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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Sonic Automotive, Inc.
(Exact name of registrant as specified in its charter)
See "Table of Additional Registration" on the following page for
information relating to the subsidiaries of Sonic
Automotive, Inc. ("Sonic") that may guarantee obligations of
Sonic on the debt securities registered hereunder.
Delaware 56-2010790
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
5401 East Independence Boulevard, P. 0. Box 18747
Charlotte, North Carolina 28212-5401
Telephone: (704) 532-3320
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Stephen K. Coss, Esq.
Vice President and General Counsel
5401 East Independence Boulevard, P. 0. Box 18747
Charlotte, North Carolina 28212-5401
Telephone: (704) 532-3320
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
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Copies to:
Brian T. Atkinson, Esq.
Thomas H. O'Donnell, Esq.
Moore & Van Allen PLLC
100 North Tryon Street, Suite 4700
Charlotte, North Carolina 28202-4003
Telephone: (704) 331-1000
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Approximate date of commencement of proposed
sale to the public: From time to time after the
registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Proposed Maximum
Title of Each Class of Amount Maximum Aggregate Amount of
Securities to Be To Be Offering Per Offering Registration
Registered (1) Registered Unit Price Fee
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Debt securities
Preferred stock
Class A common stock
Warrants
Guarantees (2)
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Total $300,000,000(3) $27,600
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(1) Certain information as to each class of securities to be registered for
sale by Sonic is not specified in accordance with General Instruction II.D.
to Form S-3 under the Securities Act of 1933, as amended. We are
registering for issuance and sale an indeterminate dollar amount of debt
securities, preferred stock, common stock and warrants. In addition, these
securities may be issued upon conversion or redemption, or upon the
exercise of debt securities, preferred stock or warrants, as applicable.
(2) We are registering the guarantees of the obligations of Sonic under the
debt securities that may be provided by the subsidiaries named in the
"Table of Additional Registrants" beginning on the following page. No
additional consideration will be received for such guarantees. Pursuant to
Rule 457(n) under the Securities Act, no additional filing fee is required
in connection with such guarantees.
(3) The proposed maximum aggregate offering price has been estimated solely to
calculate the registration fee under Rule 457(o).
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
TABLE OF ADDITIONAL REGISTRANTS
UNDER REGISTRATION STATEMENT ON FORM S-3
The following subsidiaries of Sonic are co-registrants under this
registration statement for the purpose of providing guarantees, if any, of
payments on debt securities registered hereunder:
State of IRS Employer
Subsidiary Organization ID No.
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Arngar, Inc.......................................................... North Carolina 56-1063712
Autobahn, Inc........................................................ California 94-3124481
Avalon Ford, Inc..................................................... Delaware 93-3560286
Capitol Chevrolet and Imports, Inc................................... Alabama 63-1204447
Cobb Pontiac Cadillac, Inc........................................... Alabama 63-1012553
FA Service Corporation............................................... California 94-3285891
FAA Auto Factory, Inc................................................ California 94-3285893
FAA Beverly Hills, Inc............................................... California 95-4673054
FAA Capitol F, Inc................................................... California 94-3350030
FAA Capitol N, Inc................................................... California 94-3279958
FAA Concord H, Inc................................................... California 94-3264558
FAA Concord N, Inc................................................... California 94-3266151
FAA Concord T, Inc................................................... California 94-1730939
FAA Dublin N, Inc.................................................... California 94-3267515
FAA Dublin VWD, Inc.................................................. California 94-3267514
FAA Holding Corp..................................................... California 94-3338764
FAA Las Vegas H, Inc................................................. Nevada 94-3330754
FAA Marin D, Inc..................................................... California 94-3320521
FAA Marin F, Inc..................................................... California 95-4746388
FAA Marin LR, Inc.................................................... California 94-3345066
FAA Poway D, Inc..................................................... California 94-3264557
FAA Poway G, Inc..................................................... California 33-0792049
FAA Poway H, Inc..................................................... California 94-3265895
FAA Poway T, Inc..................................................... California 94-3266152
FAA San Bruno, Inc................................................... California 94-3264556
FAA Santa Monica V, Inc.............................................. California 95-4746387
FAA Serramonte, Inc.................................................. California 94-3264554
FAA Serramonte H, Inc................................................ California 94-3293588
FAA Serramonte L, Inc................................................ California 94-3264555
FAA Stevens Creek, Inc............................................... California 94-3264553
FAA Torrance CPJ, Inc................................................ California 98-4746385
FirstAmerica Automotive, Inc......................................... Delaware 88-0206732
Fort Mill Ford, Inc.................................................. South Carolina 62-1289609
Franciscan Motors, Inc............................................... California 77-0112132
Freedom Ford, Inc.................................................... Florida 59-2214873
Frontier Oldsmobile-Cadillac, Inc.................................... North Carolina 56-1621461
HMC Finance Alabama, Inc............................................. Alabama 56-2198417
Kramer Motors Incorporated........................................... California 95-2092777
L Dealership Group, Inc.............................................. Texas 94-1719069
Marcus David Corporation............................................. North Carolina 56-1708384
Massey Cadillac, Inc................................................. Tennessee 62-1434905
Massey Cadillac, Inc................................................. Texas 75-2651186
Philpott Motors, Ltd................................................. Texas 76-0608365
Riverside Nissan, Inc................................................ Oklahoma 73-1079837
Royal Motor Company, Inc............................................. Alabama 63-1012554
Santa Clara Imported Cars, Inc....................................... California 94-1705756
Smart Nissan, Inc.................................................... California 94-3256136
Sonic Automotive-Bondesen, Inc....................................... Florida 59-3552436
State of IRS Employer
Subsidiary Organization ID No.
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Sonic Automotive of Chattanooga, LLC................................. Tennessee 62-1708471
Sonic Automotive-Clearwater, Inc..................................... Florida 59-3501017
Sonic Automotive Collision Center of Clearwater, Inc................. Florida 59-3501024
Sonic Automotive F&I, LLC............................................ Nevada 88-0444271
Sonic Automotive of Georgia, Inc..................................... Georgia 58-2399219
Sonic Automotive of Nashville, LLC................................... Tennessee 62-1708481
Sonic Automotive of Nevada, Inc...................................... Nevada 88-0378636
Sonic Automotive Servicing Company, LLC.............................. Nevada 88-0443690
Sonic Automotive of Tennessee, Inc................................... Tennessee 62-1710960
Sonic Automotive of Texas, L.P....................................... Texas 76-0586658
Sonic Automotive West, LLC........................................... Nevada 88-0444344
Sonic Automotive-1307 N. Dixie Hwy., NSB, Inc........................ Florida 59-3523302
Sonic Automotive-1400 Automall Drive, Columbus, Inc.................. Ohio 31-1604259
Sonic Automotive-1455 Automall Drive, Columbus, Inc.................. Ohio 31-1604276
Sonic Automotive-1495 Automall Drive, Columbus, Inc.................. Ohio 31-1604281
Sonic Automotive-1500 Automall Drive, Columbus, Inc.................. Ohio 31-1604285
Sonic Automotive-1720 Mason Ave., DB, Inc............................ Florida 59-3523303
Sonic Automotive-1720 Mason Ave., DB, LLC............................ Florida 57-1072509
Sonic Automotive-1919 N. Dixie Hwy., NSB, Inc........................ Florida 59-3523301
Sonic Automotive-21699 U.S. Hwy 19 N., Inc........................... Florida 59-3501021
Sonic Automotive-241 Ridgewood Ave., HH, Inc......................... Florida 59-3523304
Sonic Automotive 2424 Laurens Rd., Greenville, Inc................... South Carolina 58-2384994
Sonic Automotive-2490 South Lee Highway, LLC......................... Tennessee 62-1708486
Sonic Automotive 2752 Laurens Rd., Greenville, Inc................... South Carolina 58-2384996
Sonic Automotive-3401 N. Main, TX, L.P............................... Texas 76-0586794
Sonic Automotive-3700 West Broad Street, Columbus, Inc............... Ohio 31-1604296
Sonic Automotive-3741 S. Nova Rd., PO, Inc........................... Florida 59-3532504
Sonic Automotive-4000 West Broad Street, Columbus, Inc............... Ohio 31-1604301
Sonic Automotive-4701 I-10 East, TX, L.P............................. Texas 76-0586659
Sonic Automotive-5221 I-10 East, TX, L.P............................. Texas 76-0586795
Sonic Automotive 5260 Peachtree Industrial Blvd., LLC................ Georgia 62-1716095
Sonic Automotive-5585 Peachtree Industrial Blvd., LLC................ Georgia 58-2459799
Sonic Automotive-6008 N. Dale Mabry, FL, Inc......................... Florida 59-3535965
Sonic Automotive-6025 International Drive, LLC....................... Tennessee 62-1708490
Sonic Automotive-9103 E. Independence, NC, LLC....................... North Carolina 56-2103562
Sonic - 2185 Chapman Rd., Chattanooga, LLC........................... Tennessee 56-2126660
Sonic - Bethany H, Inc............................................... Oklahoma 73-1620712
Sonic - Buena Park H, Inc............................................ California 33-0978079
Sonic - Cadillac D, L.P.............................................. Texas Not Available
Sonic - Camp Ford, L.P............................................... Texas 76-0613472
Sonic - Capital Chevrolet, Inc....................................... Ohio 31-0743366
Sonic - Capitol Cadillac, Inc........................................ Michigan 38-3642334
Sonic - Carrollton V, L.P............................................ Texas 75-2896744
Sonic - Carson F, Inc................................................ California 75-2989450
Sonic - Carson LM, Inc............................................... California 73-1626525
Sonic - Classic Dodge, Inc........................................... Alabama 56-2139902
Sonic - Coast Cadillac, Inc.......................................... California 95-4711579
Sonic - Crest Cadillac, LLC.......................................... Tennessee 62-1708483
Sonic - Crest H, LLC................................................. Tennessee 62-1708487
Sonic - Development, LLC............................................. North Carolina 56-2140030
Sonic - Downey Cadillac, Inc......................................... California 73-1626782
Sonic - Englewood M, Inc............................................. Colorado 73-1627281
Sonic eStore, Inc.................................................... North Carolina 69-0002322
Sonic - Fort Mill Chrysler Jeep, Inc................................. South Carolina 56-2044964
Sonic - Fort Mill Dodge, Inc......................................... South Carolina 58-2285505
Sonic - FM Automotive, LLC........................................... Florida 59-3535971
State of IRS Employer
Subsidiary Organization ID No.
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Sonic - FM , Inc..................................................... Florida 65-0938819
Sonic - FM VW, Inc................................................... Florida 65-0938821
Sonic - Fort Worth T, L.P............................................ Texas 75-2897202
Sonic - Freeland, Inc................................................ Florida 65-0938812
Sonic - Global Imports, L.P.......................................... Georgia 58-2436174
Sonic - Glover, Inc.................................................. Oklahoma 74-2936323
Sonic - Harbor City H, Inc........................................... California 95-4876347
Sonic - Houston V, L.P............................................... Texas 76-0684038
Sonic - Integrity Dodge LV, LLC...................................... Nevada 88-0430677
Sonic - Lake Norman Chrysler Jeep, LLC............................... North Carolina 56-2044997
Sonic - Lake Norman Dodge, LLC....................................... North Carolina 56-2044965
Sonic - Las Vegas C East, LLC........................................ Nevada 88-0470273
Sonic - Las Vegas C West, LLC........................................ Nevada 88-0470284
Sonic - Lloyd Nissan, Inc............................................ Florida 59-3560057
Sonic - Lloyd Pontiac-Cadillac, Inc.................................. Florida 59-3560058
Sonic - Lone Tree Cadillac, Inc...................................... Colorado 75-2994986
Sonic - LS Chevrolet, LLC............................................ Delaware Not Available
Sonic - LS, L.P...................................................... Texas 76-0594652
Sonic - Lute Riley, L.P.............................................. Texas 75-2812871
Sonic - Manhattan Fairfax, Inc....................................... Virginia 52-2173072
Sonic - Manhattan Waldorf, Inc....................................... Maryland 52-2172032
Sonic - Massey Cadillac, L.P......................................... Texas 46-0465823
Sonic - Massey Chevrolet, Inc........................................ California 73-1626792
Sonic - Massey Pontiac Buick GMC, Inc................................ Colorado 71-0868348
Sonic - Montgomery FLM, Inc.......................................... Alabama 56-2169250
Sonic - Newsome Chevrolet World, Inc................................. South Carolina 57-1077344
Sonic - Newsome of Florence, Inc..................................... South Carolina 57-1077343
Sonic - North Cadillac, Inc.......................................... Florida 65-0938818
Sonic - North Charleston, Inc........................................ South Carolina 58-2460639
Sonic - North Charleston Dodge, Inc.................................. South Carolina 58-2479700
Sonic Peachtree Industrial Blvd., L.P................................ Georgia 56-2089761
Sonic - Plymouth Cadillac, Inc....................................... Michigan 30-0040929
Sonic - Reading, L.P................................................. Texas 76-0605765
Sonic Resources, Inc................................................. Nevada Not Available
Sonic - Richardson F, L.P............................................ Texas 75-2901775
Sonic - Riverside, Inc............................................... Oklahoma 73-1574888
Sonic - Riverside Auto Factory, Inc.................................. Oklahoma 73-1591124
Sonic - Rockville Imports, Inc....................................... Maryland 52-2172034
Sonic - Rockville Motors, Inc........................................ Maryland 52-2172033
Sonic - Sam White Nissan, L.P........................................ Texas 76-0597722
Sonic - Sanford Cadillac, Inc........................................ Florida 01-0595473
Sonic - Shottenkirk, Inc............................................. Florida 56-3575773
Sonic - Stevens Creek B, Inc......................................... California 94-2261540
Sonic - Superior Oldsmobile, LLC..................................... Tennessee 56-2122487
Sonic of Texas, Inc.................................................. Texas 76-0586661
Sonic - University Park A, L.P....................................... Texas 75-2963437
Sonic - Volvo LV, LLC................................................ Nevada 88-0437180
Sonic - West Covina T, Inc........................................... California 95-4876089
Sonic - West Reno Chevrolet, Inc..................................... Oklahoma 73-1618268
Sonic - Williams Buick, Inc.......................................... Alabama 63-1213085
Sonic - Williams Cadillac, Inc....................................... Alabama 63-1213084
Sonic - Williams Imports, Inc........................................ Alabama 63-1213083
Sonic - Williams Motors, LLC......................................... Alabama 63-1213161
Speedway Chevrolet, Inc.............................................. Oklahoma 73-1590233
SRE Alabama - 2, LLC................................................. Alabama 56-2202484
SRE Alabama - 3, LLC................................................. Alabama 56-2206042
State of IRS Employer
Subsidiary Organization ID No.
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SRE California - 1, LLC.............................................. California Not Available
SRE California - 2, LLC.............................................. California Not Available
SRE California - 3, LLC.............................................. California Not Available
SRE California - 4, LLC.............................................. California Not Available
SRE California - 5, LLC.............................................. California Not Available
SRE California - 6, LLC.............................................. California Not Available
SrealEstate Arizona - 1, LLC......................................... Arizona 86-0996112
SrealEstate Arizona - 2, LLC......................................... Arizona 88-0468215
SrealEstate Arizona - 3, LLC......................................... Arizona 88-0468217
SrealEstate Arizona - 4, LLC......................................... Arizona 88-0468213
SRE Florida - 1, LLC................................................. Florida 58-2560889
SRE Florida - 2, LLC................................................. Florida 58-2560900
SRE Florida - 3, LLC................................................. Florida 58-2560868
SRE Georgia - 1, L.P................................................. Georgia 58-2560891
SRE Georgia - 2, L.P................................................. Georgia 58-2555514
SRE Georgia - 3, L.P................................................. Georgia 58-2554985
SRE Holding, LLC..................................................... North Carolina 56-2198745
SRE Michigan - 1, LLC................................................ Michigan Not Available
SRE Michigan - 2, LLC................................................ Michigan Not Available
SRE Michigan - 3, LLC................................................ Michigan Not Available
SRE Nevada - 1, LLC.................................................. Nevada 88-0468209
SRE Nevada - 2, LLC.................................................. Nevada 88-0465280
SRE Nevada - 3, LLC.................................................. Nevada 88-0465279
SRE Nevada - 4, LLC.................................................. Nevada Not Available
SRE Nevada - 5, LLC.................................................. Nevada Not Available
SRE South Carolina - 2, LLC.......................................... South Carolina 58-2560892
SRE South Carolina - 3, LLC.......................................... South Carolina Not Available
SRE South Carolina - 4, LLC.......................................... South Carolina Not Available
SRE Tennessee - 1, LLC............................................... Tennessee 56-2200186
SRE Tennessee - 2, LLC............................................... Tennessee 56-2202429
SRE Tennessee - 3, LLC............................................... Tennessee 56-2202479
SRE Texas - 1, L.P................................................... Texas 74-2962385
SRE Texas - 2, L.P................................................... Texas 74-2963860
SRE Texas - 3, L.P................................................... Texas 74-2963859
SRE Texas - 4, L.P................................................... Texas Not Available
SRE Texas - 5, L.P................................................... Texas Not Available
SRE Texas - 6, L.P................................................... Texas Not Available
SRE Texas - 7, L.P................................................... Texas Not Available
SRE Texas - 8, L.P................................................... Texas Not Available
SRE Virginia - 1, LLC................................................ Virginia 52-2252370
Stevens Creek Cadillac, Inc.......................................... California 77-0093380
Town and Country Ford, Incorporated.................................. North Carolina 56-0887416
Town and Country Ford of Cleveland, LLC.............................. Tennessee 62-1708484
Town and Country Jaguar, LLC......................................... Tennessee 62-1708491
Transcar Leasing, Inc................................................ California 94-2713550
Village Imported Cars, Inc........................................... Maryland 52-0896186
Windward, Inc........................................................ Hawaii 94-2659042
The primary standard industrial classification of all of the additional
registrants is 5511. The principal executive offices of all of the additional
registrants is 5401 East Independence Boulevard, Charlotte, North Carolina
28212. There telephone number is (704) 532-3320.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. WE MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR WILL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE WHERE THE OFFER, SOLICITATION OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION DATED APRIL 19, 2002
PROSPECTUS
SONIC AUTOMOTIVE, INC.
Debt Securities, Preferred Stock,
Class A Common Stock, Warrants to
Purchase Class A Common Stock,
Guarantees of Debt Securities
Through this prospectus, we may periodically offer and sell:
. our debt securities;
. shares of our preferred stock;
. shares of our Class A common stock;
. warrants to purchase our Class A common stock; and
. guarantees by our subsidiaries of our debt securities.
The offering price of all securities we issue under this prospectus may not
exceed $300,000,000. We will provide the specific terms of these securities in
supplements to this prospectus. This prospectus may be used to offer and sell
securities only if accompanied by the prospectus supplement for those
securities. You should read this prospectus and any prospectus supplement
carefully before you invest in any of these securities.
Our Class A common stock trades on the New York Stock Exchange under the
symbol "SAH." We will list any shares of our Class A common stock we sell under
this prospectus on the New York Stock Exchange. If we decide to list or seek a
quotation for any other securities, the prospectus supplement will disclose the
exchange or market on which such securities will be listed or quoted. The last
sale price of our Class A common stock on the New York Stock Exchange on April
18, 2002 was $34.42 per share. You are urged to obtain current market data.
Investing in our securities involves risks that are described under the
heading "Risk Factors" beginning on page 1 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
This prospectus is dated , 2002.
TABLE OF CONTENTS
Page
About this Prospectus.........................................................i
Where you can find more information about Sonic..............................ii
Cautionary Notice Regarding Forward-Looking Statements.......................ii
The Company...................................................................1
Risk Factors..................................................................1
Use of Proceeds..............................................................18
Ratios of Earnings to Fixed Charges..........................................18
Description of Debt Securities...............................................18
Description of Capital Stock.................................................27
Description of Warrants......................................................32
Certain Manufacturer Restrictions............................................33
Plan of Distribution.........................................................34
Legal Matters................................................................35
Experts......................................................................35
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf registration process, we may sell any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $300,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of the offering and the securities. The prospectus supplement
may also add, update or change information contained in this prospectus. Any
statement that we make in this prospectus will be modified or superseded by any
inconsistent statement made by us in a prospectus supplement. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading "Where You Can Find More Information
About Sonic." Except as otherwise indicated, all references in this prospectus
to the "Company," "we," "us,", "our," or "Sonic" mean Sonic Automotive, Inc. and
its subsidiaries.
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You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We will not make an offer
to sell these securities (1) in any jurisdiction where the offer or sale is not
permitted, (2) where the person making the offer is not qualified to do so, or
(3) to any person who cannot legally be offered the securities. You should
assume that the information appearing in this prospectus is accurate only as of
the date on the front cover of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that date.
This prospectus is based on information provided by us and other sources
that we believe are reliable. However, we cannot assure you that the information
is accurate or complete. For example, in preparing estimates of market share and
industry data, we utilized third party sources when possible, but cannot verify
some of the estimates through independent sources.
You should not consider any information in this prospectus to be legal,
business or tax advice. You should consult your own attorney, business advisor
and tax advisor for legal, business and tax advice regarding an investment in
the Company's securities.
You should base your decision to invest in the Company's securities solely
on information contained in this prospectus, related prospectus supplement and
information incorporated by reference herein and therein.
i
No representation or warranty, express or implied, is made as to the
accuracy or completeness of the information set forth herein, and nothing
contained in this prospectus is, or shall be relied upon as, a promise or
representation, whether as to the past or the future.
WHERE YOU CAN FIND MORE INFORMATION ABOUT SONIC
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
These reports and information relate to our business, financial condition and
other matters. You may read and copy these reports, proxy statements and other
information at the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Commission's Public Reference Room in Washington, D.C. by calling the Commission
at l-800-SEC-0330. Copies may be obtained from the Commission by paying the
required fees. The Commission maintains an internet web site that contains
reports, proxy and information statements and other information regarding us and
other registrants that file electronically with the Commission. The Commission's
web site is http://www.sec.gov. Information that we file with the Commission may
also be read and copied at the offices of the New York Stock Exchange at 20
Broad Street, New York, New York 10005.
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring to documents we have previously filed with the Commission. The
information incorporated by reference is considered to be part of this
prospectus, and information that we file later with the Commission will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), until we decide to terminate this offering
earlier:
(1) Our Annual Report on Form 10-K for the fiscal year ended December
31, 2001 (excluding Exhibit 99.1 to such report);
(2) Our definitive proxy statement dated April 1, 2002;
(3) Our Current Report on Form 8-K dated January 15, 2002;
(4) Our Current Report on Form 8-K dated April 15, 2002, and
(5) The description of our Class A common stock contained in our
Registration Statement on Form 8-A, as amended, filed with the
Commission pursuant to Section 12 of the Exchange Act.
We will provide upon request a free copy of any or all of the documents
incorporated by reference in this prospectus (excluding exhibits to such
documents unless such exhibits are specifically incorporated by reference) to
anyone who receives this prospectus. Written or telephone requests should be
directed to Mr. Todd Atenhan, Director of Investor Relations, P.O. Box 18747,
Charlotte, North Carolina 28218, Telephone (888) 766-4218.
This prospectus is a part of our Registration Statement on Form S-3 filed
with the Commission. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits to the registration
statement. Statements about the contents of contracts or other documents
contained in this prospectus or in any other filing to which we refer you are
not necessarily complete. You should review the actual copy of these documents
filed as an exhibit to the registration statement or such other filing. You may
obtain a copy of the registration statement and the exhibits filed with it from
the Commission at any of the locations listed above.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains numerous "forward-looking statements" within the
meaning of the Private Litigation Securities Reform Act of 1995. These forward
looking statements address our future objectives, plans and goals, as well as
our intent, beliefs and current expectations regarding future operating
performance, and can generally be identified by words such as "may," "will,"
"should," "believe," "expect," "anticipate," "intend,"
ii
"plan," "foresee," and other similar words or phrases. Specific events addressed
by these forward looking statements include, but are not limited to:
. future acquisitions;
. industry trends;
. general economic trends, including employment rates and consumer
confidence levels;
. vehicle sales rates and same store sales growth;
. our financing plans; and
. our business and growth strategies.
These forward-looking statements are based on our current estimates and
assumptions and involve various risks and uncertainties. As a result, you are
cautioned that these forward looking statements are not guarantees of future
performance, and that actual results could differ materially from those
projected in these forward looking statements. Factors which may cause actual
results to differ materially from our projections include those risks described
elsewhere in this report under the heading "Risk Factors," as well as:
. our ability to generate sufficient cash flows or obtain additional
financing to support acquisitions, capital expenditures and general
operating activities;
. the reputation and financial condition of vehicle manufacturers whose
brands we represent, and their ability to design, manufacture, deliver
and market their vehicles successfully;
. our relationships with manufacturers which may affect our ability to
complete additional acquisitions;
. changes in laws and regulations governing the operation of automobile
franchises, accounting standards, taxation requirements and
environmental laws;
. general economic conditions in the markets in which we operate,
including fluctuations in interest rates, employment levels, and the
level of consumer spending;
. high competition in the automotive retailing industry which not only
creates pricing pressures on the products and services we offer, but
on businesses we seek to acquire; and
. our ability to successfully integrate recent and potential future
acquisitions.
iii
THE COMPANY
Sonic is the second largest automotive retailer in the United States, as
measured by total revenue, operating dealerships and collision repair centers in
several metropolitan areas of the Southeast, Southwest, Midwest and California.
We sell new and used cars, light trucks and replacement parts and provide
vehicle maintenance, warranty, paint and repair services. We also arrange
related extended warranty and financing and insurance for our automotive
customers.
Our Class A common stock is traded on the New York Stock Exchange under the
trading symbol "SAH." Our principal executive offices are located at 5401 East
Independence Boulevard, Charlotte, North Carolina 28212, Telephone (704)
532-3320. We were incorporated in Delaware in 1997.
RISK FACTORS
The risk factors described below are not necessarily exhaustive, and you
are encouraged to perform your own investigation with respect to the securities
being offered and the Company.
Our significant indebtedness could materially adversely affect our financial
health and prevent us from fulfilling our financial obligations.
As of December 31, 2001, our total outstanding indebtedness was
approximately $1,102.4 million, including the following:
. $299.2 million under a revolving credit agreement (the "Revolving
Facility") with Ford Motor Credit Company ("Ford Motor Credit"),
Chrysler Financial Company, LLC ("Chrysler Financial") and Toyota
Motor Credit Corporation ("Toyota Credit") with a borrowing limit of
$600 million, subject to a borrowing base calculated on the basis of
our receivables, inventory and equipment and a pledge of certain
additional collateral by an affiliate of Sonic;
. $377.2 million under a standardized secured inventory floor plan
facility (the "Ford Floor Plan Facility") with Ford Motor Credit;
. $142.6 million under a standardized secured floor plan facility (the
"Chrysler Floor Plan Facility") with Chrysler Financial;
. $16.4 million under a standardized secured floor plan facility (the
"Toyota Floor Plan Facility") with Toyota Credit;
. $51.7 million under a standardized secured floor plan facility (the
"GMAC Floor Plan Facility" and together with the Ford Floor Plan
Facility, the Toyota Floor Plan Facility and the Chrysler Floor Plan
Facility, the "Floor Plan Facilities") with General Motors Acceptance
Corporation ("GMAC");
. $195.7 million in 11% Senior Subordinated Notes due 2008 representing
$200.0 million in aggregate principal amount less unamortized discount
of approximately $4.3 million; and
. $19.6 million of other secured debt, including $13.3 million under a
revolving real estate acquisition and new dealership construction line
of credit (the "Construction Loan") and a related mortgage refinancing
facility (the "Permanent Loan" and together with the Construction
Loan, the "Mortgage Facility") with Ford Motor Credit.
As of December 31, 2001, we had approximately $156.8 million available for
additional borrowings under the Revolving Facility, based on a borrowing base
calculated on the basis of our receivables, inventory and equipment and certain
additional collateral pledged by an affiliate of Sonic. We also had
approximately $86.7 million available for additional borrowings under the
Mortgage Facility for real estate acquisitions and new dealership construction.
We also have significant additional capacity under the Floor Plan Facilities. In
addition, the indentures relating to our senior subordinated notes and other
debt instruments allow us to incur additional indebtedness, including secured
indebtedness.
1
The degree to which we are leveraged could have important consequences to
the holders of our securities, including the following:
. 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 and interest on our senior
subordinated notes, borrowings under the Revolving Facility and the
Floor Plan Facilities and other 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;
. the indebtedness outstanding under our credit facilities is secured by
a pledge of substantially all the assets of our dealerships; 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.
In addition, our debt agreements contain numerous covenants that limit our
discretion with respect to business matters, including mergers or acquisitions,
paying dividends, incurring additional debt, making capital expenditures or
disposing of assets.
Our future operating results depend on our ability to integrate acquisitions
into our operations.
Our future operating results depend on our ability to integrate the
operations of our recently acquired dealerships, as well as dealerships we
acquire in the future, with our existing operations. In particular, we need to
integrate our systems, procedures and structures, which can be difficult. Our
growth strategy has focused on the pursuit of strategic acquisitions that either
expand or complement our business. We acquired 72 dealerships in 1999, 11 in
2000, 12 in 2001 and 22 to date in 2002.
We cannot assure you that we will effectively and profitably integrate the
operations of these dealerships without substantial costs, delays or operational
or financial problems, due to:
. the difficulties of managing operations located in geographic areas
where we have not previously operated;
. the management time and attention required to integrate and manage
newly acquired dealerships;
. the difficulties of assimilating and retaining employees; and
. the challenges of keeping customers.
These factors could have a material adverse effect on our financial
condition and results of operations.
Risks associated with acquisitions may hinder our ability to increase revenues
and earnings.
The automobile retailing industry is considered a mature industry in which
minimal growth is expected in industry unit sales. Accordingly, our future
growth depends in large part on our ability to acquire additional dealerships,
as well as on our ability to manage expansion, control costs in our operations
and consolidate both past and future dealership acquisitions into existing
operations. In pursuing a strategy of acquiring other dealerships, we face risks
commonly encountered with growth through acquisitions. These risks include, but
are not limited to:
. incurring significantly higher capital expenditures and operating
expenses;
. failing to assimilate the operations and personnel of the acquired
dealerships;
. entering new markets with which we are unfamiliar;
2
. potential undiscovered liabilities at acquired dealerships;
. disrupting our ongoing business;
. diverting our limited management resources;
. failing to maintain uniform standards, controls and policies;
. impairing relationships with employees, manufacturers and customers as
a result of changes in management;
. causing increased expenses for accounting and computer systems, as
well as integration difficulties; and
. failure to obtain a manufacturer's consent to the acquisition of one
or more of its dealership franchises.
We may not adequately anticipate all of the demands that our growth will
impose on our systems, procedures and structures, including our financial and
reporting control systems, data processing systems and management structure. If
we cannot adequately anticipate and respond to these demands, our business could
be materially harmed.
Failure to retain qualified management personnel at any acquired dealership
may increase the risk associated with integrating the acquired dealership.
Installing new computer systems has disrupted existing operations in the
past as management and salespersons adjust to new technologies. We cannot assure
you that we will overcome these risks or any other problems encountered with
either our past or future acquisitions.
Automobile manufacturers exercise significant control over our operations and we
are dependent on them to operate our business.
Each of our dealerships operates pursuant to a franchise agreement with the
applicable automobile manufacturer or manufacturer authorized distributor. We
are significantly dependent on our relationships with these manufacturers.
Without a franchise agreement, we cannot obtain new vehicles from a
manufacturer.
Vehicles manufactured by the following manufacturers accounted for the
indicated approximate percentage of our new vehicle revenue for the year ended
December 31, 2001:
Percentage of Historical New
Vehicle Revenues for the
Year Ended
Manufacturer December 31, 2001
------------ -----------------
Ford 18.6%
Honda 13.0%
General Motors 12.2%
Toyota 11.3%
BMW 10.7%
Chrysler 8.3%
Lexus 5.3%
Nissan 5.3%
No other manufacturer accounted for more than 5% of our new vehicle sales
during 2001. A significant decline in the sale of Ford, Honda, Chrysler, General
Motors, BMW, Toyota, Nissan or Lexus new vehicles could have a material adverse
effect on our revenue and profitability.
3
Manufacturers exercise a great degree of control over the operations of our
dealerships. Each of our franchise agreements provides for termination or
non-renewal for a variety of causes, including any unapproved change of
ownership or management and other material breaches of the franchise agreements.
Manufacturers may also have a right of first refusal if we seek to sell
dealerships. We believe that we will be able to renew at expiration all of our
existing franchise agreements, other than our Oldsmobile and Plymouth franchise
agreements. DaimlerChrysler phased out the Plymouth division effective October
1, 2001 and General Motors is in the process of phasing out the Oldsmobile
division. Neither of these actions will materially affect us.
. We cannot assure you that any of our existing franchise agreements
will be renewed or that the terms and conditions of such renewals will
be favorable to us.
. If a manufacturer is allowed under state franchise laws to terminate
or decline to renew one or more of our significant franchise
agreements, this action could have a material adverse effect on our
results of operations.
. Actions taken by manufacturers to exploit their superior bargaining
position in negotiating the terms of renewals of franchise agreements
or otherwise could also have a material adverse effect on our results
of operations.
. Manufacturers allocate their vehicles among dealerships generally
based on the sales history of each dealership. Consequently, we also
depend on the manufacturers to provide us with a desirable mix of
popular new vehicles. These popular vehicles produce the highest
profit margins and tend to be the most difficult to obtain from the
manufacturers.
. Our dealerships depend on the manufacturers for certain sales
incentives, warranties and other programs that are intended to promote
and support dealership new vehicle sales. Manufacturers have
historically made many changes to their incentive programs during each
year. A reduction or discontinuation of a manufacturer's incentive
programs may materially adversely affect our profitability. Some of
these programs include:
. customer rebates on new vehicles;
. dealer incentives on new vehicles;
. special financing or leasing terms;
. warranties on new and used vehicles; and
. sponsorship of used vehicle sales by authorized new vehicle
dealers.
Adverse conditions affecting one or more manufacturers may negatively impact our
profitability.
The success of each of our dealerships depends to a great extent on the
manufacturers':
. financial condition;
. marketing;
. vehicle design;
. production capabilities;
. management; and
. labor relations.
Nissan, Chrysler and Volvo have had significant difficulty in the U.S.
market in the recent past. If any of our manufacturers, particularly Ford,
Honda, Chrysler, General Motors, BMW, Toyota, Nissan, or Lexus were
4
unable to design, manufacture, deliver and market their vehicles successfully,
the manufacturer's reputation and our ability to sell the manufacturer's
vehicles could be adversely affected.
Events such as strikes and other labor actions by unions, or negative
publicity concerning a particular manufacturer or vehicle model, may materially
and adversely affect our results of operations. Similarly, the delivery of
vehicles from manufacturers later than scheduled, which may occur particularly
during periods when new products are being introduced, can reduce our sales.
Although we have attempted to lessen our dependence on any one manufacturer by
establishing dealer relationships with a number of different domestic and
foreign automobile manufacturers, adverse conditions affecting manufacturers,
Ford, Honda, Chrysler, General Motors, BMW, Toyota, Nissan or Lexus in
particular, could have a material adverse effect on our results of operations.
In the event of a strike, we may need to purchase inventory from other
automobile dealers at prices higher than we would be required to pay to the
affected manufacturer in order to carry an adequate level and mix of inventory.
Consequently, strikes or other adverse labor actions could materially adversely
affect our profitability.
Manufacturer stock ownership/issuance restrictions limit our ability to issue
additional equity to meet our financing needs.
Standard automobile franchise agreements prohibit transfers of any
ownership interests of a dealership and its parent and, therefore, often do not
by their terms accommodate public trading of the capital stock of a dealership
or its parent. Our manufacturers have agreed to permit trading in Sonic's Class
A common stock. A number of manufacturers impose restrictions on the
transferability of the Class A common stock.
. Honda may force the sale of our Honda or Acura franchises if (1) an
automobile manufacturer or distributor acquires securities having 5%
or more of the voting power of Sonic's securities, (2) an individual
or entity that has either a felony criminal record or a criminal
record relating solely to dealings with an automobile manufacturer,
distributor or dealership acquires securities having 5% or more of the
voting power of Sonic's securities or (3) any individual or entity
acquires securities having 20% or more of the voting power of Sonic's
securities and Honda reasonably deems such acquisition to be
detrimental to Honda's interests in any material respect.
. Ford may cause us to sell or resign from one or more of our Ford,
Lincoln or Mercury franchises if any person or entity (other than O.
Bruton Smith and any entity controlled by him) acquires or has a
binding agreement to acquire securities having 50% or more of the
voting power of Sonic's securities.
. General Motors and Infiniti may force the sale of their respective
franchises if 20% of more of Sonic's voting securities are similarly
acquired.
. Toyota may force the sale of one or more of Sonic's Toyota or Lexus
dealerships if (1) an automobile manufacturer or distributor acquires
securities, or the right to vote securities by proxy or voting
agreement, having more than 5% of the voting power of Sonic's
securities, (2) any individual or entity acquires securities, or the
right to vote securities by proxy or voting agreement, having more
than 20% of the voting power of Sonic's securities, (3) there is a
material change in the composition of Sonic's Board of Directors that
Toyota reasonably concludes will be materially incompatible with
Toyota's interests or will have an adverse effect on Toyota's
reputation or brands in the marketplace or the performance of Sonic or
its Toyota and Lexus dealerships, (4) there occurs an extraordinary
transaction whereby Sonic's stockholders immediately prior to such
transaction own in the aggregate securities having less than a
majority of the voting power of Sonic or the successor entity, or (5)
any individual or entity acquires control of Sonic, Sonic Financial
Corporation or any Toyota or Lexus dealership owned by Sonic.
. Chrysler requires prior approval of any future sales that would result
in a change in voting or managerial control of Sonic.
. Mercedes requires 60 days advance notice to approve any acquisition of
20% or more of Sonic's voting securities.
. Volkswagen has approved the sale of no more than 25% of the voting
control of Sonic, and any future changes in ownership or transfers
among Sonic's current stockholders that could affect the voting or
managerial control of Sonic's Volkswagen franchise subsidiaries
requires the prior approval of Volkswagen.
5
Other manufacturers may impose similar or more limiting restrictions.
Our lending arrangements also require that holders of Sonic's Class B
common stock maintain voting control over Sonic. We are unable to prevent our
stockholders from transferring shares of our common stock, including transfers
by holders of the Class B common stock. If such transfer results in a change in
control of Sonic, it could result in the termination or non-renewal of one or
more of our franchise agreements and a default under our credit arrangements.
Moreover, these issuance limitations may impede our ability to raise capital
through additional equity offerings or to issue our stock as consideration for
future acquisitions.
Manufacturers' restrictions on acquisitions could limit our future growth.
We are required to obtain the consent of the applicable manufacturer before
the acquisition of any additional dealership franchises. We cannot assure you
that manufacturers will grant such approvals, although the denial of such
approval may be subject to certain state franchise laws.
Obtaining manufacturer consent for acquisitions could also take a
significant amount of time. Obtaining manufacturer approval for our completed
acquisitions has taken approximately three to five months. We believe that
manufacturer approvals of subsequent acquisitions from manufacturers with which
we have previously completed applications and agreements may take less time,
although we cannot provide you with assurances to that effect. In addition,
under an applicable franchise agreement or under state law, a manufacturer may
have a right of first refusal to acquire a dealership in the event we seek to
acquire that dealership franchise.
If we experience delays in obtaining, or fail to obtain, manufacturer
approvals for dealership acquisitions, our growth strategy could be materially
adversely affected. In determining whether to approve an acquisition, the
manufacturers may consider many factors, including:
. our management's moral character;
. the business experience of the post-acquisition dealership management;
. our financial condition;
. our ownership structure; and
. manufacturer-determined consumer satisfaction index scores.
In addition, a manufacturer may seek to limit the number of its dealerships
that we may own, our national market share of that manufacturer's products or
the number of dealerships we may own in a particular geographic area. These
restrictions may not be enforceable under state franchise laws.
. Our framework agreement with Ford places the following restrictions on
our ability to acquire Ford or Lincoln Mercury dealerships:
. We may not acquire additional Ford or Lincoln Mercury dealerships
unless we continue to satisfy Ford's requirement that 80% of our
Ford dealerships meet Ford's performance criteria. Beyond that,
we may not make an acquisition that would result in our owning
Ford or Lincoln Mercury dealerships with sales exceeding 5% of
the total Ford or total Lincoln Mercury retail sales of new
vehicles in the United States for the preceding calendar year.
. We may not acquire additional Ford or Lincoln Mercury dealerships
in a particular state if such an acquisition would result in our
owning Ford or Lincoln Mercury dealerships with sales exceeding
5% of the total Ford or total Lincoln Mercury retail sales of new
vehicles in that state for the preceding calendar year.
. We may not acquire additional Ford dealerships in a Ford-defined
market area if such an acquisition would result in our owning
more than one Ford dealership in a market having a total of three
or less Ford dealerships or owning more than 25% of the Ford
dealerships in a
6
market having a total of four or more Ford dealerships. An
identical market area restriction applies for Lincoln Mercury
dealerships.
. Our framework agreement with Toyota limits the number of Toyota and
Lexus dealerships that we may own on a national level, in each
Toyota-defined geographic region or distributor area, and in each
Toyota or Lexus-defined metropolitan market. Nationally, the
limitations on Toyota dealerships owned by us are for specified time
periods and are based on specified percentages of total Toyota unit
sales in the United States. In Toyota-defined geographic regions or
distributor areas, the limitations on Toyota dealerships owned by us
are specified by the applicable Toyota regional limitations policy or
distributor's policy in effect at such time. In Toyota-defined
metropolitan markets, the limitations on Toyota dealerships owned by
us are based on Toyota's metro markets limitation policy then in
effect, which currently provides a limitation based on the total
number of Toyota dealerships in the particular market. For Lexus, we
may own no more than one Lexus dealership in any one Lexus-defined
metropolitan market and no more than three Lexus dealerships
nationally.
. Our framework agreement with Honda limits the number of Honda and
Acura dealerships that we may own on a national level, in each Honda
and Acura-defined geographic zone, and in each Honda-defined
metropolitan market. Nationally, the limitations on Honda dealerships
owned by us are based on specified percentages of total Honda unit
sales in the United States. In Honda-defined geographic zones, the
limitations on Honda dealerships owned by us are based on specified
percentages of total Honda unit sales in each of 10 Honda-defined
geographic zones. In Honda-defined metropolitan markets, the
limitations on Honda dealerships owned by us are specified numbers of
dealerships in each market, which numerical limits vary based mainly
on the total number of Honda dealerships in a particular market. For
Acura, we may own no more than (A) two Acura dealerships in a
Honda-defined metropolitan market, (B) three Acura dealerships in
any one of six Honda-defined geographic zones and (C) five Acura
dealerships nationally. Honda also prohibits ownership of contiguous
dealerships.
. Mercedes restricts any company from owning Mercedes dealerships with
sales of more than 3% of total sales of Mercedes vehicles in the U.S.
during the previous calendar year.
. General Motors currently limits the maximum number of General Motors
dealerships that we may acquire to 50% of the General Motors
dealerships, by brand line, in a General Motors-defined geographic
market area having multiple General Motors dealers.
. Subaru limits us to no more than two Subaru dealerships within certain
designated market areas, four Subaru dealerships within its
Mid-America region and 12 dealerships within Subaru's entire area of
distribution.
. BMW currently prohibits publicly held companies from owning BMW
dealerships representing more than 10% of all BMW sales in the U.S. or
more than 50% of BMW dealerships in a given metropolitan market.
. Toyota, Honda and Mercedes also prohibit the coupling of a franchise
with any other brand without their consent.
As a condition to granting their consent to our acquisitions, a number of
manufacturers required additional restrictions. These agreements principally
restrict:
. material changes in our company or extraordinary corporate
transactions such as a merger, sale of a material amount of assets or
change in our board of directors or management that could have a
material adverse effect on the manufacturer's image or reputation or
could be materially incompatible with the manufacturer's interests;
. the removal of a dealership general manager without the consent of the
manufacturer; and
. the use of dealership facilities to sell or service new vehicles of
other manufacturers.
7
In addition, manufacturer consent to our acquisitions may impose
conditions, such as requiring facilities improvements by us at the acquired
dealership.
If we are unable to comply with these restrictions, we generally:
. must sell the assets of the dealerships to the manufacturer or
. to a third party acceptable to the manufacturer; or
. terminate the dealership agreements with the manufacturer.
Other manufacturers may impose other and more stringent restrictions in
connection with future acquisitions.
As of April 18, 2002, we owned the following number of franchises for the
following manufacturers:
Manufacturer Number of Franchises Manufacturer Number of Franchises
- ------------ -------------------- ------------ --------------------
Cadillac 23 Hyundai 4
Honda 14 Mitsubishi 3
Chevrolet 14 Kia 3
Ford 13 Audi 3
BMW 10 Pontiac 3
Toyota 10 Porsche 2
Nissan 9 GMC 2
Chrysler 8 Infiniti 1
Dodge 8 Acura 1
Volvo 8 Land Rover 1
Jeep 7 Subaru 1
Mercury 5 Mazda 1
Oldsmobile 5 Saab 1
Isuzu 4 Rolls Royce 1
Volkswagen 4 Bentley 1
Lexus 4 Hino 1
Lincoln 4 Buick 1
Mercedes 4
Our failure to meet a manufacturer's consumer satisfaction requirements may
adversely affect our ability to acquire new dealerships and our profitability.
Many manufacturers attempt to measure customers' satisfaction with their
sales and warranty service experiences through systems which vary from
manufacturer to manufacturer, but which are generally known as customer
satisfaction index, or scores. These manufacturers may use a dealership's CSI
scores as a factor in evaluating applications for additional dealership
acquisitions. The components of CSI have been modified by various manufacturers
from time to time in the past, and we cannot assure you that these components
will not be further modified or replaced by different systems in the future. To
date, we have not been materially adversely affected by these standards and have
not been denied approval of any acquisition based on low CSI scores, except for
Jaguar's refusal to approve our acquisition of a Chattanooga Jaguar franchise in
1997. However, we cannot assure you that we will be able to comply with these
standards in the future. A manufacturer may refuse to consent to an acquisition
of one of its franchises if it determines our dealerships do not comply with the
manufacturer's CSI standards. This could materially adversely affect our
acquisition strategy. In addition, we receive payments from the manufacturers
based, in part, on CSI scores, which could be materially adversely affected if
our CSI scores decline.
There are limitations on our financial resources available for acquisitions.
We intend to finance our acquisitions with cash generated from operations,
through issuances of our stock or debt securities and through borrowings under
credit arrangements.
8
. We cannot assure you that we will be able to obtain additional
financing by issuing stock or debt securities.
. Using cash to complete acquisitions could substantially limit our
operating or financial flexibility.
If we are unable to obtain financing on acceptable terms, we may be
required to reduce the scope of our presently anticipated expansion, which could
materially adversely affect our growth strategy.
We estimate that as of December 31, 2001, we had approximately $156.8
million available for additional borrowings under the Revolving Facility, based
on a borrowing base calculated on the basis of our receivables, inventory and
equipment and a pledge of certain additional collateral by an affiliate of Sonic
(which borrowing base was $456.0 million of the $600.0 million facility at
December 31, 2001).
In addition, we are dependent to a significant extent on our ability to
finance our inventory with "floor plan financing." Floor plan financing is how a
dealership finances its purchase of new vehicles from a manufacturer. The
dealership borrows money to buy a particular vehicle from the manufacturer and
pays off the loan when it sells that particular vehicle, paying interest during
this period. We must obtain new floor plan financing or obtain consents to
assume existing floor plan financing in connection with our acquisition of
dealerships.
Substantially all the assets of our dealerships are pledged to secure our
floor plan indebtedness and the indebtedness under the Revolving Facility. In
addition, substantially all the real property and assets of our subsidiaries
that are constructing new dealerships are pledged under our Mortgage Facility
with Ford Motor Credit. These pledges may impede our ability to borrow from
other sources.
Finally, because Ford Motor Credit is associated with Ford, any
deterioration of our relationship with one could adversely affect our
relationship with the other. The same is true of our relationships with Chrysler
and Chrysler Financial, GM and GMAC, and Toyota and Toyota Credit.
Although O. Bruton Smith, our Chairman and Chief Executive Officer, has
previously facilitated our acquisition financing, we cannot assure you that he
will be willing or able to assist in our financing needs in the future.
Mr. Smith initially guaranteed obligations under the Revolving Facility.
Such obligations were further secured with a pledge of shares of common stock of
Speedway Motorsports, Inc. ("SMI") owned by Sonic Financial Corporation ("SFC"),
a corporation controlled by Mr. Smith having an estimated value at the time of
the pledge of approximately $50.0 million (the "Revolving Pledge"). When the
Revolving Facility's borrowing limit was increased to $75.0 million in 1997, Mr.
Smith's personal guarantee of Sonic's obligations under the Revolving Facility
was released, although the Revolving Pledge remained in place. Mr. Smith was
also required by Ford Motor Credit to lend $5.5 million (the "Subordinated Smith
Loan") to Sonic to increase our capitalization because the net proceeds from our
November 1997 initial public offering were significantly less than expected. In
August 1998, Ford Motor Credit released the Revolving Pledge. In November 1999,
Ford Motor Credit further increased the borrowing limit under the Revolving
Facility to $350.0 million subject to a borrowing base calculated on the basis
of our receivables, inventory and equipment and a continuing pledge by SFC of
five million shares of SMI common stock. Presently, the borrowing limit of the
Revolving Facility is $600.0 million, subject to a similar borrowing base,
including SFC's continuing pledge of SMI stock.
Before our acquisition of FirstAmerica Automotive, Inc. ("FirstAmerica")
Mr. Smith guaranteed the obligations of FirstAmerica under FirstAmerica's new
acquisition line of credit with Ford Motor Credit. FirstAmerica obtained this
new financing to enable it to complete its then pending acquisitions. The
borrowing limit on this credit facility was approximately $138 million. Mr.
Smith had guaranteed approximately $107 million of this amount, which guarantee
was secured by a pledge of five million shares of SMI common stock owned by SFC.
We assumed FirstAmerica's obligations to Ford Motor Credit under our Revolving
Facility when we acquired FirstAmerica. Mr. Smith's secured guarantee in favor
of Ford Motor Credit guaranteed a portion of our obligations under the Revolving
Facility until August 2000. After August 2000, Mr. Smith did not provide a
guarantee in favor of the Revolving Facility lenders, but SFC continues to
pledge SMI stock as collateral. We cannot assure you that Mr. Smith will be
willing or able to provide similar guarantees or credit support in the future to
facilitate Sonic's future acquisitions.
9
Automobile retailing is a mature industry with limited growth potential in new
vehicle sales, and our acquisition strategy will affect our revenues and
earnings.
The United States automobile dealership industry is considered a mature
industry in which minimal growth is expected in unit sales of new vehicles. As a
consequence, growth in our revenues and earnings is likely to be significantly
affected by our success in acquiring and integrating dealerships and the pace
and size of such acquisitions.
High competition in automobile retailing reduces our profit margins on vehicle
sales. Further, the use of the Internet in the car purchasing process could
materially adversely affect us.
Automobile retailing is a highly competitive business. Our competition
includes:
. Franchised automobile dealerships selling the same or similar makes of
new and used vehicles that we offer in our markets and sometimes at
lower prices than we offer. Some of these dealer competitors may be
larger and have greater financial and marketing resources than we do;
. Other franchised dealers;
. Private market buyers and sellers of used vehicles;
. Used vehicle dealers;
. Internet-based vehicle brokers that sell vehicles obtained from
franchised dealers directly to consumers;
. Service center chain stores; and
. Independent service and repair shops.
Our financing and insurance ("F&I") business and other related businesses,
which have higher margins than sales of new and used vehicles, are subject to
strong competition from various financial institutions and other third parties.
This competition is increasing as these products are now being marketed and sold
over the Internet.
Gross profit margins on sales of new vehicles have been generally declining
since 1986. We do not have any cost advantage in purchasing new vehicles from
manufacturers, due to economies of scale or otherwise. We typically rely on
advertising, merchandising, sales expertise, service reputation and dealership
location to sell new vehicles. The following factors could have a significant
impact on our business:
. The Internet has become a significant part of the sales process in our
industry. Customers are using the Internet to compare pricing for cars
and related F&I services, which may further reduce margins for new and
used cars and profits for related F&I services. If Internet new
vehicle sales are allowed to be conducted without the involvement of
franchised dealers, our business could be materially adversely
affected. In addition, other franchise groups have aligned themselves
with Internet car sellers or are spending significant sums on
developing their own Internet capabilities, which could materially
adversely affect our business.
. Our revenues and profitability could be materially adversely affected
should manufacturers decide to enter the retail market directly.
. The increased popularity of short-term vehicle leasing also has
resulted, as these leases expire, in a large increase in the number of
late model vehicles available in the market, which puts added pressure
on new and used vehicle margins.
. Some of our competitors may be capable of operating on smaller gross
margins than we are, and the on-line auto brokers have been operating
at a loss.
10
. As we seek to acquire dealerships in new markets, we may face
increasingly significant competition as we strive to gain market share
through acquisitions or otherwise. This competition includes other
large dealer groups and dealer groups that have publicly traded
equity.
Our franchise agreements do not grant us the exclusive right to sell a
manufacturer's product within a given geographic area. Our revenues or
profitability could be materially adversely affected if any of our manufacturers
award franchises to others in the same markets where we operate, although
certain state franchise laws may limit such activities by the manufacturers. A
similar adverse effect could occur if existing competing franchised dealers
increase their market share in our markets. Our gross margins may decline over
time as we expand into markets where we do not have a leading position. These
and other competitive pressures could materially adversely affect our results of
operations.
The cyclical and local nature of automobile sales may adversely affect our
profitability.
The automobile industry is cyclical and historically has experienced
periodic downturns characterized by oversupply and weak demand. Many factors
affect the industry, including general economic conditions and consumer
confidence, fuel prices, the level of discretionary personal income,
unemployment rates, interest rates and credit availability. We are in the midst
of an industry and general economic slowdown that could materially adversely
effect our business.
Local economic, competitive and other conditions also affect the
performance of dealerships. We intend to pursue acquisitions outside of these
markets, but our operational focus is on our current markets. As a result, our
current results of operations depend substantially on general economic
conditions and consumer spending habits in the Southeast and Northern California
and, to a lesser extent, the Houston and Columbus markets. Sales in our Northern
California market represented 20% of our sales for the year ended December 31,
2001. Our results of operations also depend on other factors, such as tax rates
and state and local regulations specific to the states in which we currently
operate. Sonic may not be able to expand geographically and any such expansion
may not adequately insulate it from the adverse effects of local or regional
economic conditions.
We can offer you no assurances that we will be able to continue executing our
acquisition strategy without the costs of future acquisitions escalating.
Although there are many potential acquisition candidates that fit our
acquisition criteria, we cannot assure you that we will be able to consummate
any such transactions in the future or identify those candidates that would
result in the most successful combinations, or that future acquisitions will be
able to be consummated at acceptable prices and terms. In addition, increased
competition for acquisition candidates could result in fewer acquisition
opportunities for us and higher acquisition prices. The magnitude, timing,
pricing and nature of future acquisitions will depend upon various factors,
including:
. the availability of suitable acquisition candidates;
. competition with other dealer groups for suitable acquisitions;
, the negotiation of acceptable terms;
. our financial capabilities;
. our stock price;
. the availability of skilled employees to manage the acquired
companies; and
. general economic and business conditions.
We may be required to file applications and obtain clearances under
applicable federal antitrust laws before completing an acquisition. These
regulatory requirements may restrict or delay our acquisitions, and may increase
the cost of completing acquisitions.
11
The operating and financial condition of acquired businesses cannot be
determined accurately until we assume control.
Although we conduct what we believe to be a prudent level of investigation
regarding the operating and financial condition of the businesses we purchase,
in light of the circumstances of each transaction, an unavoidable level of risk
remains regarding the actual operating condition of these businesses. Similarly,
many of the dealerships are acquired, including our interest acquisitions, do
not have financial statements audited or prepared in accordance with generally
accepted accounting principles. As a result, we may not have an accurate
understanding of the historical financial condition and performance of our
acquired entities. Until we actually assume operating control of such business
assets and their operations, we may not be able to ascertain the actual value or
understand the potential liabilities of the acquired entities.
Potential conflicts of interest between Sonic and its officers could adversely
affect our future performance.
O. Bruton Smith serves as the chairman and chief executive officer of
Speedway Motorsports, Inc. ("SMI"). Accordingly, Sonic competes with SMI for the
management time of Mr. Smith.
Sonic has in the past and will likely in the future enter into transactions
with Mr. Smith, entities controlled by Mr. Smith or other affiliates of Sonic.
We believe that all of our existing arrangements with affiliates are as
favorable to us as if the arrangements were negotiated between unaffiliated
parties, although the majority of such transactions have neither been
independently verified in that regard nor are likely to be so verified in the
future. Potential conflicts of interest could arise in the future between Sonic
and its officers or directors in the enforcement, amendment or termination of
arrangements existing between them.
Under Delaware law generally, a corporate insider is precluded from acting
on a business opportunity in his individual capacity if that opportunity is
(1) one which the corporation is financially able to undertake,
(2) is in the line of the corporation's business,
(3) is of practical advantage to the corporation, and
(4) is one in which the corporation has an interest or reasonable
expectancy.
Accordingly, our corporate insiders are generally prohibited from engaging
in new dealership-related business opportunities outside of Sonic unless a
majority of Sonic's disinterested directors decide that such opportunities are
not in our best interest.
Sonic's charter contains provisions providing that transactions between
Sonic and its affiliates must be no less favorable to Sonic than would be
available in similar transactions with an unrelated third party. Moreover, any
such transactions involving aggregate payments in excess of $500,000 must be
approved by a majority of Sonic's directors and a majority of Sonic's
independent directors. If not so approved, Sonic must obtain an opinion as to
the financial fairness of the transaction to be issued by an investment banking
or appraisal firm of national standing. In addition, the terms of the Revolving
Facility and Sonic's existing senior subordinated notes restrict transactions
with affiliates in a manner similar to Sonic's charter restrictions.
The loss of key personnel and limited management and personnel resources could
adversely affect our operations and growth.
Our success depends to a significant degree upon the continued
contributions of Sonic's management team, particularly its senior management,
and service and sales personnel. Additionally, manufacturer franchise agreements
may require the prior approval of the applicable manufacturer before any change
is made in franchise general managers. We do not have employment agreements with
most of our dealership managers and other key dealership personnel.
Consequently, the loss of the services of one or more of these key employees
could have a material adverse effect on our results of operations.
In addition, as we expand we may need to hire additional managers. The
market for qualified employees in the industry and in the regions in which we
operate, particularly for general managers and sales and service personnel, is
highly competitive and may subject us to increased labor costs during periods of
low unemployment. The loss of the services of key employees or the inability to
attract additional qualified managers could have a material adverse effect on
our results of operations. In addition, the lack of qualified management or
employees employed by potential acquisition candidates may limit our ability to
consummate future acquisitions.
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Seasonality of the automotive retail business adversely affects first quarter
revenues.
Our business is seasonal, with a disproportionate amount of revenues
received generally in the second, third and fourth fiscal quarters.
Import product restrictions and foreign trade risks may impair our ability to
sell foreign vehicles profitably.
Some of the vehicles and major components of vehicles we sell are
manufactured in foreign countries. Accordingly, we are subject to the import and
export restrictions of various jurisdictions and are dependent to some extent
upon general economic conditions in, and political relations with, a number of
foreign countries, particularly Germany, Japan and Sweden. Fluctuations in
currency exchange rates may also adversely affect our sales of vehicles produced
by foreign manufacturers. Imports into the United States may also be adversely
affected by increased transportation costs and tariffs, quotas or duties.
We are subject to numerous legal and administrative proceedings.
In 2001, the Florida Attorney General's Office issued subpoenas to two of
our wholly-owned dealership subsidiaries located in Florida. The subpoenas
requested, among other things, documentation from the dealerships regarding
transactions with customers in the months of January 1999 and June 2000. In
subsequent discussions, the Attorney General's office informed each of these
dealership subsidiaries that it was investigating allegations of fraud against
customers by those dealerships in the sale of finance and insurance products. In
addition, in April 2002, the Florida Department of Insurance informed the same
two dealership subsidiaries that it had also initiated an investigation into
allegations similar to those underlying the Florida Attorney General's
investigation. Our two dealership subsidiaries are cooperating with this
investigation. To date, there have been no formal charges or administrative
proceedings filed against either dealership subsidiary by the Attorney General
or the Department of Insurance. Additionally, five private civil actions have
been filed against one of the dealership subsidiaries and one private civil
action has been filed against the other dealership subsidiary stating
allegations similar to those underlying the Florida Attorney General's
investigation. Two of the civil actions purport to represent a class of
customers as potential plaintiffs, although no motion for class certification
has been filed or granted to date.
We intend to vigorously defend ourselves and assert available defenses with
respect to each of the foregoing matters, and we do not believe that the
ultimate resolution of these matters will have a material adverse affect on our
business, results of operations, financial condition, cash flows or prospects.
However, because the investigations by the Florida Attorney General's office and
Florida Department of Insurance are continuing and have not resulted in formal
charges to date, and because the civil actions are also in the early stages of
litigation, we cannot assure you as to the outcomes of such proceedings.
In addition, we are involved, and expect to continue to be involved, in
numerous other legal proceedings arising out of the conduct of our business,
including litigation with customers, employment related lawsuits and actions
brought by governmental authorities. We do not believe that the ultimate
resolution of these matters will have a material adverse affect on our business,
results of operations, financial condition, cash flows or prospects. However,
the results of these matters cannot be predicted with certainty, and an
unfavorable resolution of one or more of these matters, including the matters
specifically discussed above, could have a material adverse effect on our
business, financial condition, results of operations, cash flows and prospects.
Governmental regulation and environmental regulation compliance costs may
adversely affect our profitability.
We are subject to a wide range of federal, state and local laws and
regulations, such as local licensing requirements, retail financing and consumer
protection laws and regulations, and federal and state environmental, health and
safety, wage-hour, anti-discrimination, and other employment practices laws and
regulations. The violation of these laws and regulations can result in
administrative, civil or criminal penalties against us or in a cease and desist
order against our operations if we are not in compliance. Our future
acquisitions may also be subject to regulation, including antitrust reviews. We
believe that we comply in all material respects with all laws and regulations
applicable to our business, but future regulations may be more stringent and
require us to incur significant additional costs.
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Our facilities and operations are also subject to federal, state and local
laws and regulations relating to environmental protection and human health and
safety, including those governing wastewater discharges, air emissions, the
operation and removal of underground and aboveground storage tanks, the use,
storage, treatment, transportation, release, recycling and disposal of solid and
hazardous materials and wastes and the cleanup of contaminated property or
water. We may be required by these laws to pay the full amount of the costs of
investigation and/or remediation of contaminated properties, even if we are not
at fault for disposal of the materials or if such disposal was legal at the
time. People who may be found liable under these laws and regulations include
the present or former owner or operator of a contaminated property and companies
that generated, transported, disposed of or arranged for the transportation or
disposal of hazardous substances found at the property.
Our past and present business operations are subject to environmental laws
and regulations governing the use, storage, handling, recycling and disposal of
hazardous or toxic substances such as new and waste motor oil, oil filters,
transmission fluid, antifreeze, freon, new and waste paint and lacquer thinner,
batteries, solvents, lubricants, degreasing agents, gasoline and diesel fuels.
We are also subject to laws and regulations relating to underground storage
tanks that exist or used to exist at many of our properties. Like many of our
competitors, we have incurred, and will continue to incur, capital and operating
expenditures and other costs in complying with such laws and regulations. In
addition, soil and groundwater contamination exists at certain of our
properties. We cannot assure you that our other properties have not been or will
not become similarly contaminated. In addition, we could become subject to
potentially material new or unforeseen environmental costs or liabilities
because of our acquisitions.
Environmental laws and regulations, including those governing air emissions
and underground storage tanks, could require compliance with new or more
stringent standards that are imposed in the future. We cannot predict what other
environmental legislation or regulations will be enacted in the future, how
existing or future laws or regulations will be administered or interpreted or
what environmental conditions may be found to exist in the future. Consequently,
we may be required to make substantial expenditures in the future.
Concentration of voting power and anti-takeover provisions of our charter,
Delaware law and our dealer agreements may reduce the likelihood of any
potential change of control of Sonic.
Sonic's common stock is divided into two classes with different voting
rights. This dual class stock ownership allows the present holders of the Class
B common stock to control Sonic. Holders of Class A common stock have one vote
per share on all matters. Holders of Class B common stock have 10 votes per
share on all matters, except that they have only one vote per share on any
transaction proposed by the Board of Directors or a Class B common stockholder
or otherwise benefiting the Class B common stockholders constituting a:
(1) "going private" transaction;
(2) disposition of substantially all of our assets;
(3) transfer resulting in a change in the nature of our business; or
(4) merger or consolidation in which current holders of common stock would
own less than 50% of the common stock following such transaction.
The holders of Class B common stock currently hold less than a majority of
Sonic's outstanding common stock, but a majority of Sonic's voting power. This
may prevent or discourage a change of control of Sonic even if such action were
favored by holders of Class A common stock.
Sonic's charter and bylaws make it more difficult for its stockholders to
take corporate actions at stockholders' meetings. In addition, options under our
1997 Stock Option Plan become immediately exercisable on a change in control.
Also, Delaware law makes it difficult for stockholders who have recently
acquired a large interest in a company to consummate a business transaction with
the company against its directors' wishes. Finally, restrictions imposed by our
dealer agreements may impede or prevent any potential takeover bid. Generally,
our franchise agreements allow the manufacturers the right to terminate the
agreements upon a change of control of our company and impose restrictions upon
the transferability of any significant percentage of our stock to any one person
or entity who may be unqualified, as defined by the manufacturer, to own one of
its dealerships. The inability of a person or entity to qualify with one or more
of our manufacturers may prevent or seriously impede a potential takeover bid.
These agreements, corporate documents and laws, as well as provisions of our
lending arrangements
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creating an event of default on a change in control, may have the effect of
delaying or preventing a change in control or preventing stockholders from
realizing a premium on the sale of their shares upon an acquisition of Sonic.
New accounting pronouncements could affect future earnings.
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") 141: Business Combinations.
SFAS 141 prohibits the pooling-of-interests method of accounting and requires
the use of the purchase method of accounting for all business combinations
initiated after June 30, 2001. In addition, SFAS 141 provides additional
guidance regarding the measurement and recognition of goodwill and other
acquired intangible assets. The provisions of this standard became effective
beginning July 1, 2001. For acquisitions after this date, we are required to
classify certain intangible assets, such as franchise rights granted from
automobile manufacturers, as intangible assets apart from goodwill. We are still
in the process of obtaining data necessary to complete the allocation of the
purchase price of our recent acquisitions, including the calculation of any
franchise rights, if any, we may need to recognize.
In June 2001, the FASB also issued SFAS 142: Goodwill and Other Intangible
Assets. Among other things, SFAS 142 no longer permits the amortization of
goodwill, but requires that the carrying amount of goodwill be reviewed and
reduced against operations if it is found to be impaired. This review must be
performed on at least an annual basis (with an initial review within six months
of adopting the new standard), but must also be performed upon the occurrence of
an event or circumstance that indicates a possible reduction in value. SFAS 142
does require the amortization of intangible assets other than goodwill over
their useful economic lives, unless the useful economic life is determined to be
indefinite. Intangible assets determined to have a finite life are required to
be reviewed for impairment in accordance with SFAS 144: Accounting for
Impairment or Disposal of Long-Lived Assets. Intangible assets that are
determined to have an indefinite economic life are not amortized and must be
reviewed for impairment in accordance with the terms of SFAS 142. The provisions
of SFAS 142 become effective for us beginning January 1, 2002; however, goodwill
and other intangible assets determined to have an indefinite useful life
acquired in business combinations completed after June 30, 2001 have not been
amortized. The initial review for impairment must be completed by June 30, 2002.
We are in the process of completing that analysis and have not yet determined
its full impact on our consolidated financial statements.
The cumulative gross goodwill balance was approximately $785.2 million at
December 31, 2001 and approximately $697.8 million at December 31, 2000.
Goodwill, net of accumulated amortization, represented 40.9% of total assets at
December 31, 2001 and 37.4% at December 31, 2000. Net goodwill represented
142.7% of stockholders' equity at December 31, 2001 and 148.3% at December 31,
2000. Goodwill amortization expense was approximately $18.3 million for the year
ending December 31, 2001 and approximately $16.8 million for the year ending
December 31, 2000.
On January 1, 2002 we adopted SFAS No. 144: Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS No. 144 establishes a single accounting
and disclosure model for assets to be disposed of by sale whether previously
held and used or newly acquired. SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001. Under the provisions of SFAS No. 144, assets
and liabilities held for sale are required to be shown separately in the balance
sheet. Results of operations of a component of an entity that has been disposed
or is classified as held for sale are now required to be reported in
discontinued operations in the statement of income. The adoption of SFAS No. 144
did not have a material impact on our consolidated financial statements.
Your right to receive payments on Debt Securities may be junior to significant
amounts of our existing indebtedness, including borrowings currently outstanding
under our Revolving Credit Facility, Floor Plan Facilities and Mortgage
Facility. Further, the subsidiary guarantees of any Debt Securities will be
junior to our subsidiary guarantors' existing indebtedness and possibly to all
their future borrowings.
All debt securities will be subordinated in right of payment to all of our
existing and future senior indebtedness, including borrowings currently under
our Revolving Credit Facility, Floor Plan Facilities and Mortgage Facility. Our
senior indebtedness includes all debt allowed under the indenture governing any
Debt Securities, except for trade payables, tax obligations and any future debt
that is expressly equal with, or subordinated in right of payment to, Debt
Securities. The holders of our senior debt will be entitled to be paid in full
before any payment may be made on Debt Securities in any bankruptcy,
liquidation, reorganization or similar proceeding. In the event of such a
proceeding, holders of any Debt Securities will participate with holders of our
other subordinated indebtedness in the distribution of assets remaining after
all of our senior debt has been paid in full. We may not have sufficient funds
to pay all of our creditors, and holders of Debt Securities may receive less,
ratably, than the holders of senior debt or holders of trade payables. We may
not pay principal of, or premium, if any, or interest on,
15
any other amounts owing on any Debt Securities, make any deposit pursuant to
defeasance provisions or purchase, redeem or otherwise retire any Debt
Securities, if any senior indebtedness is not paid when due or any other default
on senior indebtedness occurs and the maturity of such indebtedness is
accelerated in accordance with its terms. However, those restrictions would be
lifted if, in either case, the default is cured or waived, the acceleration is
rescinded or the indebtedness is repaid in full.
In addition, all payments on Debt Securities will be blocked in the event
of a payment default on senior debt and may be blocked for a period of time
under the governing indenture in the event of a non-payment default, unless the
default has been cured or waived, any acceleration of the indebtedness has been
rescinded or such indebtedness has been repaid in full.
As of December 31, 2001, we had:
. $587.9 million of floor plan indebtedness and $318.8 million of other
indebtedness, including $299.2 million under the Revolving Credit
Facility, that would have ranked senior in right of payment to any
Debt Securities, all of which is secured; and
. $200 million of indebtedness under our existing senior subordinated
notes, which may be either equal or senior in right of payment to the
Debt Securities.
Substantially all of our outstanding indebtedness is secured; Debt Securities
may not be secured.
Debt Securities may not be secured by any of our assets. The indebtedness
under our Revolving Credit Facility, Floor Plan Facilities and Mortgage Facility
is secured variously by (1) a pledge of all the equity we own in our
subsidiaries and that our subsidiary holding companies own in the subsidiaries,
excluding subsidiaries where the manufacturer does not permit such a pledge,
(2) guarantees by all of our subsidiaries that are, in turn, secured by a lien
on all of the assets of the subsidiaries, (3) a lien on substantially all of our
other assets and (4) direct liens on the real estate and other assets of our
subsidiaries that own or acquire real estate. In the event of a default on any
Debt Securities or our bankruptcy, liquidation or reorganization, those assets
will be available to satisfy the secured obligations prior to being available to
repay any Debt Securities. Accordingly, there may not be sufficient funds or
other assets remaining to pay amounts due on any Debt Securities. The indenture
for any Debt Securities may permit, and the indenture for our senior
subordinated notes does permit, us to incur additional indebtedness, which may
also be secured.
Federal and state statutes allow courts, under specific circumstances, to void
guarantees and requires Debt Security holders to return payments received from
guarantors.
Under the federal bankruptcy law and comparable provisions of state
fraudulent transfer laws, a guarantee could be voided, or claims in respect of a
guarantee could be subordinated to all other debts of that guarantor if, among
other things, the guarantor, at the time it incurred the indebtedness evidenced
by its guarantee received less than reasonably equivalent value or fair
consideration for the incurrence of such guarantee; and
. was insolvent or rendered insolvent by reason of such incurrence;
. was engaged in a business or transaction for which the guarantor's
remaining assets constituted unreasonably small capital; or
. intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.
In addition, any payment by that guarantor pursuant to its guarantee could be
voided and required to be returned to the guarantor, or to a fund for the
benefit of the creditors of the guarantor.
The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, a guarantor would be
considered insolvent if:
. the sum of its debts, including contingent liabilities, were greater
than the fair saleable value of all of its assets,
16
. if the present fair saleable value of its assets were less than the
amount that would be required to pay its probable liability on its
existing debts, including contingent liabilities, as they become
absolute and mature, or
. it could not pay its debts as they became due.
We can give you no assurance as to what standard a court would apply in
making such a determination or that a court would agree with our conclusions
that, after giving effect to a guarantee of Debt Securities, each guarantor will
not be insolvent.
17
USE OF PROCEEDS
Unless otherwise provided in a prospectus supplement, we will use the net
proceeds from the sale of the securities offered by this prospectus and any
prospectus supplement for our general corporate purposes, which may include
repayment of indebtedness, the acquisition of additional automobile dealerships,
additions to our working capital and capital expenditures.
RATIO OF EARNINGS TO FIXED CHARGES
The following table contains our consolidated ratios of earnings to fixed
charges for the periods indicated:
1997 1998 1999 2000 2001
---------------------------------
Ratio of earnings to fixed charges 4.1 3.3 3.4 3.0 3.3
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series that are offered by a prospectus supplement
will be described in the prospectus supplement.
The Debt Securities will be either our senior debt securities ("Senior Debt
Securities") or our subordinated debt securities ("Subordinated Debt
Securities"). The Senior Debt Securities and the Subordinated Debt Securities
will be issued under separate Indentures among us, our subsidiaries, if our
subsidiaries are guarantors of the Debt Securities, and a U.S. banking
institution (a "Trustee"). Senior Debt Securities will be issued under a "Senior
Indenture" and Subordinated Debt Securities will be issued under a "Subordinated
Indenture." Together, the Senior Indenture and the Subordinated Indenture are
called "Indentures."
We will describe the particular terms of any Debt Securities that we offer
and the extent to which the general provisions below will apply to those Debt
Securities in a prospectus supplement relating to those Debt Securities. The
terms of the Debt Securities will include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended. The Debt Securities will be subject to all those terms, and we
refer the holders of the Debt Securities to the Indenture and the Trust
Indenture Act for a statement of those terms. Unless we indicate otherwise,
capitalized terms have the meanings given in the applicable Indenture.
We have summarized selected provisions of the Indenture below. The summary
is not complete. The forms of the Indenture have been filed as exhibits to the
registration statement and you should read the Indentures for provisions that
may be important to you. In the summary below we have included references to
Section numbers of the applicable Indentures so that you can easily locate these
provisions. Whenever we refer in this prospectus or in the prospectus supplement
to particular Sections or defined terms of the Indenture, such Sections or
defined terms are incorporated by reference herein or therein, as applicable.
General
The Indentures provide that Debt Securities in separate series may be
issued from time to time without limitation as to aggregate principal amount. We
may specify a maximum aggregate principal amount for the Debt Securities of any
series. (Section 301) We will determine the terms and conditions of the Debt
Securities, including the maturity, principal and interest, but those terms must
be consistent with the Indenture. The Debt Securities will be our unsecured
obligations.
The Subordinated Debt Securities will be subordinated in right of payment
to the prior payment in full of all of our Senior Indebtedness (as defined) as
described under "--Subordination of Subordinated Debt Securities" and in the
prospectus supplement applicable to any Subordinated Debt Securities.
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If specified in the prospectus supplement, our subsidiaries (the
"Guarantors") will unconditionally guarantee (the "Subsidiary Guarantees") on a
joint and several basis the Debt Securities as described under "----Subsidiary
Guarantees" and in the prospectus supplement. The Subsidiary Guarantees will be
unsecured obligations of each Guarantor.
The applicable prospectus supplement will set forth the price or prices at
which the Debt Securities to be offered will be issued and will describe the
following additional terms:
. the title of the Debt Securities;
. whether the Debt Securities are Senior Debt Securities or Subordinated
Debt Securities and, if Subordinated Debt Securities, subordinated
terms relating thereto;
. whether the Guarantors will provide Subsidiary Guarantees of the Debt
Securities;
. the aggregate principal amount of the Debt Securities or any limit
thereon;
. the dates on which the principal of the Debt Securities will be
payable;
. the interest rate of the Debt Securities and the interest payment
dates for the Debt Securities;
. the places where payments on the Debt Securities will be payable;
. any terms upon which the Debt Securities may be redeemed at our
option;
. any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the Debt Securities;
. the portion of the principal amount, if less than all, of the Debt
Securities that will be payable upon declaration of acceleration of
the Maturity of the Debt Securities;
. if convertible into our Class A common stock or any of our other
securities, the terms on which such Debt Securities are convertible;
. whether the Debt Securities are secured and the terms of such
security;
. whether the Debt Securities are defeasible;
. any addition to or change in the Events of Default;
. any addition to or change in the covenants in the applicable
Indenture; and
. any other terms of the Debt Securities not inconsistent with the
provisions of the applicable Indenture. (Section 301)
Debt Securities, including Original Issue Discount Securities, may be sold
at a substantial discount below their principal amount. Special United States
federal income tax considerations applicable to Debt Securities sold at an
original issue discount may be described in the applicable prospectus
supplement. In addition, special United States federal income tax or other
considerations applicable to any Debt Securities that are denominated in a
currency other than United States dollars may be described in the applicable
prospectus supplement.
Subordination of Subordinated Debt Securities
The indebtedness evidenced by the Subordinated Debt Securities will, to the
extent set forth in the Subordinated Indenture with respect to each series of
Subordinated Debt Securities, be subordinate in right of payment to the prior
payment in full of all of our Senior Debt, including the Senior Debt Securities.
The prospectus
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supplement relating to any Subordinated Debt Securities will summarize the
subordination provisions of the Subordinated Indenture applicable to that series
including:
. the applicability and effect of such provisions upon any payment or
distribution of our assets to creditors upon any liquidation,
bankruptcy, insolvency or similar proceedings;
. the applicability and effect of such provisions in the event of
specified defaults with respect to any or certain Senior Debt,
including the circumstances under which and the periods in which we
will be prohibited from making payments on the Subordinated Debt
Securities; and
. the definition of Senior Indebtedness applicable to the Subordinated
Debt Securities of that series.
The prospectus supplement will also describe as of a recent date the
approximate amount of Senior Indebtedness to which the Subordinated Debt
Securities of that series will be subordinated.
The failure to make any payment on any of the Subordinated Debt Securities
due to the subordination provisions of the Subordinated Indenture described in
the prospectus supplement will not prevent the occurrence of an Event of Default
on the Subordinated Debt Securities arising from any such failure to make
payment.
The subordination provisions described above will not be applicable to
payments in respect of the Subordinated Debt Securities from a defeasance trust
established in connection with any defeasance or covenant defeasance of the
Subordinated Debt Securities as described under "--Defeasance and Covenant
Defeasance."
Conversion Rights
The Debt Securities may be converted into other securities of our company,
if at all, according to the terms and conditions of an applicable prospectus
supplement. Such terms will include the conversion price, the conversion period,
provisions as to whether conversion will be at the option of the holders of such
series of Debt Securities or at the option of our company, the events requiring
an adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such series of Debt Securities.
Subsidiary Guarantees
If specified in the prospectus supplement, the Guarantors will guarantee
the Debt Securities of a series. Unless otherwise indicated in the prospectus
supplement, the following provisions will apply to the Subsidiary Guarantees of
the Guarantors.
Subject to the limitations described below and in the prospectus
supplement, the Guarantors will, jointly and severally, unconditionally
guarantee the performance and punctual payment when due, whether at Stated
Maturity, by acceleration or otherwise, of all our obligations under the
Indentures and the Debt Securities of a series (the "Guaranteed Obligations").
The Guarantors will also pay, in addition to the amount stated above, any and
all expenses (including reasonable counsel fees and expenses) incurred by the
applicable Trustee in enforcing any rights under a Subsidiary Guarantee with
respect to a Guarantor.
In the case of Subordinated Debt Securities, a Guarantor's Subsidiary
Guarantee will be subordinated in right of payment to the Senior Indebtedness of
such Guarantor on the same basis as the Subordinated Debt Securities are
subordinated to our Senior Indebtedness. No payment will be made by any
Guarantor under its Subsidiary Guarantee during any period in which payments by
us on the Subordinated Debt Securities are suspended by the subordination
provisions of the Subordinated Indenture.
Each Subsidiary Guarantee will be limited in amount to an amount not to
exceed the maximum amount that can be guaranteed by the relevant Guarantor
without rendering such Subsidiary Guarantee voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
Each Subsidiary Guarantee will be a continuing guarantee and will:
20
. remain in full force and effect until either (a) payment in full of
all the Guaranteed Obligations (or the applicable Debt Securities are
defeased and discharged in accordance with the defeasance provisions
of the Indentures) or (b) released as described in the following
paragraph,
. be binding upon each Guarantor, and
. inure to the benefit of and be enforceable by the applicable Trustee,
the holders and their successors, transferees and assigns.
In the event that a Guarantor ceases to be a Significant Subsidiary,
whether as a result of a disposition of all of the assets or all of the capital
stock of such Guarantor, by way of sale, merger, consolidation or otherwise,
such Guarantor will be deemed released and relieved of its obligations under its
Subsidiary Guarantee without any further action required on the part of the
Trustee or any holder and no other person acquiring or owning the assets or
capital stock of such Guarantor (if not otherwise a Significant Subsidiary) will
be required to enter into a Subsidiary Guarantee; provided, in each case, that
the transaction or transactions resulting in such Guarantor's ceasing to be a
Significant Subsidiary are carried out pursuant to and in compliance with all of
the applicable covenants in the Indenture. In addition, the prospectus
supplement may specify additional circumstances under which a Guarantor can be
released from its Subsidiary Guarantee.
Form, Exchange and Transfer
The Debt Securities of each series will be issuable only in fully
registered form, without coupons, and, unless otherwise specified in the
applicable prospectus supplement, only in denominations of $1,000 and integral
multiple thereof. (Section 302)
At the option of the Holder, subject to the terms of the applicable
Indenture and the limitations applicable to Global Securities, Debt Securities
of each series will be exchangeable for other Debt Securities of the same series
of any authorized denomination and of a like tenor and aggregate principal
amount. (Section 305)
Subject to the terms of the applicable Indenture and the limitations
applicable to Global Securities, Debt Securities may be presented for exchange
as provided above or for registration of transfer (duly endorsed or with the
form of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by us for such
purpose. No service charge will be made for any registration of transfer or
exchange of Debt Securities, but we may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, begin satisfied with the documents of title
and identity of the person making the request. The Security Registrar and any
other transfer agent initially designated by us for any Debt Securities will be
named in the applicable prospectus supplement. (Section 305) We may at any time
designate additional transfer agents or rescind the designation of any transfer
agent or approve a change in the office through which any transfer agent acts,
except that we will be required to maintain a transfer agent in each Place of
Payment for the Debt Securities of each series. (Section 1002).
If the Debt Securities of any series (or of any series and specified terms)
are to be redeemed in part, we will not be required to (i) issue, register the
transfer of or exchange any Debt Security of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of any such
Debt Security selected for redemption and ending at the close of business on the
day of such mailing or (ii) register the transfer of or exchange any Debt
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any such Debt Security being redeemed in part. (Section 305)
Global Securities
Some or all of the Debt Securities of any series may be represented, in
whole or in part, by one or more Global Securities which will have an aggregate
principal amount equal to that of the Debt Securities represented thereby. Each
Global Security will be registered in the name of a Depositary or a nominee
thereof identified in the applicable prospectus supplement, will be deposited
with such Depository or nominee or a custodian therefor and will bear a legend
regarding the restrictions on exchanges and registration of transfer thereof
referred to below and any such other matters as may be provided for pursuant to
the Indenture.
21
Notwithstanding any provision of the applicable Indenture or any Debt
Security described herein, no Global Security may be exchanged or transferred in
whole or in part for Debt Securities registered in the name of any person other
than the Depositary for such Global Security or any nominee of such Depositary
unless:
. the Depositary is unwilling or unable to continue as depositary;
. an Event of Default has occurred and is continuing under the Debt
Securities represented by the Global Security; or
. as otherwise provided in a prospectus supplement.
All Debt Securities issued in exchange for a Global Security or any portion
thereof will be registered in such names as the Depositary may direct. (Section
305).
As long as the Depositary, or its nominee, is the registered Holder of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of such Global Security and the Debt
Securities represented thereby for all purposes under the Debt Securities and
the applicable Indenture. Except in the limited circumstances referred to above,
owners of beneficial interests in a Global Security will not be entitled to have
such Global Security or any Debt Securities represented thereby registered in
their names, will not receive or be entitled to receive physical delivery of
certificated Debt Securities in exchange therefor and will not be considered to
be the owners or Holders of such Global Security or any Debt Securities
represented thereby for any purpose under the Debt Securities or the applicable
Indenture. All payments of principal of and any premium and interest on a Global
Security will be made to the Depositary or its nominee, as the case may be, as
the Holder thereof. The laws of some jurisdictions require that certain
purchasers of Debt Securities take physical delivery of such Debt Securities in
definitive form. These laws may impair the ability to transfer beneficial
interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Debt Securities represented by the Global
Security to the accounts of its participants. Ownership of beneficial interests
in a Global Security will be shown only on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
(with respect to participants' interests) or any such participant (with respect
to interests of persons held by such participants on their behalf). Payments,
transfers, exchanges and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of us, the Guarantors, the Trustees or our
agents or the Trustees will have any responsibility or liability for any aspect
of the Depositary's or any participant's records relating to, or for payments
made on account of, beneficial interests in a Global Security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Payment and Paying Agent
Unless otherwise indicated in the applicable prospectus supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
person in whose name such Debt Security is registered at the close of business
on the regular record date for such interest. (Section 307)
Unless otherwise indicated in the applicable prospectus supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as we
may designate for such purpose from time to time, except that at our option
payment of any interest may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Security Register. Unless
otherwise indicated in the applicable prospectus supplement, the corporate trust
office of the trustee under the Senior Indenture (the "Senior Trustee") in The
City of New York will be designated as sole Paying Agent for payments with
respect to Senior Debt Securities of each series, and the corporate trust office
of the Subordinated Trustee in the City of New York will be designated as the
sole Paying Agent for payment with respect to Subordinated Debt Securities of
each series. Any other Paying Agents initially designated by us for the Debt
Securities of a particular series will be named in the applicable prospectus
supplement. We may at any time
22
designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that we will be required to maintain a Paying Agent in each Place of
Payment for the Debt Securities of a particular series. (Section 1002)
All moneys paid by us to a Paying Agent for the payment of the principal of
or any premium or interest on any Debt Security which remain unclaimed at the
end of two years after such principal, premium or interest has become due and
payable will be repaid to us, and the Holder of such Debt Security thereafter
may look only to us for payment thereof. (Section 1003)
Consolidation, Merger and Sale of Assets
We may consolidate with or merge into, or sell or lease substantially all
of our properties to any person only if:
. the successor person (if any) is a corporation, partnership, trust or
other entity organized and validly existing under the laws of any
domestic jurisdiction and assumes our obligations on the Debt
Securities and under the Indentures;
. immediately after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be
continuing; and
. any other conditions specified in the applicable prospectus supplement
are met. (Section 801)
Events of Default
Unless otherwise specified in the prospectus supplement, each of the
following will constitute an Event of Default under the applicable Indenture
with respect to Debt Securities of any series:
. failure to pay principal or premium on any Debt Security of that
series when due;
. failure to pay any interest on any Debt Security of that series when
due, continued for 30 days;
. failure to deposit any sinking fund payment, when due, on any Debt
Security of that series;
. failure to perform or comply with the provisions described under "
--Consolidation, Merger and Sale of Assets";
. failure to perform any of our other covenants in the Indenture (other
than a covenant included in such Indenture solely for the benefit of a
series other than that series) for 60 days after being given written
notice by the Trustee or holders of at least 25% in principal amount
of the Outstanding Debt Securities of that series;
. default under the terms of any instrument evidencing or securing any
of our Debt or any Significant Subsidiary having an outstanding
principal amount of $20 million individually or in the aggregate which
default results in the acceleration of the payment of all or any
portion of such Debt (which acceleration is not rescinded within a
period of 10 days from the occurrence of such acceleration) or
constitutes the failure to pay all or any portion of the principal
amount of such Debt when due;
. the rendering of a final judgment or judgments against us or any
Significant Subsidiary in an amount in excess of $20 million that
remains undischarged or unstayed for a period of 60 days after the
date on which the right to appeal has expired;
. certain events of bankruptcy, insolvency or reorganization affecting
us, any Significant Subsidiary Guarantor or any group of Significant
Subsidiaries that together would constitute a Significant Subsidiary
Guarantor; and
23
. in the case of Debt Securities guaranteed by any Guarantor, the
Subsidiary Guarantee of any Guarantor is held by a final
non-appealable order or judgment of a court of competent jurisdiction
to be unenforceable or invalid or ceases for any reason to be in full
force and effect (other than in accordance with the terms of the
applicable Indenture) or any Guarantor or any person acting on behalf
of any Guarantor denies or disaffirms such Guarantor's obligations
under its Subsidiary Guarantee (other than by reason of a release of
such Guarantor from its Subsidiary Guarantee in accordance with the
terms of the applicable Indenture) . (Section 501)
If an Event of Default (other than as a result of bankruptcy, insolvency or
reorganization) for any series of Debt Securities occurs and continues, the
applicable Trustee or the holders of at least 25% in aggregate principal amount
of the outstanding Debt Securities of that series may declare the principal
amount of the Debt Securities of that series (or, such portion of the principal
amount of such Debt Securities as may be specified in a prospectus supplement)
to be due and payable immediately. If an Event of Default results from
bankruptcy, insolvency or reorganization, the principal amount of all the Debt
Securities of a series (or, such portion of the principal amount of such Debt
Securities as may be specified in a prospectus supplement) will automatically
become immediately due and payable. If an acceleration occurs, subject to
specified conditions, the holders of a majority of the aggregate principal
amount of the outstanding Debt Securities of that series may rescind and annul
such acceleration. (Section 502)
Other than its duties in case of an Event of Default, a Trustee is not
obligated to exercise any of its rights or powers under the applicable Indenture
at the request or direction of any of the Holders, unless the Holders offer the
Trustee reasonable indemnity. (Section 603) Subject to the indemnification of
the Trustees, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of that series. (Section 512)
The Holders of Debt Securities of any series will not have any right to
institute any proceeding with respect to the applicable Indenture unless:
. the Holder previously gave written notice to the Trustee of an Event
of Default;
. the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series have made a written
request, and such Holder or Holders have offered reasonable indemnity,
to the Trustee to institute such proceeding as trustee; and
. the Trustee fails to institute such proceeding, and has not received
from the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series a direction inconsistent
with such request, within 15 days after such notice, request and
offer. (Section 507)
However, such limitations do not apply to a suit instituted by a Holder of
a Debt Security for the enforcement of payment of the principal, interest or
premium on such Debt Security on or after the applicable due date specified in
such Debt Security (Section 508)
We will be required to furnish to each Trustee annually a statement by
certain of our officers as to whether or not we are in default in the
performance of any of the terms of the applicable Indenture. (Section 1004)
Amendment and Waiver
Modifications and amendments of the Indentures may be made by us, the
Guarantors and the applicable Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
each series affected by such modification or amendment; provided, however, that
no such modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby:
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Debt Security,
(2) reduce the principal amount of, or any premium or interest on, any
Debt Security,
24
(3) reduce the amount of principal of an Original Issue Discount Security
or any other Debt Security payable upon acceleration of the Maturity
thereof,
(4) change the place or currency of payment of principal of, or any
premium or interest on, any Debt Security,
(5) impair the right to institute suit for the enforcement of any payment
on or with respect to any Debt Security,
(6) in the case of Subordinated Debt Securities, modify the subordination
provisions in a manner adverse to the Holders of the Subordinated Debt
Securities,
(7) except as provided in the applicable Indenture, release the Subsidiary
Guarantee of a Guarantor,
(8) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture,
(9) reduce the percentage in principal amount of Outstanding Debt
Securities of any series necessary for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults
or
(10) modify such provisions with respect to modification and waiver.
(Section 902)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by us with certain restrictive
provisions of the applicable Indenture. The Holders of a majority in principal
amount of the Outstanding Debt Securities of any series may waive any past
default under the applicable Indenture, except a default in the payment of
principal, premium or interest and certain covenants and provisions of the
Indenture which cannot be amended without the consent of the Holder of each
Outstanding Debt Security of such series affected. (Section 513)
The Indentures provide that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under such
Indenture as of any date, (A) the principal amount of an Original Issue Discount
Security that will be deemed to be Outstanding will be the amount of the
principal thereof that would be due and payable as of such date upon
acceleration of the Maturity thereof to such date, (B) if, as of such date, the
principal amount payable at the Stated Maturity of a Debt Security is not
determinable (for example, because it is based on an index), the principal
amount of such Debt Security deemed to be Outstanding as of such date will be an
amount determined in the manner prescribed for such Debt Security and (C) the
principal amount of a Debt Security denominated in one or more foreign
currencies or currency units that will be deemed to be Outstanding will be the
U.S. dollar equivalent, determined as of such date in the manner prescribed for
such Debt Security, of the principal amount of such Debt Security (or, in the
case of a Debt Security described in clause (A) or (B) above, of the amount
described in such clause) . Certain Debt Securities, including those for whose
payment or redemption money has been deposited or set aside in trust for the
Holders and those that have been fully defeased pursuant to Section 1502, will
not be deemed to be Outstanding. (Section 101)
Except in certain limited circumstances, we will be entitled to set any day
as a record date for the purpose of determining the Holders of Outstanding Debt
Securities of any series entitled to give or take any direction, notice,
consent, waiver or other action under the applicable Indenture, in the manner
and subject to the limitations provided in the Indenture. In certain limited
circumstances, the Trustee will be entitled to set a record date for action by
Holders. If a record date is set for any action to be taken by Holders of a
particular series, such action may be taken only by persons who are Holders of
Outstanding Debt Securities of that series on the record date. To be effective,
such action must be taken by Holders of the requisite principal amount of such
Debt Securities within a specified period following the record date. For any
particular record date, this period will be 180 days or such other period as may
be specified by us (or the Trustee, if it set the record date), and may be
shortened or lengthened (but not beyond 180 days) from time to time. (Section
104)
25
Defeasance and Covenant Defeasance
If and to the extent indicated in the applicable prospectus supplement, we
may elect, at our option at any time, to have the provisions of the Indentures,
relating to defeasance and discharge of indebtedness (Section 1502) and to
defeasance of certain restrictive covenants (Section 1503) applied to the Debt
Securities of any series, or to any specified part of a series.
Defeasance and Discharge. The Indentures provide that, upon our exercise of
our option (if any) we will be discharged from all our obligations, and have the
subordination provisions of any Subordinated Indenture (if any) cease to be
effective, with respect to the applicable Debt Securities upon the deposit in
trust for the benefit of the holders of such Debt Securities of money or U.S.
Government Obligations, or both, which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal of and any premium and interest on
such Debt Securities on the respective Stated Maturities in accordance with the
terms of the applicable Indenture and such Debt Securities.
Such defeasance or discharge may occur only if, among other things,
(1) we have delivered to the applicable Trustee an Opinion of Counsel to
the effect that we have received from, or there has been published by,
the United States Internal Revenue Service a ruling, or there has been
a change in tax law, in either case to the effect that Holders of such
Debt Securities will not recognize gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and
will be subject to federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such
deposit, defeasance and discharge were not to occur;
(2) no Event of Default or event that with the passing of time or the
giving of notice, or both, shall constitute an Event of Default shall
have occurred and be continuing;
(3) such deposit, defeasance and discharge will not result in a breach or
violation of, or constitute a default under, any agreement or
instrument to which we or any Significant Subsidiary is a party or by
which we or any Significant Subsidiary is bound;
(4) in the case of Subordinated Debt Securities, at the time of such
deposit, no default in the payment of all or a portion of principal of
(or premium, if any) or interest on or other obligations in respect of
any of our Senior Indebtedness shall have occurred and be continuing
and no other event of default with respect to any of our Senior
Indebtedness shall have occurred and be continuing permitting after
notice or the lapse of time, or both, the acceleration thereof; and
(5) we have delivered to the Trustee an Opinion of Counsel to the effect
that such deposit shall not cause the Trustee or the trust so created
to be subject to the Investment Company Act of 1940. (Sections 1502
and 1504)
Any additional conditions to the discharge of our obligations with respect
to a series of Debt Securities will be described in an applicable prospectus
supplement.
Defeasance of Certain Covenants. The Indentures provide that, upon our
exercise of our option (if any), we may omit to comply with specified
restrictive covenants as described in an applicable prospectus supplement and
the occurrence of specified Events of Default in "--Events of Default" and any
Events of Default described in an applicable prospectus supplement, will not be
deemed to either be or result in an Event of Default and, if such Debt
Securities are Subordinated Debt Securities, the provisions of the Subordinated
Indenture relating to subordination will cease to be effective, in each case
with respect to such Debt Securities. In order to exercise such option, we must
deposit, in trust for the benefit of the Holders of such Debt Securities, money
or U.S. Government Obligations, or both, which, through the payment of principal
and interest in respect thereof in accordance with their terms, will provide
money in an amount sufficient to pay the principal of and any premium and
interest on such Debt Securities on the respective Stated Maturities in
accordance with the terms of the applicable Indenture and such Debt Securities.
Such covenant defeasance may occur only if we have delivered to the applicable
Trustee an Opinion of Counsel that in effect says that Holders of such Debt
Securities will not recognize gain or loss for federal income tax purposes as a
result of such deposit and defeasance of certain obligations and will be subject
to federal income tax
26
on the same amount, in the same manner and at the same times as would have been
the case if such deposit and defeasance were not to occur and the requirements
set forth in clauses (2), (3), (4) and (5) above are satisfied. If we exercise
this option with respect to any Debt Securities and such Debt Securities were
declared due and payable because of the occurrence of any Event of Default, the
amount of money and U.S. Government Obligations so deposited in trust would be
sufficient to pay amounts due on such Debt Securities at the time of their
respective Stated Maturities but may not be sufficient to pay amounts due on
such Debt Securities upon any acceleration resulting from such Event of Default.
In such case, we would remain liable for such payments. (Sections 1503 and
1504). Any additional conditions to exercising this option with respect to a
series of Debt Securities will be described in an applicable prospectus
supplement.
Notices
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register. (Sections
101 and 106)
Title
We, the Guarantors, the Trustees and any agent of ours may treat the Person
in whose name a Debt Security is registered as the absolute owner of the Debt
Security, whether or not such Debt Security may be overdue, for the purpose of
making payment and for all other purposes. (Section 309)
Governing Law
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York. (Section 112)
DESCRIPTION OF CAPITAL STOCK
Sonic's authorized capital stock consists of (a) 100,000,000 shares of
Class A common stock, $.0l par value, (b) 30,000,000 shares of Class B common
stock, $.0l par value and (c) 3,000,000 shares of preferred stock, $.l0 par
value. As of April 18, 2002, Sonic had 30,363,732 outstanding shares of Class A
common stock, 12,029,375 outstanding shares of Class B common stock and no
outstanding shares of preferred stock.
The following summary description of Sonic's capital stock does not purport
to be complete and is qualified in its entirety by reference to Sonic's Amended
and Restated Certificate of Incorporation (which was filed as an exhibit to
Sonic's Registration Statement on Form S-l (File No. 333-33295)), Sonic's
amendment to its Amended and Restated Certificate of Incorporation (which is
filed as an exhibit to our Annual Report on Form 10-K for the year ended
December 31, 1999), Sonic's Certificate of Designations relating to the Class A
convertible preferred stock (which was filed as an exhibit to Sonic's Quarterly
Report on Form l0-Q for the quarter ended March 31, 1998) and to Delaware law.
Reference is made to such exhibits and to Delaware law for a detailed
description of the provisions thereof summarized below.
Preferred Stock
As of the date of this prospectus, no shares of preferred stock are
outstanding. Our board of directors may authorize the issuance of preferred
stock in one or more series and may determine, with respect to any series, the
designations, powers, preferences and rights of that series, and the
qualifications, limitations and restrictions of that series, including:
. the number of shares of the series, which number may thereafter be
increased or decreased by our board of directors (but not below the
number of shares of that series then outstanding);
. whether dividends, if any, will be cumulative or noncumulative and the
dividend rate of the series;
. the conditions under which and the dates upon which dividends will be
payable, and the relation which those dividends will bear to the
dividends payable on any other class or classes of stock;
27
. the redemption rights and price or prices, if any, for shares of the
series;
. the terms and amounts of any sinking fund provided for the purchase or
redemption of shares of the series;
. the amounts payable on and the preferences of shares of the series, in
the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of our company;
. whether the shares of the series will be convertible into shares of
any other class or series, or any other security, of our company or
any other corporation, and, if so, the specification of that other
class or series or that other security, the conversion price or prices
or rate or rates, that adjustments to that price or those prices or
that rate or those rates, the date or dates as of which those shares
will be convertible and all other terms and conditions upon which the
conversion may be made;
. restrictions on the issuance of shares of the same series or of any
other class or series; and
. the voting rights, if any, of the holders of shares of that series.
The prospectus supplement will specify any terms of any series of preferred
stock offered by it. The description of the terms of the preferred stock to be
set forth in an applicable prospectus supplement will not be complete and will
be subject to and qualified in its entirety by reference to the statement of
resolution relating to the applicable series of preferred stock. The
registration statement of which this prospectus forms a part will include the
statement of resolution as an exhibit or incorporate it by reference.
We believe that the ability of our board of directors to issue one or more
series of preferred stock from our undesignated preferred stock will provide us
with flexibility in structuring possible future financings and acquisitions and
in meeting other corporate needs that might arise. Our authorized shares of
preferred stock will be available for issuance without further action by our
stockholders, unless that action is required by applicable law or the rules of
any stock exchange or automated quotation system on which our securities may be
listed or traded. The New York Stock Exchange currently requires stockholder
approval as a prerequisite to listing shares in several instances, including
where the present or potential issuance of shares could result in an increase in
the number of shares of common stock outstanding, or in the amount of voting
securities outstanding, of at least 20%.
Although our board of directors has no intention at the present time of
doing so, it could issue a series of preferred stock that could, depending on
the terms of that series, impede the completion of a merger, tender offer or
other takeover attempt. Our board of directors may decide to issue those shares
based on its judgment as to the best interests of our company and our
stockholders. Our board of directors, in so acting, could issue preferred stock
having terms that could discourage a potential acquiror from making an
unsolicited and unwanted acquisition attempt through which that acquirer may be
able to change the composition of our board of directors, including a tender
offer or other transaction that some, or a majority, of our stockholders might
believe to be in their best interests or in which stockholders might receive a
premium for their stock over the then current market price of that stock.
Common Stock
Sonic's Class A common stock and Class B common stock are equal in all
respects except for voting rights, conversion rights of the Class B common stock
and as required by law, as discussed more fully below.
Voting Rights; Conversion of Class B Common Stock to Class A Common Stock
The voting powers, preferences and relative rights of the Class A common
stock and the Class B common stock are subject to the following provisions.
Holders of Class A common stock have one vote per share on all matters submitted
to a vote of the stockholders of Sonic. Holders of Class B common stock are
entitled to 10 votes per share except as described below. Holders of all classes
of common stock entitled to vote will vote together as a single class on all
matters presented to the stockholders for their vote or approval except as
otherwise required by Delaware law. There is no cumulative voting with respect
to the election of directors.
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In the event any shares of Class B common stock held by a member of the
Smith Group (as defined below) are transferred outside of the Smith Group, such
shares will automatically be converted into shares of Class A common stock. In
addition, if the total number of shares of common stock held by members of the
Smith Group is less than 15% of the total number of shares of common stock
outstanding, all of the outstanding shares of Class B common stock automatically
will be reclassified as Class A common stock. In any merger, consolidation or
business combination, the consideration to be received per share by holders of
Class A common stock must be identical to that received by holders of Class B
common stock, except that in any such transaction in which shares of common
stock are distributed, such shares may differ as to voting rights to the extent
that voting rights now differ between our classes of common stock.
Notwithstanding the foregoing, the holders of Class A common stock and
Class B common stock vote as a single class, with each share of each Class
entitled to one vote per share, with respect to any transaction proposed or
approved by the board of directors of Sonic or proposed by or on behalf of
holders of the Class B common stock or as to which any member of the Smith Group
or any affiliate thereof has a material financial interest other than as a then
existing stockholder of Sonic constituting a
. "going private" transaction;
. sale or other disposition of all or substantially all of Sonic's
asset; or
. sale or transfer that would cause the nature of Sonic's business to be
no longer primarily oriented toward automobile dealership operations
and related activities, or merger or consolidation of Sonic in which
the holders of the common stock will own less than 50% of the common
stock following such transaction.
A "going private" transaction is defined as any "Rule l3e-3 Transaction,"
as such term is defined in Rule l3e-3 promulgated under the Securities Exchange
Act of 1934. An "affiliate" is defined as (a) any individual or entity who or
that, directly or indirectly, controls, is controlled by, or is under common
control with any member of the Smith Group, (b) any corporation or organization
(other than Sonic or a majority-owned subsidiary of Sonic) of which any member
of the Smith Group is an officer, partner or is, directly or indirectly, the
beneficial owner of 10% or more of any Class of voting securities, or in which
any member of the Smith Group has a substantial beneficial interest, (c) a
voting trust or similar arrangement pursuant to which any member of the Smith
Group generally controls the vote of the shares of common stock held by or
subject to such trust or arrangement, (d) any other trust or estate in which any
member of the Smith Group has a substantial beneficial interest or as to which
any member of the Smith Group serves as trustee or in a similar fiduciary
capacity or (e) any relative or spouse of any member of the Smith Group or any
relative of such spouse, who has the same residence as any member of the Smith
Group.
As used in this prospectus, the term the "Smith Group" consists of the
following persons:
. Mr. O. Bruton Smith and his guardian, conservator, committee, or
attorney-in-fact;
. William S. Egan and his guardian, conservator, committee, or
attorney-in-fact;
. each lineal descendant of Messrs. Smith and Egan (a "Descendant") and
their respective guardians, conservators, committees or
attorneys-in-fact; and
. each "Family Controlled Entity."
The term "Family Controlled Entity" means (a) any not-for-profit
corporation if at least 80% of its board of directors is composed of Mr. Smith,
Mr. Egan and/or Descendants; (b) any other corporation if at least 80% of the
value of its outstanding equity is owned by members of the Smith Group; (c) any
partnership if at least 80% of the value of the partnership interests are owned
by members of the Smith Group; and (d) any limited liability or similar company
if at least 80% of the value of the company is owned by members of the Smith
Group.
Under Sonic's charter and Delaware law, the holders of Class A common stock
and/or Class B common stock are each entitled to vote as a separate class, as
applicable, with respect to any amendment to Sonic's Certificate that would
increase or decrease the aggregate number of authorized shares of such class,
increase or
29
decrease the par value of the shares of such class, or modify or change the
powers, preferences or special rights of the shares of such Class so as to
affect such Class adversely.
Dividends
Holders of the Class A common stock and the Class B common stock are
entitled to receive ratably such dividends, if any, as are declared by our Board
of Directors out of funds legally available for that purpose. An additional
requirement is that dividends paid in shares of Class A common stock shall be
paid only to holders of Class A common stock, and dividends paid in shares of
Class B common stock shall be paid only to holders of Class B common stock.
Sonic's charter provides that if there is any dividend, subdivision, combination
or reclassification of either Class of common stock, a proportionate dividend,
subdivision, combination or reclassification of the other Class of common stock
must be made at the same time.
Other Rights
Stockholders of Sonic have no preemptive or other rights to subscribe for
additional shares. In the event of the liquidation, dissolution or winding up of
Sonic, holders of Class A common stock and Class B common stock are entitled to
share ratably in all assets available for distribution to holders of common
stock after payment in full of creditors. No shares of any Class of common stock
are subject to a redemption or a sinking fund.
Delaware Law, Certain Charter and Bylaw Provisions
Certain provisions of Delaware Law and of Sonic's charter and bylaws,
summarized in the following paragraphs, may be considered to have an
antitakeover effect and may delay, deter or prevent a tender offer, proxy
contest or other takeover attempt that a stockholder might consider to be in
such stockholder's best interest, including such an attempt as might result in
payment of a premium over the market price for shares held by stockholders.
Delaware Antitakeover Law. Sonic is subject to the provisions of Delaware
law, including Section 203. In general, Section 203 prohibits a public Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which such person became an interested stockholder unless: (a) prior to such
date, the Board of Directors approved either the business combination or the
transaction, which resulted in the stockholder becoming an interested
stockholder; or (b) upon becoming an interested stockholder, the stockholder
then owned at least 85% of the voting stock, as defined in Section 203; or (c)
subsequent to such date, the business combination is approved by both the Board
of Directors and by holders of at least 66 2/3% of the corporation's outstanding
voting stock, excluding shares owned by the interested stockholder. For these
purposes, the term "business combination" includes mergers, asset sales and
other similar transactions with an "interested stockholder." An "interested
stockholder" is a person who, together with affiliates and associates, owns (or,
within the prior three years, did own) 15% or more of the corporation's voting
stock. Although Section 203 permits a corporation to elect not to be governed by
its provisions, Sonic to date has not made this election.
Classified Board of Directors. Sonic's bylaws provide for the Board of
Directors to be divided into three classes of directors serving staggered
three-year terms. As a result, approximately one-third of the Board of Directors
will be elected each year. Classification of the Board of Directors expands the
time required to change the composition of a majority of directors and may tend
to discourage a takeover bid for Sonic. Moreover, under Delaware law, in the
case of a corporation having a classified board of directors, the stockholders
may remove a director only for cause. This provision, when coupled with the
provision of the bylaws authorizing only the board of directors to fill vacant
directorships, will preclude stockholders of Sonic from removing incumbent
directors without cause, simultaneously gaining control of the Board of
Directors by filling the vacancies with their own nominees.
Special Meetings of Stockholders. Sonic's bylaws provide that special
meetings of stockholders may be called only by the Chairman or by the Secretary
or any Assistant Secretary at the request in writing of a majority of Sonic's
Board of Directors. Sonic's bylaws also provide that no action required to be
taken or that may be taken at any annual or special meeting of stockholders may
be taken without a meeting; the powers of stockholders to consent in writing,
without a meeting, to the taking of any action is specifically denied. These
provisions may make it more difficult for stockholders to take action opposed by
the Board of Directors.
30
Advance Notice Requirements for Stockholder Proposals and Director
Nominations. Sonic's bylaws provide that stockholders seeking to bring business
before an annual meeting of stockholders, or to nominate candidates for election
as directors at an annual or a special meeting of stockholders, must provide
timely notice thereof in writing. To be timely, a stockholder's notice must be
delivered to, or mailed and received at, the principal executive office of
Sonic, (a) in the case of an annual meeting that is called for a date that is
within 30 days before or after the anniversary date of the immediately preceding
annual meeting of stockholders, not less than 60 days nor more than 90 days
prior to such anniversary date, and, (b) in the case of an annual meeting that
is called for a date that is not within 30 days before or after the anniversary
date of the immediately preceding annual meeting, or in the case of a special
meeting of stockholders called for the purpose of electing directors, not later
than the close of business on the tenth day following the day on which notice of
the date of the meeting was mailed or public disclosure of the date of the
meeting was made, whichever occurs first. Our bylaws also specify certain
requirements for a stockholder's notice to be in proper written form. These
provisions may preclude some stockholders from bringing matters before the
stockholders at an annual or special meeting or from making nominations for
directors at an annual or special meeting.
Conflict of Interest Procedures. Sonic's charter contains provisions
providing that transactions between Sonic and its affiliates must be no less
favorable to Sonic than would be available in transactions involving arms'
length dealing with unrelated third parties. Moreover, any such transaction
involving aggregate payments in excess of $500,000 must be approved by a
majority of Sonic's directors and a majority of Sonic's independent directors.
Otherwise, Sonic must obtain an opinion as to the financial fairness of the
transactions to be issued by an investment banking or appraisal firm of national
standing.
Limitation of Liability of Officers and Directors
Delaware law authorizes corporations to limit or eliminate the personal
liability of officers and directors to corporations and their stockholders for
monetary damages for breach of officers' and directors' fiduciary duty of care.
The duty of care requires that, when acting on behalf of the corporation,
officers and directors must exercise an informed business judgment based on all
material information reasonably available to them. Absent the limitations
authorized by Delaware law, officers and directors are accountable to
corporations and their stockholders for monetary damages for conduct
constituting gross negligence in the exercise of their duty of care. Delaware
law enables corporations to limit available relief to equitable remedies such as
injunction or rescission.
Our certificate of incorporation limits the liability of our officers and
directors to us and our stockholders to the fullest extent permitted by Delaware
law. Specifically, our officers and directors will not be personally liable for
monetary damages for breach of an officer's or director's fiduciary duty in such
capacity, except for liability
. for any breach of the officer's or director's duty of loyalty to us or
our stockholders,
. for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
. for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation law, or
. for any transaction from which the officer or director derived an
improper personal benefit.
The inclusion of this provision in our certificate of incorporation may
reduce the likelihood of derivative litigation against our officers and
directors, and may discourage or deter stockholders or management from bringing
a lawsuit against our officers and directors for breach of their duty of care,
even though such an action, if successful, might have otherwise benefited us and
our stockholders.
Both our certificate of incorporation and bylaws provide indemnification to
our officers and directors and certain other persons with respect to certain
matters to the maximum extent allowed by Delaware law as it exists now or may
hereafter be amended. These provisions do not alter the liability of officers
and directors under federal securities laws and do not affect the right to sue
(nor to recover monetary damages) under federal securities laws for violations
thereof.
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Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling Sonic pursuant to
the foregoing provisions, Sonic has been informed that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
Transfer Agent and Registrar
Our transfer agent and registrar of our common stock is Wachovia Bank, N.A.
DESCRIPTION OF WARRANTS
We may issue Class A common stock warrants for the purchase of our Class A
common stock. Class A common stock warrants are referred to in this prospectus
as "Warrants." Warrants may be issued independently or together with any Class A
common stock, preferred stock or Debt Securities offered by any prospectus
supplement and may be attached to or separate from the Class A common stock,
preferred stock or Debt Securities.
Each series of Warrants will be issued under a separate warrant agreement
to be entered into between us and a bank or trust company, as warrant agent. The
warrant agent will act solely as our agent in connection with warrant
certificates evidencing the Warrants. The warrant agent will not assume any
obligation or relationship of agency or trust for or with any holders of warrant
certificates or beneficial owners of Warrants.
The following description summarizes the general terms of the form of
warrant agreements and warrant certificates, which have been filed as exhibits
to the registration statement of which this prospectus forms a part. You should
read the warrant agreement and warrant certificates for provisions summarized
below and others that may be important to you.
General
The prospectus supplement relating to a particular series of warrants will
include the specific forms of the series, including, where applicable, the
following:
. the title of the Warrants;
. the offering price;
. the currency or currency units in which the purchase price for offered
Warrants may be payable;
. the number of shares of Class A common stock purchasable upon the
exercise of a Warrant;
. the redemption or call provisions, if any, applicable to the Warrants:
. the date on and after which the Warrants and the related shares of
Class A common stock or preferred stock or the related Debt Securities
will be separately transferable;
. the price and currency or currency units at which the shares of Class
A common stock, as the case may be, may be purchased upon exercise;
. the date on which the right to exercise the Warrants begins and the
date on which the right to exercise expires (the "expiration date");
. the minimum and maximum amount of Warrants that may be exercised at
any one time;
. the antidilution provisions of the Warrants, if any;
. United States federal income tax consequences applicable to that
Warrant;
. whether the Warrants represented by the warrant certificates will be
issued in registered or bearer form;
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. procedures for cashless exercise, if any, for the Warrants; and
. any other terms of the Warrants, including terms, procedures and
limitations relating to exchange and exercise of the Warrants.
Transfers and Exchange
Warrant certificates may be exchanged for new warrant certificates of
different denominations, may, if in registered form, be presented for
registration of transfer, and may be exercised at the corporate trust office of
the warrant agent. We may specify other offices where these activities may be
conducted in an applicable prospectus supplement. Before the exercise of any
Warrants, holders of the Warrants will not have any of the rights of holders of
Class A common stock, as applicable, purchasable upon exercise. This means
holders of Warrants will not have the right to receive payments of dividends, if
any, on the Class A common stock purchasable upon such exercise or to exercise
any applicable right to vote.
Exercise
Each Warrant will entitle its holder to purchase the number of shares of
Class A common stock at the exercise price that is set forth in, or calculable
from, the applicable prospectus supplement. Holders will be able to exercise
Warrants at any time up to the time on the expiration date set forth in the
applicable prospectus supplement. After that time, or a later date to which such
expiration date may be extended by us, unexercised Warrants will become void.
Holders will be able to exercise Warrants by delivering to the warrant
agent at its corporate trust office warrant certificates properly completed and
paying the exercise price. As soon as practicable after such delivery, we will
issue and deliver to the indicated holder the shares of Class A common stock
issuable upon that exercise. If fewer than all of the Warrants represented by a
warrant certificate are exercised, we will issue a new warrant certificate for
the remaining number of Warrants.
CERTAIN MANUFACTURER RESTRICTIONS
Under agreements between Sonic and certain manufacturers, Sonic has agreed
to provide the statement provided below:
No automobile manufacturer or distributor has been involved, directly
or indirectly, in the preparation of this prospectus or in the offering
being made hereby. No automobile manufacturer or distributor has been
authorized to make any statements or representations in connection with the
offering, and no automobile manufacturer or distributor has any
responsibility for the accuracy or completeness of this prospectus or for
the offering.
Under Sonic's Dealer Agreement with General Motors ("GM"), Sonic has
agreed, among other things, to disclose the following provisions:
Sonic will deliver to GM copies of all Schedules l3D and l3G, and all
amendments thereto and terminations thereof, received by Sonic, within five
days of receipt of such Schedules. If Sonic is aware of any ownership of
its stock that should have been reported to it on Schedule l3D but that is
not reported in a timely manner, it will promptly give GM written notice of
such ownership, with any relevant information about the owner that Sonic
possesses.
If Sonic, through its board of directors or through stockholder
action, proposes or if any person, entity or group sends Sonic a Schedule
l3D, or any amendments thereto, disclosing (a) an agreement to acquire or
the acquisition of aggregate ownership of more than 20% of the voting stock
of Sonic and (b) Sonic, through its board of directors or through
stockholder action, proposes or if any plans or proposals which relate to
or would result in the following: (i) the acquisition by any person of more
than 20% of the voting stock of Sonic other than for the purposes of
ordinary passive investment; (ii) an extraordinary corporate transaction,
such as a material merger, reorganization or liquidation, involving Sonic
or a sale or
33
transfer of a material amount of assets of Sonic and its subsidiaries;
(iii) any change which, together with any changes made to the board of
directors within the preceding year, would result in a change in control of
the then current board of Sonic; or (iv) in the case of an entity that
produces motor vehicles or controls or is controlled by or is under common
control with an entity that either produces motor vehicles or is a motor
vehicle franchiser, the acquisition by any person, entity or group of more
than 20% of the voting stock of Sonic and any proposal by any such person,
entity or group, through the Sonic board of directors or stockholder s
action, to change the board of directors of Sonic, then, if such actions in
GM's business judgment could have a material or adverse effect on its image
or reputation in the GM dealerships operated by Sonic or be materially
incompatible with GM's interests (and upon notice of GM's reasons for such
judgment), Sonic has agreed that it will take one of the remedial actions
set forth in the next paragraph within 90 days of receiving such Schedule
l3D or such amendment.
If Sonic is obligated under the previous paragraph to take remedial
action, it will (a) transfer to GM or its designee, and GM or its designee
will acquire the assets, properties or business associated with any GM
dealership operated by Sonic at fair market value as determined in
accordance with GM's dealership agreement with Sonic, or (b) provide
evidence to GM that such person, entity or group no longer has such
threshold level of ownership interest in Sonic or that the actions
described in clause (b) of the previous paragraph will not occur.
Should Sonic or its GM franchisee subsidiary enter into an agreement
to transfer the assets of the GM franchisee subsidiary to a third party,
the right of first refusal described in the GM dealer agreement shall apply
to any such transfer.
PLAN OF DISTRIBUTION
We may sell securities pursuant to this prospectus (a) through underwriters
or dealers; (b) through agents; or (c) directly to one or more purchasers,
including existing stockholders in a rights offering.
By Underwriters
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account. The underwriters may resell
the securities in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time of
sale. The obligations of the underwriters to purchase the securities will be
subject to certain conditions. Unless indicated in the prospectus supplement the
underwriters must purchase all the securities of the series offered by a
prospectus supplement if any of the securities are purchased. Any initial public
offering price and any discounts or concessions allowed or re-allowed or paid to
dealers may be changed from time to time. The underwriters may, from time to
time, effect transactions that stabilize or maintain the market price of the
securities at a level above that which might otherwise prevail in the open
market, such stabilizing activities, if commenced, may be discontinued at any
time.
By Agents
Securities may also be sold through agents. Unless indicated in the
prospectus supplement, any such agent is acting on a best efforts basis for the
period of its appointment.
Direct Sales; Rights Offerings
Securities may also be sold directly. In this case, no underwriters or
agents would be involved. We may sell offered securities upon the exercise of
rights that may be issued to our security holders.
Delayed Delivery Arrangements
We may authorize agents, underwriters or dealers to solicit offers by
certain institutional investors to purchase offered securities providing for
payment and delivery on a future date specified in the prospectus supplement.
Institutional investors to which such offers may be made, when authorized,
include commercial and savings banks, insurance companies, pension funds,
investment companies, education and charitable institutions and other
institutions. The obligations of any such purchasers under such delayed delivery
and payment arrangements
34
will be subject to the condition that the purchase of the offered securities
will not at the time of delivery be prohibited under applicable law. The
underwriters and such agents will not have any responsibility with respect to
the validity or performance of such contracts.
General Information
Underwriters, brokers, dealers and agents that participate in the
distribution of offered securities may be underwriters as defined in the
Securities Act, and any discounts, concessions or commissions received by them
from us and any profit on the resale of the offered securities by them may be
treated as underwriting discounts and commissions under the Securities Act. Any
underwriters or agents will be identified and their compensation described in a
prospectus supplement. Sonic cannot presently estimate the amount of such
compensation.
Underwriters, brokers, dealers and agents may engage in transactions with,
or perform services for us or our subsidiaries in the ordinary course of their
businesses. In order to comply with certain states' securities laws, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers.
LEGAL MATTERS
The validity of the securities issuable under this prospectus will be
passed upon for Sonic by Moore & Van Allen PLLC, Charlotte, North Carolina.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from Sonic Automotive, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 2001 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated by reference, and
have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Except for the SEC Registration Fee, the following table sets forth the
estimated expenses in connection with the distribution of the securities covered
by this Registration Statement. All of the expenses will be borne by Sonic
except as otherwise indicated.
SEC Registration fee ................................................ $ 27,600
Fees and expenses of accountants .................................... $ 20,000
Fees and expenses of legal counsel .................................. $ 25,000
Fees and expenses of Trustee ........................................ $ 25,000
Printing and engraving expenses ..................................... $ 2,500
Miscellaneous ....................................................... $ 10,900
Total ............................................................... $111,000
========
Item 15. Indemnification of Directors and Officers.
Sonic's Bylaws effectively provide that Sonic shall, to the full extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time ("Section 145"), indemnify all persons
whom it may indemnify pursuant thereto. In addition, Sonic's Certificate of
Incorporation eliminates personal liability of its directors to the full extent
permitted by Section 102(b)(7) of the General Corporation Law of the State of
Delaware, as amended from time to time ("Section 102(b)(7)").
Section 145 permits a corporation to indemnify its directors and officers
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlements actually and reasonably incurred by them in connection with any
actions, suit or proceeding brought by a third party if such directors or
officers acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, indemnification may be made only for expenses
actually and reasonably incurred by directors and officers in connection with
the defense or settlement of an action or suit and only with respect to a matter
as to which they shall have acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interest of the corporation, except
that no indemnification shall be made if such person shall have been adjudged
liable to the corporation, unless and only to the extent that the court in which
the action or suit was brought shall determine upon application that the
defendant officers or directors are reasonably entitled to indemnity for such
expenses despite such adjudication of liability.
Section 102(b)(7) provides that a corporation may eliminate or limit the
personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for willful or negligent conduct
in paying dividends or repurchasing stock out of other than lawfully available
funds or (iv) for any transaction from which the director derived an improper
personal benefit. No such provision shall eliminate or limit the liability of a
director for any act or omission occurring prior to the date when such provision
becomes effective. Sonic maintains insurance against liabilities under the
Securities Act for the benefit of its officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
II-1
Item 16. Exhibits.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of Sonic under the Securities Act or the Exchange Act as indicated in
parenthesis:
Exhibit No. Description
1.1 (1) Form of Underwriting Agreement (for equity securities).
1.2 (1) Form of Underwriting Agreement (for debt securities).
1.3 (1) Form of Selling Agency Agreement.
2.1 (2) Asset Purchase Agreement dated as of January 11, 2002 by and
among Sonic and The Donald E. Massey Revocable Trust (the
"Trust") (incorporated by reference to Exhibit 2.1 to Sonic's
Current Report on Form 8-K dated April 15, 2002 (the "Form
8-K")).
2.2 (2) Stock Purchase Agreement dated as of January 11, 2002 by and
among Sonic and the Trust (incorporated by reference to Exhibit
2.2 to the Form 8-K).
2.3 (3) Stock Purchase Agreement dated as of January 11, 2002 by and
among Sonic and the Trust (incorporated by reference to Exhibit
2.3 to the Form 8-K).
4.l Amended and Restated Certificate of Incorporation of Sonic
(incorporated by reference to Exhibit 3.1 to Sonic's Registration
Statement on Form S-1 (Reg. No. 333-33295) (the "Form S-1").
4.2 Certificate of Amendment to Sonic's Amended and Restated
Certificate of Incorporation effective June 18, 1999
(incorporated by reference to Exhibit 3.2 to Sonic's Annual
Report on Form 10-K for the year ended December 31, 1999).
4.3 Bylaws of Sonic (incorporated by reference to Exhibit 3.4 to
Sonic's Annual Report on Form 10-K for the year ended December
31, 2001).
4.4 Specimen Certificate representing Class A common stock
(incorporated by reference to Exhibit 4.1 to the Form S-1).
4.5 Form of Senior Indenture (incorporated by reference to Exhibit
4.6 to Sonic's Registration Statement on Form S-3 (Reg. No.
333-50430 and Reg. Nos. 333-50430-01 through 333-50430-G7)(the
"Form S-3")).
4.6 Form of Subordinated Indenture (incorporated by reference to
Exhibit 4.7 to the Form S-3).
4.7 Form of Senior Debt Securities (incorporated by reference to
Exhibit 4.8 to the Form S-3).
4.8 Form of Subordinated Debt Securities (incorporated by reference
to Exhibit 4.9 to the Form S-3).
5.1 Opinion of Moore & Van Allen PLLC regarding the legality of the
securities being registered.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP.
23.3 Consent of Moore & Van Allen PLLC (included in Exhibit 5.1).
24.l Powers of Attorney (included in Signature Pages of Registration
Statement).
25.l (3) Form T-1 Statement of Eligibility and Qualification Under Trust
Indenture Act of 1939 of Trustee.
- ----------
(1) To be filed as an exhibit to a Current Report on Form 8-K filed by Sonic,
from time to time as an underwritten issuance of such securities is
contemplated.
(2) Certain portions of this exhibit have been omitted pursuant to a request
for confidential treatment filed with the Commission.
(3) To be filed in accordance with the requirements of Section 305(b)(2) of the
Trust Indenture Act and Rule 5b-3 promulgated thereunder.
Item 17. Undertakings
(a) The registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate
II-2
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in the
registration statement;
provided, however, that the undertakings set forth in paragraphs
--------- -------
(a)(1)(i) and (a)(1)(ii) above do not apply if the registration
statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with
or furnished to the Securities and Exchange Commission by Sonic
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The registrants hereby undertake that, for purposes of determining any
liability under the Securities Act of 1933, each filing of Sonic's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by a registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of their counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(d) The registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of a registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to
Rule 424(b) (1) or (4) or 497(h) under the Securities Act of 1933
shall be deemed to be part of this registration statement as of the
time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(e) The registrants hereby undertake to file an application for the purpose of
determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act ("TIA") in accordance with the rules
and regulations prescribed by the Commission under Section 305(6) (2) of
the TIA.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE, INC.
By: /s/ Theodore M. Wright
-------------------------------------------------------
Theodore M. Wright
Chief Financial Officer, Vice President and Treasurer
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chairman, Chief Executive Officer April 19, 2002
- -------------------------- and Director (principal executive
O. Bruton Smith officer)
Vice Chairman and Director April , 2002
- -------------------------- --
Thomas A. Price
/s/ B. Scott Smith President, Chief Operating Officer April 19, 2002
- -------------------------- and Director
B. Scott Smith
/s/ Theodore M. Wright Chief Financial Officer (principal April 19, 2002
- -------------------------- financial and accounting officer),
Theodore M. Wright Vice President, Treasurer and
Director
/s/ Jeffrey C. Rachor Executive Vice President of Retail April 19, 2002
- -------------------------- Operations and Director
Jeffrey C. Rachor
II-4
/s/ William R. Brooks Director April 19, 2002
- --------------------------
William R. Brooks
/s/ William P. Benton Director April 19, 2002
- --------------------------
William P. Benton
Director April , 2002
- -------------------------- --
William I. Belk
/s/ H. Robert Heller Director April 17, 2002
- --------------------------
H. Robert Heller
Director April , 2002
- -------------------------- --
Maryann N. Keller
/s/ Robert L. Rewey Director April 19, 2002
- --------------------------
Robert L. Rewey
Director April , 2002
- -------------------------- --
Thomas P. Capo
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
ARNGAR, INC.
AUTOBAHN, INC.
AVALON FORD, INC.
CAPITOL CHEVROLET AND IMPORTS, INC.
COBB PONTIAC CADILLAC, INC.
FA SERVICE CORPORATION
FAA AUTO FACTORY, INC.
FAA BEVERLY HILLS, INC.
FAA CAPITOL F, INC.
FAA CONCORD H, INC.
FAA CONCORD N, INC.
FAA DUBLIN N, INC.
FAA DUBLIN VWD, INC.
FAA HOLDING CORP.
FAA MARIN D, INC.
FAA MARIN F, INC.
FAA MARIN LR, INC.
FAA POWAY D, INC.
FAA POWAY G, INC.
FAA POWAY H, INC.
FAA SANTA MONICA V, INC.
FAA SERRAMONTE H, INC.
FAA SERRAMONTE, INC.
FAA STEVENS CREEK, INC.
FAA TORRANCE CPJ, INC.
FORT MILL FORD, INC.
FRANCISCAN MOTORS, INC.
FRONTIER OLDSMOBILE-CADILLAC, INC.
HMC FINANCE ALABAMA, INC.
KRAMER MOTORS INCORPORATED
L DEALERSHIP GROUP, INC.
MARCUS DAVID CORPORATION
RIVERSIDE NISSAN, INC.
ROYAL MOTOR COMPANY, INC.
SANTA CLARA IMPORTED CARS, INC.
SMART NISSAN, INC.
SONIC AUTOMOTIVE - 1400 AUTOMALL DRIVE,
COLUMBUS, INC.
SONIC AUTOMOTIVE - 1455 AUTOMALL DRIVE,
COLUMBUS, INC.
SONIC AUTOMOTIVE - 1495 AUTOMALL DRIVE,
COLUMBUS, INC.
SONIC AUTOMOTIVE - 1500 AUTOMALL DRIVE,
COLUMBUS, INC.
SONIC AUTOMOTIVE - 3700 WEST BROAD STREET,
COLUMBUS, INC.
SONIC AUTOMOTIVE - 4000 WEST BROAD STREET,
COLUMBUS, INC.
SONIC AUTOMOTIVE 2424 LAURENS RD.,
GREENVILLE, INC.
SONIC AUTOMOTIVE 2752 LAURENS RD.,
GREENVILLE, INC.
II-6
Sonic - Bethany H, Inc.
SONIC - BUENA PARK H, INC.
SONIC - CAPITAL CHEVROLET, INC.
SONIC - CARSON F, INC.
SONIC - CARSON LM, INC.
SONIC - CLASSIC DODGE, INC.
Sonic - COAST CADILLAC, INC.
SONIC - DOWNEY CADILLAC, INC.
SONIC - ENGLEWOOD M, INC.
SONIC ESTORE, INC.
SONIC - FORT MILL CHRYSLER JEEP, INC.
SONIC - FORT MILL DODGE, INC.
SONIC - GLOVER, INC.
SONIC - HARBOR CITY H, INC.
SONIC - LONE TREE CADILLAC, INC.
SONIC - MANHATTAN FAIRFAX, INC.
SONIC - MANHATTAN WALDORF, INC.
SONIC - MASSEY CHEVROLET, INC.
SONIC - MASSEY PONTIAC BUICK GMC, INC.
SONIC - MONTGOMERY FLM, INC.
SONIC - NEWSOME CHEVROLET WORLD, INC.
SONIC - NEWSOME OF FLORENCE, INC.
SONIC - NORTH CHARLESTON, INC.
SONIC - NORTH CHARLESTON DODGE, INC.
SONIC - RIVERSIDE, INC.
SONIC - RIVERSIDE AUTO FACTORY, INC.
SONIC - ROCKVILLE IMPORTS, INC.
SONIC - ROCKVILLE MOTORS, INC.
SONIC - STEVENS CREEK B, INC.
SONIC - WEST COVINA T, INC.
SONIC - WEST RENO CHEVROLET, INC.
SONIC - WILLIAMS BUICK, INC.
SONIC - WILLIAMS CADILLAC, INC.
SONIC - WILLIAMS IMPORTS, INC.
SPEEDWAY CHEVROLET, INC.
STEVENS CREEK CADILLAC, INC.
TOWN AND COUNTRY FORD, INCORPORATED
TRANSCAR LEASING, INC.
VILLAGE IMPORTED CARS, INC.
WINDWARD, INC.
By: /s/ Theodore M. Wright
---------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his true and lawful attorneys-in-fact and agents, to do any
and all acts and things for him, and in his name, place and stead, to execute
and sign any and all pre-effective and post-effective amendments to such
Registration Statement and any additional registration statement pursuant to
Rule 462(b) under the Securities Act of 1933, and file the same, together with
all exhibits and schedules thereto and all other documents in connection
therewith, with the Commission and with such state securities authorities as may
be appropriate, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform each and every act and
II-7
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith President and Director (principal April 19, 2002
- -------------------------- executive officer)
O. Bruton Smith
/s/ B. Scott Smith Vice President and Director April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
FIRSTAMERICA AUTOMOTIVE, INC.
By: /s/ Theodore M. Wright
--------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chairman, Chief Executive Officer April 19, 2002
- -------------------------- and Director (principal executive
O. Bruton Smith officer)
/s/ B. Scott Smith President and Director April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
FREEDOM FORD, INC.
SONIC AUTOMOTIVE - BONDESEN, INC.
SONIC AUTOMOTIVE - CLEARWATER, INC.
SONIC AUTOMOTIVE COLLISION CENTER OF
CLEARWATER, INC.
SONIC AUTOMOTIVE - 1307 N. DIXIE HWY., NSB,
INC.
SONIC AUTOMOTIVE - 1720 MASON AVE., DB, INC.
SONIC AUTOMOTIVE - 1919 N. DIXIE HWY., NSB,
INC.
SONIC AUTOMOTIVE - 21699 U.S. HWY 19 N., INC.
SONIC AUTOMOTIVE - 241 RIDGEWOOD AVE., HH,
INC.
SONIC AUTOMOTIVE - 6008 N. DALE MABRY, FL,
INC.
SONIC - FM, INC.
SONIC - FM VW, INC.
SONIC - FREELAND, INC.
SONIC - LLOYD NISSAN, INC.
SONIC - LLOYD PONTIAC - CADILLAC, INC.
SONIC - NORTH CADILLAC, INC.
SONIC - SANFORD CADILLAC, INC.
SONIC - SHOTTENKIRK, INC.
By: /s/ Theodore M. Wright
-------------------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
II-10
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Director April 19, 2002
- --------------------------
O. Bruton Smith
/s/ B. Scott Smith President and Director (principal April 19, 2002
- -------------------------- executive officer)
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE - 9103 E. INDEPENDENCE, NC,
LLC
SONIC DEVELOPMENT, LLC
SONIC -LAKE NORMAN CHRYSLER JEEP, LLC
SONIC - LAKE NORMAN DODGE, LLC
SONIC - WILLIAMS MOTORS, LLC
SRE HOLDING, LLC
SRE ALABAMA-2, LLC
SRE ALABAMA-3, LLC
SREALESTATE ARIZONA-1, LLC
SREALESTATE ARIZONA-2, LLC
SREALESTATE ARIZONA-3, LLC
SREALESTATE ARIZONA-4, LLC
SRE SOUTH CAROLINA-2, LLC
SRE SOUTH CAROLINA-3, LC
SRE SOUTH CAROLINA-4, LLC
SRE TENNESSEE-1, LLC
SRE TENNESSEE-2, LLC
SRE TENNESSEE-3, LLC
SRE VIRGINIA-1, LLC
By: /s/ Theodore M. Wright
---------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned managers and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
II-12
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith President and Manager (principal April 19, 2002
- -------------------------- executive officer)
O. Bruton Smith
/s/ B. Scott Smith Vice President and Manager April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Manager
Theodore M. Wright
II-13
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE - 1720 MASON AVE., DB, LLC
SONIC - FM AUTOMOTIVE, LLC
SRE FLORIDA-1, LLC
SRE FLORIDA-2, LLC
SRE FLORIDA-3, LLC
SRE NEVADA-1, LLC
SRE NEVADA-2, LLC
SRE NEVADA-3, LLC
SRE NEVADA-4, LLC
SRE NEVADA-5, LLC
By: /s/ Theodore M. Wright
---------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned managers and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Manager April 19, 2002
- --------------------------
O. Bruton Smith
/s/ B. Scott Smith President and Manager (principal April 19, 2002
- -------------------------- executive officer)
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Manager
Theodore M. Wright
II-14
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE OF GEORGIA, INC.
On behalf of itself and the following entities as
General Partner:
SONIC - GLOBAL IMPORTS, L.P.
SONIC PEACHTREE INDUSTRIAL BLVD.,
L.P.
SRE GEORGIA-1, L.P.
SRE GEORGIA-2, L.P.
SRE GEORGIA-3, L.P.
By: /s/ Theodore M. Wright
----------------------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith President (principal executive April 19, 2002
- -------------------------- officer)
O. Bruton Smith
/s/ B. Scott Smith Vice President and Director April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
/s/ Peggy McFarland Assistant Secretary, Assistant April 19, 2002
- -------------------------- Treasurer and Director
Peggy McFarland
II-15
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC OF TEXAS, INC.
On behalf of itself and the following entities as
General Partner:
PHILPOTT MOTORS, LTD.
SONIC AUTOMOTIVE OF TEXAS, L.P.
SONIC AUTOMOTIVE - 3401 N. MAIN, TX, L.P.
SONIC AUTOMOTIVE - 4701 I-10 EAST, TX, L.P.
SONIC AUTOMOTIVE - 5221 I-10 EAST, TX, L.P.
SONIC - CADILLAC D, L.P.
SONIC - CAMP FORD, L.P.
SONIC - CARROLLTON V, L.P.
SONIC - FORT WORTH T, L.P.
SONIC - HOUSTON V, L.P.
SONIC - LUTE RILEY, L.P.
SONIC - MASSEY CADILLAC, L.P.
SONIC - READING, L.P.
SONIC - RICHARDSON F, L.P.
SONIC - SAM WHITE NISSAN, L.P.
SONIC - UNIVERSITY PARK A, L.P.
SRE TEXAS-1, L.P.
SRE TEXAS-2, L.P.
SRE TEXAS-3, L.P.
SRE TEXAS-4, L.P.
SRE TEXAS-5, L.P.
SRE TEXAS-6, L.P.
SRE TEXAS-7, L.P.
SRE TEXAS-8, L.P.
By: /s/ Theodore M. Wright
----------------------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
II-16
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith President (principal executive April 19, 2002
- -------------------------- officer)
O. Bruton Smith
/s/ B. Scott Smith Vice President and Director April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
/s/ Roger A. Elswick Assistant Secretary, Assistant April 19, 2002
- -------------------------- Treasurer and Director
Roger A. Elswick
II-17
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC - VOLVO LV, LLC
By: /s/ Theodore M. Wright
----------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned managers and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chief Executive Officer (principal April 19, 2002
- -------------------------- executive officer)
O. Bruton Smith
/s/ B. Scott Smith President and Manager April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Manager
Theodore M. Wright
/s/ Jeffrey C. Rachor Manager April 19, 2002
- --------------------------
Jeffrey C. Rachor
II-18
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC - INTEGRITY DODGE LV, LLC
SONIC - LAS VEGAS C EAST, LLC
SONIC - LAS VEGAS C WEST, LLC
By: /s/ Theodore M. Wright
-----------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned managers and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chief Executive Officer (principal April 19, 2002
- -------------------------- executive officer)
O. Bruton Smith
/s/ B. Scott Smith President and Manager April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Manager
Theodore M. Wright
/s/ Jeffrey C. Rachor Manager April 19, 2002
- --------------------------
Jeffrey C. Rachor
II-19
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE OF TENNESSEE, INC.
By: /s/ Theodore M. Wright
--------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ B. Scott Smith President, Chief Executive Officer April 19, 2002
- -------------------------- and Director (principal executive
B. Scott Smith officer)
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Director
Theodore M. Wright
/s/ Jeffrey C. Rachor Director April 19, 2002
- --------------------------
Jeffrey C. Rachor
II-20
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE - 3741 S. NOVA RD., PO, INC.
By: /s/ Theodore M. Wright
-------------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ B. Scott Smith President and Director (principal April 19, 2002
- -------------------------- executive officer)
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Director
Theodore M. Wright
/s/ Jeffrey C. Rachor Director April 19, 2002
- --------------------------
Jeffrey C. Rachor
II-21
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
FAA CAPITOL N, INC.
FAA CONCORD T, INC.
FAA POWAY T, INC.
FAA SAN BRUNO, INC.
FAA SERRAMONTE L, INC.
By: /s/ Theodore M. Wright
----------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith President and Director (principal April 19, 2002
- -------------------------- executive officer)
O. Bruton Smith
/s/ B. Scott Smith Vice President and Director April 19, 2002
- --------------------------
B. Scott Smith
Vice President, Treasurer, and
/s/ Theodore M. Wright Director April 19, 2002
- --------------------------
Theodore M. Wright
/s/ Thomas A. Price Vice President and Director April 19, 2002
- --------------------------
Thomas A. Price
II-22
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
FAA LAS VEGAS H, INC.
By: /s/ Theodore M. Wright
----------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chairman, Chief Executive Officer April 19, 2002
- -------------------------- and Director (principal executive
O. Bruton Smith officer)
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
/s/ David Plummer Assistant Secretary and Director April 19, 2002
- --------------------------
David Plummer
II-23
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE OF NEVADA, INC.
By: /s/ Theodore M. Wright
------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chief Executive Officer and Director April 19, 2002
- -------------------------- (principal executive officer)
O. Bruton Smith
/s/ Theodore M. Wright Vice President and Director April 19, 2002
- --------------------------
Theodore M. Wright
/s/ David Plummer Assistant Secretary, Treasurer and April 19, 2002
- -------------------------- Director
David Plummer
II-24
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC RESOURCES, INC.
By: /s/ Theodore M. Wright
-----------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ B. Scott Smith President and Director (principal April 19, 2002
- -------------------------- executive officer)
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
/s/ David Plummer Assistant Secretary, Assistant April 19, 2002
- -------------------------- Treasurer and Director
David Plummer
II-25
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE F&I, LLC
SONIC AUTOMOTIVE WEST, LLC
By: /s/ Theodore M. Wright
------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned managers and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chairman and Chief Executive April 19, 2002
- -------------------------- Officer (principal executive officer)
O. Bruton Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Manager
Theodore M. Wright
/s/ Gail M. Syfert Assistant Secretary, Assistant April 19, 2002
- -------------------------- Treasurer and Manager
Gail M. Syfert
/s/ David Plummer Assistant Secretary, Assistant April 19, 2002
- -------------------------- Treasurer and Manager
David Plummer
II-26
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
MASSEY CADILLAC, INC.
SONIC - CAPITOL CADILLAC, INC.
SONIC - PLYMOUTH CADILLAC, INC.
By: /s/ Theodore M. Wright
--------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ B. Scott Smith President and Director (principal April 19, 2002
- -------------------------- executive officer)
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
/s/ David Plummer Assistant Secretary and Director April 19, 2002
- --------------------------
David Plummer
II-27
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
MASSEY CADILLAC, INC.
By: /s/ Theodore M. Wright
----------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned directors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ B. Scott Smith President and Director (principal April 19, 2002
- -------------------------- executive officer)
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer, and April 19, 2002
- -------------------------- Director
Theodore M. Wright
/s/ Roger Elswick Director April 19, 2002
- --------------------------
Roger Elswick
II-28
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SRE CALIFORNIA-1, LLC
SRE CALIFORNIA-2, LLC
SRE CALIFORNIA-3, LLC
SRE CALIFORNIA-4, LLC
SRE CALIFORNIA-5, LLC
SRE CALIFORNIA-6, LLC
SRE MICHIGAN-1, LLC
SRE MICHIGAN-2, LLC
SRE MICHIGAN-3, LLC
SRE SOUTH CAROLINA-3, LLC
SRE SOUTH CAROLINA-4, LLC
By: /s/ Theodore M. Wright
-------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned managers and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chief Executive Officer and April 19, 2002
- -------------------------- Manager (principal executive
O. Bruton Smith officer)
/s/ B. Scott Smith President and Manager April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Manager
Theodore M. Wright
II-29
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE OF CHATTANOOGA, LLC
SONIC AUTOMOTIVE OF NASHVILLE, LLC
SONIC AUTOMOTIVE - 249O SOUTH LEE
HIGHWAY, LLC
SONIC AUTOMOTIVE - 6025 INTERNATIONAL
DRIVE, LLC
SONIC - 2185 CHAPMAN ROAD, CHATTANOOGA,
LLC
SONIC - CREST CADILLAC, LLC
SONIC - CREST H, LLC
SONIC - SUPERIOR OLDSMOBILE, LLC
TOWN AND COUNTRY FORD OF CLEVELAND, LLC
TOWN AND COUNTRY JAGUAR, LLC
By: /s/ Theodore M. Wright
-----------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned governors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ Jeffrey C. Rachor Chief Manager and Governor April 19, 2002
- --------------------------
Jeffrey C. Rachor
/s/ O. Bruton Smith President April 19, 2002
- --------------------------
O. Bruton Smith
/s/ B. Scott Smith Vice President and Governor April 19, 2002
- --------------------------
B. Scott Smith
II-30
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Governor
Theodore M. Wright
II-31
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC - LS, LLC
On behalf of itself and the following entity as General
Partner
SONIC - LS CHEVROLET, L.P.
SRE SOUTH CAROLINA - 2, LLC
SRE TENNESSEE-1, LLC
SRE TENNESSEE-2, LLC
SRE TENNESSEE-3, LLC
SRE VIRGINIA-1, LLC
By: /s/ Theodore M. Wright
---------------------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned managers and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith President and Manager (principal April 19, 2002
- -------------------------- executive officer)
O. Bruton Smith
/s/ B. Scott Smith Vice President and Manager April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Manager
Theodore M. Wright
II-32
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE 5260 PEACHTREE
INDUSTRIAL BLVD., LLC
By: /s/ Theodore M. Wright
----------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned governors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith President and Governor (principal April 19, 2002
- -------------------------- executive officer)
O. Bruton Smith
/s/ B. Scott Smith Vice President and Governor April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Governor
Theodore M. Wright
II-33
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE - 5585 PEACHTREE
INDUSTRIAL BLVD., LLC
By: /s/ Theodore M. Wright
-----------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned governors and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith President (principal executive April 19, 2002
- -------------------------- officer)
O. Bruton Smith
/s/ B. Scott Smith Vice President and Governor April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Governor
Theodore M. Wright
/s/ Peggy McFarland Assistant Secretary, Assistant April 19, 2002
- -------------------------- Treasurer and Governor
Peggy McFarland
II-34
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Charlotte, state of North
Carolina, on April 19, 2002.
SONIC AUTOMOTIVE SERVICING COMPANY, LLC
By: /s/ Theodore M. Wright
-------------------------------------
Theodore M. Wright
Vice President
POWER OF ATTORNEY
Each of the undersigned managers and officers of the above named
Registrants, by his execution hereof, hereby constitutes and appoints B. Scott
Smith, Theodore M. Wright and Stephen K. Coss, and each of them, with full power
of substitution, as his or her true and lawful attorneys-in-fact and agents, to
do any and all acts and things for him or her, and in his or her name, place and
stead, to execute and sign any and all pre-effective and post-effective
amendments to such Registration Statement and any additional registration
statement pursuant to Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all other documents
in connection therewith, with the Commission and with such state securities
authorities as may be appropriate, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as the undersigned might or could do in person, and
hereby ratifying and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the premises or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ O. Bruton Smith Chairman and Chief Executive April 19, 2002
- -------------------------- Officer (principal executive officer)
O. Bruton Smith
/s/ B. Scott Smith President April 19, 2002
- --------------------------
B. Scott Smith
/s/ Theodore M. Wright Vice President, Treasurer and April 19, 2002
- -------------------------- Manager
Theodore M. Wright
/s/ Gail M. Syfert Assistant Secretary, Assistant April 19, 2002
- -------------------------- Treasurer and Manager
Gail M. Syfert
/s/ David Plummer Assistant Secretary, Assistant April 19, 2002
- -------------------------- Treasurer and Manager
David Plummer
II-35
EXHIBIT INDEX
Exhibit No. Description
1.1 (1) Form of Underwriting Agreement (for equity securities).
1.2 (1) Form of Underwriting Agreement (for debt securities).
1.3 (1) Form of Selling Agency Agreement.
2.1 (2) Asset Purchase Agreement dated as of January 11, 2002 by and
among Sonic and The Donald E. Massey Revocable Trust (the
"Trust") (incorporated by reference to Exhibit 2.1 to Sonic's
Current Report on Form 8-K dated April 15, 2002 (the "Form
8-K")).
2.2 (2) Stock Purchase Agreement dated as of January 11, 2002 by and
among Sonic and the Trust (incorporated by reference to Exhibit
2.2 to the Form 8-K).
2.3 (3) Stock Purchase Agreement dated as of January 11, 2002 by and
among Sonic and the Trust (incorporated by reference to Exhibit
2.3 to the Form 8-K).
4.l Amended and Restated Certificate of Incorporation of Sonic
(incorporated by reference to Exhibit 3.1 to Sonic's Registration
Statement on Form S-1 (Reg. No. 333-33295) (the "Form S-1").
4.2 Certificate of Amendment to Sonic's Amended and Restated
Certificate of Incorporation effective June 18, 1999
(incorporated by reference to Exhibit 3.2 to Sonic's Annual
Report on Form 10-K for the year ended December 31, 1999).
4.3 Bylaws of Sonic (incorporated by reference to Exhibit 3.4 to
Sonic's Annual Report on Form 10-K for the year ended December
31, 2001).
4.4 Specimen Certificate representing Class A common stock
(incorporated by reference to Exhibit 4.1 to the Form S-1).
4.5 Form of Senior Indenture (incorporated by reference to Exhibit
4.6 to Sonic's Registration Statement on Form S-3 (Reg. No.
333-50430 and Reg. Nos. 333-50430-01 through 333-50430-G7)(the
"Form S-3")).
4.6 Form of Subordinated Indenture (incorporated by reference to
Exhibit 4.7 to the Form S-3).
4.7 Form of Senior Debt Securities (incorporated by reference to
Exhibit 4.8 to the Form S-3).
4.8 Form of Subordinated Debt Securities (incorporated by reference
to Exhibit 4.9 to the Form S-3).
5.1 Opinion of Moore & Van Allen PLLC regarding the legality of the
securities being registered.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP.
23.3 Consent of Moore & Van Allen PLLC (included in Exhibit 5.1).
24.l Powers of Attorney (included in Signature Pages of Registration
Statement).
25.l (3) Form T-1 Statement of Eligibility and Qualification Under Trust
Indenture Act of 1939 of Trustee.
- ----------
(1) To be filed as an exhibit to a Current Report on Form 8-K filed by Sonic,
from time to time as an underwritten issuance of such securities is
contemplated.
(2) Certain portions of this exhibit have been omitted pursuant to a request
for confidential treatment filed with the Commission.
(3) To be filed in accordance with the requirements of Section 305(b)(2) of the
Trust Indenture Act and Rule 5b-3 promulgated thereunder.
II-36