þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2007 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from _______ to _________ |
DELAWARE | 76-0506313 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
950 Echo Lane, Suite 100
Houston, Texas 77024 |
(713) 647-5700
(Registrants telephone |
|
(Address of principal
executive
offices, including zip code) |
(Registrants telephone
number, including area code) |
Title of each class
|
Name of exchange on which registered
|
|
Common stock, par value $0.01 per share | New York Stock Exchange |
| our future operating performance; | |
| our ability to improve our margins; | |
| operating cash flows and availability of capital; | |
| the completion of future acquisitions; | |
| the future revenues of acquired dealerships; | |
| future stock repurchases and dividends; | |
| capital expenditures; | |
| changes in sales volumes in the new and used vehicle and parts and service markets; | |
| business trends in the retail automotive industry, including the level of manufacturer incentives, new and used vehicle retail sales volume, customer demand, interest rates and changes in industrywide inventory levels; and | |
| availability of financing for inventory, working capital, real estate and capital expenditures. |
| the future economic environment, including consumer confidence, interest rates, the price of gasoline, the level of manufacturer incentives and the availability of consumer credit may affect the demand for new and used vehicles, replacement parts, maintenance and repair services and finance and insurance products; | |
| adverse domestic and international developments such as war, terrorism, political conflicts or other hostilities may adversely affect the demand for our products and services; | |
| the future regulatory environment, unexpected litigation or adverse legislation, including changes in state franchise laws, may impose additional costs on us or otherwise adversely affect us; | |
| the ability of our principal automobile manufacturers, especially Toyota/Lexus, Ford, Chrysler, General Motors, Honda/Acura, BMW, Daimler and Nissan/Infiniti to continue to produce or make available to us vehicles that are in high demand by our customers or to provide financing, advertising or other assistance to us; | |
| facility requirements imposed on us by our manufacturers may limit our acquisitions and require us to increase the level of capital expenditures related to our dealership facilities; | |
| our existing and/or new dealership operations may not perform at expected levels or achieve expected improvements; | |
| our failure to achieve expected future cost savings or future costs being higher than we expect; | |
| available capital resources, increases in cost of financing and various debt agreements may limit our ability to complete acquisitions, complete construction of new or expanded facilities and repurchase shares; | |
| new accounting standards could materially impact our reported earnings per share; | |
| the inability to adjust our cost structure to offset any reduction in the demand for our products and services; |
ii
| our loss of key personnel; | |
| competition in our industry may impact our operations or our ability to complete additional acquisitions or changes in the pace of acquisitions; | |
| insurance costs could increase significantly and all of our losses may not be covered by insurance; | |
| fluctuations in foreign currencies; and | |
| our inability to obtain inventory of new and used vehicles and parts, including imported inventory, at the cost, or in the volume, we expect. |
iii
33
70
71
72
73
Item 1.
Business
1
Table of Contents
Greater emphasis on improving same-store results, especially in
the parts and service and finance and insurance business;
Completion of the transition to an operating model with greater
commonality of key operating processes and systems that support
the extension of best practices and the leveraging of scale;
Continued emphasis on cost reduction and operating efficiency
efforts;
Increased ownership of our real estate holdings; and
Improving or disposing of underperforming dealerships in our
current portfolio.
2
Table of Contents
Percentage of Our
New Vehicle
Retail Units Sold
During the Twelve
As of December 31, 2007
Months Ended
Number of
Number of
Geographic Market
December 31, 2007
Dealerships
Franchises
Massachusetts
11.7
%
9
10
New Jersey
5.5
6
7
Louisiana
3.9
3
7
New Hampshire
3.7
3
3
Georgia
3.5
4
4
Florida
3.4
4
4
New York
2.6
5
5
Mississippi
1.5
3
3
Alabama
0.8
1
1
South Carolina
2
2
36.6
40
46
Texas
32.0
32
46
Oklahoma
9.6
13
20
New Mexico
1.9
3
7
Kansas
1.0
2
3
44.5
50
76
California
17.4
11
14
U.K.
1.5
3
6
100.0
%
104
142
manufacturer incentives, if any;
the resale of any trade-in purchased by the dealership;
3
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the sale of third-party finance, vehicle service and insurance
contracts in connection with the retail sale; and
the service and repair of the vehicle both during and after the
warranty period.
Franchises Owned
as of
New Vehicle
New Vehicle
December 31,
Revenues
Unit Sales
2007
(In thousands)
$
938,061
38,103
13
(1)
407,606
13,292
12
380,115
7,439
11
379,925
14,941
12
315,428
7,063
3
305,538
12,983
8
246,910
4,178
6
177,303
5,914
6
170,388
5,757
8
111,979
3,098
4
77,567
2,862
8
62,621
1,783
4
60,411
2,184
8
49,156
1,277
1
41,601
1,160
2
37,231
2,077
N/A
(1)
35,977
1,262
5
25,998
550
1
23,612
1,046
2
20,533
870
4
19,317
449
3
16,833
731
2
15,034
623
1
11,241
433
4
10,211
136
1
9,671
465
4
7,664
19
1
7,202
145
1
6,948
316
1
6,452
209
4
6,322
314
2
697
37
142
3
$
3,985,694
131,719
142
(1)
The Scion brand is not considered a separate franchise, but
rather is governed by our Toyota franchise agreements. We sell
the Scion brand at 12 of our Toyota franchised locations.
4
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New Vehicle
New Vehicle
Percentage of
Revenues
Unit Sales
Total Units Sold
(In thousands)
$
1,750,735
72,041
55
%
983,260
32,899
25
1,251,699
26,779
20
$
3,985,694
131,719
100
%
5
Table of Contents
Focus on Customer Relationships; Emphasize Preventative
Maintenance.
Our dealerships seek to retain new
and used vehicle customers as customers of our parts and service
departments. To accomplish this goal, we use computer systems
that track customers maintenance records and provide
advance notice to owners of vehicles purchased or serviced at
our dealerships when their vehicles are due for periodic
service. Our use of computer-based customer relationship
management tools increases the reach and effectiveness of our
marketing efforts, allowing us to target our promotional
offerings to areas in which service capacity is under-utilized
or profit margins are greatest. We continue to train our service
personnel to establish relationships with their service
customers to promote a long-term business relationship. Vehicle
service contracts sold by our finance and insurance personnel
also assist us in the retention of customers after the
manufacturers warranty expires. To further enhance access
to our service facilities, we are rolling out technology that
allows customers to schedule service appointments utilizing the
internet. We believe our parts and service activities are an
integral part of the customer service experience, allowing us to
create ongoing relationships with our dealerships
customers thereby deepening customer loyalty to the dealership
as a whole.
Sell Vehicle Service Contracts in Conjunction with Vehicle
Sales.
Our finance and insurance sales
departments attempt to connect new and used vehicle customers
with vehicle service contracts and secure repeat customer
business for our parts and service departments.
Efficient Management of Parts Inventory.
Our
dealerships parts departments support their sales and
service departments, selling factory-approved parts for the
vehicle makes and models sold by a particular dealership. Parts
are either used in repairs made in the service department, sold
at retail to customers, or sold at wholesale to independent
repair shops and other franchised dealerships. Our dealerships
employ parts managers who oversee parts inventories and sales.
Our dealerships also frequently share parts with each other.
Software programs are used to monitor parts inventory to avoid
obsolete and unused parts to maximize sales and to take
advantage of manufacturer return procedures.
6
Table of Contents
extended warranties;
maintenance, or vehicle service, products and programs;
guaranteed asset protection, or GAP, insurance,
which covers the shortfall between a customers contract
balance and insurance payoff in the event of a total vehicle
loss; and
lease wear and tear insurance.
7
Table of Contents
enhancing brand and geographic diversity with a focus on import
and luxury brands;
creating economies of scale;
delivering a targeted return on investment; and
eliminating underperforming dealerships.
purchased 65 franchises with expected annual revenues, estimated
at the time of acquisition, of $3.0 billion;
disposed of 38 franchises with annual revenues of
$0.5 billion; and
have been granted four new franchises by vehicle manufacturers.
expand into geographic areas we do not currently serve;
expand our brand, product and service offerings in our existing
markets;
capitalize on economies of scale in our existing markets;
acquire the real estate to provide maximum operating
flexibility; and/or
increase operating efficiency and cost savings in areas such as
advertising, purchasing, data processing, personnel utilization
and the cost of floorplan financing.
the rate of return over a period of time;
location of the dealership in relation to existing markets and
our ability to leverage our cost structure; and
the dealership franchise brand.
8
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9
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$670.8 million under the Floorplan Line of our Revolving
Credit Facility;
$135.0 million under the Acquisition Line of our Revolving
Credit Facility;
$601.5 million of future commitments under various
operating leases;
$281.9 million in 2.25% convertible senior notes due 2036
(the 2.25% Convertible Notes);
$100.3 million in 8.25% senior subordinated notes due
2013 (the 8.25% Notes);
$124.9 million under our FMCC Facility;
$131.3 million under our real estate credit facility (our
Mortgage Facility);
$46.1 million under floorplan notes payable to various
manufacturer affiliates for foreign and rental vehicles;
$24.9 million of various notes payable;
$18.0 million of letters of credit, to collateralize
certain obligations, issued under the Acquisition Line of our
Revolving Credit Facility; and
$72.7 million of other short- and long-term purchase
commitments.
$329.2 million under the Floorplan Line of our Revolving
Credit Facility, including $64.5 million of immediately
available funds;
$197.0 million under the Acquisition Line of our Revolving
Credit Facility, which may be limited from time to time based
upon certain debt covenants;
$175.1 million under our FMCC Facility; and
$103.7 million available for additional borrowings under
the Mortgage Facility.
10
Table of Contents
inventory levels;
working capital levels;
the sales process;
minimum sales performance requirements;
customer satisfaction standards;
marketing and branding;
facility standards and signage;
personnel;
changes in management; and
monthly financial reporting.
11
Table of Contents
Percentage of New
Vehicle Retail
Units Sold
during the
Twelve Months Ended
December 31,
2007
35.9
%
12.4
%
12.3
%
12.2
%
12
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13
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claims by employees, customers or other third parties for
personal injury or property damage resulting from our
operations; and
fines and civil and criminal penalties resulting from alleged
violations of federal and state laws or regulatory requirements.
14
Table of Contents
1,355 were employed in managerial positions;
2,193 were employed in non-managerial vehicle sales department
positions;
3,819 were employed in non-managerial parts and service
department positions; and
1,565 were employed in administrative support positions.
54
President and Chief Executive Officer
46
Senior Vice President and Chief Financial Officer
54
Senior Vice President, Operations and Corporate Development
49
Vice President, General Counsel and Corporate Secretary
15
Table of Contents
Annual Report on
Form 10-K;
Quarterly Reports on
Form 10-Q;
Current Reports on
Form 8-K;
Amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act;
Our Corporate Governance Guidelines;
The charters for our Audit, Compensation, Finance/Risk
Management and Nominating/Governance Committees;
Our Code of Conduct for Directors, Officers and
Employees; and
Our Code of Ethics for our Chief Executive Officer, Chief
Financial Officer and Controller.
16
Table of Contents
Item 1A.
Risk
Factors
17
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18
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19
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any one person, who in the opinion of the manufacturer is
unqualified to own its franchised dealership or has interests
incompatible with the manufacturer, from acquiring more than a
specified percentage of our common stock (ranging from 20% to
50% depending on the particular manufacturers
restrictions) and this trigger level can fall to as low as 5% if
another vehicle manufacturer is the entity acquiring the
ownership interest or voting rights;
certain material changes in our business or extraordinary
corporate transactions such as a merger or sale of a material
amount of our assets;
the removal of a dealership general manager without the consent
of the manufacturer; and
a change in control of our Board of Directors or a change in
management.
customer rebates;
dealer incentives on new vehicles;
below-market financing on new vehicles and special leasing terms;
20
Table of Contents
warranties on new and used vehicles; and
sponsorship of used vehicle sales by authorized new vehicle
dealers.
incurring significantly higher capital expenditures and
operating expenses;
failing to integrate the operations and personnel of the
acquired dealerships;
entering new markets with which we are not familiar;
incurring undiscovered liabilities at acquired dealerships, in
the case of stock acquisitions;
disrupting our ongoing business;
failing to retain key personnel of the acquired dealerships;
impairing relationships with employees, manufacturers and
customers; and
incorrectly valuing acquired entities,
21
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22
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currency and exchange rate fluctuations;
foreign government regulative and potential changes;
lack of franchise protection creating greater
competition; and
tariffs, trade restrictions, prohibition on transfer of funds,
and international tax laws and treaties.
23
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franchised automotive dealerships in our markets that sell the
same or similar makes of new and used vehicles that we offer,
occasionally at lower prices than we do;
other national or regional affiliated groups of franchised
dealerships
and/or
of
used vehicle dealerships;
private market buyers and sellers of used vehicles;
Internet-based vehicle brokers that sell vehicles obtained from
franchised dealers directly to consumers;
service center chain stores; and
independent service and repair shops.
24
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25
Table of Contents
our ability to obtain additional financing for acquisitions,
capital expenditures, working capital or general corporate
purposes may be impaired in the future;
a substantial portion of our current cash flow from operations
must be dedicated to the payment of principal on our
indebtedness, thereby reducing the funds available to us for our
operations and other purposes;
some of our borrowings are and will continue to be at variable
rates of interest, which exposes us to the risk of increasing
interest rates; and
we may be substantially more leveraged than some of our
competitors, which may place us at a relative competitive
disadvantage and make us more vulnerable to changing market
conditions and regulations.
26
Table of Contents
providing for a board of directors with staggered, three-year
terms, permitting the removal of a director from office only for
cause;
allowing only the Board of Directors to set the number of
directors;
requiring super-majority or class voting to affect certain
amendments to our certificate of incorporation and bylaws;
limiting the persons who may call special stockholders
meetings;
limiting stockholder action by written consent;
establishing advance notice requirements for nominations for
election to the board of directors or for proposing matters that
can be acted upon at stockholders meetings; and
allowing our Board of Directors to issue shares of preferred
stock without stockholder approval.
Item 1B.
Unresolved
Staff Comments
27
Table of Contents
Item 2.
Properties
Dealerships
Owned
Leased
Massachusetts
4
5
New Hampshire
3
New Jersey
4
3
New York
1
3
Louisiana
3
Florida
2
2
Georgia
3
1
Mississippi
3
Alabama
1
South Carolina
2
16
24
Texas
2
32
Oklahoma
3
8
New Mexico
3
Kansas
2
7
43
California
2
9
U.K.
3
28
76
28
Table of Contents
Item 3.
Legal
Proceedings
Item 4.
Submission
of Matters to a Vote of Security Holders
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
29
Table of Contents
High
Low
Dividends Paid
$
50.17
$
30.94
$
0.13
63.97
47.54
0.14
61.73
43.27
0.14
58.68
47.80
0.14
$
55.37
$
39.16
$
0.14
43.41
39.14
0.14
42.96
32.57
0.14
35.38
23.59
0.14
30
Table of Contents
AMONG GROUP 1 AUTOMOTIVE, INC., S&P 500 INDEX AND A PEER
GROUP
Group 1
Automotive, Inc.
S&P 500
Peer Group
$
100.00
$
100.00
$
100.00
151.52
128.68
160.31
131.88
142.67
163.45
131.59
149.65
186.52
217.10
173.28
202.66
101.30
182.67
143.96
Item 6.
Selected
Financial Data
31
Table of Contents
Year Ended December 31,
2007
2006
2005
2004
2003
(In thousands, except per share amounts)
$
6,392,997
$
6,083,484
$
5,969,590
$
5,435,033
$
4,518,560
5,396,618
5,118,684
5,037,184
4,603,267
3,795,149
996,379
964,800
932,406
831,766
723,411
778,061
739,765
741,471
672,210
561,078
20,897
18,138
18,927
15,836
12,510
16,784
2,241
7,607
44,711
180,637
204,656
164,401
99,009
149,823
(48,117
)
(46,682
)
(37,997
)
(25,349
)
(21,571
)
(25,471
)
(18,783
)
(18,122
)
(19,299
)
(15,191
)
(1,598
)
(488
)
(6,381
)
572
645
125
(28
)
11
106,023
139,348
108,407
47,952
113,072
38,071
50,958
38,138
20,171
36,946
67,952
88,390
70,269
27,781
76,126
(16,038
)
$
67,952
$
88,390
$
54,231
$
27,781
$
76,126
$
2.92
$
3.66
$
2.94
$
1.22
$
3.38
$
2.92
$
3.66
$
2.27
$
1.22
$
3.38
$
2.90
$
3.62
$
2.90
$
1.18
$
3.26
$
2.90
$
3.62
$
2.24
$
1.18
$
3.26
$
0.56
$
0.55
$
$
$
23,270
24,146
23,866
22,808
22,524
23,406
24,446
24,229
23,494
23,346
32
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December 31,
2007
2006
2005
2004
2003
(In thousands)
$
190,553
$
237,054
$
137,196
$
155,453
$
275,582
899,792
830,628
756,838
877,575
671,279
2,505,297
2,113,955
1,833,618
1,947,220
1,502,445
670,820
437,288
407,396
632,593
297,848
170,911
287,978
316,189
215,667
195,720
135,000
84,000
131,317
420,781
429,493
158,860
157,801
231,088
684,481
692,840
626,793
567,174
518,109
50
%
38
%
20
%
30
%
31
%
(1)
Includes, the acquisition line, mortgage facility and other
long-term debt
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operation
Table of Contents
Asset Impairments:
In conjunction with our
annual impairment assessment of goodwill and indefinite-lived
intangible assets, we determined the carrying value of
indefinite-lived intangible franchise rights associated with six
of our dealerships to be impaired. Accordingly, we recognized a
$9.2 million pretax impairment charge in the fourth quarter
of 2007. Further, in conjunction with the sale of real estate
associated with one of our dealerships, we recognized a
$5.4 million pretax impairment charge. In addition, we
recognized a total of $2.2 million in additional pretax
impairment charges related to the impairment of fixed assets,
primarily associated with sold stores and terminated franchises.
Lease Terminations:
During the first half of
2007, our results were negatively impacted by $4.3 million
of pretax charges as we terminated real estate leases associated
with the sale or termination of two of our domestic brand
franchises. In addition, during 2007, we successfully completed
the conversion of all of our stores to operate on the Dealer
Services Group of Automatic Data Processing Inc.
(ADP) platform for dealership management services.
As a result, we recognized an additional $0.7 million in
lease termination costs related to these conversions.
Loss on Bond Redemption:
During the third
quarter 2007, we recognized a $1.6 million pretax charge on
the redemption of $36.4 million of our 8.25% Notes.
Asset Impairments:
In conjunction with our
annual impairment assessment of goodwill and indefinite-lived
intangible assets, we determined the carrying value of
indefinite-lived intangible franchise rights associated with two
of our domestic franchises to be impaired. Accordingly, we
recognized a $1.4 million pretax impairment charge in the
fourth quarter of 2006. In addition, during the fourth quarter
of 2006, we entered into an agreement to sell one of our Ford
dealership franchises and, as a result, identified the carrying
value of certain fixed assets associated with the dealership to
be impaired. In connection therewith, we recorded a pretax
impairment charge of $0.8 million.
Hurricanes Katrina and Rita Insurance Settlements and New
Orleans Recovery:
We settled all building,
content and vehicle damage and business interruption insurance
claims with our insurance carriers in 2006. As a result, we
recognized an additional $6.4 million of business
interruption proceeds related to covered
34
Table of Contents
payroll and fixed cost expenditures incurred during 2006, as a
reduction of selling, general and administrative expenses in the
consolidated statements of operations.
Lease Terminations:
On March 30, 2006, we
announced that ADP would become the sole dealership management
system provider for our existing stores. We converted a number
of our stores from other systems to ADP in 2006 and settled the
lease termination agreement with one of our other system
providers for all stores converted as of December 31, 2006.
Dealership Disposals:
We disposed of 13
franchises during 2006, resulting in an aggregate pretax gain on
sale of $5.8 million.
Severance Costs:
In conjunction with our
management realignment from platform to regional structures, we
entered into severance agreements with several employees. In
aggregate, these severance costs amounted to $3.5 million
in 2006.
Stock-Based Compensation:
We provide
compensation benefits to employees and non-employee directors
pursuant to our 1996 Stock Option Plan, as amended, and 1998
Employee Stock Purchase Plan, as amended. Historically, we
utilized stock options to provide long-term incentive to these
individuals. However, beginning in March 2005, we began
utilizing restricted stock awards or, at the recipients
election, phantom stock awards, in lieu of stock options. Any
future grants of either stock options or restricted stock awards
are subject to the discretion of our board of directors.
Hurricanes Katrina and Rita:
On
August 29, 2005, Hurricane Katrina struck the Gulf Coast of
the United States, including New Orleans, Louisiana. At that
time, we operated six dealerships in the New Orleans area
consisting of nine franchises. Two of the dealerships were
located in the heavily flooded East Bank of New Orleans and
nearby Metairie areas, while the other four were located on the
West Bank of New Orleans, where flood-related damage was less
severe. The East Bank stores suffered significant damage and
were ultimately closed in 2006 and the respective franchises
terminated. The West Bank stores reopened approximately two
weeks after the storm.
35
Table of Contents
Cumulative Effect of a Change in Accounting
Principle:
For some of our dealerships, our
adoption of Emerging Issues Task Force (EITF)
D-108,
Use of the Residual Method to Value Acquired Assets Other
Than Goodwill, resulted in intangible franchise rights
having carrying values that were in excess of their fair values.
This required us to write-off the excess value of
$16.0 million, net of deferred taxes of $10.2 million,
or $0.66 per diluted share, as the cumulative effect of a change
in accounting principle in the first quarter of 2005.
Asset Impairments:
In connection with the
preparation and review of our third-quarter interim financial
statements, we determined that recent events and circumstances
in New Orleans indicated that an impairment of goodwill,
intangible franchise rights
and/or
other
long-lived assets may have occurred in the three months ended
September 30, 2005. Therefore, we performed interim
impairment assessments of these assets. As a result of these
assessments, we determined that the carrying value of the
intangible franchise right associated with our Dodge franchise
in New Orleans was impaired and recorded a pretax charge of
$1.3 million during the third quarter of 2005.
36
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For the Year Ended December 31,
2007
2006
2005
131,719
129,198
126,108
67,286
67,868
68,286
199,005
197,066
194,394
45,524
45,706
50,489
244,529
242,772
244,883
6.7
%
7.2
%
7.1
%
11.3
%
12.6
%
12.3
%
54.6
%
54.4
%
54.3
%
15.6
%
15.9
%
15.6
%
78.1
%
76.7
%
79.5
%
2.8
%
3.4
%
2.8
%
1.7
%
2.3
%
1.8
%
$
1,050
$
977
$
957
(1)
We monitor a statistic we call adjusted used vehicle gross
margin which equals total used vehicle gross profit, which
includes the total net profit or loss from the wholesale sale of
used vehicles, divided by retail used vehicle sales revenues.
The net profit or loss on wholesale used vehicle sales are
included in this number, as these transactions facilitate retail
used vehicle sales and management of inventory levels.
(2)
Selling, general and administrative expenses.
37
Table of Contents
38
Table of Contents
certain transaction costs, which are presently treated as cost
of the acquisition, will be expensed;
restructuring costs associated with a business combination,
which are presently capitalized, will be expensed subsequent to
the acquisition date;
contingencies, including contingent consideration, which is
presently accounted for as an adjustment of purchase price, will
be recorded at fair value with subsequent adjustments recognized
in operations; and
valuation allowances on acquired deferred tax assets, which are
presently considered to be subsequent changes in consideration
and are recorded as decreases in goodwill, will be recognized up
front and in operations.
39
Table of Contents
40
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41
Table of Contents
42
Table of Contents
For the Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
$
3,599,205
(2.7
)%
$
3,698,628
$
3,542,274
(1.0
)%
$
3,578,174
1,035,880
(2.7
)%
1,064,560
1,058,082
2.0
%
1,037,638
273,348
(13.8
)%
317,049
309,502
(15.8
)%
367,412
649,414
2.3
%
634,997
635,423
1.9
%
623,654
196,261
4.7
%
187,535
182,206
0.9
%
180,582
5,754,108
(2.5
)%
5,902,769
5,727,487
(1.0
)%
5,787,460
3,360,665
(2.1
)%
3,433,422
3,287,339
(1.1
)%
3,322,394
912,537
(1.6
)%
927,626
920,967
1.6
%
906,404
277,361
(13.1
)%
319,316
312,881
(15.6
)%
370,533
296,241
2.7
%
288,531
290,765
2.4
%
284,055
4,846,804
(2.5
)%
4,968,895
4,811,952
(1.5
)%
4,883,386
$
907,304
(2.8
)%
$
933,874
$
915,535
1.3
%
$
904,074
$
708,255
(0.2
)%
$
710,006
$
708,059
(0.1
)%
$
708,814
$
18,118
6.2
%
$
17,063
$
17,442
(3.9
)%
$
18,157
$
43,323
(2.4
)%
$
44,371
$
43,947
21.9
%
$
36,062
6.6
%
7.2
%
7.2
%
7.1
%
9.1
%
9.7
%
9.8
%
9.1
%
54.4
%
54.6
%
54.2
%
54.5
%
15.8
%
15.8
%
16.0
%
15.6
%
78.1
%
76.0
%
77.3
%
78.4
%
3.0
%
3.5
%
3.3
%
3.0
%
$
1,086
10.6
%
$
982
$
986
2.7
%
$
960
43
Table of Contents
For the Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
119,565
(5.2
)%
126,118
119,912
(2.1
)%
122,484
12,154
3,080
9,286
3,624
131,719
2.0
%
129,198
129,198
2.5
%
126,108
$
3,599,205
(2.7
)%
$
3,698,628
$
3,542,274
(1.0
)%
$
3,578,174
386,489
88,950
245,304
96,706
$
3,985,694
5.2
%
$
3,787,578
$
3,787,578
3.1
%
$
3,674,880
$
238,540
(10.1
)%
$
265,206
$
254,935
(0.3
)%
$
255,780
28,142
6,804
17,075
5,587
$
266,682
(2.0
)%
$
272,010
$
272,010
4.1
%
$
261,367
$
1,995
(5.1
)%
$
2,103
$
2,126
1.8
%
$
2,088
$
2,315
$
2,209
$
1,839
$
1,542
$
2,025
(3.8
)%
$
2,105
$
2,105
1.5
%
$
2,073
6.6
%
7.2
%
7.2
%
7.1
%
7.3
%
7.6
%
7.0
%
5.8
%
6.7
%
7.2
%
7.2
%
7.1
%
63
0.0
%
63
63
12.5
%
56
(1)
Inventory days supply equals units in inventory at the end of
the period, divided by unit sales for the month then ended,
multiplied by 30 days.
44
Table of Contents
For The Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
37,713
(4.8
)%
39,615
34,290
10.2
%
31,116
13,290
(15.9
)
15,812
16,032
(15.5
)
18,965
12,335
(4.1
)
12,859
11,335
(1.2
)
11,475
11,055
2.9
10,740
10,214
1.8
10,035
5,914
(14.5
)
6,913
7,152
(9.3
)
7,886
5,732
(6.1
)
6,102
6,287
(10.5
)
7,021
7,019
4.3
6,728
6,129
7.0
5,726
4,907
5.6
4,645
4,319
1.6
4,249
4,069
(1.1
)
4,116
4,116
18.8
3,466
2,037
(7.4
)
2,200
1,940
(4.6
)
2,034
15,494
(5.5
)
16,388
18,098
(11.8
)
20,511
119,565
(5.2
)
126,118
119,912
(2.1
)
122,484
45
Table of Contents
(dollars
in thousands, except per unit amounts)
For The Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
61,073
(5.8
)%
64,828
64,874
(1.2
)%
65,689
6,213
3,040
2,994
2,597
67,286
(0.9
)%
67,868
67,868
(0.6
)%
68,286
$
1,035,880
(2.7
)%
$
1,064,560
$
1,058,082
2.0
%
$
1,037,638
132,988
47,112
53,590
37,968
$
1,168,868
5.1
%
$
1,111,672
$
1,111,672
3.4
%
$
1,075,606
$
123,343
(9.9
)%
$
136,934
$
137,115
4.5
%
$
131,234
12,661
6,474
6,293
4,936
$
136,004
(5.2
)%
$
143,408
$
143,408
5.3
%
$
136,170
$
2,020
(4.4
)%
$
2,112
$
2,114
5.8
%
$
1,998
$
2,038
$
2,130
$
2,102
$
1,901
$
2,021
(4.4
)%
$
2,113
$
2,113
6.0
%
$
1,994
11.9
%
12.9
%
13.0
%
12.6
%
9.5
%
13.7
%
11.7
%
13.0
%
11.6
%
12.9
%
12.9
%
12.7
%
46
Table of Contents
(dollars
in thousands, except per unit amounts)
For The Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
40,764
(7.2
)%
43,930
42,500
(11.5
)%
48,022
4,760
1,776
3,206
2,467
45,524
(0.4
)%
45,706
45,706
(9.5
)%
50,489
$
273,348
(13.8
)%
$
317,049
$
309,502
(15.8
)%
$
367,412
44,530
12,620
20,167
16,444
$
317,878
(3.6
)%
$
329,669
$
329,669
(14.1
)%
$
383,856
$
(4,013
)
(77.0
)%
$
(2,267
)
$
(3,379
)
(8.3
)%
$
(3,121
)
5
(822
)
290
(857
)
$
(4,008
)
(29.8
)%
$
(3,089
)
$
(3,089
)
22.3
%
$
(3,978
)
$
(98
)
(88.5
)%
$
(52
)
$
(80
)
(23.1
)%
$
(65
)
$
1
$
(463
)
$
90
$
(347
)
$
(88
)
(29.4
)%
$
(68
)
$
(68
)
13.9
%
$
(79
)
(1.5
)%
(0.7
)%
(1.1
)%
(0.8
)%
0.0
%
(6.5
)%
1.4
%
(5.2
)%
(1.3
)%
(0.9
)%
(0.9
)%
(1.0
)%
47
Table of Contents
For the Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
101,837
(6.4
)%
108,758
107,374
(5.6
)%
113,711
10,973
4,816
6,200
5,064
112,810
(0.7
)%
113,574
113,574
(4.4
)%
118,775
$
1,309,228
(5.2
)%
$
1,381,609
$
1,367,584
(2.7
)%
$
1,405,050
177,518
59,732
73,757
54,412
$
1,486,746
3.2
%
$
1,441,341
$
1,441,341
(1.2
)%
$
1,459,462
$
119,330
(11.4
)%
$
134,667
$
133,736
4.4
%
$
128,113
12,666
5,652
6,583
4,079
$
131,996
(5.9
)%
$
140,319
$
140,319
6.1
%
$
132,192
$
1,172
(5.3
)%
$
1,238
$
1,246
10.6
%
$
1,127
$
1,154
$
1,174
$
1,062
$
805
$
1,170
(5.3
)%
$
1,235
$
1,235
11.0
%
$
1,113
9.1
%
9.7
%
9.8
%
9.1
%
7.1
%
9.5
%
8.9
%
7.5
%
8.9
%
9.7
%
9.7
%
9.1
%
35
12.9
%
31
31
10.7
%
28
(1)
Inventory days supply equals units in inventory at the end of
the period, divided by unit sales for the month then ended,
multiplied by 30 days.
48
Table of Contents
For the Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
$
649,414
2.3
%
$
634,997
$
635,423
1.9
%
$
623,654
62,236
26,939
26,513
25,567
$
711,650
7.5
%
$
661,936
$
661,936
2.0
%
$
649,221
$
353,173
1.9
%
$
346,466
$
344,658
1.5
%
$
339,599
35,621
13,376
15,184
13,221
$
388,794
8.0
%
$
359,842
$
359,842
2.0
%
$
352,820
54.4
%
54.6
%
54.2
%
54.5
%
57.2
%
49.7
%
57.3
%
51.7
%
54.6
%
54.4
%
54.4
%
54.3
%
49
Table of Contents
50
Table of Contents
For the Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
180,638
(5.4
)%
190,946
184,786
(1.8
)%
188,173
18,367
6,120
12,280
6,221
199,005
1.0
%
197,066
197,066
1.4
%
194,394
$
68,323
(0.5
)%
$
68,641
$
66,922
(1.7
)%
$
68,112
6,016
2,047
3,766
2,054
$
74,339
5.2
%
$
70,688
$
70,688
0.7
%
$
70,166
$
84,148
13.1
%
$
74,387
$
71,830
4.6
%
$
68,663
3,412
1,862
4,419
2,069
$
87,560
14.8
%
$
76,249
$
76,249
7.8
%
$
70,732
$
43,790
(1.6
)%
$
44,507
$
43,454
(0.8
)%
$
43,807
3,218
1,185
2,238
1,322
$
47,008
2.9
%
$
45,692
$
45,692
1.2
%
$
45,129
$
196,261
4.7
%
$
187,535
$
182,206
0.9
%
$
180,582
12,646
5,094
10,423
5,445
$
208,907
8.5
%
$
192,629
$
192,629
3.5
%
$
186,027
$
1,086
10.6
%
$
982
$
986
2.7
%
$
960
$
689
$
832
$
849
$
875
$
1,050
7.5
%
$
977
$
977
2.1
%
$
957
51
Table of Contents
For The Year Ended December 31,
%
%
2007
Change
2006
2006
Change
2005
$
418,460
(0.4
)%
$
419,957
$
414,549
(3.8
)%
$
431,079
41,262
17,930
23,338
17,364
$
459,722
5.0
%
$
437,887
$
437,887
(2.4
)%
$
448,443
$
53,235
(17.3
)%
$
64,398
$
63,408
3.6
%
$
61,186
5,425
4,225
5,215
3,197
$
58,660
(14.5
)%
$
68,623
$
68,623
6.6
%
$
64,383
$
90,783
1.9
%
$
89,133
$
91,194
8.0
%
$
84,470
5,621
6,668
4,607
4,758
$
96,404
0.6
%
$
95,801
$
95,801
7.4
%
$
89,228
$
145,777
6.8
%
$
136,518
$
138,908
5.2
%
$
132,079
17,498
936
(1,454
)
7,338
$
163,275
18.8
%
$
137,454
$
137,454
(1.4
)%
$
139,417
$
708,255
(0.2
)%
$
710,006
$
708,059
(0.1
)%
$
708,814
69,806
29,759
31,706
32,657
$
778,061
5.2
%
$
739,765
$
739,765
(0.2
)%
$
741,471
$
907,304
(2.8
)%
$
933,874
$
915,535
1.3
%
$
904,074
89,075
30,926
49,265
28,332
$
996,379
3.3
%
$
964,800
$
964,800
3.5
%
$
932,406
78.1%
76.0%
77.3%
78.4%
78.4%
96.2%
64.4%
115.3%
78.1%
76.7%
76.7%
79.5%
8,900
8,800
8,800
8,400
52
Table of Contents
53
Table of Contents
For The Year Ended December 31,
2007
% Change
2006
2006
% Change
2005
$
18,118
6.2
%
$
17,063
$
17,442
(3.9
)%
$
18,157
2,779
1,075
696
770
$
20,897
15.2
%
$
18,138
$
18,138
(4.2
)%
$
18,927
54
Table of Contents
(dollars
in thousands)
For the Year Ended December 31,
2007
% Change
2006
2006
% Change
2005
$
43,323
(2.4
)%
$
44,371
$
43,947
21.9
%
$
36,062
4,794
2,311
2,735
1,935
$
48,117
3.1
%
$
46,682
$
46,682
22.9
%
$
37,997
$
38,183
0.1
%
$
38,129
$
38,129
7.1
%
$
35,610
55
Table of Contents
56
Table of Contents
For the Year Ended December 31,
2007
2006
2005
(In thousands)
$
3,772
$
53,444
$
365,379
(393,165
)
(269,258
)
(49,962
)
383,862
217,432
(315,472
)
(33
)
$
(5,564
)
$
1,618
$
(55
)
Operating activities.
For the year ended
December 31, 2007, we realized $3.8 million in net
cash from operating activities, primarily driven by net income
of $68.0 million and significant non-cash adjustments
related to depreciation and amortization of $20.9 million,
deferred income taxes of $18.1 million and asset
impairments of $16.8 million. Substantially offsetting the
positive cash flow from these operating activities, the net
change in our operating assets and liabilities resulted in a
cash outflow of $130.1 million, which was principally the
result of our decision not to renew the floorplan financing
arrangement with DaimlerChrysler in February 2007 and to use
$112.1 million of borrowings from our revolving credit
facility to close the DaimlerChrysler facility. The result of
this decision was a decrease in operating cash flow and increase
in financing cash flow.
57
Table of Contents
Investing activities.
During 2007, we used
$393.2 million in investing activities, primarily as a
result of $281.8 million paid for acquisitions, net of cash
received, and $146.7 million for the purchase of property
and equipment. The $281.8 million used for acquisitions
consisted of $75.0 million to purchase the associated
dealership real estate, of which $49.7 million was
ultimately financed through our Mortgage Facility, and
$72.9 million to pay off the sellers floorplan
borrowings. The $146.7 million of the property and
equipment purchases consisted of $76.3 million for the
purchase of land and existing buildings, of which
$66.6 million was financed through our Mortgage Facility,
and $70.4 million for the construction of new or expanded
facilities, imaging projects required by the manufacturer and
replacement of dealership equipment.
Financing activities.
During 2007, we
generated $383.9 million from financing activities,
consisting of $233.5 million in net borrowings under the
floorplan line of our credit facility, $135.0 million in
net borrowings under the acquisition line of our credit facility
utilized to fund the dealership acquisitions consummated in the
fourth quarter of 2007 and $133.7 million of borrowings
under our mortgage facility as we continue to implement our
strategy of strategically acquiring the real estate associated
with our dealership operations. Partially offsetting this
positive cash flow, we used $63.0 million of cash to
repurchase outstanding common stock and $36.9 million of
cash to repurchase $36.4 million par value of our
outstanding 8.25% Notes.
58
Table of Contents
Revolving Credit Facility.
In March 2007, we
amended our revolving credit facility, expanding it by
$400.0 million to a total of $1.35 billion, in order
to increase our inventory borrowing capacity and reduce our
overall cost of capital. The facility, which is now comprised of
22 major financial institutions, including three
manufacturer-affiliated finance companies (Toyota, Nissan and
BMW), matures in March 2012. We can expand the Revolving Credit
Facility to its maximum commitment of $1.85 billion,
subject to participating lender approval. This Revolving Credit
Facility consists of two tranches: (1) $1.0 billion
for floorplan financing, which we refer to as the Floorplan
Line, and (2) $350.0 million for acquisitions, capital
expenditures and general corporate purposes, including the
issuance of letters of credit. We refer to this tranche as the
Acquisition Line. The Floorplan Line bears interest at rates
equal to LIBOR plus 87.5 basis points for new vehicle
inventory and LIBOR plus 97.5 basis points for used vehicle
inventory. The Acquisition Line bears interest at LIBOR plus a
margin that ranges from 150.0 to 225.0 basis points,
depending on our leverage ratio. The capacity under these two
tranches can be redesignated within the overall
$1.35 billion commitment. On January 16, 2008, we
redistributed $150.0 million of borrowing capacity from our
Acquisition Line to our Floorplan Line.
Ford Motor Credit Facility.
The FMCC Facility
provides financing for our entire Ford, Lincoln and Mercury new
vehicle inventory. The FMCC Facility, which matures in December
2008, provides for up to $300.0 million of financing for
inventory at an interest rate equal to Prime plus 100 basis
points minus certain incentives. We expect the net cost of our
borrowings under the FMCC Facility, after all incentives, to
approximate the cost of borrowing under the Floorplan Line of
our revolving credit facility.
Real Estate Credit Facility.
In March 2007, we
completed an initial $75.0 million, five-year real estate
credit facility with Bank of America, N.A. In April 2007, we
amended this facility expanding its maximum commitment to
$235.0 million and syndicating the facility with nine
financial institutions. We refer to this facility as the
Mortgage Facility. The Mortgage Facility will be used for
general working capital, capital expenditures, and acquisitions
of real estate and dealerships. Borrowings under the Mortgage
Facility consist of individual term loans, each in a minimum
amount of $0.5 million,
59
Table of Contents
secured by a parcel or property. Borrowings under the facility
totaled $131.3 million at December 31, 2007. The
Mortgage Facility matures in March 2012 and bears interest at a
rate equal to LIBOR plus 105.0 basis points.
DaimlerChrysler Facility.
On February 28,
2007, the DaimlerChrysler Facility matured. The facility
provided for up to $300.0 million of financing for our
entire Chrysler, Dodge, Jeep and Mercedes-Benz new vehicle
inventory. We elected not to renew the DaimlerChrysler Facility
and used available funds from our Floorplan Line to pay off the
outstanding balance on the maturity date. We continue to use the
Floorplan Line to finance our Chrysler, Dodge, Jeep and
Mercedes-Benz new vehicle inventory.
Total
Commitment
Outstanding
Available
(In thousands)
$
1,000,000
$
670,820
$
329,180
350,000
153,000
197,000
1,350,000
823,820
526,180
300,000
124,866
175,134
235,000
131,317
103,683
$
1,885,000
$
1,080,003
$
804,997
(1)
The available balance at December 31, 2007, includes
$64.5 million of immediately available funds.
(2)
The outstanding balance at December 31, 2007 includes
$135 million associated with acquisitions during the year
and $18 million of letters of credit outstanding.
(3)
Outstanding balance excludes $46.1 million of borrowings
with manufacturer-affiliates for foreign and rental vehicle
financing not associated with any of the Companys credit
facilities.
60
Table of Contents
We may, prior to August 15, 2008, redeem all or a portion
of the 8.25% Notes at a redemption price equal to the
principal amount plus a make-whole premium to be determined,
plus accrued interest.
We may, during the twelve-month periods beginning
August 15, 2008, 2009, 2010 and 2011, and thereafter,
redeem all or a portion of the 8.25% Notes at redemption
prices of 104.125%, 102.750%, 101.375% and 100.000%,
respectively, of the principal amount plus accrued interest.
61
Table of Contents
62
Table of Contents
Net
Share Entitlement
Shares
Shares Issuable
Under the
Issuable
Potential
Company
Under the 2.25%
Purchased
Under
Net Shares
EPS
Notes
Options
the Warrants
Issuable
Dilution
(In thousands)
6
(6
)
6
201
(201
)
201
380
(380
)
380
547
(547
)
547
701
(701
)
701
845
(845
)
845
979
(979
)
979
1,104
(1,104
)
1,104
1,221
(1,221
)
1,221
1,332
(1,332
)
100
100
1,432
1,435
(1,435
)
240
240
1,675
1,533
(1,533
)
372
372
1,905
1,625
(1,625
)
497
497
2,122
1,713
(1,713
)
615
615
2,328
1,795
(1,795
)
726
726
2,521
1,874
(1,874
)
832
832
2,706
1,948
(1,948
)
933
933
2,881
2,019
(2,019
)
1,029
1,029
3,048
63
Table of Contents
Payments Due by Period
Total
< 1 Year
1-3 Years
3-5 Years
Thereafter
(In thousands)
$
841,731
$
841,731
$
$
$
687,098
12,260
17,553
250,602
406,683
7,770
7,770
317,079
35,570
71,139
65,544
144,826
498,724
54,125
105,638
100,631
238,330
72,668
72,668
$
2,425,070
$
1,024,124
$
194,330
$
416,777
$
789,839
(1)
Includes $18.0 million of outstanding letters of credit.
64
Table of Contents
(2)
Estimated interest payments were calculated using the floorplan
balance and weighted average interest rate at December 31,
2007, and the assumption that these liabilities would be settled
within 60 days which approximates our weighted average
inventory days outstandings
(3)
Estimated interest payments on long-term debt obligations
includes fixed rate interest on our
8
1
/
4
% Senior
Subordinated Notes due 2013, and our
2
1
/
4
% Convertible
Notes due 2036 and variable rate interest on our real estate
mortgage facility due 2012 and the Acquisition Line of our
Revolving Credit Facility Due 2012.
(4)
Includes capital expenditures, acquisition commitments and other.
Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
65
Table of Contents
Item 8.
Financial
Statements and Supplementary Data
Item 9.
Changes
in and Disagreements With Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
66
Table of Contents
67
Table of Contents
68
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accounting Fees and Services
Item 15.
Exhibits,
Financial Statement Schedules
Exhibit
3
.1
Restated Certificate of Incorporation (Incorporated by reference
to Exhibit 3.1 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-1
Registration
No. 333-29893)
3
.2
Certificate of Designation of Series A Junior Participating
Preferred Stock (Incorporated by reference to Exhibit 3.2
of Group 1s Quarterly Report on
Form 10-Q
(File
No. 001-13461)
for the period ended March 31, 2007)
3
.3
Amended and Restated Bylaws of Group 1 Automotive, Inc.
(Incorporated by reference to Exhibit 3.1 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed November 13, 2007)
4
.1
Specimen Common Stock Certificate (Incorporated by reference to
Exhibit 4.1 of Group 1 Automotive, Inc.s Registration
Statement on
Form S-1
Registration
No. 333-29893)
4
.2
Subordinated Indenture dated August 13, 2003 among Group 1
Automotive, Inc., the Subsidiary Guarantors named therein and
Wells Fargo Bank, N.A., as Trustee (Incorporated by reference to
Exhibit 4.6 of Group 1 Automotive, Inc.s Registration
Statement on
Form S-4
Registration
No. 333-109080)
4
.3
First Supplemental Indenture dated August 13, 2003 among
Group 1 Automotive, Inc., the Subsidiary Guarantors named
therein and Wells Fargo Bank, N.A., as Trustee (Incorporated by
reference to Exhibit 4.7 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-4
Registration
No. 333-109080)
69
Table of Contents
Exhibit
4
.4
Form of Subordinated Debt Securities (included in
Exhibit 4.3)
4
.5
Purchase Agreement dated June 20, 2006 among Group 1
Automotive, Inc., J.P. Morgan Securities Inc., Banc of
America Securities LLC, Comerica Securities Inc., Morgan
Stanley & Co. Incorporated, Wachovia Capital Markets,
LLC, and U.S. Bancorp Investments, Inc. (Incorporated by
reference to Exhibit 4.1 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.6
Indenture related to the Convertible Senior Notes Due 2036 dated
June 26, 2006 between Group 1 Automotive Inc. and Wells
Fargo Bank, National Association, as trustee (including Form of
2.25% Convertible Senior Note Due 2036) (Incorporated by
reference to Exhibit 4.2 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.7
Registration Rights Agreement dated June 26, 2006 among
Group 1 Automotive, Inc., J.P. Morgan Securities Inc., Banc
of America Securities LLC, Comerica Securities Inc., Morgan
Stanley & Co. Incorporated, Wachovia Capital Markets,
LLC, and U.S. Bancorp Investments, Inc. (Incorporated by
reference to Exhibit 4.3 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.8
Letter Agreement dated June 20, 2006 between Group 1
Automotive, Inc. and JPMorgan Chase Bank, National Association,
London Branch (Incorporated by reference to Exhibit 4.4 of
Group 1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.9
Amendment dated June 23, 2006 to Letter Agreement dated
June 20, 2006 between Group 1 Automotive, Inc. and JPMorgan
Chase Bank, National Association, London Branch (Incorporated by
reference to Exhibit 4.8 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.10
Letter Agreement dated June 20, 2006 between Group 1
Automotive, Inc. and Bank of America, N.A. (Incorporated by
reference to Exhibit 4.5 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.11
Amendment dated June 23, 2006 to Letter Agreement dated
June 20, 2006 between Group 1 Automotive, Inc. and Bank of
America, N.A. (Incorporated by reference to Exhibit 4.9 of
Group 1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.12
Letter Agreement dated June 20, 2006 between Group 1
Automotive, Inc. and JPMorgan Chase Bank, National Association,
London Branch (Incorporated by reference to Exhibit 4.6 of
Group 1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.13
Amendment dated June 23, 2006 to Letter Agreement dated
June 20, 2006 between Group 1 Automotive, Inc. and JPMorgan
Chase Bank, National Association, London Branch (Incorporated by
reference to Exhibit 4.10 of Group 1 Automotive,
Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.14
Letter Agreement dated June 20, 2006 between Group 1
Automotive, Inc. and Bank of America, N.A. (Incorporated by
reference to Exhibit 4.7 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.15
Amendment dated June 23, 2006 to Letter Agreement dated
June 20, 2006 between Group 1 Automotive, Inc. and Bank of
America, N.A. (Incorporated by reference to Exhibit 4.11 of
Group 1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
10
.1
Seventh Amended and Restated Revolving Credit Agreement
effective March 19, 2007 among Group 1 Automotive, Inc.,
the Subsidiary Borrowers listed therein, the Lenders listed
therein, JPMorgan Chase Bank, N.A., as Administrative Agent,
Comerica Bank, as Floor Plan Agent, and Bank of America, N.A.,
as Syndication Agent (Incorporated by reference to
Exhibit 10.1 of Group 1 Automotive, Inc.s Current
Report on
Form 8-K
(File
No. 001-13461)
filed March 21, 2007)
10
.2
First Amendment to Revolving Credit Agreement dated effective
January 16, 2008, among Group 1 Automotive, Inc., the
Subsidiary Borrowers listed therein, the Lenders listed therein,
JPMorgan Chase Bank, N.A., as Administrative Agent, Comerica
Bank, as Floor Plan Agent, and Bank of America, N.A., as
Syndication Agent
Table of Contents
Exhibit
10
.3
Credit Agreement dated as of March 29, 2007 among Group 1
Realty, Inc., Group 1 Automotive, Inc., Bank of America, N.A.,
and the other Lenders Party Hereto (Confidential Treatment
requested for portions of this document) (Incorporated by
reference to Exhibit 10.2 of Group 1s Quarterly
Report on
Form 10-Q
(File
No. 001-13461)
for the period ended March 31, 2007
10
.4
Amendment No. 1 to Credit Agreement and Joinder Agreement
dated as of April 27, 2007 by and among Group 1 Realty,
Inc., Group 1 Automotive, Inc., Bank of America, N.A. and the
Joining Lenders (Incorporated by reference to Exhibit 10.3
of Group 1 Automotive, Inc.s Quarterly Report on
Form 10-Q
(File
No. 001-13461)
for the quarter ended March 31, 2007)
10
.5
Amendment No. 2 to Credit Agreement and Joinder Agreement
dated as of December 20, 2007 by and among Group 1 Realty,
Inc., Group 1 Automotive, Inc., Bank of America, N.A. and the
Joining Lenders
10
.6
Amendment No. 3 to Credit Agreement dated as of
January 16, 2008 by and among Group 1 Realty, Inc., Group 1
Automotive, Inc., Bank of America, N.A. and the Joining Lenders
10
.7
Form of Ford Motor Credit Company Automotive Wholesale Plan
Application for Wholesale Financing and Security Agreement
(Incorporated by reference to Exhibit 10.2 of Group 1
Automotive, Inc.s Quarterly Report on
Form 10-Q
(File
No. 001-13461)
for the quarter ended June 30, 2003)
10
.8
Supplemental Terms and Conditions dated September 4, 1997
between Ford Motor Company and Group 1 Automotive, Inc.
(Incorporated by reference to Exhibit 10.16 of Group 1
Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.9
Form of Agreement between Toyota Motor Sales, U.S.A., Inc. and
Group 1 Automotive, Inc. (Incorporated by reference to
Exhibit 10.12 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.10
Toyota Dealer Agreement effective April 5, 1993 between
Gulf States Toyota, Inc. and Southwest Toyota, Inc.
(Incorporated by reference to Exhibit 10.17 of Group 1
Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.11
Lexus Dealer Agreement effective August 21, 1995 between
Lexus, a division of Toyota Motor Sales, U.S.A., Inc. and SMC
Luxury Cars, Inc. (Incorporated by reference to
Exhibit 10.18 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.12
Form of General Motors Corporation U.S.A. Sales and Service
Agreement (Incorporated by reference to Exhibit 10.25 of
Group 1 Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.13
Form of Ford Motor Company Sales and Service Agreement
(Incorporated by reference to Exhibit 10.38 of Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 1998)
10
.14
Form of Supplemental Agreement to General Motors Corporation
Dealer Sales and Service Agreement (Incorporated by reference to
Exhibit 10.13 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.15
Form of Chrysler Corporation Sales and Service Agreement
(Incorporated by reference to Exhibit 10.39 of Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 1998)
10
.16
Form of Nissan Division of Nissan North America, Inc. Dealer
Sales and Service Agreement (Incorporated by reference to
Exhibit 10.25 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2003)
10
.17
Form of Infiniti Division of Nissan North America, Inc. Dealer
Sales and Service Agreement (Incorporated by reference to
Exhibit 10.26 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2003)
10
.18
Lease Agreement between Howard Pontiac GMC and Robert E.
Howard II (Incorporated by reference to Exhibit 10.9
of Group 1 Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.19
Lease Agreement between Bob Howard Motors and Robert E.
Howard II (Incorporated by reference to Exhibit 10.9
of Group 1 Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
Table of Contents
Exhibit
10
.20
Lease Agreement between Bob Howard Chevrolet and Robert E.
Howard II (Incorporated by reference to Exhibit 10.9
of Group 1 Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.21
Lease Agreement between Bob Howard Automotive-East, Inc. and
REHCO East, L.L.C. (Incorporated by reference to
Exhibit 10.37 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2002)
10
.22
Lease Agreement between Howard-H, Inc. and REHCO, L.L.C.
(Incorporated by reference to Exhibit 10.38 of Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2002)
10
.23
Lease Agreement between Howard Pontiac-GMC, Inc. and North
Broadway Real Estate Limited Liability Company (Incorporated by
reference to Exhibit 10.10 of Group 1 Automotive,
Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2002)
10
.24
Lease Agreement between Bob Howard Motors, Inc. and REHCO,
L.L.C., (Incorporated by reference to Exhibit 10.54 of
Group 1 Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2005)
10
.25*
Form of Indemnification Agreement of Group 1 Automotive, Inc.
(Incorporated by reference to Exhibit 10.1 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed on November 13, 2007)
10
.26*
Description of Annual Incentive Plan for Executive Officers of
Group 1 Automotive, Inc. (Incorporated by reference to
Exhibit 10.22 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2006)
10
.27*
Description of Group 1 Automotive, Inc. Non-Employee Director
Compensation Plan for 2008
10
.28*
Group 1 Automotive, Inc. Deferred Compensation Plan, as Amended
and Restated, effective January 1, 2008
10
.29*
Group 1 Automotive, Inc. 2007 Long Term Incentive Plan, as
Amended and Restated, effective March 8, 2007 (Incorporated
by reference to Exhibit A of the Group 1 Automotive, Inc.
Proxy Statement (File
No. 001-13461)
filed on April 16, 2007)
10
.30*
Form of Incentive Stock Option Agreement for Employees
(Incorporated by reference to Exhibit 10.49 to Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2004)
10
.31*
Form of Nonstatutory Stock Option Agreement for Employees
(Incorporated by reference to Exhibit 10.50 to Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2004)
10
.32*
Form of Restricted Stock Agreement for Employees (Incorporated
by reference to Exhibit 10.2 of Group 1 Automotive,
Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed March 16, 2005)
10
.33*
Form of Phantom Stock Agreement for Employees (Incorporated by
reference to Exhibit 10.3 of Group 1 Automotive,
Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed March 16, 2005)
10
.34*
Form of Restricted Stock Agreement for Non-Employee Directors
(Incorporated by reference to Exhibit 10.4 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed March 16, 2005)
10
.35*
Form of Phantom Stock Agreement for Non-Employee Directors
(Incorporated by reference to Exhibit 10.5 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed March 16, 2005)
10
.36*
Form of Performance-Based Restricted Stock Agreement
(Incorporated by reference to Exhibit 10.3 of Group 1
Automotive, Inc.s Quarterly Report on
Form 10-Q
(File
No. 001-13461)
for the quarter ended June 30, 2007)
10
.37*
Performance-Based Restricted Stock Agreement Vesting Schedule
(Incorporated by reference to Exhibit 10.2 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed on November 13, 2007)
Table of Contents
Exhibit
10
.38*
Employment Agreement dated April 9, 2005 between Group 1
Automotive, Inc. and Earl J. Hesterberg, Jr. (Incorporated by
reference to Exhibit 10.1 of Group 1 Automotive,
Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed April 14, 2005)
10
.39*
First Amendment to the Employment Agreement dated effective as
of April 9, 2005 between Group 1 Automotive, Inc. and Earl
J. Hesterberg, effective as of November 8, 2007
10
.40*
First Amendment to Restricted Stock Agreement dated as of
November 8, 2007 by and between Group 1 Automotive, Inc.
and Earl J. Hesterberg
10
.41*
Employment Agreement dated June 2, 2006 between Group 1
Automotive, Inc. and John C. Rickel (Incorporated by reference
to Exhibit 10.1 of Group 1 Automotive, Inc.s Current
Report on
Form 8-K
(File
No. 001-13461)
filed June 7, 2006)
10
.42*
Incentive Compensation and Non-Compete Agreement dated
June 2, 2006 between Group 1 Automotive, Inc. and John C.
Rickel (Incorporated by reference to Exhibit 10.2 of Group
1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 7, 2006)
10
.43*
First Amendment to the Employment Agreement dated effective as
of June 2, 2006 between Group 1 Automotive, Inc. and John
C. Rickel, effective as of November 8, 2007
10
.44*
Employment Agreement dated December 1, 2006 between Group 1
Automotive, Inc. and Darryl M. Burman (Incorporated by reference
to Exhibit 10.1 of Group 1 Automotive, Inc.s Current
Report on
Form 8-K/A
(File
No. 001-13461)
filed December 1, 2006)
10
.45*
Incentive Compensation and Non-Compete Agreement dated
December 1, 2006 between Group 1 Automotive, Inc. and
Darryl M. Burman (Incorporated by reference to Exhibit 10.2
of Group 1 Automotive, Inc.s Current Report on
Form 8-K/A
(File
No. 001-13461)
filed December 1, 2006)
10
.46*
First Amendment to the Employment Agreement dated effective as
of December 1, 2006 between Group 1 Automotive, Inc. and
Darryl M. Burman, effective as of November 8, 2007
10
.47*
Incentive Compensation, Confidentiality, Non-Disclosure and
Non-Compete Agreement dated December 31, 2006, between
Group 1 Automotive, Inc. and Randy L. Callison
10
.48*
First Amendment to the Incentive Compensation, Confidentiality,
Non-Disclosure and Non-Compete Agreement dated effective as of
December 31, 2006 between Group 1 Automotive, Inc. and
Randy L. Callison, effective as of November 8, 2007
10
.49*
Split Dollar Life Insurance Agreement dated January 23,
2002 between Group 1 Automotive, Inc., and Leslie Hollingsworth
and Leigh Hollingsworth Copeland, as Trustees of the
Hollingsworth 2000 Childrens Trust (Incorporated by
reference to Exhibit 10.36 of Group 1 Automotive,
Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2002)
11
.1
Statement re Computation of Per Share Earnings (Incorporated by
reference to Note 12 to the financial statements)
12
.1
Statement re Computation of Ratios
14
.1
Code of Ethics for Specified Officers of Group 1 Automotive,
Inc. dated November 6, 2006 (Incorporated by reference to
Exhibit 14.1 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File No. 001-13461) for the year ended December 31,
2006)
21
.1
Group 1 Automotive, Inc. 2007 Subsidiary List
23
.1
Consent of Ernst & Young LLP
31
.1
Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31
.2
Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32
.1**
Certification of Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32
.2**
Certification of Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
*
Management contract or compensatory plan or arrangement
**
Furnished herewith
Table of Contents
By:
President and Chief Executive Officer and Director
(Principal Executive Officer)
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Chairman and Director
Director
Director
Director
Director
Director
74
Table of Contents
F-2
F-3
F-4
F-5
F-6
F-7
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
F-4
Table of Contents
Accumulated Other
Comprehensive Income (Loss)
Unrealized
Unrealized
Unrealized
Additional
Deferred
Gains (Losses)
Gains (Losses)
Gains on
Common Stock
Paid-in
Retained
Stock-Based
on Interest
on Marketable
Currency
Treasury
Shares
Amount
Capital
Earnings
Compensation
Rate Swaps
Securities
Translation
Stock
Total
(In thousands)
23,916
$
239
$
265,645
$
318,931
$
$
$
(173
)
$
$
(17,468
)
$
567,174
54,231
54,231
(384
)
(384
)
(149
)
(149
)
53,698
(19,257
)
(19,257
)
(670
)
(7
)
(19,318
)
19,325
1,151
12
19,146
19,158
241
2
8,381
(8,383
)
(50
)
(1,394
)
1,394
1,576
1,576
4,444
4,444
24,588
246
276,904
373,162
(5,413
)
(384
)
(322
)
(17,400
)
626,793
88,390
88,390
1,181
1,181
116
116
89,687
(5,413
)
5,413
(54,964
)
(54,964
)
346
3
(279
)
23,968
23,692
303
3
(3
)
(72
)
5,086
5,086
8,089
8,089
(116,251
)
(116,251
)
80,551
80,551
43,594
43,594
(13,437
)
(13,437
)
25,165
252
292,278
448,115
797
(206
)
(48,396
)
692,840
67,952
67,952
(10,915
)
(10,915
)
130
130
634
634
57,801
(63,039
)
(63,039
)
(232
)
(2
)
(8,761
)
8,763
214
2
5,036
5,038
414
4
(4
)
(29
)
(1
)
1
4,954
4,954
171
171
(13,284
)
(13,284
)
25,532
$
255
$
293,675
$
502,783
$
$
(10,118
)
$
(76
)
$
634
$
(102,672
)
$
684,481
F-5
Table of Contents
Year Ended December 31,
2007
2006
2005
(In thousands)
$
67,952
$
88,390
$
54,231
16,038
16,784
2,241
7,607
20,897
18,138
18,927
2,278
1,601
1,949
4,954
5,086
1,576
18,142
20,073
3,872
171
8,088
4,444
(150
)
(3,657
)
2,442
1,609
3,848
(1,180
)
(5,849
)
772
1,598
488
(4,324
)
(1,235
)
(16,113
)
(6,972
)
3,067
(2,845
)
14,269
(33,128
)
130,584
(3,185
)
1,215
4,961
(114,718
)
(23,342
)
102,549
(10,812
)
(24,346
)
39,220
(4,374
)
(4,995
)
(6,241
)
3,772
53,444
365,379
(146,697
)
(71,550
)
(58,556
)
(281,834
)
(246,322
)
(35,778
)
10,192
38,024
10,881
22,516
13,289
35,588
2,658
(2,699
)
(2,097
)
(393,165
)
(269,258
)
(49,962
)
5,599,770
3,942,148
3,260,946
(5,366,236
)
(3,912,244
)
(3,486,144
)
170,000
15,000
25,000
(35,000
)
(15,000
)
(109,000
)
133,684
(63,039
)
(54,964
)
(19,256
)
(36,865
)
(10,827
)
(13,284
)
(13,437
)
5,038
23,692
19,158
(3,630
)
(6,726
)
(2,873
)
(4,228
)
(787
)
(1,276
)
(2,498
)
(4,880
)
(2,027
)
150
3,657
287,500
(116,251
)
80,551
383,862
217,432
(315,472
)
(33
)
(5,564
)
1,618
(55
)
39,313
37,695
37,750
$
33,749
$
39,313
$
37,695
F-6
Table of Contents
1.
BUSINESS
AND ORGANIZATION:
2.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
F-7
Table of Contents
F-8
Table of Contents
F-9
Table of Contents
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
F-14
Table of Contents
certain transaction costs, which are presently treated as cost
of the acquisition, will be expensed;
restructuring costs associated with a business combination,
which are presently capitalized, will be expensed subsequent to
the acquisition date;
contingencies, including contingent consideration, which is
presently accounted for as an adjustment of purchase price, will
be recorded at fair value with subsequent adjustments recognized
in operations; and
F-15
Table of Contents
valuation allowances on acquired deferred tax assets, which are
presently considered to be subsequent changes in consideration
and are recorded as decreases in goodwill, will be recognized up
front and in operations.
3.
ACQUISITIONS:
4.
HURRICANES
KATRINA AND RITA BUSINESS INTERRUPTION INSURANCE:
F-16
Table of Contents
5.
ASSET
IMPAIRMENTS:
As required by SFAS No. 142, the Company performed an
annual review of the fair value of its goodwill and
indefinite-lived intangible assets at December 31, 2007. As
a result of this assessment, the Company determined that the
fair value of indefinite-lived intangible franchise rights
related to six dealerships did not exceed their carrying values
and impairment charges were required. Accordingly, the Company
recorded $9.2 million of pretax impairment charges during
the fourth quarter of 2007.
In accordance with SFAS No. 144 and
SFAS No. 13, the Company reviews long-lived assets for
impairment whenever there is evidence that the carrying amount
of such assets may not be recoverable. In connection with the
Companys sale of one of its dealership facilities, the
Company recognized a $5.4 million pretax impairment charge,
based upon the estimated fair market value as determined by a
third-party appraisal. Further, primarily in connection with the
disposal of several dealership franchises during 2007, the
Company determined that the fair value of certain fixed assets
was less than their carrying values and impairment charges were
required. Accordingly, the Company recorded approximately
$2.2 million of pretax impairment charges.
As required by SFAS No. 142, the Company performed an
annual review of the fair value of its goodwill and
indefinite-lived intangible assets at December 31, 2006. As
a result of this assessment, the Company determined that the
fair value of indefinite-lived intangible franchise rights
related to two of its domestic franchises did not exceed their
carrying values and impairment charges were required.
Accordingly, the Company recorded $1.4 million of pretax
impairment charges during the fourth quarter of 2006.
F-17
Table of Contents
In accordance with SFAS No. 144, the Company reviews
long-lived assets for impairment whenever there is evidence that
the carrying amount of such assets may not be recoverable. In
connection with the then pending disposal of a dealership
franchise, the Company determined that the fair value of certain
of the fixed assets was less than their carrying values and
impairment charges were required. Accordingly, the Company
recorded $0.8 million of pretax impairment charges during
the fourth quarter of 2006.
In connection with the preparation and review of its
third-quarter of 2005 interim financial statements, the Company
determined that recent events and circumstances in New Orleans
indicated that an impairment of goodwill
and/or
other
long-lived assets may have occurred in the three months ended
September 30, 2005. As a result, the Company performed
interim impairment assessments of its intangible franchise
rights and other long-lived assets in the New Orleans area,
followed by an interim impairment assessment of goodwill
associated with its New Orleans operations, in connection with
the preparation of its financial statements for the quarter
ended September 30, 2005.
Due to the then pending disposal of two of the Companys
California franchises, a Kia and a Nissan franchise, the Company
tested the respective intangible franchise rights and other
long-lived assets for impairment during the third quarter of
2005. These tests resulted in two impairments of long-lived
assets totaling $3.7 million.
As required by SFAS No. 142, the Company performed an
annual review of the fair value of its goodwill and
indefinite-lived intangible assets at December 31, 2005. As
a result of this annual assessment, the Company determined that
the fair value of indefinite-lived intangible franchise rights
related to three of its franchises did not exceed their carrying
value and an impairment charge was required. Accordingly, the
Company recorded a $2.6 million pretax impairment charge
during the fourth quarter of 2005.
6.
DETAIL OF
CERTAIN BALANCE SHEET ACCOUNTS:
December 31,
2007
2006
(In thousands)
$
43,295
$
45,103
20,992
18,068
16,204
7,838
6,784
8,323
87,275
79,332
3,588
2,539
$
83,687
$
76,793
F-18
Table of Contents
December 31,
2007
2006
(In thousands)
$
680,769
$
645,559
118,778
105,955
46,898
29,237
53,347
49,877
$
899,792
$
830,628
Estimated
Useful Lives
December 31,
in Years
2007
2006
(In thousands)
$
137,344
$
66,383
30 to 40
168,763
51,056
7 to 15
60,989
57,526
7 to 20
58,681
43,798
3 to 10
63,393
56,099
3 to 5
11,670
9,980
30,558
30,163
531,398
315,005
102,160
84,620
$
429,238
$
230,385
F-19
Table of Contents
7.
INTANGIBLE
FRANCHISE RIGHTS AND GOODWILL:
Intangible
Franchise Rights
Goodwill
(In thousands)
$
164,210
$
372,844
87,842
56,681
(766
)
(2,427
)
(1,400
)
(659
)
249,886
426,439
59,810
61,509
(591
)
(9,226
)
(582
)
$
300,470
$
486,775
8.
CREDIT
FACILITIES:
F-20
Table of Contents
December 31,
2007
2006
(In thousands)
$
590,469
$
372,973
71,973
59,061
8,378
5,254
$
670,820
$
437,288
$
124,866
$
132,967
131,807
46,045
23,204
$
170,911
$
287,978
F-21
Table of Contents
F-22
Table of Contents
F-23
Table of Contents
9.
LONG-TERM
DEBT:
December 31,
2007
2006
(In thousands)
$
281,915
$
281,327
100,273
135,248
135,000
131,317
38,593
12,918
$
687,098
$
429,493
12,260
854
$
674,838
$
428,639
F-24
Table of Contents
F-25
Table of Contents
The Company may, prior to August 15, 2008, redeem all or a
portion of the 8.25% Notes at a redemption price equal to
the principal amount plus a make-whole premium to be determined,
plus accrued interest.
The Company may, during the twelve-month periods beginning
August 15, 2008, 2009, 2010 and 2011, and thereafter,
redeem all or a portion of the 8.25% Notes at redemption
prices of 104.125%, 102.750%, 101.375% and 100.000%,
respectively, of the principal amount plus accrued interest.
F-26
Table of Contents
$
12,260
8,892
8,661
8,785
241,817
406,683
10.
STOCK-BASED
COMPENSATION PLANS:
F-27
Table of Contents
2005
5.9
%
6.0 yrs
42.0
%
$
13.84
Weighted
Average
Weighted
Remaining
Aggregate
Average
Contractual
Intrinsic
Number
Exercise Price
Term
Value
(In thousands)
271,170
$
28.10
(34,725
)
22.81
(24,671
)
33.52
211,774
$
28.33
4.6
$
315
196,312
$
28.31
4.5
$
314
180,594
$
28.29
4.3
$
314
F-28
Table of Contents
Weighted Average
Grant Date
Awards
Fair Value
380,000
$
43.28
419,561
31.77
(53,630
)
30.83
(25,862
)
46.04
720,069
37.40
F-29
Table of Contents
Year Ended
December 31,
2005
(In thousands,
except per share
amounts)
$
54,231
993
3,532
$
51,692
$
2.27
$
2.17
$
2.24
$
2.13
F-30
Table of Contents
11.
EMPLOYEE
SAVINGS PLANS:
12.
EARNINGS
PER SHARE:
Year Ended December 31,
2007
2006
2005
(In thousands)
$
67,952
$
88,390
$
54,231
23,270
24,146
23,866
69
216
337
67
84
26
23,406
24,446
24,229
$
2.92
$
3.66
$
2.27
$
2.90
$
3.62
$
2.24
F-31
Table of Contents
13.
OPERATING
LEASES:
Related
Third
Parties
Parties
Total
$
6,730
$
47,395
$
54,125
6,730
46,632
53,362
6,730
45,546
52,276
6,730
44,112
50,842
6,600
43,189
49,789
25,287
213,043
238,330
$
58,807
$
439,917
$
498,724
F-32
Table of Contents
14.
INCOME
TAXES:
Year Ended December 31,
2007
2006
2005
(In thousands)
$
103,590
$
139,348
$
108,407
2,433
$
106,023
$
139,348
$
108,407
Year Ended December 31,
2007
2006
2005
(In thousands)
Current
$
18,059
$
29,194
$
32,143
16,810
19,592
3,060
Current
1,537
1,689
2,123
1,125
483
812
Current
332
208
$
38,071
$
50,958
$
38,138
F-33
Table of Contents
Year Ended December 31,
2007
2006
2005
(In thousands)
$
36,257
$
48,772
$
37,943
State income tax, net of benefit for federal deduction
2,254
3,023
2,313
540
(1,908
)
(329
)
(1,194
)
(465
)
(1,227
)
(221
)
317
790
(503
)
794
11
$
38,071
$
50,958
$
38,138
F-34
Table of Contents
December 31,
2007
2006
(In thousands)
$
39,083
$
42,151
24,868
23,275
(64,294
)
(46,063
)
(3,145
)
(3,729
)
8,318
6,548
(735
)
(1,179
)
6,070
(478
)
(17
)
(1,203
)
10,148
19,322
(6,237
)
(4,933
)
$
3,911
$
14,389
December 31,
2007
2006
(In thousands)
$
19,660
$
19,462
61,567
57,104
(1,373
)
(2,286
)
(75,943
)
(59,891
)
$
3,911
$
14,389
F-35
Table of Contents
$
592
$
592
15.
COMMITMENTS
AND CONTINGENCIES
F-36
Table of Contents
F-37
Table of Contents
16.
RELATED
PARTY TRANSACTION:
17.
CONDENSED
CONSOLIDATING FINANCIAL INFORMATION:
F-38
Table of Contents
December 31, 2007
F-39
Table of Contents
Non-
Total
Group 1
Guarantor
Guarantor
Company
Eliminations
Automotive, Inc.
Subsidiaries
Subsidiaries
(In thousands)
$
6,392,997
$
$
$
6,218,869
$
174,128
5,396,618
5,245,521
151,097
996,379
973,348
23,031
778,061
1,345
759,428
17,288
20,897
19,548
1,349
16,784
16,784
180,637
(1,345
)
177,588
4,394
(48,117
)
(47,302
)
(815
)
(25,471
)
(25,091
)
(380
)
(1,026
)
(1,055
)
29
(69,297
)
69,297
106,023
(69,297
)
67,952
104,140
3,228
38,071
37,251
820
$
67,952
$
(69,297
)
$
67,952
$
66,889
$
2,408
F-40
Table of Contents
Non-
Total
Group 1
Guarantor
Guarantor
Company
Automotive
Subsidiaries
Subsidiaries
(In thousands)
$
3,772
$
(1,345
)
$
(7,565
)
$
12,682
(146,697
)
(146,522
)
(175
)
(281,834
)
(232,417
)
(49,417
)
10,192
10,192
22,516
22,516
2,658
2,800
(142
)
(393,165
)
(343,431
)
(49,734
)
5,599,770
5,599,770
(5,366,236
)
(5,366,236
)
170,000
170,000
(35,000
)
(35,000
)
(2,498
)
(2,498
)
(4,228
)
(3,556
)
(672
)
133,684
133,684
(36,865
)
(36,865
)
(3,630
)
(3,630
)
5,038
5,038
150
150
(63,039
)
(63,039
)
93,791
(93,791
)
(79,132
)
41,148
37,984
94,836
(94,836
)
(13,284
)
(13,284
)
383,862
1,345
345,205
37,312
(33
)
(33
)
(5,564
)
(5,791
)
227
39,313
38,958
355
$
33,749
$
$
33,167
$
582
F-41
Table of Contents
18.
SELECTED
QUARTERLY FINANCIAL DATA (UNAUDITED):
Quarter
First
Second
Third
Fourth
Full Year
(In thousands, except per share data)
$
1,522,738
$
1,679,589
$
1,661,305
$
1,529,365
$
6,392,997
247,157
257,974
257,255
233,993
996,379
17,447
24,216
20,816
5,473
67,952
0.73
1.02
0.90
0.24
2.92
0.72
1.01
0.90
0.24
2.90
$
1,417,566
$
1,557,046
$
1,601,812
$
1,507,060
$
6,083,484
236,825
243,662
249,848
234,465
964,800
22,311
24,872
26,420
14,787
88,390
0.93
1.01
1.11
0.62
3.66
0.91
1.00
1.10
0.61
3.62
F-42
Table of Contents
Exhibit
3
.1
Restated Certificate of Incorporation (Incorporated by reference
to Exhibit 3.1 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-1
Registration
No. 333-29893)
3
.2
Certificate of Designation of Series A Junior Participating
Preferred Stock (Incorporated by reference to Exhibit 3.2
of Group 1s Quarterly Report on
Form 10-Q
(File
No. 001-13461)
for the period ended March 31, 2007)
3
.3
Amended and Restated Bylaws of Group 1 Automotive, Inc.
(Incorporated by reference to Exhibit 3.1 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed November 13, 2007)
4
.1
Specimen Common Stock Certificate (Incorporated by reference to
Exhibit 4.1 of Group 1 Automotive, Inc.s Registration
Statement on
Form S-1
Registration
No. 333-29893)
4
.2
Subordinated Indenture dated August 13, 2003 among Group 1
Automotive, Inc., the Subsidiary Guarantors named therein and
Wells Fargo Bank, N.A., as Trustee (Incorporated by reference to
Exhibit 4.6 of Group 1 Automotive, Inc.s Registration
Statement on
Form S-4
Registration
No. 333-109080)
4
.3
First Supplemental Indenture dated August 13, 2003 among
Group 1 Automotive, Inc., the Subsidiary Guarantors named
therein and Wells Fargo Bank, N.A., as Trustee (Incorporated by
reference to Exhibit 4.7 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-4
Registration
No. 333-109080)
4
.4
Form of Subordinated Debt Securities (included in
Exhibit 4.3)
4
.5
Purchase Agreement dated June 20, 2006 among Group 1
Automotive, Inc., J.P. Morgan Securities Inc., Banc of
America Securities LLC, Comerica Securities Inc., Morgan
Stanley & Co. Incorporated, Wachovia Capital Markets,
LLC, and U.S. Bancorp Investments, Inc. (Incorporated by
reference to Exhibit 4.1 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.6
Indenture related to the Convertible Senior Notes Due 2036 dated
June 26, 2006 between Group 1 Automotive Inc. and Wells
Fargo Bank, National Association, as trustee (including Form of
2.25% Convertible Senior Note Due 2036) (Incorporated by
reference to Exhibit 4.2 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.7
Registration Rights Agreement dated June 26, 2006 among
Group 1 Automotive, Inc., J.P. Morgan Securities Inc., Banc
of America Securities LLC, Comerica Securities Inc., Morgan
Stanley & Co. Incorporated, Wachovia Capital Markets,
LLC, and U.S. Bancorp Investments, Inc. (Incorporated by
reference to Exhibit 4.3 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.8
Letter Agreement dated June 20, 2006 between Group 1
Automotive, Inc. and JPMorgan Chase Bank, National Association,
London Branch (Incorporated by reference to Exhibit 4.4 of
Group 1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.9
Amendment dated June 23, 2006 to Letter Agreement dated
June 20, 2006 between Group 1 Automotive, Inc. and JPMorgan
Chase Bank, National Association, London Branch (Incorporated by
reference to Exhibit 4.8 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.10
Letter Agreement dated June 20, 2006 between Group 1
Automotive, Inc. and Bank of America, N.A. (Incorporated by
reference to Exhibit 4.5 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.11
Amendment dated June 23, 2006 to Letter Agreement dated
June 20, 2006 between Group 1 Automotive, Inc. and Bank of
America, N.A. (Incorporated by reference to Exhibit 4.9 of
Group 1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.12
Letter Agreement dated June 20, 2006 between Group 1
Automotive, Inc. and JPMorgan Chase Bank, National Association,
London Branch (Incorporated by reference to Exhibit 4.6 of
Group 1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.13
Amendment dated June 23, 2006 to Letter Agreement dated
June 20, 2006 between Group 1 Automotive, Inc. and JPMorgan
Chase Bank, National Association, London Branch (Incorporated by
reference to Exhibit 4.10 of Group 1 Automotive,
Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
Table of Contents
Exhibit
4
.14
Letter Agreement dated June 20, 2006 between Group 1
Automotive, Inc. and Bank of America, N.A. (Incorporated by
reference to Exhibit 4.7 of Group 1 Automotive, Inc.s
Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
4
.15
Amendment dated June 23, 2006 to Letter Agreement dated
June 20, 2006 between Group 1 Automotive, Inc. and Bank of
America, N.A. (Incorporated by reference to Exhibit 4.11 of
Group 1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 26, 2006)
10
.1
Seventh Amended and Restated Revolving Credit Agreement
effective March 19, 2007 among Group 1 Automotive, Inc.,
the Subsidiary Borrowers listed therein, the Lenders listed
therein, JPMorgan Chase Bank, N.A., as Administrative Agent,
Comerica Bank, as Floor Plan Agent, and Bank of America, N.A.,
as Syndication Agent (Incorporated by reference to
Exhibit 10.1 of Group 1 Automotive, Inc.s Current
Report on
Form 8-K
(File
No. 001-13461)
filed March 21, 2007)
10
.2
First Amendment to Revolving Credit Agreement dated effective
January 16, 2008, among Group 1 Automotive, Inc., the
Subsidiary Borrowers listed therein, the Lenders listed therein,
JPMorgan Chase Bank, N.A., as Administrative Agent, Comerica
Bank, as Floor Plan Agent, and Bank of America, N.A., as
Syndication Agent
10
.3
Credit Agreement dated as of March 29, 2007 among Group 1
Realty, Inc., Group 1 Automotive, Inc., Bank of America, N.A.,
and the other Lenders Party Hereto (Confidential Treatment
requested for portions of this document) (Incorporated by
reference to Exhibit 10.2 of Group 1s Quarterly
Report on
Form 10-Q
(File
No. 001-13461)
for the period ended March 31, 2007
10
.4
Amendment No. 1 to Credit Agreement and Joinder Agreement
dated as of April 27, 2007 by and among Group 1 Realty,
Inc., Group 1 Automotive, Inc., Bank of America, N.A. and the
Joining Lenders (Incorporated by reference to Exhibit 10.3
of Group 1 Automotive, Inc.s Quarterly Report on
Form 10-Q
(File
No. 001-13461)
for the quarter ended March 31, 2007)
10
.5
Amendment No. 2 to Credit Agreement and Joinder Agreement
dated as of December 20, 2007 by and among Group 1 Realty,
Inc., Group 1 Automotive, Inc., Bank of America, N.A. and the
Joining Lenders
10
.6
Amendment No. 3 to Credit Agreement dated as of
January 16, 2008 by and among Group 1 Realty, Inc., Group 1
Automotive, Inc., Bank of America, N.A. and the Joining Lenders
10
.7
Form of Ford Motor Credit Company Automotive Wholesale Plan
Application for Wholesale Financing and Security Agreement
(Incorporated by reference to Exhibit 10.2 of Group 1
Automotive, Inc.s Quarterly Report on
Form 10-Q
(File
No. 001-13461)
for the quarter ended June 30, 2003)
10
.8
Supplemental Terms and Conditions dated September 4, 1997
between Ford Motor Company and Group 1 Automotive, Inc.
(Incorporated by reference to Exhibit 10.16 of Group 1
Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.9
Form of Agreement between Toyota Motor Sales, U.S.A., Inc. and
Group 1 Automotive, Inc. (Incorporated by reference to
Exhibit 10.12 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.10
Toyota Dealer Agreement effective April 5, 1993 between
Gulf States Toyota, Inc. and Southwest Toyota, Inc.
(Incorporated by reference to Exhibit 10.17 of Group 1
Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.11
Lexus Dealer Agreement effective August 21, 1995 between
Lexus, a division of Toyota Motor Sales, U.S.A., Inc. and SMC
Luxury Cars, Inc. (Incorporated by reference to
Exhibit 10.18 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.12
Form of General Motors Corporation U.S.A. Sales and Service
Agreement (Incorporated by reference to Exhibit 10.25 of
Group 1 Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.13
Form of Ford Motor Company Sales and Service Agreement
(Incorporated by reference to Exhibit 10.38 of Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 1998)
10
.14
Form of Supplemental Agreement to General Motors Corporation
Dealer Sales and Service Agreement (Incorporated by reference to
Exhibit 10.13 of Group 1 Automotive, Inc.s
Registration Statement on
Form S-1
Registration
No. 333-29893)
Table of Contents
Exhibit
10
.15
Form of Chrysler Corporation Sales and Service Agreement
(Incorporated by reference to Exhibit 10.39 of Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 1998)
10
.16
Form of Nissan Division of Nissan North America, Inc. Dealer
Sales and Service Agreement (Incorporated by reference to
Exhibit 10.25 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2003)
10
.17
Form of Infiniti Division of Nissan North America, Inc. Dealer
Sales and Service Agreement (Incorporated by reference to
Exhibit 10.26 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2003)
10
.18
Lease Agreement between Howard Pontiac GMC and Robert E.
Howard II (Incorporated by reference to Exhibit 10.9
of Group 1 Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.19
Lease Agreement between Bob Howard Motors and Robert E.
Howard II (Incorporated by reference to Exhibit 10.9
of Group 1 Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.20
Lease Agreement between Bob Howard Chevrolet and Robert E.
Howard II (Incorporated by reference to Exhibit 10.9
of Group 1 Automotive, Inc.s Registration Statement on
Form S-1
Registration
No. 333-29893)
10
.21
Lease Agreement between Bob Howard Automotive-East, Inc. and
REHCO East, L.L.C. (Incorporated by reference to
Exhibit 10.37 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2002)
10
.22
Lease Agreement between Howard-H, Inc. and REHCO, L.L.C.
(Incorporated by reference to Exhibit 10.38 of Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2002)
10
.23
Lease Agreement between Howard Pontiac-GMC, Inc. and North
Broadway Real Estate Limited Liability Company (Incorporated by
reference to Exhibit 10.10 of Group 1 Automotive,
Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2002)
10
.24
Lease Agreement between Bob Howard Motors, Inc. and REHCO,
L.L.C., (Incorporated by reference to Exhibit 10.54 of
Group 1 Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2005)
10
.25*
Form of Indemnification Agreement of Group 1 Automotive, Inc.
(Incorporated by reference to Exhibit 10.1 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed on November 13, 2007)
10
.26*
Description of Annual Incentive Plan for Executive Officers of
Group 1 Automotive, Inc. (Incorporated by reference to
Exhibit 10.22 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2006)
10
.27*
Description of Group 1 Automotive, Inc. Non-Employee Director
Compensation Plan for 2008
10
.28*
Group 1 Automotive, Inc. Deferred Compensation Plan, as Amended
and Restated, effective January 1, 2008
10
.29*
Group 1 Automotive, Inc. 2007 Long Term Incentive Plan, as
Amended and Restated, effective March 8, 2007 (Incorporated
by reference to Exhibit A of the Group 1 Automotive, Inc.
Proxy Statement (File
No. 001-13461)
filed on April 16, 2007)
10
.30*
Form of Incentive Stock Option Agreement for Employees
(Incorporated by reference to Exhibit 10.49 to Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2004)
10
.31*
Form of Nonstatutory Stock Option Agreement for Employees
(Incorporated by reference to Exhibit 10.50 to Group 1
Automotive, Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2004)
10
.32*
Form of Restricted Stock Agreement for Employees (Incorporated
by reference to Exhibit 10.2 of Group 1 Automotive,
Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed March 16, 2005)
10
.33*
Form of Phantom Stock Agreement for Employees (Incorporated by
reference to Exhibit 10.3 of Group 1 Automotive,
Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed March 16, 2005)
Table of Contents
Exhibit
10
.34*
Form of Restricted Stock Agreement for Non-Employee Directors
(Incorporated by reference to Exhibit 10.4 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed March 16, 2005)
10
.35*
Form of Phantom Stock Agreement for Non-Employee Directors
(Incorporated by reference to Exhibit 10.5 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed March 16, 2005)
10
.36*
Form of Performance-Based Restricted Stock Agreement
(Incorporated by reference to Exhibit 10.3 of Group 1
Automotive, Inc.s Quarterly Report on
Form 10-Q
(File
No. 001-13461)
for the quarter ended June 30, 2007)
10
.37*
Performance-Based Restricted Stock Agreement Vesting Schedule
(Incorporated by reference to Exhibit 10.2 of Group 1
Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed on November 13, 2007)
10
.38*
Employment Agreement dated April 9, 2005 between Group 1
Automotive, Inc. and Earl J. Hesterberg, Jr. (Incorporated by
reference to Exhibit 10.1 of Group 1 Automotive,
Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed April 14, 2005)
10
.39*
First Amendment to the Employment Agreement dated effective as
of April 9, 2005 between Group 1 Automotive, Inc. and Earl
J. Hesterberg, effective as of November 8, 2007
10
.40*
First Amendment to Restricted Stock Agreement dated as of
November 8, 2007 by and between Group 1 Automotive, Inc.
and Earl J. Hesterberg
10
.41*
Employment Agreement dated June 2, 2006 between Group 1
Automotive, Inc. and John C. Rickel (Incorporated by reference
to Exhibit 10.1 of Group 1 Automotive, Inc.s Current
Report on
Form 8-K
(File
No. 001-13461)
filed June 7, 2006)
10
.42*
Incentive Compensation and Non-Compete Agreement dated
June 2, 2006 between Group 1 Automotive, Inc. and John C.
Rickel (Incorporated by reference to Exhibit 10.2 of Group
1 Automotive, Inc.s Current Report on
Form 8-K
(File
No. 001-13461)
filed June 7, 2006)
10
.43*
First Amendment to the Employment Agreement dated effective as
of June 2, 2006 between Group 1 Automotive, Inc. and John
C. Rickel, effective as of November 8, 2007
10
.44*
Employment Agreement dated December 1, 2006 between Group 1
Automotive, Inc. and Darryl M. Burman (Incorporated by reference
to Exhibit 10.1 of Group 1 Automotive, Inc.s Current
Report on
Form 8-K/A
(File
No. 001-13461)
filed December 1, 2006)
10
.45*
Incentive Compensation and Non-Compete Agreement dated
December 1, 2006 between Group 1 Automotive, Inc. and
Darryl M. Burman (Incorporated by reference to Exhibit 10.2
of Group 1 Automotive, Inc.s Current Report on
Form 8-K/A
(File
No. 001-13461)
filed December 1, 2006)
10
.46*
First Amendment to the Employment Agreement dated effective as
of December 1, 2006 between Group 1 Automotive, Inc. and
Darryl M. Burman, effective as of November 8, 2007
10
.47*
Incentive Compensation, Confidentiality, Non-Disclosure and
Non-Compete Agreement dated December 31, 2006, between
Group 1 Automotive, Inc. and Randy L. Callison
10
.48*
First Amendment to the Incentive Compensation, Confidentiality,
Non-Disclosure and Non-Compete Agreement dated effective as of
December 31, 2006 between Group 1 Automotive, Inc. and
Randy L. Callison, effective as of November 8, 2007
10
.49*
Split Dollar Life Insurance Agreement dated January 23,
2002 between Group 1 Automotive, Inc., and Leslie Hollingsworth
and Leigh Hollingsworth Copeland, as Trustees of the
Hollingsworth 2000 Childrens Trust (Incorporated by
reference to Exhibit 10.36 of Group 1 Automotive,
Inc.s Annual Report on
Form 10-K
(File
No. 001-13461)
for the year ended December 31, 2002)
11
.1
Statement re Computation of Per Share Earnings (Incorporated by
reference to Note 12 to the financial statements)
12
.1
Statement re Computation of Ratios
14
.1
Code of Ethics for Specified Officers of Group 1 Automotive,
Inc. dated November 6, 2006 (Incorporated by reference to
Exhibit 14.1 of Group 1 Automotive, Inc.s Annual
Report on
Form 10-K
(File No. 001-13461) for the year ended December 31,
2006)
21
.1
Group 1 Automotive, Inc. 2007 Subsidiary List
23
.1
Consent of Ernst & Young LLP
Table of Contents
Exhibit
31
.1
Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31
.2
Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32
.1**
Certification of Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32
.2**
Certification of Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
*
Management contract or compensatory plan or arrangement
**
Furnished herewith
-1-
(a) | 100% of the wholesale purchase price of New Motor Vehicles and Demonstrators that are part of the Collateral |
-2-
less 100% of the wholesale purchase price of New Motor Vehicles and Demonstrators where the Agents Lien is subordinated; | |||
|
|||
(b) | 85% of the Book Value of Used Motor Vehicles and Rental Motor Vehicles that are part of the Collateral where the Agent holds a valid and perfected first priority Lien, excluding any Used Vehicles that were purchased by the applicable Floor Plan Borrower more than 90 days prior to the date of determination; | ||
(c) | 100% of the amount of contracts in transit, including, without limitation, all accounts, chattel paper and agreements of third parties to pay the purchase price of vehicles sold to customers, which agreements are not yet funded; | ||
(d) | 80% of Eligible Accounts where the Agent holds a valid and perfected first priority Lien, excluding all described in (c) above; | ||
(e) | 60% of the Book Value of parts inventory where the Agent holds a valid and perfected first priority Lien; | ||
(f) | 50% of the cash deposits in all deposit accounts; provided that after , 2008 [60 days after effective date of amendment], such cash deposits will be included only for deposit accounts in which the Agent has a perfected first priority Lien evidenced by a control agreement with the depository bank for each such account; and | ||
(g) | 50% of the market value of the securities held in securities accounts in which the Agent has a perfected first priority Lien evidenced by a control agreement with the securities intermediary for each such account. | ||
and |
-3-
-4-
Eurodollar | ||||||||||||||
Eurocurrency | ||||||||||||||
Total Leverage | Pounds Sterling | Alternate Base | Commitment | |||||||||||
Ratio | Margin | Rate Margin | Fee Rate | |||||||||||
Category 1
|
x > 4.0 | 2.50 | % | 1.00 | % | .375 | % | |||||||
Category 2
|
3.25 £ x £ 4.0 | 2.25 | % | .75 | % | .375 | % | |||||||
Category 3
|
2.00 £ x < 3.25 | 2.00 | % | .50 | % | .35 | % | |||||||
Category 4
|
1.50 £ x < 2.00 | 1.75 | % | .25 | % | .30 | % | |||||||
Category 5
|
x < 1.50 | 1.50 | % | .00 | % | .25 | % |
-5-
-6-
-7-
-8-
GROUP 1 AUTOMOTIVE, INC.
,
a Delaware corporation |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
Senior Vice President and CFO | ||||
GROUP 1 FUNDING, INC.
,
a Delaware corporation; GROUP 1 REALTY, INC. , a Delaware corporation; |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
President | ||||
BARON DEVELOPMENT COMPANY, LLC
,
a Kansas limited liability company G1R FLORIDA, LLC , a Delaware limited liability company IVORY AUTO PROPERTIES OF SOUTH CAROLINA, LLC, A South Carolina limited liability company By: Group 1 Realty, Inc., its Sole Member |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
President | ||||
BOHN HOLDINGS, LLC
,
a Delaware limited liability company; By: Bohn Holdings, Inc., its Sole Member BOHN-FII, LLC , a Delaware limited liability company; By: Bohn Holdings-F, Inc., its Sole Member GPI KS-SV, LLC , a Delaware limited liability company By: GPI KS-SB, Inc., its Sole Member |
GPI SC-SV, LLC
,
a Delaware limited liability company By: GPI SC-SB, Inc., its Sole Member GROUP 1 ASSOCIATES HOLDINGS, LLC , a Delaware limited liability company By: Group 1 Associates, Inc., its Sole Member HARVEY-FLM, LLC , a Delaware limited liability company; By: Bohn Holdings-F, Inc., its Sole Member HARVEY FORD, LLC , a Delaware limited liability company; By: Bohn-FII, LLC, its Sole Member By: Bohn Holdings-F, Inc., its Sole Member HARVEY GM, LLC , a Delaware limited liability company; By: Bohn Holdings, LLC, its Sole Member By: Bohn Holdings, Inc., its Sole Member HARVEY OPERATIONS-T, LLC , a Delaware limited liability company By: Bohn Holdings, LLC, its Sole Member By: Bohn Holdings, Inc., its Sole Member IRA AUTOMOTIVE GROUP, LLC , a Delaware limited liability company By: Danvers-T, Inc., its Sole Member |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
Vice President |
DANVERS-SU, LLC
,
a Delaware limited liability company By: Group 1 Holdings-S, L.L.C., its Sole Member |
||||
GROUP 1 HOLDINGS-DC, L.L.C.
,
a Delaware limited liability company; GROUP 1 HOLDINGS-F, L.L.C. , a Delaware limited liability company; GROUP 1 HOLDINGS-GM, L.L.C. , a Delaware limited liability company; GROUP 1 HOLDINGS-H, L.L.C. , a Delaware limited liability company; GROUP 1 HOLDINGS-N, L.L.C. , a Delaware limited liability company; GROUP 1 HOLDINGS-S, L.L.C. , a Delaware limited liability company; GROUP 1 HOLDINGS-T, L.L.C. , a Delaware limited liability company; HOWARD-DCIII, LLC , a Delaware limited liability company; |
||||
By: Group 1 Automotive, Inc.,
its Sole Member |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
Senior Vice President & CFO | ||||
COURTESY FORD, LLC
,
a Delaware limited liability company; GULF BREEZE FORD, LLC , a Delaware limited liability company; KEY FORD, LLC , a Delaware limited liability company; KOONS FORD, LLC , a Delaware limited liability company; |
||||
By: Group 1 FL Holdings, Inc.,
its Sole Member |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
Vice President |
GROUP 1 LP INTERESTS-DC, INC.
,
a Delaware corporation; GROUP 1 LP INTERESTS-GM, INC. , a Delaware corporation; GROUP 1 LP INTERESTS-S, INC. , a Delaware corporation; |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
President | ||||
AMARILLO MOTORS-C, LTD.
,
a Texas limited partnership; AMARILLO MOTORS-J, LTD. , a Texas limited partnership; AMARILLO MOTORS-SM, LTD. , a Texas limited partnership; GPI, LTD. , a Texas limited partnership; MAXWELL-G, LTD. , a Texas limited partnership; MCCALL-SL, LTD. , a Texas limited partnership; PRESTIGE CHRYSLER SOUTH, LTD. , a Texas limited partnership; ROCKWALL AUTOMOTIVE-DCD, LTD. , a Texas limited partnership; |
||||
By: Group 1 Associates, Inc.,
its General Partner |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
Vice President |
ADVANTAGECARS.COM, INC.
,
a Delaware corporation; AMARILLO MOTORS-F, INC. , a Delaware corporation; BOB HOWARD AUTOMOTIVE-EAST, INC. , an Oklahoma corporation; BOB HOWARD CHEVROLET, INC. , an Oklahoma corporation; BOB HOWARD DODGE, INC. , an Oklahoma corporation; BOB HOWARD MOTORS, INC. , an Oklahoma corporation; BOB HOWARD NISSAN, INC. , an Oklahoma corporation; BOHN HOLDINGS, INC. , a Delaware corporation; BOHN HOLDINGS-F, INC. , a Delaware corporation; CASA CHEVROLET, INC. , a New Mexico corporation; CASA CHRYSLER PLYMOUTH JEEP, INC. , a New Mexico corporation; CHAPERRAL DODGE, INC. , a Delaware corporation; DANVERS-DCII, INC. , a Delaware corporation; DANVERS-DCIII, INC. , a Delaware corporation; DANVERS-N, INC. , a Delaware corporation; DANVERS-NII, INC. , a Delaware corporation; DANVERS-S, INC. , a Delaware corporation; DANVERS-SB, INC. , a Delaware corporation; DANVERS-T, INC. , a Delaware corporation; DANVERS-TII, INC. , a Delaware corporation; DANVERS-TIII, INC. , a Delaware corporation; DANVERS-TL, INC. , a Delaware corporation; |
FMM, INC.
,
a California corporation; GPI AL-N, INC. , a Delaware corporation; GPI ATLANTA-F, INC. , a Georgia corporation; GPI ATLANTA-FLM, INC. , a Delaware corporation; GPI ATLANTA-FLMII, INC. , a Delaware corporation; GPI ATLANTA-T, INC. , a Delaware corporation; GPI CA-DMII, INC. a Delaware corporation; GPI CA-NIII, INC. , a Delaware corporation; GPI CA-TII, INC. , a Delaware corporation; GPI GA-DM, INC., a Delaware corporation; GPI KS-SB, INC. , a Delaware corporation; GPI MS-H, INC. , a Delaware corporation; GPI MS-N, INC. , a Delaware corporation; GPI MS-SK, INC. , a Delaware corporation; GPI NH-T, INC. , a Delaware corporation; GPI NH-TL, INC. , a Delaware corporation; GPI SAC-SK, INC. , a Delaware corporation; GPI SAC-T, INC. , a Delaware corporation; GPI SD-DC, INC. , a Delaware corporation; GPI SC-SB, INC. , a Delaware corporation; GPI SD-IMPORTS, INC. , a Delaware corporation; GROUP 1 ASSOCIATES, INC. , a Delaware corporation; |
GROUP 1 FL HOLDINGS, INC.
,
a Delaware corporation; HOWARD FORD, INC. , a Delaware corporation; HOWARD PONTIAC-GMC, INC. , an Oklahoma corporation; HOWARD-GM, INC. , a Delaware corporation; HOWARD-GMII, INC. , a Delaware corporation; HOWARD-GMIII, INC. , a Delaware corporation; HOWARD-H, INC. , a Delaware corporation; HOWARD-HA, INC. , a Delaware corporation; HOWARD-SB, INC. , a Delaware corporation; JIM TIDWELL FORD, INC. , a Delaware corporation; KUTZ-N, INC. , a Delaware corporation; LUBBOCK MOTORS, INC. , a Delaware corporation; LUBBOCK MOTORS-F, INC. , a Delaware corporation; LUBBOCK MOTORS-GM, INC. , a Delaware corporation; LUBBOCK MOTORS-S, INC. , a Delaware corporation; LUBBOCK MOTORS-SH, INC. , a Delaware corporation; LUBBOCK MOTORS-T, INC. , a Delaware corporation; LUBY CHEVROLET CO. , a Delaware corporation; MAXWELL CHRYSLER DODGE JEEP, INC. , a Delaware corporation; MAXWELL FORD, INC. , a Delaware corporation; MAXWELL-GMII, INC. , a Delaware corporation; MAXWELL-N, INC. , a Delaware corporation; |
MAXWELL-NII, INC.
,
a Delaware corporation; MCCALL-H, INC. , a Delaware corporation; MCCALL-HA, INC. , a Delaware corporation; MCCALL-N, INC. , a Delaware corporation; MCCALL-SB, INC. , a Delaware corporation; MCCALL-T, INC. , a Delaware corporation; MCCALL-TII, INC. , a Delaware corporation; MCCALL-TL, INC. , a Delaware corporation; MIKE SMITH AUTOMOTIVE-H, INC. , a Delaware corporation; MIKE SMITH AUTOMOTIVE-N, INC. , a Texas corporation; MIKE SMITH AUTOPLAZA, INC. , a Texas corporation; MIKE SMITH AUTOPLEX BUICK, INC. , a Texas corporation; MIKE SMITH AUTOPLEX DODGE, INC. , a Texas corporation; MIKE SMITH AUTOPLEX, INC. , a Texas corporation; MIKE SMITH AUTOPLEX-GERMAN IMPORTS, INC. , a Texas corporation; MIKE SMITH GM, INC. , a Delaware corporation; MIKE SMITH IMPORTS, INC. , a Texas corporation; MIKE SMITH MOTORS, INC. , a Texas corporation; MILLBRO, INC. , a California corporation; MILLER AUTOMOTIVE GROUP, INC. , a California corporation; MILLER FAMILY COMPANY, INC. , a California corporation; MILLER IMPORTS, INC. , a California corporation; |
MILLER INFINITI, INC.
,
a California corporation; MILLER NISSAN, INC. , a California corporation; MILLER-DM, INC. , a Delaware corporation; MILLER-SH, INC. , a Delaware corporation; NJ-DM, INC. , a Delaware corporation; NJ-H, INC. , a Delaware corporation; NJ-HA, INC. , a Delaware corporation; NJ-HAII, INC. , a Delaware corporation; NJ-HII, INC. , a Delaware corporation; NJ-SB, INC. , a Delaware corporation; NJ-SV, INC. , a Delaware corporation; NY-FV, INC. , a Delaware corporation; NY-FVII, INC. , a Delaware corporation; NY-SB, INC. , a Delaware corporation; NY-SBII, INC. , a Delaware corporation PERIMETER FORD, INC. , a Delaware corporation; PRESTIGE CHRYSLER NORTHWEST, INC. , a Delaware corporation; ROCKWALL AUTOMOTIVE-F, INC. , a Delaware corporation; SUNSHINE BUICK PONTIAC GMC TRUCK, INC. , a New Mexico corporation WEST CENTRAL MANAGEMENT CO., INC. , a Delaware corporation; |
||||
By: | /s/ John C. Rickel | |||
John C. Rickel | ||||
Vice President | ||||
AGENT, ISSUING BANK AND LENDER: |
JPMORGAN CHASE BANK, N.A.
|
|||
By: | /s/ H. David Jones | |||
Name: | H. David Jones | |||
Title: | Senior Vice President |
FLOOR PLAN AGENT, SWING LINE BANK AND LENDER: |
COMERICA BANK
|
|||
By: | /s/ Jonathan S. Heine | |||
Name: | Jonathan S. Heine | |||
Title: | Vice President |
SYNDICATION AGENT AND LENDER: |
BANK OF AMERICA, N.A.
|
|||
By: | /s/ M. Patricia Kay | |||
Name: | M. Patricia Kay | |||
Title: | Senior Vice President |
LENDER: |
TOYOTA MOTOR CREDIT CORPORATION
|
|||
By: | /s/ Mark Doi | |||
Name: | Mark Doi | |||
Title: | National Accounts Dealer Credit Manager |
LENDER: |
NISSAN MOTOR ACCEPTANCE CORPORATION
,
a California corporation |
|||
By: | /s/ Kevin Cullum | |||
Name: | Kevin Cullum | |||
Title: | Director, Commercial Credit |
LENDER: |
SOVEREIGN BANK
|
|||
By: | /s/ Kyle S. Bourque | |||
Name: | Kyle S. Bourque | |||
Title: | Vice President |
LENDER: |
BMW FINANCIAL SERVICES NA. LLC
|
|||
By: | /s/ Jeff Burnside | |||
Name: | Jeff Burnside | |||
Title: | Credit Manager, Retailer Finance |
By: | /s/ John B. Nore | |||
Name: | John B. Nore | |||
Title: | GM, Retailer Finance |
LENDER: |
WACHOVIA BANK, NATIONAL ASSOCIATION
|
|||
By: | /s/ Michael R. Burkitt | |||
Name: | Michael R. Burkitt | |||
Title: | Senior Vice President |
LENDER: |
BNP PARIBAS
|
|||
By: | /s/ Richard Broeren | |||
Name: | Richard Broeren | |||
Title: | Managing Director |
By: | /s/ Michael Pearce | |||
Name: | Michael Pearce | |||
Title: | Director |
LENDER: |
U.S. BANK, N.A.
|
|||
By: | /s/ Jonathan A. Horton | |||
Name: | Jonathan A. Horton | |||
Title: | Senior Vice President |
LENDER: |
CITIBANK, N.A.
|
|||
By: | /s/ Christopher M. Murphy | |||
Name: | Christopher M. Murphy | |||
Title: | Vice President |
LENDER: |
BARCLAYS BANK PLC
|
|||
By: | /s/ Douglas Bernegger | |||
Name: | Douglas Bernegger | |||
Title: | Director |
LENDER: |
RBS CITIZENS, N.A., SUCCESSOR BY MERGER TO CITIZENS BANK NEW HAMPSHIRE
|
|||
By: | /s/ Mark C. Mazmanian | |||
Name: | Mark C. Mazmanian | |||
Title: | Vice President |
LENDER: |
KEY BANK
|
|||
By: | /s/ Jim Webber | |||
Name: | Jim Webber | |||
Title: | Commercial RM, VP |
LENDER: |
SUNTRUST BANK
|
|||
By: | /s/ Baerbel Freudenthaler | |||
Name: | Baerbel Freudenthaler | |||
Title: | Vice President |
LENDER: |
WELLS FARGO BANK, NATIONAL ASSOCIATION
|
|||
By: | /s/ Byron Slaughter | |||
Name: | Byron Slaughter | |||
Title: | Credit Manager |
LENDER: |
FIFTH THIRD BANK
|
|||
By: | /s/ Mark Olson | |||
Name: | Mark Olson | |||
Title: | Vice President |
LENDER: |
NATIONAL CITY BANK
|
|||
By: | /s/ John R. Schufield | |||
Name: | John R. Schufield | |||
Title: | Vice President |
LENDER: |
DEUTSCHE BANK AG NEW YORK BRANCH
|
|||
By: | /s/ Scottye Lindsey | |||
Name: | Scottye Lindsey | |||
Title: | Director | |||
By: | /s/ Carin Keegan | |||
Name: | Carin Keegan | |||
Title; Vice President |
LENDER: |
WORLD OMNI FINANCIAL CORP.
|
|||
By: | /s/ Rebecca Hewitt | |||
Name: | Rebecca Hewitt | |||
Title: | AVP Commercial Operations |
LENDER: |
AMARILLO NATIONAL BANK
|
|||
By: | /s/ Cory Ramsey | |||
Name: | Cory Ramsey | |||
Title: | Senior Vice President |
LENDER: |
BANK OF OKLAHOMA, N.A.
|
|||
By: | /s/ Kenneth R. Owens | |||
Name: | Kenneth R. Owens | |||
Title: | Vice President | |||
(I) | Acquisition Loan Advance Limit Calculation: | |||||||
|
||||||||
(a) | The lesser of (i) and (ii): | |||||||
|
||||||||
|
(i) | The Acquisition Loan Commitment | $___________ | |||||
|
||||||||
|
(ii) | The Acquisition Loan Borrowing Base (as calculated in (II) below) | $___________ | |||||
|
||||||||
(b) | Minus the amount of the Reserve Commitment | $___________ | ||||||
|
||||||||
(II) | Revolving Credit Borrowing Base Calculation : | |||||||
|
||||||||
For the Company and its Subsidiaries on a consolidated basis, the difference between (a) and (b): | ||||||||
|
||||||||
(a) | The sum of the following items, without duplication, on which the Administrative Agent holds a valid and perfected Lien: | |||||||
|
||||||||
|
(i) | 100% of the wholesale purchase price of New Motor Vehicles and Demonstrators that are part of the Collateral; | $___________ | |||||
|
||||||||
|
(less 100 % of the
wholesale purchase
price of New Motor
Vehicles and
Demonstrators where
Agents Lien is
subordinate, which
includes Ford New
Motor Vehicles &
Demos, which includes
Ford,
Lincoln/Mercury,
Mazda, Volvo, Range
Rover, and Jaguar)
|
($__________) |
|
(ii) | 85% of the Book Value of Used Motor Vehicles and Rental Motor Vehicles that are part of the Collateral and where the Agent holds a valid and perfected first priority Lien; | $___________ | |||||
|
||||||||
|
(less 85% of the Book
Value of Used
Vehicles that were purchased
by the applicable
Floor Plan Borrower more than
90 days prior to
the date of determination)
|
($__________) | ||||||
|
||||||||
|
(iii) | 100% of the amount of contracts in transit, including, without limitation, all accounts, chattel paper and agreements of third parties to pay the purchase price of vehicles sold to customers, which agreements are not yet funded; | $___________ | |||||
|
||||||||
|
(iv) | 80% of Eligible Accounts where the Agent holds a valid and perfected first priority Lien, excluding all described in (iii) above; | $___________ | |||||
|
||||||||
|
(v) | 60% of the Book Value of parts inventory where the Agent holds a valid and perfected first priority Lien; | $___________ | |||||
|
||||||||
|
(vi) | 50% of the cash deposits in all deposit accounts; provided that after ______, 2008, such cash deposits will be included only for deposit accounts in which the Agent has a perfected first priority Lien evidenced by a control agreement with the depository bank for each such account; and | $___________ | |||||
|
||||||||
|
(vii) | 50% of the market value of the securities held in securities accounts in which the Agent has a perfected first priority Lien evidenced by a control agreement with the securities intermediary for such account. | $___________ | |||||
|
||||||||
Sum of (i) through (vii) | $___________ |
2
3
4
5
6
7
8
9
BORROWER:
GROUP 1 REALTY, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
COMPANY:
GROUP 1 AUTOMOTIVE, INC. |
||||
By: | /s/ John C. Rickel | |||
Name: | John C. Rickel | |||
Title: | Senior Vice President and CFO | |||
GUARANTORS:
BARON DEVELOPMENT COMPANY, L.L.C. |
||||
By: | GROUP 1 REALTY, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
BOHN HOLDINGS, LLC
|
||||
By: | BOHN HOLDINGS, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
BOHN-FII, LLC
|
||||
By: | BOHN HOLDINGS-F, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
DANVERS-SU, LLC
|
||||
By: | GROUP 1 HOLDINGS-S, LLC, its Sole Member | |||
By: | GROUP 1 AUTOMOTIVE, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
DELAWARE ACQUISITION-DC, L.L.C.
|
||||
By: | GROUP 1 LP INTERESTS-DC, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
DELAWARE ACQUISITION-F, L.L.C.
|
||||
By: | GROUP 1 LP INTERESTS-F, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
DELAWARE ACQUISITION-GM, L.L.C.
|
||||
By: | GROUP 1 LP INTERESTS-GM, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
DELAWARE ACQUISITION-T, L.L.C.
|
||||
By: | GROUP 1 LP INTERESTS-T, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
2
DELAWARE ACQUISITION-N, L.L.C.
|
||||
By: | GROUP 1 LP INTERESTS-N, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
GPI KS-SV, LLC
|
||||
By: | GPI KS-SB, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
GROUP 1 ASSOCIATES HOLDINGS, LLC
|
||||
By: | GROUP 1 ASSOCIATES, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
HOWARD-DCIII, LLC
GROUP 1 HOLDINGS-DC, L.L.C. GROUP 1 HOLDINGS-F, L.L.C. GROUP 1 HOLDINGS-GM, L.L.C. GROUP 1 HOLDINGS-H, L.L.C. GROUP 1 HOLDINGS-N, L.L.C. GROUP 1 HOLDINGS-S, LLC GROUP 1 HOLDINGS-T, L.L.C. |
||||
By: | GROUP 1 AUTOMOTIVE, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
3
HARVEY GM, LLC
HARVEY OPERATIONS-T, LLC |
||||
By: | BOHN HOLDINGS, LLC, its Sole Member | |||
By: | BOHN HOLDINGS, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
HARVEY-SM, LLC
|
||||
By: | BOHN HOLDINGS-S, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
IRA AUTOMOTIVE GROUP, LLC
|
||||
By: | DANVERS-T, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
4
CHAPERRAL DODGE, INC.
KUTZ-N, INC. LUBBOCK MOTORS-GM, INC. LUBBOCK MOTORS-S, INC. LUBBOCK MOTORS-SH, INC. LUBBOCK MOTORS-T, INC. LUBBOCK MOTORS, INC. MAXWELL-N, INC. MAXWELL-NII, INC. MAXWELL CHRYSLER DODGE JEEP, INC. MCCALL-HA, INC. MCCALL-T, INC. MCCALL-TII, INC. MCCALL-TL, INC. MCCALL-H, INC. MCCALL-N, INC. MCCALL-SB, INC. PRESTIGE CHRYSLER NORTHWEST, INC. WEST CENTRAL MANAGEMENT COMPANY, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
AMARILLO MOTORS-C, LTD.
AMARILLO MOTORS-J, LTD. AMARILLO MOTORS-SM, LTD. GPI, LTD. MAXWELL-G, LTD. MAXWELL-GII, LTD. MCCALL-SL, LTD. PRESTIGE CHRYSLER SOUTH, LTD. ROCKWALL AUTOMOTIVE-DCD, LTD. |
||||
By: | GROUP 1 ASSOCIATES, INC., its General Partner | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
5
BOB HOWARD AUTOMOTIVE-EAST, INC.
BOB HOWARD CHEVROLET, INC. BOB HOWARD DODGE, INC. BOB HOWARD MOTORS, INC. BOB HOWARD NISSAN, INC. BOHN HOLDINGS, INC. BOHN HOLDINGS-F, INC. BOHN HOLDINGS-S, INC. CASA CHEVROLET INC. CASA CHRYSLER PLYMOUTH JEEP INC. DANVERS DCIII, INC. DANVERS DCII, INC. DANVERS-N, INC. DANVERS NII, INC. DANVERS S, INC. DANVERS-SB, INC. DANVERS-T, INC. DANVERS-TII, INC. DANVERS-TIII, INC. DANVERS TL, INC. FMM, INC. GPI AL-N, INC. GPI ATLANTA-T, INC. GPI CA-NIII, INC. GPI CA-TII, INC. GPI KS-SB, INC. GPI MS-H, INC. GPI MS-N, INC. GPI MS-SK, INC. GPI NH-T, INC. GPI NH-TL, INC. GPI SAC-SK, INC. GPI SAC-T, INC. GPI SD-DC, INC. GPI SD-IMPORTS, INC. GROUP 1 ASSOCIATES, INC. GROUP 1 FL HOLDINGS, INC. HOWARD-DCII, INC. HOWARD-GM, INC. HOWARD-GM II, INC. HOWARD-GMIII, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
6
HOWARD-H, INC.
HOWARD-HA, INC. HOWARD-SB, INC. HOWARD-SI, INC. HOWARD-FLMII, INC. HOWARD PONTIAC-GMC, INC. LUBY CHEVROLET CO. MIKE SMITH AUTOMOTIVE H, INC. MIKE SMITH AUTOMOTIVE-N, INC. MIKE SMITH AUTOPLAZA, INC. MIKE SMITH AUTOPLEX BUICK, INC. MIKE SMITH AUTOPLEX DODGE, INC. MIKE SMITH AUTOPLEX, INC. MIKE SMITH AUTOPLEX-GERMAN IMPORTS, INC. MIKE SMITH GM, INC. MIKE SMITH IMPORTS, INC. MIKE SMITH MOTORS, INC. MILLER-DM, INC. MILLER-NII, INC. MILLER-SH, INC. MILLER AUTOMOTIVE GROUP, INC. MILLBRO, INC. MILLER FAMILY COMPANY, INC. MILLER IMPORTS, INC. MILLER INFINITI INC. MILLER NISSAN, INC. NJ-DM, INC. NJ-H, INC. NJ-HA, INC. NJ-HAII, INC. NJ-HII, INC. NJ-SB, INC. NJ-SV, INC. NY-FV, INC. NY-FVII, INC. NY-SB, INC. NY-SBII, INC. SUNSHINE BUICK PONTIAC GMC TRUCK, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
7
GROUP 1 FUNDING, INC.
NY-H, INC. NY-HA, INC. SMC INVESTMENT, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
GROUP 1 LP INTERESTS-DC, INC.
GROUP 1 LP INTERESTS-F, INC. GROUP 1 LP INTERESTS-GM, INC. GROUP 1 LP INTERESTS-H, INC. GROUP 1 LP INTERESTS-N, INC. GROUP 1 LP INTERESTS-S, INC. GROUP 1 LP INTERESTS-T, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
8
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent |
|||||
By: | /s/ Anne M. Zeschke | ||||
Name: | Anne M. Zeschke | ||||
Title: | Assistant Vice President | ||||
LENDERS:
BANK OF AMERICA, N.A. |
|||||
By: | /s/ M. Patricia Kay | ||||
Name: | M. Patricia Kay | ||||
Title: | Senior Vice President | ||||
COMERICA BANK
|
|||||
By: | /s/ Jonathan S. Heine | ||||
Name: | Jonathan S. Heine | ||||
Title: | Vice President | ||||
JPMORGAN CHASE BANK, N.A.
|
|||||
By: | /s/ Robert L. Mendoza | ||||
Name: | Robert L. Mendoza | ||||
Title: | Vice President | ||||
KEYBANK NATIONAL ASSOCIATION
|
|||||
By: | /s/ Jim Webber | ||||
Name: | Jim Webber | ||||
Title: | Commercial RM | ||||
NISSAN MOTOR ACCEPTANCE CORPORATION
|
|||||
By: | - | ||||
Name: | - | ||||
Title: | - |
9
10
Environmental
Environmental
Financed Property
Holdback Amount
Completion Date
$
100,000
September 29, 2008
Atlanta, GA 30341
$
250,000
September 29, 2008
Pleasantville, NY 08232
$
150,000
September 29, 2008
Pleasantville, NY 08232
$
250,000
September 29, 2008
Mapleshade, NJ 08052
$
500,000
September 29, 2008
Oklahoma City, OK 73157
$
500,000
February 22, 2009
Palmetto Bay, FL
$
150,000
April 15, 2009
Stafford, TX
1
(a) | The definition of Account in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
(b) | Section 7.13 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
2
3
4
BORROWER
:
GROUP 1 REALTY, INC. |
||||
By: | /s/ John C. Rickel | |||
Name: | John C. Rickel | |||
Title: | President | |||
COMPANY:
GROUP 1 AUTOMOTIVE, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
GUARANTORS:
BARON DEVELOPMENT COMPANY, L.L.C. IVORY AUTO PROPERTIES OF SOUTH CAROLINA, LLC |
||||
By: | GROUP 1 REALTY, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
BOHN HOLDINGS, LLC | ||||
By: | BOHN HOLDINGS, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
BOHN-FII, LLC | ||||
By: | BOHN HOLDINGS-F, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
DANVERS-SU, LLC
|
||||
By: | GROUP 1 HOLDINGS-S, LLC, its Sole Member | |||
By: | GROUP 1 AUTOMOTIVE, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
GPI KS-SV, LLC
|
||||
By: | GPI KS-SB, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
GROUP 1 ASSOCIATES HOLDINGS, LLC
|
||||
By: | GROUP 1 ASSOCIATES, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
2
HOWARD-DCIII, LLC
GROUP 1 HOLDINGS-DC, L.L.C. GROUP 1 HOLDINGS-F, L.L.C. GROUP 1 HOLDINGS-GM, L.L.C. GROUP 1 HOLDINGS-H, L.L.C. GROUP 1 HOLDINGS-N, L.L.C. GROUP 1 HOLDINGS-S, LLC GROUP 1 HOLDINGS-T, L.L.C. |
||||
By: | GROUP 1 AUTOMOTIVE, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
HARVEY GM, LLC
HARVEY OPERATIONS-T, LLC |
||||
By: | BOHN HOLDINGS, LLC, its Sole Member | |||
By: | BOHN HOLDINGS, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
IRA AUTOMOTIVE GROUP, LLC
|
||||
By: | DANVERS-T, INC., its Sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
3
CHAPERRAL DODGE, INC.
KUTZ-N, INC. LUBBOCK MOTORS-GM, INC. LUBBOCK MOTORS-S, INC. LUBBOCK MOTORS-SH, INC. LUBBOCK MOTORS-T, INC. LUBBOCK MOTORS, INC. MAXWELL-N, INC. MAXWELL-NII, INC. MAXWELL CHRYSLER DODGE JEEP, INC. MCCALL-HA, INC. MCCALL-T, INC. MCCALL-TII, INC. MCCALL-TL, INC. MCCALL-H, INC. MCCALL-N, INC. MCCALL-SB, INC. PRESTIGE CHRYSLER NORTHWEST, INC. WEST CENTRAL MANAGEMENT COMPANY, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
AMARILLO MOTORS-C, LTD.
AMARILLO MOTORS-J, LTD. AMARILLO MOTORS-SM, LTD. GPI, LTD. MAXWELL-G, LTD. MCCALL-SL, LTD. PRESTIGE CHRYSLER SOUTH, LTD. ROCKWALL AUTOMOTIVE-DCD, LTD. |
||||
By: | GROUP 1 ASSOCIATES, INC., its General Partner | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
4
BOB HOWARD AUTOMOTIVE-EAST, INC.
BOB HOWARD CHEVROLET, INC. BOB HOWARD DODGE, INC. BOB HOWARD MOTORS, INC. BOB HOWARD NISSAN, INC. BOHN HOLDINGS, INC. BOHN HOLDINGS-F, INC. CASA CHEVROLET INC. CASA CHRYSLER PLYMOUTH JEEP INC. DANVERS DCIII, INC. DANVERS DCII, INC. DANVERS-N, INC. DANVERS NII, INC. DANVERS S, INC. DANVERS-SB, INC. DANVERS-T, INC. DANVERS-TII, INC. DANVERS-TIII, INC. DANVERS TL, INC. FMM, INC. GPI AL-N, INC. GPI ATLANTA-T, INC. GPI CA-NIII, INC. GPI CA-TII, INC. GPI KS-SB, INC. GPI MS-H, INC. GPI MS-N, INC. GPI MS-SK, INC. GPI NH-T, INC. GPI NH-TL, INC. GPI SAC-SK, INC. GPI SAC-T, INC. GPI SC-SB, INC. GPI SD-DC, INC. GPI SD-IMPORTS, INC. GROUP 1 ASSOCIATES, INC. GROUP 1 FL HOLDINGS, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
5
HOWARD-DCII, INC.
HOWARD-GM, INC. HOWARD-GM II, INC. HOWARD-GMIII, INC. HOWARD-H, INC. HOWARD-HA, INC. HOWARD-SB, INC. HOWARD-FLMII, INC. HOWARD PONTIAC-GMC, INC. LUBY CHEVROLET CO. MIKE SMITH AUTOMOTIVE H, INC. MIKE SMITH AUTOMOTIVE-N, INC. MIKE SMITH AUTOPLAZA, INC. MIKE SMITH AUTOPLEX BUICK, INC. MIKE SMITH AUTOPLEX DODGE, INC. MIKE SMITH AUTOPLEX, INC. MIKE SMITH AUTOPLEX-GERMAN IMPORTS, INC. MIKE SMITH GM, INC. MIKE SMITH IMPORTS, INC. MIKE SMITH MOTORS, INC. MILLER-DM, INC. MILLER-SH, INC. MILLER AUTOMOTIVE GROUP, INC. MILLBRO, INC. MILLER FAMILY COMPANY, INC. MILLER IMPORTS, INC. MILLER INFINITI INC. MILLER NISSAN, INC. NJ-DM, INC. NJ-H, INC. NJ-HA, INC. NJ-HAII, INC. NJ-HII, INC. NJ-SB, INC. NJ-SV, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
6
NY-FV, INC.
NY-FVII, INC. NY-SB, INC. NY-SBII, INC. SUNSHINE BUICK PONTIAC GMC TRUCK, INC. GROUP 1 FUNDING, INC. GPI CA-DMII, INC. NY-DM, INC. ADVANTAGECARS.COM, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
GROUP 1 LP INTERESTS-DC, INC.
GROUP 1 LP INTERESTS-GM, INC. GROUP 1 LP INTERESTS-S, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
GPI SC-SV, LLC
|
||||
By: | GPI SC-SB, INC., its sole Member | |||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President |
7
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent |
||||
By: | /s/ Anne M. Zeschke | |||
Name: | Anne M. Zeschke | |||
Title: | Assistant Vice President | |||
LENDERS:
BANK OF AMERICA, N.A. |
||||
By: | /s/ M. Patricia Kay | |||
Name: | M. Patricia Kay | |||
Title: | Senior Vice President | |||
COMERICA BANK
|
||||
By: | /s/ Jonathan S. Heine | |||
Name: | Jonathan S. Heine | |||
Title: | Vice President | |||
JPMORGAN CHASE BANK, N.A.
|
||||
By: | /s/ H. David Jones | |||
Name: | H. David Jones | |||
Title: | Senior Vice President | |||
KEYBANK NATIONAL ASSOCIATION
|
||||
By: | /s/ Jim Webber | |||
Name: | Jim Webber | |||
Title: | Commercial RM, VP | |||
NISSAN MOTOR ACCEPTANCE CORPORATION
|
||||
By: | /s/ Ed Littleton | |||
Name: | Ed Littleton | |||
Title: | Manager Commercial Credit |
8
WACHOVIA BANK, NATIONAL ASSOCIATION
|
||||
By: | /s/ Michael R. Burkitt | |||
Name: | Michael R. Burkitt | |||
Title: | Senior Vice President | |||
SOVEREIGN BANK
|
||||
By: | /s/ Kyle S. Bourque | |||
Name: | Kyle S. Bourque | |||
Title: | Vice President | |||
TOYOTA MOTOR CREDIT CORPORATION
|
||||
By: | /s/ Mark Doi | |||
Name: | Mark Doi | |||
Title: | National Dealer Credit Manager | |||
BMW FINANCIAL SERVICES NA, LLC
|
||||
By: | - | |||
Name: | - | |||
Title: | - | |||
9
Amount | ||||
Annual Retainer
1
:
|
||||
Cash
|
$ | 35,000 | ||
Stock
2
|
70,000 | |||
Additional Annual Retainers:
|
||||
Non-Executive Chairman of the Board
|
100,000 | |||
Audit Committee Chair
|
25,000 | |||
Compensation Committee Chair
|
10,000 | |||
All Other Committee Chairs
|
7,500 | |||
Presiding Director
|
15,000 | |||
Meeting Fees
3
:
|
||||
Board
|
2,500 | |||
Audit Committee
|
2,500 | |||
Non-Audit Committee
|
1,500 | |||
Vehicle Stipend
|
17,600 |
1. | Payable in quarterly installments. | |
2. | Granted under Group 1 Automotive, Inc. 2007 Long Term Incentive Plan; valued at the date of grant. | |
3. | Abbreviated meetings, as determined at the discretion of the chair, will result in the payment of one-half of the regular fees for the meeting. |
ARTICLE | PAGE | |||||
I
|
| Definitions and Construction | I-1 | |||
II
|
| Participation | II-1 | |||
III
|
| Account Credits and Allocations of Income or Loss | III-1 | |||
IV
|
| Deemed Investment of Funds | IV-1 | |||
V
|
| Determination of Vested Interest and Forfeitures | V-1 | |||
VI
|
| In-Service Withdrawals | VI-1 | |||
VII
|
| Termination Benefits | VII-1 | |||
VIII
|
| Administration of the Plan | VIII-1 | |||
IX
|
| Administration of Funds | IX-1 | |||
X
|
| Nature of the Plan | X-1 | |||
XI
|
| Miscellaneous | XI-1 | |||
XII
|
| Participation by Consultants | XII-1 | |||
XIII
|
| Participation by Non-Employee Directors | XIII-1 |
-i-
-ii-
(1) | Account(s) : A Members Employer Account and/or Deferral Account, including the amounts credited thereto. | |
(2) | Affiliate : Each trade or business (whether or not incorporated) which together with the Company would be deemed to be a single employer within the meaning of subsections (b) or (c) of Section 414 of the Code, in each case determined by an 80% control test. | |
(3) | As soon as administratively practicable : For purposes of benefit distributions, a date of distribution that is as soon as administratively practicable as determined by the Committee following a permissible payment event, but in no event later than the later of the 15 th day of the third calendar month following the date of the permissible payment event or December 31 st of the calendar year in which the permissible payment event occurs. In no event shall a Member or his Beneficiary be permitted to designate the taxable year of the payment. | |
(4) | Base Salary : The base rate of pay paid in cash by the Employer to or for the benefit of a Member for services rendered or labor performed while a Member, including base pay a Member could have received in cash in lieu of (i) Compensation deferrals pursuant to Section 3.1 and (ii) elective contributions made on his behalf by the Employer pursuant to a qualified cash or deferred arrangement (as defined in Section 401(k) of the Code) or pursuant to a plan maintained under Section 125 of the Code. | |
(5) | Beneficiary : The person or entity who will receive payment of a Members benefit in the event of his death pursuant to Section 7.4. | |
(6) | Board : The Board of Directors of the Company. | |
(7) | Bonus : Each incentive bonus, if any, paid in cash by the Employer to or for the benefit of a Member for services rendered or labor performed, including the portion thereof that a Member could have received in cash in lieu of (i) Compensation deferrals pursuant to Section 3.1 and (ii) elective contributions made on his behalf by the Employer pursuant to a qualified cash or deferred arrangement (as defined in Section 401(k) of the Code) or pursuant to a plan maintained under Section 125 of the Code. | |
(8) | Change in Control : With respect to the Company, a Change in Control shall be conclusively deemed to have occurred if (and only if) any of the following events shall have occurred: (i) any merger, consolidation, or reorganization in which the Company is not the surviving entity (or survives only as a subsidiary of an entity), (ii) any sale, lease, exchange, or other transfer of all or substantially all of the assets of the Company to any other person or entity other than a wholly-owned subsidiary of the Company (in one |
I-1
transaction or a series of related transactions), (iii) dissolution or liquidation of the Company, (iv) when any person or entity, including a group as contemplated by Section 13(d)(3) of the Exchange Act acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of the Companys voting stock (based upon voting power), or (v) during any two-year period, the persons who were directors of the Company (together with any new directors whose election by the Board or whose nomination for election by the Companys shareholders was approved by a vote of at least three quarters of the directors still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) shall cease for any reason to constitute a majority of the Board; provided, however, that the term Change in Control shall not include any reorganization, merger, consolidation, or similar transaction or series of transactions pursuant to which the record holders of the voting stock of the Company immediately prior to such transaction or series of transactions continue to hold immediately following such transaction or series of transactions 50% or more of the voting securities (based upon voting power) of (a) any entity which owns (directly or indirectly) the stock of the Company, (b) any entity with which the Company has merged, or (c) any entity that owns an entity with which the Company has merged. | ||
With respect to an Employer other than the Company, the Employer shall be deemed to have undergone a Change in Control in the event that (a) the Employer ceases to be an Affiliate of the Company, provided that the transaction or series of transactions that resulted in such cessation constitutes a change in the ownership or effective control of the Employer or a majority shareholder of the Employer (or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, with the chain ending at the Employer), or (b) a change in the ownership of a substantial portion of the Employers assets, in each case within the meaning of Section 409A(a)(2)(A)(v) of the Code. | ||
(9) | Code : The Internal Revenue Code of 1986, as amended. References herein to provisions of the Code shall include any successor statute and the applicable regulations or other authoritative guidance promulgated thereunder. | |
(10) | Commissions : The commissions, if any, paid in cash by the Employer to or for the benefit of a Member for services rendered or labor performed, including the portion thereof that a Member could have received in cash in lieu of (i) Compensation deferrals pursuant to Section 3.1 and (ii) elective contributions made on his behalf by the Employer pursuant to a qualified cash or deferred arrangement (as defined in Section 401(k) of the Code) or pursuant to a plan maintained under Section 125 of the Code. | |
(11) | Committee : The administrative committee appointed by the Compensation Committee to administer the Plan. | |
(12) | Company : Group 1 Automotive, Inc. | |
(13) | Compensation : Base Salary, Bonus and/or Commissions. |
I-2
(14) | Compensation Committee : The Compensation Committee of the Board. | |
(15) | Consultant : An individual who has entered into a Consulting Arrangement with the Employer as described in Section 12.2(1). | |
(16) | Deferral Account : An individual account for each Member to which is credited his Member Deferrals pursuant to Section 3.1 and which is adjusted to reflect changes in value as provided in Section 3.3. | |
(17) | Director : The term Director shall have the meaning set forth in Section 13.2. | |
(18) | Disability : The term Disability shall mean total and permanent disability as determined under the Savings Plan. | |
(19) | Effective Date : January 1, 2008, as to this restatement of the Plan except as otherwise provided herein. The original effective date of the Plan was November 10, 1999. Notwithstanding anything to the contrary herein, this restatement shall not apply to (i) Member Deferrals made on or prior to December 31, 2004, (ii) Employer Deferrals in which a Member had a Vested Interest as of December 31, 2004 (and only to the extent of the respective Vested Interests the Members had on such date), and (iii) earnings under the Plan on amounts in Members Deferral Accounts and Employer Accounts to the extent attributable to amounts described in the preceding provisions of this sentence, all of which amounts shall be segregated under the Plan in separate subaccounts (the Grandfathered Subaccounts) and which shall be governed by the provisions of the Plan as in effect on October 3, 2004. For sake of clarity, none of the provisions of this restatement shall apply to the Grandfathered Subaccounts. | |
(20) | Eligible Employee : Each individual who has been selected by the Committee for participation in the Plan. | |
(21) | Eligibility Period : The 30-day period following an Eligible Employees notification by the Committee of eligibility to participate in the Plan. | |
(22) | Employer : The Company and any other adopting entity that adopts the Plan pursuant to the provisions of Section 2.3. | |
(23) | Employer Account : An individual account for each Member to which is credited the Employer Deferrals made on his behalf pursuant to Section 3.2 and which is adjusted to reflect changes in value as provided in Section 3.3. | |
(24) | Employer Deferrals : Deferrals made by the Employer on a Members behalf pursuant to Section 3.2. | |
(25) | ERISA : The Employee Retirement Income Security Act of 1974, as amended. | |
(26) | Exchange Act : The Securities Exchange Act of 1934, as amended. |
I-3
(27) | Funds : The investment funds, if any, designated from time to time by the Committee for the deemed investment of Accounts pursuant to Section 4.1. | |
(28) | Member : Each Eligible Employee who has become a Member pursuant to Article II. In addition, where the context requires, the term Member shall be deemed to include an Eligible Employee for purposes of Section 3.1 if such Eligible Employee has not yet become a Member pursuant to Section 2.1. | |
(29) | Member Deferrals : Deferrals made by a Member pursuant to Section 3.1. | |
(30) | Performance Bonus : A Bonus that constitutes performance-based compensation within the meaning of Section 409A(a)(4)(B)(iii) of the Code. | |
(31) | Plan : The Group 1 Automotive, Inc. Deferred Compensation Plan, as amended from time to time. | |
(32) | Plan Year : The twelve consecutive month period commencing January 1 of each year. | |
(33) | Retirement Date : The date upon which a Member attains age 55. | |
(34) | Savings Plan : The Group 1 Automotive, Inc. 401(k) Savings Plan, as amended from time to time. | |
(35) | Scheduled In-Service Withdrawal : A distribution elected by the Member pursuant to Section 3.1 for an in-service withdrawal of amounts of Member Deferrals and/or Employer Deferrals made in a given Plan Year, and earnings or losses attributable thereto, as set forth on the election form for such Plan Year. | |
(36) | Scheduled Withdrawal Date : The distribution date elected by the Member for a Scheduled In-Service Withdrawal. | |
(37) | Specified Employee : An individual who on the date of his Termination of Service meets the definition of key employee in Section 416(i) of the Code (applied in accordance with the Treasury Regulations promulgated thereunder and without regard to subparagraph (5) thereof) and, as of the date of his Termination of Service, the Company or any Affiliate is publicly traded on an established securities market or otherwise. The identification of Specified Employees for purpose of distributions upon Termination of Service pursuant to Article VII shall be made in accordance with the general requirements of Section 409A(a)(2)(B)(i) of the Code pursuant to any method elected by the Compensation Committee or, if no such election is made, under the default rules under such Code Section. | |
(38) | Termination of Service : The termination of a Members employment with the Employer and all Affiliates for any reason whatsoever. Notwithstanding anything to the contrary herein, a Member shall not be considered to have incurred a Termination of Service for purposes of the Plan if his termination does not constitute a separation from service within the meaning of Section 409A(a)(2)(A)(i) of the Code. Whether a |
I-4
Termination of Service has occurred with respect to a Consultant or Director shall be determined in accordance with Section 12.3 or 13.4, as applicable. |
(39) | Trust : The trust, if any, established under the Trust Agreement. | |
(40) | Trust Agreement : The agreement, if any, entered into between the Employer and the Trustee pursuant to Article X. | |
(41) | Trust Fund : The funds and properties, if any, held pursuant to the provisions of the Trust Agreement, together with all income, profits and increments thereto. | |
(42) | Trustee : The trustee or trustees qualified and acting under the Trust Agreement, if any, at any time. | |
(43) | Unforeseeable Financial Emergency : An unexpected need of a Member for cash that (i) arises from a severe financial hardship of the Member resulting from an illness or accident of the Member or the Members spouse, Beneficiary, or dependent (within the meaning of Section 152(a) of the Code, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B)), loss of the Members property due to casualty, or other similar extraordinary and unforeseeable circumstances, as determined under Section 409A of the Code, arising as a result of events beyond the control of such Member and (ii) would result in severe financial hardship to such Member if his Compensation deferral election were not canceled pursuant to Section 3.1(e) and/or if a benefit payment pursuant to Section 6.2 or 7.5(b) were not permitted. Cash needs arising from foreseeable events, such as the purchase of a house or payment of college tuition, shall not be considered to be the result of an Unforeseeable Financial Emergency. Further, cash needs that may be relieved (a) through reimbursement or compensation from insurance or otherwise, (b) by liquidation of the Members assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or (c) by cessation of deferrals under the Plan shall not be considered to be Unforeseeable Financial Emergencies. | |
(44) | Valuation Date : Each day that the New York Stock Exchange is open for business; provided, however, that the Committee shall in its discretion determine the Valuation Dates that will occur during any period for which the provisions of Section 4.2 apply; provided further, however, that with respect to any period for which the provisions of Section 4.2 apply, subject to Section 7.2(b), the Committee shall determine Valuation Dates of sufficient frequency to result in the payment or commencement of benefits pursuant to Article VII at a time not later than the end of the Plan Year in which a Members Termination of Service occurred or, if later, by the 15 th day of the third calendar month following such Members Termination of Service. | |
(45) | Vested Interest : The portion of a Members Accounts which, pursuant to the Plan, is nonforfeitable. |
I-5
I-6
II-1
II-2
III-1
III-2
III-3
III-4
III-5
IV-1
V-1
VI-1
VII-1
VII-2
VII-3
VII-4
VII-5
VIII-1
VIII-2
VIII-3
IX-1
X-1
XI-1
XI-2
XI-3
XI-4
(1) | Consulting Arrangement . A written arrangement pursuant to which an individual agrees to perform consulting or advisory services for the Employer in a capacity other than as an employee. |
(2) | Consulting Arrangement Plan Year . The Plan Year during which a Member enters into a Consulting Arrangement with the Employer and thereby becomes a Consultant. |
(3) | Consulting Pay . The pay of any kind whatsoever paid in cash by the Employer to or for the benefit of a Member for services performed pursuant to a Consulting Arrangement while a Member, including pay a Member could have received in cash in lieu of deferrals made pursuant to Section 12.3(c). |
XII-1
XII-2
(1) | Director . Each individual who is a member of the Board, other than any such individual who is an employee of the Company or an Affiliate. Where the context requires, the term Member shall be deemed to include a Director for purposes of Section 13.4(b) if such Director has not yet become a Member pursuant to Section 13.3. |
(2) | Director Compensation . The pay paid in cash by the Company to or for the benefit of a Member for services performed while a Member with respect to such Members (i) general service as a Director, (ii) membership on a committee of the Board, (iii) chairmanship of any such committee and (iv) attendance (physically or otherwise) at any meeting of the Board or committee thereof, including the portion thereof that a Member could have received in cash in lieu of deferrals made pursuant to Section 13.4(b). |
(3) | Director Eligibility Period . The 30-day period following the date upon which an individual becomes a Director. |
XIII-1
XIII-2
GROUP 1 AUTOMOTIVE, INC.
|
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
THE EMPLOYER:
GROUP 1 AUTOMOTIVE, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President & General Counsel | |||
Date: | November 8, 2007 | |||
EMPLOYEE:
|
||||
By: | /s/ Earl J. Hesterberg | |||
Name: | Earl J. Hesterberg, Individually | |||
Date: | November 8, 2007 | |||
Number of Restricted Shares | Date of Lapse | |
20,000 | April 21, 2007 | |
10,000 | May 15, 2008 | |
10,000 | May 15, 2009 | |
30,000 | May 15, 2010 |
GROUP 1 AUTOMOTIVE, INC.
|
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President | |||
EXECUTIVE
|
||||
By: | /s/ Earl J. Hesterberg | |||
Name: | Earl J. Hesterberg | |||
Title: | President & Chief Executive Officer | |||
-2-
THE EMPLOYER:
GROUP 1 AUTOMOTIVE, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: | Vice President & General Counsel | |||
Date: | November 8, 2007 | |||
EMPLOYEE:
|
||||
By: | /s/ John C. Rickel | |||
Name: | John C. Rickel, Individually | |||
Date: | November 8, 2007 | |||
THE EMPLOYER:
GROUP 1 AUTOMOTIVE, INC. |
||||
By: | /s/ John C. Rickel | |||
Name: | John C. Rickel | |||
Title: |
Senior Vice President & CFO
|
|||
Date: | November 8, 2007 | |||
EMPLOYEE:
|
||||
By: | /s/ Darryl M. Burman | |||
Name: |
Darryl M. Burman, Individually
|
|||
Date: | November 8, 2007 | |||
1
2
(i) | engage in the Restricted Area in any business competitive with any line of business conducted by Employer or any of its subsidiaries or affiliates (including without limitation any public or private auto retailer); | ||
(ii) | render advice or services to, or otherwise assist, any other person, association, or entity who is engaged in the Restricted Area, directly or indirectly, in any business competitive with any line of business conducted by Employer or any of its subsidiaries or affiliates (including without limitation any public or private auto retailer); | ||
(iii) | engage in any business of, render advice or services to, or otherwise assist, any private or public automobile dealership consolidator owning ten (10) or more dealerships at the time Employee seeks to engage in any business of, render advice or services to, or otherwise assist any such automobile dealership consolidator; | ||
(iv) | solicit or accept the business of, or call upon, any customer or client of Employer for the purpose of conducting competitive business or otherwise seeking profit from a competitive activity; and |
3
(v) | encourage or induce any current or former employee of Employer or any of its subsidiaries or affiliates to leave the employment of Employer or any of its subsidiaries or affiliates or proselytize, offer employment, retain, hire or assist in the hiring of any such employee by any person, association, or entity not affiliated with Employer or any of its subsidiaries or affiliates; provided, however, that nothing in this subsection (v) shall prohibit Employee from offering employment to any prior employee of Employer or any of its subsidiaries or affiliates who was not employed by Employer or any of its subsidiaries or affiliates at any time in the twelve (12) months prior to the termination of Employees employment. |
4
5
(i) | A breach by Employer of any material provision of this Agreement or the occurrence of a Constructive Termination Event, which shall be defined as the failure by the Employer to pay the Employees compensation as provided in this Agreement, relocation without the Employees consent of the Employees primary employment location to a location that is more than 50 miles from the location to which he will be required to report on his first day of employment, a material diminution in the Employees position, duties, responsibilities, reporting status, or authority, or if the Employee is requested to perform any illegal activity or to sign-off on any inappropriate financial statement or acknowledgement, except that before exercising his right to terminate the employment relationship pursuant to any of the provisions of this subsection (i), the Employee must first give written notice to the Employers Board of Directors of the circumstances purportedly giving rise to his right to so terminate and must provide the Employer with a minimum fifteen (15) days to correct the problem, unless correction is inherently impossible; | ||
(ii) | The involuntary reduction of Employees base salary or incentive compensation targets (other than a reduction in such targets applied consistently to the Companys other executive officers that is designed to account for changes in relative EPS projections as a result of such Corporate Change) within six (6) months after the occurrence of any Corporate Change (defined below) that is not |
6
cured by Employer or its successor, as applicable, within thirty (30) days of receiving detailed written notice of such event from Employee. A Corporate Change shall mean the first to occur of any of the following events: (1) an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (each, a Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either: (i) the then outstanding shares of common stock of Employer (the Outstanding Common Stock) or (ii) the combined voting power of the then outstanding voting securities of Employer entitled to vote generally in the election of directors (the Outstanding Voting Securities); excluding, however, the following: (A) any acquisition directly from Employer (including without limitation any public offering), other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from Employer; (B) any acquisition by Employer; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Employer or any Person controlled by Employer; or (D) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (1) of this definition of Corporate Change); (2) within any period of 24 consecutive months, a change in the composition of the board of directors of Employer (the Board) such that the individuals who, immediately prior to such period, constituted the Board (such Board will be hereinafter referred to as the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this definition of Corporate Change that any individual who becomes a member of the Board during such period, whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) will be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board will not be so considered as a member of the Incumbent Board; provided further that any individual who voluntarily resigns from the Board in connection with the reduction in size of the Board will not be deemed to be a member of the Incumbent Board; (3) the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Employer (a Corporate Transaction); excluding, however, such a Corporate Transaction pursuant to which (i) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Corporate Transaction (including, without limitation, an entity which as a result of such transaction owns Employer or all or substantially all of the Employers assets, either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate |
7
Transaction, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, (ii) no Person (other than Employer, any employee benefit plan (or related trust) sponsored or maintained by Employer, by any entity controlled by Employer, or by such entity resulting from such Corporate Transaction) will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock of the entity resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors, except to the extent that such ownership existed with respect to Employer prior to the Corporate Transaction, and (iii) individuals who were members of the Board immediately prior to the approval by the stockholders of Employer of such Corporate Transaction will constitute at least a majority of the members of the board of directors of the entity resulting from such Corporate Transaction (it is intended that this subsection (3) include Corporate Transactions that result in entities other than corporations that are governed by bodies other than a board of directors, including without limitation, limited liability companies that are governed by a board of managers); or (4) the approval by the stockholders of Employer of a complete liquidation or dissolution of Employer, other than to a corporation pursuant to a transaction which would comply with clauses (i), (ii) and (iii) of subsection (3) of this definition of Corporate Change, assuming for this purpose that such transaction were a Corporate Transaction. Any such Corporate Change must also constitute a change in control as such phrase is defined in section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the Code) and the guidance issued thereunder, including consideration of all applicable attribution of ownership rules under section 318 of the Code to the extent required by any guidance under section 409 A of the Code; or | |||
(iii) | For any other reason whatsoever, in the sole discretion of Employee, upon thirty (30) days written notice by Employee. |
8
9
10
11
DATE: 12/31/06
|
GROUP 1 AUTOMOTIVE, INC. | |||
|
||||
|
By: | /s/ Earl J. Hesterberg | ||
|
||||
|
Name: | Earl J. Hesterberg | ||
|
||||
|
Title: | President and Chief Executive Officer | ||
|
||||
|
||||
DATE: 12/29/06
|
/s/ Randy L. Callison | |||
|
||||
|
RANDY L. CALLISON |
12
THE EMPLOYER:
GROUP 1 AUTOMOTIVE, INC. |
||||
By: | /s/ Darryl M. Burman | |||
Name: | Darryl M. Burman | |||
Title: |
Vice President & General Counsel
|
|||
Date: | November 8, 2007 | |||
EMPLOYEE:
|
||||
By: | /s/ Randy L. Callison | |||
Name: | Randy L. Callison, Individually | |||
Date: | November 8, 2007 |
Ratios of Earnings to Fixed Charges
(dollars in thousands)
For the year ended December 31,
2007
2006
2005
2004
2003
106,023
139,348
108,407
47,952
113,072
106,327
98,687
81,089
66,559
53,964
(2,011
)
(733
)
(1,301
)
(563
)
210,339
237,302
188,195
113,948
167,036
$
73,588
$
65,465
$
56,119
$
44,648
$
36,762
30,728
32,489
23,669
21,348
17,202
2,011
733
1,301
563
$
106,327
$
98,687
$
81,089
$
66,559
$
53,964
2.0
2.4
2.3
1.7
3.1
GPI Atlanta-FLM, Inc. (DE)
NY-SBII, Inc. (DE)
GPI Atlanta-FLM II, Inc. (DE)
Bohn Holdings, Inc. (DE)
Perimeter Ford, Inc. (DE)
Bob Howard Nissan, Inc. (OK)
Group 1 LP Interests-DC, Inc. (DE)
Group 1 LP Interests-GM, Inc. (DE)
Group 1 Holdings-F, LLC (DE)
Group 1 Holdings-GM, LLC (DE)
Group 1 Holdings N, LLC (DE)
Group 1 Holdings-S, LLC (DE)
Howard Pontiac-GMC, Inc. (OK)
Howard-GMIII, Inc. (DE)
Maxwell-G, Ltd. (TX)
Prestige Chrysler South, Ltd. (TX)
Amarillo Motors-SM, Ltd. (TX)
Luby Chevrolet Co. (DE)
Mike Smith Autoplaza, Inc. (TX)
Mike Smith GM, Inc. (DE)
Danvers-DCII, Inc. (DE)
Danvers-DCIII, Inc. (DE)
GPI SD-Imports, Inc. (DE)
GPI SAC-SK, Inc. (DE)
Group 1 Automotive UK Limited (UK)
Chandlers Garage Holdings Limited (UK)
Chandlers (Hailsham) Limited (UK)
Chandlers Garage (Brighton) Limited (UK)
Group 1 Associates, Inc. (DE)
Group 1 Associates Holdings, LLC (DE)
Group 1 Funding, Inc. (DE)
GPI, Ltd. (TX)
Mike Smith Autoplex Buick, Inc. (TX)
Baron Development Company, LLC (KS)
Miller Infiniti, Inc. (CA)
McCall-SL, Ltd. (TX)
Amarillo Motors-C, Ltd. (TX)
Miller Automotive Group, Inc. (CA)
(Nevis Islands)
Miller Imports, Inc. (CA)
Ivory Auto Properties of South Carolina, LLC (SC)
(Nevis Islands)
GPI SC-SV, LLC (DE)
dba
Advantage Volkswagen
GPI SC-SB, Inc. (DE)
dba
BMW of Columbia
dba
Miller Nissan Van Nuys
Courtesy Ford, LLC (DE)
dba
World Ford Kendall
NY-DM, Inc. (DE)
dba
Mercedes-Benz of Massapequa
dba
Mercedes-Benz of Augusta
Bob Howard Chevrolet, Inc. (OK)
dba
Howard Chevrolet
Bob Howard Automotive-East, Inc. (OK)
dba
South Pointe Chevrolet
dba
Dallas Dodge Chrysler Jeep
Gulf Breeze Ford, LLC (DE)
dba
Gulf Breeze Ford
Bob Howard Dodge, Inc. (OK)
dba
Bob Howard Dodge Chrysler Jeep
dba
Courtesy Nissan
Koons Ford, LLC (DE)
dba
World Ford Pembroke Pines
Howard-GM II, Inc. (DE)
dba
Smicklas Chevrolet
dba
World Ford Pensacola
Howard-HA, Inc. (DE)
dba
Bob Howard Acura
Howard-SB, Inc. (DE)
dba
BMW of Tulsa
dba
Rockwall Ford Mercury
Howard-DCIII, LLC (DE)
dba
South Pointe Chrysler Jeep Dodge
Danvers-N, Inc. (DE)
dba
Ira Nissan Tewksbury
dba
Bob Howard Honda
Maxwell-N, Inc. (DE)
dba
Town North Nissan
Maxwell-NII, Inc. (DE)
dba
Round Rock Nissan
dba
Ira Nissan Woburn
GPI MS-N, Inc. (DE)
dba
Pat Peck Nissan
GPI MS-SK, Inc. (DE)
dba
Pat Peck Kia
dba
Sterling McCall Nissan
GPI KS-SV, LLC (DE)
dba
Baron Volkswagen
Maxwell Chrysler Dodge Jeep, Inc. (DE)
dba
Maxwell Chrysler Dodge Jeep
dba
Pat Peck Honda
McCall-HA, Inc. (DE)
dba
Sterling McCall Acura
Maxwell-GMII, Inc. (DE)
dba
Freedom Chevrolet
dba
Ira Subaru
GPI AL-N, Inc. (DE)
dba
Pat Peck Nissan
Mike Smith Automotive-H, Inc. (DE)
dba
Mike Smith Honda
dba
Sterling McCall Honda
Millbro, Inc. (CA)
dba
Miller Honda of Culver City
Sunshine Buick Pontiac GMC Truck, Inc. (NM)
dba
Sunshine Buick Pontiac GMC
dba
Ira Lexus
Mike Smith Autoplex Dodge, Inc. (TX)
dba
Mike Smith Chrysler Jeep Dodge
Mike Smith Autoplex-German Imports, Inc. (TX)
dba
Mike Smith Mercedes Benz
dba
BMW of Beaumont
NJ-H, Inc. (DE)
dba
Honda of Freehold
NJ-HII, Inc. (DE)
dba
Boardwalk Honda
dba
Mike Smith Nissan
NJ-SV, Inc. (DE)
dba
Volkswagen of Freehold
GPI CA-DMII, Inc. (DE)
dba
Mercedes-Benz of Escondido
dba
Mercedes-Benz of Freehold
NJ-HAII, Inc. (DE)
dba
Boardwalk Acura
Miller Family Company, Inc. (CA)
dba
Miller Honda Van Nuys
dba
Elite Acura
NJ-SB, Inc. (DE)
dba
BMW of Atlantic City
McCall-TII, Inc. (DE)
dba
Fort Bend Toyota
Fort Bend Scion
dba
Sterling McCall Toyota
Sterling McCall Scion
Maxwell Ford, Inc. (DE)
dba
Maxwell Ford
Maxwell Ford Supercenter
Danvers-TII, Inc. (DE)
dba
Ira Toyota II
Ira Scion II
dba
Sterling McCall Lexus
Lexus of Clear Lake
Bob Howard Motors, Inc. (OK)
dba
Bob Howard Toyota
Bob Howard Scion
Harvey Operations-T, LLC (DE)
dba
Bohn Brothers Toyota
Bohn Brothers Scion
dba
Ira Toyota III
Ira Scion III
Lubbock Motors, Inc. (DE)
dba
The Credit Connection
The Credit Connection of Amarillo
Lubbock Motors-SH, Inc. (DE)
dba
Gene Messer Hyundai
Gene Messer Kia
dba
Don Bohn Buick, Pontiac GMC
Don Bohn Used Cars
GPI CA-TII, Inc. (DE)
dba
Miller Scion of Anaheim
Miller Toyota of Anaheim
GPI CA-NIII, Inc. (DE)
dba
Performance Nissan
Millers Performance Nissan
dba
Shamrock Chevrolet
Shamrock Accessories
GPI Atlanta-F, Inc. (GA)
dba
Stone Mountain Ford
World Ford Stone Mountain
Danvers-T, Inc. (DE)
dba
Ira Toyota
Ira Scion
dba
Gene Messer Toyota
Gene Messer Scion
Casa Chrysler Plymouth Jeep Inc. (NM)
dba
Casa Chrysler Jeep on the Westside
Casa Mitsubishi
Danvers-SB, Inc. (DE)
dba
Ira BMW of Stratham
BMW of Stratham
dba
Baron BMW
Baron MINI
Casa Chevrolet Inc. (NM)
dba
Casa Chevrolet at Lomas & Louisiana
Xtreme Auto-Truck Accessories
Rockwall Automotive-DCD, Ltd. (TX)
dba
Rockwall Dodge
Rockwall Chrysler Jeep Dodge
dba
Hassel Volvo Glen Cove
Hassel Volvo
Hassel Auto Group
Howard-GM, Inc. (DE)
dba
Bob Howard Pontiac
Bob Howard GMC Truck
Bob Howard Buick Pontiac-GMC
NY-SB, Inc. (DE)
dba
Hassel BMW
Hassel MINI
Hassel Auto Group
dba
Miller Toyota
Miller Toyota Culver City
Miller Scion
GPI NH-T, Inc. (DE)
dba
Ira Toyota of Manchester
Ira Lexus of Manchester
Ira Scion of Manchester
NY-FVII, Inc. (DE)
dba
Hassel Volvo Huntington
Hassel Volvo
Hassel Auto Group
dba
Jim Tidwell Ford
Group 1 Atlanta
Group 1 Automotive Southeast Region
Lubbock Motors-S, Inc. (DE)
dba
Gene Messer Mitsubishi
Gene Messer Volkswagen
Gene Messer Used Cars
Danvers-S, Inc. (DE)
dba
Ira Mazda
Ira Porsche
Ira Audi
dba
World Toyota
World Toyota Collision & Glass Center
World Scion
Prestige Chrysler Northwest, Inc. (DE)
dba
Maxwell Dodge
Maxwell Dodge Supercenter
Credit Connection Autos
Harvey Ford, LLC (DE)
dba
Don Bohn Ford
Don Bohn Ford Lincoln Mercury
Don Bohn Used Cars
dba
Mercedes Benz of Beverly Hills
Millers Mercedes-Benz of Beverly Hills
smart center Beverly Hills
GPI SAC-T, Inc. (DE)
dba
Folsom Lake Toyota
Folsom Lake Scion
Folsom Lake Used Car Outlet
Mike Smith Autoplex, Inc. (TX)
dba
Mike Smith Buick
Mike Smith Cadillac
Mike Smith Pontiac
Mike Smith GMC Truck
dba
Advantage Car Sales
AdvantageCars
Advantage Cars
Advantagecars.com
McCall-SB, Inc. (DE)
dba
Advantage BMW
Advantage BMW Midtown
BMW of Clear Lake
Advantage BMW of Clear Lake
GPI SD-DC, Inc. (DE)
dba
Rancho Chrysler Jeep Dodge
Rancho Chrysler
Rancho Jeep
Rancho Dodge
dba
Gene Messer Ford
The Credit Connection
Gene Messer Value Lot
Gene Messer Value Lot Wolfforth
Dr. Scratch
Napa Auto Parts
Howard Ford, Inc. (DE)
dba
Bob Howard Downtown Ford
Lincoln-Mercury
Bob Howard Downtown Lincoln-Mercury
Bob Howard Downtown Ford
Lincoln Mercury of Oklahoma City
Amarillo Motors-F, Inc. (DE)
dba
Gene Messer Ford
Gene Messer Ford of Amarillo
Gene Messer Ford, Lincoln Mercury and
Mazda of
Amarillo
Gene Messer Mazda
Gene Messer Ford Lincoln Mercury
Gene Messer Ford Value Lot
1. | Registration Statement (Form S-3 No. 333-75714) of Group 1 Automotive, Inc. and related Prospectus; | |
2. | Registration Statement (Form S-3 No. 333-137088) of Group 1 Automotive, Inc. and related Prospectus; | |
3. | Registration Statement (Form S-4 No. 333-109080) of Group 1 Automotive, Inc. and related Prospectus; | |
4. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1996 Stock Incentive Plan (No. 333-42165); | |
5. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1996 Stock Incentive Plan (No. 333-80399); | |
6. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1996 Stock Incentive Plan (No. 333-75784); | |
7. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1996 Stock Incentive Plan (No. 333-115961); | |
8. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1998 Employee Stock Purchase Plan (No. 333-42165); | |
9. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1998 Employee Stock Purchase Plan (No. 333-70043); | |
10. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1998 Employee Stock Purchase Plan (No. 333-75754); | |
11. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1998 Employee Stock Purchase Plan (No. 333-106486); | |
12. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 1998 Employee Stock Purchase Plan (No. 333-137081); | |
13. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 401(k) Savings Plan (No. 333-80399); | |
14. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. 401(k) Savings Plan (No. 333-113679); | |
15. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. Deferred Compensation Plan (No. 333-83260); | |
16. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. Deferred Compensation Plan (No. 333-115962); | |
17. | Registration Statement (Form S-8) pertaining to the Group 1 Automotive, Inc. Deferred Compensation Plan and the Group 1 Automotive, Inc. 2007 Long Term Incentive Plan (No. 333-145034); |
1. | I have reviewed this annual report on Form 10-K for the fiscal year ended December 31, 2007 of Group 1 Automotive, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Earl J. Hesterberg | ||||
Earl J. Hesterberg | ||||
Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K for the fiscal year ended December 31, 2007 of Group 1 Automotive, Inc. ; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ John C. Rickel | ||||
John C. Rickel | ||||
Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Earl J. Hesterberg | ||||
Earl J. Hesterberg | ||||
Chief Executive Officer | ||||
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ John C. Rickel | ||||
John C. Rickel | ||||
Chief Financial Officer | ||||