<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 5)
Under the Securities Exchange Act of 1934
United Auto Group, Inc.
-----------------------
(Name of Issuer)
Voting Common Stock, par value $0.0001 per share
------------------------------------------------
(Title of Class of Securities)
909440109
---------
(CUSIP Number of Class of Securities)
Philip N. Smith, Jr.
Trace International Holdings, Inc.
375 Park Avenue, 11th Floor
New York, New York 10152
(212) 230-0400
--------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 3, 1999
-----------
(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following: [ ]
Page 1 of 6 Pages
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- -------------------- -----------------
CUSIP No. 909440109 SCHEDULE 13D Page 2 of 6 Pages
- -------------------- -----------------
- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Marshall S. Cogan I.D. #
- ----------- --------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- --------------------------------------------------------------------
3 SEC USE ONLY
- ----------- --------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- ----------- --------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- ----------- --------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- --------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
105,000 shares
--------- ------------------------------------------------
NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 1,000 shares
PERSON WITH
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
105,000 shares
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,000 shares
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
106,000 shares
- ----------- --------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
- ----------- --------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ----------- --------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
- -------------------- -----------------
CUSIP No. 909440109 SCHEDULE 13D Page 3 of 6 Pages
- -------------------- -----------------
- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trace International Holdings, Inc. I.D. #58-1080969
- ----------- --------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ----------- --------------------------------------------------------------------
3 SEC USE ONLY
- ----------- --------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC, BK
- ----------- --------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- ----------- --------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
4,016,110 shares
--------- ------------------------------------------------
NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 0 shares
PERSON WITH
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
4,016,110 shares
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 shares
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,016,110 shares
- ----------- --------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.9%
- ----------- --------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC, CO
- ----------- --------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
This Amendment No. 5 to Schedule 13D (this "Amendment No. 5") is being
filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on behalf of Trace International Holdings, Inc. ("Trace International")
and Marshall S. Cogan ("Mr. Cogan" and, together with Trace International, the
"Filing Persons") and relates to the voting common stock, par value $0.0001 per
share (the "Common Stock"), of United Auto Group, Inc., a Delaware corporation
(the "Company" or "UAG"). This Amendment No. 5 amends the Schedule 13D filed by
Trace International and Mr. Cogan on April 2, 1997, as amended on August 27,
1997, January 23, 1998, September 4, 1998 and April 21, 1999.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended and supplemented by adding the
following:
On April 12, 1999, the Company entered into a Securities Purchase Agreement
(the "Agreement") with International Motor Cars Group I, L.L.C. and
International Motor Cars Group II, L.L.C. (together, the "Purchaser"), two
entities formed by Penske Capital Partners, L.L.C. On May 3, 1999, the Purchaser
and the Company consummated the first step (the "Initial Closing") of the
transactions contemplated by the Agreement. In connection with the Initial
Closing, the Company, the Purchaser, Trace International, AIF II, L.P. and
Aeneas Venture Corporation entered into a Stockholders Agreement, which is set
forth as Exhibit 10.12 hereto and is incorporated by reference herein.
Except with respect to the transactions contemplated by the Agreement as
set forth herein, the Filing Persons do not have any plans or proposals which
relate to or would result in any of the matters set forth in (a) through (j) of
Item 4 to Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Item 5(a) is hereby amended and supplemented by adding the following:
As a result of the Stockholders Agreement described in Item 4 above, the
Filing Persons may be deemed to have formed a "group" within the meaning of
Section 13(d) of the Exchange Act with the Purchaser, Aeneas Venture Corporation
and/or AIF II, L.P. The filing of this Amendment No. 5 to the Schedule 13D shall
not be construed as an admission that either Filing Person is, for the purposes
of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of any
securities covered by this Amendment No. 5 to the Schedule 13D other than the
securities stated herein to be beneficially owned by such Filing Person. The
Filing Persons expressly disclaim beneficial ownership of any shares of Common
Stock beneficially owned by the Purchaser, Aeneas Venture Corporation or AIF II,
L.P.
Page 4 of 6 Pages
<PAGE>
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
Item 6 is hereby amended and supplemented by adding the following:
The information set forth in Item 4 above is hereby incorporated by
reference.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended and supplemented by adding the following:
EXHIBIT 10.12 Stockholders Agreement, dated as of May 3, 1999, by and among
Trace International Holdings, Inc., AIF II, L.P., Aeneas Venture
Corporation, International Motor Cars Group I, L.L.C.,
International Motor Cars Group II, L.L.C. and United Auto Group,
Inc.
Page 5 of 6 Pages
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 4, 1999
TRACE INTERNATIONAL HOLDINGS, INC.
By: /s/ Philip N. Smith, Jr.
----------------------------
Name: Philip N. Smith, Jr.
Title: Senior Vice President
and General Counsel
/s/ Marshall S. Cogan
----------------------------
Name: Marshall S. Cogan
Page 6 of 6 Pages
<PAGE>
EXHIBIT INDEX
Exhibit No. Title
- ------- ---------
10.12 Stockholders Agreement, dated as of May 3, 1999, by and
among Trace International Holdings, Inc., AIF II, L.P.,
Aeneas Venture Corporation, International Motor Cars Group
I, L.L.C., International Motor Cars Group II, L.L.C. and
United Auto Group, Inc.
<PAGE>
EXHIBIT 10.12
EXECUTION COPY
================================================================================
UNITED AUTO GROUP, INC.
STOCKHOLDERS AGREEMENT
BY AND AMONG
AIF II, L.P.,
AENEAS VENTURE CORPORATION,
INTERNATIONAL MOTOR CARS GROUP I, L.L.C.,
INTERNATIONAL MOTOR CARS GROUP II, L.L.C.,
TRACE INTERNATIONAL HOLDINGS, INC.,
AND
UNITED AUTO GROUP, INC.
Dated as of May 3, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
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Page #
------
ARTICLE I. DEFINITIONS........................................................1
Section 1.1. Definitions...................................................1
Section 1.2. Rules of Construction.........................................3
ARTICLE II. BOARD COMPOSITION AND VOTING AGREEMENTS...........................4
Section 2.1. Board Composition from the Initial Closing Date
through the Second Closing Date...............................4
Section 2.2. Board Composition from the Second Closing Date................4
Section 2.3. Composition of Committees of the Board of Directors...........5
Section 2.4. Voting Agreement..............................................5
Section 2.5. Reduction in Right of PCP Entities to Designate Directors.....6
Section 2.6. Suspension of Right to Designate Directors....................6
Section 2.7. Replacement Directors.........................................7
Section 2.8. Resignation of PCP Directors..................................7
Section 2.9. Termination of Article II.....................................7
ARTICLE III. STANDSTILL PROVISIONS............................................7
Section 3.1. Standstill Provisions.........................................7
Section 3.2. Exceptions to the Standstill Provisions.......................8
ARTICLE IV. TRANSFER RESTRICTIONS.............................................9
Section 4.1. Restrictions on Transfer of Restricted Securities.............9
Section 4.2. Tag-Along Rights..............................................9
Section 4.3. Transferees; Noncomplying Transfers..........................10
Section 4.4. Restrictions on Transfers of Interests in the PCP Entities...10
ARTICLE V. CERTAIN COVENANTS.................................................11
Section 5.1. Legend on Certificates.......................................11
Section 5.2. Roger Penske to Serve as Chairman and Chief Executive
Officer......................................................11
Section 5.3. Approval of Company Action Under the Securities Purchase
Agreement.......................................................12
Section 5.4. Trace Shelf Registration Statement............................12
Section 5.5. Further Assurances...........................................12
(i)
<PAGE>
ARTICLE VI. MUTUAL REPRESENTATIONS AND WARRANTIES............................13
Section 6.1. Organization.................................................13
Section 6.2. Authorization, Validity and Enforceability...................13
Section 6.3. No Violation or Breach.......................................13
Section 6.4. Beneficial Ownership of Common Stock.........................14
ARTICLE VII. TERM............................................................14
Section 7.1. Term.........................................................14
Section 7.2. Effects of Termination.......................................14
ARTICLE VIII. MISCELLANEOUS PROVISIONS.......................................14
Section 8.1. Survival.....................................................14
Section 8.2. Notices......................................................14
Section 8.3. Amendments...................................................16
Section 8.4. Assignment and Parties in Interest...........................16
Section 8.5. Expenses.....................................................16
Section 8.6. Entire Agreement.............................................16
Section 8.7. Descriptive Headings.........................................17
Section 8.8. Counterparts.................................................17
Section 8.9. Governing Law; Jurisdiction..................................17
Section 8.10. Severability.................................................17
Section 8.11. Specific Performance.........................................18
Schedule 6.3 - Conflicts
Schedule 6.4 - Equity Ownership
(ii)
<PAGE>
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (the "Agreement") dated as of May 3,
1999 by and among AIF II, L.P., a Delaware limited partnership ("Apollo"),
Aeneas Venture Corporation, a Delaware corporation ("Harvard"), International
Motor Cars Group I, L.L.C. ("PCP I"), International Motor Cars Group II, L.L.C.
("PCP II" and, together with PCP I, the "PCP Entities"), Trace International
Holdings, Inc. ("Trace" and together with Apollo, Harvard and the PCP Entities,
the "Restricted Stockholders"), and United Auto Group, Inc. (the "Company").
WHEREAS, pursuant to the terms of a Securities Purchase
Agreement, between the Company and the PCP Entities, dated as of April 12, 1999
(the "Securities Purchase Agreement"), the PCP Entities are acquiring Series A
Convertible Preferred Stock, par value $.0001 per share, of the Company (the
"Series A Preferred Stock"), Series B Convertible Preferred Stock, par value
$.0001 per share (the "Series B Preferred Stock") and warrants (the "Warrants")
to acquire the Company's voting Common Stock, par value $.0001 per share, and
non-voting Common Stock, par value $.0001 per share (together, the "Common
Stock"), of the Company;
WHEREAS, Apollo, Harvard and Trace are existing stockholders
of the Company; and
WHEREAS, the parties wish to provide for certain matters
relating to the ownership and transfer of the Common Stock.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. Unless otherwise defined herein, the
terms defined in the introductory paragraph and the Recitals to this Agreement
shall have the respective meanings specified therein, and the following terms
shall have the meanings specified below:
"Adjusted Beneficial Ownership" is defined in Section 2.5.
"Affiliate" means affiliate as defined in Rule 405 promulgated
under the Securities Act.
"Apollo" has the meaning set forth in the preamble.
"Beneficial Ownership" means "beneficial ownership" as defined
in Rule 13d-5 promulgated under the Exchange Act.
<PAGE>
The term "Beneficial Owner" shall have a correlative meaning.
"Business Day" means a calendar day, other than (a) a Saturday
or Sunday and (b) a day on which commercial banks are required or
permitted by law or other governmental action to close in New York, New
York, United States of America.
"Common Stock" has the meaning set forth in the recitals
hereto, and includes any securities issued with respect to such shares
by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, amalgamation, merger,
consolidation or other reorganization or otherwise.
"Company" has the meaning set forth in the recitals hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Harvard" has the meaning set forth in the recitals hereto.
"Independent Directors" (a) initially means two persons who
were members of the Audit Committee of the Company's Board of Directors
as of December 31, 1998 and who shall be selected by a majority of said
Audit Committee and (b) after the Initial Closing Dates means persons
nominated by the immediately preceding Independent Directors who are
not Affiliates of either the PCP Entities or their respective
Affiliates (other than the Company).
"Initial Closing Date" means the date of the "Initial Closing"
(as defined in the Securities Purchase Agreement).
"PCP Directors" has the meaning set forth in Section 2.1.
"PCP Entities" has the meaning set forth in the recitals
hereto.
"PCP I" has the meaning set forth in the recitals hereto.
"PCP II" has the meaning set forth in the recitals hereto.
"Permitted Transferee" of a person means (i) a corporation,
partnership or other entity wholly owned by such person; provided that
such corporation, partnership or other entity shall agree in writing
that it shall transfer to such person any Restricted Securities which
it holds
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<PAGE>
prior to such time as it ceases to be wholly owned by such person, and
(ii) the equity owners of such person to the extent such equity owners
receive a pro rata distribution of Restricted Securities.
"Restricted Securities" means any Common Stock or other equity
security of the Company Beneficially Owned by a Restricted Stockholder
and any securities convertible, exercisable or exchangeable for Common
Stock or such other equity securities, including, without limitation,
the Series A Preferred Stock and the Warrants.
"Restricted Stockholder" has the meaning set forth in the
preamble.
"Second Closing Date" means the date of the "Second Closing"
(as defined in the Securities Purchase Agreement).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Purchase Agreement" has the meaning set forth in
the recitals hereto.
"Series A Preferred Stock" has the meaning set forth in the
recitals hereto.
"Series B Preferred Stock" has the meaning set forth in the
recitals hereto.
"Tag-Along Notice" is defined in Section 4.2.
"Tag-Along Stockholders" is defined in Section 4.2.
"Trace" has the meaning set forth in the recitals hereto.
"Transfer" means any direct or indirect transfer, sale,
assignment, gift, pledge, mortgage, hypothecation or other disposition
of any interest. The term "Transferee" shall have a correlative
meaning.
"Warrants" has the meaning set forth in the recitals hereto.
Section 1.2. Rules of Construction. Unless the context
otherwise requires: (a) a term has the meaning assigned to it by this Agreement;
(b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles in effect in the United
States of America; (c) "or" is not exclusive; and (d) words in the singular
include the plural, and in the plural include the singular. The language used in
this Agreement shall be deemed to be the language chosen by the parties to
express their mutual
-3-
<PAGE>
intent, and no rule of strict construction shall be applied against any party.
Any references to any statute or law shall also refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
ARTICLE II.
BOARD COMPOSITION AND VOTING AGREEMENTS
Section 2.1. Board Composition from the Initial Closing Date
through the Second Closing Date. From the Initial Closing Date through and
including the Second Closing Date, the Restricted Stockholders shall use their
reasonable best efforts to have the Board of Directors of the Company consist of
seven (7) persons as follows:
(a) Roger Penske, and two (2) additional directors nominated
by the PCP Entities (nominating as a single group) (Mr. Penske and any
additional directors nominated by the PCP Entities are collectively
referred to as the "PCP Directors").
(b) One (1) director nominated by Trace.
(c) The chief operating officer of the Company as of the date
immediately prior to the Initial Closing Date, or in his absence,
another person designated by the Independent Directors.
(d) Two (2) Independent Directors.
Section 2.2. Board Composition from the Second Closing Date.
The Restricted Stockholders shall use their reasonable best efforts to:
(a) Prior to the Second Closing Date:
(i) expand the size of the Board of Directors of the
Company to nine (9) persons effective as of the Second Closing
Date; and
(ii) nominate for election by the Company's
stockholders two additional PCP Directors to fill the
vacancies created by the expansion of the size of the Board of
Directors.
(b) On the Second Closing Date, fill the vacancies created by
the expansion of the size of the Board of Directors with the directors
elected by the stockholders.
(c) From and after the earlier of (x) the first meeting of
stockholders of the Company following the Second Closing Date, and (y)
the first vacancy on the Board of
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<PAGE>
Directors following the Second Closing Date, cause the Board of
Directors to consist of:
(i) Roger Penske, and four (4) additional PCP
Directors.
(ii) One (1) director nominated by Trace.
(iii) Three (3) Independent Directors.
Section 2.3. Composition of Committees of the Board of
Directors.
(a) From the Initial Closing Date through the Second Closing
Date, the Restricted Stockholders shall use their reasonable best
efforts to have PCP Directors appointed to committees of the Board of
Directors of the Company as follows:
(i) PCP Directors shall be appointed to constitute no
less than one-half of the members of the Executive Committee,
if any.
(ii) One PCP Director shall be appointed to each
other committee of the Board of Directors and other members of
which not less than 2 (two) shall be Independent Directors.
(b) From and after the Second Closing Date, the Restricted
Stockholders shall use their reasonable best efforts to have the
Compensation Committee of the Board of Directors of the Company consist
of four persons as follows:
(i) Roger Penske and one (1) additional PCP Director.
(ii) Two (2) Independent Directors.
Section 2.4. Voting Agreement. Each of the Restricted
Stockholders agrees to vote all of the voting securities of the Company
Beneficially Owned by it in favor of the persons to be nominated as directors
pursuant to Section 2.1 or 2.2, and to take all other reasonable action to cause
such Persons to be elected as the only directors of the Company.
Section 2.5. Reduction in Right of PCP Entities to Designate
Directors. Notwithstanding anything to the contrary contained in this Agreement,
at such time after the Second Closing Date as the percentage Beneficial
Ownership in the Company of the PCP Entities, taken together, and excluding
Common Stock Beneficially Owned as a result of unexercised Warrants ("Adjusted
Beneficial Ownership") is reduced below 20% then the number of PCP Directors
shall be reduced to the applicable number in the chart below:
-5-
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<TABLE>
<CAPTION>
If such Adjusted
Beneficial Ownership No. of PCP Directors
is equal to or to be designated
greater than: but less than: thereafter
- ------------- -------------- ----------
<S> <C> <C>
17.5% 20.0% 4
15.0% 17.5% 3
12.5% 15.0% 2
10.0% 12.5% 1
</TABLE>
The number of PCP Directors to be designated shall be further reduced
as such Adjusted Beneficial Ownership is further reduced, as provided in the
chart above. Any reduction resulting from application of this Section 2.5 shall
take place on the earlier to occur of (x) the first meeting of stockholders of
the Company following the determination of such reduction, and (y) the first
vacancy on the Board of Directors following the determination of such reduction.
Section 2.6. Suspension of Right to Designate Directors.
Notwithstanding anything to the contrary contained in this Agreement, the right
of the PCP Entities or Trace to designate directors of the Company shall be
suspended at such time as either:
(a) such Restricted Stockholder's Beneficial Ownership in the
Company (with respect to the PCP Entities, their Adjusted Beneficial
Ownership) is reduced below 10%; or
(b) in the case of the PCP Entities, if either (i) they are in
default of Section 5.2(b) other than as a result of the death,
incapacity, or capture and detention of Mr. Penske, or (ii) one or both
of the PCP Entities has requested that the Company repurchase all or a
portion of its Restricted Securities pursuant to the terms of the
Securities Purchase Agreement.
Section 2.7. Replacement Directors . During such time as the
right of either the PCP Entities or Trace to nominate directors is reduced or
suspended pursuant to Section 2.5 or 2.6, the Restricted Stockholders shall use
their reasonable best efforts to have the successors to such directors both:
(a)be selected by a majority of the remaining Board of Directors, excluding the
director whose position is no longer entitled to be designated by Trace or the
PCP Entities, and (b) not be Affiliates of the PCP Entities and their Affiliates
(other than the Company and its subsidiaries).
-6-
<PAGE>
Section 2.8. Resignation of PCP Directors . Upon exercise by
the PCP Entities of their right pursuant to Section 7.2 or 7.4 of the Securities
Purchase Agreement, the PCP Entities shall cause all of the PCP Directors to
immediately resign as members of the Board of Directors of the Company.
Section 2.9. Termination of Article II. The provisions
contained in this Article II shall terminate and be of no further effect from
and after the third anniversary of the Initial Closing Date.
ARTICLE III.
STANDSTILL PROVISIONS
Section 3.1. Standstill Provisions. Subject to Section 3.2, at
any time prior to the third anniversary of the Initial Closing Date, each
Restricted Stockholder shall not, and shall cause its Affiliates not to, either
alone or as part of a "group" (as such term is used in Section 13d-5 (as such
rule is currently in effect) of the Exchange Act), directly or indirectly:
(a) acquire or seek to acquire, by purchase or otherwise,
ownership (including, but not limited to, Beneficial Ownership) of (i)
any capital stock of the Company, or direct or indirect rights
(including convertible securities) or options to acquire such capital
stock or (ii) any of the assets or businesses of the Company, or direct
or indirect rights or options to acquire such assets or businesses;
(b) offer, seek or propose to enter into any transaction of
merger, consolidation, sale of substantial assets or any other business
combination involving the Company or any of its Affiliates, whether or
not any parties other than such Restricted Stockholder and its
Affiliates are involved;
(c) make, or in any way participate, directly or indirectly,
in any "solicitation" of "proxies" (as such terms are defined or used
in Regulation 14A under the Exchange Act) or become a "participant" in
any "election contest" (as such terms are defined or used in Rule
14a-11 under the Exchange Act) to vote, or seek to advise or influence
any person or entity with respect to the voting of, any voting
securities of the Company of any of its Affiliates, except as set forth
in Article II of this Agreement;
(d) initiate or propose any stockholder proposals for
submission to a vote of stockholders, whether by action at a
stockholder meeting or by written consent, with respect to the Company
or any of its Affiliates, or except as provided
-7-
<PAGE>
in this Agreement propose any person for election to the Board of
Directors of the Company;
(e) disclose to any third party, or make any filing under the
Exchange Act, including, without limitation, under Section 13(d)
thereof, disclosing, any intention, plan or arrangement inconsistent
with the foregoing;
(f) form, join or in any way participate in a group to take
any actions otherwise prohibited by the terms of this Agreement;
(g) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing; or
(h) make any public announcement with respect to any of the
foregoing.
Section 3.2. Exceptions to the Standstill Provisions.
Notwithstanding the foregoing, the provisions of Section 3.1 shall not prohibit:
(a) any transaction by a Restricted Stockholder approved by
either (i) a majority of the members of the Board of Directors who are
neither designated by such Restricted Stockholder nor otherwise
affiliated with such Restricted Stockholder, or (ii) a majority of the
stockholders of the Company other than such Restricted Stockholder and
its Affiliates;
(b) in the case of the PCP Entities, the acquisition of
securities pursuant to the terms of the Securities Purchase Agreement;
(c) in the case of the PCP Entities, Harvard and Apollo, the
acquisition of securities or of Beneficial Ownership of securities if,
after giving effect to such acquisition, the Beneficial Ownership of
such Restricted Stockholder in the Company is less than or equal to
49%;
(d) in the case of the PCP Entities, a tender offer for all,
but not less than all, of the outstanding Common Stock of the Company
or a merger with or into the Company;
(e) the granting by the Board of Directors of options to
Affiliates of Restricted Stockholders; or
(f) the exercise of stock options.
-8-
<PAGE>
ARTICLE IV.
TRANSFER RESTRICTIONS
Section 4.1. Restrictions on Transfer of Restricted
Securities. Until the third anniversary of the Initial Closing Date, neither of
the PCP Entities nor Trace shall Transfer any of its Restricted Securities
except:
(a) as part of a merger, consolidation or amalgamation of the
Company or a tender offer for Common Stock of the Company which is open
to all stockholders of the Company;
(b) in the case of a PCP Entity, a Transfer of Common Stock in
compliance with Section 4.2 of this Agreement to a Transferee that has
agreed to comply with the provisions of Section 4.2.
(c) to a Permitted Transferee who shall have become a party to
this Agreement by executing a signature page hereto and delivering such
signature page to the Company and the other Restricted Stockholders,
which execution and delivery shall constitute an agreement by such
Permitted Transferee that it and the Restricted Securities that it
acquires shall be bound by and entitled to the benefits of this
Agreement;
(d) pursuant to a Brokers' Transaction (as such term is
defined in Rule 144(g) under the Securities Act) or pursuant to an
underwritten public offering of Common Stock; or
(e) to a pledgee of the Restricted Securities pursuant to a
pledge (or other security) agreement existing as of the date of this
Agreement.
Section 4.2. Tag-Along Rights
(a) In the event either or both of the PCP Entities desires to
Transfer any Restricted Securities pursuant to Section 4.1(b) at any
time prior to the third anniversary of the Initial Closing Date, such
PCP Entity shall notify Apollo and Harvard (the "Tag-Along
Stockholders") in writing, of such proposed Transfer and its terms and
conditions (the "Tag-Along Notice").
(b) Within ten (10) Business Days of the date of the Tag-Along
Notice, each Tag-Along Stockholder shall notify the PCP Entities if it
elects to participate in such Transfer. Any such Tag-Along Stockholder
that fails to notify either PCP Entity within such ten (10) Business
Day period shall be deemed to have waived its rights to participate in
such Transfer. Each such Tag-Along Stockholder that so notifies the PCP
Entities shall have the right to Transfer, at the same price per share
of Common
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Stock and on the same terms and conditions as the applicable PCP Entity
or Entities, an amount of shares equal to the shares the Transferee
actually proposes to purchase multiplied by a fraction, the numerator
of which shall be the number of shares of Common Stock issued and owned
by such Tag-Along Stockholder and the denominator of which shall be the
aggregate number of shares of Common Stock issued and owned by such PCP
Entity (or both PCP Entities, if both are selling pursuant to such
transaction) and each other Tag-Along Stockholder exercising its rights
under this Section (assuming for purposes of calculating such fraction
the conversion of all convertible securities and the exercise of all
options and warrants held by the PCP Entities and each other Tag-Along
Stockholder exercising its rights under this Section).
Section 4.3. Transferees; Noncomplying Transfers. In the event
of any purported Transfer of any Restricted Securities in violation of Article
IV of this Agreement, such purported Transfer shall be void and of no effect,
and no dividend of any kind whatsoever nor any distribution pursuant to
liquidation or otherwise shall be paid by the Company to the purported
transferee in respect of such Restricted Securities (all such dividends and
distributions being deemed waived), and the voting rights of such Restricted
Securities, if any, on any matter whatsoever shall remain vested in the
Transferor, and the Transferor shall not be relieved of any of its obligations
hereunder as the holder of such Restricted Securities. In the event of such a
non-complying Transfer, the Company shall not Transfer any such Restricted
Securities on its books or recognize the purported Transferee as a stockholder,
for any purpose, until all applicable provisions of this Agreement have been
complied with.
Section 4.4. Restrictions on Transfers of Interests in the PCP
Entities. Until the second anniversary of the Initial Closing Date:
(a) Each of the PCP Entities shall not register or permit any
Transfer of the membership interests in such entity by Penske
Corporation or Penske Capital Partners, L.L.C., except pursuant to a
pro rata Transfer by all of the members of interests valued at up to
$15 million to certain members of the Company's management (a
"Management Incentive Transfer").
(b) Penske Corporation and Penske Capital Partners, L.L.C.
each agrees not to Transfer any interest in the PCP Entities or
Restricted Securities, except for a Management Incentive Transfer.
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<PAGE>
ARTICLE V.
CERTAIN COVENANTS
Section 5.1. Legend on Certificates. Each certificate for
Restricted Securities of PCP shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED
BY THAT CERTAIN STOCKHOLDERS AGREEMENT, BY AND AMONG UNITED
AUTO GROUP, INC., TRACE INTERNATIONAL HOLDINGS, INC.,
INTERNATIONAL MOTOR CARS GROUP I, L.L.C., INTERNATIONAL MOTOR
CARS GROUP II, L.L.C., AIF II, L.P. AND AENEAS VENTURE
CORPORATION, A COUNTERPART OF WHICH STOCKHOLDERS AGREEMENT HAS
BEEN PLACED ON FILE BY THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS AND ITS REGISTERED OFFICE. A COPY OF SUCH
STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE RECORD HOLDER HEREOF UPON WRITTEN REQUEST TO
THE COMPANY AT THE PRINCIPAL PLACE OF BUSINESS OF THE
COMPANY."
Section 5.2. Roger Penske to Serve as Chairman and Chief
Executive Officer.
(a) On the Initial Closing Date, the Restricted Stockholders
shall use their reasonable best efforts to have Roger Penske appointed
as Chairman and Chief Executive Officer of the Company.
(b) From and after the Initial Closing Date, the PCP Entities
shall cause Roger Penske:
(i) to serve as the Chairman of the Company until the
third anniversary of the Second Closing Date and as Chief
Executive Officer of the Company until the second anniversary
of the Second Closing Date; provided, however, such obligation
shall cease if pursuant to Sections 2.5 or 2.6, PCP Directors
shall no longer constitute a majority of the Company's Board
of Directors, and provided further, that upon exercise by the
PCP Entities of their right pursuant to Section 7.2 or 7.4 of
the Securities Purchase Agreement, Roger Penske shall
promptly, but in no event later than the Business Day
immediately following such exercise, resign as Chairman, as a
Director and as Chief Executive Officer;
(ii) to receive compensation payable by the Company
no greater than: (x) salary of $1 per annum, (y) a bonus
determined by the Compensation Committee of the Board of
Directors, and (z) options for 400,000 shares of Common Stock
with an exercise price of $10.00 per share to be granted on
the Second Closing Date.
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<PAGE>
Such options shall vest in equal installments over a three
year period from and after the Initial Closing Date, so long
as Mr. Penske continues to serve as Chairman of the Board of
Directors.
Section 5.3. Approval of Company Action Under the Securities
Purchase Agreement. From and after the Initial Closing Date, all consents,
waivers, amendments or other actions on the part of the Company under the
Securities Purchase Agreement and the other agreements with the PCP Entities
contemplated by the Securities Purchase Agreement shall be undertaken under the
direction of a majority of the Board of Directors (excluding for such purposes
the PCP Directors and any other directors Affiliated with either PCP Entity).
Section 5.4. Trace Shelf Registration Statement.
(a) From the date hereof through the third anniversary of the
Initial Closing Date, the Company shall use its reasonable best efforts
to maintain effective a registration statement relating to the sale by
Trace of its Restricted Securities, including, without limitation,
filing accountants' consents and updating the disclosure for material
developments.
(b) Trace shall reimburse the Company for its reasonable
out-of-pocket expenses incurred in connection with keeping such
registration statement effective.
Section 5.5. Further Assurances. Each of the parties hereto
shall use commercially reasonable efforts to do such additional things and
execute such documents as are reasonably necessary or proper to carry out and
effectuate the intent of this Agreement or any part hereof.
ARTICLE VI.
MUTUAL REPRESENTATIONS AND WARRANTIES
Each of the parties hereto represents and warrants to the
others as follows:
Section 6.1. Organization. It is duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation,
and has all requisite power and authority to own, lease and operate its assets
and properties and to conduct its business as currently being conducted.
Section 6.2. Authorization, Validity and Enforceability. It
has full power and authority to execute, deliver and perform its obligations
under this Agreement. The execution, delivery and performance by it of this
Agreement and the consummation by it of the transactions contemplated hereby
have been duly authorized by its board of directors or other
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<PAGE>
governing body and no other proceedings on its part are necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement has been
duly executed and delivered by it, and constitutes the legal, valid and binding
obligation of it, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting rights of creditors
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).
Section 6.3. No Violation or Breach. Except as set forth on
Schedule 6.3, the execution, delivery and performance by it of this Agreement
and the consummation of the transactions contemplated hereby, do not and will
not conflict with, result in a violation or breach of, constitute a default (or
an event which with the giving of notice or the lapse of time or both would
constitute a default) or give rise to any right of termination or acceleration
of any right or obligation of it under, or result in the creation or imposition
of any lien, mortgage, pledge, security interest, claim, right of first refusal
or other limitation on transfer or other encumbrance upon any of its Restricted
Securities by reason of the terms of, (a) its memorandum of association,
certificate of incorporation, by-laws or other charter or organizational
document, (b) any contract, agreement, lease, license, mortgage, note, bond,
debenture, indenture or other instrument or obligation to which it is a party or
by or to which it or its assets or properties may be bound or subject, (c) any
order, writ, judgment, injunction, award, decree, law, statute, rule or
regulation applicable to it or (d) any license, permit, order, consent,
approval, registration, authorization or qualification with or under any
governmental agency, other than in the case of clauses (b), (c) or (d) above any
conflict, violation, breach or default which would not, individually or in the
aggregate together with all other such conflicts, violations, breaches or
defaults, have a material adverse effect on it or have a material adverse effect
on its ability to perform its obligations, or consummate the transactions
contemplated, hereunder.
Section 6.4. Beneficial Ownership of Common Stock. As of the
Initial Closing Date, such Restricted Stockholder Beneficially Owns the shares
of Common Stock set forth opposite its name on Schedule 6.4.
ARTICLE VII.
TERM
Section 7.1. Term. This Agreement shall commence on the date
hereof, and shall terminate on the earliest of (a) the termination of the
Securities Purchase Agreement, (b) in the event that the Second Closing Date
does not occur on or prior to December 31, 1999, January 1, 2000 and (c)
December 31, 2009.
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<PAGE>
This Agreement shall terminate with respect to a Restricted Stockholder at such
time as it ceases to Beneficially Own any Restricted Securities.
Section 7.2. Effects of Termination. Upon termination of this
Agreement, this Agreement (other than Section 8.9) shall thereafter become void
and have no effect, and no party hereto shall have any liability or obligation
to any other party hereto in respect of this Agreement.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
Section 8.1. Survival. All of the representations, warranties,
covenants, and agreements of the parties contained in this Agreement shall
survive the Initial Closing Date and the Second Closing Date and shall continue
in full force and effect forever thereafter.
Section 8.2. Notices. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given (a)
when delivered personally to the recipient, (b) when sent to the recipient by
telecopy (receipt electronically confirmed by sender's telecopy machine) if
during normal business hours of the recipient, otherwise on the next Business
Day, (c) one Business Day after the date when sent to the recipient by reputable
express courier service (charges prepaid), or (d) seven Business Days after the
date when mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the parties at the addresses indicated below:
If to Apollo Apollo Advisors, L.P.
1999 Avenue of the Stars
Los Angeles, CA 90067
Attention: Michael Weiner
Telecopy: (310) 201-4166
If to Harvard Aeneas Venture Corporation
c/o Charlesbank Capital Partners, LLC
600 Atlantic Avenue, 26th Floor
Boston, MA 02210
Attention: Mark A. Rosen
Facsimile No. (617) 619-5402
With a copy to: Ropes & Gray
(which shall not One International Place
constitute notice) Boston, MA 02110
Attention: Larry Jordan Rowe
Facsimile No. (617) 951-7050
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<PAGE>
If to either
PCP Entity
c/o Penske Capital Partners, L.L.C.
399 Park Avenue
New York, NY 10022
With a copy to: Fried, Frank, Harris, Shriver &
(which shall not Jacobson
constitute notice) One New York Plaza
New York, NY 10004
If to Trace: Trace International Holdings, Inc.
375 Park Avenue
11th Floor
New York, NY 10152
Attention: Philip N. Smith, Jr.
Facsimile No.: (212) 593-1363
If to the Company United Auto Group, Inc.
375 Park Avenue
New York, NY 10152
Attention: Philip N. Smith, Jr., Esq.
Telecopy: (212) 593-1303
With a copy to: Willkie Farr & Gallagher
(which shall not 787 Seventh Avenue
constitute notice) New York, NY 10019
Attention: Maurice M. Lefkort, Esq.
Telecopy: (212) 728-8111
or to such other address as either party hereto may, from time to time,
designate in writing delivered pursuant to the terms of this Section 8.2.
Section 8.3. Amendments. The terms, provisions and conditions
of this Agreement may not be changed, modified or amended in any manner except
by an instrument in writing duly executed by all of the parties hereto.
Section 8.4. Assignment and Parties in Interest.
(a) Except as provided in Section 4.1(c), neither this
Agreement nor any of the rights, duties, or obligations of any party
hereunder may be assigned or delegated (by operation of law or
otherwise) by any party hereto except with the prior written consent of
the other parties hereto.
(b) This Agreement shall not confer any rights or remedies
upon any person or entity other than the parties
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<PAGE>
hereto and their respective permitted successors and assigns; provided,
however, that (i) the rights set forth in Article II hereof shall not
inure to the benefit of any transferee (other than a Permitted
Transferee) without the prior written consent of each Restricted
Stockholder (other than the Transferor) and (ii) the provisions of this
Agreement shall not be binding on any Transferee of Restricted
Securities except as set forth in Sections 4.1(c) and 4.2.
Section 8.5. Expenses. Each party to this Agreement shall bear
all of its legal, accounting, investment banking, and other expenses incurred by
it or on its behalf in connection with the transactions contemplated by this
Agreement, whether or not such transactions are consummated.
Section 8.6. Entire Agreement. This Agreement constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes and is in full substitution for any and all prior
agreements and understandings among them relating to such subject matter, and no
party shall be liable or bound to the other party hereto in any manner with
respect to such subject matter by any warranties, representations, indemnities,
covenants, or agreements except as specifically set forth herein.
Section 8.7. Descriptive Headings. The descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 8.8. Counterparts. For the convenience of the parties,
any number of counterparts of this Agreement may be executed by any one or more
parties hereto, and each such executed counterpart shall be, and shall be deemed
to be, an original, but all of which shall constitute, and shall be deemed to
constitute, in the aggregate but one and the same instrument.
Section 8.9. Governing Law; Jurisdiction.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to
contracts made and performed therein.
(b) Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of New York and the United States of America
located in the County of New York for any action or proceeding arising
out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any action or proceeding relating
thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail to is
respective address set forth in
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<PAGE>
Section 8.2 shall be effective service of process for any action or
proceeding brought against it in any such court. Each of the parties
hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any action or proceeding arising out of this
Agreement or the transactions contemplated hereby in the courts of the
State of New York or the United States of America located in the County
of New York, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 8.10. Severability. In the event that any one or more
of the provisions contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument. Furthermore, in lieu of any such
invalid or unenforceable term or provision, the parties hereto intend that there
shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible and be valid and
enforceable.
Section 8.11. Specific Performance.
(a) The parties hereto acknowledge and agree that irreparable
damage would occur in the event that any provision of this Agreement
was not performed in accordance with its specific terms or was
otherwise breached, and further acknowledge and agree that money
damages are an inadequate remedy for the breach of this Agreement
because of the difficulty of ascertaining the amount of damage that
would be suffered in the event of such breach. The parties hereto
accordingly agree that they each shall be entitled to obtain specific
performance of any provision of this Agreement and injunctive or other
equitable relief to prevent or cure breaches of any provision of this
Agreement, this being in addition to any other remedy to which they may
be entitled by law or equity.
(b) The parties hereto further agree that they shall not be
permitted or have the right to terminate or suspend performance of any
provision of this Agreement, it being agreed that all provisions of
this Agreement shall continue and be specifically enforceable in all
events and under all circumstances regardless of any events,
occurrences, actions or omissions before or after the date hereof. In
furtherance of the foregoing, the parties hereto agree that they shall
not be permitted to, and shall not, bring any claim seeking to
terminate or suspend performance of any provision of this Agreement or
seeking any determination that any provision of this Agreement
(including, without
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limitation, this Section 8.11) is invalid, inapplicable or
unenforceable.
[The remainder of this page intentionally left blank.]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
AIF II, L.P.
By: /s/ John J. Hannan
----------------------
Name: John J. Hannan
Title: Authorized Signatory
AENEAS VENTURE CORPORATION
By: /s/ Michael R. Eisenson
---------------------------
Name: Michael R. Eisenson
Title: Authorized Signatory
INTERNATIONAL MOTOR CARS GROUP, I, L.L.C.
By: /s/ James A. Hislop
-----------------------
Name: James A. Hislop
Title: Chairman
INTERNATIONAL MOTOR CARS GROUP, II, L.L.C.
By: /s/ James A. Hislop
-----------------------
Name: James A. Hislop
Title: Chairman
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<PAGE>
TRACE INTERNATIONAL HOLDINGS, INC.
By: /s/ Philip N. Smith, Jr.
----------------------------
Name: Philip N. Smith, Jr.
Title: Senior Vice President
UNITED AUTO GROUP, INC.
By: /s/ James Davidson
----------------------
Name: James Davidson
Title: Executive Vice President
Solely for the purposes
of Section 4.4 hereof:
PENSKE CORPORATION
By: /s/ James A. Hislop
-----------------------
Name: James A. Hislop
Title: Director
PENSKE CAPITAL PARTNERS, L.L.C.
By: /s/ James A. Hislop
-----------------------
Name: James A. Hislop
Title: President and Chief Executive Officer
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<PAGE>
Schedule 6.3
Contraventions
Trace -- Trace has pledged its Common Stock in the Company to the Bank
of Nova Scotia.
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<PAGE>
Schedule 6.4
Beneficial Ownership as of Initial Closing Date
Restricted Stockholder Beneficial Ownership
- ---------------------- --------------------
Apollo 1,843,656
Harvard 2,843,656
PCP I 0 (*)
PCP II 0 (*)
Trace 4,016,110
- -------------
(*) Without giving effect to the acquisition of 2,906.743 shares of Series A
Preferred Stock by PCP I and 821.1266 shares of Series A Preferred Stock by PCP
II, in each case in connection with the Initial Closing.
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