UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: October 19, 2004
Date of Earliest Event Reported: October 18, 2004
The Pep Boys - Manny, Moe & Jack
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(Exact name of registrant as specified in charter)
Pennsylvania 1-3381 23-0962915
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(State or other jurisdiction of (Commission (I.R.S. Employer ID number)
incorporation or organization) File No.)
3111 W. Allegheny Ave. Philadelphia, PA 19132
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(Address of principal executive offices) (Zip code)
215-430-9000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
( ) Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
( ) Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
( ) Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
( ) Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a material definitive agreement.
On October 18, 2004, the Company entered into a Trade Payables Agreement with
GMAC Commercial Finance, LLC ("GMAC CF") pursuant to which GMAC CF will effect
payment of the Company's accounts payable to participating suppliers.
Participating suppliers will have the ability to have their accounts receivable
from the Company financed in advance by GMAC CF in an exchange for a negotiated
discount. The Company will, in turn, pay GMAC CF the full amount of the
corresponding accounts payable on their ordinary due dates.
The Company's accounts payable subject to this program will be reflected on the
Company's balance sheet as "financed vendor accounts payable."
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On October 18, 2004, the Company entered into a Master Lease Agreement (the
"Lease") with RBS Lombard, Inc., a member of The Royal Bank of Scotland
Group plc. (the "Lessor"), providing for the lease of up to $35,000,000 of new
point-of-sale hardware for the Company's stores. The Lease will be reflected
as an operating lease in the Company's financial statements. The Lease is for
an initial term of two years, with two one-year renewal options. The rental
amount is based on the dollar amount of equipment actually leased and will be
adjusted monthly based on a floating rate per annum equal to the 30-day London
Interbank Offered Rate (LIBOR) plus a spread of 225 basis points. At the end
of the Lease term, the Company has the option of purchasing or returning the
equipment. The purchase price for the equipment is equal to the Lease Balance
(defined below). If the Company elects to return the equipment, the Company
and Lessor are obligated to use reasonable efforts to sell the equipment to a
third party with the Company (i) receiving the excess, if any, of the net
proceeds over the Lease Balance and (ii) responsible to the Lessor for the
shortfall, if any, of the net proceeds to the Lease Balance up to the amount of
the Lessee Obligation (defined below).
Lease Balance Lessee Obligation
End of Term Year (% of Lease Amount) (% of Lease Amount)
- ---------------- ------------------- -------------------
2 57.50 44.58
3 36.25 28.77
4 15.00 09.33
All of the Company's obligations under the Lease are subject to acceleration
upon the Company's default thereunder including the failure to pay rental
amounts when due, the breach of representations or covenants, the acceleration
of any indebtedness of the Company in excess of $5,000,000, a change in control
of the Company or insolvency.
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Item 9.01 Financial Statements and Exhibits
(c) Exhibits. The following exhibits are filed with this report:
Exhibit No. 99.1 Master Lease Agreement among The Pep Boys-Manny, Moe & Jack,
The Pep Boys Manny Moe & Jack of California, Pep Boys -
Manny, Moe & Jack of Puerto Rico, Inc., and Pep Boys -
Manny, Moe & Jack of Delaware, Inc., and RBS LOMBARD, INC.
dated October 18, 2004
Exhibit No. 99.2 Schedule No. 1 for the Master Lease Agreement among The Pep
Boys-Manny, Moe & Jack, The Pep Boys Manny Moe & Jack of
California, Pep Boys - Manny, Moe & Jack of Puerto Rico,
Inc., and Pep Boys - Manny, Moe & Jack of Delaware, Inc.,
and RBS LOMBARD, INC. dated October 18, 2004
Exhibit No. 99.3 Trade Payables Agreement between GMAC Commercial Finance LLC
and The Pep Boys-Manny, Moe & Jack dated October 18, 2004.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE PEP BOYS - MANNY, MOE & JACK
By: /s/ Harry F. Yanowitz
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Harry F. Yanowitz
Chief Financial Officer
Date: October 19, 2004
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