Document:

exv10w46

Exhibit 10.46

Sonic Automotive, Inc.

Supplemental Executive Retirement Plan 

“SERP”

Effective January 1, 2010

 

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	 	 	 	 	 

	ARTICLE I
	 	Establishment and Purpose

	 	 	1	 
	 
	ARTICLE II
	 	Definitions

	 	 	1	 
	 
	ARTICLE III
	 	Eligibility and Participation

	 	 	8	 
	 
	ARTICLE IV
	 	Vesting

	 	 	8	 
	 
	ARTICLE V
	 	Benefits

	 	 	8	 
	 
	ARTICLE VI
	 	Administration

	 	 	14	 
	 
	ARTICLE VII
	 	Amendment and Termination

	 	 	15	 
	 
	ARTICLE VIII
	 	Informal Funding

	 	 	15	 
	 
	ARTICLE IX
	 	Claims

	 	 	16	 
	 
	ARTICLE X
	 	General Provisions

	 	 	20	 

Schedule A

Schedule A-1

 

 

ARTICLE I

Establishment and Purpose

Sonic Automotive, Inc. (the “Company”) hereby adopts the Sonic Automotive, Inc. Supplemental
Executive Retirement Plan, a nonqualified defined benefit plan (the “Plan” or the “SERP”),
effective as of the Effective Date.

The purpose of the Plan is to attract and retain key employees by providing Participants with a
retirement benefit in addition to the benefits provided by the Company’s tax-qualified retirement
and other nonqualified deferred compensation plans. The Plan is not intended to meet the
qualification requirements of Code Section 401(a), but is intended to meet the requirements of Code
Section 409A, and shall be operated and interpreted consistent with that intent.

The Plan constitutes an unsecured promise by the Employer to pay benefits in the future.
Participants in the Plan shall have the status of general unsecured creditors of the Company (or
other Employer, as applicable). Each Employer shall be solely responsible for payment of the
benefits of its participating Employees and their Beneficiaries. The Plan is unfunded for Federal
tax purposes and is intended to be an unfunded arrangement for eligible employees who are part of a
select group of management or highly compensated employees of the Employer within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Any amounts set aside to defray the liabilities
of the Company or other Employer under this Plan will remain the general assets of the Company or
other Employer, as the case may be, and shall remain subject to the claims of the Company’s or
other Employer’s creditors until such amounts are distributed to the Participants.

ARTICLE II

Definitions

	2.1	 	Accrued Benefit. Accrued Benefit means an annual payment made to a Participant or,
if applicable, a Beneficiary or Beneficiaries, to the extent provided under the Plan including
Schedule A, attached hereto.
	 
	2.2	 	Annual Salary. Annual Salary means the highest annualized base salary paid to a
Participant by the Company or other Employer during a Plan Year, or if applicable, a partial
Plan Year.
	 
	2.3	 	Beneficiary. Beneficiary means a natural
person, estate, or trust designated by a Participant to receive
payments to which a Beneficiary is entitled in accordance with
provisions of the Plan. The Participant’s spouse, if living, otherwise
the Participant’s estate, shall be the Beneficiary if: (i) the
Participant has failed to properly designate a Beneficiary, or (ii)
all designated Beneficiaries have predeceased the Participant.
Notwithstanding the foregoing, to the extent provided in Schedule A,
in the event of the Participant’s death during the “benefit duration
period” described in Schedule A, only the Participant’s surviving
spouse (if any) may be the Beneficiary.

 

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	A former spouse shall have no interest under the Plan, as Beneficiary
or otherwise, unless the Participant designates such person as a
Beneficiary after dissolution of the marriage, except to the extent
provided under the terms of a domestic relations order as described in
Code Section 414(p)(1)(B).
	 
	2.4	 	Cause. Cause means:

     (i) a material breach by the Participant of his or her obligations set forth in any
employment agreement (other than due to Disability) with the Company or other Employer,
which material breach is not remedied within five (5) business days after receipt of written
notice specifying such a breach;

     (ii) a breach by the Participant of the terms of any secrecy, confidentiality,
noncompetition, no-solicit, no-hire, nondisparagement and/or other restrictive covenants or
clauses contained in any agreement with the Company, another Employer, and/or a subsidiary
or affiliate of either;

     (iii) the conviction of the Participant of a felony;

     (iv) actions by the Participant involving moral turpitude;

     (v) willful failure of the Participant to comply with reasonable and lawful directives
of the Company’s Board of Directors or the Participant’s superiors;

     (vi) chronic absenteeism of the Participant;

     (vii) willful or material misconduct of the Participant, including without limitation,
misconduct involving fraud or dishonesty in the performance of the Participant’s covenants,
duties or obligations in connection with his job or conduct which is deemed, in the sole
judgment of the Compensation Committee, to be injurious to the Company or any of its
subsidiaries or affiliates;

     (viii) the Participant’s illegal use of controlled substances; or

     (ix) to the extent applicable, the final and non-appealable determination by a court
of competent jurisdiction that the Participant willfully and knowingly filed a fraudulent
certification under Section 302 of the Sarbanes Oxley Act.

	2.5	 	Change in Control. Change in Control means any of the following events: (i) a change
in the ownership of the Company, (ii) a change in the effective control of the Company, or
(iii) a change in the ownership of a substantial portion of the assets of the Company.

- 2 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	For purposes of this Section, a change in the ownership of the Company occurs on the date on
which any one person, or more than one person acting as a group (other than (a) Sonic
Financial Corporation, O. Bruton Smith or B. Scott Smith, (b) any spouse, immediate family
member or lineal descendent of O. Bruton Smith or B. Scott Smith (collectively with O.
Bruton Smith or B. Scott Smith, a “Smith Family Member”) or (c) any trust, corporation,
partnership or other entity the beneficiaries, stockholders, partners or owners of which are
Smith Family Members (the persons and entities in (a), (b) and (c) referred to, individually
and collectively, as the “Smith Group”)) acquires ownership of stock of the Company that,
together with stock held by such person or group, constitutes more than 50% of the total
fair market value or total voting power of the stock of the Company.
	 
	 	 	A change in the effective control of the Company occurs on the date on which either: (i) a
person, or more than one person acting as a group, (in either case, other than members of
the Smith Group) acquires ownership of stock of the Company possessing 30% or more of the
total voting power of the stock of the Company, taking into account all such stock acquired
during the 12-month period ending on the date of the most recent acquisition, or (ii) a
majority of the members of the Company’s Board of Directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority of the
members of such Board of Directors prior to the date of the appointment or election, but
only if no other corporation is a majority shareholder of the Company.
	 
	 	 	A change in the ownership of a substantial portion of assets occurs on the date on which any
one person, or more than one person acting as a group, other than members of the Smith
Group or any other person or group of persons that is related to the Company, acquires
assets from the Company that have a total gross fair market value equal to or more than 50%
of the total gross fair market value of all of the assets of the Company immediately prior
to such acquisition or acquisitions, taking into account all such assets acquired during the
12-month period ending on the date of the most recent acquisition.
	 
	 	 	The determination as to the occurrence of a Change in Control shall be based on objective
facts and in accordance with the requirements of Code Section 409A.
	 
	2.6	 	Claimant. Claimant means a Participant or Beneficiary filing a claim under Article
IX of this Plan.
	 
	2.7	 	Code. Code means the Internal Revenue Code of 1986, as amended from time to time.
Reference to any section of the Code or Treasury Regulations shall be deemed to include
reference to any amendments or successor provisions thereto.

- 3 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	2.8	 	Code Section 409A. Code Section 409A means Section 409A of the Code, and regulations
and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.
	 
	2.9	 	Committee. Committee means the Compensation Committee of the Board of Directors of
the Company.
	 
	2.10	 	Company. Company means Sonic Automotive, Inc.
	 
	2.11	 	Death Benefit. Death Benefit means the Accrued Benefit payable pursuant to the
provisions of Article V of the Plan to a Participant’s Beneficiary(ies) upon the Participant’s
death.
	 
	2.12	 	Disability Benefit. Disability Benefit means the Accrued Benefit payable pursuant to
the provisions of Article V of the Plan to a Participant in the event such Participant is
determined to be Disabled.
	 
	2.13	 	Disabled (or Disability). Disabled or Disability means that a Participant is, by
reason of any medically-determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less than 12 months:
(i) unable to engage in any substantial gainful activity, or (ii) receiving income replacement
benefits for a period of not less than three months under an accident and health plan covering
employees of the Participant’s Employer. The Committee shall determine whether a Participant
is Disabled in accordance with Code Section 409A; provided, however, that a Participant shall
be deemed to be Disabled if determined to be totally disabled by the Social Security
Administration.
	 
	2.14	 	Effective Date. Effective Date means January 1, 2010.
	 
	2.15	 	Eligible Employee. Eligible Employee means a member of a “select group of management
or highly compensated employees” of the Company and other Employers within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as determined by the Committee from time to
time in its sole discretion.
	 
	2.16	 	Employee. Employee means a common-law employee of an Employer.
	 
	2.17	 	Employer. Employer means, with respect to Employees it employs, the Company and all
subsidiaries and affiliates of the Company.
	 
	2.18	 	ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

- 4 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	2.19	 	Final Average Salary. Final Average Salary means the average of the highest three
Annual Salaries during the last five Plan Years prior to the Participant’s Separation from
Service. In the event that a Participant has fewer than three Plan Years of employment with
the Company and/or other Employer, Final Average Salary means the average of the Annual
Salaries paid to such Participant during such Plan Years of employment (including one, if
applicable).
	 
	2.20	 	Normal Retirement. Normal Retirement means Separation from Service on or after
attaining age sixty-five (65), or after attaining age fifty-five (55) so long as the
Participant has at least ten (10) Years of Service.
	 
	2.21	 	Participant. Participant means an Eligible Employee who has received notification of
his or her eligibility to receive benefits under the Plan pursuant to Section 3.1 and any
other person with an Accrued Benefit greater than zero, regardless of whether such individual
continues to be an Eligible Employee. A Participant’s continued participation in the Plan
shall be governed by Section 3.2 of the Plan. Participants are designated as “Tier 1,” “Tier
2,” or “Tier 3” Participants by the Committee upon notification of eligibility.
	 
	2.22	 	Payment Schedule. Payment Schedule means the time and form of payment in which
payment of a benefit will be made under the Plan, as specified in Article V of the Plan.
	 
	2.23	 	Plan. Generally, the term Plan means the “Sonic Automotive, Inc. Supplemental
Executive Retirement Plan” or the “Sonic Automotive, Inc. SERP” as documented herein and as
may be amended from time to time hereafter. However, to the extent permitted or required under
Code Section 409A, the term Plan may in the appropriate context also mean a portion of the
Plan that is treated as a single plan under Treas. Reg. Section 1.409A-1(c), or the Plan and
any other nonqualified defined benefit plan or portion thereof that is treated as a single
plan under such Section.
	 
	2.24	 	Plan Year. Plan Year means January 1 through December 31.
	 
	2.25	 	Retirement Benefit. Retirement Benefit means the Accrued Benefit payable to a
Participant pursuant to the provisions of Article V of the Plan following the Participant’s
Normal Retirement.
	 
	2.26	 	Separation from Service. Separation from Service means an Employee’s termination of
employment with the Employer. Whether a Separation from Service has occurred shall be
determined by the Committee in accordance with Code Section 409A.
	 
	 	 	Except in the case of an Employee on a bona fide leave of absence as provided below, an
Employee is deemed to have incurred a Separation from Service if the Employer and the
Employee reasonably anticipated that the level of services to be performed by the

- 5 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	Employee after a date certain would be reduced to 20% or less of the average services
rendered by the Employee during the immediately preceding 36-month period (or the total
period of employment, if less than 36 months), disregarding periods during which the
Employee was on a bona fide leave of absence.
	 
	 	 	An Employee who is absent from work due to military leave, sick leave, or other bona fide
leave of absence shall incur a Separation from Service on the first date immediately
following the later of: (i) the six month anniversary of the commencement of the leave, or
(ii) the expiration of the Employee’s right, if any, to reemployment under statute or
contract.
	 
	 	 	For purposes of determining whether a Separation from Service has occurred, the Employer
means the Employer as defined in Section 2.17 of the Plan, except that in applying Code
Sections 1563(a)(1), (2) and (3) for purposes of determining whether another organization is
a subsidiary or affiliate of the Company under Code Section 414(b), and in applying Treas.
Reg. Section 1.414(c)-2 for purposes of determining whether another organization is a
subsidiary or affiliate of the Company under Code Section 414(c), 80% shall remain the
applicable percentage in making such determinations.
	 
	 	 	The Committee specifically reserves the right to determine whether a sale or other
disposition of substantial assets to an unrelated party constitutes a Separation from
Service with respect to a Participant providing services to the seller immediately prior to
the transaction and providing services to the buyer after the transaction. Such
determination shall be made in accordance with the requirements of Code Section 409A.
	 
	2.27	 	Specified Employee. Specified Employee means an Employee who, as of the date of his
or her Separation from Service, is a “key employee” of the Company or any Affiliate, any stock
of which is actively traded on an established securities market or otherwise.
	 
	 	 	An Employee is a key employee if he or she meets the requirements of Code Section
416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with applicable regulations
thereunder and without regard to Code Section 416(i)(5)) at any time during the 12-month
period ending on the Specified Employee Identification Date. Such Employee shall be treated
as a key employee for the entire 12-month period beginning on the Specified Employee
Effective Date.
	 
	 	 	For purposes of determining whether an Employee is a Specified Employee, the compensation of
the Employee shall be determined in accordance with the definition of compensation provided
under Treas. Reg. Section 1.415(c)-2(d)(2) (wages, salaries, fees for professional services,
and other amounts received for personal services actually rendered in the course of
employment with the employer maintaining the Plan, to the

- 6 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	extent such amounts are includible in gross income or would be includible but for an
election under Code Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b),
including the earned income of a self-employed individual)/1.415(c)-2(d)(3) (wages within
the meaning of Code Section 3401(a) for purposes of income tax withholding at the source,
plus amounts excludible from gross income under Code Section 125(a), 132(f)(4), 402(e)(3),
402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit the remuneration included
in wages based on the nature or location of the employment or the services performed).
	 
	 	 	Notwithstanding anything in this paragraph to the contrary: (i) if a different definition of
compensation has been designated by the Company with respect to another nonqualified
deferred compensation plan in which a key employee participates, the definition of
compensation shall be the definition provided in Treas. Reg. Section 1.409A-1(i)(2), and
(ii) the Company may, through action that is legally binding with respect to all
nonqualified deferred compensation plans maintained by the Company, elect to use a different
definition of compensation.
	 
	 	 	In the event of corporate transactions described in Treas. Reg. Section 1.409A-1(i)(6), the
identification of Specified Employees shall be determined in accordance with the default
rules described therein, unless the Company elects to utilize the available alternative
methodology through designations made within the timeframes specified therein.
	 
	2.28	 	Specified Employee Identification Date. Specified Employee Identification Date means
December 31, unless the Company has elected a different date through action that is legally
binding with respect to all nonqualified deferred compensation plans maintained by the Company
and other Employers.
	 
	2.29	 	Specified Employee Effective Date. Specified Employee Effective Date means the first
day of the fourth month following the Specified Employee Identification Date, or such earlier
date as is selected by the Committee.
	 
	2.30	 	Termination Benefit. Termination Benefit means the vested portion of the Accrued
Benefit payable to a Participant pursuant to provisions of Article V of the Plan following the
Participant’s Separation from Service other than due to death, Disability, or Normal
Retirement.
	 
	2.31	 	Year of Service. Year of Service (for purposes of Normal Retirement prior to age 65)
means each 365-day period of employment with the Company and/or other Employer, commencing on
a Participant’s hire date and each anniversary thereof.
	 
	2.32	 	Year of Plan Service. Year of Plan Service (for purposes of vesting and, to the
extent provided by the Plan and Schedule A, determining Accrued Benefits) means each 365-

- 7 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	day period of employment with the Company and/or other Employer, commencing on the
Participant’s effective date of participation in the Plan and each anniversary thereof.

ARTICLE III

Eligibility and Participation

	3.1	 	Eligibility and Participation. An Eligible Employee becomes a Participant upon
receipt of notification of eligibility to participate. Tier 1, Tier 2, and Tier 3
Participants have different Accrued Benefit levels, as further described in Schedule A. The
Committee designates the Eligible Employees who shall become Participants and may require that
Eligible Employees execute a participation acknowledgment or agreement as a condition of
participation.
	 
	3.2	 	Duration. A Participant with an Accrued Benefit remains a Participant, regardless of
any change in employment status, until such benefit has been paid in full.

ARTICLE IV

Vesting

Accrued Benefits vest in accordance with the vesting schedule set forth in Schedule A (including
Schedule A-1, as applicable), attached hereto. The portion of a Participant’s Accrued Benefit that
remains unvested upon his or her Separation from Service after the application of the terms of this
Article IV shall be forfeited.

A Participant also shall forfeit his or her Accrued Benefit as provided in Article V below.

ARTICLE V

Benefits

	5.1	 	Benefits, Generally. A Participant shall be entitled to the following benefits under
the Plan:

	 	(a)	 	Retirement Benefit. Upon the Participant’s Normal Retirement, he or she shall
be entitled to a Retirement Benefit. The Retirement Benefit shall be equal to the
Participant’s Accrued Benefit, determined as of the first day of the month following
the Participant’s Separation from Service.
	 
	 	(b)	 	Termination Benefit. Upon the Participant’s Separation from Service for
reasons other than death, Disability or Normal Retirement, he or she shall be entitled
to a Termination Benefit. The Termination Benefit shall be equal to his or her vested

- 8 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	 	Accrued Benefit, reduced to reflect commencement of payments earlier than the date
that Normal Retirement would have occurred had the Participant remained employed
with the Company, as further provided in Schedule A (including Schedule A-1, as
applicable). The Termination Benefit shall be based on the value of the Accrued
Benefit as of the first day of the month following the month in which Separation
from Service occurs.
	 
	 	(c)	 	Disability Benefit. Upon a determination by the Committee that a Participant
is Disabled, he or she shall be entitled to a Disability Benefit. The Disability
Benefit shall be equal to the Retirement Benefit calculated as though the date of onset
of the Participant’s Disability was the date of the Participant’s Normal Retirement.
The Disability Benefit shall be based on the value of the Accrued Benefit as of the
last day of the month in which Disability occurs.
	 
	 	(d)	 	Death Benefit. In the event of the Participant’s death prior to Separation
from Service, his or her designated Beneficiary(ies) shall be entitled to a Death
Benefit equal to the present value (utilizing reasonable interest assumptions
determined in the sole discretion of the Committee) of the installment payments of the
Retirement Benefit calculated as though the date of death were the date of Normal
Retirement.

	5.2	 	Payment Schedule.

	 	(a)	 	Retirement Benefit. A Participant (or Beneficiary, if applicable) who is
entitled to receive a Retirement Benefit shall receive payment of such benefit
according to the Payment Schedule specified in Schedule A. Payment of the Retirement
Benefit will begin the first day of the month following the month in which Separation
from Service occurs, provided, however, that with respect to a Participant who is a
Specified Employee as of the date of such Participant’s Normal Retirement, the first
installment payment will be made on the first day of the seventh month following the
month in which such Separation from Service occurs. Subsequent installment payments to
a Specified Employee will be paid on the anniversary of the date the initial
installment otherwise would have been made.
	 
	 	(b)	 	Termination Benefit. A Participant (or Beneficiary, if applicable) who is
entitled to receive a Termination Benefit shall receive payment of such benefit
according to the Payment Schedule specified in Schedule A. Payment of the Termination
Benefit will begin the first day of the month following the month in which Separation
from Service occurs; provided, however, that with respect to a Participant who is a
Specified Employee as of the date such Participant incurs a Separation from Service,
the first installment payment will be made on the first

- 9 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	 	day of the seventh month following the month in which such Separation from Service
occurs. Subsequent installment payments to a Specified Employee will be paid on the
anniversary of the date the initial installment otherwise would have been made.
	 
	 	(c)	 	Disability Benefit. A Participant (or Beneficiary, if applicable) who is
entitled to receive a Disability Benefit shall receive payment of such benefit
according to the Payment Schedule specified in Schedule A. The Disability Benefit will
begin to be paid the first day of the month following the month in which Disability
occurs.
	 
	 	(d)	 	Death Benefit. A designated Beneficiary who is entitled to receive a Death
Benefit shall receive payment of such benefit in a single lump sum. The Death Benefit
shall be paid on the first day of the month following the month in which death
occurred.
	 
	 	(e)	 	Change in Control. The foregoing provisions regarding form of payment
notwithstanding, a Participant will receive his or her Retirement Benefit or
Termination Benefit, as applicable, in a single lump sum payment equal to the present
value (utilizing reasonable interest assumptions determined in the sole discretion of
the Committee) of the unpaid, vested Accrued Benefit, if Separation from Service occurs
within 24 months following a Change in Control.

	5.3	 	Acceleration of or Delay in Payments. The Committee, in its sole and absolute
discretion, may elect to accelerate the time or form of payment of a benefit owed to the
Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section
1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time
for payment of a benefit owed to the Participant hereunder, to the extent permitted under
Treas. Reg. Section 1.409A-2(b)(7). If the Plan receives a domestic relations order (within
the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a Participant’s
Accounts be paid to an “alternate payee,” any amounts to be paid to the alternate payee(s)
shall be paid in a single lump sum.
	 
	5.4	 	Payments Treated as Made on the Designated Payment Date. Payments made on the
payment date specified in the Plan, or on a later date within the same taxable year of the
Participant or Beneficiary, or, if later, by the fifteenth (15th) day of the third
calendar month following the payment date specified in the Plan shall be treated as having
been made on the payment date; provided, however, that the Participant or Beneficiary is not
permitted, directly or indirectly, to designate the taxable year of the payment. In addition,
payments made no earlier than 30 days before the designated payment date will likewise be
treated as having been made on the payment date so long as the Participant or Beneficiary is
not permitted, directly or indirectly, to designate the taxable year of the payment. The
foregoing shall be administered in compliance with the provisions of

- 10 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	Treas. Reg. Section 1.409A-3(d), which Regulation may authorize other instances in which
payments made after the payment date shall be treated as having been made on the payment
date.
	 
	5.5	 	Forfeiture of Accrued Benefit.

	 	(a)	 	Termination for Cause. Notwithstanding anything herein to the contrary, if a
Participant incurs a Separation from Service due to termination of his or her
employment for Cause, or if a Participant is determined by the Committee to have
engaged in any act (or omission) which would have constituted Cause for termination of
employment (provided that for a Participant who already incurred a Separation from
Service prior to such Committee determination, only Sections 2.4(ii), (v), (vii) and
(ix) shall be considered for this purpose), the Participant shall immediately forfeit
his or her Accrued Benefit (regardless of the extent vested) and no future benefits
shall be paid to the Participant or any Beneficiary thereof, including any remaining
unpaid Retirement Benefit, Disability Benefit or Termination Benefit if the Participant
already is in pay status. In the case of a Participant who already is in pay status,
the Participant shall be obligated to pay to the Company an amount equal to all benefit
payments the Participant has received pursuant to the Plan.
	 
	 	(b)	 	Violation of Restrictive Covenants. As a condition precedent to receiving an
Accrued Benefit under the Plan and notwithstanding anything herein to the contrary, a
Participant shall immediately forfeit his or her Accrued Benefit (regardless of the
extent vested) and no future benefits shall be paid to the Participant or any
Beneficiary thereof, including any remaining unpaid Retirement Benefit, Disability
Benefit or Termination Benefit if the Participant already is in pay status, in the
event that the Committee determines, in its good faith discretion, that the Participant
has failed to comply with any of the conditions in this Section 5.5(b). In the case of
a Participant who already is in pay status, the Participant shall be obligated to pay
to the Company an amount equal to all benefit payments the Participant has received
pursuant to the Plan.
	 
	 	 	 	Notwithstanding the foregoing, the Participant shall not incur such forfeiture with
respect to (ii) or (iii) below if the Participant has sought and received a waiver
from the Committee or a majority of the members of the Company’s Board of Directors
as constituted at that time (which waiver shall not be unreasonably withheld) with
respect to the restricted actions proposed to be taken by the Participant.
	 
	 	 	 	For the avoidance of any doubt, the sole consequences arising under this Plan with
respect to a Participant who violates any of the provisions of this Section

- 11 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	 	5.5(b) shall be the forfeiture of the Participant’s Accrued Benefit and the
repayment obligations described above, and this Section 5.5(b) does not vest in the
Company any right to injunctive relief or any other remedies with respect to a
violation of this Section 5.5(b). Notwithstanding the foregoing, nothing under this
Plan shall limit the Company’s (or its subsidiaries’ or affiliates’) remedies under
any other agreements containing secrecy, confidentiality, noncompetition,
no-solicit, no-hire, nondisparagement and/or other restrictive covenants or clauses
which the Participant may have breached.
	 
	 	 	 	For purposes of this Section 5.5(b), the term “Business” shall refer to the
Company’s business of owning and operating automobile and/or truck dealerships and
collision repair centers, which business includes, without limitation, the
marketing, selling and leasing of new and used vehicles, the servicing of
automobiles and trucks, including collision repair, and the provision of financing
and insurance to automobile and truck customers. In addition, the term
“Confidential Information” shall refer to the valuable, highly confidential,
privileged and proprietary information relating to the Company’s Business,
including, without limitation, existing and future inventory information, financial
information, unpublished present and future marketing strategies and promotional
programs, and other information regarded by the Company as proprietary and
confidential.

	 	(i)	 	While a Participant in the Plan and thereafter, the Participant
shall not at any time, without the Company’s prior written consent, use,
divulge, disclose, furnish or make accessible to any third person, company or
other entity, any aspect of the Confidential Information (other than as
required in the ordinary discharge of the Participant’s duties for the
Company).
	 
	 	(ii)	 	While a Participant in the Plan and, if later, until the end of
the two-year period following the Participant’s Separation from Service, the
Participant shall not directly or indirectly:

	 	(A)	 	employ or solicit the employment of, or hire or
retain as an agent, consultant or in any other capacity, or engage in
any business enterprise with, any person who is or was employed by the
Company, its affiliates or subsidiaries at any time while the
Participant is a Participant in the Plan and, if later, during the
two-year period following the Participant’s Separation from Service; or
	 
	 	(B)	 	interfere or attempt to interfere with the
terms or other aspects of the relationship between the Company and any
person or entity from whom the Company has purchased automobiles,
trucks, parts,

- 12 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	 	supplies, inventory or services at any time while the Participant is
a Participant in the Plan and, if later, during the two-year period
following the Participant’s Separation from Service.

	 	(iii)	 	While a Participant in the Plan and, if later, until the end
of the two-year period following the Participant’s Separation from Service, the
Participant shall not directly or indirectly, provide information to, solicit
or sell for, organize or own any interest in (either directly or thorough any
parent, affiliate or subsidiary corporation, partnership, or other entity), or
become employed or engaged by, or act as agent for any person, corporation,
partnership or other entity that is directly or indirectly engaged in a
business in the Restricted Territory (as defined below) which is substantially
similar to the Business or any of its component parts, or which is otherwise
competitive with the Company’s business; provided, however,
that nothing herein shall preclude the Participant from holding not more than
3% of the outstanding shares of any publicly held company which may be so
engaged in a trade or business identical or similar to the Business of the
Company, so long as such ownership does not provide to the Participant the
ability to influence the management of such company in any material respect.
	 
	 	 	 	For this purpose, “Restricted Territory” means (A) all Standard Metropolitan
Statistical Areas, as determined by the United States Office of Management
and Budget from time to time, in which the Company or one of the Company’s
subsidiaries has an office, store or other place of business at any time
while the Participant is a Participant in the Plan and, if later, during the
two-year period following the Participant’s Separation from Service; and (B)
all counties in all states in which the Company or one of the Company’s
subsidiaries has an office, store or other place of business at any time
while the Participant is a Participant in the Plan and, if later, during the
two-year period following the Participant’s Separation from Service.
	 
	 	(iv)	 	While a Participant in the Plan and thereafter, the Participant
shall not at any time, directly or indirectly, either orally, in writing or
otherwise, disparage the Company or any subsidiary or affiliate thereof, its
officers, directors, employees, representatives, agents, shareholders or its
business or products, and shall not, directly or indirectly, make any
communication or comment, whether written or oral, which might cause injury or
damage to any of the foregoing or their respective reputations.

- 13 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

ARTICLE VI

Administration

	6.1	 	Plan Administration. This Plan shall be administered by the Committee which shall
have discretionary authority to make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Plan and to utilize its discretion to decide or
resolve any and all questions, including but not limited to eligibility to participate,
eligibility for benefits and interpretations of this Plan and its terms, as may arise in
connection with the Plan. Claims for benefits shall be filed with the Committee and resolved
in accordance with the claims procedures in Article IX.
	 
	6.2	 	Withholding. The Company or applicable Employer shall have the right to withhold
from any payment due under the Plan (or with respect to any amounts credited to the Plan) any
taxes required by law to be withheld in respect of such payment (or credit). The Company or
applicable Employer also shall have the right to withhold from other amounts owed to a
Participant, or require the Participant to remit, an amount sufficient to satisfy any taxes
required by law to be withheld with respect to any Plan benefit or the vesting or payment of
any Plan benefit.
	 
	6.3	 	Indemnification. The Company shall indemnify and hold harmless its employees,
officers, and directors to whom or to which are delegated duties, responsibilities, and
authority under the Plan or otherwise with respect to administration of the Plan, including,
without limitation, the Committee, against all claims, liabilities, fines and penalties, and
all expenses reasonably incurred by or imposed upon him or it (including but not limited to
reasonable attorney fees) which arise as a result of his or its actions or failure to act in
connection with the operation and administration of the Plan to the extent lawfully allowable
and to the extent that such claim, liability, fine, penalty, or expense is not paid for by
liability insurance purchased or paid for by the Company. Notwithstanding the foregoing, the
Company shall not indemnify any person if his or her actions or failure to act are due to
gross negligence or willful misconduct or for any such amount incurred through any settlement
or compromise of any action unless the Company consents in writing to such settlement or
compromise.
	 
	6.4	 	Delegation of Authority. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative duties as it sees fit,
and may from time to time consult with legal counsel who may be legal counsel to the Company.
	 
	6.5	 	Binding Decisions or Actions. The decision or action of the Committee in respect of
any question arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations thereunder shall be final and conclusive
and binding upon all persons having any interest in the Plan.

- 14 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

ARTICLE VII

Amendment and Termination

	7.1	 	Amendment and Termination. The Company may at any time and from time to time amend
the Plan or may terminate the Plan as provided in this Article VII.
	 
	7.2	 	Amendments. The Company, by action taken by the Committee, may amend the Plan at any
time and for any reason, provided that any such amendment shall not reduce the vested Accrued
Benefits of any Participant accrued as of the date of any such amendment (as if the
Participant had incurred a Separation from Service on such date) without the written consent
of the Participant.
	 
	7.3	 	Termination. The Company, by action taken by the Committee, may terminate the Plan
at any time and, in such case, may determine to pay Participants and Beneficiaries the present
value (utilizing reasonable interest assumptions determined in the sole discretion of the
Committee) of their Accrued Benefits in a single lump sum, to the extent permitted by and in
accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix).
	 
	7.4	 	Accrued Benefits Taxable Under Code Section 409A. The Plan is intended to constitute
a plan of deferred compensation that meets the requirements for deferral of income taxation
under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may
sever from the Plan any provision or exercise of a right that otherwise would result in a
violation of Code Section 409A.

ARTICLE VIII

Informal Funding

	8.1	 	General Assets. Obligations established under the terms of the Plan may be satisfied
from the general funds of the Company or applicable Employer, or a trust described in this
Article VIII. No Participant, spouse or Beneficiary shall have any right, title or interest
whatever in assets of the Company or other Employer. Nothing contained in this Plan, and no
action taken pursuant to its provisions, shall create or be construed to create a trust of any
kind, or a fiduciary relationship, between the Company or other Employer and any Participant,
Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive
payments hereunder, such rights are no greater than the right of an unsecured general creditor
of the Company or other Employer, as the case may be.
	 
	8.2	 	Rabbi Trust. The Company may, in its sole discretion, establish a grantor trust,
commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under
the Plan. Payments under the Plan may be paid from the general assets of the Company or other
applicable Employer or from the assets of any such rabbi trust.

- 15 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	Payment from any such source shall reduce the obligation owed to the Participant or
Beneficiary under the Plan.
	 
	 	 	If a rabbi trust is in existence upon the occurrence of a Change in Control, as defined in
this Plan, the Company shall, upon such Change in Control, and on each anniversary of the
Change in Control, contribute (and/or cause each applicable Employer to contribute) in cash
or liquid securities such amounts as are necessary so that the value of assets after making
the contributions at least equals the total value of all Accrued Benefits.

ARTICLE IX

Claims

	9.1	 	Filing a Claim. Any controversy or claim arising out of or relating to the Plan
shall be filed in writing with the Committee which shall make all determinations concerning
such claim. Any claim filed with the Committee and any decision by the Committee denying such
claim shall be in writing and any such denial shall be delivered to the Participant or
Beneficiary filing the claim (the “Claimant”). For purposes of the Plan, electronic
notification from the Committee may serve as written notification subject to and in accordance
with applicable Department of Labor regulations.

	 	(a)	 	In General. Notice of a denial of benefits (other than Disability Benefits)
will be provided within 90 days of the Committee’s receipt of the Claimant’s claim for
benefits. If the Committee determines that it needs additional time to review the
claim, the Committee will provide the Claimant with a notice of the extension before
the end of the initial 90-day period. The extension will not be more than 90 days from
the end of the initial 90-day period and the notice of extension will explain the
special circumstances that require the extension and the date by which the Committee
expects to make a decision.
	 
	 	(b)	 	Disability Benefits. Notice of denial of a Disability Benefit will be provided
within 45 days of the Committee’s receipt of the Claimant’s claim for a Disability
Benefit. If the Committee determines that it needs additional time to review the
Disability claim, the Committee will provide the Claimant with a notice of the
extension before the end of the initial 45-day period. If the Committee determines that
a decision cannot be made within the first extension period due to matters beyond the
control of the Committee, the time period for making a determination may be further
extended for an additional 30 days. If such an additional extension is necessary, the
Committee shall notify the Claimant prior to the expiration of the initial 30-day
extension. Any notice of extension shall indicate the circumstances necessitating the
extension of time, the date by which the Committee expects to furnish a notice of
decision, the specific standards on which such entitlement to a

- 16 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	 	benefit is based, the unresolved issues that prevent a decision on the claim and any
additional information needed to resolve those issues. A Claimant will be provided a
minimum of 45 days to submit any necessary additional information to the Committee.
In the event that a 30-day extension is necessary due to a Claimant’s failure to
submit information necessary to decide a claim, the period for furnishing a notice
of decision shall be tolled from the date on which the notice of the extension is
sent to the Claimant until the earlier of the date the Claimant responds to the
request for additional information or the response deadline.
	 
	 	(c)	 	Contents of Notice. If a claim for benefits is completely or partially denied,
notice of such denial shall be in writing and shall set forth the reasons for denial in
plain language. The notice also shall: (i) reference the pertinent provisions of the
Plan document, and (ii) explain, where appropriate, how the Claimant can perfect the
claim, including a description of any additional material or information necessary to
complete the claim and why such material or information is necessary. The claim denial
also shall include an explanation of the claims review procedures and the time limits
applicable to such procedures, including a statement of the Claimant’s right to bring a
civil action under Section 502(a) of ERISA following an adverse decision on review. In
the case of a complete or partial denial of a Disability Benefit claim, the notice
shall provide a statement that the Committee will provide to the Claimant, upon request
and free of charge, a copy of any internal rule, guideline, protocol, or other similar
criterion that was relied upon in making the decision.

	9.2	 	Appeal of Denied Claims. A Claimant whose claim has been completely or partially
denied shall be entitled to appeal the claim denial by filing a written appeal with a
committee designated to hear such appeals (the “Appeals Committee”), which may be the
Committee except as otherwise provided below. A Claimant who timely requests a review of the
denied claim (or his or her authorized representative) may have, upon request and free of
charge, reasonable access to and copies of all documents, records and other information
relevant to the claim for benefits and may submit written comments, documents, records and
other information relevant to the claim to the Appeals Committee. All written comments,
documents, records, and other information shall be considered “relevant” if the information:
(i) was relied upon in making a benefits determination, (ii) was submitted, considered or
generated in the course of making a benefits decision regardless of whether it was relied upon
to make the decision, or (iii) demonstrates compliance with administrative processes and
safeguards established for making benefit decisions. The Appeals Committee may, in its sole
discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to
the claim appeal.

- 17 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	(a)	 	In General. Appeal of a denied benefits claim (other than a Disability Benefit
claim) must be filed in writing with the Appeals Committee no later than 60 days after
receipt of the written notification of such claim denial. The Appeals Committee shall
make its decision regarding the merits of the denied claim within 60 days following
receipt of the appeal (or within 120 days after such receipt, in a case where there are
special circumstances requiring extension of time for reviewing the appealed claim). If
an extension of time for reviewing the appeal is required because of special
circumstances, written notice of the extension shall be furnished to the Claimant prior
to the commencement of the extension. The notice will indicate the special
circumstances requiring the extension of time and the date by which the Appeals
Committee expects to render the determination on review. The review will take into
account comments, documents, records and other information submitted by the Claimant
relating to the claim without regard to whether such information was submitted or
considered in the initial benefit determination.
	 
	 	(b)	 	Disability Benefits. Appeal of a denied Disability Benefit claim must be filed
in writing with the Appeals Committee no later than 180 days after receipt of the
written notification of such claim denial. The review shall be conducted by the Appeals
Committee (exclusive of any person who made the initial adverse decision or such
person’s subordinate). In reviewing the appeal, the Appeals Committee shall: (i) not
afford deference to the initial denial of the claim, (ii) if the initial claim denial
was based in whole or in part on a medical judgment, consult a medical professional who
has appropriate training and experience in the field of medicine involving the medical
judgment and who was neither consulted as part of the initial denial nor is the
subordinate of such individual, and (iii) identify any medical or vocational experts
whose advice was obtained with respect to the initial benefit denial, without regard to
whether the advice was relied upon in making the decision. The Appeals Committee shall
make its decision regarding the merits of the denied claim within 45 days following
receipt of the appeal (or within 90 days after such receipt, in a case where there are
special circumstances requiring extension of time for reviewing the appealed claim). If
an extension of time for reviewing the appeal is required because of special
circumstances, written notice of the extension shall be furnished to the Claimant prior
to the commencement of the extension. The notice will indicate the special
circumstances requiring the extension of time and the date by which the Appeals
Committee expects to render the determination on review. Following its review of any
additional information submitted by the Claimant, the Appeals Committee shall render a
decision on its review of the denied claim.

- 18 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	(c)	 	Contents of Notice. If a benefits claim is completely or partially denied on
review, notice of such denial shall be in writing and shall set forth the reasons for
denial in plain language.
	 
	 	 	 	The decision on review shall set forth: (i) the specific reason or reasons for the
denial, (ii) specific references to the pertinent Plan provisions on which the
denial is based, (iii) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies of all documents,
records, or other information relevant (as defined above) to the Claimant’s claim,
and (iv) a statement describing any voluntary appeal procedures offered by the Plan
(provided that the Plan is not required to have any such procedures) and a statement
of the Claimant’s right to bring an action under Section 502(a) of ERISA.
	 
	 	(d)	 	For the denial of a Disability Benefit, the notice will also include (i) a
statement that the Appeals Committee will provide, upon request and free of charge: (A)
any internal rule, guideline, protocol or other similar criterion relied upon in making
the decision, and (B) any medical opinion relied upon to make the decision, and (ii) if
applicable, the required statement under Section 2560.503-1(j)(5)(iii) of the
Department of Labor regulations.

	9.3	 	Legal Action. A Claimant may not bring any legal action, including commencement of
any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant
has followed the claims procedures under the Plan and exhausted his or her administrative
remedies under such claims procedures.
	 
	 	 	If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to
enforce the rights of such Participant or any other similarly situated Participant or
Beneficiary, in whole or in part, the Company shall reimburse such Participant or
Beneficiary for all legal costs, expenses, attorneys’ fees and such other liabilities
incurred as a result of such proceedings. If the legal proceeding is brought in connection
with a Change in Control and the Company has established a rabbi trust as described in
Section 8.2, the Participant or Beneficiary may file a claim directly with the trustee for
reimbursement of such costs, expenses and fees. For purposes of the preceding sentence, the
amount of the claim shall be treated as if it were an addition to the Participant’s or
Beneficiary’s Accrued Benefit and will be included in determining the Company’s or other
Employer’s trust funding obligation under Section 8.2.
	 
	9.4	 	Discretion of Appeals Committee. All interpretations, determinations and decisions
of the Appeals Committee with respect to any claim shall be made in its sole discretion, and
shall be final and conclusive.

- 19 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

ARTICLE X

General Provisions

	10.1	 	Assignment. No interest of any Participant, spouse or Beneficiary under this Plan
and no benefit payable hereunder shall be assigned as security for a loan, and any such
purported assignment shall be null, void and of no effect, nor shall any such interest or any
such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation,
sale, transfer, assignment or encumbrance by or through any Participant, spouse or
Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the
discretion to make payments to an alternate payee in accordance with the terms of a domestic
relations order (as defined in Code Section 414(p)(1)(B)).
	 
	 	 	The Company or other Employer may assign any or all of its liabilities under this Plan in
connection with any restructuring, recapitalization, sale of assets or other similar
transactions affecting the Company or other Employer without the consent of the Participant.
	 
	10.2	 	No Legal or Equitable Rights or Interest. No Participant or other person shall have
any legal or equitable rights or interest in this Plan that are not expressly granted in this
Plan. Participation in this Plan does not give any person any right to be retained in the
service of the Company or other Employer. The right and power of the Company or other Employer
to dismiss or discharge an Employee is expressly reserved. The Company and other Employers
make no representations or warranties as to the tax consequences to a Participant or a
Participant’s Beneficiaries resulting from participation in the Plan.
	 
	10.3	 	No Employment Contract. Nothing contained herein shall be construed to constitute a
contract of employment between an Employee and the Company and/or other Employer.
	 
	10.4	 	Notice. Any notice or filing required or permitted to be delivered to the Company or
Committee under this Plan shall be delivered in writing in person or by registered or
certified mail, or through such electronic means as is established by the Committee. Once
received, notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.
Written transmission shall be sent by certified mail to:

SONIC AUTOMOTIVE, INC.

ATTN: VICE PRESIDENT OF HUMAN RESOURCES

6415 IDLEWILD ROAD, SUITE 109

CHARLOTTE, NORTH CAROLINA 28212

- 20 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	 	 	Any notice or filing required or permitted to be given to a Participant under this Plan
shall be sufficient if in writing or hand-delivered, or sent by mail to the last known
address of the Participant or delivered electronically in accordance with applicable
Department of Labor regulations.
	 
	10.5	 	Headings. The headings of Sections are included solely for convenience of reference,
and if there is any conflict between such headings and the text of this Plan, the text shall
control.
	 
	10.6	 	Invalid or Unenforceable Provisions. If any provision of this Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof and the Committee may elect in its sole discretion to construe such invalid
or unenforceable provisions in a manner that conforms to applicable law or as if such
provisions, to the extent invalid or unenforceable, had not been included.
	 
	10.7	 	Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled
to a benefit from the Plan has the duty to keep the Committee advised of his or her current
mailing address. If the Committee is unable to locate a Participant or Beneficiary to whom
payment is due or if benefit payments are returned to the Plan or are not presented for
payment after a reasonable amount of time, the Committee shall cause the benefit due under the
terms of the Plan to be paid into a taxable bank account established by the Committee in the
name of such Participant or Beneficiary.
	 
	10.8	 	Facility of Payment to a Minor. If a distribution is to be made to a minor, or to a
person who is otherwise incompetent, then the Committee may, in its discretion, make such
distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom
the payee maintains his or her residence, or (ii) to the conservator or committee or, if none,
to the person having custody of an incompetent payee. Any such distribution shall fully
discharge the Committee, the Company, the Employer and the Plan from further liability on
account thereof.
	 
	10.9	 	Governing Law. To the extent not preempted by ERISA, the laws of the State of North
Carolina shall govern the construction and administration of the Plan.

- 21 -

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

IN WITNESS WHEREOF, the undersigned executed this Plan as of the _____ day of
                    , 2009, to be effective as of the Effective Date.

Sonic Automotive, Inc.

            
                     
                     
       (Signature)

By:            
                     
         (Print Name)

Its:            
                     
         (Title)

- 22 -

 

Schedule A

	1.	 	Accrued Benefit.

	 	(a)	 	The Accrued Benefit for a Tier 1 Participant shall be fifty percent
(50%) of such Participant’s Final Average Salary, determined in the sole discretion
of the Committee.
	 
	 	(b)	 	The Accrued Benefit for a Tier 2 Participant shall be forty percent
(40%) of such Participant’s Final Average Salary, determined in the sole discretion
of the Committee.
	 
	 	(c)	 	The Accrued Benefit for a Tier 3 Participant shall be thirty-five
percent (35%) of such Participant’s Final Average Salary, determined in the sole
discretion of the Committee.

	2.	 	Payment Schedule for Benefits other than Death Benefit.

	 	 	 	The Payment Schedule for the Retirement Benefit, Termination Benefit and Disability
Benefit shall be annual installment payments in substantially equal amounts to the
Participant and/or (if applicable) to the Participant’s spouse for the duration of
the “benefit payment period.” The “benefit payment period” is fifteen (15) years.
Payments are made to the Participant unless the Participant dies during the “benefit
payment period” leaving a spouse surviving him or her, in which case payments
continue to be made to the surviving spouse for the remainder of the benefit payment
period.

	3.	 	Reduction of Accrued Benefit for Early Separation from Service.

	 	 	 	Except as provided in Schedule A-1, the Accrued Benefit for purposes of determining
the Termination Benefit shall be calculated by beginning with the amount of the
vested Retirement Benefit and then reducing that amount by ten percent (10%) for
each year the Participant’s payment commencement date precedes the earliest date
that such Participant would have qualified for Normal Retirement (e.g., the earlier
of attainment of age 65 or age 55 with at least ten Years of Service).

	4.	 	Vesting. Except as provided in Schedule A-1, Participants will vest in their Accrued
Benefits according to the applicable schedule as follows:

	 	 	 	 	 
	Years of Plan Service	 	Percent Vested
	Less than 1
	 	 	0	%
	At least 1 but less than 2
	 	 	20	%
	At least 2 but less than 3
	 	 	40	%
	At least 3 but less than 4
	 	 	60	%
	At least 4 but less than 5
	 	 	80	%
	5 or more
	 	 	100	%

 

 

Sonic Automotive, Inc. Supplemental Executive Retirement Plan (“SERP”)

	5.	 	Accelerated Vesting. Participants will become 100% vested in their Accrued Benefits
upon Normal Retirement, death prior to Separation from Service, Disability prior to Separation
from Service, or upon a Change in Control prior to Separation from Service.

- 2 -

 

Schedule A-1

Special Provisions Applicable to David Cosper

1. No Reduction of Accrued Benefit for Early Separation from Service. Section 3 of Schedule
A shall not apply to Mr. Cosper’s Accrued Benefit.

2. Special Vesting Schedule. Notwithstanding the vesting schedule in Section 4 of Schedule
A, Mr. Cosper will vest in his Accrued Benefits according to the applicable schedule as follows:

	 	 	 	 	 
	Years of Plan Service	 	Percent Vested
	Less than 2
	 	 	0	%
	At least 2 but less than 4
	 	 	20	%
	At least 4 but less than 6
	 	 	50	%
	At least 6 but less than 8
	 	 	75	%
	8 or more
	 	 	100	%

Section 5 of Schedule A (Accelerated Vesting) also shall apply to Mr. Cosper.exv10w47

Exhibit 10.47

FIRST AMENDMENT

TO THE

SONIC AUTOMOTIVE, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(“SERP”)

THIS AMENDMENT IS ADOPTED AS OF THE ___ DAY OF December, 2010, by Sonic Automotive, Inc. (the
“Company”) to be effective as of January 1, 2010;

WITNESSETH:

WHEREAS, the Company adopted the Sonic Automotive, Inc. Supplemental Executive Retirement Plan
(“the SERP”) effective January 1, 2010; and

WHEREAS, Article VII of the SERP permits the Company, by action taken by the Compensation Committee
of the Board of Directors of the Company, to amend the SERP at any time and for any reason,
provided that any such amendment shall not reduce the vested Accrued Benefits of any Participant
accrued as of the date of any such amendment without the written consent of the Participant;

NOW, THEREFORE, the SERP is hereby amended effective as of January 1, 2010, as follows:

	 	1.	 	Section 2.25, “Retirement Benefit”, is deleted in its entirety and replaced by:
	 
	 	 	 	“2.25 Retirement Benefit. Retirement Benefit means the vested portion of the
Accrued Benefit payable to a Participant pursuant to the provisions of Article V of the Plan
following the Participant’s Normal Retirement.”
	 
	 	2.	 	Section 5.1(a), “Retirement Benefit”, is deleted in its entirety and replaced by:
	 
	 	 	 	“(a) Retirement Benefit. Upon the Participant’s Normal Retirement, he or she shall be
entitled to a Retirement Benefit, which shall be determined as of the first day of the month
following the Participant’s Separation from Service.”
	 
	 	3.	 	SCHEDULE A is deleted in its entirety, to be replaced by the Amended and Restated
SCHEDULE A, including the Amended and Restated SCHEDULE A-1, attached hereto as EXHIBIT A.

IN WITNESS WHEREOF, the Company, by action of the Compensation Committee of the Board of Directors,
has caused the Amendment to be properly executed as of the day and year first above written.

	 	 	 	 	 
	 	SONIC AUTOMOTIVE, INC.

 	 
	 	By:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

EXHIBIT A

Amended and Restated

Schedule A

	1.	 	Accrued Benefit.

	 	(a)	 	The Accrued Benefit for a Tier 1 Participant shall be fifty percent (50%)
of such Participant’s Final Average Salary, determined in the sole discretion of
the Committee.
	 
	 	(b)	 	The Accrued Benefit for a Tier 2 Participant shall be forty percent (40%)
of such Participant’s Final Average Salary, determined in the sole discretion of
the Committee.
	 
	 	(c)	 	The Accrued Benefit for a Tier 3 Participant shall be thirty-five percent
(35%) of such Participant’s Final Average Salary, determined in the sole discretion
of the Committee.

	2.	 	Payment Schedule for Benefits other than Death Benefit. The Payment Schedule for the
Retirement Benefit, Termination Benefit and Disability Benefit shall be annual installment
payments in substantially equal amounts to the Participant and/or (if applicable) to the
Participant’s spouse for the duration of the “benefit payment period.” The “benefit payment
period” is fifteen (15) years. Payments are made to the Participant unless the Participant
dies during the “benefit payment period” leaving a spouse surviving him or her, in which case
payments continue to be made to the surviving spouse for the remainder of the benefit payment
period.
	 
	3.	 	Reduction of Accrued Benefit for Early Separation from Service. Except as provided
in Schedule A-1, the Accrued Benefit for purposes of determining the Termination Benefit shall
be calculated by beginning with the amount of the vested Retirement Benefit and then reducing
that amount by ten percent (10%) for each year the Participant’s payment commencement date
precedes the earliest date that such Participant would have qualified for Normal Retirement
(e.g., the earlier of attainment of age 65 or age 55 with at least ten Years of Service).
	 
	4.	 	Vesting. Except as provided in Schedule A-1, Participants will vest in their Accrued
Benefit according to the applicable schedule as follows:

	 	 	 	 	 
	Years of Plan Service	 	Percent Vested
	Less than 1
	 	 	0	%
	At least 1 but less than 2
	 	 	20	%
	At least 2 but less than 3
	 	 	40	%
	At least 3 but less than 4
	 	 	60	%
	At least 4 but less than 5
	 	 	80	%
	5 or more
	 	 	100	%

	5.	 	Accelerated Vesting. The foregoing notwithstanding, Participants will become 100%
vested in their Accrued Benefit upon death prior to Separation from Service, Disability prior
to Separation from Service, or upon a Change in Control prior to Separation from Service.

 

 

Amended and Restated

Schedule A-1

Special Provisions Applicable to David Cosper

	1.	 	No Reduction of Accrued Benefit for Early Separation from Service. Section 3 of
Schedule A shall not apply to Mr. Cosper’s Accrued Benefit.
	 
	2.	 	Special Vesting Schedule. Notwithstanding the vesting schedule in Section 4 of
Schedule A, Mr. Cosper will vest in his Accrued Benefit according to the applicable schedule
as follows:

	 	 	 	 	 
	Years of Plan Service	 	Percent Vested
	Less than 2
	 	 	0	%
	At least 2 but less than 4
	 	 	20	%
	At least 4 but less than 6
	 	 	50	%
	At least 6 but less than 8
	 	 	75	%
	8 or more
	 	 	100	%

	3.	 	Accelerated Vesting. The foregoing notwithstanding, Mr. Cosper will become 100%
vested in his Accrued Benefit upon death prior to Separation from Service, Disability prior to
Separation from Service, or upon a Change in Control prior to Separation from Service.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00184-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00184-of-00352.parquet"}]]