AutoNation (AN) FIles 8-K Regarding Toyota's (TM) Agreement with ESL Investments

November 24, 2009 9:04 AM EST

As previously announced on a Current Report on Form 8-K filed with the Securities and Exchange Commission on January 29, 2009 by AutoNation, Inc. (NYSE: AN), the Board of Directors of the Company approved a letter agreement with Toyota Motor Sales, U.S.A. Inc. (NYSE: TM) in order to, among other things, eliminate any potential adverse consequences under Toyota’s framework agreement with the Company in the event that ESL Investments, Inc. and certain investment affiliates of ESL Investments, Inc. acquires more than 50% of the Company’s common stock. Pursuant to the Toyota Agreement, Toyota’s consent to ESL acquiring more than 50% of the Company’s common stock terminates on December 31, 2009, solely with respect to ESL purchases of the Company’s common stock after such date unless extended by Toyota at ESL’s request. The Toyota Agreement also contains governance-related and other provisions as described in the January 2009 8-K.

At ESL’s request, Toyota has granted a one-year extension of its Consent under the Toyota Agreement, and the Company signed an acknowledgement to the Extension Agreement, which is dated November 23, 2009. Toyota’s Consent under the Toyota Agreement will now terminate on December 31, 2010, with respect to purchases of the Company’s common stock by ESL after such date, provided that ESL may continue to seek successive annual one-year extensions of Toyota’s Consent, and Toyota shall not unreasonably withhold or delay its consent thereto. All other terms and conditions of the Toyota Agreement were unchanged. ESL currently owns approximately 46% of the Company’s common stock.

As discussed in the January 2009 8-K, the Company and ESL are also parties to: (i) a letter agreement with American Honda Motor Co., Inc. (NYSE: HMC), in which, among other things, Honda has agreed not to assert its right to purchase the Company’s Honda and Acura franchises and/or similar remedies under Honda’s framework agreement with the Company in the event that ESL acquires 50% or more of the Company’s common stock; and (ii) an agreement in which ESL has agreed to vote shares of the Company’s common stock owned by ESL in excess of 45% in the same proportion as all non-ESL-owned shares are voted. The Honda Agreement also contains governance-related and other provisions as described in the January 2009 8-K. The ESL Agreement expires on January 28, 2010, unless extended by mutual agreement by all parties.

The foregoing summaries of the Toyota Agreement, the Extension Agreement, the Honda Agreement and the ESL Agreement are qualified in their entirety by reference to such agreements. The Toyota Agreement, the Honda Agreement and the ESL Agreement were filed as exhibits to the January 2009 8-K and are incorporated by reference herein. The Extension Agreement is filed as Exhibit 10.2 to this Form 8-K and is also incorporated by reference herein.

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