Employee Stock Ownership Plan Becomes Reality for Honda Dealer

1 July 1999

Employee Stock Ownership Plan Becomes Reality for Country's Fourth Largest Honda Dealer; $13 Million Loan Fuels Program For New Jersey Dealers

    STAMFORD, Conn.--July 1, 1999--Employees at one of the country's largest Honda automobile dealerships are about to become company owners. Union, N.J.-based Planet Honda plans to announce today that it will become one of the first dealerships in the nation to make ownership through an employee stock ownership plan (ESOP) available to its workers. To announce the program to Planet Honda's employees, a dinner reception will be held this evening, beginning at 7 p.m., at the Brooklake Country Club in Florham Park, N.J.
    To finance the purchase of the ESOP, Planet Honda secured $13 million in a long-term, fixed-rate, non-recourse loan from Falcon Financial, a company specializing in capital solutions for automotive dealers.
    "An ESOP is a great way to build an incredibly strong company while offering the thrill of ownership to each and every one of our 155 full-time employees," said Timothy Ciasulli, owner and president of Planet Honda. "The novel thing about our ESOP is that most of the time, ESOPs are used by the spouse of a deceased dealer as an exit strategy. Here, I believe that sharing our success with our employees will prove to be a catalyst making our growth even more meteoric than it has been."
    "Falcon Financial is pleased to participate in the excitement of this innovative ownership program with Planet Honda and its employees," said Vernon Schwartz, CEO of Falcon Financial. "This ESOP was a first for Falcon as well as for Planet Honda. This is the single largest loan closed to date by Falcon and it enabled Falcon to break the $100 million barrier in originations." Falcon Financial is co-owned by SunAmerica Inc., an affiliate of Goldman, Sachs & Co., and senior management.

    Falcon Becomes Lender of Choice for New Jersey Dealers

    With this loan to Planet Honda, Falcon has begun to establish itself as the lender of choice for New Jersey auto dealers. "Falcon is becoming recognized among New Jersey auto dealers for its ability to provide more money than other lenders with long-term fixed rates and lower payments, and also for unique and notable programs such as our ESOP," said Ciasulli. The loan to Planet Honda was Falcon's fifth financing package for a New Jersey dealership.
    Stamford, Conn.-based Falcon Financial was incorporated in 1997 to provide capital solutions for automotive dealers. Falcon offers, without personal recourse, 15-year, fixed rate loans backed by a dealership's real estate, net worth and estimated franchise value based on cash flow. Because Falcon recognizes and lends on "blue sky" or estimated franchise valuations, auto dealers are likely to obtain loan proceeds higher than those from traditional lenders.
    Falcon Financial's mission is to become the leading provider of long-term capital to new car automobile dealers by adopting a creative approach to financing. This approach is designed to allow Falcon's customers to maximize their assets and equity in their business to facilitate growth, expansion and competitiveness.

    EDITORS' NOTE: Telephone interviews are available with Vernon Schwartz, CEO of Falcon Financial, this morning, July 1, 1999, specifically to discuss the trend of auto dealers offering Employee Stock Ownership Plans. Call Chris Wailes at the Austin Lawrence Group (203-391-3022) to schedule a time to talk.
    For additional information on Falcon Financial services, contact the company at 2015 West Main Street, Stamford, Conn., 06902, Phone: (203) 967-0000.