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 4.2 of the Plan.
.
(e) Within 15 days 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 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 or assignable by the
Optionee, except that, subject to the provisions of paragraph 4, the Option may
be transferred by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder.
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 termination of the Optionee's status as an Independent
Director incidental to conduct that, in the judgment of the Committee, involves
a breach of fiduciary duty by such Independent Director or other conduct
detrimental to the Company.
(c) In the event of death of the Optionee or if the Option is
transferred pursuant to a qualified domestic relations order prior to the
exercise in full of the Option, then
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such option may be exercised not later than the expiration of twelve months
following such death or transfer, as the case may be, by the person or persons
to whom his or her rights under the Option shall have be transferred by reason
thereof but only to the extent that such Option was exercisable on the date of
such death or transfer. Notwithstanding anything to the contrary, an option may
not be exercised by anyone after the expiration of its term.
(d) To the extent set forth in paragraph 7, below, upon the
dissolution, liquidation, consolidation or merger of the Company, and 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 OF 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 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 tax withholding
or other employment tax due in such event shall be made by the Company and shall
be binding upon the Optionee.
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 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 the 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
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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 to which this Option shall then be 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 4.2(d) of the Plan, this Option shall be subject to acceleration as
provided in such Section 4.2(d).
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, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue bonds, debentures, preferred or
other stock 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 issue 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 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
person 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 disputes 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.
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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 transfer of a party to this Agreement); and the parties agree,
for themselves and their successors, assigns 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:
Sonic Automotive, Inc.
5401 East Independence Boulevard
P. O. Box 18747
Charlotte, North Carolina 28212
Attention: Chief Financial Officer
or at such other address as the Company
shall designate by notice.
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(ii) if to the Optionee, to the
Optionee's address appearing in the
Company's 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 principals of conflict of laws thereof).
(g) SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Option Agreement shall not affect the other
provision hereof, and this Agreement shall be construed in all aspects as if
such invalid or unenforceable provisions were omitted.
IN WITNESS WHEREOF, the parties hereto have executed this Option
Agreement as of the day and year first written above.
SONIC AUTOMOTIVE, INC.
By: ______________________________________
Title: ____________________________________
OPTIONEE:
_____________________________________(SEAL)
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