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<TABLE>
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As filed with the Securities and Exchange Registration No. 333-__________
Commission on March 23, 1999
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CHAMPIONSHIP AUTO RACING TEAMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 38-3389456
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
755 WEST BIG BEAVER ROAD
SUITE 2800
TROY, MICHIGAN 48084
(Address and Zip Code of Principal Executive Offices)
CHAMPIONSHIP AUTO RACING TEAMS, INC.
1997 STOCK OPTION PLAN
CHAMPIONSHIP AUTO RACING TEAMS, INC.
DIRECTOR STOCK OPTION PLAN
(Full title of the plan)
--------------------------
ANDREW H. CRAIG
PRESIDENT
CHAMPIONSHIP AUTO RACING TEAMS, INC.
755 WEST BIG BEAVER ROAD
SUITE 800
TROY, MICHIGAN 48084
(248) 362-8800
(Name and address of agent for service)
--------------------------
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to be to be Offering Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
- ------------------------------ ---------------------- ---------------------- ---------------------- -------------------------------
<S> <C>
Common Stock, par value $.01
per share 1,087,500(1) $16.00(1) $17,400,000
10,000(1) $17.75(1) $177,500
10,000(1) $29.625(1) $296,250
100,250(1) $27.50(1) $2,756,875
892,250(2) $28.31(2) $25,259,598 $12,758
- ------------------------------ ---------------------- ---------------------- ---------------------- ================================
</TABLE>
(1) Pursuant to Rule 457(h), the offering price is based on the per share
option exercise price.
(2) Pursuant to Rule 457(c) and 457(h), offering prices are based on $28.31
per share, the average of the high and low prices of the Common Stock on
the New York Stock Exchange on March 15, 1999, and is estimated solely
for purpose of calculating the registration fee.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
_________________________
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with
Rule 428 under the Securities Act of 1933, as amended (hereinafter, the
"Securities Act"), and the "Note" to Part I of Form S-8.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated as of their respective
dates in this Registration Statement by reference:
(i) the annual report on Form 10-K for Championship Auto Racing Teams,
Inc., a Delaware corporation (the "Registrant"), for the year ending December
31, 1998;
(ii) the description of common stock, par value $0.01 per share,
contained in the Registrant's Registration Statement on Form S-1 (File No.
333-43141) effective with the Commission on March 10, 1998 for registration of
common stock under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, are incorporated by reference
in this Registration Statement and are a part hereof from the date of filing of
such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters with respect to the legality of the issuance of
the Common Stock offered hereby will be passed upon for the Registrant by
Kegler, Brown, Hill & Ritter Co., L.P.A., Columbus, Ohio.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under provisions of the Certificate of Incorporation and Bylaws of the
Company, each person who is or was a director or officer of the Company shall be
indemnified by the Company as a matter of right to the full extent permitted by
law. The effects of the Certificate of Incorporation, Bylaws and General
Corporation Law of Delaware may be summarized as follows:
(a) Under Delaware law, to the extent that such a person is successful
on the merits in defense of a suit or proceeding against him by reason of the
fact that he is a director or officer of the Company, he shall be indemnified
against expenses (including attorneys' fees) reasonably incurred in connection
with such action.
(b) If unsuccessful in defense of a third-party civil suit or a
criminal suit, or if such a suit is settled, such a person shall be indemnified
under such law against both (1) expenses (including attorneys' fees) and (2)
judgments, fines and amounts paid in settlement if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the Company, and with respect to any criminal action, had no reasonable cause
to believe his conduct was unlawful.
(c) If unsuccessful in defense of a suit brought by or in the right of
the Company, or if such suit is settled, such a person shall be indemnified
under such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company except that if such a person is adjudged to be liable in a suit in the
performance of his duty to the Company, he cannot be made whole even for
expenses unless the court determines that he is fairly and reasonably entitled
to indemnity for such expenses.
(d) The Company may not indemnify a person in respect of a proceeding
described in (b) or (c) above unless it is determined that indemnification is
permissible because the person has met the prescribed standard of conduct by any
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one of the following: (i) the Board of Directors, by a majority vote of a quorum
consisting of directors not at the time parties to the proceeding, (ii) if a
quorum of directors not parties to the proceeding cannot be obtained, or, if
obtainable but the quorum so directs, by independent legal counsel selected by
the Board of Directors or the committee thereof; or (iii) by the stockholders.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as part of this Registration
Statement:
Exhibit No. Description of Document
- ----------- -----------------------
4.1 Championship Auto Racing Teams, Inc. 1997 Stock Option Plan
4.2 Championship Auto Racing Teams, Inc. Director Stock Option Plan
5.1 Opinion of Kegler, Brown, Hill & Ritter Co., L.P.A.
23.1 Consent of Deloitte & Touche
23.2 Consent of Kegler, Brown, Hill & Ritter Co., L.P.A. (included
in Exhibit 5.1)
24.1 Powers of Attorney
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or
sales are being made of securities registered hereby,
a post-effective amendment to this Registration
Statement to include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Detroit, in the State of Michigan, on the 22nd day of March,
1999.
CHAMPIONSHIP AUTO RACING TEAMS, INC.
By: /s/ Andrew H. Craig
-------------------
Name: Andrew H. Craig
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the indicated capacities on March 22, 1999.
Signature Title
- --------- -----
/s/ Andrew H. Craig President, Chief Executive
- -------------------
Andrew H. Craig Officer and Director
/s/ Randy K. Dzierzawski Executive Vice President -
- ------------------------ Finance and Chief Financial
Randy K. Dzierzawski Officer
/s/ Gerald R. Forsythe* Director
- -----------------------
Gerald R. Forsythe
/s/ Chip Ganassi* Director
- -----------------
Chip Ganassi
/s/ Carl A. Haas* Director
- -----------------
Carl A. Haas
/s/ James F. Hardymon* Director
- ----------------------
James F. Hardymon
/s/ Bruce R. McCaw* Director
- -------------------
Bruce R. McCaw
/s/ Don Ohlmeyer, Jr.* Director
- ----------------------
Don Ohlmeyer, Jr.
/s/ U.E. Patrick* Director
- -----------------
U.E. Patrick
/s/ Robert W. Rahal* Director
- -------------------
Robert W. Rahal
/s/ Derrick Walker* Director
- -------------------
Derrick Walker
*Signed Pursuant to Power of Attorney
By /s/ Jack A. Bjerke
Jack A. Bjerke,
-------------------
Attorney-in-Fact
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Exhibit 4.1
CHAMPIONSHIP AUTO RACING TEAMS, INC.
1997 STOCK OPTION PLAN
I. PURPOSE
The purpose of this 1997 Stock Option Plan (the "Plan") is to enable
Championship Auto Racing Teams, Inc. (the "Company"), and such of its
subsidiaries (as defined in Section 424(f) of the Internal Revenue Code of 1986
(the "Code")) as the Board of Directors of the Company (the "Board") shall from
time to time designate ("Participating Subsidiaries"), to attract and retain
qualified employees, and to provide such persons with additional motivation to
advance the interests of the Company and its Participating Subsidiaries. The
Plan provides for the grant of Stock Options, Limited Rights and Supplemental
Bonuses to employees of the Company.
II. CERTAIN DEFINITIONS
2.1 "CHANGE OF CONTROL". The term "Change of Control" shall mean any of
the following events:
(A) any Person, as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than Company, any trustee or other fiduciary
holding securities under an employee benefit plan of Company, or any company
owned, directly or indirectly, by the stockholders of Company in substantially
the same proportions as their ownership of stock of Company) is or becomes the
"Beneficial Owner" as defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of 25% or more of the combined voting power of Company's outstanding
securities;
(B) individuals who constitute the Board on the effective date
of the Plan (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any Person becoming a director subsequent to
such effective date whose election, or nomination for election by Company's
stockholders, was approved by a vote of at least a majority of the directors
comprising the Incumbent Board (either by a specific vote or by approval of the
proxy statement of Company in which such person is named as a nominee for
director, without objection to such nomination) shall be, for purposes of this
clause (B), considered as though such Person were a member of the Incumbent
Board.
(C) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a reverse
stock split of outstanding voting securities, or consummation of any such
transaction if stockholder approval is not obtained, other than (1) any such
transaction which would result in at least 50% of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction being "Beneficially Owned" (as defined above)
by 75% or more of the holders of outstanding voting securities of the Company
immediately prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not substantially
altered in the transaction, or (2) a merger or consolidation effected to
implement a recapitalization of Company (or similar transaction) in which no
"Person" (as defined above) acquires more than 50% of the combined voting power
of the Company's then outstanding securities; or
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(D) the stockholders of Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by Company of
all or substantially all of Company's assets.
Notwithstanding anything in the foregoing to the contrary, no Change of Control
shall be deemed to have occurred with respect to any particular Employee by
virtue of any transaction which results in such Employee, or a group of Persons
which includes such Employee, acquiring, directly or indirectly, 25% or more of
the combined voting power of the Company's outstanding securities.
2.2 "COMMON STOCK". Common Stock means Common Stock, par value $0.01 share
of the Company.
2.3 "DISINTERESTED PERSON". A Disinterested Person is a person who, at the
time he exercises discretion in administering the Plan, qualifies as a
"disinterested person" under Rule 16b-3(c)(2) under the Exchange Act.
2.4 "EMPLOYEE". An Employee is an employee of the Company or any
Participating Subsidiary.
2.5 "EXCHANGE ACT". "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
2.6 "FAIR MARKET VALUE". The Fair Market Value of a share of Common Stock
on any date shall be the closing price of Common Stock as reported in
the Wall Street Journal for securities listed on the NASDAQ or the New
York Stock Exchange for the date in question, or if no such closing
price is available, the closing price on the next preceding date for
which a closing price was so reported, unless otherwise specified by
the Subcommittee.
2.7 "LIMITED RIGHT". A Limited Right is the right to receive payment, in
cash, following a Change of Control, of an amount equal to the product
computed by multiplying (i) the excess of (A) the higher of (x) the
Minimum Price Per Share, if the Change of Control occurs as a result
of a Transaction, tender offer or exchange offer, or (y) the highest
Fair Market Value per share during the period commencing thirty days
prior to the Change of Control and ending immediately prior to the
date the Limited Right is exercised, over (B) the Option Price per
share under the Stock Option to which such Limited Right relates, by
(ii) the number of shares of Common Stock as to which such Limited
Right is being exercised provided that, in the case of any ISO, the
amount computed under part (A) of the foregoing formula shall be equal
to the Fair Market Value of Common Stock on the date the Limited Right
is in fact exercised, and provided further that, in the case of any
other Limited Right that has not been outstanding at least seven
months at the time the Change of Control occurs, the amount computed
under part (A) of the foregoing formula shall be equal to the highest
amount that could be computed under part (y) of such formula using a
Fair Market Value that first became determinable six months or more
after the date of grant of the Limited Right (with such Fair Market
Value otherwise determined in accordance with the foregoing formula).
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2.8 "MINIMUM PRICE PER SHARE". Minimum Price Per Share means the highest
gross price (before brokerage commissions and soliciting dealer's fees) paid or
to be paid for a share of Common Stock (whether by way of exchange, conversion,
distribution or upon liquidation or otherwise) in any Transaction, tender offer
or exchange offer occurring prior to the date on which such Limited Right is
exercised. If the consideration paid or to be paid in any such Transaction,
tender offer or exchange offer shall consist, in whole or in part, of
consideration other than cash, the Subcommittee shall take such action, as in
its judgment it deems appropriate, to establish the cash value of such
consideration, but such valuation shall not be less than the value, if any,
attributed to such consideration in writing by any party to such Transaction,
tender offer or exchange offer other than the Company.
2.9 "PARTICIPANT". A Participant is an Employee to whom a Stock Option,
Limited Right or Supplemental Bonus is granted.
2.10 "STOCK OPTION". A Stock Option is the right granted under the Plan to
an Employee to purchase, at such time or times and at such price or prices
("Option Price") as are determined by the Subcommittee, the number of shares of
Common Stock determined by the Subcommittee.
2.11 "SUBCOMMITTEE". Subcommittee means the Committee described in Section
IV.
2.12 "SUPPLEMENTAL BONUS". A Supplemental Bonus is the right to receive
payment, in shares of Common Stock, cash or a combination of shares of Common
Stock and cash, of an amount specified by the Subcommittee pursuant to Section
7.6.
2.13 "TRANSACTION". A Transaction is (A) any consolidation or merger of the
Company in which the Company is not the surviving corporation other than a
merger solely to effect a reincorporation or a merger of the Company as to which
stockholder approval is not required pursuant to Sections 251(f) or 253 of the
Delaware General Corporation Law, (B) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of 50% or more
of the assets or earnings power of the Company, or (C) the adoption of any plan
or proposal for the liquidation or dissolution of the Company.
For purposes of this Plan, the Subcommittee may, by resolution, clarify the date
as of which a Change of Control shall be deemed to have occurred.
III. INCENTIVE STOCK OPTIONS AND NONSTATUTORY STOCK OPTIONS
The Stock Options granted under the Plan may be either:
(a) Incentive Stock Options ("ISOs") which are intended to be "incentive stock
options" as that term is defined in Section 422 of the Code: or
(b) Nonstatutory Stock Options ("NSOs") which are intended to be options that do
not qualify as "incentive stock options" under Section 422 of the Code.
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The individual Option Agreement(s) shall clearly designate whether the Stock
Options granted are ISOs or NSOs. Subject to other provisions of the Plan, a
Participant may receive ISOs and NSOs at the same time, provided that the ISOs
and NSOs are clearly designated as such.
Except as otherwise expressly provided herein, all of the provisions and
requirements of the Plan relating to Stock Options shall apply to ISOs and NSOs.
IV. ADMINISTRATION
4.1 SUBCOMMITTEE. The Plan shall be administered by a Subcommittee of the
Compensation Committee of the Board. The Subcommittee shall consist of at least
two members of the Board of Directors who are not employed by the Company and
who shall be Disinterested Persons. Subject to the provisions of the Plan, the
Subcommittee shall have full authority to administer the Plan, including
authority to grant awards under the Plan and determine the terms thereof, to
interpret and construe any provision of the Plan and any Stock Option, Limited
Right or Supplemental Bonus granted thereunder, to adopt such rules and
regulations for administering the Plan, including those it may deem necessary in
order to comply with the requirements of the Code or in order that Stock Options
that are intended to be ISOs will be classified as incentive stock options under
the Code, or in order to conform to any regulation or to any change in any law
or regulation applicable thereto and to make all other decisions and
determinations under the plan.
4.2 ACTIONS OF SUBCOMMITTEE. All actions taken and all interpretations and
determinations made by the Subcommittee in good faith (including determinations
of Fair Market Value) shall be final and binding upon all Participants, the
Company and all other interested persons. No member of the Subcommittee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan, and all members of the Subcommittee shall, in
addition to their rights as directors, be fully protected by the Company with
respect to any such action, determination or interpretation.
V. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBLE EMPLOYEES. Grants of Stock Options, Limited Rights and
Supplemental Bonuses may be made to Employees. Any director of the Company or of
a Participating Subsidiary who is also an Employee shall also be eligible, but
directors who are not Employees shall not be eligible, to receive Stock Options,
Limited Rights and Supplemental Bonuses under the Plan. The Subcommittee shall
from time to time determine the Employees to whom Stock Options shall be
granted, the number of shares of Common Stock subject to each Stock Option to be
granted to each such Employee, the Option Price of such Stock Options and the
terms and conditions of such Stock Options, subject to the provisions of this
Plan.
5.2 OPTION PRICE. Except as otherwise provided in Section 7.8, the Option
Price of any ISO or NSO shall not be less than the Fair Market Value of a share
of Common Stock on the date on which the Stock Option is granted and shall not
be less than par value of Common Stock. If an ISO is granted to an Employee who
then owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any parent or subsidiary corporation of
the Company, the Option Price of such ISO shall be at least 110% of the Fair
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Market Value of the Common Stock subject to the ISO on the date such ISO is
granted, and such ISO shall not be exercisable after five years after the date
on which it was granted.
5.3 OPTION AGREEMENT. Each Stock Option shall be evidenced by a written
agreement ("Option Agreement") containing such terms and provisions as the
Subcommittee may determine, subject to the provisions of this Plan.
VI. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
6.1 MAXIMUM NUMBER. The maximum aggregate number of shares of Common Stock
that may be issued under the Plan shall be 2,000,000 shares, subject to
adjustment as provided in Section 6.2. Such shares may be authorized and
unissued shares or may be treasury shares. The aggregate Fair Market Value
(determined as of the time the ISO is granted) of the Common Stock as to which
all ISOs granted to an individual may first become exercisable in a particular
calendar year may not exceed $100,000, provided that to the extent that Stock
Options intended to be ISOs (together with all incentive stock options granted
under other Company plans to such individual) become exercisable in a given year
in excess of this limit, such Stock Options shall be deemed to be NSOs and shall
be exercisable as such. If any shares of Common Stock subject to Stock Options
are not purchased or otherwise paid for before such Stock Options expire or
otherwise terminate, unless such Stock Options are surrendered upon exercise of
Limited Rights, such shares may again be made subject to Stock Options or
otherwise issued under the Plan. Shares shall be treated as issued under the
Plan and counted against the limitation set forth in this Section 6.1, including
with respect to the payment of Supplemental Bonuses, in a manner that complies
with applicable requirements under Rule 16b-3 under the Exchange Act.
6.2 CAPITAL CHANGES. In the event any changes are made to the shares of
Common Stock (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend in excess of one percent (1%) at any single
time, stock split, combination of shares, exchange of shares, extraordinary cash
dividend, change in corporate structure or otherwise), the Subcommittee shall,
in order to prevent dilution or enlargement of Participants' rights, make
appropriate adjustments in: (i) the number and kind of shares theretofore made
subject to Stock Options, and in the Option Price of said shares; and (ii) the
aggregate number of shares which may be issued under the Plan. If any of the
foregoing adjustments shall result in a fractional share, the fraction shall be
disregarded, and the Company shall have no obligation to make any cash or other
payment with respect to such a fractional share.
VII. EXERCISE OF STOCK OPTIONS
7.1 TIME OF EXERCISE. Subject to the provisions of the Plan, including
without limitation Section 7.7, the Subcommittee, in its discretion, shall
determine the time when a Stock Option, or a portion of a Stock Option, shall
become exercisable, and the time when a Stock Option, or a portion of a Stock
Option, shall expire. Such time or times shall be set forth in the Option
Agreement evidencing such Stock Option. An ISO shall expire, to the extent not
exercised, no later than the tenth anniversary of the date on which it was
granted, and an NSO shall expire, to the extent not exercised, no later than 10
years and one day after the date on which it was granted. The Subcommittee may
accelerate the vesting of any Participant's Stock option by giving written
notice to the Participant. Unless otherwise determined by the
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Subcommittee, the acceleration of the exercise period of a Stock Option shall
not affect the expiration date of that Stock Option.
7.2 SURRENDER OF SHARES IN PAYMENT OF EXERCISE PRICE. The Subcommittee, in
its sole discretion, may permit a Participant to surrender to the Company shares
of the Common Stock as part or full payment for the exercise of a Stock Option.
Such surrendered shares shall be valued at their Fair Market Value on the date
of exercise. Unless otherwise determined by the Subcommittee, any such shares
surrendered by the Participant shall have been held by him for at least six
months prior to surrender.
7.3 USE OF PROMISORY NOTE: EXERCISE LOANS. The Subcommittee may, in its
sole discretion, impose terms and conditions, including conditions relating to
the manner and timing of payments of the Option Price, on the exercise of Stock
Options. Such terms and conditions may include, but are not limited to,
permitting a Participant to deliver to the Company his promissory note as
payment for the exercise of a Stock Option; provided that, with respect to any
promissory note given as payment or partial payment for the exercise of an ISO,
all terms of such note shall be determined at the time a Stock Option is granted
and set forth in the Option Agreement. The Subcommittee, in its sole discretion,
may authorize the Company to make a loan to a Participant in connection with the
exercise of Stock Options, or authorize the Company to arrange or guaranty loans
to a Participant by a third party, including in connection with broker assisted
cashless exercises. The foregoing notwithstanding, a Participant shall pay at
least the par value of the Common Stock to be acquired upon exercise of a Stock
Option in the form of lawful consideration under the Delaware General
Corporation Law prior to issuance of such shares.
7.4 STOCK RESTRICTION AGREEMENT. The Subcommittee may provide that shares
of Common Stock issuable upon the exercise of a Stock Option shall, under
certain conditions, be subject to restrictions whereby the Company has a right
of first refusal with respect to such shares or a right or obligation to
repurchase all or a portion of such shares, which restrictions may survive a
Participant's term of employment with the Company. The acceleration of time or
times at which the Stock Option becomes exercisable may be conditioned upon the
Participant's agreement to such restrictions.
7.5 TERMINATION OF EMPLOYMENT BEFORE EXERCISE. If a Participant's
employment with the Company or a Participating Subsidiary shall terminate for
any reason other than the Participant's disability, any ISO then held by the
Participant, to the extent then exercisable under the applicable Option
Agreement(s), shall remain exercisable after the termination of his employment
for a period of three months. If the Participant's employment is terminated
because the Participant is disabled within the meaning of Section 22(e)(3) of
the Code, any ISO then held by the Participant, to the extent then exercisable
under the applicable Option Agreement(s), shall remain exercisable after the
termination of his employment for a period of one year (but in no event beyond
ten years from the date of grant of the ISO). If the Stock Option is not
exercised during the applicable period, it shall be deemed to have been
forfeited and of no further force or effect. The period and extent to which an
NSO may be exercised following termination of employment shall be determined by
the Subcommittee.
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7.6 GRANT OF SUPPLEMENTAL BONUSES. The Subcommittee, either at the time of
grant or at any time prior to exercise of any NSO or Limited Right, may provide
for a Supplemental Bonus from the Company or Participating Subsidiary in
connection with a specified number of shares of Common Stock then purchasable,
or which may become purchasable, under an NSO, or a specified number of Limited
Rights which may be or become exercisable. A Supplemental Bonus shall be
automatically payable upon the exercise of the NSO or Limited Right with regard
to which such Supplemental Bonus was granted. A Supplemental Bonus shall not
exceed the amount necessary to reimburse the Participant for the income tax
liability incurred by him upon the exercise of the NSO or upon the exercise of
such Limited Right, calculated using the maximum combined federal and applicable
state income tax rates then in effect and taking into account the tax liability
arising from the Participant's receipt of the Supplemental Bonus, all as
determined by the Subcommittee. The Subcommittee may, in its discretion, elect
to pay any part or all of the Supplemental Bonus in: (i) cash; (ii) shares of
Common Stock; or (iii) any combination of cash and shares of Common Stock;
provided that bonuses payable in respect of Limited Rights shall be payable only
in cash. The Subcommittee's election shall be made by giving written notice to
the Participant not later than 90 days after the related exercise, which notice
shall specify the portion which the Subcommittee elects to pay in cash, shares
of Common Stock or a combination thereof. In the event any portion is to be paid
in shares of Common Stock, the number of shares to be delivered shall be
determined by dividing the amount which the subcommittee elects to pay in shares
of Common Stock by the Fair Market Value of one share of Common Stock on the
date of exercise. Any fractional share resulting from any such calculation shall
be disregarded. Said shares, together with any cash payable to the Participant,
shall be delivered within said 90-day period.
7.7 OPTIONAL VESTING UPON CHANGE OF CONTROL OF THE COMPANY. In the event of
a Change of Control of the Company, the vesting of Stock Options granted
pursuant to the Plan shall automatically be accelerated, so that all Stock
Options outstanding at the time of such Change of Control will be exercisable
immediately except as otherwise provided in Section 2.1.
7.8 STAND ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS. Awards granted
under the Plan may, in the discretion of the Subcommittee, be granted either
alone or in addition to, in tandem with, or in substitution for, any other award
granted under the Plan or any other plan of the Company or any Participating
Subsidiary or any other right of a Participant to receive payment from the
Company or any Participating Subsidiary. If an award is granted in substitution
for another such award, the Committee shall require the surrender of such other
award in consideration for the grant of the new award. Awards granted in
addition to or in tandem with other awards may be granted either as of the same
time as or a different time from the grant of such other awards. The per share
Option Price of any Stock Option:
(A) Granted in substitution for an outstanding award shall be not less
than the lesser of the Fair Market Value of a share of Common Stock at the
date such substitute award is granted or such Fair Market Value at that
date reduced to reflect the fair market value (as determined by the
Subcommittee) at that date of the award required to be surrendered by the
Participant as a condition to receipt of the substitute award; or
7
<PAGE> 8
(B) Retroactively granted in tandem with an outstanding award shall be
not less than the lesser of the Fair Market Value of a share of Common
Stock at the date of grant of the later award or at the date of grant of
the earlier award.
Except for the Option Price required to be paid upon the exercise of Stock
Options and except as provided in this Section 7.8, only services may be
required as consideration for the grant of any award under the Plan.
VIII. LIMITED RIGHTS
8.1 GRANT OF LIMITED RIGHTS. The Subcommittee may in its discretion grant
Limited Rights to a Participant concurrently with the grant of each ISO or at
any time with respect to any NSO. Such Limited Rights shall be exercisable with
respect to the number of shares of Common Stock which are, or may become,
purchasable under any such Stock Option. The Subcommittee may, in its
discretion, specify the terms and conditions of such rights, including without
limitation the date or dates upon which such rights shall expire and become void
and unexercisable, except that Limited Rights granted with respect to an ISO
shall only be exercisable, and shall expire, at the time or times the ISO is
exercisable and expires, respectively. In any event, a Limited Right shall not
be exercisable within six months from the date of grant of the Limited Right.
Each Participant to whom Limited Rights are granted shall be given written
notice advising him of the grant of such rights and specifying the terms and
conditions of the rights, which shall be subject to all the provisions of this
Plan.
8.2 EXERCISE OF LIMITED RIGHTS. Subject to the limitations set forth in
Section 8.1, a Limited Right may be exercised only during the period beginning
on the first day following the occurrence of a Change of Control and ending on
the sixtieth day following such date; provided, however, that if the Change of
Control occurs prior to the expiration of six months after the date of grant of
a Limited Right, then such Limited Right shall be exercisable for a period of 60
days following expiration of such six-month period. Upon the occurrence of a
tender or exchange offer constituting a Change of Control, a Limited Right may
be exercised in such manner regardless of whether the Board supports or opposes
such tender or exchange offer. A Participant shall exercise his Limited Rights
by delivering a written notice to the Subcommittee specifying the number of
shares with respect to which he exercises Limited Rights and agreeing to
surrender the right to purchase an equivalent number of shares of Common Stock
subject to his Stock Option. If a Participant exercises Limited Rights, payment
of his Limited Rights shall be made in accordance with Section 8.3 on or before
the thirtieth day after the date of exercise of the Limited Rights. A Limited
Right shall remain exercisable during the exercise periods specified in
accordance with Section 8.1 and this Section in the event of a termination of
employment of the Participant holding the Limited Right after a Change of
Control. Notwithstanding the above, upon a termination of the employment of the
holder of the Limited Right before the occurrence of any Change of Control, the
Limited Right shall expire immediately.
8.3 FORM OF PAYMENT. If a Participant elects to exercise Limited Rights as
provided in Section 8.2, the Company shall pay to the Participant in cash the
amount set forth in Section 2.7 hereof, calculated with respect to the shares as
to which the Participant has exercised Limited Rights, within thirty days of the
date of exercise of the Limited Rights. If such amount is not paid
8
<PAGE> 9
in full within the prescribed period, the Company shall be liable to such
Participant for the costs of collection of such amount, including attorney's
fees.
8.4 TERMINATION. When a Limited Right is exercised, the Stock Option to
which it relates, if any, shall cease to be exercisable to the extent of the
number of shares of Common Stock with respect to which such Limited Right was
exercised. Upon the exercise or termination of a Stock Option, any Limited Right
granted with respect thereto shall terminate to the extent of the number of
shares as to which such Stock Option was exercised or terminated.
IX. NO CONTRACT OF EMPLOYMENT
Nothing in this Plan shall confer upon the Participant the right to
continue in the employ of the Company, or any Participating Subsidiary, nor
shall it interfere in any way with the right of the Company, or any such
Participating Subsidiary, to discharge the Participant at any time for any
reason whatsoever, with or without cause. Nothing in this Article IX shall
affect any rights or obligations of the Company or any Participant under any
written contract of employment.
X. NO RIGHTS AS A STOCKHOLDER
A Participant shall have no rights as a stockholder with respect to any
shares of Common Stock subject to a Stock Option, until such Stock Option is
exercised. Except as provided in Section 6.2, no adjustment shall be made in the
number of shares of Common Stock issued to a Participant, or in any other rights
of the Participant upon exercise of a Stock Option by reason of any dividend,
distribution or other right granted to stockholders for which the record date is
prior to the date of exercise of the Participant's Stock Option.
XI. NON-TRANSFERABILITY
No Stock Option, Limited Right or Supplemental Bonus right granted
under this Plan, nor any other rights acquired by a Participant under this Plan,
shall be assignable or transferable by a Participant, other than by will or the
laws of descent and distribution, or pursuant to a qualified domestic relations
order as defined under the Internal Revenue Code or Title I of the Employee
Retirement Income Security Act of 1974, and any ISO shall be exercisable, during
his lifetime, only by him. In the event of a Participant's death, the Stock
Option or any Limited Right or Supplemental Bonus right may be exercised by the
Personal Representative of the Participant's estate or, if no Personal
Representative has been appointed, by the successor or successors in interest
determined under the Participant's will or under the applicable laws of descent
and distribution.
XII. COMPLIANCE WITH RULE 16B-3
It is the intent of the Company that the Plan comply in all respects with Rule
l*b-3 under the Exchange Act in connection with any award granted to a person
who is subject to Section 16 of the Exchange Act. Accordingly, if any provision
of the Plan or any agreement hereunder does not comply with the requirements of
Rule 16b-3 as then applicable to any such person, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements with respect to such person.
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<PAGE> 10
XIII. AMENDMENT
The Company by action of the Board may amend, modify or terminate this
Plan at any time or, by action of the Subcommittee may amend, modify or
terminate any outstanding Option Agreement, except that any such amendment,
modification or termination of the Plan shall be subject to the approval of the
Company's stockholders within one year after such Board action if such
stockholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automated quotation system on which the
Common Stock may be listed or quoted, or if the Board in its discretion
determines that obtaining such stockholder approval is for any reason advisable.
Moreover, no action may be taken by the Company without the consent of the
affected Participant which will materially impair the rights of any Participant
under any award then outstanding or which will prevent an ISO from continuing to
qualify under Section 422 of the Code.
XIV. REGISTRATION OF OPTIONED SHARES
No Stock Option shall be exercisable unless the Company's sale of such
optioned shares is pursuant to an applicable effective registration statement
under the Securities Act of 1933, as amended, or unless, in the opinion of
counsel to the Company, the Company's sale of such optioned shares would be
exempt from the registration requirements of the Securities Act of 1933, as
amended, and unless, in the opinion of such counsel, such sale would be exempt
from the registration or qualification requirements of applicable state
securities law.
XV. WITHHOLDING TAXES
The Company or a Participating Subsidiary may take such steps as the
Subcommittee may deem necessary or appropriate for the withholding of any taxes
which the Company or the Participating Subsidiary is required by any law or
regulation or any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with any Stock Option, Limited
Right or Supplemental Bonus, and to take such other action as the Subcommittee
may deem necessary or advisable to enable the Company and Participants to
satisfy obligations for the payment of tax liabilities in excess of such
withholding obligations relating to any such award. This authority shall include
authority to withhold or receive shares or other property and to make cash
payments in respect thereof in satisfaction of Participant's tax obligations.
XVI. FINANCING ARRANGEMENTS
The Subcommittee, in its discretion, may enter into arrangements with
one or more banks, brokers or other financial institutions to facilitate the
exercise, and the disposition of shares acquired upon exercise of Stock Options
or Supplemental Bonuses, including, without limitation, arrangements for the
simultaneous exercise of Stock Options (including a related Supplemental Bonus),
and sale of the shares acquired upon such exercise.
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<PAGE> 11
XVII. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to stockholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any subsidiary now has lawfully put into effect, including,
without limitation, any retirement, pension, savings and stock purchase plan,
insurance, death and disability benefits and executive short-term incentive
plans.
XVIII. EFFECTIVE DATE
This Plan was adopted by the Board of Directors and became effective on
December 19, 1997 and was approved by the Company's stockholders at the
stockholders' meeting in 1997 by the affirmative votes of the holders of a
majority of shares present in person or represented by proxy, and entitled to
vote at such meeting, or any adjournment thereof, or by the written consent of
the holders of a majority of shares entitled to vote, in each case in accordance
with applicable provisions of the Delaware General Corporation Law. Any Stock
Options, Limited Rights, or Supplemental Bonus granted under the Plan prior to
such approval of stockholders shall be effective when granted (unless, with
respect to any such award, the Subcommittee specifies otherwise at the time of
grant), but no such award may be exercised prior to such stockholder approval,
and if stockholders fail to approve the Plan as specified hereunder, any such
award shall be canceled. No ISO shall be granted subsequent to ten years after
the effective date of the Plan. Unless earlier terminated by the Board, the Plan
shall terminate when no shares of Common Stock remain reserved and available for
issuance and the Company has no further obligation with respect to any award
granted under the Plan.
11
<PAGE> 1
Exhibit 4.2
CHAMPIONSHIP AUTO RACING TEAMS, INC.
DIRECTOR STOCK OPTION PLAN
<PAGE> 2
TABLE OF CONTENTS
ARTICLE DESCRIPTION PAGE
- ------- ----------- ----
1. PURPOSE..............................................................1
2. ADMINISTRATION.......................................................1
3. ELIGIBILITY..........................................................1
4. COMMON STOCK.........................................................1
5. REQUIRED TERMS AND CONDITIONS OF NONQUALIFIED OPTIONS................2
6. EXPIRATION OF OPTION.................................................3
7. METHOD OF EXERCISE...................................................4
8. ADJUSTMENTS..........................................................4
9. OPTION AGREEMENTS...................................................5
10. LEGAL AND OTHER REQUIREMENTS.........................................5
11. NONTRANSFERABILITY...................................................5
12. INDEMNIFICATION OF COMMITTEE.........................................5
13. TERMINATION AND AMENDMENT OF PLAN....................................6
14. EFFECTIVE DATE OF PLAN...............................................6
<PAGE> 3
CHAMPIONSHIP AUTO RACING TEAMS, INC.
DIRECTOR STOCK OPTION PLAN
1. PURPOSE
The purpose of the Championship Auto Racing Teams, Inc. Director Stock
Option Plan (the "Plan"), as hereinafter set forth, is to allow
Championship Auto Racing Teams, Inc., a Delaware corporation (the
"Company"), or any successor corporation, to attract, retain and reward
non-employee Directors; to foster a wide-spread sense of ownership and
commitment by offering them an opportunity to have long-term
compensation, a greater proprietary interest in and closer identity
with the Company and with its financial success; provided, however,
that the exercise of Options shall be subject to the restrictions of
Section 6. Proceeds of cash or property received by the Company from
the sale of Common Stock pursuant to Options granted under the Plan
will be used for general corporate purposes. The use of the terms
"Options" herein shall refer to both Fixed Options and Elected Options.
2. ADMINISTRATION
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board").
Subject to the express provisions of the Plan, the Committee may
interpret the Plan, prescribe, amend and rescind rules and regulations
relating to it, provide for the terms of the Option Agreements for
Fixed and Elected Options, and make such other determinations as it
deems necessary or advisable for the administration of the Plan. The
decisions of the Committee on matters within their jurisdiction under
the Plan shall be conclusive and binding. No member of the Board or the
Committee shall be liable for any action taken or determination made in
good faith.
3. ELIGIBILITY
Options are granted under this Plan only to nonemployee Directors of
the Company, or its subsidiaries (referred to as "Participants") who
are current and active members of the Board of Directors of the Company
or a subsidiary. Beginning in 1998, Participants are eligible for
Options if they are non-employee Directors and not Franchise Holders.
Directors of the Company following the adjournment of the Company's
Annual Meeting of Shareholders for that year (the "Annual Meeting"),
will continue to participate in the Plan each year thereafter so long
as they are a Director immediately preceding such Annual Meeting and
have been reelected or otherwise remain as a Director immediately
thereafter.
4. COMMON STOCK
Options may be granted under the Plan for a number of shares not to
exceed, in the aggregate, 100,000 shares of Common Stock of the
Company, except as such number of shares shall be adjusted in
accordance with the provisions of Section 8 hereof. Such shares
<PAGE> 4
may be either authorized but unissued shares or treasury shares. In the event
that any Option granted under the Plan expires unexercised, or is surrendered by
a Participant for cancellation, or is terminated, or ceases to be exercisable
for any other reason without having been fully exercised prior to the end of the
period during which Options may be granted under the Plan, the shares
theretofore subject to such Option, or to the unexercised portion thereof, shall
again become available for new Options to be granted under the Plan to any
eligible Participant (including the holder of such former Option) at an Option
price determined in accordance with Sections 5(a) and (b) hereof, which price
may then be greater or less than the Option price of such former Option.
5. REQUIRED TERMS AND CONDITIONS OF NONQUALIFIED OPTIONS
The Options granted under the Plan shall be in the following form:
(a) SHARES UNDER FIXED OPTIONS
Each Participant on the effective date of this Plan shall
automatically be granted Options for 10,000 Shares. Each
individual first elected to serve as a director of the Company
after the effective date of this Plan shall, upon such
election, automatically be granted Options for 10,000 Shares
("Fixed Options"). In addition, commencing immediately after
the adjournment of the Company's Annual Meeting continuing on
an annual basis immediately following the adjournment of each
Annual Meeting, each Participant whose term did not expire at
that Annual Meeting and who has then served as a director of
the Company continuously since the previous Annual Meeting
shall automatically be granted an additional Option for 5,000
Shares ("Fixed Options").
The exercise price per share of each Fixed Option to purchase
Common Stock shall be equal to the Fair Market Value of the
stock on the day of grant.
(b) SHARES UNDER ELECTED OPTIONS
Each Participant shall be eligible to receive additional
Options, if, prior to March 1 of that year, the Participant
files with the Secretary of the Company an irrevocable
election to receive a stock option in lieu of the annual
retainer to be earned in the following year beginning March 1
and ending February 28 (or February 29, as the case may be)
(called "Elected Options").
The number of Elected Option shares granted to a Participant
will be determined by a formula which provides that each
Participant will receive an option equal to the nearest number
of whole shares equivalent to the Participant's Annual
Retainer divided by the fair market value of the stock per
share less one dollar ($1.00). "Annual Retainer" is defined as
the amount to which the Participant will be entitled to
receive for serving as a director during the Plan year (from
one annual meeting until the next), but does not include fees
directly associated with service on any committee of the Board
of Directors.
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<PAGE> 5
The exercise price of each Elected Option to purchase Common
Stock shall be equal to one dollar ($1.00) per share less than
the Fair Market Value of the stock on the day of grant.
(c) MAXIMUM TERM
No Option shall be exercisable after the expiration of ten
(10) years from the date it is granted.
(d) TIME OF EXERCISE
All Options granted under the Plan shall be immediately
exercisable.
(e) FAIR MARKET VALUE
If the Company's Common Stock is listed on a national
securities exchange at the date of grant, Fair Market Value
per share shall mean the average of the highest and lowest
selling price of a share on such exchange on such date or, if
there were no sales on said date, then on the next prior
business day on which there were sales.
If the Company's Common Stock is traded other than on a
national securities exchange at the date of the grant of the
Option, Fair Market Value per share shall mean an amount not
less than the average between the bid and asked price of a
share on the Option date, as reported by NASDAQ or, if there
is no bid and asked price on said date, then on the next
prior business day on which there was a bid and asked price.
If no such bid and asked price is available, then the
Committee shall make a good faith determination of the Fair
Market Value of a share, using any reasonable method of
valuation.
6. EXPIRATION OF OPTION
(a) GENERAL RULE
Each Option shall expire on the earlier of the date set forth
in the Option agreement (which shall not exceed the maximum
term permitted by this Plan) or, if earlier on the applicable
date specified in the following subsection of this Section 6.
(b) EXPIRATION UPON TERMINATION OF DIRECTORSHIP
Each Option shall expire on the date that the directorship of
the optionee with the Company terminates for any reason other
than disability, death, retirement or death following
retirement; provided, however, that the Committee, in its sole
discretion, may permit such Participant to exercise the Option
during a period of up to ninety (90) days following his/her
directorship termination.
3
<PAGE> 6
(c) EXPIRATION UPON DISABILITY OR DEATH
If the Participant ceases to be a Director of the Company by
reason of disability (as determined by the Committee) or by
reason of death, his/her Options, if any, shall expire on the
first anniversary of such termination of directorship.
(d) EXPIRATION UPON RETIREMENT
If the Participant ceases to be a Director of the Company due
to retirement with the consent of the Company, his/her
Options, if any, shall expire ninety (90) days after the date
of such termination of directorship. If an optionee who has so
retired dies prior to exercising in full an Option which has
not expired pursuant to the preceding sentence, then
notwithstanding the preceding sentence, his/her Options shall
expire on the first anniversary of the date of the optionee's
death.
(e) EXPIRATION FOR CAUSE
If the Participant ceases to be a Director of the Company for
cause, his/her Options, if any, shall expire on the date of
termination. For purposes of the Plan, termination "for cause"
shall mean termination because the optionee engaged in
dishonest or fraudulent conduct in the performance of his/her
duties for the Company or its subsidiaries.
7. METHOD OF EXERCISE
Subject to any restrictions contained herein, Options may be exercised
by the Participant by giving written notice to the Secretary of the
Company stating the number of shares of Common Stock with respect to
which the Option is being exercised and tendering payment therefor.
Payment for Common Stock, whether in cash, other shares of Common Stock
or other property, shall be made in full at the time that an Option, or
any part thereof, is exercised.
8. ADJUSTMENTS
(a) The aggregate number of shares of Common Stock with respect to
which Options may be granted hereunder, the number of shares of
Common Stock subject to each outstanding Option and the Option
price per share for each such Option may all be appropriately
adjusted, as the Committee may determine, for any increase or
decrease in the number of shares of issued Common Stock of the
Company resulting from a subdivision or consolidation of shares
whether through merger, consolidation, recapitalization,
reorganization, payment of a share dividend or other increase or
decrease in the number of such shares outstanding effected
without receipt of consideration by the Company.
(b) On the basis of information known to the Company, the Board or
the Committee
4
<PAGE> 7
shall make all determinations under this Section 8, including
whether a transaction involves a sale of substantially all the
Company's assets, and all such determinations shall be conclusive
and binding.
9. OPTION AGREEMENTS
Each Participant shall agree to such terms and conditions in connection
with the exercise of an Option, including restrictions on the
disposition of the Common Stock acquired upon the exercise thereof, as
the Committee may deem appropriate. The certificates evidencing the
shares of Common Stock acquired upon exercise of an Option may bear a
legend referring to the terms and conditions contained in the
respective Option agreement and the Plan, and the Company may place a
stop transfer order with its transfer agent against the transfer of
such shares. If requested to do so by the Committee at the time of
exercise of an Option, each Participant shall execute a certificate
indicating that the Participant is purchasing the Common Stock under
such Option for investment and not with any present intention to sell
the same. Upon the exercise of an Option, the Company shall have the
right to deduct from any cash payments otherwise due to the Participant
any amounts required to be withheld under any Federal, state or local
income tax laws.
10. LEGAL AND OTHER REQUIREMENTS
The obligation of the Company to grant any option or to sell and
deliver Common Stock under any Option granted under the Plan shall be
subject to all applicable laws, regulations, rules and approvals,
including, but not limited to, securities laws, rules and regulations
and the effectiveness of a registration statement under the Securities
Act of 1933, if deemed necessary or appropriate by the Board, of the
Common Stock reserved for issuance upon exercise of Options. A
Participant shall have no rights as a stockholder with respect to any
shares covered by an Option granted to or exercised by the Participant
until the date of delivery of a stock certificate for such shares. No
adjustment other than pursuant to Section 8 hereof shall be made for
dividends or other rights for which the record date is prior to the
date such stock certificate is delivered.
11. NONTRANSFERABILITY
During the lifetime of a Participant, any Option granted shall be
exercisable only by the Participant or the Participant's guardian or
legal representative. No Option shall be assignable or transferable by
the Participant, except by will or by the laws of descent or
distribution. The granting of an Option shall impose no obligation upon
the Participant to exercise such Option or right.
12. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee
shall be indemnified by the Company against the reasonable expenses,
including attorneys' fees actually and necessarily incurred with the
defense of any action, suit or proceeding (or in connection with any
appeal
5
<PAGE> 8
therein), to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or
any Option granted hereunder, and against all amounts paid by them in
settlement thereof or paid by them in satisfaction of a judgment in
any such action, suit or proceeding, so long as such Committee member
acted in good faith, received no improper benefit, believed his/her
conduct was in the best interests of the Company and, in the case of a
criminal proceeding, had no reasonable cause to believe his/her
conduct was unlawful. Indemnification may take the form of paying
attorneys' fees and expenses as they accrue and advancing attorneys'
fees and expenses to the affected Committee member.
13. TERMINATION AND AMENDMENT OF PLAN
No Options shall be granted under the Plan more than ten (10) years
after the date the Plan was adopted by the Board. The Board, acting by
a majority of its members without further action on the part of the
stockholders, may from time to time alter, amend or suspend the Plan or
any Option granted hereunder or may at any time terminate the Plan;
provided, however, the Board may not:
(1) (Except as provided in Section 8 hereof) change the
total number of shares of Common Stock available for
Options under the Plan;
(2) Extend the duration of the Plan;
(3) Increase the maximum term of the Options;
(4) Decrease the minimum Option price or otherwise
materially increase the benefits accruing to
Participants under the Plan; or
(5) Materially modify the eligibility requirements of the Plan;
and provided further that no such action shall materially and adversely
affect any outstanding Options without the consent of the respective
optionees.
14. EFFECTIVE DATE OF PLAN
The Plan shall become effective upon adoption by the Board; provided,
however, that it shall be submitted for approval by the holders of a
majority of the outstanding shares of Common Stock of the Company
within twelve (12) months thereafter, and Options granted prior to such
stockholder approval shall become null and void if such stockholder
approval is not obtained.
6
<PAGE> 1
Exhibit 5.1
KEGLER, BROWN, HILL & RITTER
A LEGAL PROFESSIONAL ASSOCIATION
[LETTER HEAD]
March 16, 1999
Championship Auto Racing Teams, Inc.
755 West Big Beaver Road, Suite 800
Troy, MI 48084
Re: Registration Statement on Form S-8 Relating to the
Championship Auto Racing Teams, Inc. 1997 Stock
Option Plan and Director Stock Option Plan ("Plans")
Gentlemen:
We have acted as counsel for Championship Auto Racing Teams, Inc., a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended, on a Registration Statement on Form S-8
("Registration Statement") of the issuance and sale of up to 2,100,000 shares of
the Company's Common Stock, par value $.01 per share ("Shares"), to be offered,
issued and sold by the Company pursuant to the Plans.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Company's
Certificate of Incorporation, as amended, the Company's Bylaws, as amended, the
minutes of proceedings of the Board of Directors of the Company, the
Registration Statement, including the exhibits thereto, the Plans and such other
documents as we have deemed necessary for the purpose of rendering the opinion
below.
In rendering the opinion below, we have assumed that (a) upon issuance
of the Shares pursuant to the Plans, the Company will have a sufficient number
of authorized but unissued shares of Common Stock not restricted for other
purposes to permit the issuance of the Shares, and (b) no changes occur in the
applicable law or pertinent facts.
Based upon and subject to the foregoing and the further qualifications
and limitations set forth below, we are of the opinion that the Shares, when
issued and sold by the Company against payment therefor in accordance with the
terms of the Plans and the Registration Statement, will be validly issued, fully
paid and non-assessable.
<PAGE> 2
KEGLER, BROWN, HILL, & RITTER
A LEGAL PROFESSIONAL ASSOCIATION
March 16, 1999
Page 2
This opinion is limited to the federal laws of the United States and to
the General Corporation Law of the State of Delaware in effect as of the date
hereof. This opinion is furnished by us solely for the benefit of the Company in
connection with the issuance of the Shares pursuant to the Plans and the filing
of the Registration Statement. This opinion may not be relied upon by any other
person or assigned, quoted or otherwise used without our prior written consent.
Notwithstanding the foregoing, we hereby consent to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
KEGLER, BROWN, HILL & RITTER
CO., L.P.A.
By: /s/ Amy M. Shepherd
------------------------------
Amy M. Shepherd, Vice President
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Championship Auto Racing Teams, Inc. on Form S-8 of our report dated February
5, 1999, appearing in the Annual Report on Form 10-K of Championship Auto
Racing Teams, Inc. for the year ended December 31, 1998.
/s/ Deloitte & Touche LLP
Detriot, Michigan
March 19, 1999
<PAGE> 1
Exhibit 24
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Andrew Craig
-------------------------
Signature
ANDREW CRAIG
<PAGE> 2
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Randy K. Dzierzawski
-------------------------
Signature
RANDY K. DZIERZAWSKI
<PAGE> 3
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Gerald Forsythe
-------------------------
Signature
GERALD FORSYTHE
<PAGE> 4
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Floyd R. Ganassi, Jr.
-------------------------
Signature
FLOYD R. GANASSI, JR.
<PAGE> 5
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Robert W. Rahal
-------------------------
Signature
ROBERT W. RAHAL
<PAGE> 6
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Carl A. Haas
-------------------------
Signature
CARL A. HAAS
<PAGE> 7
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ U.E. Patrick
-------------------------
Signature
U. E. PATRICK
<PAGE> 8
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Derrick Walker
-------------------------
Signature
DERRICK WALKER
<PAGE> 9
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ James F. Hardymon
-------------------------
Signature
JAMES F. HARDYMON
<PAGE> 10
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Bruce R. McCaw
-------------------------
Signature
BRUCE R. McCAW
<PAGE> 11
CHAMPIONSHIP AUTO RACING TEAMS, INC.
FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint Andrew Craig, Randy K. Dzierzawski, Jack A. Bjerke, and
Amy M. Shepherd, and each of them, each with full power to act without the
other, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a Registration Statement on Form S-8 of
Championship Auto Racing Teams, Inc. relating to the 1997 Stock Option Plan and
the Director Stock Option Plan (the "Registration Statement") and to sign any
and all amendments (including post effective amendments) to the Registration
Statement, any registration statement related to the offering contemplated by
this Registration Statement and any abbreviated registration statement in
connection with this Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 8th day of February, 1999.
/s/ Don Ohlmeyer
-------------------------
Signature
DON OHLMEYER
