Exhibit 4.3
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NONSTATUTORY STOCK OPTION AGREEMENT AND GRANT
PURSUANT TO
SONIC AUTOMOTIVE, INC. 1997 STOCK OPTION PLAN
This Nonstatutory Stock Option Agreement and Grant is entered into as of
this ___ day of _____________, 199__ between Sonic Automotive, Inc., a Delaware
corporation (the "Company"), and __________________ (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 of the
Company or of 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:
(1) "Act" shall mean the Securities Act of 1933, as amended.
(2) "Board" shall mean the Board of Directors of the Company.
(3) "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.
(4) "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.
(5) "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.
(6) "Common Stock" shall mean the Class A Common Stock, par value $.01 per
share, of the Company.
(7) "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.
(8) "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.
(9) "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.
(10) "Immediate Family" shall mean the Optionee's spouse, children, present or
former stepchildren, grandchildren, present or former stepgrandchildren,
parents, present or former stepparents, grandparents, siblings (including half
brothers and sisters), in-laws and individuals whose relationship with the
Optionee arises due to legal adoption.
(11) "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.
(12) "Option" shall mean the option to purchase shares of Common Stock granted
to the Optionee pursuant to this Option Agreement.
(13) "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.
(14) "Option Period" shall mean the period commencing one year 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.
(15) "Option Shares" shall mean the shares of Common Stock purchased upon
exercise of the Option.
(16) "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
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distribution, pursuant to a domestic relations order as defined in the Code, or
as otherwise permitted by paragraph 3(f) below.
(17) "Permitted Transferee" shall mean a member of the Optionee's Immediate
Family, a trust established solely for the benefit of one or more members of the
Optionee's Immediate Family or a partnership or limited liability company of
which the only individuals or entities who are or could be partners or
shareholders are members of the Optionee's Immediate Family and/or a trust
established solely for the benefit of one or more members of the Optionee's
Immediate Family.
(18) "Plan" shall mean the Sonic Automotive, Inc. 1997 Stock Option Plan and any
amendments thereto.
(19) "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.
(20) "Subsidiary" shall mean any subsidiary corporation of Sonic Automotive,
Inc. as defined in Sections 424(f) and 424(g) of the Code.
(21) "Termination" shall mean the cessation, for any reason, of the
employer-employee relationship between the Company and any Subsidiary and the
Optionee.
(22) "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 $____ per share, up
to but not exceeding in the aggregate _________ shares of Common Stock.
3. Exercise of Option. The Option granted in paragraph 2 above may be exercised
as follows:
(1) The Option shall be exercisable during the Option Period in three equal
annual installments, with one-third of the total number of shares covered by the
Option becoming exercisable one year from the date hereof, another one-third of
the total number of shares covered by the Option becoming exercisable two years
from the date hereof, and the final one-third of the total number of shares
covered by the Option becoming exercisable three years from the date hereof. 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 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.
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(2) 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.
(3) 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.
(4) The Option shall be exercised by the Optionee in accordance with the terms
and conditions of Section 5(c) of the Plan.
(5) 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 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.
(6) The Option is not transferable by the Optionee otherwise than (i) by will or
the laws of descent and distribution; (ii) pursuant to a domestic relations
order as defined in the Code; or (iii) by transfer without consideration to a
Permitted Transferee, with the consent and subject to the rules of the Committee
and provided that the Committee is notified in advance in writing of the terms
and conditions of any proposed transfer to a Permitted Transferee and the
Committee determines that the proposed transfer complies with the requirements
of the Plan and this Nonstatutory Stock Option Agreement. No assignment or
transfer of this 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:
(1) The expiration of the Option Period.
(2) The Termination of the Optionee's employment for any reason other than the
Optionee's death, Disability or Involuntary Termination Without Cause.
(3) 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 Termination of the Optionee's employment.
(4) The expiration of twelve months after Termination of the Optionee's
employment with the Company and any Subsidiary as a result of the Optionee's
Disability. During
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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 Termination
of the Optionee's employment.
(5) In the event of the death of the Optionee while in the employ of the Company
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 Termination of the Optionee's employment.
(6) 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.
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 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
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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 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 a
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.
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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.
(1) 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 and representatives, to execute any instrument
which may be necessary legally to effect the terms and conditions of this Option
Agreement.
(2) 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.
(3) 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.
(4) Construction of Terms. Any reference herein to the singular or plural shall
be construed as plural or singular whenever the context requires.
(5) 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:
(1) if to the Company, at the following address:
Sonic Automotive, Inc.
0000 Xxxx Xxxxxxxxxxxx Xxxxxxxxx
P.O. Box 18747
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
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Attention: Chief Financial Officer
or at such other address as the Company shall designate by notice.
(2) 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.
(6) 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).
(7) 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.
(8) 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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