EXHIBIT 4.3
NONSTATUTORY STOCK OPTION AGREEMENT AND GRANT
PURSUANT TO THE
SONIC AUTOMOTIVE, INC. 1997 STOCK OPTION PLAN
This Nonstatutory Stock Option Agreement and Xxxxx is entered into as
of the [DATE] between SONIC AUTOMOTIVE, INC., a Delaware corporation (the
"Company"), and [NAME] (the "Optionee").
WHEREAS, the Company and its stockholders have approved the Sonic
Automotive, Inc. 1997 Stock Option Plan (the "Plan"), pursuant to which the
Company may, from time to time, make awards of Options (as defined below) and
enter into Nonstatutory Stock Option Agreements with, eligible employees,
directors, consultants and other individuals providing services to the Company
or any Subsidiary (as defined below);
WHEREAS, pursuant to the Plan, the Company has determined to grant to
the Optionee an Option to purchase Common Stock (as defined below) of the
Company, which Option shall be subject to the terms and conditions of this
Nonstatutory Stock Option Agreement and Grant;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereby agree as
follows:
1. DEFINITIONS.
For purposes of this Nonstatutory Stock Option Agreement and Grant, the
following terms shall have the meanings indicated:
(a) "ACT" shall mean the Securities Act of 1933, as amended.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CAUSE" shall mean any act, action or series of acts or
actions or any omission, omissions, or series of omissions which result in, or
which have the effect of resulting in, (i) the commission of a crime by the
Optionee involving moral turpitude, which crime has a material adverse impact on
the Company or any Subsidiary, (ii) gross negligence or willful misconduct which
is continuous and results in material damage to the Company or any Subsidiary,
or (iii) the continuous, willful failure of the person in question to follow the
reasonable directives of the Board of Directors.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as
amended, any successor revenue laws of the United States and the rules and
regulations promulgated thereunder.
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(e) "COMMITTEE" shall mean the committee of members of the
Board that is designated by the Board to administer the Plan. In the event that
no such Committee exists or is appointed, "COMMITTEE" shall mean the Board.
(f) "COMMON STOCK" shall mean the Class A Common Stock, par
value $.01 per share, of the Company.
(g) "DISABILITY" shall mean the inability or failure of a
person to perform those duties for the Company or any Subsidiary traditionally
assigned to and performed by such person because of the person's then-existing
physical or mental condition, impairment or incapacity. The fact of disability
shall be determined by the Committee, which may consider such evidence as it
considers desirable under the circumstances, the determination of which shall be
final and binding upon all parties.
(h) "EXERCISE DATE" shall mean the business day, during the
Option Period, upon which the Optionee delivers to the Company the written
notice and consideration contemplated by Section 5(c) of the Plan.
(i) "FAIR MARKET VALUE" shall mean, with respect to the Common
Stock on any day, its market value determined as provided in Section 5(c) of the
Plan.
(j) "FAMILY MEMBER" shall mean any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships, of the
Optionee or any person sharing the Optionee's household (other than a tenant or
employee).
(k) "INVOLUNTARY TERMINATION WITHOUT CAUSE" shall mean either
(i) the dismissal of, or the request for the resignation of, a person, by court
order, order of any court-appointed liquidator or trustee of the Company, or the
order or request of any creditors' committee of the Company constituted under
the federal bankruptcy laws, provided that such order or request contains no
specific reference to Cause; or (ii) the dismissal of, or the request for the
resignation of, a person, by a duly constituted corporate officer of the Company
or any Subsidiary, or by the Board, for any reason other than for Cause.
(l) "OPTION" shall mean the option to purchase shares of
Common Stock granted to the Optionee pursuant to this Option Agreement.
(m) "OPTION AGREEMENT" shall mean this Nonstatutory Stock
Option Agreement and Grant between the Company and the Optionee by which the
Option is granted to the Optionee pursuant to the Plan.
(n) "OPTION PERIOD" shall mean the period commencing [(DATE)
(__MONTHS/YEAR(S) FROM THE DATE OF THIS OPTION AGREEMENT)] and ending at the
close of business ten years from the date of this Option Agreement or such
earlier date as when this Option Agreement may be terminated by its terms.
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(o) "OPTION SHARES" shall mean the shares of Common Stock
purchased upon exercise of the Option.
(p) "OPTIONEE" shall mean the individual executing this Option
Agreement and, as applicable, the estate, personal representative, beneficiary
or Permitted Transferee to whom this Option may be transferred pursuant to this
Option Agreement by will, by the laws of descent and distribution, pursuant to a
qualified domestic relations order as defined in the Code, or as otherwise
permitted by paragraph 3(f) below.
(q) "PERMITTED TRANSFEREE" shall mean a Family Member, a trust
in which Family Members have more than fifty percent of the beneficial interest,
a foundation in which Family Members (or the Optionee) control the management of
assets, and any other entity in which Family Members (or the Optionee) own more
than fifty percent of the voting interests.
(r) "PLAN" shall mean the Sonic Automotive, Inc. 1997 Stock
Option Plan, amended and restated as of June 8, 1999, and any amendments
thereto.
(s) "RETIREMENT" shall mean, with respect to the Optionee,
retirement from the Company and any Subsidiary in accordance with the Company's
and/or Subsidiary's retirement policy as may be in effect from time to time.
(t) "SUBSIDIARY" shall mean any subsidiary corporation of the
Company as defined in Sections 424(f) and 424(g) of the Code and any other
subsidiary entity of the Company.
(u) "TERMINATION" shall mean the cessation, for any reason, of
the employer-employee relationship (within the meaning of Section 4 of the Plan)
between the Company and any Subsidiary and the Optionee.
(v) "TOTAL OPTION PRICE" shall mean the consideration payable
to the Company by the Optionee upon exercise of the Option pursuant to Section
5(c) of the Plan.
2. GRANT OF OPTION. Effective upon the date hereof, and subject to the
terms and conditions set forth herein, the Company hereby grants to the Optionee
the Option to purchase from the Company, at an exercise price of $[PRICE PER
SHARE] per share, up to but not exceeding in the aggregate [NUMBER OF SHARES]
shares of Common Stock.
3. EXERCISE OF OPTION. The Option granted in paragraph 2 above may be
exercised as follows:
(a) The Option shall be exercisable during the Option Period
[VESTING SCHEDULE -- example: in three equal annual installments, with the
Option becoming exercisable one year from the date hereof with respect to
one-third of the total number of shares covered by the Option, and the Option
becoming exercisable two years from the date hereof with respect to another
one-third of the total number of shares covered by the Option, and the Option
becoming exercisable three years from the date hereof with respect to the final
one-third of the total number of shares covered by the Option]. The Option shall
terminate on the expiration of the Option Period, if not earlier terminated;
provided that, in the event of the Optionee's Retirement, the Committee in its
sole
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and absolute discretion may accelerate the Exercise Date, which acceleration
may, in the sole discretion of the Committee, be subject to further terms and
conditions mandated by the Committee.
(b) No less than 100 shares of Common Stock may be purchased
on any Exercise Date unless the number of shares purchased at such time is the
total number of shares in respect of which the Option is then exercisable.
(c) If at any time and for any reason the Option covers a
fraction of a share, then, upon exercise of the Option, the Optionee shall
receive the Fair Market Value of such fractional share in cash.
(d) The Option shall be exercised by the Optionee in
accordance with the terms and conditions of Section 5(c) of the Plan.
(e) As soon as administratively practicable after the Exercise
Date, subject to the receipt of payment of the Total Option Price and of any
payment in cash of federal, state or local income tax withholding or other
employment tax that may be due upon the issuance of the Option Shares as
determined and computed by the Company pursuant to paragraph 6 below, the
Company shall issue to the Optionee the number of shares with respect to which
such Option shall be so exercised and shall deliver to the Optionee a
certificate or certificates therefor.
(f) The Option is not transferable by the Optionee otherwise
than (i) by will or the laws of descent and distribution; (ii) pursuant to a
qualified domestic relations order as defined in the Code; or (iii) by transfer
without consideration to a Permitted Transferee. In the case of a transfer
pursuant to (iii) above, the Committee must be notified in advance in writing of
the terms of any proposed transfer to a Permitted Transferee and such transfers
may occur only with the consent of and subject to the rules and conditions
imposed by the Committee. The Permitted Transferee and the Option shall continue
to be subject to the same terms and conditions as were applicable immediately
prior to the transfer. The provisions of the Plan and this Option Agreement
shall continue to apply with respect to the Optionee, and the Option shall be
exercisable by the Permitted Transferee only to the extent and for the periods
specified herein. The Optionee shall remain subject to withholding taxes upon
exercise of any transferred Option by the Permitted Transferee. No assignment or
transfer of the Option, or of the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise, except as described above,
shall vest in the assignee or transferee any interest or right herein
whatsoever; but immediately upon any attempt to assign or transfer this Option,
except as expressly permitted herein, the same shall terminate and be of no
force or effect.
4. TERMINATION. The Option granted hereby shall terminate and be of no
force or effect upon and following the occurrence of any of the following
events:
(a) The expiration of the Option Period.
(b) The Optionee's Termination for any reason other than the
Optionee's death, Disability or Involuntary Termination Without Cause.
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(c) The expiration of three months after the date of the
Optionee's Involuntary Termination Without Cause. During such three-month
period, the Optionee shall have the right to exercise the Option hereby granted
in accordance with the terms of this Option Agreement, but only to the extent
the Option was exercisable on the date of the Optionee's Involuntary Termination
Without Cause.
(d) The expiration of twelve months after the Optionee's
Termination as a result of the Optionee's Disability. During such twelve-month
period, the Optionee shall have the right to exercise the Option hereby granted
in accordance with the terms of this Option Agreement, but only to the extent
the Option was exercisable on the date of the Optionee's Termination.
(e) In the event of the Optionee's Termination as a result of
the Optionee's death, or, in the event of the death of the Optionee after
Termination described in subparagraph (c) or (d), above, but within the
three-month or twelve-month period described in subparagraph (c) or (d), above,
upon the expiration of twelve months following the Optionee's death. During such
extended period, the Option may be exercised by the person or persons to whom
the deceased Optionee's rights under the Option Agreement shall pass by will or
by the laws of descent and distribution, but only to the extent the Option was
exercisable on the date of the Optionee's Termination.
(f) To the extent set forth in paragraph 7 below, upon the
dissolution, liquidation, consolidation or merger of the Company, and, to the
extent set forth in subparagraph 3(f) above, upon an attempted assignment or
transfer of the Option otherwise than as expressly permitted herein.
Any determination made by the Committee with respect to any matter
referred to in this paragraph 4 shall be final and conclusive on all persons
affected thereby.
5. RIGHTS AS STOCKHOLDER. An Optionee shall have no rights as a
stockholder of the Company with respect to any shares underlying the Option
until the day of the issuance of a stock certificate to him or her for those
shares upon payment of the exercise price in accordance with the terms and
provisions hereof. Subject to paragraph 7 below, no adjustments shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such stock certificate is issued.
6. PAYMENT OF WITHHOLDING TAXES. Upon the Optionee's exercise of his or
her Option with respect to any of the Option Shares in accordance with the
provisions of paragraph 3 above, the Optionee shall pay to the Company upon
exercise of the Option the amount of any federal, state or local income tax
withholding or other employment tax that may be due upon such exercise. The
determination of the amount of any such federal, state or local income tax
withholding or other employment tax due in such event shall be made by the
Company and shall be binding upon the Optionee. If the amount requested is not
paid, the Company may refuse to issue the Common Stock. Nothing in this
paragraph shall be construed to impose on the Company a duty to withhold where
applicable law does not require such withholding.
7. RECAPITALIZATION; REORGANIZATION. The shares underlying this Option
are shares of Common Stock as constituted on the date of this Agreement, but if,
during the Option Period and prior to the delivery by the Company of all of the
shares of Common Stock with respect to which this Option is granted, the Company
shall effect a subdivision or consolidation of shares or other
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capital readjustment, the payment of a stock dividend or some other increase or
decrease in the number of shares of Common Stock outstanding, without receiving
compensation therefor in money, services or property, then, (a) in the event of
any increase in the number of such shares outstanding, the number of shares of
Common Stock then remaining subject to this Option shall be proportionately
increased (except that any fraction of a share resulting from any such
adjustment shall be excluded from the operation of this Option Agreement), and
the exercise price per share shall be proportionately reduced, and, (b) in the
event of a reduction in the number of such shares outstanding, the number of
shares of Common Stock then remaining subject to this Option shall be
proportionately reduced (except that any fractional share resulting from any
such adjustment shall be excluded from the operation of this Option Agreement),
and the exercise price per share shall be proportionately increased.
In the event of a merger of one or more corporations into the Company
with respect to which the Company shall be the surviving or resulting
corporation, the Optionee shall, at no additional cost, be entitled upon any
exercise of this Option to receive (subject to any required action by
shareholders), in lieu of the number of shares as to which this Option shall
then be so exercised, the number and class of shares of stock or other
securities to which the Optionee would have been entitled pursuant to the terms
of the agreement of merger if, immediately prior to such merger, the Optionee
had been the holder of record of a number of shares of Common Stock of the
Company equal to the number of shares as to which such Option shall be so
exercised; provided, however, that, anything herein contained to the contrary
notwithstanding, upon the occurrence of any event described in Section 5(g) of
the Plan, this Option shall be subject to acceleration as provided in such
Section 5(g).
In the event of a change in the Common Stock as presently constituted,
which change is limited to a change of all of the authorized shares with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.
The existence of this Option shall not affect in any way the right or
power of the Company or its shareholders to make or authorize any or all
adjustments, dividends, stock dividends, recapitalization, reorganizations or
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting, the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
8. NO REGISTRATION RIGHTS. Anything in this Option Agreement to the
contrary notwithstanding, if, at any time specified herein for the issuance of
Option Shares, any law, regulation or requirements of any governmental authority
having jurisdiction in the premises shall require either the Company or the
Optionee, in the opinion of the Company's counsel, to take any action in
connection with the shares then to be issued, the issuance of such shares shall
be deferred until such action shall have been taken. Nothing in this Option
Agreement shall be construed to obligate the Company at any time to file or
maintain the effectiveness of a registration statement under the Act, or under
the securities laws of any state or other jurisdiction, or to take or cause to
be taken any action which may be necessary in order to provide an exemption from
the registration
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requirements of the Act under Rule 144 or any other exemption with respect to
the Option Shares or otherwise for resale or other transfer by the Optionee (or
by the executor or administrator of such Optionee's estate or a person who is a
Permitted Transferee or who acquired the Option or any Option Shares or other
rights by bequest or inheritance or by reason of the death of the Optionee) as a
result of the exercise of an Option granted pursuant to this Option Agreement.
9. RESOLUTION OF DISPUTES. Any dispute or disagreement that arises
under, or as a result of, or pursuant to, this Option Agreement shall be
determined by the Committee in its absolute and uncontrolled discretion, and any
such determination or other determination by the Committee under or pursuant to
this Option Agreement, and any interpretation by the Committee of the terms of
this Option Agreement, shall be final, binding and conclusive on all parties
affected thereby.
10. COMPLIANCE WITH THE ACT. Notwithstanding any provision herein to
the contrary or in the Plan, the Company shall be under no obligation to issue
any shares of Common Stock to the Optionee upon exercise of the Option granted
hereby unless and until the Company has determined that such issuance is either
exempt from registration, or is registered, under the Act and is either exempt
from registration and qualification, or is registered or qualified, as
applicable, under all applicable state securities or "blue sky" laws.
11. MISCELLANEOUS.
(a) BINDING ON SUCCESSORS AND REPRESENTATIVES. This Option
Agreement shall be binding not only upon the parties, but also upon their heirs,
executors, administrators, personal representatives, successors and assigns
(including any transferee of a party to this Agreement); and the parties agree,
for themselves and their successors, assigns (including any transferee of a
party to this Agreement) and representatives, to execute any instrument which
may be necessary legally to effect the terms and conditions of this Option
Agreement.
(b) ENTIRE AGREEMENT. This Option Agreement, together with the
Plan, constitutes the entire agreement of the parties with respect to the Option
and supersedes any previous agreement, whether written or oral, with respect
thereto. This Option Agreement has been entered into in compliance with the
terms of the Plan; wherever a conflict may arise between the terms of this
Option Agreement and the terms of the Plan, the terms of the Plan shall control.
(c) AMENDMENT. Neither this Option Agreement nor any of the
terms and conditions herein set forth may be altered or amended orally, and any
such alteration or amendment shall be effective only when reduced to writing and
signed by each of the parties or their respective successors and assigns.
(d) CONSTRUCTION OF TERMS. Any reference herein to the
singular or plural shall be construed as plural or singular whenever the context
requires.
(e) NOTICES. All notices, requests and amendments under this
Option Agreement shall be in writing, and notices shall be deemed to have been
given when personally delivered or sent prepaid registered mail:
(i) if to the Company, at the following address:
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Sonic Automotive, Inc.
0000 Xxxx Xxxxxxxxxxxx Xxxxxxxxx
P.O. Box 18747
Charlotte, North Carolina 28218
Attention: Chief Financial Officer
or at such other address as the Company shall designate by notice.
(ii) if to the Optionee, to the Optionee's
address appearing in the Company's
employment records, or at such other address
as the Optionee shall designate by notice.
(f) GOVERNING LAW. This Option Agreement shall be governed by,
and construed in accordance with, the laws of the State of North Carolina
(excluding the principles of conflict of laws thereof).
(g) SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Option Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provisions were omitted.
(h) NOT AN INCENTIVE STOCK OPTION. The Option granted
hereunder is not intended to be an "incentive stock option" under Section 422 of
the Code.
IN WITNESS WHEREOF, the parties hereto have executed this Option
Agreement as of the day and year first written above.
SONIC AUTOMOTIVE, INC.
By: _____________________________________
OPTIONEE: [NAME]
____________________________________(SEAL)
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