SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 3, 2004
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Asbury Automotive Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
5511 01-0609375
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(Commission File Number) (IRS Employer Identification No.)
622 Third Avenue, 37th Floor, New York, NY 10017
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(Address of principal executive offices) (Zip Code)
(212) 885-2500
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(Registrant's telephone number, including area code)
None
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(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
In response to an anonymous shareholder letter, the Board of Directors
engaged independent counsel to conduct an investigation of the facts and
circumstances surrounding the Company's sub-lease of its new headquarters in New
York, which was entered into in the summer of 2003. That investigation has been
completed.
Upon completion of its investigation, counsel reported to the Board that,
at the direction of Kenneth Gilman, the Company's Chief Executive Officer, a
payment of $150,000 had been made by the Company in connection with the lease
transaction to an individual in the real estate business. Counsel also concluded
that this individual had a conflict of interest and that the making of this
payment could involve a violation of applicable law. Certain documents relating
to the lease transaction could lead to the conclusion that Mr. Gilman had
knowledge of the conflict of interest. This information could provide the basis
for a prosecutor to conclude that Mr. Gilman had violated the law in authorizing
the payment. It is, of course, uncertain whether a prosecutor would reach this
conclusion or would bring a proceeding against Mr. Gilman. In that connection,
the investigation of independent counsel did not find conclusive evidence that
Mr. Gilman read or focused upon the relevant portions of the documents. Mr.
Gilman has told the Board of Directors that he did not knowingly engage in any
unlawful conduct. Mr. Gilman has also told the Board that he did not derive any
personal financial benefit from the transaction, and that the payment to the
individual was made upon the recommendation of Asbury's broker.
After a thorough review and discussion of the facts derived from
independent counsel's investigation and Mr. Gilman's assertions to the Board,
the Board concluded that it believes that Mr. Gilman did not knowingly engage in
unlawful conduct. After considering Mr. Gilman's past performance and
contributions to the Company, his business reputation and prior employment
history and that Mr. Gilman derived no personal financial benefit from the
transaction, the Board of Directors continues to have confidence in Mr. Gilman's
leadership.
The Company is in the process of notifying the appropriate law enforcement
authorities. Mr. Gilman has advised the Company that he will cooperate fully
with any investigation. The Board of Directors will continue to monitor the
situation and will take further actions as circumstances warrant.
It is anticipated that these events will have no impact on the terms and
conditions of Asbury's sub-lease.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASBURY AUTOMOTIVE GROUP, INC.
Date: May 3, 2004 By: /s/ J. Gordon Smith
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Name: J. Gordon Smith
Title: Senior Vice President and Chief Financial Officer