AutoNation (AN)

approve all related party transactions valued over $500,000, while our Audit Committee must approve all related party transactions valued between $100,000 and $500,000 and review with management all other related party transactions. The following is a summary of agreements and transactions with parties related to our directors or us since January 1, 2006.

 

We paid AutoZone approximately $60,000 for parts purchases made during 2006. We received approximately $325,000 from AutoZone for parts sales made during 2006. Mr. Lampert served as a director of AutoZone until December 13, 2006 and is Chairman, Chief Executive Officer and controlling principal of ESL Investments, Inc., which together with its affiliated investment partnerships owns approximately 31% of the outstanding common stock of AutoZone. Mr. Crowley is the President and Chief Operating Officer of ESL Investments, Inc. Payments made by us to AutoZone in any given year, or received by us from AutoZone, represent significantly less than 0.1% of the annual revenue of each of AutoZone and AutoNation, respectively. We expect to enter into similar arrangements with AutoZone in the future.

 

We paid Sears Holdings Corporation and its affiliates approximately $570,000 primarily for automotive parts and accessories purchases made by our stores in the ordinary course of business during 2006. Mr. Lampert serves as Chairman of the Board of Directors of Sears Holdings and Mr. Crowley serves as a director, interim-Chief Financial Officer and as Executive Vice President, Chief Administrative Officer of Sears Holdings. ESL Investments, Inc., together with its affiliated investment partnerships, owns approximately 42% of the outstanding common stock of Sears Holdings. We expect to continue to enter into purchases of automotive parts and accessories from Sears Holdings and its affiliates in 2007. On March 29, 2007, the Board ratified and approved the transactions with Sears Holdings and future similar transactions entered into by our stores in the ordinary course of business.

 

On March 10, 2006, we commenced a tender offer to purchase up to 50 million shares of our common stock at a price per share of $23 in cash. As previously disclosed, ESL Investments, Inc. agreed to tender all of its shares of our common stock in the offer. Mr. Lampert is the Chief Executive Officer and Mr. Crowley is the President and Chief Operating Officer of ESL Investments, Inc. On April 19, 2006, we accepted for payment 50 million shares of our common stock pursuant to the offer, including 20,353,844 shares of common stock tendered by ESL Investments.

which we have the right to use the “Maroone” name in connection with automobile dealerships and related products and services in exchange for which we provide to Mr. Maroone, and his immediate family members, the use of various demonstrator vehicles. We expect this agreement to remain in place for the foreseeable future.

 

We provide corporate aircraft for business travel primarily limited to business trips taken by our two most senior executives, Messrs. Jackson and Maroone. Under the terms of their employment agreements, Messrs. Jackson and Maroone also are entitled to limited use of our corporate aircraft for personal travel. A third-party aviation services company manages our corporate air transportation. In order to ensure the availability of qualified corporate aircraft, the aviation services company has selected other charter companies to provide aircraft for its clients, including AutoNation, in the event that the aircraft in its managed fleet are unavailable. The aviation services company selects the charter companies on the basis of several factors, including competitive pricing, the quality and safety of the aircraft and flight crews, and availability. Each of Mr. Maroone and his father, Mr. Al Maroone, owns fifty percent of the outstanding common stock of one of these companies, Florida Jet Service, Inc. Since January 1, 2005, we incurred approximately $179,000 of charter fees with Florida Jet Service, Inc. in connection with our use of its aircraft. Mr. Maroone is not involved in the selection process managed by the aviation services company.

 

On March 10, 2006, we commenced a tender offer to purchase up to 50 million shares of our common stock at a price per share of $23 in cash. As previously disclosed, ESL Investments, Inc. agreed to tender all of its shares of our common stock in the offer. Mr. Lampert is the Chief Executive Officer and Mr. Crowley is the President and Chief Operating Officer of ESL Investments, Inc. On April 19, 2006, we accepted for payment 50 million shares of our common stock pursuant to the offer, including 20,353,844 shares of common stock tendered by ESL Investments.