Exhibit 10.7

SONIC AUTOMOTIVE, INC.

2012 STOCK INCENTIVE PLAN

STOCK APPRECIATION RIGHTS AGREEMENT

This Stock Appreciation Rights Agreement is entered into as of <Date Granted>
between SONIC AUTOMOTIVE, INC., a Delaware corporation (the “Company”), and
<Name> (the “Participant”).

WHEREAS, the Company has established the Sonic Automotive, Inc. 2012 Stock
Incentive Plan pursuant to which the Company may, from time to time, grant stock
appreciation rights to eligible employees and other individuals providing
services to the Company and its Subsidiaries; and

WHEREAS, in consideration for the Participant’s service to the Company and/or
its Subsidiaries, the Company has determined to grant the Participant stock
appreciation rights pursuant to the terms and conditions of this Stock
Appreciation Rights Agreement (the “SAR Agreement”) and the Plan[, and which
stock appreciation rights also are in consideration for and conditioned upon the
Participant entering into the Restrictive Covenants and Confidentiality
Agreement that accompanies this SAR Agreement (unless such Restrictive Covenants
and Confidentiality Agreement was previously executed and delivered to the
Company in connection with a prior stock incentive award)];

NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements hereinafter set forth, the parties hereby agree as follows:

1. Definitions. For purposes of this SAR Agreement, the following terms have the
meanings set forth in the Plan, as generally defined below. Capitalized terms
not otherwise defined in this SAR Agreement have the meanings indicated in the
Plan.

(a) “Cause” means any act(s) or omission(s) that result in, or that have the
effect of resulting in, (i) the commission of a crime by the Participant
involving moral turpitude, which crime has a material adverse impact on the
Company or any Subsidiary or which is intended to result in the personal
enrichment of the Participant at the expense of the Company or any Subsidiary;
(ii) a material violation of the Participant’s responsibilities; (iii) the
Participant’s gross negligence or willful misconduct; or (iv) the continuous,
willful failure of the Participant to follow the reasonable directives of the
Company’s Board of Directors.

(b) “Committee” means the Compensation Committee of the Company’s Board of
Directors or such other committee that is designated by the Board of Directors
to administer the Plan. In the event that no such Committee exists or is
appointed, “Committee” refers to the Company’s Board of Directors.

(c) “Common Stock” means the Class A Common Stock, par value $.01 per share, of
the Company.

(d) “Disability” means the permanent and total disability of the Participant,
determined in accordance with the Plan.

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(e) “Initial Value” means the initial value assigned to each SAR as set forth in
Section 2 of the SAR Agreement.

(f) “Involuntary Termination Without Cause” means the dismissal of, or the
request for the resignation of, the Participant either (i) 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 actions or omissions that would constitute Cause; or (ii) by a duly
authorized corporate officer of the Company or any Subsidiary, or by the
Company’s Board of Directors, for any reason other than for Cause.

(g) “Participant” means the person to whom the SAR is granted and, as
applicable, the estate, personal representative, beneficiary or other permitted
transferee to whom the SARs may be transferred pursuant to this SAR Agreement by
will or the laws of descent and distribution, or as otherwise permitted by the
Plan.

(h) “Plan” means the Sonic Automotive, Inc. 2012 Stock Incentive Plan, as
amended from time to time.

(i) “SAR” means a stock appreciation right granted to the Participant pursuant
to this SAR Agreement.

(j) “SAR Agreement” means this Stock Appreciation Rights Agreement between the
Company and the Participant.

(k) “SAR Period” means the period beginning on the date of this SAR Agreement
and ending at the close of business <insert number of years – no more than ten
years> years from the date of this SAR Agreement.

(l) “Subsidiary” means a corporation, partnership, limited liability company,
joint venture or other entity in which the Company directly or indirectly
controls more than 50% of the voting power or equity or profits interests.

(m) “Termination of Service” means the termination of the Participant’s service
with the Company and its Subsidiaries. A Participant generally shall be
considered to have incurred a Termination of Service if his or her employer
ceases to be a Subsidiary. All determinations relating to whether the
Participant has incurred a Termination of Service and the effect thereof shall
be made by the Committee, including whether a leave of absence shall constitute
a Termination of Service, subject to applicable law.

2. Grant of SARs. Subject to the terms and conditions set forth in this SAR
Agreement and the Plan [and to the Participant’s entering into the Restrictive
Covenants and Confidentiality Agreement], the Company hereby grants to the
Participant stock appreciation rights with respect to an aggregate of
             shares of Common Stock (the “SARs”). The Initial Value of each SAR
is $            , which is no less than the aggregate Fair Market Value of a
share of Common Stock on the date of grant of the SARs. Once vested, a SAR
entitles the Participant to receive from the Company upon exercise of the SAR an
amount [payable in cash] [payable in shares of Common Stock] equal to the
excess, if any, of the Fair Market Value of one

 

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share of Common Stock on the date of exercise over the Initial Value of the SAR
[include if applicable: ; provided, that the amount payable upon exercise of the
SAR shall not exceed $            ]. The SARs shall terminate at the expiration
of the SAR Period, unless the SARs terminate earlier pursuant to this SAR
Agreement. [Notwithstanding the foregoing, if the Participant has previously
executed and delivered to the Company a Restrictive Covenants and
Confidentiality Agreement in connection with a prior stock incentive award, the
Participant shall be deemed to have satisfied such condition with respect to the
grant of these SARs.]

3. Exercise of SARs. Subject to termination of the SARs, the SARs may be
exercised in accordance with the following:

(a) The SARs shall vest <insert vesting schedule>. Vesting on any such date is
subject to the Participant’s continued service with the Company and its
Subsidiaries through such date.

(b) The SARs will become fully vested and exercisable in connection with a
“Change in Control” (as defined in the Plan).

(c) To the extent vested, the SARs generally will be exercisable until the
expiration of the SAR Period or earlier termination of the SARs.

(d) No less than 100 SARs may be exercised at any time unless the number of
shares purchased at such time is the total number of shares for which the SARs
are then exercisable.

(e) The Participant may exercise the SARs, to the extent vested and exercisable,
by the delivery to the Company (or its designated representative) of a written
notice of exercise (in the form and manner directed by the Company or its
delegate) specifying the number of SARs to be exercised and payment of, or
provision for, all applicable withholding taxes (pursuant to Section 4 below).

(f) Upon the exercise of a vested SAR, the Participant shall receive from the
Company an amount [payable in cash] [payable in shares of Common Stock] equal to
(i) the excess of the Fair Market Value on the date of exercise of one share of
Common Stock, over (ii) the Initial Value of the SAR on the date of grant as set
forth above [include if applicable: ; provided, that the amount payable upon
exercise of the SAR shall not exceed $            ]. [In the event the amount
payable as a result of the exercise of a SAR is settled in shares of Common
Stock and a fractional share of Common Stock would be deliverable upon the
exercise of the SAR, a cash payment shall be made in lieu of such fractional
share of Common Stock.]

(g) The Company may require that the Participant make such representations and
agreements and furnish such information as the Company deems appropriate to
assure compliance with applicable legal and regulatory requirements.

4. Payment of Withholding Taxes. Upon the Participant’s exercise of any SAR, the
Participant shall pay or make provision for payment to the Company, through
payroll or other withholding (which withholding the Participant hereby
authorizes) or other means acceptable to

 

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the Committee and permissible under the Plan, the amount necessary to satisfy
any federal, state or local tax and other withholding requirements that may
arise in connection with or be due upon such exercise. The determination of the
withholding amounts due shall be made by the Company and its Subsidiaries and
shall be binding upon the Participant. If the amount requested is not paid, the
Company may refuse to settle the SAR. Nothing in this Section shall be construed
to impose on the Company and its Subsidiaries a duty to withhold where
applicable law does not require such withholding.

THE PARTICIPANT ACKNOWLEDGES THAT HE OR SHE IS RESPONSIBLE FOR, AND IS ADVISED
TO CONSULT WITH HIS OR HER OWN TAX ADVISORS REGARDING, THE TAX CONSEQUENCES TO
THE PARTICIPANT THAT MAY ARISE IN CONNECTION WITH THE SARS AND THEIR EXERCISE.

5. Termination of Service. If the Participant incurs a Termination of Service
prior to the expiration of the SAR Period, the SARs shall terminate except as
provided below:

(a) The SARs shall terminate sixty (60) days from the Participant’s Termination
of Service for any reason other than Cause, death, Disability or Involuntary
Termination Without Cause.

(b) The SARs shall terminate ninety (90) days from the Participant’s Involuntary
Termination Without Cause.

(c) The SARs shall terminate one (1) year from the Participant’s Termination of
Service due to the Participant’s Disability.

(d) The SARs shall terminate one (1) year from the Participant’s death if it
caused the Participant’s Termination of Service or occurred during the exercise
period following Termination of Service described in subsection (a), (b) or
(c) above.

(e) The SARs shall terminate immediately upon the Participant’s Termination of
Service for Cause.

In the event the SAR remains exercisable for a period of time following
Termination of Service as described above, the SAR may be exercised during such
period of time only to the same extent the SAR was vested and exercisable on the
date of the Participant’s Termination of Service. Notwithstanding any extended
exercise period following a Termination of Service, the SAR will terminate
earlier upon the expiration of the SAR Period.

6. Transferability. Except as otherwise permitted under the Plan, the SARs are
not transferable by the Participant other than by will or the laws of descent
and distribution. No assignment, pledge or transfer of the SARs, or of the
rights represented thereby, whether voluntary or involuntary, by operation of
law or otherwise, except as described above, shall be effective; but immediately
upon any such attempt to assign, pledge or transfer the SARs, the SARs shall
terminate and be of no further force or effect.

7. Company Policies. The SARs and the exercise thereof are subject to the terms
and conditions of any policy regarding clawbacks, forfeitures, or recoupments
adopted by the

 

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Company from time to time. Without limiting the foregoing, by acceptance of the
SARs, the Participant agrees to repay to the Company or any Subsidiary any
amount that may be required to be repaid under any such policy.

8. Restrictive Covenants. In the event that the Company determines that the
Participant has violated the terms of any secrecy, confidentiality,
noncompetition, no-solicit and/or no-hire covenants or clauses contained in any
agreement with the Company and/or one or more Subsidiaries, including but not
limited to any Restrictive Covenants and Confidentiality Agreement (even if such
covenants, clauses or agreements are held invalid or unenforceable), then (a) to
the extent still outstanding, the SARs shall immediately terminate upon such
violation and (b) the Participant shall be required to immediately pay the
Company an amount equal to the Participant’s gain associated with the exercise
of all or any part of the SARs both after such violation and within two
(2) years prior to such violation, with such gain being determined based on the
excess of the fair market value of the Common Stock at exercise over the
exercise price, without regard to any subsequent increase or decrease in the
value of the Common Stock. The Company and its Subsidiaries shall have the right
to offset such gain against any amounts otherwise owed to the Participant by the
Company or a Subsidiary (including, but not limited to, wages or other
compensation, vacation pay, fringe benefits or pursuant to any other
compensatory arrangement); provided, that any payment that constitutes
nonqualified deferred compensation subject to Section 409A of the Code, as
determined by the Company, shall be subject to offset only to the extent such
offset would not give rise to a failure to comply with Section 409A of the Code.
Notwithstanding the foregoing, nothing under this Section shall limit the
Company’s or its Subsidiaries’ remedies under any such agreements containing
secrecy, confidentiality, noncompetition, no-solicit and/or no-hire covenants or
clauses or otherwise against the Participant for violations thereof.

9. Rights as Stockholder. The Participant shall have no rights as a stockholder
of the Company with respect to any shares of Common Stock subject to a SAR
unless and until the Participant shall have become the holder of record of such
Common Stock (if the SAR is payable in shares of Common Stock) following
exercise of the SAR. Subject to Section 10 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 that the Participant shall have become the holder of record of the
shares of Common Stock acquired pursuant to the SARs (if any).

10. Adjustments. Subject to the Plan, in the event of a reorganization,
recapitalization, stock split, stock dividend, extraordinary dividend, spin-off,
combination of shares, merger, consolidation or similar transaction or other
change in corporate capitalization affecting the Common Stock, equitable
adjustments and/or substitutions, as applicable, will be made by the Committee
to prevent the dilution or enlargement of rights, including adjustments to the
Initial Value of the SARs, as provided in the Plan. The Committee also will make
adjustments in its discretion to eliminate any resulting fractional shares.

The existence of the SARs does not affect in any way the authority of the
Company and its stockholders to exercise their corporate rights and powers,
including, but not by way of limitation, the right of the Company to authorize
any adjustment, reclassification, reorganization, or other change in its capital
or business structure, any merger or consolidation of the Company, the
dissolution or liquidation of the Company, the issuance of securities with
preference ahead of or affecting the Common Stock, or any sale or transfer of
all or any part of its business or assets.

 

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11. Securities Laws. 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 Participant upon exercise of the SARs unless and until the Company
has determined that such issuance is either exempt from registration, or is
registered, under the Securities Act of 1933, as amended, and is either exempt
from registration and qualification, or is registered or qualified, as
applicable, under all applicable state securities or “blue sky” laws. Nothing in
this SAR Agreement shall be construed to obligate the Company at any time to
file or maintain a registration statement under the Securities Act of 1933, as
amended, or to effect similar compliance under any applicable state laws with
respect to the Common Stock that may be issued pursuant to this SAR Agreement.

12. Personal Data. The Participant acknowledges that Plan participation and
receipt of awards under the Plan (including the SARs) involve the use and
transfer, in electronic or other form, of personal data about the Participant
between and among the Company, its Subsidiaries and third-party service
providers. This data may include, but is not limited to, the Participant’s name,
home address, telephone number, date of birth, social security number,
information regarding securities of the Company held by such Participant, and
details of awards granted to the Participant under the Plan, including the SARs.
By accepting the SARs, the Participant consents and agrees that the Company and
its Subsidiaries may transfer such data to third parties assisting the Company
in the administration and management of the Plan, the SARs and the Participant’s
participation in the Plan, including any requisite transfer of such data to a
broker or other third party with whom the Company or the Participant may deposit
any shares of Common Stock.

13. Resolution of Disputes; Interpretation. Any question of interpretation,
dispute or disagreement that arises under, or as a result of, this SAR Agreement
shall be determined by the Committee in its absolute and uncontrolled
discretion, and any determination or interpretation by the Committee in
connection with this SAR Agreement shall be final, binding and conclusive on all
parties affected thereby.

14. Miscellaneous.

(a) Binding on Successors and Representatives. Subject to applicable transfer
restrictions applicable to the Participant, this SAR Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the Company and
the Participant’s heirs, executors, administrators, personal representatives,
and assigns; and the parties agree, for themselves and their successors,
representatives and assigns, to execute any instrument that may be necessary
legally to effect the terms and conditions of this SAR Agreement.

(b) No Employment Rights. Nothing contained in this SAR Agreement shall confer
upon the Participant any right to continue in the employ or service of the
Company or any Subsidiary nor interfere with or limit in any way the right of
the Company or a Subsidiary to terminate the Participant’s employment by, or
performance of services for, the Company or Subsidiary at any time.

 

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(c) Entire Agreement. This SAR Agreement together with the Plan constitute the
entire agreement of the parties with respect to the SARs and supersede any
previous agreement, whether written or oral, with respect thereto. This SAR
Agreement has been entered into in compliance with the terms of the Plan;
wherever a conflict may arise between the terms of this SAR Agreement and the
terms of the Plan, the terms of the Plan shall control.

(d) Amendment. Except as otherwise provided in the Plan, neither this SAR
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 agreed to by each of the parties hereto or their
respective successors and assigns.

(e) Construction of Terms. Any reference herein to the singular or plural shall
be construed as plural or singular whenever the context requires.

(f) Notices. Except as otherwise provided in Section 3, all notices required and
permitted to be given hereunder shall be in writing and notices shall be deemed
to have been given (i) if delivered by hand, when so delivered, (ii) if sent by
overnight express service, one (1) business day after delivery to such service,
or (iii) if mailed by certified or registered mail, return receipt requested,
three (3) days after delivery to the post office. In each case, all notices
shall be addressed to the intended recipient as follows or at such other address
as is provided by either party by notice to the other:

 

If to the Company:    With a copy to: Sonic Automotive, Inc.    Sonic
Automotive, Inc. Attention: Chief Financial Officer    Attention: General
Counsel 4401 Colwick Road    4401 Colwick Road Charlotte, NC 28211    Charlotte,
NC 28211

If to the Participant:

The Participant’s address appearing in the Company’s records.

(g) Governing Law. This SAR Agreement shall be governed by, and construed in
accordance with, the laws of the State of North Carolina, without regard to its
principles of conflict of laws. The parties agree that any action, suit or
proceeding arising out of or related to this SAR Agreement shall be instituted
in the state or federal courts sitting in Mecklenburg County, North Carolina.

(h) Severability. The invalidity or unenforceability of any particular provision
of this SAR Agreement shall not affect the other provisions hereof, and the
Committee may elect in its discretion to construe such invalid or unenforceable
provision in a manner which conforms to applicable law or as if such provision
was omitted.

(i) Electronic Delivery and Acknowledgement. The Participant acknowledges and
agrees that the Company may, in its discretion, deliver documents related to the
SARs and participation in the Plan (including, without limitation, this SAR
Agreement, Plan

 

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documents and disclosures that may be required by the Securities and Exchange
Commission) by electronic means, including through an on-line or electronic
system (including by posting them on a website) established and maintained by
the Company or a third party designated by the Company, and the Participant
consents to receive documents in such manner. Regardless of whether the Company
delivers and permits or requires acceptance of this SAR Agreement
electronically, the Participant agrees to be bound by all terms and provisions
of this SAR Agreement and the Plan.

IN WITNESS WHEREOF, the parties hereto have executed this SAR Agreement
effective as of the day and year first written above.

 

SONIC AUTOMOTIVE, INC.     PARTICIPANT: <NAME> By:  

 

   

 

Title:  

 

   

 

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