1
EXHIBIT 99.1
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT ("Agreement") dated as of June 24, 1999, between
Group 1 Automotive, Inc., a Delaware corporation (the "Company") and the
undersigned holder ("Stockholder") of Common Stock of the Company.
WHEREAS, the Company has requested that the Stockholder agree not to sell
any shares of Common Stock of the Company until July 15, 2000, except in an
offering registered with the Securities and Exchange Commission ("SEC")
initiated by the Company; and
WHEREAS, in consideration of Stockholder agreeing not to sell shares of
Common Stock of the Company, the Company has agreed to initiate an offering
registered with the SEC of a portion of the shares of Common Stock of the
Company held by Stockholder.
NOW, THEREFORE, for and in consideration of the above premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows.
1. Stockholder is the beneficial owner of the number of shares of Common
Stock of the Company set forth after his name on Schedule I attached hereto and
desires to sell up to the number of shares of Common Stock of the Company set
forth after his name on Schedule I attached hereto in an offering registered
with the SEC.
2. Stockholder hereby irrevocably agrees, except for the number of
shares of the Company set forth after his name on Schedule I attached hereto to
be included in a registration statement to be filed with the SEC and sold in an
offering registered with the SEC as shall be determined by the Company, that
Stockholder will not, directly or indirectly, sell, lend, offer, contract to
sell, transfer the economic risk of ownership in, make any short sale, pledge
or otherwise dispose of or transfer any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock without the prior written consent of
the Company for a period from the date hereof until the earliest of (i) 60 days
following the death of Stockholder; (ii) 60 days following the time at which
Stockholder is determined to be "permanently disabled" (for purposes of the
immediately preceding sentence, "permanently disabled" shall mean a condition
(certified by a licensed physician, selected by the Company) rendering
Stockholder unable to engage in employment that is substantially similar to
Stockholder's current employment); or (iii) July 15, 2000. Notwithstanding the
foregoing, if Stockholder is an individual, he or she may transfer any shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock either during his or her lifetime or on death by will or
intestacy to his or her immediate
-1-
2
family or to a trust the beneficiaries of which are exclusively the undersigned
and/or a member or members of his or her immediate family; provided, however,
that prior to any such transfer each transferee shall execute an agreement,
satisfactory to the Company, pursuant to which each transferee shall agree to
receive and hold such shares of Common Stock, or securities convertible into or
exchangeable or exercisable for the Common Stock, subject to the provisions
hereof, and there shall be no further transfer except in accordance with the
provisions hereof. For the purposes of this paragraph, "immediate family"
shall mean spouse, lineal descendant, father, mother, brother or sister of the
transferor. The Stockholder understands that the agreements of the Stockholder
are irrevocable and shall be binding upon the Stockholder's heirs, legal
representatives, successors and assigns.
3. Whether or not the offering registered with the SEC actually occurs
depends on a number of factors, including market conditions. Any offering
registered with the SEC will only be made pursuant to one or more agreements
(each a "Purchase Agreement"), the terms of which are subject to agreement
between the Company and either the underwriters, dealers, agents or direct
purchasers (the "Purchasers"), depending on the type of offering. The
Stockholder agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of Common Stock or other
securities of the Company held by the Stockholder except in compliance with
this Agreement.
4. Attached hereto as Appendix A is a form of Power of Attorney and
Custody Agreement that the Stockholder agrees to execute contemporaneous with
the execution of this Agreement.
5. The Company shall, as expeditiously as reasonably possible, and in
any case prior to August 1, 1999, prepare and file with the SEC a registration
statement with respect to the shares of Common Stock that Stockholder desires
to sell as set forth in paragraph 1 and use its best efforts to cause such
registration statement to become and remain effective; provided, however, that
the Company shall have no obligation to maintain the effectiveness of any
registration statement filed hereunder or to cause the information therein to
remain current for more that such period as is customary and is required by the
Purchaser in the offering registered with the SEC. The Company shall select
the Purchaser or Purchasers, as the case may be, with respect to the offering
of the shares of Common Stock held by the Stockholder. The Company shall
cooperate with the Purchasers as the Purchasers may reasonably request in
facilitating the offeng registered with the SEC.
6. All expenses incurred in connection with a registration statement
pursuant to this Agreement, including without limitation all registration and
qualification fees, printing and accounting fees, and fees and disbursements of
counsel for the Company and the Stockholder, shall be borne by the Company.
The Stockholder shall pay the Purchasers' discounts and commissions applicable
to the Common Stock sold by the Stockholder. In addition, the Stockholder
shall pay his or her own costs for experts or professionals (other than
counsel) employed by the Stockholder or on his or her behalf in connection with
the registration of the
-2-
3
Common Stock under this Agreement.
7. The Company agrees to indemnify the Stockholder with respect to the
offering registered with the SEC of Common Stock pursuant to this Agreement as
set forth in Appendix B attached hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth above.
STOCKHOLDER GROUP 1 AUTOMOTIVE, INC.
________________________ By: ________________________
X. X. Xxxxxxxxxxxxx, Xx.
Chairman, President and
Chief Executive Officer
-3-
4
APPENDIX B
INDEMNIFICATION
(a) The Company will, if Common Stock held by a Stockholder is
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify such Stockholder, each of its
officers and directors, and each person controlling such Stockholder, with
respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each Purchaser, if any, and each
person who controls any Purchaser, against all claims, losses, damages and
liabilities (or actions in respect thereof') arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based
on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act of 1933, as amended (the "Act"), or
of any other federal, state or common law! applicable to the Company and
relating to any action or inaction required of the Company in connection
with any such registration, qualification or compliance, and will
reimburse each such Stockholder, each of its officers and directors, and
each person controlling such Stockholder, each such Purchaser and each
person who controls any such Purchaser, for any legal and any other
expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability. or action, provided that the
Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished
to the Company by an instrument duly executed by such Stockholder or
Purchaser and stated to be specifically for use therein. Such indemnity
shall remain in full force and effect regardless of any investigation made
by or on behalf of such party and shall survive the subsequent transfer of
shares of Common Stock by the seller thereof and the transfer of any
shares of Common Stock of the Company which were the subject of such
registration, qualification or listing.
(b) Each Stockholder will, if Common Stock held by such Stockholder
is included in the securities as to which such registration, qualification
or compliance is being effected, indemnify the Company, each of its
directors and officers, each legal counsel and independent accountant of
the Company, each Purchaser, if any, of the Company's securities covered
by such a registration statement, each person who controls the Company or
such Purchaser within the meaning of the Act, and each other Stockholder
registering Common Stock, each of its officers and directors and each
person controlling such Stockholder, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospec-
-4-
5
tus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse the Company, such Stockholders, such directors, officers,
persons, Purchasers or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance
upon and in conformity with written information furnished to the Company
by an instrument duly executed by such Stockholder and stated to be
specifically for use therein; provided, however, that (i) the obligations
of such Stockholders hereunder shall be limited to an amount equal to the
proceeds to each such Stockholder of Common Stock sold as contemplated
herein and (ii) the indemnity for untrue statements or omissions described
above shall not apply if the Stockholder providing such written
information provides the Company with such additional written information
prior to the effectiveness of the registration as is required to make the
previously supplied written information true and complete, together with a
description in reasonable detail of the information previously supplied
which was untrue or incomplete.
(c) Each party entitled to indemnification hereunder (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement. After notice from the Indemnifying
Party to the Indemnified Party of its election to assume the defense of
such claim or litigation, the Indemnifying Party will not be liable to
such Indemnified Party for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof
other than reasonable costs of investigation, unless the Indemnifying
Party abandons the defense of such claim or litigation. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with
the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.
No Indemnified Party shall consent to the entry of any judgment or enter
into any settlement without the prior written consent of the Indemnifying
Party.
-5-
