8-K

Group 1 Automotive, Inc.

Date: June 25, 2014

/s/ John C. Rickel

Name: John C. Rickel

Title: Senior Vice President and Chief Financial Officer

0001193125-14-249735.txt : 20140627 0001193125-14-249735.hdr.sgml : 20140627 20140626060153 ACCESSION NUMBER: 0001193125-14-249735 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20140625 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140626 DATE AS OF CHANGE: 20140626 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GROUP 1 AUTOMOTIVE INC CENTRAL INDEX KEY: 0001031203 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500] IRS NUMBER: 760506313 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13461 FILM NUMBER: 14941365 BUSINESS ADDRESS: STREET 1: 800 GESSNER STREET 2: SUITE 500 CITY: HOUSTON STATE: TX ZIP: 77024 BUSINESS PHONE: 713-647-5700 MAIL ADDRESS: STREET 1: 800 GESSNER STREET 2: SUITE 500 CITY: HOUSTON STATE: TX ZIP: 77024 8-K 1 d746849d8k.htm 8-K 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 25, 2014

Group 1 Automotive, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-13461

76-0506313

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

800 Gessner

Suite 500

Houston, Texas 77024

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (713) 647-5700

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

In connection with the settlement of the previously announced tender offer by Group 1 Automotive, Inc. (the “Company”) for the Company’s 3.00% Convertible Senior Notes due 2020 (the “Convertible Notes”), on June 25, 2014, the Company entered into the Partial Unwind Agreement (the “JPM Unwind Agreement”) with JPMorgan Chase Bank, National Association (“JPMorgan”), which amends the terms of the convertible note hedges and warrant agreements entered into in March 2010 with JPMorgan relating to the Convertible Notes. The JPM Unwind Agreement reduces the number of call options under the JPMorgan convertible note hedge agreements to 22,551 call options upon payment therefor. The JPM Unwind Agreement also reduces the number of warrants under the JPMorgan warrant agreements to 303,716 warrants.

In addition, on June 25, 2014, the Company entered into the Partial Unwind Agreement (the “BofA Unwind Agreement”) with Bank of America, N.A. (“BofA”), which amends the terms of the convertible note hedges and warrant agreements entered into in March 2010 with BofA relating to the Convertible Notes. The BofA Unwind Agreement reduces the number of call options under the BofA convertible note hedge agreements to 22,550 call options. The BofA Unwind Agreement also reduces the number of warrants under the BofA warrant agreements to 303,694 warrants upon payment therefor.

Copies of the JPM Unwind Agreement and the BofA Unwind Agreement are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The descriptions of the JPM Unwind Agreement and the BofA Unwind Agreement are summaries and are qualified in their entirety by the terms of the JPM Unwind Agreement and the BofA Unwind Agreement.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.


Exhibit Number		Description

10.1		Partial Unwind Agreement between Group 1 Automotive, Inc. and JPMorgan Chase Bank, National Association dated June 25, 2014.

10.2		Partial Unwind Agreement between Group 1 Automotive, Inc. and Bank of America, N.A., dated June 25, 2014.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit Index


Exhibit Number		Description

10.1		Partial Unwind Agreement between Group 1 Automotive, Inc. and JPMorgan Chase Bank, National Association, dated June 25, 2014.

10.2		Partial Unwind Agreement between Group 1 Automotive, Inc. and Bank of America, N.A., dated June 25, 2014.

EX-10.1 2 d746849dex101.htm EX-10.1 EX-10.1

Exhibit 10.1

PARTIAL UNWIND AGREEMENT

dated as of June 25, 2014

with respect to the Call Option Transaction Confirmations

and the Warrants Confirmations

between Group 1 Automotive, Inc. and JPMorgan Chase Bank, National Association

THIS PARTIAL UNWIND AGREEMENT (this “Agreement”) with respect to the Call Option Transaction Confirmations (as defined below) and the Warrants Confirmations (as defined below) is made as of June 25, 2014, between Group 1 Automotive, Inc. (the “Company”) and JPMorgan Chase Bank, National Association, London Branch (“Dealer”).

WHEREAS, the Company and Dealer entered into a Base Call Option Transaction Confirmation dated as of March 16, 2010 (the “Base Call Option Transaction Confirmation”) and an Additional Call Option Transaction Confirmation dated as of March 29, 2010 (the “Additional Call Option Transaction Confirmation” and together with the Base Call Option Transaction Confirmation, the “Call Option Transaction Confirmations”), relating to USD 115,000,000 principal amount of 3.00% Convertible Senior Notes due 2020 (the “Convertible Notes”);

WHEREAS, the Company and Dealer entered into a Base Warrants Confirmation, dated as of March 16, 2010, (the “Base Warrants Confirmation”) and an Additional Warrants Confirmation, dated as of March 29, 2010, (the “Additional Warrants Confirmation” and together with the Base Warrants Confirmation, the “Warrants Confirmations”), pursuant to which the Company issued to Dealer warrants to purchase shares of common stock, par value $0.01 per share, of the Company;

WHEREAS, the Company has repurchased a portion of the Convertible Notes;

WHEREAS, the Company has requested, and Dealer has agreed, to terminate in full the Additional Call Option Transaction Confirmation and unwind the Base Call Option Transaction Confirmation with respect to a portion of the Number of Options included in such confirmation;

WHEREAS, the Company has requested, and Dealer has agreed, to terminate in full the Additional Warrants Confirmation and unwind the Base Warrants Confirmation with respect to a portion of the Number of Warrants included therein;

NOW, THEREFORE, in consideration of their mutual covenants herein contained, the parties hereto, intending to be legally bound, hereby mutually covenant and agree as follows:

1. Defined Terms. Any capitalized term not otherwise defined herein shall have the meaning set forth for such term in the Call Option Transaction Confirmations or the Warrants Confirmations, as applicable.

2. Partial Call Option Unwind. Upon the payment referred to in Section 5 below, the Additional Call Option Transaction Confirmation will be terminated in full (and all rights and obligations of each party thereunder shall be extinguished) and the Number of Options in the Base Call Option Transaction Confirmation shall be reduced to 22,551.

3. Partial Warrants Unwind. Upon the payment referred to in Section 5 below, the Additional Warrants Confirmation will be terminated in full (and all rights and obligations of each party thereunder shall be extinguished) and Number of Warrants set forth in the Base Warrants Confirmation shall be reduced to 303,716, which, for the avoidance of doubt, reflects all adjustments to the Number of Warrants for the period since the date of the Base Warrants Confirmation pursuant to the terms thereof to the date of this Agreement.

4. Measurement Dates. For purposes of this agreement, “Measurement Date” means each of the next five immediately succeeding Scheduled Trading Days following the date of this Agreement (it being understood that any Exchange Business Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Measurement Date); provided, however, that if such date is a Disrupted Day, such date shall not constitute a Measurement Date, and an additional Measurement Date shall occur on the Scheduled Trading Day after the date that would otherwise be the final Measurement Date. The “Measurement Period” means the period from and including the first Measurement Date to and including the final Measurement Date.

5. Payments. In consideration for the terminations and partial unwinds referred to in Sections 2 and 3 above, on the first Scheduled Trading Day following the conclusion of the Measurement Period, or if such day is not a Clearance System Business Day, on the next Clearance System Business Day immediately following such day, Dealer shall pay to the Company in immediately available funds, cash in an amount equal to the product of (i) the 1,245,059 multiplied by (ii) the Cash Settlement Amount per Option in respect of such Measurement Period. “Cash Settlement Amount per Option” means the amount as determined based on the grid attached as Exhibit A to this Agreement.

6. Representations and Warranties of the Company. The Company represents and warrants to Dealer on the date hereof that:

(a) it has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and to perform its obligations under this Agreement and has taken all necessary action to authorise such execution, delivery and performance;

(b) such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets;

(c) all governmental and other consents that are required to have been obtained by it with respect to this Agreement have been obtained and are in full force and effect and all conditions of any such consents have been complied with;

(d) its obligations under this Agreement constitutes its legal, valid and binding obligations, enforceable in accordance with its terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law); and

(e) each of it and its affiliates is not in possession of any material nonpublic information regarding Company or its common stock.

7. Representations and Warranties of Dealer. Dealer represents and warrants to the Company on the date hereof that:

8. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without reference to choice of law doctrine).

9. No Other Changes. Except as expressly set forth herein, all of the terms and conditions of the Base Call Option Transaction Confirmation and the Base Warrants Confirmation shall remain in full force and effect and are hereby confirmed in all respects.

10. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same instrument.

11. No Reliance, etc. The Company hereby confirms that it has relied on the advice of its own counsel and other advisors (to the extent it deems appropriate) with respect to any legal, tax, accounting, or regulatory consequences of this Agreement, that it has not relied on Dealer or its affiliates in any respect in connection therewith, and that it will not hold Dealer or its affiliates accountable for any such consequences.

12. Agreements and Acknowledgements Regarding Hedging. Company understands, acknowledges and agrees that: (A) at any time on and prior to the last Measurement Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to terminate and/or unwind the Transactions related to the Call Option Transaction Confirmations and Warrant Confirmations; (B) Dealer and its affiliates also may be active in the market for Shares other than in connection with hedging activities in relation to the unwind and/or termination of the Transactions related to the Call Option Transaction Confirmations and Warrant Confirmations; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of Issuer shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the payment required under this Agreement; and (D) any market activities of Dealer and its affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the amount of the payment required under this Agreement, each in a manner that may be adverse to Company.

13. Role of Agent: Each party agrees and acknowledges that (i) J.P. Morgan Securities LLC, an affiliate of JPMorgan (“JPMS”), has acted solely as agent and not as principal with respect to this Agreement and (ii) JPMS has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of this Agreement (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under this Agreement.

IN WITNESS WHEREOF, the parties have executed this AGREEMENT the day and the year first above written.


GROUP 1 AUTOMOTIVE, INC.

By:		/s/ John C. Rickel
Title:		Senior Vice President and Chief Financial Officer


JPMORGAN CHASE BANK, NATIONAL ASSOCIATION by J.P. Morgan Securities LLC, as its Agent

By:		/s/ Tim Oeljeschlager
		Name: Tim Oeljeschlager
		Title: Executive Director

EXHIBIT A


Unwind Price	Cash Settlement Amount per Option
$76.00	$	10.0079
$77.00	$	10.0725
$78.00	$	10.2016
$79.00	$	10.2662
$80.00	$	10.3307
$81.00	$	10.3953
$82.00	$	10.4599
$83.00	$	10.5244
$84.00	$	10.5890
$85.00	$	10.6536

If the Cash Settlement Amount per Option is not specified on the grid above, Cash Settlement Amount per Option shall be determined based on a straight-line interpolation between the Unwind Prices or extrapolation from the Unwind Prices (as the case may be) specified on the grid above.

“Unwind Price” means the arithmetic average of the VWAP Prices for all of the Measurement Dates during the relevant Measurement Period.

“VWAP Price” for any Scheduled Trading Day means the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page GPI <equity> AQR (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Scheduled Trading Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Scheduled Trading Day, as determined by Dealer).

Notwithstanding anything to the contrary in this Agreement, if (i) any Scheduled Trading Day during any Measurement Period is a Disrupted Day (as defined in the Warrant Confirmation) or (ii) Dealer determines in its commercially reasonable judgment that on any Scheduled Trading Day during the relevant Measurement Period an extension of such Measurement Period is reasonably necessary or appropriate to preserve Dealer’s hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect sales of Shares in connection with its hedge unwind activity hereunder in a manner that would be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer, then the VWAP Price for such Scheduled Trading Day(s) shall be the volume-weighted average price per Share on such Scheduled Trading Day on the Exchange, as determined by the Dealer based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Scheduled Trading Day for which Dealer determines there is no Market Disruption Event and the number of Measurement Dates and the Unwind Price for the relevant Measurement Period shall be adjusted by Dealer to account for such disruption and/or extension.

EX-10.2 3 d746849dex102.htm EX-10.2 EX-10.2

Exhibit 10.2

PARTIAL UNWIND AGREEMENT

dated as of June 25, 2014

with respect to the Call Option Transaction Confirmations

and the Warrants Confirmations

between Group 1 Automotive, Inc. and Bank of America, N.A.

WHEREAS, the Company has repurchased a portion of the Convertible Notes;

NOW, THEREFORE, in consideration of their mutual covenants herein contained, the parties hereto, intending to be legally bound, hereby mutually covenant and agree as follows:

3. Partial Warrants Unwind. Upon the payment referred to in Section 5 below, the Additional Warrants Confirmation will be terminated in full (and all rights and obligations of each party thereunder shall be extinguished) and Number of Warrants set forth in the Base Warrants Confirmation shall be reduced to 303,694 which, for the avoidance of doubt, reflects all adjustments to the Number of Warrants for the period since the date of the Base Warrants Confirmation pursuant to the terms thereof.

4. Measurement Dates. For purposes of this agreement, “Measurement Date” means each of the 5 consecutive Scheduled Trading Days from and including the first Scheduled Trading Day immediately following the date of this Agreement (it being understood that any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Measurement Date); provided, however, that if such date is a Disrupted Day in whole, such date shall not constitute a Measurement Date, and an additional Measurement Date shall occur on the Scheduled Trading Day after the date that would otherwise be the final Measurement Date. The “Measurement Period” means the period from and including the first Measurement Date to and including the final Measurement Date.

5. Payments. In consideration for the terminations and partial unwinds referred to in Sections 2 and 3 above, on the first Scheduled Trading Day following the conclusion of the Measurement Period, or if such day is not a Clearance System Business Day, on the next Clearance System Business Day immediately following such day, Dealer shall pay to the Company in immediately available funds, cash in an amount equal to the product of (i) 1,245,081 multiplied by (ii) the Cash Settlement Amount per Option in respect of such Measurement Period. “Cash Settlement Amount per Option” means the amount as determined based on the grid attached as Exhibit A to this Agreement.

6. Representations and Warranties of the Company. The Company represents and warrants to Dealer on the date hereof that:

(d) its obligations under this Agreement constitute its legal, valid and binding obligations, enforceable in accordance with its terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)); and

(e) each of it and its affiliates is not in possession of any material nonpublic information regarding Company or its common stock.

7. Representations and Warranties of Dealer. Dealer represents and warrants to the Company on the date hereof that:

8. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without reference to choice of law doctrine).

12. Agreements and Acknowledgements Regarding Hedging. Company understands, acknowledges and agrees that: (A) at any time on or prior to the last Measurement Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to terminate and/or unwind the Transactions related to the Call Option Transaction Confirmations and Warrant Confirmations; (B) Dealer and its affiliates also may be active in the market for Shares other than in connection with hedging activities in relation to the unwind and/or termination of the Transactions related to the Call Option Transaction Confirmations and Warrant Confirmations; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of Issuer shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the payment required under this Agreement; and (D) any market activities of Dealer and its affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the amount of the payment required under this Agreement, each in a manner that may be adverse to Company.

13. Designation by Dealer. Notwithstanding any other provision in this Agreement to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Dealer obligations in respect of the transactions contemplated by this Agreement and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance.

IN WITNESS WHEREOF, the parties have executed this AGREEMENT the day and the year first above written.


GROUP 1 AUTOMOTIVE, INC.

By:		/s/ John C. Rickel
Title:		Senior Vice President and Chief Financial Officer

BANK OF AMERICA, N.A.

By:		/s/ Christopher A. Hutmaker
		Name: Christopher A. Hutmaker
		Title: Managing Director

EXHIBIT A


Unwind Price	Cash Settlement Amount per Option
$70.00	$	9.38
$71.00	$	9.48
$72.00	$	9.57
$73.00	$	9.67
$74.00	$	9.76
$75.00	$	9.85
$76.00	$	9.94
$77.00	$	10.03
$78.00	$	10.11
$79.00	$	10.20
$80.00	$	10.28
$81.00	$	10.36
$82.00	$	10.44
$83.00	$	10.51
$84.00	$	10.59
$85.00	$	10.66
$86.00	$	10.74
$87.00	$	10.81
$88.00	$	10.88
$89.00	$	10.95
$90.00	$	11.01

If the Cash Settlement Amount per Option is not specified on the grid above, Cash Settlement Amount per Option shall be determined by Dealer based on a straight-line interpolation between the Unwind Prices or extrapolation from the Unwind Prices (as the case may be) specified on the grid above.

“Unwind Price” means the arithmetic average of the VWAP Prices for all of the Measurement Dates during the Measurement Period.

“VWAP Price” for any Scheduled Trading Day means the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page GPI.N <equity> AQR (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Scheduled Trading Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Scheduled Trading Day, as determined by Dealer).

Notwithstanding anything to the contrary in this Agreement, if (i) any Scheduled Trading Day during any Measurement Period is a Disrupted Day (as defined in the Warrant Confirmation) or (ii) Dealer determines in its commercially reasonable judgment that on any Scheduled Trading Day during the Measurement Period an extension of such Measurement Period is reasonably necessary or appropriate to preserve Dealer’s hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect sales of Shares in connection with its hedge unwind activity hereunder in a manner that would be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer, then the VWAP Price for such Scheduled Trading Day(s) shall be the volume-weighted average price per Share on such Scheduled Trading Day on the Exchange, as determined by the Dealer based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Scheduled Trading Day for which Dealer determines there is no Market Disruption Event and the number of Measurement Dates and the Unwind Price for the Measurement Period shall be adjusted by Dealer to account for such disruption and/or extension.

Dealer may adjust the table above upon the occurrence of any event or condition that would have allowed Dealer to adjust the terms of the transactions evidenced by the Warrants Confirmations.