Exhibit 10.34

 

FORM

SONIC AUTOMOTIVE, INC.

2004 STOCK INCENTIVE PLAN

 

PERFORMANCE-BASED

RESTRICTED STOCK AGREEMENT

 

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

 

WHEREAS, the Company has established the Sonic Automotive, Inc. 2004 Stock
Incentive Plan (the “Plan”), pursuant to which the Company may, from time to
time, make grants of restricted shares of the Company’s Common Class A Stock,
par value $.01 per share (the “Common Stock”), to eligible employees and other
individuals providing services to the Company and its Subsidiaries (as defined
in the Plan);

 

WHEREAS, in consideration for the Recipient’s service to the Company and/or its
Subsidiaries, the Company has determined to grant the Recipient restricted
shares of the Company’s Common Stock pursuant to the terms and conditions of the
Plan and this Restricted Stock Agreement; and

 

WHEREAS, the grant of restricted Common Stock also is in consideration for and
conditioned upon the Recipient entering into the Restrictive Covenants and
Confidentiality Agreement that accompanies this Restricted Stock 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, mutual covenants and
agreements hereinafter set forth, the parties hereby agree as follows:

 

1. Grant of Restricted Stock. In consideration for the Recipient’s service to
the Company and/or its Subsidiaries and subject to the terms and conditions set
forth in this Restricted Stock Agreement and the Plan, the Company hereby grants
to the Recipient              (            ) restricted shares of Common Stock
(the “Target Grant”). As used in this Restricted Stock Agreement, the term
“Restricted Stock” shall refer to the Target Grant or the Adjusted Grant
(defined in Section 2 below), as applicable.

 

This grant of Restricted Stock also is subject to the Recipient’s entering into
the accompanying Restrictive Covenants and Confidentiality Agreement. If the
Recipient has previously executed and delivered to the Company the same
Restrictive Covenants and Confidentiality Agreement in connection with a prior
stock incentive award, the Recipient shall be deemed to have satisfied such
condition with respect to this grant of Restricted Stock.

 

2. Performance Conditions. If [insert performance conditions], the Target Grant
shall be immediately and automatically forfeited in its entirety and the
Recipient shall not have any further interest in such shares of Common Stock. If
[insert performance conditions], then the number of restricted shares of Common
Stock subject to this Restricted Stock Agreement shall be adjusted [describe
adjustment] (the “Adjusted Grant”).

 

3. Vesting Conditions. Subject to Section 2 above, the Restricted Stock shall
vest [insert vesting schedule], except as otherwise provided below or elsewhere
in this Restricted Stock Agreement. [Describe effect of “Termination of
Service”]

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4. Restrictions on Transferability. The Recipient may not sell, assign, convey,
pledge, exchange, hypothecate, alienate or otherwise dispose of or transfer the
Restricted Stock in any manner to the extent it remains unvested. No assignment,
pledge or transfer of the Restricted Stock, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise,
shall be effective; but immediately upon any such attempt to assign, pledge or
otherwise transfer the Restricted Stock, the Restricted Stock shall be
forfeited.

 

5. Restrictive Covenants. In the event that the Company determines that the
Recipient 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) any unvested shares of Restricted Stock and any vested shares of Common
Stock that have not yet been delivered to the Recipient shall be immediately and
automatically forfeited and rescinded upon such violation and (b) if any other
shares of Restricted Stock have vested after such violation or within two
(2) years prior to such violation, then (without regard to tax consequences) the
Recipient agrees to return such shares of Common Stock to the Company or if the
Recipient has sold or disposed of such shares, the Recipient agrees to
immediately pay the Company an amount equal to the fair market value of such
shares at the time of such sale or disposition. The Company and its Subsidiaries
shall have the right to offset such amount against any amounts otherwise owed to
the Recipient 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). 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 Recipient for
violations thereof.

 

6. Forfeiture Procedures. In the event of any forfeiture of the Restricted
Stock, such forfeiture shall be automatic and without further act or deed by the
Recipient. Notwithstanding the foregoing, if requested by the Company (or its
agent), the Recipient shall execute such documents (including, without
limitation, a power of attorney in favor of the Company) and take such other
action deemed necessary or desirable by the Company to evidence such forfeiture.

 

7. Tax Matters (Withholding and 83(b) Elections). The Recipient shall pay or
make provision for payment to the Company or its Subsidiary, as applicable,
through payroll or other withholding (which withholding the Recipient hereby
authorizes) or other means acceptable to the Company or its Subsidiary and
permissible under the Plan, the amount necessary to satisfy any federal, state
or local withholding requirements applicable to any taxable event arising in
connection with the Restricted Stock (including, without limitation, vesting
events and the payment of dividends). If other satisfactory arrangements have
not been made by the Recipient, the Company may retain from the Common Stock
otherwise deliverable to the Recipient upon vesting of the Restricted Stock such
number of shares with a fair market value equal to the required withholding
amount. The determination of the withholding amounts due shall be made by the
Company and its Subsidiaries and shall be binding upon the Recipient. The
Company shall not be required to deliver such shares of Common Stock unless the
Recipient has made acceptable arrangements to satisfy any such withholding
requirements. Nothing in this Section shall be construed to impose on the
Company a duty to withhold where applicable law does not require such
withholding.

 

THE RECIPIENT ACKNOWLEDGES THAT THE RECIPIENT IS RESPONSIBLE FOR AND IS ADVISED
TO CONSULT WITH THE RECIPIENT’S OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES
TO THE RECIPIENT THAT MAY ARISE IN CONNECTION WITH THE RESTRICTED STOCK,
INCLUDING THE DECISION TO MAKE AND TIMELY FILE, AND THE CONSEQUENCES OF, ANY
ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE. THE RECIPIENT ALSO
SHALL TIMELY DELIVER A COPY OF ANY SUCH SECTION 83(b) FILING TO THE COMPANY.

 

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8. Book-Entry Form. The shares of Restricted Stock generally shall be evidenced
in book-entry or similar form and maintained by or on behalf of the Company in
such form. In such case, no stock certificates shall be issued and the
applicable restrictions will be noted in the records of the Company and its
transfer agent. Notwithstanding the foregoing, in the discretion of the Company,
a certificate or certificates representing the Restricted Stock may be
registered in the name of the Recipient and held in escrow or other custody by
or on behalf of the Company. In either case, each certificate or book-entry
record may bear such legends as the Company deems appropriate to reflect the
applicable terms and conditions upon the Restricted Stock.

 

9. Rights as Shareholder. Notwithstanding the foregoing vesting and transfer
restrictions that apply to the Restricted Stock, the Recipient generally shall
otherwise have the beneficial ownership of the Restricted Stock and shall be
entitled to exercise the rights and privileges of a shareholder with respect to
the Restricted Stock, including the right to receive dividends (if any) paid
with respect to such shares and the right to vote such shares; provided,
however, that (a) any dividend payments will be made no later than the end of
the calendar year in which the dividends are paid to shareholders of the Common
Stock or, if later, the fifteenth day of the third month following the date the
dividends are paid to shareholders of the Common Stock; and (b) with respect to
any shares of Common Stock that arise from dividends or adjustments under
Section 10 with respect to the Restricted Stock, the Recipient shall have the
same rights and privileges, and shall be subject to the same restrictions, that
apply to the Restricted Stock under this Restricted Stock Agreement and the
Plan.

 

10. Adjustments; Change in Control. The Restricted Stock granted pursuant to
this Restricted Stock Agreement may be subject to adjustment as provided in the
Plan in the event of a merger, consolidation, recapitalization,
reclassification, combination of shares, stock dividend, stock split, or other
relevant changes in the Company’s capital structure. In addition, the Restricted
Stock may become fully vested in connection with a “Change in Control” (as
defined in the Plan).

 

The existence of the Restricted Stock shall 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.

 

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 Recipient pursuant to this Restricted Stock Agreement 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 Restricted Stock 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 Restricted Stock Agreement. The Company may require that the
Recipient make such representations and agreements and furnish such information
as the Company deems appropriate to assure compliance with applicable legal and
regulatory requirements.

 

12. Resolution of Disputes; Interpretation. Any question of interpretation,
dispute or disagreement that arises under, or as a result of, this Restricted
Stock Agreement shall be determined by the Committee in its absolute and
uncontrolled discretion, and any such determination or other interpretation by
the Committee pursuant to this Restricted Stock Agreement shall be final,
binding and conclusive on all parties affected thereby.

 

13. Miscellaneous.

 

(a) Binding on Successors and Representatives. Subject to the transfer
restrictions applicable to the Recipient hereunder and other conditions hereof,
this Restricted Stock Agreement shall be binding

 

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upon and inure to the benefit of the successors and assigns of the Company and
the Recipient’s heirs, executors, administrators and personal representatives;
and the parties agree, for themselves and their successors, representatives and
assigns, to execute any instrument which may be necessary legally to effect the
terms and conditions of this Restricted Stock Agreement.

 

(b) No Employment Rights. Nothing contained in this Restricted Stock Agreement
shall confer upon the Recipient 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 Recipient’s employment by,
or performance of services for, the Company or Subsidiary at any time.

 

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

 

(d) Amendment. Except as otherwise provided below or in the Plan, neither this
Restricted Stock 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. Notwithstanding the foregoing, to the
extent applicable, it is intended that this Restricted Stock Agreement comply
with the provisions of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”). The Company or the Committee may, without obtaining the
Recipient’s written consent, amend this Restricted Stock Agreement in any
respect either deems necessary or advisable to comply with Section 409A of the
Code and applicable regulations and guidance thereunder and/or to prevent this
Restricted Stock Agreement from being subject to Section 409A of the Code.

 

(e) Construction of Terms and Definitions. Any reference herein to the singular
or plural shall be construed as plural or singular whenever the context
requires. Capitalized terms not otherwise defined in this Restricted Stock
Agreement shall have the meanings ascribed to them in the Plan.

 

(f) Notices. All notices required and permitted to be given hereunder shall be
in writing and shall be deemed to have been given (i) if delivered by hand, when
so delivered; (ii) if sent by Federal Express or other 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

6415 Idlewild Road, Suite 109

   6415 Idlewild Road, Suite 109

Charlotte, NC 28212

   Charlotte, NC 28212

If to the Recipient:

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

 

(g) Governing Law. This Restricted Stock 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 Restricted Stock Agreement
shall be instituted only in the state or federal courts sitting in Mecklenburg
County, North Carolina.

 

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(h) Severability. The invalidity or unenforceability of any particular provision
of this Restricted Stock 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.

 

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

 

SONIC AUTOMOTIVE, INC.       RECIPIENT: <NAME> By:               (SEAL) Title:  
                               

 

 

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