SONIC AUTOMOTIVE, INC. (NYSE:SAH) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e) On February13, 2017, the Compensation Committee of the Board
of Directors (the Compensation Committee) of Sonic Automotive,
Inc. (the Company) established the parameters for determining
performance-based cash bonuses under the Sonic Automotive, Inc.
Incentive Compensation Plan (the Incentive Compensation Plan) for
the performance period January1, 2017 through December31, 2017
(the Performance Period) for Messrs. O. Bruton Smith, B. Scott
Smith, David Bruton Smith, Jeff Dyke and Heath R. Byrd (the
Executive Officers) that are intended to meet the requirements
for deductibility under Section 162(m) of the Internal Revenue
Code.
The Compensation Committee established a two-tiered approach to
determine incentive cash bonus awards for the Performance Period.
The first tier is an objective threshold achievement level of
defined adjusted earnings per share for the Company for the
Performance Period. No bonuses are payable under the Incentive
Compensation Plan for the Performance Period if the threshold
goal is not achieved. If the threshold adjusted earnings per
share goal is achieved, then each Executive Officer is eligible
for a bonus of $3,000,000 (the maximum bonus amount). However,
the second tier of the bonus program establishes additional
performance requirements that the Compensation Committee will use
to determine actual bonus amounts payable to the Executive
Officers. These performance requirements include additional
achievement levels related to adjusted earnings per share goals
and customer satisfaction performance goals based on the
percentage of the Companys dealerships that meet or exceed
specified objectives, as reported by the respective manufacturers
for such brands. If the first tier performance requirement has
been achieved, the Compensation Committee may, in its
determination, exercise negative discretion to reduce the dollar
amount of an Executive Officers actual bonus to less than the
maximum bonus amount based upon achievement of the adjusted
earnings per share and customer satisfaction performance goals
along with other factors the Compensation Committee determines
relevant, such as its subjective assessment of financial,
operational, strategic, corporate and individual performance, and
unanticipated contingencies and events. An Executive Officers
bonus amount under the Incentive Compensation Plan may be less
than (but not more than) the maximum bonus amount.
On February13,
2017, the Compensation Committee also approved grants of
performance-based restricted stock units under the Sonic
Automotive, Inc. 2012 Stock Incentive Plan to the Executive
Officers in the following amounts: Mr.O. Bruton Smith, 95,195
units; Mr.B. Scott Smith, 82,222 units; Mr.David Bruton Smith,
55,921 units; Mr.Jeff Dyke, 73,416 units; and Mr.HeathR. Byrd,
51,308 units. As provided by the Compensation Committee, these
restricted stock unit awards generally remain subject to
forfeiture for up to three years from the date of grant based on
continuation of employment and violation of any restrictive
covenants contained in any agreement between the Company and the
respective officer. The awards of restricted stock units are also
subject to forfeiture, in whole or in part, based on achievement
of specified measures of the Companys defined adjusted earnings
per share performance for the 2017 calendar year. The restricted
stock units will be converted to, and paid in the form of, an
equivalent number of shares of the Companys ClassA common stock
following vesting. Subject to the performance conditions, these
awards vest in three annual installments, with 25% of the shares
vesting on March31, 2018, 30% of the shares vesting on
February13, 2019 and 45% of the shares vesting on February13,
2020. These unit awards will not be eligible for dividend
equivalents or voting rights.
| Item5.03. |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
(a) On February13,
2017, the Board of Directors of the Company (the Board) approved
certain amendments to the Companys Bylaws (as amended, the
Bylaws), effective immediately, to:
| (i) |
amend Article 2, Section2.02 to provide for special meetings to be called at the written request of holders of more than eighty percent (80%) of the total voting power of the outstanding shares of capital stock of the Company then entitled to vote; |
| (ii) |
clarify in Article 2, Section2.03 that the Company does not need to give a stockholder who attends a stockholder meeting without protest, or a stockholder who waives notice of any meeting, notice of such meeting; |
| (iii) |
amend Article 2, Section2.06 to provide for a majority voting standard in uncontested director elections, provided that a plurality voting standard will continue to apply in contested director elections; |
| (iv) |
amend the advance notice provisions in Article 2, Section2.08 to (a)expand the information and representations that a stockholder must include in a written notice to nominate directors for election or propose a matter for consideration at any meeting of stockholders, including details regarding any beneficial ownership such stockholder has in the Company, and (b)amend the timing within which any such notice in respect of a meeting of stockholders must be received at the Companys principal executive office; |
| (v) |
include a new Article 2, Section2.09, to clarify when a meeting of stockholders may be adjourned; |
| (vi) |
clarify in Article 3, Section3.13 that the Board shall have the power to change the members of any committee of the Board at any time, to fill vacancies and to dissolve any such committee, either with or without cause, at any time; and |
| (vii) | make certain ministerial, clarifying and conforming changes. |
The foregoing
description is qualified in its entirety by reference to the full
text of the Companys Bylaws, a copy of which is attached hereto
as Exhibit 3.1 and incorporated herein by reference.
| Item9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 3.1 | Bylaws of Sonic Automotive, Inc., as amended and restated. |
About SONIC AUTOMOTIVE, INC. (NYSE:SAH)
Sonic Automotive, Inc. is an automotive retailer in the United States. The Company’s operating segments include Franchised Dealerships and EchoPark. The Company’s Franchised Dealerships segment consists of traditional retail automotive franchises that sell new and used vehicles, replacement parts and vehicle repair and maintenance services, and finance and insurance products. The EchoPark segment consists of standalone pre-owned specialty retail locations that provide customers an opportunity to search, buy, service and sell their pre-owned vehicles. The Company’s dealerships provide services, including sales of both new and used cars, and light trucks; sales of replacement parts; performance of vehicle maintenance; manufacturer warranty repairs; paint and collision repair services, and arrangement of extended warranties, service contracts, financing, insurance and other aftermarket products for its customers. The Company’s specialty retail locations operate under the EchoPark brand. SONIC AUTOMOTIVE, INC. (NYSE:SAH) Recent Trading Information
SONIC AUTOMOTIVE, INC. (NYSE:SAH) closed its last trading session down -0.45 at 23.60 with 188,854 shares trading hands.