<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CROSS-CONTINEND AUTO RETAILERS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
CROSS-CONTINENT AUTO RETAILERS, INC.
1201 SOUTH TAYLOR STREET
AMARILLO, TEXAS 79101
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Cross-Continent Auto Retailers, Inc. (the "Company") will be held
on Tuesday, May 12, 1998, at 2:00 p.m., local time, at the Ambassador Hotel, San
Jacinto Room, 3100 I-40 West, Amarillo, Texas 79109, for the following purposes:
(1) To elect one (1) member of the Company's Board of Directors in Class II,
to serve for a three-year term expiring in 2001 and until his successor
is elected and qualified; and
(2) To consider and transact such other business as may properly be brought
before the Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 31, 1998 will
be entitled to vote at the Annual Meeting.
By order of the Board of Directors
R. Wayne Moore
SECRETARY
Amarillo, Texas
March 31, 1998
YOUR VOTE IS IMPORTANT
TO ENSURE THAT YOUR INTERESTS WILL BE REPRESENTED AT THE ANNUAL MEETING,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE,
SIGN AND MAIL THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING IN PERSON MAY REVOKE THEIR PROXIES
AND VOTE IN PERSON IF THEY SO DESIRE.
<PAGE>
CROSS-CONTINENT AUTO RETAILERS, INC.
1201 SOUTH TAYLOR STREET
AMARILLO, TEXAS 79101
------------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998
------------------------
This Proxy Statement and the enclosed proxy are furnished to stockholders of
Cross-Continent Auto Retailers, Inc., a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company (the "Board of Directors") from holders of outstanding shares of the
common stock, par value $.01 per share (the "Common Stock"), of the Company for
use at the Annual Meeting of Stockholders of the Company (the "Annual Meeting")
to be held on Tuesday, May 12, 1998, at 2:00 p.m., local time, at the Ambassador
Hotel, San Jacinto Room, 3100 I-40 West, Amarillo, Texas 79109, and at any
adjournment or postponement thereof. This Proxy Statement and the related form
of proxy are first being mailed to stockholders on or about March 31, 1998.
At the Annual Meeting, action will be taken (a) to elect one (1) member of
the Board of Directors in Class II to serve for a three-year term expiring in
2001 and until his successor is elected and qualified, and (b) to consider and
transact such other business as may properly be brought before the Annual
Meeting or any adjournment thereof.
If the enclosed proxy is properly executed and returned, and if a
stockholder specifies a choice on the proxy, the shares of Common Stock
represented by the proxy will be voted (or withheld from voting) in accordance
with such stockholder's choice. If the proxy is signed and returned but no
specification is made, the proxy will be voted FOR the election of the nominee
for Director listed herein.
As of the date of this Proxy Statement, the Board of Directors knows of no
business that will be presented for consideration at the Annual Meeting other
than the matters described in this Proxy Statement. If any other matters are
properly brought before the Annual Meeting, the persons named in the
accompanying form of proxy will vote the proxies in accordance with their
judgment.
Any proxy executed and returned by a stockholder may be revoked by such
stockholder, at any time prior to its being voted, by filing with the Secretary
of the Company at its address set forth above, a written notice of revocation or
a duly executed proxy bearing a later date. Any proxy also may be revoked by the
stockholder's attendance at the Annual Meeting and voting in person. A notice of
revocation need not be on any specific form.
RECORD DATE AND VOTING AT THE MEETING
The Board of Directors has fixed the close of business on March 31, 1998 as
the record date (the "Record Date") for the determination of the stockholders of
the Company entitled to notice of and to vote at the Annual Meeting. As of the
close of business on the Record Date, there were outstanding 13,573,908 shares
of Common Stock. Each stockholder of record on the Record Date is entitled to
one vote for each share of Common Stock held. No other voting securities of the
Company were outstanding on the Record Date. Stockholders are not entitled to
cumulate their votes.
Votes cast by proxy or in person at the Annual Meeting will be counted by a
person appointed by the Company to act as inspector for the Annual Meeting. A
majority of the outstanding shares of Common Stock, represented in person or by
proxy, will constitute a quorum at the Annual Meeting. The election
<PAGE>
inspector will treat shares represented by proxies that reflect abstentions as
shares that are present and entitled to vote for the purpose of determining the
presence of a quorum.
The Amended and Restated Certificate of Incorporation of the Company (the
"Certificate") provides that each nominee for Director must receive the
affirmative vote of the holders of a majority of all votes cast at the Annual
Meeting. Abstentions will have no effect on the outcome of the election of
directors.
PROPOSAL ONE: ELECTION OF DIRECTORS
Pursuant to the Certificate, the Board of Directors is divided into three
classes, with each class serving a three-year term and one class being elected
at each annual meeting of stockholders. One of the present Directors whose term
will expire at the Annual Meeting resigned, effective as of March 31, 1998, from
his positions as an officer and Director of the Company. Pursuant to Section 2.1
of the Company's Amended and Restated Bylaws, the Board of Directors has taken
action to reduce the size of the Board of Directors to five (5) members. The
other Director whose term expires at the Annual Meeting is being nominated for
re-election to the Board of Directors to serve until the 2001 Annual Meeting of
Stockholders or until his successor is elected and qualified. The remaining four
Directors will continue to serve on the Board of Directors until their
respective terms expire as indicated below under the caption "Directors Whose
Terms Will Continue After the Annual Meeting," and until their successors are
elected and qualified.
John H. Marmaduke is the Director whose term is expiring and who has been
nominated by the Board of Directors for re-election to the Board of Directors to
serve a three-year term expiring at the 2001 Annual Meeting of Stockholders.
Unless such authority is withheld, it is the intention of the persons named in
the enclosed proxy to vote such proxy for the election of the Class II Director
nominee. If a stockholder who executes and returns a proxy fails to designate a
vote for the Class II Director nominee, the person acting under the proxy will
vote such stockholder's shares for the election of the Class II Director
nominee.
The Board of Directors has no reason to believe that the Class II Director
nominee will be unavailable or unwilling to serve if elected, and the Class II
Director nominee has expressed an intention to serve the entire term for which
election is sought. However, if for any reason the Class II Director nominee
should become unavailable for election or decline to serve, the persons named in
the proxy will (i) vote on such substitute nominees, (ii) vote to allow the
vacancy created thereby to remain open until filled by the Board of Directors or
(iii) vote to reduce the number of directors for the ensuing year, as the Board
of Directors recommends. In no event, however, can the proxy be voted to elect
more than one Class II director. The Certificate requires the affirmative vote
of the holders of a majority of all votes cast at the Annual Meeting.
NOMINEE FOR ELECTION TO THE BOARD
John H. Marmaduke, age 50, has been a Director of the Company since November
1996. Since 1976, Mr. Marmaduke has served as President and Chief Executive
Officer of Hastings Entertainment, Inc., which owns a chain of 117 stores
selling books, music, and videos.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS
To be elected a Director, the nominee must receive the affirmative vote of
the holders of a majority of all votes cast at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
ELECTION OF THE CLASS II DIRECTOR NOMINEE.
2
<PAGE>
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING
<TABLE>
<CAPTION>
TERM TO
NAME AGE POSITIONS HELD DIRECTOR SINCE EXPIRE
- ------------------ --- --------------------------------------------------------- ------------------ -----------
<S> <C> <C> <C> <C>
Bill A. Gilliland 60 Chairman of the Board, Chief Executive Officer, Director May 1996 1999
Robert W. Hall 40 Senior Vice Chairman, Director May 1996 2000
John W. Gaines 37 Vice President-Finance, Treasurer, Director November 1996 2000
Robert F. Green 55 Director November 1996 1999
</TABLE>
Bill A. Gilliland, age 60, has been the Chairman and Chief Executive Officer
and a Director of the Company since its formation. Since 1987, Mr. Gilliland has
been the Managing Partner of Gilliland Group Family Partnership ("GGFP"), which
prior to June 1996 owned a majority interest in the Company's dealerships. Mr.
Gilliland currently is, and since their acquisition by GGFP has been, a director
and the president of each of the Company's dealerships.
Robert W. Hall, age 40, has been the Senior Vice Chairman and a Director of
the Company since the Company's formation. Until June 1997, Mr. Hall was a
director and the treasurer of each of the dealerships. Since June 1997, Mr. Hall
has been a director and vice-president of each of the dealerships. Since 1988,
Mr. Hall has been a partner of GGFP. Mr. Hall is the son-in-law of Bill A.
Gilliland, the Chairman and Chief Executive Officer and a Director of the
Company.
John W. Gaines, age 37, has been the Vice President-Finance of the Company
since June 1996, and Treasurer of the Company since May 1997. Effective as of
April 1, 1998, Mr. Gaines will be the Chief Financial Officer of the Company. He
has been Treasurer of each of the Company's dealerships since June 1997. From
February 1992 to June 1996, Mr. Gaines was employed by GGFP as the coordinator
of projects and systems for the Company's dealerships. Mr. Gaines was the
Controller for Amarillo National Bank in Amarillo, Texas, from 1983 to 1992.
Robert F. Green, age 55, has been a Director of the Company since November
1996. Mr. Green is a private investor and retired commercial banker. From 1978
until his retirement in 1991, Mr. Green served as Senior Vice President for
Amarillo National Bank, Amarillo, Texas.
FAMILY RELATIONSHIPS; AGREEMENTS WITH DIRECTORS AND EXECUTIVE OFFICERS
Bill A. Gilliland is the Chairman and Chief Executive Officer and a Director
of the Company. Robert W. Hall, Senior Vice Chairman and a Director of the
Company, is married to Mr. Gilliland's daughter. No arrangement or understanding
exists between any Director or executive officer or any other person pursuant to
which any Director or executive officer was selected as a Director or executive
officer of the Company. All executive officers are elected annually by, and
serve at the discretion of, the Board of Directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a Compensation Committee and an Audit Committee.
The Board of Directors does not have a nominating committee.
The Compensation Committee currently consists of Bill A. Gilliland, Robert
W. Hall, Robert F. Green and John H. Marmaduke. The Compensation Committee is
responsible for establishing and administering the overall compensation policies
and determining compensation matters applicable to the Company's senior
management and other key officers. The Compensation Committee may exercise such
additional authority as may be prescribed from time to time by the Board of the
Directors.
3
<PAGE>
The Audit Committee currently consists of Mr. Green and Mr. Marmaduke. The
Audit Committee is responsible for meeting with the Company's auditors at least
annually to review the Company's financial statements and internal accounting
controls. The Audit Committee is also responsible for submitting recommendations
to the Board of Directors regarding the Company's internal accounting controls.
The Audit Committee may exercise such additional authority as may be prescribed
from time to time by the Board of Directors.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During 1997, there were 10 meetings of the Board of Directors, 4 meetings of
the Audit Committee and 2 meetings of the Compensation Committee. No incumbent
Director attended fewer than 75% of all meetings of the Board of Directors and
the committees on which such Director served during such period. In addition,
the Board of Directors took action on certain occasions by unanimous written
consent.
COMPENSATION OF DIRECTORS
The Company pays each of its non-employee Directors an annual retainer of
$10,000 and a fee of $1,000 for each regularly scheduled meeting of the Board of
Directors personally attended. The Company issues options to purchase 5,000
shares of Common Stock to each non-employee Director who attends, either in
person or by telephone, all four regularly scheduled Board meetings during each
year. The Company also reimburses each Director for out-of-pocket expenses
incurred in attending meetings of the Board of Directors or a committee.
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the Board
of Directors and are chosen annually by the Board of Directors at its first
meeting following the annual meeting of stockholders.
The following are other executive officers of the Company not named
elsewhere in this Proxy Statement, together with their ages, all positions held
by them and a description of their business experience during at least the past
five years.
James H. Holman, age 47, has been the Vice President--City Manager of the
Company and Vice President of its Texas-based dealerships since August 1997. Mr.
Holman was city manager of the Company's Oklahoma dealerships from May 1996 to
November 1996, and of its Texas dealerships from March 1997 to the present.
During the period from February 1992 to May 1996, he was the general manager or
sales manager of several of the Company's Texas dealerships.
R. Wayne Moore, age 47, has been General Counsel of the Company since
February 1997, and Secretary of the Company and all of its subsidiaries since
April 1997. From 1982 to 1992, Mr. Moore was an associate and partner in the
Gibson, Ochsner & Adkins law firm in Amarillo, Texas. From 1992 to February
1997, Mr. Moore was a partner in the Sprouse, Mozola, Smith & Rowley law firm in
Amarillo, Texas.
R. Douglas Spedding, age 63, has been the Vice President--Regional Manager
of the Company and Vice President of the Company's Oklahoma, Colorado, and
Nevada dealerships since August 1997. Mr. Spedding was President and majority
owner of two dealerships prior to the purchase by the Company of both such
dealerships. He has been since 1989 the President and owner of Automotive
Assistance Corporation, a service contract and credit life insurance company,
and of RDS, Inc., a real estate and management company, since 1975.
Charles D. Winton, age 35, has been a Vice President of the Company since
its formation and its Chief Accounting Officer from April 1997 to the present.
He was Chief Financial Officer of the Company and Secretary of the Company and
its Texas dealerships from June 1995 to March 1997. From 1993 to June 1995, Mr.
Winton was Vice President of Accounting and Taxes for Sims-Plummer Financial
Services.
4
<PAGE>
From 1990 to 1993, Mr. Winton was a supervisor with George B. Jones & Company,
an accounting firm serving franchised automobile dealers.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE OFFICER COMPENSATION
OBJECTIVES AND COMPENSATION PHILOSOPHY
During 1997, the Compensation Committee was responsible for establishing and
administering the overall compensation policies and determining compensation
matters applicable to the Company's senior management and other key officers.
The Compensation Committee's overall executive compensation policy was to offer
the Company's senior management and other key officers competitive compensation
based upon personal performance, the performance of the Company and the
individual's contribution to that performance, with the goal of attracting,
motivating and retaining qualified executives integral to the overall success of
the Company. The key elements of executive compensation in 1997 were base
salary, annual incentives and long-term incentives in the form of stock options.
BASE SALARY. The base salary for each executive officer was based primarily
on personal performance and the salary levels in effect for comparable positions
with the Company's principal competitors. The Company used no set formula in
making these determinations and may afford different weight to different factors
from time to time for each executive officer. The Compensation Committee
established the 1997 base salary for the Company's executive officers.
ANNUAL INCENTIVES. Although the Company does not have a formal bonus plan,
the Compensation Committee determines incentive awards for executive officers
from time to time based on individual performance and Company performance.
STOCK-BASED INCENTIVE COMPENSATION. Stock options are considered long-term
incentives and are designed to align the interests of the Company's executive
officers with those of the stockholders. Typically, each grant of stock options
under the Company's 1996 Amended and Restated Stock Option Plan (the "Stock
Option Plan") allows the grantee to acquire shares of Common Stock at a fixed
price over a period of time. In many cases, the option vests in periodic
installments subject to the continued employment of the executive. Accordingly,
the option provides value to the executive only if the value of the Common Stock
increases over time and, in many cases, only if the executive remains in the
Company's employ.
DEDUCTIBILITY OF COMPENSATION
The Compensation Committee has reviewed the impact of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), which limits the
deductibility of certain otherwise deductible compensation in excess of $1
million paid to the Chief Executive Officer and other Named Executive Officers
(as hereafter defined). It is the policy of the Company to attempt to have its
executive compensation plans treated as tax deductible compensation wherever, in
the judgment of the Compensation Committee, to do so would be consistent with
the objectives of that compensation plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
The base salary of Bill A. Gilliland, the Company's Chairman and Chief
Executive Officer, was $300,000 during 1997. Mr. Gilliland's base salary was
based on a comparison to the compensation of officers in similar positions at
the Company's principal competitors, taking into consideration the Company's
performance, the accomplishment by Mr. Gilliland of the Company's goals and
objectives and his overall contribution to the Company. During a portion of
1997, Mr. Gilliland agreed to take a reduction in his base salary and, in lieu
thereof, to receive options to purchase 27,907 shares of Common Stock at an
exercise price of $8.0625 per share (the market price of the Common Stock on the
date of the grant). The Company advanced to Mr. Gilliland $51,580.26, which is
to be repaid to the Company by no later than
5
<PAGE>
February, 1999. In addition, in August, 1997, Mr. Gilliland was granted an
option to acquire 100,000 shares of Common Stock at an exercise price of $8.00.
The report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended (the
"Securities Act"), or under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such acts.
The foregoing report has been submitted by the undersigned in our capacity
as members of the Compensation Committee.
Bill A. Gilliland
Robert W. Hall
Robert F. Green
John H. Marmaduke
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the years ended December
31, 1997 and 1996 awarded to or earned by (i) each person serving as chief
executive officer of the Company at any time during such periods, and (ii)
certain other executive officers of the Company whose salary and bonus exceeded
$100,000 for services rendered in all capacities (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) OTHER(3) OPTIONS
- ------------------------------------------------ --------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
Bill A. Gilliland .............................. 1997 $ 225,000 127,907(6)
Chairman and Chief Executive Officer 1996 $ 150,000 --
Robert W. Hall ................................. 1997 $ 180,000 72,326(6)
Senior Vice Chairman 1996 $ 120,000 --
R. Douglas Spedding ............................ 1997 $ 250,000 $ 124,144 46,512(6)(7)
Vice President--Regional Manager 1996 -- -- --
James F. Purser ................................ 1997 $ 137,080 $ 20,760 71,860(6)
Chief Financial Officer(4) 1996 -- -- --
James H. Holman ................................ 1997 $ 36,000 $ 100,946 $ 5,766 55,356(6)(8)
Vice President--City Manager 1996 $ 76,000 $ 164,129 -- --
Thomas A. Corchado ............................. 1997 $ 60,000 $ 140,087 $ 6,261 27,520(6)
(Former) Vice President--Fixed Operations(5) 1996 $ 62,849 $ 140,304 $ 5,628 --
</TABLE>
- ------------------------
(1) The Company has no long-term incentive compensation plans other than the
Stock Option Plan. A total of 1,065,479 options were granted under the Stock
Option Plan in 1997.
(2) The Company has no formal bonus plan and does not provide for deferred
awards. The Company may pay bonuses based on individual and Company
performance.
(3) The aggregate amount of Other Annual Compensation for each named executive
officer did not equal or exceed the lesser of $50,000 or 10% of such
individual's base salary and bonus for the year ended December 31, 1997.
6
<PAGE>
(4) Mr. Purser's employment with the Company was terminated to be effective as
of March 31, 1998.
(5) Mr. Corchado's employment with the Company was terminated on December 22,
1997.
(6) During a portion of 1997, each of the Named Executive Officers (and certain
other officers and key employees) agreed to a reduction in his base salary
or bonus and, in lieu thereof, to receive options to purchase Common Stock
at an exercise price of $8.0625 per share (the market price of the Common
Stock on the date of grant). All of the options were fully vested when
granted. The Company granted an aggregate of 492,214 options to purchase
Common Stock in lieu of base salary or bonuses for that period. In addition,
the Company advanced to the Named Executive Officers (and certain other
officers and key employees) an aggregate of approximately $821,000, which is
to be repaid to the Company by no later than February 1999. The following
Named Executive Officers were granted an option to acquire the number of
shares set forth opposite their name in lieu of base salary or bonus:
<TABLE>
<S> <C> <C>
a) Bill A. Gilliland 27,907
b) Robert W. Hall 22,326
c) R. Douglas Spedding 46,512
d) James F. Purser 21,860
e) James H. Holman 29,178
f) Thomas A. Corchado 27,520
</TABLE>
(7) Pursuant to the terms of Mr. Spedding's employment agreement with the
Company, Mr. Spedding will be granted that number of options to purchase
Common Stock equal to 2% of the Company's net earnings (as defined in the
employment agreement) for the fiscal year ended December 31, 1997. The
number of options to be granted pursuant to this provision of Mr. Spedding's
employment agreement has not yet been finally determined.
(8) Pursuant to the terms of Mr. Holman's employment contract with Westgate
Chevrolet, Inc. ("Westgate"), a wholly-owned subsidiary of the Company, Mr.
Holman will be granted that number of options to purchase Common Stock equal
to 4% of the net profit of Westgate, divided by the price of the Common
Stock on the last trading day of 1997 (according to the closing price as
published in the Wall Street Journal), and multiplied by 2. The number of
options to be granted pursuant to this provision of Mr. Holman's employment
contract has not yet been finally determined.
STOCK OPTION PLAN
The Company has no long-term incentive compensation plan other than the
Stock Option Plan, which was adopted by the Board of Directors and the Company's
stockholders in September 1996 and amended and restated in September 1996 and
further amended in December 1996 by the Board of Directors.
The purpose of the Stock Option Plan is to attract and retain employees
(including officers), directors and independent consultants of the Company (for
purposes of this description of the Stock Option Plan, the "Company" includes
subsidiaries and certain affiliates of the Company) and provide such individuals
with additional incentives by increasing their equity ownership in the Company.
The Company has reserved an aggregate of 1,380,000 shares of Common Stock for
issuance under the Stock Option Plan. As of December 31, 1997, options to
purchase up to 1,195,565 shares had been granted under the Stock Option Plan, of
which options for 1,019,399 shares are still outstanding.
Options granted under the Stock Option Plan are intended to qualify either
as incentive stock options under Section 422 of the Code or be nonqualified. The
Stock Option Plan is intended to satisfy the conditions of Rule 16b-3 under the
Exchange Act.
7
<PAGE>
OPTION GRANTS
The following table sets forth certain information relating to stock option
grants to the Named Executive Officers during the year ended December 31, 1997.
Unless otherwise indicated, all options were granted under the Stock Option
Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL NET REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION TERM
UNDERLYING GRANTED TO EXERCISE EXPIRATION --------------------------------
NAME OPTIONS GRANTED EMPLOYEES PRICE DATE 0%($) 5%($) 10%($)
- ----------------------------------- --------------- ------------- ----------- ------------ --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Bill A. Gilliland.................. 100,000 9.39 8.0000 08/20/2007 0 503,116 1,274,994
27,907 2.62 8.0625 08/01/2007 0 141,501 358,592
Robert W. Hall..................... 50,000 4.69 8.0000 08/20/2007 0 251,558 637,497
22,326 2.10 8.0625 08/01/2007 0 113,203 286,879
R. Douglas Spedding................ 46,512 4.37 8.0625 08/20/2007 0 350,927 889,317
James F. Purser.................... 25,000 2.35 0.0100 03/10/2007 468,500 763,294 1,215,567
46,860 4.40 8.0625 08/01/2007 0 237,602 602,130
James H. Holman.................... 55,356 5.20 8.0625 08/01/2007 0 280,681 711,300
Thomas A. Corchado................. 27,520 2.58 8.0625 08/10/2007 0 139,539 353,620
</TABLE>
STOCK OPTION EXERCISES AND YEAR-END STOCK OPTION VALUES
The following table sets forth certain information with respect to the value
of unexercised options held by the Named Executive Officers at December 31,
1997. No stock options were exercised by any of the Named Executive Officers
during 1997.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-TH-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
-------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Bill A. Gilliland........................................ 127,907 0 $ 38,226.75 $ 0
Robert W. Hall........................................... 72,326 0 21,206.50 0
R. Douglas Spedding...................................... 69,210 0 17,302.50 0
James F. Purser.......................................... 26,860 45,000 6,715.00 212,562.50
James H. Holman.......................................... 34,571 20,785 8,642.75 5,196.25
Thomas A. Corchado....................................... 27,520 0 6,880.00 0
</TABLE>
REPORT ON OPTION REPRICING
The Company believes that the granting of stock options to employees has
provided a significant incentive to the Company's employees to align their
interests with those of the Company's stockholders. Many of the Company's
employees have received options in the past. On August 1, 1997, when the fair
market value of the Common Stock was $8.0625 per share, the Board reviewed the
Company's outstanding
8
<PAGE>
options and determined that certain current employees of the Company had options
to purchase 169,038 shares of Common Stock at exercise prices significantly
above the current market price of the Common Stock (the "Old Options").
The Board believed that because of the significant decrease in the price of
the Common Stock from the time of the granting of the Old Options, it was
unlikely that the Old Options would provide significant incentive for employees,
particularly in the short term. Accordingly, on August 4, 1997, the Company
notified each of the holders of the Old Options that they had the opportunity to
cancel their Old Options in exchange for the same number of options at the
current market value (the "New Options"). Of the 169,038 Old Options, holders of
169,038 Old Options cancelled and were issued the same number of New Options.
The Board believed it was in the best interests of the Company to cancel the Old
Options and to issue the New Options because the granting of the New Options
would provide an additional incentive for employees and would result in
increased stockholder value.
The following table presents information on the repricing of stock options
of executive officers employed by the Company during the period the Company has
been publicly listed.
10-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
EXERCISE
NUMBER OF MARKET PRICE PRICE AT NEW LENGTH OF ORIGINAL
OPTIONS AT TIME OF TIME OF EXERCISE OPTION TERM REMAINING
NAME DATE REPRICED REPRICING REPRICING PRICE AT DATE OF REPRICING
- ---------------------------------------- --------- ----------- ------------ ---------- --------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
James F. Purser......................... 8-1-97 25,000 $ 8.0625 $ 18.0000 $ 8.0625 9 years, 7 months
James H. Holman......................... 8-1-97 1,178 $ 8.0625 $ 18.0000 $ 8.0625 9 years, 6 months
John W. Gaines.......................... 8-1-97 50,000 $ 8.0625 $ 19.2500 $ 8.0625 9 years, 4 months
Charles D. Winton....................... 8-1-97 50,000 $ 8.0625 $ 19.2500 $ 8.0625 9 years, 4 months
R. Wayne Moore.......................... 8-1-97 15,000 $ 8.0625 $ 18.0000 $ 8.0625 9 years, 6 months
</TABLE>
The foregoing report on option repricing has been submitted by the
undersigned in our capacity as members of the Compensation Committee.
Bill A. Gilliland
Robert W. Hall
Robert F. Green
John H. Marmaduke
EMPLOYMENT AGREEMENTS
James F. Purser resigned as the Chief Financial Officer and a Director of
the Company, to be effective as of March 31, 1998. Pursuant to the terms of a
settlement agreement to be entered into between the Company and Mr. Purser, the
Company will pay to Mr. Purser an aggregate of $469,500 (less $37,950
representing the amount owed to the Company by Mr. Purser) which is an amount
equal to two year's salary under Mr. Purser's employment agreement. Mr. Purser
will enter into a two year consulting agreement with the Company pursuant to
which he will provide such consulting services as the Company may reasonably
request, provided that Mr. Purser is not obligated to perform more than 400
hours of consulting services during either year of the consulting agreement. If
Mr. Purser fails to perform any consulting services that are reasonably
requested for any reason other than death, disability or mental incompetence,
Mr. Purser will be obligated to repay to the Company an amount equal to $540 for
each hour Mr. Purser fails to perform. Mr. Purser will be reimbursed all
reasonable out-of-pocket expenses he incurs in performing the consulting
services for the Company. Mr. Purser and the Company will execute a mutual
release of all claims through March 31, 1998. An option to purchase 25,000
shares of Common Stock at an exercise price of $.01 per share that was granted
to Mr. Purser pursuant to his employment
9
<PAGE>
agreement will be cancelled. Mr. Purser will receive a cash payment of $175,000
in consideration of the cancellation of this option. An option to purchase
25,000 shares of Common Stock at an exercise price of $18.00 per share (this
option was repriced on August 1, 1997 and the exercise price is now $8.0625)
will immediately vest and become fully exercisable.
Effective April 1, 1997, the Company entered into an employment agreement
with R. Douglas Spedding pursuant to which Mr. Spedding will be employed by the
Company until April 1, 2000, subject to early termination by the Company for
"cause," as defined in the agreement. Mr. Spedding will receive an annual salary
of $500,000 under the agreement, plus bonus compensation equal to 2% of the
Company's net earnings for each calendar quarter. Mr. Spedding will further
receive stock options equal to 2% of the Company's net earnings each year during
the term of the agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Gilliland, a member of the Compensation Committee, is the Company's
Chairman and Chief Executive Officer, a position he held during all of 1997 and
1996. Mr. Hall, a member of the Compensation Committee, is the Senior Vice
Chairman of the Company, a position he held during all of 1997 and 1996. For a
description of certain material transactions involving Messrs. Gilliland, Hall
and the Company, see "Certain Relationships and Related Transactions."
10
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative return to the stockholders of the Company's Common Stock, based on an
investment of $100, with the cumulative return of the Standard and Poor's 500
Composite Stock Index and an industry peer group for the period commencing after
the close of the market on September 24, 1996 (the date of the Initial Public
Offering) and ending on December 31, 1997. Returns for the indices are weighted
based on market capitalization. The industry peer group, selected by the Company
in good faith, is comprised of Lithia Motors, Inc. (Class A Common Stock), Rush
Enterprises, Inc., Ugly Duckling Corporation, United Auto Group, Inc., Circuit
City Stores Carmax Group, Group 1 Automotive, Inc., Republic Industries, Inc.,
and Sonic Automotive, Inc. (Class A Common Stock).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CROSS CONTINENT
<S> <C> <C> <C>
AUTO RETAILERS S&P 500 INDEX PEER GROUP
Base Period Dec 92 $100.00 $100.00 $100.00
Dec-96 $104.38 $108.60 $112.25
Dec-97 $ 41.56 $144.84 $ 83.14
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company from time to time used an airplane that was beneficially owned
by Bill Gilliland and Robert W. Hall, Chairman and Senior Vice Chairman,
respectively. The Company paid the owners $20,000 per month for fixed costs,
$500 per hour for operating expenses and actual fuel cost when the airplane was
used by the Company. During 1997, 1996 and 1995 the Company paid the owners an
aggregate of $502,000, $175,000 and $199,000 respectively under the current and
similar arrangements. In the fourth quarter of 1997, this agreement was amended
due to a change in equipment. The new owner is Bill Gilliland. The agreement
provides for the Company to pay the owner $20,000 per month for fixed cost, $800
per hour for operating expenses and actual fuel cost when the airplane is used
by the Company. No payments were made under the new arrangement in 1997. The
Company believes that these fees are no less favorable to the Company than could
be obtained in an arm's length transaction between unrelated parties. The
Company anticipates that as it pursues its acquisition strategy, its use of this
airplane will increase and its costs associated with the plan will
correspondingly increase.
11
<PAGE>
During 1997, the Company provided certain services, primarily payroll
related, to GGFP. GGFP reimbursed the Company approximately $351,000 for these
services. The Company no longer provides these services to GGFP.
As with other franchised dealerships, the Company is entitled to deposit
funds in an account with General Motors Acceptance Corporation (the "GMAC
Deposit Account") in an amount up to 75% of the amount of inventory financed by
GMAC. These funds so deposited earn interest at a rate equal to the rate charged
under the GMAC floor plan. Historically, the Company has permitted its employees
(including its principal stockholders and Named Executive Officers) to advance
funds to the Company for the purpose of investing in the GMAC Deposit Account.
The Company has acted only as an intermediary in this process. At December 31,
1997, funds advanced and outstanding from the Company's principal stockholders
and Named Executive Officers aggregated $2,843,000. The amount of interest
accrued pursuant to these arrangements during 1997 totaled $259,000.
GGFP leases to the Company its corporate offices, which were expanded in
1997, for an annual rent of $123,000 under a five year lease extending through
June 2001.
GGFP was the contracting agent for the construction of certain facilities
for the Company during 1997. The total cost of the facilities approximated
$448,000. Such amount included approximately $106,000 as payment to GGFP for
architectural and construction management fees.
In 1997, the Company acquired Toyota West Sales & Service, Inc. ("Toyota
West") from R. Douglas Spedding and Douglas Toyota, Inc. ("Douglas Toyota") from
RDS, Inc., a corporation owned by Mr. Spedding, for a total purchase price of
$40.7 million. In connection with the acquisition of Toyota West and Douglas
Toyota, the Company purchased a tract of land from Mr. Spedding and a tract of
land from RDS, Inc. in exchange for a total of $7.5 million in seller-financed
notes. The principal amount, together with interest at the prime rate, matures
in October, 1998. The tracts of land will be used to relocate the Las Vegas,
Nevada and Denver, Colorado dealerships to newly constructed facilities. In
connection with interim financing on construction projects at the two new
locations, the Company entered into an Interim Construction and Master Loan
Agreement (the "Loan Agreement") with Mr. Spedding. The Loan Agreement provides
interim financing of $7.4 million at an interest rate of prime plus 1% for
construction of new automobile dealership facilities in Las Vegas, Nevada and
Denver, Colorado. At December 31, 1997, the amount outstanding pursuant to the
Loan Agreement approximated $4,807,000 and had an interest rate of 9.5%. Total
interest paid during 1997 to Mr. Spedding and his affiliates was approximately
$204,000.
In connection with the acquisition of Toyota West and Douglas Toyota, Mr.
Spedding agreed to reimburse the Company for the cost of repair work for
customers who had purchased an extended warranty from Toyota West or Douglas
Toyota prior to the acquisition. In 1997, Mr. Spedding reimbursed the Company
$446,000 for the cost of such repair work. The Company also agreed to reimburse
Mr. Spedding for his office facilities in Denver, Colorado until he is relocated
to the new facility under construction in Denver, Colorado. The Company
reimbursed Mr. Spedding $155,000 in 1997 for such office cost.
Effective July 1, 1997, the Company sold 100% of the stock of Performance
Dodge, Inc. and Performance Nissan, Inc. to Benji Investments, Ltd., a Texas
limited partnership controlled by Emmett M. Rice, Jr., the former Chief
Operating Officer and director of the Company. The Company received 760,000
shares of Common Stock valued at a total of $8.7 million. The Company recorded a
loss on the disposition in the amount of $347,000. The Company retained
ownership of the Performance Dodge, Inc. facilities and the related mortgage,
and leases such facilities to Performance Dodge, Inc. The term of the lease is
fifteen years with annual rental of approximately $253,000.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table describes the beneficial ownership of the outstanding
Common Stock as of March 31, 1998 by (i) each person (or group of affiliated
persons) who is known by the Company to own beneficially more than 5% of the
Common Stock, (ii) each of the Company's directors and Named Executive Officers
and (iii) all directors and executive officers as a group:
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
BENEFICIAL OWNER(1) OWNED(2) TOTAL
- -------------------------------------------------------------------------------------- ----------------- -----------
<S> <C> <C>
Bill A. Gilliland(3)(4)(5)............................................................ 6,771,876 49.42
Robert W. Hall(6)(7)(8)............................................................... 1,693,681 12.41
R. Douglas Spedding(9)................................................................ 326,232 2.40
James F. Purser(10)................................................................... 31,985 0.24
James H. Holman(11)................................................................... 36,571 0.27
Thomas A. Corchado(12)................................................................ 27,520 0.20
John W. Gaines(13).................................................................... 21,263 0.16
Robert F. Green(14)(15)............................................................... 252,455 1.86
John H. Marmaduke(16)(17)............................................................. 38,900 0.29
The Equitable Companies, Incorporated(18) ............................................ 1,098,600 8.09
1290 Avenue of the Americas
New York, New York 10104
Heartland Advisors, Inc.(18) ......................................................... 690,600 5.09
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
All executive officers and directors as a group (11
persons)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12)(13)(14)(15)(16)........................... 9,239,499 65.94
</TABLE>
- ------------------------
(1) Unless otherwise indicated in the table above, the address for each
beneficial owner is in care of the Company, 1201 South Taylor Street,
Amarillo, Texas 79101.
(2) Except as indicated in the footnotes to this table, to the knowledge of the
Company, the persons named in the table have sole voting and investment
power with respect to all shares of Common Stock shown as beneficially owned
by them, except to the extent authority is shared by spouses under
applicable state law.
(3) Of these shares, 1,634,375 are owned of record by Xaris, Ltd., a Texas
limited partnership. Pursuant to the terms of an agreement among Mr.
Gilliland, Lori D'Atri (Mr. Gilliland's daughter) and Mr. Hall and his wife,
Robin W. Hall, Mr. Gilliland controls Xaris Management Co., the general
partner of Xaris, Ltd. Mr. Gilliland disclaims beneficial ownership of these
shares.
(4) Includes 127,907 shares of Common Stock issuable upon the exercise of
options granted to Mr. Gilliland under the Stock Option Plan, 100,000 of
which are at an exercise price of $8.00 and 27,907 of which are at an
exercise price of $8.0625, all of which options are currently exercisable.
(5) Includes 47,000 shares of Common Stock owned in the name of Gilliland Group
Family Partnership, of which Mr. Gilliland is a managing partner. Mr.
Gilliland disclaims beneficial ownership of these shares, except to the
extent of his pecuniary interest therein.
(6) Mr. and Mrs. Hall hold a controlling interest in the general partner of
Twenty-Two Ten, Ltd., a Texas limited partnership, which is the record owner
of these shares.
(7) Includes 72,326 shares of Common Stock issuable upon the exercise of options
granted to Mr. Hall under the Stock Option Plan, 50,000 of which are at an
exercise price of $8.00 and 22,326 of which are at an exercise price of
$8.0625, all of which options are currently exercisable.
13
<PAGE>
(8) Includes 47,000 shares of Common Stock owned in the name of Gilliland Group
Family Partnership, of which Mr. Hall is a managing partner. Mr. Hall
disclaims beneficial ownership of these shares, except to the extent of his
pecuniary interest therein.
(9) Includes 46,512 shares of Common Stock issuable upon the exercise of options
granted to Mr. Spedding under the Stock Option Plan at an exercise price of
$8.0625, which options are currently exercisable.
(10) Includes 29,985 shares of Common Stock issuable upon the exercise of
options granted to Mr. Purser under the Stock Option Plan, 3,125 of which
are at an exercise price of $.01 and 26,860 of which are at an exercise
price of $8.0625, all of which options are currently exercisable.
(11) Includes 34,571 shares of Common Stock issuable upon the exercise of
options granted to Mr. Holman under the Stock Option Plan at an exercise
price of $8.0625, all of which options are currently exercisable.
(12) Includes 27,520 shares of Common Stock issuable upon the exercise of
options granted to Mr. Corchado under the Stock Option Plan at an exercise
price of $8.0625, which options are currently exercisable.
(13) Includes 21,163 shares of Common Stock issuable upon the exercise of
options granted to Mr. Gaines under the Stock Option Plan at an exercise
price of $8.0625, which options are currently exercisable.
(14) Includes 22,000 shares of Common Stock held in the Genevieve Currie Green
Revocable Living Trust dated October 15, 1993, of which Mr. Green is the
trustee, an aggregate of 14,100 owned of record by Mr. Green as custodian
for several of his children under the Uniform Gifts to Minors Act, and 3,525
shares of Common Stock owned of record by Mr. Green's daughter. Mr. Green
disclaims beneficial ownership with respect to these shares of Common Stock.
(15) Includes 20,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Green under the Stock Option Plan, 10,000 of which
are at an exercise price of $8.0625 per share and 10,000 of which are at an
exercise price of $8.00 per share, all of which options are currently
exercisable.
(16) Includes 11,800 shares of Common Stock owned by The John H. Marmaduke
Family Limited Partnership, which Mr. Marmaduke controls through voting
control of the corporate general partner. Mr. Marmaduke disclaims beneficial
ownership of these securities except to the extent of his pecuniary interest
therein.
(17) Includes 20,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Marmaduke under the Stock Option Plan, 10,000 of
which are at an exercise price of $8.0625 per share and 10,000 of which are
at an exercise price of $8.00 per share, all of which options are currently
exercisable.
(18) As disclosed on the Schedule 13G filed by such beneficial owner, a copy of
which was furnished to the Company.
ADDITIONAL INFORMATION
AUDITORS
The Board of Directors selected Price Waterhouse LLP to continue as the
Company's independent auditors for the fiscal year ending December 31, 1998. The
firm of Price Waterhouse LLP has been the independent auditors of the Company
since the Company's inception. One or more representatives of Price Waterhouse
LLP will be present at the Annual Meeting. The representatives will have the
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions.
14
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORT COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors, officers
and persons who own more than 10% of the Common Stock to file reports about
their beneficial ownership of the Common Stock. Based solely on a review of
copies of such reports furnished to the Company and written representations that
no other reports were required, all of the Company's directors, officers or
owners of more than 10% of the Common Stock complied with all reporting
requirements of Section 16(a) of the Exchange Act with respect to the year 1997,
except Mr. Marmaduke who failed to timely file two Form 4's and Mr. Hall who
failed to timely file one Form 4. Late reports were filed in each instance.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1997 has previously been sent or is concurrently being sent to
stockholders of the Company. The Annual Report to Stockholders is not part of
the proxy solicitation materials. The Company will provide without charge a copy
of the Company's Annual Report on Form 10-K (without exhibits) to any
stockholder upon written request to R. Wayne Moore, Secretary, 1201 S. Taylor,
P.O. Box 750, Amarillo, Texas 79105.
STOCKHOLDER PROPOSALS
Proposals that stockholders of the Company intend to present for inclusion
in the Company's proxy statement and form of proxy with respect to the Company's
1999 Annual Meeting of Stockholders must be received by the Company at the
address indicated on the first page of this Proxy Statement no later than
December 10, 1998.
EXPENSE OF SOLICITATION
The Company expects to solicit proxies primarily by mail, but directors,
officers, employees and agents of the Company may also solicit proxies in person
or by telephone or other electronic means. The cost of preparing, assembling,
and mailing the proxies and accompanying materials for this Annual Meeting,
including the cost of reimbursing brokers and nominees for forwarding proxies
and proxy statements to their principals, will be paid by the Company. Morrow &
Co., Inc. will assist the Company in the solicitation of proxies. It is
estimated that the Company will pay approximately $3,000 in fees, plus expenses
and disbursements, to Morrow & Co., Inc. for the Company's proxy solicitation
services.
MISCELLANEOUS
The information set forth in this Proxy Statement under the captions
"Compensation Committee Report on Executive Officer Compensation" and
"Performance Graph" shall not be deemed to be (i) incorporated by reference into
any filing by the Company under the Securities Act or the Exchange Act, except
to the extent that in any such filing the Company expressly so incorporates such
information by reference, and (ii) "soliciting material" or to be "filed" with
the Commission.
Where information contained in this Proxy Statement rests particularly
within the knowledge of a person other than the Company, the Company has relied
upon information furnished by such person or contained in filings made by such
person with the Commission.
By Order of the Board of Directors
R. Wayne Moore
SECRETARY
Amarillo, Texas
March 31, 1998
15
<PAGE>
CROSS-CONTINENT AUTO RETAILERS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 12, 1998
The undersigned, revoking any proxy heretofore given, hereby appoint(s)
John W. Gaines and R. Wayne Moore, proxy of the undersigned with full power
of substitution, to vote all of the shares of common stock, par value $.01
per share, of CROSS-CONTINENT AUTO RETAILERS, INC. (the "Company") which the
undersigned is entitled to vote at the Company's Annual Meeting to be held at
2:00 p.m. local time, on Tuesday, May 12, 1998, at the Ambassador Hotel, San
Jacinto Room, 3100 I-40 West, Amarillo, Texas and at any adjournment thereof,
hereby ratifying all that said proxies or their substitutes may do by virtue
hereof, and the undersigned authorizes and instructs said proxies to vote as
set forth on the Reverse Side hereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments thereof.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE NOMINEE
LISTED IN PROPOSAL 1.
Please fill in, date, sign and mail this Proxy in the enclosed
postage-paid return envelope.
By signing and returning this Proxy, the undersigned acknowledges
receipt of the Notice of Annual Meeting and Proxy Statement
and of the Annual Report and
financial statements of the Company CROSS-CONTINENT AUTO RETAILERS, INC.
preceding or accompanying the same. P.O. BOX 11189
NEW YORK, N.Y. 10203-0189
Unless a contrary direction is
indicated, this Proxy will be vote
FOR the nominee listed in Proposal 1
as more specifically set forth in
the Proxy Statement; if specific
instructions are indicated, this
Proxy will be voted in accordance
therewith.
(Please Sign and Date on Reverse Side)
<PAGE>
<TABLE>
/ /
<S> <C>
1. Election of Directors Nominee: John H. Marmaduke FOR /X/ WITHHOLD AUTHORITY /X/
2. In their discretion, upon such other matters as properly come before the meeting.
PLEASE MARK IF YOU /X/ CHANGE OF ADDRESS AND/ /X/
PLAN TO ATTEND THE MEETING OR COMMENTS MARK HERE
Please sign exactly as name appears hereon. When
signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
If owned jointly, each owner should sign.
Date:
--------------------------------------------------
--------------------------------------------------
Signature
--------------------------------------------------
Signature
Votes must be indicated /X/
(x) in Black or Blue ink.
(Please sign, date and return this proxy in the enclosed postage prepaid envelope.)
</TABLE>
