<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 2-44197
ASSOCIATES FIRST CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-0876639
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
250 East Carpenter Freeway, Irving, Texas 75062-2729
(Address of principal executive offices)
(Zip Code)
214-541-4000
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes..X.. No.....
As of March 31, 1996, the registrant had 250 shares of Common Stock
authorized, issued and outstanding, all of which were owned directly by Ford
FSG, Inc.
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PART I - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS.
ASSOCIATES FIRST CAPITAL CORPORATION
SUPPLEMENTAL COMBINED STATEMENT OF EARNINGS
(In Millions)
Three Months Ended
March 31
1996 1995
REVENUE
Finance charges $1,505.0 $1,288.9
Insurance premiums 93.1 92.5
Investment and other income 46.9 43.6
1,645.0 1,425.0
EXPENSES
Interest expense 580.5 509.2
Operating expenses 461.2 403.9
Provision for losses on finance receivables 252.3 200.1
Insurance benefits paid or provided 34.2 38.0
1,328.2 1,151.2
EARNINGS BEFORE PROVISION FOR INCOME TAXES 316.8 273.8
PROVISION FOR INCOME TAXES 124.5 105.5
NET EARNINGS $ 192.3 $ 168.3
PRO FORMA NET EARNINGS PER SHARE* $ 0.55 $ 0.49
* Based on 346.5 million shares of Common Stock outstanding and in whole
dollars (see NOTE 9, Subsequent Event).
See notes to supplemental combined financial statements.
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ASSOCIATES FIRST CAPITAL CORPORATION
SUPPLEMENTAL COMBINED BALANCE SHEET
(In Millions)
March 31 December 31
1996 1995
ASSETS
CASH AND CASH EQUIVALENTS $ 458.1 $ 532.2
INVESTMENTS IN DEBT AND EQUITY SECURITIES
- NOTE 3 932.3 881.1
FINANCE RECEIVABLES, net of unearned finance
income - NOTE 4
Consumer Finance 28,595.8 27,575.3
Commercial Finance 12,475.3 12,127.2
Total net finance receivables 41,071.1 39,702.5
ALLOWANCE FOR LOSSES ON FINANCE RECEIVABLES
- NOTE 5 (1,368.8) (1,268.6)
INSURANCE POLICY AND CLAIMS RESERVES (636.7) (625.4)
OTHER ASSETS 2,069.1 2,082.1
Total assets $42,525.1 $41,303.9
LIABILITIES AND STOCKHOLDER'S EQUITY
NOTES PAYABLE, unsecured short-term
Commercial Paper $14,655.2 $12,902.9
Bank Loans 317.3 844.4
Related Party - NOTE 7 1,724.2
ACCOUNTS PAYABLE AND ACCRUALS 1,516.7 1,382.9
LONG-TERM DEBT
Senior Notes 21,081.0 21,230.8
Subordinated and Capital Notes 141.8 141.8
21,222.8 21,372.6
STOCKHOLDER'S EQUITY
Common Stock, no par value, 250 shares
authorized, issued and outstanding, at
stated value 47.0 47.0
Paid-in Capital 2,124.3 2,124.3
Retained Earnings 629.2 2,287.0
Foreign Currency Translation Adjustment 289.9 330.6
Unrealized (Loss) Gain on Available-for-Sale
Securities - NOTE 3 (1.5) 12.2
Total stockholder's equity 3,088.9 4,801.1
Total liabilities and stockholder's equity $42,525.1 $41,303.9
See notes to supplemental combined financial statements.
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ASSOCIATES FIRST CAPITAL CORPORATION
SUPPLEMENTAL COMBINED STATEMENT OF CASH FLOWS
(In Millions)
Three Months Ended
March 31
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 192.3 $ 168.3
Adjustments to net earnings for noncash items:
Provision for losses on finance receivables 252.3 200.1
Increase in accounts payable and accruals 169.0 198.3
Depreciation and amortization 53.6 44.4
Increase in insurance policy and claims
reserves 11.3 22.4
Deferred income taxes 6.0 16.3
Unrealized gain on trading securities (3.0)
Purchases of trading securities (4.0)
Sales and maturities of trading securities 5.3
Net cash provided from operating activities 684.5 648.1
CASH FLOWS FROM INVESTING ACTIVITIES
Finance receivables originated or purchased (10,011.9) (8,526.2)
Finance receivables liquidated 8,466.7 6,830.5
Acquisition of other finance business, net (116.1)
Purchases of available-for-sale securities (270.8) (198.2)
Sales and maturities of available-for-sale
securities 198.4 35.3
Decrease in real estate loans held for sale 3.1 10.6
Increase in other assets (19.2) (146.9)
Net cash used for investing activities (1,633.7) (2,111.0)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt 1,133.2 1,650.8
Retirement of long-term debt (1,302.6) (307.3)
Increase (decrease) in notes payable 1,225.2 (86.5)
Cash dividends (140.0) (72.0)
Net cash provided from financing activities 915.8 1,185.0
EFFECT OF FOREIGN CURRENCY TRANSLATION
ADJUSTMENTS ON CASH (40.7) 152.0
DECREASE IN CASH AND CASH EQUIVALENTS (74.1) (125.9)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 532.2 606.0
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 458.1 $ 480.1
CASH PAID FOR:
Interest $ 509.5 $ 471.7
Income taxes $ 10.2 $ 2.1
See notes to supplemental combined financial statements.
ASSOCIATES FIRST CAPITAL CORPORATION
NOTES TO SUPPLEMENTAL COMBINED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
Associates First Capital Corporation ("AFCC" or the "Company"), a Delaware
corporation, is a majority-owned subsidiary of Ford FSG, Inc. and an indirect
majority-owned subsidiary of Ford Motor Company ("Ford"). See NOTE 9 to these
supplemental combined financial statements. Associates Corporation of North
America ("Associates") is the principal operating subsidiary of AFCC.
NOTE 2 - BASIS OF PRESENTATION AND CONSOLIDATION
The supplemental combined financial statements of AFCC and subsidiaries have
been prepared to give retroactive effect to the contribution by Ford of
certain foreign finance operations to AFCC on May 8, 1996. AFCC was acquired
by Ford in 1989. At that time, AFCC transferred its finance operations in
Japan, the United Kingdom, Canada and Puerto Rico to other foreign
subsidiaries of Ford, but maintained management supervision over such
operations. In 1995, AFCC also commenced management supervision of operations
in Mexico. Ford recontributed the previously owned foreign finance operations
and Mexico, (herein after referred to as the "Foreign Operations") to AFCC as
part of an organizational restructuring of Ford's financial services
companies. The results and net assets of these operations have been
retroactively included in AFCC's results and net assets contained herein.
Generally accepted accounting principles proscribe giving effect to a
consummated business combination accounted for by the pooling-of-interest
method in the financial statements that do not include the consummation date;
however, they will become the historical consolidated financial statements of
AFCC after the financial statements covering the date of the consummation of
the business combination are issued.
In the opinion of the management of AFCC, all adjustments necessary to present
fairly the results of operations and financial position have been made and are
of a normal recurring nature. The results of operations for any interim
period are not necessarily indicative of the results of operations for a full
year. Certain prior period financial statement amounts have been reclassified
to conform to the current period presentation.
NOTE 3 - INVESTMENTS IN DEBT AND EQUITY SECURITIES
DEBT SECURITIES
The Company invests in debt securities, principally bonds and notes held by
the Company's insurance subsidiaries, with the intention of holding them to
maturity. However, if market conditions change, the Company may sell these
securities prior to maturity. Accordingly, the Company classifies its
investments in debt securities as available-for-sale securities and adjusts
its recorded value to market. The estimated market value at March 31, 1996
and December 31, 1995 was $919.7 million and $868.5 million, respectively.
Amortized cost at March 31, 1996 and December 31, 1995 was $922.1 million and
$849.8 million, respectively. Realized gains or losses on sales are included
in investment and other income. Unrealized gains or losses are reported as
a component of stockholder's equity, net of tax.
EQUITY SECURITIES
Equity security investments are recorded at market value. The Company
classifies its investments in equity securities as trading securities and
includes in earnings unrealized gains or losses on such securities. The
estimated market value at March 31, 1996 and December 31, 1995 was $12.6
million. Historical cost at March 31, 1996 and December 31, 1995 was $8.5
million.
NOTE 4 - NET FINANCE RECEIVABLES
At March 31, 1996 and December 31, 1995, net finance receivables consisted of
the following (in millions):
March 31 December 31
1996 1995
Consumer Finance
Home equity lending $14,591.9 $14,316.3
Personal lending and retail sales finance 6,455.6 6,225.1
Credit card 5,399.7 4,984.6
Manufactured housing 2,148.6 2,049.3
28,595.8 27,575.3
Commercial Finance
Truck and truck trailer 7,910.2 7,724.0
Equipment 4,174.2 4,012.0
Other 390.9 391.2
12,475.3 12,127.2
Net finance receivables $41,071.1 $39,702.5
NOTE 5 - ALLOWANCE FOR LOSSES ON FINANCE RECEIVABLES
Changes in the allowance for losses on finance receivables during the periods
indicated were as follows (in millions):
Three Months Ended Year Ended
March 31 December 31
1996 1995 1995
Balance at beginning of period $1,268.6 $1,061.6 $1,061.6
Provision for losses 252.3 200.1 834.0
Recoveries on receivables
charged off 36.2 36.2 132.9
Losses sustained (212.1) (181.7) (757.1)
Reserves of acquired businesses
and other 23.8 11.0 (2.8)
Balance at end of period $1,368.8 $1,127.2 $1,268.6
NOTE 6 - DEBT RESTRICTIONS
Associates, AFCC's principal operating subsidiary, is subject to various
limitations under the provisions of its outstanding debt and revolving credit
agreements. The most significant of these limitations are summarized as
follows:
LIMITATION ON PAYMENT OF DIVIDENDS
A restriction contained in certain issues of Associates debt securities, the
latest of which matures on March 15, 1999, generally limits payments of cash
dividends on Associates Common Stock in any year to not more than 50% of
Associates consolidated net earnings for such year, subject to certain
exceptions, plus increases in contributed capital and extraordinary gains.
Any such amounts available for the payment of dividends in such fiscal year
and not so paid, may be paid in any one or more of the five subsequent fiscal
years. In accordance with this provision, at March 31, 1996, $96.9 million
was available for dividends.
LIMITATION ON MINIMUM TANGIBLE NET WORTH
A restriction contained in certain revolving credit agreements requires
Associates to maintain a minimum tangible net worth, as defined, of $1.5
billion. At March 31, 1996, Associates tangible net worth was $4.3 billion.
NOTE 7 - RELATED PARTY NOTE PAYABLE
On February 8, 1996, the Company paid a dividend in the amount of $1.75
billion to its Ford-affiliated parent in the form of an interest-bearing
intercompany note the outstanding balance of which was $1.72 billion,
including accrued interest, at March 31, 1996.
NOTE 8 - RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges of AFCC for the three months ended
March 31, 1996 and 1995 was 1.54 and 1.53, respectively. For purposes of such
computation, the term "earnings" represents Earnings Before Provision for
Income Taxes, plus fixed charges. The term "fixed charges" represents
interest expense and a portion of rentals representative of an implicit
interest factor for such rentals.
NOTE 9 - SUBSEQUENT EVENT
On April 2, 1996, the Company paid the related party note payable (see NOTE
7) through the issuance of short-term notes payable from unrelated
parties.
On May 10, 1996, the Company sold a portion of its common stock, representing
approximately a 19.3% economic interest, to the public. The Company used
substantially all of the net proceeds to reduce short-term notes payable. As
a consequence, the Company became a majority-owned subsidiary of Ford rather
than a wholly-owned subsidiary of Ford. In connection with the sale, the
Company restated its Certificate of Incorporation; at the conclusion of the
transaction, the Company had approximately 346.5 million shares of its Class
A and Class B Common Stock outstanding.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Net earnings for the three-month period ended March 31, 1996 were $192.3
million, a 14.2% increase over the same period in the previous year. The
increase in earnings was principally due to growth in net finance receivables,
an improvement in the ratio of net interest margin to average net receivables
and an increase in operating expense efficiency, all of which more than offset
an increase in the provision for losses on finance receivables.
Finance charge revenue, on a dollar basis, increased for the three months
ended March 31, 1996, compared to the same period in the prior year,
principally as a result of growth in average net finance receivables
outstanding. Finance charge revenue as a percentage of average net finance
receivables (the "Finance Charge Ratio") was 14.91% for the first quarter of
1996 compared to 14.94% for the same period in 1995. The consumer and
commercial portfolio finance charge ratios for the first quarter of 1996 were
17.98% and 10.15%, respectively, compared to 17.83% and 9.98%, respectively,
for the same period in 1995. The increases in consumer and commercial
portfolio finance charge ratios were principally due to changes in competitive
market conditions. The decrease in the composite portfolio finance charge
ratio was principally due to changes in the mix of finance receivables during
the period.
Interest expense increased for the first quarter of 1996 compared to 1995,
primarily due to an increase in average debt outstanding related to the
aforementioned growth in average net finance receivables. Debt is the primary
source of funding to support the Company's growth in net finance receivables.
The increase due to growth was partially offset by a decline in the Company's
average short- and long-term borrowing rates, principally due to changes in
market conditions. As a result, the Company's total average borrowing rate
for the first quarter of 1996 was 6.36% compared to 6.70% for the same period
in the prior year.
As a result of the aforementioned changes in finance charge revenue and
interest expense, the Company's net interest margin increased to $924.5
million for the first quarter of 1996 compared to $779.7 million for the
prior-year period. The Company's net interest margin expressed as a ratio to
average net finance receivables also improved to 9.16% compared to 9.04% for
the same period in the prior year. The principal cause of the increase was
the Company's ability to maintain its lending rates on new loans in a period
during which its average borrowing rate decreased.
First quarter operating expenses were greater in 1996 than in 1995
reflecting growth in the size of the Company. However, operating expense
efficiency, measured as the ratio of total operating expenses divided by total
revenue net of interest expense and insurance benefits paid or provided,
improved to 44.8% for the first three months of 1996 compared to 46.0% for the
same period in the prior year. The improvement principally reflects the
benefit from certain initiatives designed to improve operating efficiency.
The Company's provision for losses increased from $200.1 million during
the first quarter of 1995 to $252.3 million for the same period in 1996,
principally due to increased losses. Total net losses as a percentage of
average net receivables were 1.74% for the first quarter of 1996 compared to
1.69% for the same period in 1995. The increase in net losses was principally
due to less favorable trends in economic conditions.
Financial Condition
Net finance receivables grew $1.4 billion (13.8% annualized) during the
first quarter of 1996 compared to $1.7 billion (19.6% annualized) for the same
period in 1995. The Company had growth in substantially all of its product
lines. However, of the total growth in the first quarter of 1996,
approximately 43% was from major acquisitions, principally of credit card
portfolios.
Total 60+days contractual delinquency was 1.78% of gross finance
receivables at March 31, 1996, which was higher than the 1.42% at March 31,
1995 and 1.71% at December 31, 1995. The increase in contractual delinquency
was principally due to less favorable trends in economic conditions.
Contractual delinquency was higher at March 31, 1996 than at March 31, 1995
and year-end 1995 (but moderated during the quarter after January); the
aforementioned increases in delinquency, net losses and the uncertainty in
economic conditions, led the Company to increase its allowance for losses to
3.33% of net finance receivables at March 31, 1996 compared to 3.20% at
December 31, 1995. The allowance for losses divided by annualized net credit
losses was 1.95 times losses at March 31, 1996 compared to 1.94 times losses
and 2.03 times losses at March 31, 1995 and December 31, 1995, respectively.
Management believes the allowance for losses at March 31, 1996 is sufficient
to provide adequate coverage against losses in its portfolios.
During the first quarter of 1996, stockholder's equity increased as a
result of the aforementioned increase in net earnings of the Company. However,
this increase was more than offset by dividends that the Company paid to its
majority-owned parent, Ford FSG, Inc., totaling $1.85 billion, $1.75 billion
of which was in the form of an interest-bearing intercompany note. To a
lesser extent, stockholder's equity decreased as a result of recording
unrealized losses on its insurance subsidiaries' investments in marketable
securities in the net amount of $13.7 million and recording net unrealized
foreign currency translation losses in the amount of $40.7 million,
principally related to its yen- and sterling-denominated net investments in
its Japan and United Kingdom operations.
As a result of the aforementioned, the Company's return on average assets,
average equity and average tangible equity for the three-month period ended
March 31, 1996 was 1.84%, 19.50% and 28.64%, respectively. This compares to
a return on average assets, average equity and average tangible equity for the
three months ended March 31, 1995 of 1.86%, 14.75% and 21.30%, respectively.
Excluding the impact of the aforementioned aggregate dividends of $1.85
billion, the Company's net earnings for the three-month period ended March 31,
1996 would have been $201.5 million, a 19.7% increase from the comparable
period. In addition, its return on average assets, average equity and average
tangible equity for the three months ended March 31, 1996 would have been
1.92%, 16.56% and 22.33%, respectively.
LIQUIDITY
The principal sources of cash for the Company are proceeds from issuance
of short- and long-term debt in both the United States and foreign countries
in which it operates and cash provided from the Company's operations.
Management believes that the Company has sufficient liquidity, from a
combination of cash provided from operations and external borrowing, to
support its operations.
At March 31, 1996, the Company had short- and long-term debt outstanding
of $16.7 billion and $21.2 billion, respectively. Short-term debt principally
consists of commercial paper issued by the Company and represents the
Company's primary source of short-term liquidity. Long-term debt principally
consists of unsecured long-term debt issued publicly and privately by the
Company in the United States and foreign countries in which the Company
operates. During the three months ended March 31, 1996 and 1995, the Company
raised debt aggregating $1.1 billion and $1.7 billion, respectively, through
public and private offerings.
Substantial additional liquidity is available to the Company's operations
through established credit facilities in support of its net short-term
borrowings. Such credit facilities provide a means of refinancing its
maturing short-term obligations as needed. At March 31, 1996, short-term bank
lines, revolving credit facilities and receivable purchase facilities totaled
$11.4 billion, $61.5 million of which was in use in the United Kingdom at that
date. These facilities represent 77% of net short-term indebtedness
outstanding at March 31, 1996.
Management believes that the Company has limited exposure to foreign
currency exchange risks resulting from transactions with its foreign
operations. It has been the historical practice of the Company to hedge
foreign currency transaction risks. Management also believes it has limited
exposure to foreign currency translation risks resulting from the translation
of the net assets and net earnings of its foreign operations from the foreign
currencies in which they are denominated to the reporting currency, the U.S.
dollar. At March 31, 1996, approximately 10% of the Company's consolidated
total assets and 14% of its consolidated net earnings were denominated in
foreign currencies, principally the yen, and to a lesser extent the sterling.
As a result of the general decline in the value of such currencies in
relationship to the U.S. dollar at and for the period ended March 31, 1996
versus December 31, 1995, the Company recorded an unrealized translation loss
of $40.7 million as an adjustment to stockholder's equity.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None to report
In accordance with General Instruction H.(2)(b), the following items have been
omitted: Item 2, Changes in Securities; Item 3, Defaults Upon Senior
Securities; and Item 4, Submission of Matters to a Vote of Security Holders.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3.1 Restated Certificate of Incorporation of the Company
3.2 By-laws of the Company
*3.3 Specimen Certificate of Class A Common Stock of the
Company
10.1 Corporate Agreement between the Company and Ford
10.2 Tax-Sharing Agreement between the Company and Ford
10.3 Management Services Agreement between the Company and
Ford
10.4 Trademark License Agreement between the Company and Ford
10.5(a) Employment Agreement of Keith W. Hughes
10.5(b) Employment Agreement of Harold D. Marshall
10.5(c) Employment Agreement of Joseph M. McQuillan
10.5(d) Employment Agreement of Chester D. Longenecker
10.7 The Company's Equity Deferral Plan
10.8 The Company's Long-Term Equity Compensation Plan
*10.11 The Company's Corporate Annual Performance Plan
*10.12 The Company's Long-Term Performance Plan
*10.13 The Company's Executive Deferred Salary Plan
*10.14 The Company's Deferred Compensation Unit Plan Agreement
*10.15 ACONA Executive Incentive Plan
*10.16 The Company's Supplemental Retirement Plan
*10.17 The Company's Excess Benefits Plan
*10.18 Ford Motor Company 1990 Long-Term Incentive Plan
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
(b) Reports on Form 8-K
During the first quarter ended March 31, 1996, AFCC filed a
Current Report on Form 8-K dated February 9, 1996, related to an
initial public offering of its Common Stock.
* Incorporated by reference to the Company's Registration Statement No.
333-817.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 14, 1996
ASSOCIATES FIRST CAPITAL CORPORATION
(registrant)
By/s/ Roy A. Guthrie
Executive Vice President, Comptroller,
Principal Accounting Officer and
Principal Financial Officer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
-----------------------------------------------------------------------------
<S> <C> <C>
3.1 -- Restated Certificate of Incorporation of the Company
3.2 -- By-laws of the Company
*3.3 -- Specimen Certificate of Class A Common Stock of the
Company
10.1 -- Corporate Agreement between the Company and Ford
10.2 -- Tax-Sharing Agreement between the Company and Ford
10.3 -- Management Services Agreement between the Company
and Ford
10.4 -- Trademark License Agreement between the Company and
Ford
10.5(a) -- Employment Agreement of Keith W. Hughes
10.5(b) -- Employment Agreement of Harold D. Marshall
10.5(c) -- Employment Agreement of Joseph M. McQuillan
10.5(d) -- Employment Agreement of Chester D. Longenecker
10.7 -- The Company's Equity Deferral Plan
10.8 -- The Company's Long-Term Equity Compensation Plan
*10.11 -- The Company's Corporate Annual Performance Plan
*10.12 -- The Company's Long-Term Performance Plan
*10.13 -- The Company's Executive Deferred Salary Plan
*10.14 -- The Company's Deferred Compensation Unit Plan
Agreement
*10.15 -- ACONA Executive Incentive Plan
*10.16 -- The Company's Supplemental Retirement Plan
*10.17 -- The Company's Excess Benefits Plan
*10.18 -- Ford Motor Company 1990 Long-Term Incentive Plan
12 -- Computation of Ratio of Earnings to Fixed Charges
27 -- Financial Data Schedule
</TABLE>
------------
* Incorporated by reference to the Company's Registration Statement
No. 333-817.
<PAGE>
<PAGE> 1 EXHIBIT 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
ASSOCIATES FIRST CAPITAL CORPORATION
* * * * *
Associates First Capital Corporation, a Delaware corporation,
the original Certificate of Incorporation of which was filed with the
Secretary
of State of the State of Delaware on December 22, 1971 under the name
Associates First National Corporation, HEREBY CERTIFIES that this Restated
Certificate of Incorporation restating, integrating and amending its
Certificate of Incorporation was duly adopted by its Board of Directors and
its
stockholders in accordance with Sections 242 and 245 of the General
Corporation
Law of the State of Delaware (the "Delaware General Corporation Law").
1. NAME OF CORPORATION. The name of the corporation is
ASSOCIATES FIRST CAPITAL CORPORATION (the "Corporation").
2. REGISTERED OFFICE AND REGISTERED AGENT. The address of
the Corporation's registered office in the State of Delaware is 1013 Centre
Road, in the City of Wilmington, County of New Castle. The name of the
Corporation's registered agent at such address is The Prentice-Hall
Corporation
System, Inc.
3. PURPOSE. The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be organized under the
Delaware General Corporation Law as the same exists or may hereafter be
amended.
4. CAPITAL STOCK. (a) The total number of shares of stock
that the Corporation shall have authority to issue is 230,191,525 of which (i)
23,603,669 shares shall be shares of Class A Common Stock, par value $.01 per
share (the "Class A Common Stock"), and 255,881,180 shares shall be
shares of Class B Common Stock, par value $.01 per share (the "Class B Common
Stock") (the Class A Common Stock and the Class B Common Stock being
collectively referred to herein as the "Common Stock"), and (ii) 50,000,000
shares shall be shares of Preferred Stock, par value $.01 per share (the
"Preferred Stock").
(b) The number of authorized shares of any class or classes
of stock may be increased or decreased (but not below the number of shares
thereof then outstanding) by the affirmative vote of the holders of a majority
of the votes entitled to be cast by the holders of the Common Stock of the
Corporation, voting together as a single class, irrespective of the provisions
<PAGE>
<PAGE> 2 2
of Section 242(b)(2) of the Delaware General Corporation Law or any
corresponding provision hereinafter enacted.
(c) The following is a statement of the relative powers,
preferences and participating, optional or other special rights, and the
qualifications, limitations and restrictions of the Class A Common Stock and
Class B Common Stock of the Corporation:
(1) Except as otherwise set forth below in this Article 4,
the relative powers, preferences and participating, optional or other
special rights, and the qualifications, limitations or restrictions
of
the Class A Common Stock and Class B Common Stock shall be identical
in all respects.
(2) Subject to the rights of the holders of Preferred Stock,
and subject to any other provisions of this Restated Certificate of
Incorporation, holders of Class A Common Stock and Class B Common
Stock shall be entitled to receive such dividends and other
distributions in cash, stock of any corporation (other than Common
Stock of the Corporation) or property of the Corporation as may be
declared thereon by the Board of Directors from time to time out of
assets or funds of the Corporation legally available therefor and
shall share equally on a per share basis in all such dividends and
other distributions. In the case of dividends or other distributions
payable in Common Stock, including distributions pursuant to stock
splits or divisions of Common Stock of the Corporation, only shares
of
Class A Common Stock shall be paid or distributed with respect to
Class A Common Stock and only shares of Class B Common Stock shall be
paid or distributed with respect to Class B Common Stock. The number
of shares of Class A Common Stock and Class B Common Stock so
distributed shall be equal in number on a per share basis. Neither
the shares of Class A Common Stock nor the shares of Class B Common
Stock may be reclassified, subdivided or combined unless such
reclassification, subdivision or combination occurs simultaneously
and
in the same proportion for each class.
(3)(A) At every meeting of the stockholders of the
Corporation every holder of Class A Common Stock shall be entitled to
one vote in person or by proxy for each share of Class A Common Stock
standing in his or her name on the transfer books of the Corporation,
and every holder of Class B Common Stock shall be entitled to five
votes in person or by proxy for each share of Class B Common Stock
standing in his or her name on the transfer books of the Corporation
in connection with the election of directors and all other matters
submitted to a vote of stockholders; provided, however, that with
respect to any proposed conversion of the shares of Class B Common
Stock into shares of Class A Common
<PAGE>
<PAGE> 3 3
Stock pursuant to paragraph (c)(6)(B) below, every holder of a share
of Common Stock, irrespective of class, shall have one vote in person
or by proxy for each share of Common Stock standing in his or her
name
on the transfer books of the Corporation. Except as may be otherwise
required by law or by this Article 4, the holders of Class A Common
Stock and Class B Common Stock shall vote together as a single class,
subject to any voting rights which may be granted to holders of
Preferred Stock, on all matters submitted to a vote of stockholders
of
the Corporation.
(B) Except as otherwise provided by law, and subject to any
rights of the holders of Preferred Stock, the provisions of this
Restated Certificate of Incorporation shall not be modified, revised,
altered or amended, repealed or rescinded in whole or in part,
without
the approval of a majority of the votes entitled to be cast by the
holders of the Class A Common Stock and the Class B Common Stock,
voting together as a single class; provided, however, that with
respect to any proposed amendment of this Restated Certificate of
Incorporation which would alter or change the powers, preferences or
special rights of the shares of Class A Common Stock or Class B
Common
Stock so as to affect them adversely, the approval of a majority of
the votes entitled to be cast by the holders of the shares affected
by
the proposed amendment, voting separately as a class, shall be
obtained in addition to the approval of a majority of the votes
entitled to be cast by the holders of the Class A Common Stock and
the
Class B Common Stock voting together as a single class as
hereinbefore
provided. Any increase in the authorized number of shares of any
class or classes of stock of the Corporation or creation,
authorization or issuance of any securities convertible into, or
warrants, options or similar rights to purchase, acquire or receive,
shares of any such class or classes of stock shall be deemed not to
affect adversely the powers, preferences or special rights of the
shares of Class A Common Stock or Class B Common Stock.
(C) Every reference in this Restated Certificate of
Incorporation to a majority or other proportion of shares of Common
Stock, Class A Common Stock or Class B Common Stock shall refer to
such majority or other proportion of the votes to which such shares
of
Common Stock, Class A Common Stock or Class B Common Stock are
entitled.
(4) In the event of any dissolution, liquidation or winding
up of the affairs of the Corporation, whether voluntary or
involuntary, after payment in full of the amounts required to be paid
to the holders of Preferred Stock, the remaining assets and funds of
the Corporation shall be distributed pro rata to the holders of Class
A Common Stock and Class B Common Stock. For purposes of this
paragraph (c)(4), the voluntary sale, conveyance, lease,
<PAGE>
<PAGE> 4 4
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the assets of the
Corporation or a consolidation or merger of the Corporation with one
or more other corporations (whether or not the Corporation is the
corporation surviving such consolidation or merger) shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary.
(5) In case of any reorganization or any consolidation of
the
Corporation with one or more other corporations or a merger of the
Corporation with another corporation, each holder of a share of Class
A Common Stock shall be entitled to receive with respect to such
share
the same kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reorganization,
consolidation or merger by a holder of a share of Class B Common
Stock
and each holder of a share of Class B Common Stock shall be entitled
to receive with respect to such share the same kind and amount of
shares of stock and other securities and property (including cash)
receivable upon such reorganization, consolidation or merger by a
holder of a share of Class A Common Stock.
(6)(A) Prior to the date on which shares of Class B Common
Stock are issued to stockholders of Ford Motor Company (Ford Motor
Company, together with its successors, "Ford"), or the Class B
Transferee (as defined in paragraph (c)(6)(B) below) in a Tax-Free
Spin-Off (as defined in paragraph (c)(6)(B) below), each record
holder
of shares of Class B Common Stock may convert such shares into an
equal number of shares of Class A Common Stock by surrendering the
certificates for such shares, accompanied by any required tax
transfer
stamps and by a written notice by such record holder to the
Corporation stating that such record holder desires to convert such
shares of Class B Common Stock into the same number of shares of
Class
A Common Stock for the purpose of the sale or other disposition of
such shares of Class A Common Stock and requesting that the
Corporation issue all of such shares of Class A Common Stock to
persons named therein, setting forth the number of shares of Class A
Common Stock to be issued to each such person and the denominations
in
which the certificates therefor are to be issued. To the extent
permitted by law, such voluntary conversion shall be deemed to have
been effected at the close of business on the date of such surrender.
Following a Tax-Free Spin-Off, shares of Class B Common Stock shall
no
longer be convertible into shares of Class A Common Stock except as
set forth in paragraph (c)(6)(B) below.
(B) Prior to a Tax-Free Spin-Off, each share of Class B
Common Stock shall automatically convert into one share of Class A
Common Stock upon the transfer of such share if, after such transfer,
such share is not beneficially owned by
<PAGE>
<PAGE> 5 5
Ford or any subsidiary of Ford or, as set forth below in this
paragraph (c)(6)(B), the Class B Transferee or any subsidiary of the
Class B Transferee. Shares of Class B Common Stock shall not convert
into shares of Class A Common Stock (i) in any transfer effected in
connection with a distribution of Class B Common Stock to
stockholders
of Ford or of the Class B Transferee as a dividend intended to be on
a
tax-free basis under the Internal Revenue Code of 1986, as amended
from time to time (the "Code"), (a "Tax-Free Spin-Off") or (ii)
except
as otherwise set forth below in this paragraph (c)(6)(B), in any
transfer after a Tax-Free Spin- Off. For purposes of this paragraph
(c)(6), a Tax-Free Spin-Off shall be deemed to have occurred at the
time shares are first transferred to stockholders of Ford or to
stockholders of the Class B Transferee, as the case may be, following
receipt of an affidavit described in clauses (vi) or (vii) of the
first sentence of paragraph (c)(6)(D) below. For purposes of this
paragraph (c)(6), the term "beneficially owned" with respect to
shares
of Class B Common Stock means ownership by a person or entity who,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise controls the voting power
(which includes the power to vote or to direct the voting) of such
Class B Common Stock and the term "subsidiary" means as to any person
or entity, all corporations, partnerships, joint ventures,
associations and other entities in which such person or entity
beneficially owns (directly or indirectly) 50% or more of the
outstanding voting stock, voting power, partnership interests or
similar voting interests. Prior to a Tax-Free Spin-Off, shares of
Class B Common Stock representing more than a 50% economic interest
in
the then outstanding Common Stock taken as a whole transferred by
Ford
or any of its subsidiaries in a single transaction to one unrelated
person (together with its successors, the "Class B Transferee") or
any
subsidiary of the Class B Transferee shall not automatically convert
to Class A Common Stock upon the transfer of such shares. Any shares
of Class B Common Stock retained by Ford or any of its subsidiaries
following any such transfer of shares of Class B Common Stock to the
Class B Transferee shall automatically convert into shares of Class A
Common Stock upon such transfer. For purposes of this paragraph
(c)(6), each reference to a "person" shall be deemed to include not
only a natural person, but also a corporation, partnership, joint
venture, association, or legal entity of any kind; each reference to
a
"natural person" (or to a "record holder" of shares, if a natural
person) shall be deemed to include in his or her representative
capacity a guardian, committee, executor, administrator or other
legal
representative of such natural person or record holder.
In the event of a Tax-Free Spin-Off, shares of Class
B Common Stock shall automatically convert into shares of Class A
Common Stock on the fifth anniversary of the date
<PAGE>
<PAGE> 6 6
on which shares of Class B Common Stock are first transferred to
stockholders of Ford or of the Class B Transferee, as the case may
be,
in a Tax-Free Spin-Off unless, prior to such Tax-Free Spin-Off, Ford
or the Class B Transferee, as the case may be, delivers to the
Corporation an opinion of counsel reasonably satisfactory to the
Corporation (which, in the case of Ford, shall include Ford's Chief
Tax Officer) to the effect that such conversion would preclude Ford
or
the Class B Transferee, as the case may be, from obtaining a
favorable
ruling from the Internal Revenue Service that the distribution would
be a Tax-Free Spin-Off under the Code. If such an opinion is
received, approval of such conversion shall be submitted to a vote of
the holders of the Common Stock as soon as practicable after the
fifth
anniversary of the Tax-Free Spin-Off unless Ford or the Class B
Transferee, as the case may be, delivers to the Corporation an
opinion
of counsel reasonably satisfactory to the Corporation (which, in the
case of Ford, shall include Ford's Chief Tax Officer) prior to such
anniversary to the effect that such vote would adversely affect the
status of the Tax-Free Spin-Off. At the meeting of stockholders
called for such purpose, every holder of Common Stock shall be
entitled to one vote in person or by proxy for each share of Common
Stock standing in his or her name on the transfer books of the
Corporation. Approval of such conversion shall require the approval
of a majority of the votes entitled to be cast by the holders of the
Class A Common Stock and Class B Common Stock present and voting,
voting together as a single class, and the holders of the Class B
Common Stock shall not be entitled to a separate class vote. Such
conversion shall be effective on the date on which such approval is
given at a meeting of stockholders called for such purpose.
Each share of Class B Common Stock shall
automatically convert into one share of Class A Common Stock if at
any
time prior to a Tax-Free Spin-Off the number of outstanding shares of
Class B Common Stock owned by Ford or any of its subsidiaries or the
Class B Transferee or any of its subsidiaries, as the case may be, is
less than 45% of the aggregate number of shares of Common Stock then
outstanding.
The Corporation will provide notice of any automatic
conversion of all outstanding shares of Class B Common Stock to
holders of record of the Common Stock as soon as practicable
following
such conversion, provided, however, that the Corporation may satisfy
such notice requirement by providing such notice prior to such
conversion. Such notice shall be provided by mailing notice of such
conversion first class postage prepaid, to each holder of record of
the Common Stock, at such holder's address as it appears on the
transfer books of the Corporation; provided, however, that no failure
to give such
<PAGE>
<PAGE> 7 7
notice nor any defect therein shall affect the validity of the
automatic conversion of any shares of Class B Common Stock. Each
such
notice shall state, as appropriate, the following:
(a) the automatic conversion date;
(b) that all outstanding shares of Class B Common
Stock are automatically converted;
(c) the place or places where certificates for such
shares are to be surrendered for conversion; and
(d) that no dividends will be declared on the
shares
of Class B Common Stock converted after such conversion date.
Immediately upon such conversion, the rights of the
holders of shares of Class B Common Stock as such shall cease and
such
holders shall be treated for all purposes as having become the record
owners of the shares of Class A Common Stock issuable upon such
conversion; provided, however, that such persons shall be entitled to
receive when paid any dividends declared on the Class B Common Stock
as of a record date preceding the time of such conversion and unpaid
as of the time of such conversion, subject to paragraph (c)(6)(F)
below.
(C) Prior to a Tax-Free Spin-Off, holders of shares of Class
B Common Stock may (i) sell or otherwise dispose of or transfer any
or
all of such shares held by them, respectively, only in connection
with
a transfer which meets the qualifications of paragraph (c)(6)(D)
below, and under no other circumstances, or (ii) convert any or all
of
such shares into shares of Class A Common Stock for the purpose of
effecting the sale or disposition of such shares of Class A Common
Stock to any person as provided in paragraph (c)(6)(A) above. Prior
to a Tax-Free Spin-Off, no one other than those persons in whose
names
shares of Class B Common Stock become registered on the original
stock
ledger of the Corporation by reason of their record ownership of
shares of common stock of the Corporation which are reclassified into
shares of Class B Common Stock, or transferees or successive
transferees who receive shares of Class B Common Stock in connection
with a transfer which meets the qualifications set forth in paragraph
(c)(6)(D) below, shall by virtue of the acquisition of a certificate
for shares of Class B Common Stock have the status of an owner or
holder of shares of Class B Common Stock or be recognized as such by
the Corporation or be otherwise entitled to enjoy for his or her own
benefit the special rights and powers of a holder of shares of Class
B
Common Stock.
<PAGE>
<PAGE> 8 8
Holders of shares of Class B Common Stock may at any and all
times transfer to any person the shares of Class A Common Stock
issuable upon conversion of such shares of Class B Common Stock.
(D) Prior to a Tax-Free Spin-Off, shares of Class B Common
Stock shall be transferred on the books of the Corporation and a new
certificate therefor issued, upon presentation at the office of the
Secretary of the Corporation (or at such additional place or places
as
may from time to time be designated by the Secretary or any Assistant
Secretary of the Corporation) of the certificate for such shares, in
proper form for transfer and accompanied by all requisite stock
transfer tax stamps, only if such certificate when so presented shall
also be accompanied by any one of the following:
(i) an affidavit from Ford stating that such
certificate is being presented to effect a transfer by Ford
of
such shares to a subsidiary of Ford; or
(ii) an affidavit from Ford stating that such
certificate is being presented to effect a transfer by any
subsidiary of Ford of such shares to Ford or another
subsidiary of Ford; or
(iii) an affidavit from Ford stating that such
certificate is being presented to effect a transfer by Ford
or
any of its subsidiaries of such shares to the Class B
Transferee or a subsidiary of the Class B Transferee as
contemplated by paragraph (c)(6)(B); or
(iv) an affidavit from the Class B Transferee
stating that such certificate is being presented to effect a
transfer by the Class B Transferee of such shares to a
subsidiary of the Class B Transferee; or
(v) an affidavit from the Class B Transferee
stating that such certificate is being presented to effect a
transfer by any subsidiary of the Class B Transferee of such
shares to the Class B Transferee or another subsidiary of the
Class B Transferee; or
(vi) an affidavit from Ford stating that such
certificate is being presented to effect a transfer by Ford
of
such shares to the stockholders of Ford in connection with a
Tax-Free Spin-Off; or
(vii) an affidavit from the Class B Transferee
stating that such certificate is being presented to effect a
transfer by the Class B Transferee of such shares to the
stockholders of the Class B Transferee in connection with a
Tax-Free Spin-Off.
<PAGE>
<PAGE> 9 9
Each affidavit of a record holder furnished pursuant to this
paragraph (c)(6)(D) shall be verified as of a date not earlier than
five days prior to the date of delivery thereof, and, where such
record holder is a corporation or partnership, shall be verified by
an
officer of the corporation or by a general partner of the
partnership,
as the case may be.
If a record holder of shares of Class B Common Stock shall
deliver a certificate for such shares, endorsed by him or her for
transfer or accompanied by an instrument of transfer signed by him or
her, to a person who receives such shares in connection with a
transfer which does not meet the qualifications set forth in this
paragraph (c)(6)(D), then such person or any successive transferee of
such certificate may treat such endorsement or instrument as
authorizing him or her on behalf of such record holder to convert
such
shares in the manner above provided for the purpose of the transfer
to
himself or herself of the shares of Class A Common Stock issuable
upon
such conversion, and to give on behalf of such record holder the
written notice of conversion above required, and may convert such
shares of Class B Common Stock accordingly.
If such shares of Class B Common Stock shall improperly have
been registered in the name of such a person (or in the name of any
successive transferee of such certificate) and a new certificate
therefor issued, such person or transferee shall surrender such new
certificate for cancellation, accompanied by the written notice of
conversion above required, in which case (A) such person or
transferee
shall be deemed to have elected to treat the endorsement on (or
instrument of transfer accompanying) the certificate so delivered by
such former record holder as authorizing such person or transferee on
behalf of such former record holder so to convert such shares and so
to give such notice, (B) the shares of Class B Common Stock
registered
in the name of such former record holder shall be deemed to have been
surrendered for conversion for the purpose of the transfer to such
person or transferee of the shares of Class A Common Stock issuable
upon conversion, and (C) the appropriate entries shall be made on the
books of the Corporation to reflect such action.
In the event that the Board of Directors of the Corporation
(or any committee of the Board of Directors, or any officer of the
Corporation, designated for the purpose by the Board of Directors)
shall determine, upon the basis of facts not disclosed in any
affidavit or other document accompanying the certificate for shares
of
Class B Common Stock when presented for transfer, that such shares of
Class B Common Stock have been registered in violation of the
provisions of paragraph (c)(6), or shall determine that a person is
enjoying for his or her own benefit the special
<PAGE>
<PAGE> 10 10
rights and powers of shares of Class B Common Stock in violation of
such provisions, then the Corporation shall take such action at law
or
in equity as is appropriate under the circumstances. An unforeclosed
pledge made to secure a bona fide obligation shall not be deemed to
violate such provisions.
(E) Prior to the occurrence of a Tax-Free Spin-Off, every
certificate for shares of Class B Common Stock shall bear a legend on
the face thereof reading as follows:
"The shares of Class B Common Stock represented by
this certificate may not be transferred to any person in
connection with a transfer that does not meet the
qualifications set forth in paragraph (c)(6)(D) of Article 4
of the Restated Certificate of Incorporation of this
corporation as amended and no person who receives such shares
in connection with a transfer which does not meet the
qualifications prescribed by paragraph (c)(6)(D) of said
Article 4 is entitled to own or to be registered as the
record
holder of such shares of Class B Common Stock, but the record
holder of this certificate may at any time convert such
shares
of Class B Common Stock into the same number of shares of
Class A Common Stock for purposes of effecting the sale or
other disposition of such shares of Class A Common Stock to
any person. Each holder of this certificate, by accepting
the
same, accepts and agrees to all of the foregoing."
Upon and after the transfer of shares in a Tax-Free Spin-Off,
shares of Class B Common Stock shall no longer bear the legend set
forth above in this paragraph (c)(6)(E).
(F) Upon any conversion of shares of Class B Common Stock
into shares of Class A Common Stock pursuant to the provisions of
this
paragraph (c)(6), any dividend, for which the record date or payment
date shall be subsequent to such conversion, which may have been
declared on the shares of Class B Common Stock so converted shall be
deemed to have been declared, and shall be payable, with respect to
the shares of Class A Common Stock into or for which such shares of
Class B Common Stock shall have been so converted, and any such
dividend which shall have been declared on such shares payable in
shares of Class B Stock shall be deemed to have been declared, and
shall be payable, in shares of Class A Common Stock.
(G) The Corporation shall not reissue or resell any shares
of
Class B Common Stock which shall have been converted into shares of
Class A Common Stock pursuant to or as permitted by the provisions of
this paragraph (c)(6), or any shares of Class B Common Stock which
shall have been acquired by the Corporation in any other manner. The
<PAGE>
<PAGE> 11 11
Corporation shall, from time to time, take such appropriate action as
may be necessary to retire such shares and to reduce the authorized
amount of Class B Common Stock accordingly.
The Corporation shall at all times reserve and keep
available,
out of its authorized but unissued Common Stock, such number of
shares
of Class A Common Stock as would become issuable upon the conversion
of all shares of Class B Common Stock then outstanding.
(H) In connection with any transfer or conversion of any
stock of the Corporation pursuant to or as permitted by the
provisions
of this paragraph (c)(6), or in connection with the making of any
determination referred to in this paragraph (c)(6):
(i) the Corporation shall be under no obligation
to
make any investigation of facts unless an officer, employee
or
agent of the Corporation responsible for making such transfer
or determination or issuing Class A Common Stock pursuant to
such conversion has substantial reason to believe, or unless
the Board of Directors (or a committee of the Board of
Directors designated for the purpose) determines that there
is
substantial reason to believe, that any affidavit or other
document is incomplete or incorrect in a material respect or
that an investigation would disclose facts upon which any
determination referred to in paragraph (c)(6)(F) above should
be made, in either of which events the Corporation shall make
or cause to be made such investigation as it may deem
necessary or desirable in the circumstances and have a
reasonable time to complete such investigation; and
(ii) neither the Corporation nor any director,
officer, employee or agent of the Corporation shall be liable
in any manner for any action taken or omitted in good faith.
(I) The Corporation will not be required to pay any
documentary, stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Class A Common Stock on
the conversion of shares of Class B Common Stock pursuant to this
paragraph (c)(6), and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the
Corporation
the amount of any such tax or has established, to the satisfaction of
the Corporation, that such tax has been paid.
(d) All rights to vote and all voting power (including,
without limitation thereto, the right to elect directors) shall be vested
exclusively, in accordance with paragraph (c)(3) and paragraphs (d) through
(g), inclusive, in
<PAGE>
<PAGE> 12 12
the holders of Common Stock, voting together as a single class, except as
otherwise expressly provided by the Board of Directors pursuant to Article 5
of
this Restated Certificate of Incorporation or as otherwise expressly required
by the law of the State of Delaware.
(e) No stockholder shall be entitled to exercise any right
of
cumulative voting. If, however, any stockholder should at any time become
entitled to exercise a right of cumulative voting, whether by express
requirement of the law of the State of Delaware or otherwise, then at all
elections of directors each holder of Class A Common Stock shall be entitled
to
cast one vote for each share of Class A Common Stock held by him or her, each
holder of Class B Common Stock shall be entitled to cast five votes for each
share of Class B Common Stock held by him or her and each holder of Full
Voting
Preferred Stock (as defined in Article 5, paragraph (b)), if any, of any
series
shall be entitled to cast the number of votes (which may be one vote or more
or
less than one vote) for each share of Full Voting Preferred Stock held by him
or her which the Board of Directors shall have determined pursuant to Article
5
in establishing voting rights with respect to such series, in each case
multiplied by the number of directors to be elected, and each such holder
shall
be entitled to cast all of his or her votes for a single director or to
distribute them among the number of directors to be voted for, or to cast his
or her votes for any two or more of them as he or she may see fit.
(f) At any meeting of stockholders, the presence in person
or
by proxy of the holders of shares entitled to cast a majority of all the votes
which could be cast at such meeting by the holders of all of the outstanding
shares of stock of the Corporation entitled to vote on every matter that is to
be voted on without regard to class at such meeting shall constitute a quorum.
(g) At every meeting of stockholders, the holders of Class
A
Common Stock, the holders of Class B Common Stock and the holders of Full
Voting Preferred Stock, if any, shall vote together as a class, and their
votes
shall be counted and totalled together; and at any meeting of stockholders
duly
called and held at which a quorum (determined in accordance with the
provisions
of paragraph (f)) is present, (i) in all matters other than the election of
directors, a majority of the votes which could be cast at such meeting upon a
given question and (ii) in the case of the election of directors, a plurality
of the votes which could be cast at such meeting upon such election, by such
holders who are present in person or by proxy, shall be necessary, in addition
to any vote or other action that may be expressly required by the provisions
of
this Restated Certificate of Incorporation or by the law of the State of
Delaware, to decide such question or election, and shall decide such question
or election if no such additional vote or other action is so required.
<PAGE>
<PAGE> 13 13
(h) Each holder of Preferred Stock shall be entitled to vote
to the extent, if any, provided by the Board of Directors pursuant to Article
5.
(i) Immediately upon the effectiveness of this Restated
Certificate of Incorporation, each share of stock of the Corporation, no par
value, issued and outstanding immediately prior to such effectiveness, shall
be
changed into and reclassified as 239,191,525 shares of Class B Common Stock.
5. PREFERRED STOCK. (a) Shares of Preferred Stock of the
Corporation may be issued from time to time in one or more series. Subject to
the limitations set forth in this Restated Certificate of Incorporation and
any
limitations prescribed by the law of the State of Delaware, the Board of
Directors is expressly authorized, prior to issuance of any series of
Preferred
Stock, to fix by resolution or resolutions providing for the issue of any
series, the number of shares included in such series and the designation,
relative powers, preferences and participating, optional or other special
rights, and the qualifications, limitations or restrictions of such series.
Pursuant to the foregoing general authority vested in the Board of Directors,
but (except as provided in the proviso to clause (v) of this Article 5) not in
limitation of the powers conferred on the Board of Directors thereby and by
the
law of the State of Delaware, the Board of Directors is expressly authorized
to
determine with respect to each series of Preferred Stock:
(i) the distinctive designation of such series and
the
number of shares (which number from time to time may be decreased by
the Board of Directors, but not below the number of such shares then
outstanding, or may be increased by the Board of Directors unless
otherwise provided in creating such series) constituting such series;
(ii) the rate and time at which, and the preferences
and conditions under which, dividends shall be payable on shares of
such series, the status of such dividends as cumulative, or
non-cumulative, the date or dates from which dividends, if
cumulative,
shall accumulate, and the status of such shares as participating or
non-participating after the payment of dividends as to which such
shares are entitled to any preference;
(iii) the right, if any, of holders of shares of such
series to convert such shares into, or to exchange such shares for,
shares of any other class or classes (other than Class B Common
Stock)
or of any other series of the same class, the prices or rates of
conversion or exchange, and adjustments thereto, and any other terms
and conditions applicable to such conversion or exchange;
(iv) the rights and preferences,if any, of the holders
of shares of such series upon the liquidation,
<PAGE>
<PAGE> 14 14
dissolution or winding up of the affairs of, or upon any distribution
of the assets of, the Corporation, which amount may vary depending
upon whether such liquidation, dissolution, or winding up is
voluntary
or involuntary, and, if voluntary, may vary at different dates, and
the status of the shares of such series as participating or
non-participating after the satisfaction of any such rights and
preferences;
(v) the voting powers, if any, of the holders of
shares of such series which may, without limiting the generality of
the foregoing, include (A) the general right to one vote (or more or
less than one vote) per share on every matter (including, without
limitation, the election of directors) voted on by the stockholders
without regard to class and (B) the limited right to vote, as a
series
by itself or together with other series of Preferred Stock or
together
with all series of Preferred Stock as a class, upon such matters,
under such circumstances and upon such conditions as the Board of
Directors may fix, including, without limitation, the right, voting
as
a series by itself or together with other series of Preferred Stock
or together with all series of Preferred Stock as a class, to elect
one or more directors of the Corporation in the event there shall
have
been a default in the payment of dividends on any one or more series
of Preferred Stock; provided, however, that notwithstanding the
provisions of the preceding subclause (B) or any other provisions of
this paragraph (a) to the contrary, the holders of Preferred Stock,
considered in the aggregate (whether voting by individual series or
together with other series of Preferred Stock or together with all
series of Preferred Stock as a class), shall not have the right to a
separate class vote for the election of one or more directors of the
Corporation except in the event there shall have been a default in
the
payment of dividends on any one or more series of Preferred Stock
and,
in such event, shall not have the right to a separate class vote for
more than a total of two directors;
(vi) the times, terms and conditions, if any, upon
which shares of such series shall be subject to redemption, including
the amount which the holders of shares of such series shall be
entitled to receive upon redemption (which amount may vary under
different conditions or at different redemption dates) and the
amount,
terms, conditions and manner of operation of any purchase, retirement
or sinking fund to be provided for the shares of such series;
(vii) the limitations, if any, applicable while shares
of such series are outstanding on the payment of dividends or making
of distributions on, or the acquisition or redemption of, Class A
Common Stock or Class B Common Stock or any other class of shares
ranking junior, either as to dividends or upon liquidation, to the
shares of such series;
<PAGE>
<PAGE> 15 15
(viii) the conditions or restrictions, if any, upon the
issue of any additional shares (including additional shares of such
series or any other class) ranking on a parity with or prior to the
shares of such series either as to dividends or upon liquidation; and
(ix) any other relative powers, preferences and
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of shares of
such
series;
in each case, so far as not inconsistent with the provisions of this
Restated Certificate of Incorporation or the Delaware General
Corporation Law. Unless otherwise provided by the Board of
Directors,
all shares of Preferred Stock shall be identical and of equal rank
and, unless otherwise provided by the Board of Directors, all shares
of each series of Preferred Stock shall be identical and of equal
rank
except as to the dates from which cumulative dividends, if any,
thereon shall be cumulative.
(b) As used in this Restated Certificate of
Incorporation, the term "Full Voting Preferred Stock" shall mean Preferred
Stock of any one or more series the holders of which shall be entitled to vote
on every matter (including, without limitation, the election of directors)
voted on by the stockholders without regard to class.
6. COMPUTATION; USE OF TERMS. (a) In determining the
number or the record holders of outstanding shares of any class of stock of
the
Corporation for the purpose of computing or determining the method of
computing
the vote or determining the right to vote at any meeting of stockholders or of
a class of stockholders, the original stock ledger of the Corporation as at
the
close of business on the record date fixed for such meeting or, if the stock
transfer books of the Corporation shall have been closed for a period
immediately preceding the date of such meeting, then as at the close of
business on the date as of which such stock transfer books were so closed,
shall be conclusive for all purposes, and in determining the number or the
record holders of outstanding shares of any class of stock of the Corporation
for any other purpose, the original stock ledger of the Corporation as at the
close of business on the date as of which the determination is being made,
shall be conclusive for all purposes; all notwithstanding any other provision
of this Restated Certificate of Incorporation.
(b) Wherever a term shall be used in the singular
in
this Restated Certificate of Incorporation, it shall be deemed in all
appropriate circumstances to include also the plural, and wherever a term
shall
be so used in the plural, it shall similarly be deemed to include also the
singular.
<PAGE>
<PAGE> 16 16
7. DURATION. The Corporation is to have perpetual
existence.
8. PROPERTY OF STOCKHOLDERS NOT SUBJECT TO CORPORATE
DEBTS. The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever.
9. POWERS OF THE BOARD OF DIRECTORS. (a) In
furtherance, and not in limitation, of the powers conferred by statute, the
Board of Directors is expressly authorized:
To make, alter or repeal the By-laws of the Corporation; to
set apart out of any funds of the Corporation available for dividends
a reserve or reserves for any proper purpose and to abolish the same
in the manner in which it was created, and to fix and determine and
to
vary the amount of the working capital of the Corporation; to
determine the use and disposition of the working capital and of any
surplus or net profits over and above the capital of the Corporation
determined as provided by law, and to fix the times for the
declaration and payment of dividends; to authorize and cause to be
executed mortgages and liens, without limit as to amount, upon the
real and personal property of the Corporation; and to fix and
determine the fees and other compensation to be paid by the
Corporation to its directors;
To determine from time to time whether and to what extent,
and
at what times and places, and under what conditions and regulations,
the accounts and books of the Corporation (other than the stock
ledger), or any of them, shall be open to inspection of the
stockholders; and no stockholder shall have any right to inspect any
account, book or document of the Corporation except as conferred by
statute, unless authorized by a resolution of the stockholders or
directors;
To make donations for the public welfare or for charitable,
scientific or educational purposes; and to cause the Corporation to
cooperate with other corporations or with natural persons, or to act
alone, in the creation and maintenance of community funds or
charitable, scientific, or educational instrumentalities, and to make
donations for the public welfare or for charitable, scientific, or
educational purposes; and
To designate, by resolution passed by a majority of the
entire
Board of Directors, one or more committees, each committee to consist
of two or more of the directors of the Corporation, which to the
extent provided in the resolution or in the By-laws of the
Corporation, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the
Corporation,
<PAGE>
<PAGE> 17 17
and may authorize the seal of the Corporation to be affixed to all
papers which may require it.
As used in this Restated Certificate of Incorporation, the term
"entire Board of Directors" means the total number of directors which the
Corporation would have if there were no vacancies.
(b) The Corporation may in its By-laws confer powers
upon
its directors in addition to the foregoing, and in addition to the powers and
authorities expressly conferred upon them by the laws of the State of
Delaware.
10. BOARD OF DIRECTORS - NUMBER AND VACANCIES. (a)
Subject
to any rights of holders of Preferred Stock to elect additional directors
under
specified circumstances, the number of directors of the Corporation shall be
not more than twelve (12) nor less than three (3), with the exact number to be
fixed from time to time as provided in the By-laws of the Corporation.
(b) Subject to any rights of holders of Preferred Stock, and
unless the Corporation's Board of Directors otherwise determines, any vacancy
occurring in the Board of Directors caused by death, resignation, increase in
number of directors or otherwise may be filled by the affirmative vote of a
majority of the remaining members of the Board of Directors, though less than
a
quorum, or by a sole remaining director. Except as otherwise provided by law,
any such vacancy may not be filled by the stockholders of the Corporation.
(c) Notwithstanding anything contained in this Restated
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 75% of the total voting power of all classes of
outstanding
capital stock, voting together as a single class, shall be required to amend,
repeal or adopt any provision inconsistent with this Article 10.
11. CONDUCT OF CERTAIN AFFAIRS OF THE CORPORATION. (a) In
anticipation that the Corporation will cease to be an indirect, wholly-owned
subsidiary of Ford, but that Ford will remain a substantial stockholder of the
Corporation, and in anticipation that the Corporation and Ford may engage in
the same or similar activities or lines of business and have an interest in
the
same areas of corporate opportunities, and in recognition of the benefits to
be
derived by the Corporation through its continued contractual, corporate and
business relations with Ford (including possible service of officers and
directors of Ford as officers and directors of the Corporation), the
provisions
of this Article 11 are set forth to regulate and define the conduct of certain
affairs of the Corporation as they may involve Ford and its officers and
directors, and the powers, rights, duties and liabilities of the Corporation
and its officers, directors and stockholders in connection therewith.
<PAGE>
<PAGE> 18 18
(b) Ford shall have no duty to refrain from engaging in the
same or similar activities or lines of business as the Corporation, and
neither
Ford nor any officer or director thereof (except as provided in paragraph (c)
below) shall be liable to the Corporation or its stockholders for breach of
any
fiduciary duty by reason of any such activities of Ford. In the event that
Ford acquires knowledge of a potential transaction or matter which may be a
corporate opportunity for both Ford and the Corporation, Ford shall have no
duty to communicate or offer such corporate opportunity to the Corporation and
shall not be liable to the Corporation or its stockholders for breach of any
fiduciary duty as a stockholder of the Corporation by reason of the fact that
Ford pursues or acquires such corporate opportunity for itself, directs such
corporate opportunity to another person, or does not communicate information
regarding such corporate opportunity to the Corporation.
(c) In the event that a director or officer of the
Corporation who is also a director or officer of Ford acquires knowledge of a
potential transaction or matter which may be a corporate opportunity for both
the Corporation and Ford, such director or officer of the Corporation shall
have fully satisfied and fulfilled the fiduciary duty of such director or
officer to the Corporation and its stockholders with respect to such corporate
opportunity, if such director or officer acts in a manner consistent with the
following policy:
(i) A corporate opportunity offered to any person who
is an officer of the Corporation, and who is also a director but not
an officer of Ford, shall belong to the Corporation; (ii) a corporate
opportunity offered to any person who is a director but not an
officer
of the Corporation, and who is also a director or officer of Ford
shall belong to the Corporation if such opportunity is expressly
offered to such person in writing solely in his or her capacity as a
director of the Corporation, and otherwise shall belong to Ford; and
(iii) a corporate opportunity offered to any person who is an officer
of both the Corporation and Ford shall belong to the Corporation if
such opportunity is expressly offered to such person in writing
solely
in his or her capacity as an officer of the Corporation, and
otherwise
shall belong to Ford.
(d) Any person purchasing or otherwise acquiring any
interest
in shares of the capital stock of the Corporation shall be deemed to have
notice of and to have consented to the provisions of this Article 11.
(e) For purposes of this Article 11 only:
(1) A director of the Corporation who is Chairman of the
Board of Directors of the Corporation or of a committee thereof shall
not be deemed to be an officer of the Corporation by reason of
holding
such position (without
<PAGE>
<PAGE> 19 19
regard to whether such position is deemed an office of the
Corporation
under the By-laws of the Corporation), unless such person is a
full-time employee of the Corporation; and
(2) (A) The term "Corporation" shall mean the Corporation
and
all corporations, partnerships, joint ventures, associations and
other
entities in which the Corporation beneficially owns (directly or
indirectly) 50% or more of the outstanding voting stock, voting
power,
partnership interests or similar voting interests, and (B) the term
"Ford" shall mean Ford and all corporations, partnerships, joint
ventures, associations and other entities (other than the
Corporation,
defined in accordance with clause (A) of this paragraph (e)(2)) in
which Ford beneficially owns (directly or indirectly) 50% or more of
the outstanding voting stock, voting power, partnership interests or
similar voting interests.
(f) Notwithstanding anything in this Restated Certificate of
Incorporation to the contrary, (i) the foregoing provisions of this Article 11
shall expire on the date that Ford ceases to own beneficially Common Stock
representing at least 20% of the total voting power of all classes of
outstanding Common Stock of the Corporation and no person who is a director or
officer of the Corporation is also a director or officer of Ford; and (ii) in
addition to any vote of the stockholders required by this Restated Certificate
of Incorporation, until the time that Ford ceases to own beneficially Common
Stock representing at least 20% of the total voting power of all classes of
outstanding Common Stock of the Corporation, the affirmative vote of the
holders of more than 80% of the total voting power of all classes of
outstanding Common Stock of the Corporation shall be required to alter, amend
or repeal in a manner adverse to the interests of Ford, or adopt any provision
adverse to the interests of Ford and inconsistent with, any provision of this
Article 11. Neither the alteration, amendment or repeal of this Article 11
nor
the adoption of any provision of this Restated Certificate of Incorporation
inconsistent with this Article 11 shall eliminate or reduce the effect of this
Article 11 in respect of any matter occurring, or any cause of action, suit or
claim that, but for this Article 11, would accrue or arise, prior to such
alteration, amendment, repeal or adoption.
12. MEETINGS. (a) If the By-laws so provide, the
stockholders and the directors may hold their meetings, and the Corporation
may
have one or more offices, either inside or outside of the State of Delaware.
The books and records of the Corporation (subject to the provisions of the
laws
of the State of Delaware) may be kept either inside or outside of the State of
Delaware at such places as from time to time may be determined by the Board of
Directors.
(b) Any corporate action required to be taken at any annual
or special meeting of stockholders of the Corporation, or
<PAGE>
<PAGE> 20 20
any corporate action which may be taken at any annual or special meeting of
the
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent or consents in writing, setting forth the corporate
action
so taken, shall be signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted and shall be delivered to the Corporation by delivery to its
registered office in Delaware (either by hand or by certified or registered
mail, return receipt requested), its principal place of business, or an
officer
or agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded; provided, however, that on and after
the
date on which neither Ford nor the Class B Transferee continues to
beneficially
own 50% or more of the total voting power of all classes of outstanding Common
Stock, any corporate action required to be taken at any annual or special
meeting of the stockholders, or any corporate action which may be taken at any
annual or special meeting of the stockholders, may be taken only at a duly
called annual or special meeting of stockholders and may not be taken by
written consent of the stockholders in lieu of such meeting.
So long as stockholders are entitled to consent to
corporate action in writing without a meeting in accordance with this
paragraph
(b), every written consent shall bear the date of signature of each
stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the
date
the earliest dated consent is delivered to the Corporation, a written consent
or consents signed by a sufficient number of holders to take action are
delivered to the Corporation in the manner prescribed in this paragraph (b).
(c) Unless otherwise prescribed by law or this Restated
Certificate of Incorporation, special meetings of stockholders may be held at
any time on call of the Chairman of the Board of Directors, a Vice Chairman of
the Board of Directors, the President or, at the request in writing of a
majority of the Board of Directors, any officer.
(d) Notwithstanding anything contained in this Restated
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 75% of the total voting power of all classes of
outstanding
capital stock, voting together as a single class, shall be required to amend,
repeal or adopt any provision inconsistent with this Article 12.
13. LIMITATION ON LIABILITY OF DIRECTORS. (a) A
director of the Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability
<PAGE>
<PAGE> 21 21
(i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General
Corporation Law or
(iv) for any transaction from which the director
derived an improper personal benefit.
(b) If the Delaware General Corporation Law is amended after
approval by the stockholders of this Article 13 to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended.
(c) Any repeal or modification of this Article 13 by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal
or modification.
14. INDEMNIFICATION AND INSURANCE. (a) Each person who
was or is made a party or is threatened to be made a party to or is involved
in
any action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise (hereinafter a "proceeding"), by reason of the fact
that he or she, or a person of whom he or she is the legal representative, is
or was a director, officer or employee of the Corporation or is or was serving
at the request of the Corporation as a director, officer or employee of
another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer or employee or in any other capacity while serving as a director,
officer or employee, shall be indemnified and held harmless by the Corporation
to the fullest extent authorized by the Delaware General Corporation Law, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said law permitted the Corporation
to provide prior to such amendment), against all expense, liability and loss
(including penalties, fines, judgments, attorney's fees, amounts paid or to be
paid in settlement and excise taxes or penalties imposed on fiduciaries with
respect to (i) employee benefit plans, (ii) charitable organizations or (iii)
similar matters) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has
ceased
<PAGE>
<PAGE> 22 22
to be a director, officer or employee and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person (other
than pursuant to paragraph (b) of this Article 14) only if such proceeding (or
part thereof) was authorized by the Board of Directors of the Corporation.
The
right to indemnification conferred in this paragraph (a) of Article 14 shall
be
a contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the Delaware General Corporation Law
requires, the payment of such expenses incurred by a director or officer in
his
or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such person while a director or officer,
including without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or
officer,
to repay all amounts so advanced if it shall ultimately be determined that
such
director or officer is not entitled to be indemnified under this paragraph (a)
of Article 14 or otherwise.
(b) If a claim which the Corporation is obligated to pay
under paragraph (a) of this Article 14 is not paid in full by the Corporation
within 60 days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in defending any proceeding in
advance
of its final disposition where the required undertaking, if any is required,
has been tendered to the Corporation) that the claimant has not met the
standards of conduct which make it permissible under the Delaware General
Corporation Law for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or
create
a presumption that the claimant has not met the applicable standard of
conduct.
(c) The provisions of this Article 14 shall cover
claims,
actions, suits and proceedings, civil or criminal,
<PAGE>
<PAGE> 23 23
whether now pending or hereafter commenced, and shall be retroactive to cover
acts or omissions or alleged acts or omissions which heretofore have taken
place. If any part of this Article 14 should be found to be invalid or
ineffective in any proceeding, the validity and effect of the remaining
provisions shall not be affected.
(d) The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final
disposition
conferred in this Article 14 shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, provision of this
Restated Certificate of Incorporation, By-Law, agreement, vote of stockholders
or disinterred directors or otherwise.
(e) The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense,
liability or loss under the Delaware General Corporation Law.
(f) The Corporation may, to the extent authorized from
time to time by the Board of Directors, grant rights to indemnification, and
rights to be paid by the Corporation the expenses incurred in defending any
proceeding in advance of its final disposition, to any agent of the
Corporation
to the fullest extent of the provisions of this Article 14 with respect to the
indemnification and advancement of expenses of directors, officers and
employees of the Corporation.
15. LIMITATION OF ACTIONS. Every asserted right of
action by or on behalf of the Corporation or by or on behalf of any
stockholder
against any past, present or future member of the Board of Directors, or any
committee thereof, or against any officer or employee of the Corporation or
any
subsidiary thereof, arising out of or in connection with any bonus,
supplemental compensation, stock investment, stock option or other plan or
plans for the benefit of any employee, irrespective of the place where such
right of action may arise or be asserted and irrespective of the place of
residence of any such director, member, officer or employee, shall cease and
be
barred upon the expiration of three years from the later of the following
dates: (a) the date of any alleged act or omission in respect of which such
right of action may be asserted to have arisen, or (b) the date upon which the
Corporation shall have made generally available to its stockholders
information
with respect to, as the case may be, the aggregate amount credited for a
fiscal
year to a bonus or supplemental compensation reserve, or the aggregate amount
of awards in a fiscal year of bonuses or supplemental compensation, or the
aggregate amount of stock optioned or made available for purchase during a
fiscal year, or the aggregate amount expended by the Corporation during a
fiscal year in
<PAGE>
<PAGE> 24 24
connection with any other plan for the benefit of such employees, to all or
any
part of which such asserted right of action may relate; and every asserted
right of action by or on behalf of any employee, past, present or future, or
any spouse, child, or legal representative thereof, against the Corporation or
any subsidiary thereof arising out of or in connection with any such plan,
irrespective of the place where such asserted right of action may arise or be
asserted, shall cease and be barred by the expiration of three years from the
date of the alleged act or omission in respect of which such right of action
shall be asserted to have arisen.
16. BY-LAWS AMENDMENTS. The By-laws of the Corporation
may be altered, amended or repealed at any meeting of the Board of Directors
or
of the stockholders, provided that notice of such alteration, amendment or
repeal be contained in the notice of such meeting of the Board of Directors or
stockholders (subject, in the case of meetings of stockholders, to the
provisions of Article II of the By-laws), as the case may be. All such
amendments must be approved by the affirmative vote of the holders of at least
75% of the total voting power of all classes of outstanding capital stock,
voting together as a single class (if effected by action of the stockholders),
or by the affirmative vote of directors constituting not less than a majority
of the entire Board of Directors (if effected by action of the Board of
Directors).
17. AMENDMENTS. The Corporation reserves the right to
amend, alter, change or repeal any provision contained in this Restated
Certificate of Incorporation, in the manner now or hereafter prescribed by the
law of the State of Delaware, and all rights of the stockholders herein are
granted subject to this reservation.
<PAGE>
<PAGE> 25 25
IN WITNESS WHEREOF, Associates First Capital Corporation has
caused this Restated Certificate of Incorporation to be signed on this 8th day
of May, 1996 in its name.
ASSOCIATES FIRST CAPITAL
CORPORATION
By: /S/ Chester D. Longenecker
- ------------------------------
Name:Chester D. Longenecker
Title: Executive Vice President
<PAGE>
<PAGE> 1 EXHIBIT 3.2
BY-LAWS
OF
ASSOCIATES FIRST CAPITAL CORPORATION
(THE "COMPANY")
ADOPTED APRIL 30, 1996
ARTICLE I.
OFFICES
The registered office of the Company shall be in the City of
Wilmington, County of New Castle, State of Delaware. The Company may also
have
one or more offices at such other places, either inside or outside of the
State
of Delaware, as the Board of Directors may from time to time determine or as
the business of the Company may require. The books and records of the
Company
may be kept (subject to the provisions of the laws of the State of Delaware)
at
any place, either inside or outside of the State of Delaware, as from time to
time may be determined by the Board of Directors.
ARTICLE II.
STOCKHOLDERS
SECTION 1. PLACE OF MEETING.
Meetings of stockholders (whether annual or special) shall be held
at
such place, either inside or outside of the State of Delaware, as the Board
of
Directors shall from time to time determine.
SECTION 2. ANNUAL MEETING.
The annual meeting of stockholders shall be held on the last
Thursday
of May of each year or at such other time as shall be determined by the Board
of Directors. Should said day be a legal holiday, such annual meeting shall
be
held on the preceding regular business day. If, for any reason, the annual
meeting be not held at the time aforesaid, the directors shall fix another
date
for such meeting.<PAGE>
<PAGE> 2
SECTION 3. SPECIAL MEETINGS.
Unless otherwise prescribed by law or by the Company's Restated
Certificate of Incorporation, as amended from time to time (the "Charter"),
special meetings of stockholders may be held at any time on call of the
Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors,
the President, or, at the request in writing of a majority of the Board of
Directors, any officer. Such request shall state the purpose or purposes of
the proposed meeting.
SECTION 4. NOTICE OF MEETINGS.
Except as otherwise provided by law, at least twenty (20) days'
notice
of stockholders' meetings stating the time and place and the objects thereof
shall be given by the Chairman of the Board of Directors, a Vice Chairman of
the Board of Directors, the President, the Secretary or an Assistant
Secretary
to each stockholder of record having voting power in respect of the business
to
be transacted thereat. Subject to Section 5 of this Article II, no business
other than that stated in the notice shall be transacted at any meeting.
SECTION 5. NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.
(A) Annual Meetings of Stockholders. (1) Nominations of
persons
for election to the Board of Directors and the proposal of business to be
considered by the stockholders may be made at an annual meeting of
stockholders
(a) pursuant to the Company's notice of meeting delivered pursuant to Section
4
of this Article II, (b) by or at the direction of the Board of Directors or
(c)
by any stockholder of the Company who is entitled to vote at the meeting, who
complied with the notice procedures set forth in paragraphs (A)(2) and (A)(3)
of this Section 5 and who was a stockholder of record at the time such notice
is delivered to the Secretary of the Company.
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of paragraph
(A)(1) of this Section 5, the stockholder must have given timely notice
thereof
in writing to the Secretary of the Company and such business must be a proper
subject for stockholder action under the General Corporation Law of the State
of Delaware. To be timely, a stockholder's notice shall be delivered to the
Secretary at the principal executive offices of the Company not less than
sixty
(60) days nor more than ninety (90) days prior to the first anniversary of
the
preceding year's annual meeting; provided, however, that in the event that
the
date of the annual meeting is advanced by more than thirty (30) days or
delayed
by more than sixty (60) days from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the ninetieth
day prior to such annual meeting and not later than the close of business on
the later of the sixtieth day prior to such annual meeting or the tenth day
following the day on which public announcement of the date of such meeting is
first made. Such stockholder's notice shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or reelection as a
director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934,<PAGE>
<PAGE> 3
as amended (the "Exchange Act"), (including such person's written consent to
being named in the proxy statement as a nominee and to serving as a director
if
elected); (b) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting
and
any material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any, on whose
behalf
the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Company's books, and of such beneficial
owner and (ii) the class and number of shares of the Company which are owned
beneficially and of record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Section 5 to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is
no
public announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Company at least seventy
(70) days prior to the first anniversary of the preceding year's annual
meeting, a stockholders's notice required by this Section 5 shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Company not later than the close of
business
on the tenth day following the day on which such public announcement is first
made by the Company.
(B) Special Meetings of Stockholders. Only such business shall
be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Company's notice of meeting pursuant to
Section 4 of this Article II. Nominations of persons for election to the
Board
of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Company's notice of meeting (a)
by
or at the direction of the Board of Directors or (b) by any stockholder of
the
Company who is entitled to vote at the
meeting, who complies with the notice procedures set forth in this Section 5
and who is a stockholder of record at the time such notice is delivered to
the
Secretary of the Company. Nominations by stockholders of persons for
election
to the Board of Directors may be made at such a special meeting of
stockholders
if the stockholder's notice required by paragraph (A)(2) of this Section 5
shall be delivered to the Secretary at the principal executive offices of the
Company not earlier than the ninetieth day prior to such special meeting and
not later than the close of business on the later of the sixtieth day prior
to
such special meeting or the tenth day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting.
(C) General. (1) Only persons who are nominated in accordance
with the procedures set forth in this Section 5 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 5. Except as otherwise provided by
law, the Charter or these By-laws, the chairman of the meeting shall have the
power and duty to determine whether a nomination or any business proposed to
be
brought before the meeting was made in accordance with this Section 5 and, if
any proposed <PAGE>
<PAGE> 4
nomination or business is not in compliance with this Section 5, to declare
that such defective proposal or nomination shall be disregarded.
(2) For purposes of this Section 5, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document
publicly
filed by the Company with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 5,
a
stockholder shall also comply with all applicable requirements of the
Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section 5. Nothing in this Section 5 shall be deemed to affect
any rights of stockholders to request inclusion of proposals in the Company's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
SECTION 6. QUORUM.
At any meeting of stockholders, the number of shares the holders of
which shall be present or represented by proxy in order to constitute a
quorum
for, and the votes that shall be necessary for, the transaction of any
business
shall be as expressly provided in Article 4 of the Charter. At any meeting
of
stockholders at which a quorum is not present, the person serving as chairman
of the meeting or the holders of shares entitled to cast a majority of all of
the votes which could be cast at such meeting by the holders of outstanding
shares of stock of the Company who are present in person or by proxy and who
are entitled to vote on every matter that is to be voted on without regard to
class at such meeting may adjourn the meeting from time to time.
SECTION 7. ORGANIZATION AND CONDUCT OF BUSINESS.
The Chairman of the Board of Directors shall act as chairman of
meetings of the stockholders. The Board of Directors may designate any other
officer or director of the Company to act as chairman of any meeting in the
absence of the Chairman of the Board of Directors, and the Board of Directors
may further provide for determining who shall act as chairman of any
stockholders' meeting in the absence of the Chairman of the Board of
Directors
and such designee. The person serving as chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him or her in order.
The Secretary of the Company shall act as secretary of all meetings
of
the
stockholders, but in the absence of the Secretary the presiding officer may
appoint any other person to act as secretary of any meeting.<PAGE>
<PAGE> 5
SECTION 8. PROXIES AND VOTING.
At any meeting of stockholders, every stockholder entitled to vote
may
vote in person or by proxy authorized by an instrument in writing or by a
transmission permitted by law filed in accordance with the procedure
established for the meeting. Any copy, facsimile telecommunication or other
reliable reproduction of the writing or transmission created pursuant to this
paragraph may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of
the entire original writing or transmission.
All voting, including on the election of directors but excepting
where
otherwise required by law, may be a voice vote; provided, however, that upon
demand therefor by a stockholder entitled to vote or by his or her proxy, a
stock vote shall be taken. Every stock vote shall be taken by ballots, each
of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the
meeting.
SECTION 9. STOCK LISTS.
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and
showing the address of each such stockholder and the number of shares
registered in his or her name, shall be open to the examination of any such
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten (10) days prior to the meeting, either at
a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or if not so specified, at the place
where the meeting is to be held.
The stock list shall also be kept at the place of the meeting during
the whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the
identity of the stockholders entitled to vote at the meeting and the number
of
shares held by each of them.
SECTION 10. RATIFICATION.
Any transaction questioned in any stockholders' derivative suit, or
any other suit to enforce alleged rights of the Company or any of its
stockholders, on the ground of lack of authority, defective or irregular
execution, adverse interest of any director, officer or stockholder,
nondisclosure, miscomputation or the application of improper principles or
practices of accounting may be approved, ratified and confirmed before or
after
judgment by the Board of Directors or by the holders of the Company's Class A
Common Stock, par value $.01 per share ("Class A Common Stock") and the
holders
of the Company's Class B Common Stock, par value $.01 per share ("Class B
Common Stock") voting as provided in paragraph (g) of Article 4 of the
Charter,
and, if so approved, ratified or confirmed, shall have the same force and
effect as if the questioned transaction had been originally duly authorized,
and said approval, ratification or confirmation shall be binding upon the
Company
<PAGE>
<PAGE> 6
and all of its stockholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
SECTION 11. INSPECTORS OF ELECTION.
The Board of Directors may, and to the extent required by law,
shall,
in advance of any meeting of stockholders, appoint one or more inspectors to
act at the meeting, decide upon the qualification of voters, count the votes,
decide the results and make a written report thereof in accordance with the
General Corporation Law of the State of Delaware. The Board of Directors may
designate one or more persons as alternate inspectors to replace any
inspector
who fails to act. If no inspector or alternate is able to act at a meeting
of
stockholders, the person presiding at the meeting may, and to the extent
required by law, shall, appoint one or more inspectors to act at the meeting.
Each inspector, before entering upon the discharge of his or her duties,
shall
take and sign an oath faithfully to execute the duties of inspector with
strict
impartiality and according to the best of his or her ability. Every vote
taken
by ballots shall be counted by an inspector or inspectors appointed by the
chairman of the meeting.
ARTICLE III.
BOARD OF DIRECTORS
SECTION 1. NUMBER, TERM OF OFFICE AND ELIGIBILITY.
Subject to any rights of holders of Preferred Stock to elect
additional directors under specified circumstances, as provided in Article 5
of
the Charter, the number of directors of the Company shall be fixed from time
to
time exclusively by resolution of the Board of Directors adopted by the
affirmative vote of directors constituting not less than a majority of the
total number of directors that the Company would have if there were no
vacancies on the Company's Board of Directors, but shall consist of not more
than twelve (12) nor less than three (3) directors. Each director shall be
elected annually by ballot by the holders of Class A Common Stock and the
holders of Class B Common Stock voting as provided in paragraph (g) of
Article
4 of the Charter at the annual meeting of stockholders, to serve until his or
her successor shall have been elected and shall have qualified, except as
provided in this Section 1. No person may be elected or re-elected a
director
of the Company if at the time of his or her election or re-election he or she
shall have attained the age of seventy years, and the term of any director
who
shall have attained such age while serving as a director shall terminate as
of
the time of the first annual meeting of stockholders following his or her
seventieth birthday; provided, however, that the Board of Directors by
resolution may waive such age limitation in any year and from year to year
with
respect to any director or directors. Subject to any rights of holders of
Preferred Stock, and unless the Board of Directors otherwise determines, any
vacancy occurring in the Board of Directors caused by death, resignation,
increase in number of directors or otherwise may be filled by the affirmative
vote of a majority of the remaining members of the Board of Directors, though
less than a quorum, or by a sole remaining director, and except as otherwise
provided by law, any such vacancy may <PAGE>
<PAGE> 7
not be filled by the stockholders of the Company, and any director so
elected shall hold office until the next election of directors and until
his or her successor is duly elected and qualified, or until his or her
earlier death, resignation or removal.
SECTION 2. MEETINGS.
Meetings of the Board of Directors may be held at such place,
either inside or outside of the State of Delaware, as may from time to time
be designated by the Chairman of the Board of Directors, a Vice Chairman of
the Board of Directors, the President or resolution of the Board of
Directors or as may be specified in the call of any meeting. In the
absence of any such designation, the meetings shall be held at the
principal office of the Company in Irving, Texas.
An annual meeting of the Board of Directors shall be held on the
same day as, and as soon as practicable following the annual meeting of
stockholders or at such other time or place as shall be determined by the
Board of Directors at its regular meeting next preceding said annual
meeting of stockholders. Regular meetings of the Board of Directors shall
be held on the last Thursday of February, May, August and November of each
year or at such other time as shall be determined by the Board of
Directors. Should said day be a legal holiday, such regular meeting shall
be held on the next Thursday that is not a legal holiday.
Special meetings of the Board of Directors may be held at any time
on the call of the Chairman of the Board of Directors, a Vice Chairman of
the Board of Directors, the President or the Board of Directors. Meetings
may be held at any time or place without notice if all the directors are
present or if those not present waive notice of the meeting in writing.
SECTION 3. NOTICE OF MEETINGS.
The Secretary or an Assistant Secretary shall give notice of the
time and place of meetings of the Board of Directors (excepting the annual
meeting of directors) by (i) mailing or sending via courier such notice not
later than during the second day preceding the day on which such meeting is
to be held, or (ii) by (a) sending a facsimile transmission or other form
of electronic communication containing such notice or (b) delivering such
notice personally or by telephone, in each case, not later than during the
first day preceding the day on which such meeting is to be held to each
director. Unless otherwise stated in the notice thereof any and all
business may be transacted at any meeting.
SECTION 4. QUORUM AND ORGANIZATION OF MEETINGS.
One-third of the total number of members of the Board of Directors
as constituted from time to time, but in no event less than three, shall
constitute a quorum for the transaction of business; but if at any meeting
of the Board of Directors there shall be less than a quorum present, a
majority of those present may adjourn the meeting from time to time, and
the meeting may be held as adjourned without further notice or waiver.
Except as otherwise provided by law or by the Charter or these By-laws, a
majority of the directors present at any duly constituted meeting may
decide any question brought before such meeting.
<PAGE>
<PAGE> 8
Meetings shall be presided over by the Chairman of the Board of Directors or,
in his or her absence, by such other person as the Board of Directors may
designate or the members present may select.
SECTION 5. POWERS
In addition to the powers and authorities by these By-laws expressly
conferred upon them, the Board of Directors shall have and may exercise all
such powers of the Company and do all such lawful acts and things that are
not
by statute, the Charter or these By-laws directed or required to be exercised
or done by the stockholders. Without prejudice to or limitation of such
general powers and any other powers conferred by statute, the Charter or
these
By- laws, the Board of Directors shall have the following powers:
(1) To determine, subject to the requirements of law
and
of paragraph (c)(2) of Article 4 of the Charter, what, if any,
dividends shall be declared and paid to the stockholders out of
net profits, current or accumulated, or out of surplus or other
assets of the Company available for dividends.
(2) To fix, and from time to time to vary, the amount
of
working capital of the Company, and to set aside from time to time
out
of net profits, current or accumulated, or surplus of the Company
such
amount or amounts as they in their discretion may deem necessary and
proper as, or as a safeguard to the maintenance of, working capital,
as a reserve for contingencies, as a reserve for repairs,
maintenance, or rehabilitation, as a reserve for revaluation of
profits of the Company or for such other proper purpose as may in
the opinion of the directors be in the best interests of the
Company; and in their sole discretion to abolish or modify any
such provision for working capital or any such reserve, and to
credit the amount thereof to net profits, current or accumulated,
or to the surplus of the Company.
(3) To purchase, or otherwise acquire for the
Company, any business, property, rights or privileges which the
Company may at the time be authorized to acquire, at such price or
consideration and generally on such terms and conditions as they
think fit; and at their discretion to pay therefor either wholly
or partly in money, stock,
bonds, debentures or other securities of the Company.
(4) To create, make and issue mortgages, bonds, deeds of
trust, trust agreements or negotiable or transferable instruments
or securities, secured by mortgage or otherwise, and to do every
other act and thing necessary to effect the same.
(5) To appoint any person or corporation to accept and
hold in trust for the Company any property belonging to the
Company, or in which it is interested, or for any other purpose,
and to execute such deeds and do all things requisite in relation
to any such trust.<PAGE>
<PAGE> 9
(6) To remove any officer of the Company with or without
cause, and from time to time to devolve the powers and duties of
any officer upon any other person for the time being.
(7) To confer upon any officer of the Company the power
to appoint, remove and suspend subordinate officers, agents and
employees.
(8) To determine who shall be authorized on the
Company's behalf, either generally or specifically, to make and
sign bills,
notes, acceptances, endorsements, checks, releases, receipts,
contracts, conveyances, and all other written instruments executed
on behalf of the Company.
(9) To make and change regulations, not inconsistent with
these By-laws, for the management of the Company's business and
affairs.
(10) To adopt and, unless otherwise provided therein, to
amend and repeal, from time to time, bonus and supplemental
compensation plans for employees (including employees who are
officers or directors) of the Company or any subsidiary. Power to
construe, interpret, administer, modify or suspend any such plan
shall be vested in the Board of Directors or a committee thereof.
(11) To adopt a retirement plan, or plans, for the purpose
of making retirement payments to employees (including employees
who are officers or directors) of the Company or of any subsidiary
thereof; and to adopt a group insurance plan, or plans, for the
purpose of enabling employees (including employees who are
officers or directors) of the Company or of any subsidiary thereof
to acquire insurance protection; any such retirement plan or
insurance plan,
unless otherwise provided therein, shall be subject to amendment
or revocation by the Board of Directors.
(12) To delegate any of the powers of the Board of
Directors in the course of the business of the Company to any
officer, employee or agent, and to appoint any person the agent of
the Company, with such powers (including the power to subdelegate)
and upon such terms as the Board of Directors may think fit.
SECTION 6. RELIANCE UPON BOOKS, REPORTS AND RECORDS.
Each director, each member of any committee designated by the Board of
Directors and each officer, in the performance of his or her duties, shall
be fully protected in relying in good faith upon such information,
opinions, reports or statements presented to the Company by any of its
officers or employees, or by committees of the Board of Directors, or by
any other person, as to matters such director, member or officer, as the
case may be, reasonably believes are within such person's professional or
expert competence and who has been selected with reasonable care by the
Board of Directors or by any such committee, or in relying in good faith
upon other records of the Company.<PAGE>
<PAGE> 10
SECTION 7. COMPENSATION OF DIRECTORS.
Directors, as such, may receive, pursuant to resolution of the
Board of Directors, fixed fees and other compensation for their services as
directors, including, without limitation, services as members of committees
of the Board of Directors; provided, however, that nothing herein contained
shall be construed to preclude any director from serving the Company in any
other capacity and receiving compensation therefor.
SECTION 8. MEETINGS BY MEANS OF CONFERENCE TELEPHONE.
Unless otherwise provided by the Charter or these By-laws, members
of the Board of Directors, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other, and participation in a meeting pursuant to this Section 8
shall constitute presence in person at such meeting.
ARTICLE IV.
COMMITTEES
SECTION 1. COMMITTEES OF THE BOARD OF DIRECTORS.
There are hereby established as committees of the Board of
Directors an Audit Committee, a Compensation Committee and a Nominating
Committee, each of which shall have the powers and functions set forth in
Sections 2, 3 and 4 hereof, respectively, and such additional powers as may
be delegated to it by the Board of Directors. The Board of Directors may
from time to time establish additional standing committees or special
committees of the Board of Directors, each of which shall have such powers
and functions as may be delegated to it by the Board of Directors. The
Board of Directors may abolish any committee established by or pursuant to
this Section 1 as it may deem advisable. Each such committee shall consist
of two or more directors, the exact number being determined from time to
time by the Board of Directors. Designations of the chairman and members
of each such committee, and, if desired, a vice chairman and alternates for
members, shall be made by the Board of Directors. In the absence or
disqualification of any member of any committee and any alternate member in
his or her place, the member or members of the committee present at the
meeting and not disqualified from voting whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the
Board of Directors to act at the meeting in the place of the absent or
disqualified member. Each committee shall have a secretary who shall be
designated by its chairman. A vice chairman of a committee shall act as
the chairman of the committee in the absence or disability of the chairman.
<PAGE>
<PAGE> 11
SECTION 2. AUDIT COMMITTEE.
The Audit Committee shall select and engage, on behalf of the
Company, independent public accountants to (1) audit the books of account
and other corporate records of the Company and (2) perform such other
duties as the Audit Committee may from time to time prescribe. The Audit
Committee shall transmit financial statements certified by such independent
public accountants to the Board of Directors after the close of each fiscal
year. The selection of independent public accountants for each fiscal year
shall be made in advance of the annual meeting of stockholders in such
fiscal year and shall be submitted for ratification or rejection at such
meeting. The Audit Committee shall confer with such accountants and review
and approve the scope of the audit of the books of account and other
corporate records of the Company. The Audit Committee shall have the power
to confer with and direct the officers of the Company to the extent
necessary to review the internal controls, accounting practices, financial
structure and financial reporting of the Company. From time to time the
Audit Committee shall report to and advise the Board of Directors
concerning the results of its consultation and review and such other
matters relating to the internal controls, accounting practices, financial
structure and financial reporting of the Company as the Audit Committee
believes merit review by the Board of Directors. The Audit Committee also
shall perform such other functions and exercise such other powers as may be
delegated to it from time to time by the Board of Directors.
SECTION 3. COMPENSATION COMMITTEE.
The Compensation Committee shall fix from time to time the
salaries of members of the Board of Directors who are officers or employees
of the Company and of all Senior Executive Vice Presidents, Executive Vice
Presidents and Senior Vice Presidents of the Company. It also shall
perform such functions as may be delegated to it under the provisions of
any bonus, supplemental compensation, special compensation or stock option
plan of the Company.
SECTION 4. NOMINATING COMMITTEE.
The Nominating Committee from time to time shall consider and make
recommendations to the Board of Directors with respect to nominations or
elections of directors and officers of the Company and the appointments of
such other employees of the Company as shall be referred to the Nominating
Committee.
The Nominating Committee from time to time shall consider the size
and
composition of the Board of Directors and make recommendations to the Board
of
Directors with respect to such matters. Prior to the annual meeting of
stockholders each year, and prior to any special meeting of stockholders at
which a director is to be elected, the Nominating Committee shall recommend
to the Board of Directors persons proposed to constitute the nominees whose
election at such meeting will be recommended by the Board of Directors.
<PAGE>
<PAGE> 12
The authority vested in the Nominating Committee by this Section 4
shall not derogate from the power of individual members of the Board of
Directors to recommend or place in nomination persons other than those
recommended by the Nominating Committee.
The Nominating Committee also shall perform such other functions
and exercise such other powers as may be delegated to it from time to time
by the Board of Directors.
SECTION 5. OTHER COMMITTEES.
The Board of Directors, or any committee, officer or employee of
the Company may establish additional standing committees or special
committees to
serve in an advisory capacity or in such other capacities as may be
permitted by law, the Charter and these By-laws. The members of any such
committee need not
be members of the Board of Directors. Any committee established pursuant
to this Section 5 may be abolished by the Board of Directors or by the
person or body by whom it was established as he, she or it may deem
advisable. Each such committee shall consist of two or more members, the
exact number being determined from time to time by such person or body.
Designations of members of each such committee and, if desired, alternates
for members, shall be made by such person or body, at whose will all such
members and alternates shall serve. The chairman of each such committee
shall be designated by such person or body. Each such committee shall have
a secretary who shall be designated by the chairman.
SECTION 6. RULES AND PROCEDURES.
Each committee may fix its own rules and procedures and shall meet
at such times and places as may be provided by such rules, by resolution of
the committee or by call of the chairman or vice chairman. Notice of
meeting of each committee, other than of regular meetings provided for by
its rules or resolutions, shall be given to committee members. The
presence of one-third of its members, but not less than two, shall
constitute a quorum of any committee, and all questions shall be decided by
a majority vote of the members present at the meeting. All action taken at
each committee meeting shall be recorded in minutes of the meeting.
SECTION 7. APPLICATION OF ARTICLE.
Whenever any provision of any other document relating to any
committee of the Company named therein shall be in conflict with any
provision of this Article IV, the provisions of this Article IV shall
govern, except that if such other document shall have been approved by the
stockholders, voting as provided in the Charter, or by the Board of
Directors, the provisions of such other document shall govern.<PAGE>
<PAGE> 13
ARTICLE V.
OFFICERS
SECTION 1. OFFICERS.
The Officers of the Company shall include a Chairman of the Board
of Directors and may include one or more Vice Chairmen of the Board of
Directors, each of whom shall be chosen from among the directors, and a
President, one or more Senior Executive Vice Presidents, one or more
Executive Vice Presidents, one or more Senior Vice Presidents, one or more
Vice Presidents, a Treasurer, a Comptroller, a General Counsel and a
Secretary, each of whom shall be elected by the Board of Directors to hold
office until his or her successor shall have been chosen and shall have
qualified. The Board of Directors, the Chairman of the Board of Directors
and the President may elect or appoint one or more Assistant Vice
Presidents, one or more Assistant Treasurers, one or more Assistant
Comptrollers, one or more Assistant General Counsels, one or more Assistant
Secretaries, and the Board of Directors may elect or appoint such other
officers as it may deem necessary, or desirable, each of whom shall have
such authority, shall perform such duties and shall hold office for such
term as may be prescribed by the Board of Directors from time to time. Any
person may hold at one time more than one office, excepting that the duties
of the President and Secretary shall not be performed by one person.
SECTION 2. CHAIRMAN OF THE BOARD OF DIRECTORS.
The Chairman of the Board of Directors shall be the Chief
Executive Officer of the Company. Subject to the provisions of these
By-laws and to the direction of the Board of Directors, he or she shall
have ultimate authority for decisions relating to the general management
and control of the affairs and business of the Company and shall perform
all other duties and exercise all other powers commonly incident to the
position of Chief Executive Officer or which are or from time to time may
be delegated to him or her by the Board of Directors, or
which are or may at any time be authorized or required by law. He or she
shall preside at all meetings of the Board of Directors. He or she may
redelegate from time to time and to the full extent permitted by law, in
writing, to officers or employees of the Company any or all of such duties
and powers, and any such redelegation may be either general or specific.
Whenever he or she so shall delegate any of his or her authority, he or she
shall file a copy of the redelegation with the Secretary of the Company.
SECTION 3. VICE CHAIRMEN OF THE BOARD OF DIRECTORS.
Subject to the provisions of these By-laws and to the direction of
the Board of Directors and of the Chief Executive Officer, the Vice
Chairmen of the Board of Directors shall have such powers and shall perform
such duties as from time to time may be delegated to them by the Board of
Directors or by the Chief Executive Officer, or which are or may at any
time be authorized or required by law.<PAGE>
<PAGE> 14
SECTION 4. PRESIDENT.
Subject to the provisions of these By-laws and to the direction of
the Board of Directors and of the Chief Executive Officer, the President
shall have such powers and shall perform such duties as from time to time
may be delegated to him or her by the Board of Directors or by the Chief
Executive Officer, or which are or may at any time be authorized or
required by law.
SECTION 5. SENIOR EXECUTIVE VICE PRESIDENTS, EXECUTIVE VICE
PRESIDENTS, SENIOR VICE PRESIDENTS AND VICE
PRESIDENTS.
Each of the Senior Executive Vice Presidents, each of the
Executive Vice Presidents, each of the Senior Vice Presidents and each of
the other Vice Presidents shall have such powers and shall perform such
duties as may be delegated to him or her by the Board of Directors, the
Chairman of the Board of Directors, the President or such other officer or
officers to whom he or she is directly responsible.
SECTION 6. TREASURER AND ASSISTANT TREASURER.
The Treasurer, subject to the direction of the Board of Directors,
shall have the care and custody of all funds and securities of the Company
which may come into his or her hands. When necessary or proper he or she
shall endorse on behalf of the Company, for collection, checks, notes and
other obligations, and shall deposit all funds of the Company in such banks
or other depositaries as may be designated by the Board of Directors or by
such officers or employees as may be authorized by the Board of Directors
so to designate. He or she shall perform all acts incident to the office of
Treasurer, subject to the control of the Board of Directors and such other
officer or officers to whom he or she is directly <PAGE>
<PAGE> 15
responsible. He or she may be required to give a bond for the faithful
discharge of his or her duties, in such sum and upon such conditions as the
Board of Directors may require.
At the request and direction of the Treasurer or, in the case of
his or her absence or inability to act, any Assistant Treasurer may act in
his or her place. In the case of the death of the Treasurer, or in the
case of his or her absence or inability to act without having designated an
Assistant Treasurer to act temporarily in his or her place, the Assistant
Treasurer so to perform the duties of the Treasurer shall be designated by
the Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, the President or an Executive Vice President.
SECTION 7. SECRETARY AND ASSISTANT SECRETARY.
The Secretary shall keep full and accurate minutes of the meetings
of the stockholders and of the Board of Directors in the proper record book
of the Company provided therefor, and, when required, the minutes of
meetings of the committees, and shall be responsible for the custody of all
such minutes. Subject to the direction of the Board of Directors, the
Secretary shall have custody of the stock ledgers and documents of the
Company. He or she shall have custody of the corporate seal of the Company
and shall affix and attest such seal to any instrument whose execution
under seal shall have been duly authorized. He or she shall give due
notice of meetings and, subject to the direction of the Board of Directors,
shall perform all other duties commonly incident to his or her office or as
properly required of him or her by the Chairman of the Board of Directors
and such other officer or officers to whom he or she is directly
responsible and shall enjoy all other powers commonly incident to his or
her office.
At the request and direction of the Secretary or, in the case of
his or her absence or inability to act, any Assistant Secretary may act in
his or her place. In the case of the death of the Secretary, or in the
case of his or her absence or inability to act without having designated an
Assistant Secretary to act temporarily in his or her place, the Assistant
Secretary or other person so to perform the duties of the Secretary shall
be designated by the Chairman of the Board of Directors, a Vice Chairman of
the Board of Directors, the President or an Executive Vice President.
SECTION 8. ASSISTANT VICE PRESIDENTS AND OTHER OFFICERS.
Each assistant vice president and other officers shall perform
such duties commonly incident to his or her office or as properly required
of him or her by the Chairman of the Board of Directors and such other
officer or officers to whom he or she is directly responsible.
SECTION 9. GENERAL COUNSEL.
The General Counsel shall have general supervision of all matters
of a legal nature concerning the Company. He or she shall perform all such
duties<PAGE>
<PAGE> 16
commonly incident to his or her office or as properly required of him or
her by the Chairman of the Board of Directors and such other officer or
officers to whom he or she is directly responsible.
SECTION 10. COMPTROLLER.
The Comptroller shall keep and maintain the books of account of
the Company in such manner that they fairly present the financial condition
of the Company and its subsidiaries. The Comptroller shall have such
powers and shall perform such duties as may be delegated to him or her by
the Board of Directors, the Chairman of the Board of Directors, the
President or the appropriate Executive Vice President, Senior Vice
President or Vice President or such other officer or officers to whom he or
she is directly responsible.
SECTION 11. SALARIES.
Salaries of officers, agents or employees shall be fixed from time
to time by the Board of Directors or by such committee or committees, or
person or persons, if any, to whom such power shall have been delegated by
the Board of Directors. An employment contract, whether with an officer,
agent or employee, if expressly approved or specifically authorized by the
Board of Directors, may fix a term of employment thereunder; and such
contract, if so approved or authorized, shall be valid and binding upon the
Company in accordance with the terms thereof, provided that this provision
shall not limit or restrict in any way the right of the Company at any time
to remove from office, discharge or terminate the employment of any such
officer, agent or employee prior to the expiration of the term of
employment under any such contract.
SECTION 12. VACANCIES.
A vacancy in any office filled by election of the Board of
Directors may be filled by the Board of Directors by the election of a new
officer who shall hold office, subject to the provisions of this Article V,
until the regular meeting of the directors following the next annual
meeting of the stockholders and until his or her successor is elected.
SECTION 13. REMOVAL OR DISCHARGE.
Any officer may be removed or discharged by the Chairman of the
Board of Directors at any time excepting an officer who is also a director.
Any officer who also is a director may be discharged at any time by the
Board of Directors.
ARTICLE VI.
RESIGNATIONS
Any director, officer or agent of the Company, or any member of
any committee, may resign at any time by giving written notice to the Board
of Directors, the Chairman of the Board of Directors, a Vice Chairman of
the Board of Directors, the President or the Secretary <PAGE>
<PAGE> 17
of the Company. Any such resignation shall take effect at the time
specified therein, or if the time be not specified therein, then upon
receipt thereof. The acceptance of such resignation shall not be necessary
to make it effective.
ARTICLE VII.
CAPITAL STOCK - DIVIDENDS - SEAL
SECTION 1. CERTIFICATES OF SHARES.
The certificates for shares of the capital stock of the Company
shall be in such form, not inconsistent with the Charter, as shall be
approved by the Board of Directors. The certificates shall be numbered and
signed by the Chairman of the Board of Directors, a Vice Chairman of the
Board of Directors, the President, an Executive Vice President, a Senior
Vice President or a Vice President, and also by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary. Any and
all signatures may be facsimiles.
All certificates shall bear the name of the persons owning the
shares represented thereby, shall state the number of shares represented by
such certificate and the date of issue; and such information shall be
entered in the Company's original stock ledger.
SECTION 2. ADDRESSES OF STOCKHOLDERS.
It shall be the duty of every stockholder to notify the Company of
his or her post office address and of any change therein. The latest
address furnished by each stockholder shall be entered on the original
stock ledger of the Company and the latest address appearing on such
original stock ledger shall be deemed conclusively to be the post office
address and the last-known post office address of such stockholder. If any
stockholder shall fail to notify the Company of his or her post office
address, it shall be sufficient to send corporate notices to such
stockholder at the address, if any, understood by the Secretary to be his
or her post office address, or in the absence of such address, to such
stockholder, at the General Post Office in the City of Wilmington, State of
Delaware.
SECTION 3. LOST, DESTROYED OR STOLEN CERTIFICATE.
Any person claiming a stock certificate in lieu of one lost,
destroyed or stolen, shall give the Company an affidavit as to his, her or
its ownership of the certificate and of the facts which go to prove that it
has been lost, destroyed or stolen. If required by the Board of Directors,
he, she or it also shall give the Company a bond, in such form as may be
approved by the Board of Directors, sufficient to indemnify the Company
against any claim that may be made against it on account of the alleged
loss of the certificate or the issuance of a new certificate. A new
certificate shall be issued upon receipt of such an affidavit and, if
required, upon the giving of such a bond.<PAGE>
<PAGE> 18
SECTION 4. RECORD OF HOLDER OF SHARES.
The Company shall be entitled to treat the holder of record of any
share or shares as the holder in fact thereof, and accordingly shall not be
bound to recognize any equitable or other claims to or interest in such
shares on the part of any other person, whether or not it shall have
express or other notice thereof, save as expressly provided by the General
Corporation Law of the State of Delaware. The Company shall be entitled to
recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends and to vote as such owner.
SECTION 5. RECORD DATE.
In order that the Company may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders, or to receive
payment of any dividend or other distribution or allotment of any rights or
to exercise any rights in respect of any change, conversion or exchange of
stock (other than conversions or exchanges pursuant to Article 4 of the
Charter) or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the
date on which the resolution fixing the record date is adopted and which
record date shall not be more than sixty (60) nor less than ten (10) days
before the date of any meeting of stockholders, nor more than sixty (60)
days prior to the time for such other action as hereinbefore described;
provided, however, that if no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the day next preceding the
day on which the meeting is held, and, for determining stockholders
entitled to receive payment of any dividend or other distribution or
allotment of rights or to exercise any rights of change, conversion or
exchange of stock (other than conversions or exchanges pursuant to Article
4 of the Charter) or for any other purpose, the record date shall be at the
close of business on the day on which the Board of Directors adopts a
resolution relating thereto.
A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
If stockholders are entitled to consent to corporate action in
writing without a meeting in accordance with the General Corporation Law of
the State of Delaware and the Charter, in order that the Company may
determine the stockholders entitled to so consent, the Board of Directors
may fix a record date, which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall be not more than ten (10) days after the date upon
which the resolution fixing the record date is adopted and no record date
has been fixed by the Board of Directors and if no prior action by the
Board of Directors is required by the General Corporation Law of the State
of Delaware, the record date shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Company in the manner prescribed by Article 12 of the
Charter. If stockholders are entitled to consent to corporate
action in writing
<PAGE>
<PAGE> 19
without a meeting in accordance with the General Corporation Law of the
State of Delaware and the Charter, and no record date has been fixed by the
Board of Directors and prior action by the Board of Directors is required
by the General Corporation Law of the State of Delaware with respect to the
proposed action by written consent of the stockholders, the record date for
determining stockholders entitled to consent to corporate action in writing
shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action.
SECTION 6. REGULATIONS.
The Board of Directors shall have power and authority to make all
such rules and regulations not inconsistent with any of the provisions of
Article 4 of the Charter, as it may deem expedient, concerning the issue,
transfer and registration of certificates for shares of the stock of the
Company.
SECTION 7. CORPORATE SEAL.
The corporate seal shall be in such form as shall from time to
time be approved by the Board of Directors. If and when so authorized by
the Board of Directors, a duplicate of the seal may be kept and used by the
Secretary or Treasurer or by any Assistant Secretary or Assistant
Treasurer.
ARTICLE VIII.
EXECUTION OF CONTRACTS AND OTHER DOCUMENTS
SECTION 1. CONTRACTS, ETC.
Except as otherwise prescribed in these By-laws, such officers,
employees or agents of the Company as shall be specified by the Board of
Directors shall sign, in the name and on behalf of the Company, all deeds,
bonds, contracts, mortgages and other instruments or documents, the
execution of which shall be authorized by the Board of Directors; and such
authority may be general or confined to specific instances. Except as so
authorized by the Board of Directors, no officer, agent or employee of the
Company shall have power or authority to bind the Company by any contract
or engagement or to pledge, mortgage, sell or otherwise dispose of its
credit or any of its property or to render it pecuniarily liable for any
purpose or in any amount.
SECTION 2. CHECKS, DRAFTS, ETC.
Except as otherwise provided in these By-laws, all checks, drafts,
notes, bonds, bills of exchange or other orders, instruments or obligations
for the payment of money shall be signed by such officer or officers,
employee or employees, or agent or agents, as the Board of Directors shall
by resolution direct. The Board of Directors may, in its discretion, also
<PAGE>
<PAGE> 20
provide by resolution for the countersignature or registration of any or
all such orders, instruments or obligations for the payment of money.
ARTICLE IX.
FISCAL YEAR
The fiscal year of the Company shall begin the first day of January in
each year.
ARTICLE X.
MISCELLANEOUS
SECTION 1. ORIGINAL STOCK LEDGER.
As used in these By-laws and in the Charter, the words "original
stock ledger" shall mean the record maintained by the Secretary of the
Company of the name and address of each of the holders of shares of any
class of stock of the Company, and the number of shares and the numbers of
the certificates for such shares held by each of them, taking into account
transfers at the time made by and recorded on the transfer sheets of each
of the Transfer Agents of the Company although such transfers may not have
been posted in the record maintained by the Secretary.
SECTION 2. NOTICES AND WAIVERS THEREOF.
Whenever any notice whatever is required by these By-laws, the
Charter or any of the laws of the State of Delaware to be given to any
stockholder, director or officer, such notice, except as otherwise provided
by the laws of the State of Delaware, may be given personally or by
telephone or be given by facsimile transmission or other form of electronic
communication, addressed to such stockholder at the address set forth as
provided in Section 2 of Article VII of these By-laws, or to such director
or officer at his or her Company location, if any, or at such address as
appears on the books of the Company, or the notice may be given in writing
by depositing the same in a post office, or in a regularly maintained
letter box, or by sending it via courier in a postpaid, sealed wrapper
addressed to such stockholder at the address set forth in Section 2 of
Article VII of these By-laws, or to such director or officer at his or her
Company location, if any, or such address as appears on the books of the
Company.
Any notice given by facsimile transmission or other form of
electronic communication shall be deemed to have been given when it shall
have been transmitted. Any notice given by mail or courier shall be deemed
to have been given when it shall have been mailed or delivered to the
courier.<PAGE>
<PAGE> 21
A waiver of any such notice in writing, including by facsimile
transmission, signed or dispatched by the person entitled to such notice or
by his or her duly authorized attorney, whether before or after the time
stated therein, shall be deemed equivalent to the notice required to be
given, and the presence at any meeting of any person entitled to notice
thereof shall be deemed a waiver of such notice as to such person.
SECTION 3. VOTING UPON STOCKS.
The Board of Directors (whose authorization in this connection
shall be necessary in all cases) may from time to time appoint an attorney
or attorneys or agent or agents of the Company, or may at any time or from
time to time authorize the Chairman of the Board of Directors, any Vice
Chairman of the Board of Directors, the President, any Senior Executive
Vice President, any Executive Vice President, any Senior Vice President,
any Vice President, the Treasurer or the Secretary to appoint an attorney
or attorneys or agent or agents of the Company, in the name and on behalf
of the Company, to cast the votes which the Company may be entitled to cast
as a stockholder or otherwise in any other corporation or association, any
of the stock or securities of which may be held by the Company, at meetings
of the holders of the stock or other securities of such other corporation
or association, or to consent in writing to any action by any such other
corporation or association and the Board of Directors or any aforesaid
officer so authorized may instruct the person or persons so appointed as to
the manner of casting such votes or giving such consent, and the Board of
Directors or any aforesaid officer so authorized may from time to time
authorize the execution and delivery, on behalf of the Company and under
its corporate seal, or otherwise, of such written proxies,consents, waivers
or other instruments as may be deemed necessary or proper in the premises.
ARTICLE XI.
AMENDMENTS
These By-laws may be altered, amended or repealed at any meeting
of the Board of Directors or of the stockholders, provided that notice of
such alteration, amendment or repeal be contained in the notice of such
meeting of the Board of Directors or stockholders (subject, in the case of
meetings of stockholders, to the provisions of Article II of these
By-laws), as the case may be. All such amendments must be approved by the
affirmative vote of the holders of at least 75% of the total voting power
of all classes of outstanding capital stock, voting together as a single
class (if effected by action of the stockholders), or by the affirmative
vote of directors constituting not less than a majority of the total number
of directors that the Company would have if there were no vacancies on the
Company's Board of Directors (if effected by action of the Board of
Directors).
<PAGE>
<PAGE> 1 EXHIBIT 10.1
CORPORATE AGREEMENT
THIS CORPORATE AGREEMENT ("Agreement") is entered into as of
May 8, 1996 by and between FORD MOTOR COMPANY, a Delaware corporation
("Ford"), and ASSOCIATES FIRST CAPITAL CORPORATION, a Delaware corporation
("Associates").
RECITALS
A. Ford, through its indirect, wholly owned subsidiary Ford
FSG, Inc., a Delaware corporation ("FFSG"), beneficially owns all of the
issued
and outstanding Class B Common Stock, par value $.01 per share ("Class B
Common
Stock"), of Associates and directly owns 23,503,669 shares of Class A Common
Stock,
par value $.01 per share ("Class A Common Stock"), of Associates, and
Associates is a member of Ford's "affiliated group" of corporations (the "Ford
Group") for federal income tax purposes.
B. The parties are contemplating the possibility that
Associates will issue shares of Class A Common Stock in an initial public
offering (the "Initial Public Offering") registered under the Securities Act
of
1933, as amended.
C. The parties desire to enter into this Agreement to set
forth their agreement regarding (i) Ford's rights to purchase additional
shares
of Class B Common Stock upon any issuance of certain classes of capital stock
of Associates to any person to permit Ford to maintain its percentage
ownership
interest in Associates, (ii) Ford's rights to purchase shares of non-voting
classes of capital stock of Associates to permit Ford to own 80 percent of
each
class of such stock outstanding, (iii) certain registration rights with
respect
to Class B Common Stock (and any other securities issued in respect thereof or
in exchange therefor) and (iv) certain representations, warranties, covenants
and agreements applicable so long as Associates is a subsidiary of Ford.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Ford and Associates,
for themselves, their successors, and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. As used in this Agreement, the following
terms will have the following meanings, applicable both to the singular and
the
plural forms of the terms described:
<PAGE>
<PAGE> 2
"Affiliate" means, with respect to a given Person, any Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to vote a
majority of the securities having voting power for the election of directors
(or other Persons acting in similar capacities) of such Person or otherwise to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or
otherwise.
"Agreement" has the meaning ascribed thereto in the preamble
hereto, as such agreement may be amended and supplemented from time to time in
accordance with its terms.
"Applicable Stock" means at any time the (i) shares of Common
Stock owned by the Ford Entities that were owned on the date hereof, plus (ii)
shares of Class B Common Stock purchased by the Ford Entities pursuant to
Article II of this Agreement, plus (iii) shares of Common Stock that were
issued to Ford Entities in respect of shares described in either clause (i) or
clause (ii) in any reclassification, share combination, share subdivision,
share dividend, share exchange, merger, consolidation or similar transaction
or
event.
"Associates" has the meaning ascribed thereto in the preamble
hereto.
"Associates Entities" means Associates and its Subsidiaries,
and "Associates Entity" shall mean any of the Associates Entities.
"Class A Common Stock" has the meaning ascribed thereto in
the
recitals to this Agreement.
"Class B Common Stock" has the meaning ascribed thereto in
the
recitals to this Agreement.
"Class B Common Stock Option" has the meaning ascribed
thereto
in Section 2.1(a).
"Class B Common Stock Option Notice" has the meaning ascribed
thereto in Section 2.2.
"Common Stock" means the Class B Common Stock, the Class A
Common Stock, any other class of Associates' capital stock representing the
right to vote generally for the election of directors and, for so long as
Associates continues to be a subsidiary corporation includable in a
consolidated federal income tax return of the Ford Group, any other security
of
Associates treated as stock for purposes of Section 1504 of the Internal
Revenue Code of 1986, as amended.
<PAGE> 3
"Company Securities" has the meaning ascribed thereto in
Section 3.2(b).
"Disadvantageous Condition" has the meaning ascribed thereto
in Section 3.1(a).
"FFSG" has the meaning ascribed thereto in the preamble
hereto.
"Ford Entities" means Ford and Subsidiaries of Ford (other
<PAGE> 3
than Subsidiaries that constitute Associates Entities), and "Ford Entity"
shall
mean any of the Ford Entities.
"Ford Ownership Reduction" means any decrease at any time in
the Ownership Percentage to less than 45%.
"Ford Transferee" has the meaning ascribed thereto in Section
3.9.
"Ford" has the meaning ascribed thereto in the preamble
hereto.
"Ford Group" has the meaning ascribed thereto in the recitals
to this Agreement.
"Holder" means Ford, the other Ford Entities and any
Transferee.
"Holder Securities" has the meaning ascribed thereto in
Section 3.2(b).
"Initial Public Offering" has the meaning ascribed thereto in
the recitals to this Agreement.
"Initial Public Offering Date" means the date of completion
of
the initial sale of Class A Common Stock in the Initial Public Offering.
"Issuance Event" has the meaning ascribed thereto in Section
2.2.
"Issuance Event Date" has the meaning ascribed thereto in
Section 2.2.
"Market Price" of any shares of Class A Common Stock on any
date means (i) the average of the last sale price of such shares on each of
the
five trading days immediately preceding such date on the New York Stock
Exchange, Inc. or, if such shares are not listed thereon, on the principal
national securities exchange or automated interdealer quotation system on
which
such shares are traded or (ii) if such sale prices are unavailable or such
shares are not so traded, the value of such shares on such date determined in
accordance with agreed-upon procedures reasonably satisfactory to Associates
and Ford.<PAGE>
<PAGE> 4
"Nonvoting Stock" means any class of Associates' capital
stock
not representing the right to vote generally for the election of directors.
"Nonvoting Stock Option" has the meaning ascribed thereto in
Section 2.1(c).
"Nonvoting Stock Option Notice" has the meaning ascribed
thereto in Section 2.2.
"Other Holders" has the meaning ascribed thereto in Section
3.2(b).
"Other Securities" has the meaning ascribed thereto in
Section
3.2.
"Ownership Percentage" means, at any time, the fraction,
expressed as a percentage and rounded to the next highest thousandth of a
percent, whose numerator is the aggregate Value of the Applicable Stock and
whose denominator is the aggregate Value of outstanding shares of Common Stock
of Associates; provided, however, that any shares of Common Stock issued by
Associates in violation of its obligations under Article II of this Agreement
shall not be deemed outstanding for the purpose of determining the Ownership
Percentage. For purposes of this definition, "Value" means, with respect to
any share of stock, the value of such share determined by Ford under
principles
applicable for purposes of Section 1504 of the Internal Revenue Code of 1986,
as amended.
"Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
government (and any department or agency thereof) or other entity.
"Registrable Securities" means shares of Class B Common
Stock,
shares of Class A Common Stock and any stock or other securities into which or
for which such Common Stock may hereafter be changed, converted or exchanged
and any other shares or securities issued to Holders of such Common Stock (or
such shares or other securities into which or for which such shares are so
changed, converted or exchanged) upon any reclassification, share combination,
share subdivision, share dividend, share exchange, merger, consolidation or
similar transaction or event or pursuant to the Nonvoting Stock Option. As to
any particular Registrable Securities, such Registrable Securities shall cease
to be Registrable Securities when (i) a registration statement with respect to
the sale by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been distributed to the
public in accordance with Rule 144, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting
further
transfer shall have been
<PAGE>
<PAGE> 5
delivered by Associates and subsequent disposition of them shall not require
registration or qualification of them under the Securities Act or any state
securities or blue sky law then in effect or (iv) they shall have ceased to be
outstanding.
"Registration Expenses" means any and all expenses incident
to
performance of or compliance with any registration of securities pursuant to
Article III, including, without limitation, (i) the fees, disbursements and
expenses of Associates' counsel and accountants and the fees and expenses of
counsel selected by the Holders in accordance with this Agreement in
connection
with the registration of the securities to be disposed of, such fees and
expenses of such counsel selected by the Holders to be reasonable in the
reasonable discretion of Associates; (ii) all expenses, including filing fees,
in connection with the preparation, printing and filing of the registration
statement, any preliminary prospectus or final prospectus, any other offering
document and amendments and supplements thereto and the mailing and delivering
of copies thereof to any underwriters and dealers; (iii) the cost of printing
or producing any underwriting agreements and blue sky or legal investment
memoranda and any other documents in connection with the offering, sale or
delivery of the securities to be disposed of; (iv) all expenses in connection
with the qualification of the securities to be disposed of for offering and
sale under state securities laws, including the fees and disbursements of
counsel for the underwriters or the Holders of securities in connection with
such qualification and in connection with any blue sky and legal investment
surveys; (v) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of
the securities to be disposed of; (vi) transfer agents' and registrars' fees
and expenses and the fees and expenses of any other agent or trustee appointed
in connection with such offering; (vii) all security engraving and security
printing expenses; (viii) all fees and expenses payable in connection with the
listing of the securities on any securities exchange or automated interdealer
quotation system or the rating of such securities, (ix) any other fees and
disbursements of underwriters customarily paid by the sellers of securities,
but excluding underwriting discounts and commissions and transfer taxes, if
any, and (x) other reasonable out-of-pocket expenses of Holders other than
legal fees and expenses referred to in clause (i) above.
"Rule 144" means Rule 144 (or any successor rule to similar
effect) promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to similar
effect)
promulgated under the Securities Act.
"SEC" means the United States Securities and Exchange
Commission.
<PAGE>
<PAGE> 6
"Securities Act" means the Securities Act of 1933, as
amended,
or any successor statute.
"Selling Holder" has the meaning ascribed thereto in Section
3.4(e).
"Subsidiary" means, as to any Person, any corporation,
association, partnership, joint venture or other business entity of which more
than 50% of the voting capital stock or other voting ownership interests is
owned or controlled, directly or indirectly, by such Person or by one or more
of the Subsidiaries of such Person or by a combination thereof. "Subsidiary,"
when used with respect to Ford or Associates, shall also include any other
entity affiliated with Ford or Associates, as the case may be, that Ford and
Associates may hereafter agree in writing shall be treated as a "Subsidiary"
for the purposes of this Agreement.
"Transferee" has the meaning ascribed thereto in Section
3.9.
1.2. Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement and
references to the parties shall mean the parties to this Agreement.
ARTICLE II
OPTIONS
2.1. Options. (a) Associates hereby grants to Ford, on the
terms and conditions set forth herein, a continuing right (the "Class B Common
Stock Option") to purchase from Associates, at the times set forth herein,
such
number of shares of Class B Common Stock as is necessary to allow the Ford
Entities to maintain the Ownership Percentage. The Class B Common Stock
Option
shall be assignable, in whole or in part and from time to time, by Ford to any
Ford Entity. The exercise price for the shares of Class B Common Stock
purchased pursuant to the Class B Common Stock Option shall be the Market
Price
of the Class A Common Stock as of the date of first delivery of notice of
exercise of the Class B Common Stock Option by Ford (or its permitted assignee
hereunder) to Associates.
(b) The provisions of Section 2.1(a) hereof notwithstanding,
the Class B Common Stock Option granted pursuant to Section 2.1(a) shall not
apply and shall not be exercisable in connection with the issuance by
Associates of any shares of Common Stock pursuant to any stock option or other
executive or employee benefit or compensation plan maintained by Associates,
so
long as, from and after the date hereof and prior to the issuance of such
shares, Associates has repurchased from shareholders and not subsequently
reissued a number of shares
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<PAGE> 7
equal or greater to the number of shares to be issued in any such issuance.
(c) Associates hereby grants to Ford, on the terms and
conditions set forth herein, a continuing right (the "Nonvoting Stock Option"
and, together with the Class B Common Stock Option, the "Options") to purchase
from Associates, at the times set forth herein, such number of shares of
Nonvoting Stock as is necessary to allow the Ford Entities to own 80 percent
of
each class of outstanding Nonvoting Stock. The Nonvoting Stock Option shall
be
assignable, in whole or in part and from time to time, by Ford to any Ford
Entity. The exercise price for the shares of Nonvoting Stock purchased
pursuant to the Nonvoting Stock Option shall be the price at which such
Nonvoting Stock is then being sold to third parties, or, if no Nonvoting Stock
is being sold, the fair market value thereof as determined in good faith by
the
Board of Directors of Associates.
2.2. Notice. At least 20 business days prior to the
issuance
of any shares of Common Stock (other than in connection with the Initial
Public
Offering, including the full exercise of all underwriters' over-allotment
options granted in connection therewith and other than issuances of Common
Stock to any Ford Entity) or the first date on which any event could occur
that, in the absence of a full or partial exercise of the Class B Common Stock
Option, would result in a reduction in the Ownership Percentage, Associates
will notify Ford in writing (a "Class B Common Stock Option Notice") of any
plans it has to issue such shares or the date on which such event could first
occur. At least 20 business days prior to the issuance of any shares of
Nonvoting Stock (other than issuances of Nonvoting Stock to any Ford entity)
or
the first date on which any event could occur that, in the absence of a full
or
partial exercise of the Nonvoting Stock Option, would result in the Ford
Entities owning less than 80 percent of each class of outstanding Nonvoting
Stock, Associates will notify Ford in writing (a "Nonvoting Stock Option
Notice" and, together with a Class B Common Stock Option Notice, an "Option
Notice") of any plans it has to issue such shares or the date on which such
event could first occur. Each Option Notice must specify the date on which
Associates intends to issue such additional shares or on which such event
could
first occur (such issuance or event being referred to herein as an "Issuance
Event" and the date of such issuance or event as an "Issuance Event Date"),
the
number of shares Associates intends to issue or may issue and the other terms
and conditions of such Issuance Event.
2.3. Option Exercise and Payment. The Class B Common Stock
Option may be exercised by Ford (or any Ford Entity to which all or any part
of
the Class B Common Stock Option has been assigned) for a number of shares
equal
to or less than the number of shares that are necessary for the Ford Entities
to maintain, in the aggregate, the then- current Ownership Percentage. The
Nonvoting Stock Option may be exercised by Ford (or any Ford
<PAGE>
<PAGE> 8
Entity to which all or any part of the Nonvoting Stock Option has been
assigned) for a number of shares equal to or less than the number of shares
that are necessary for the Ford Entities to own, in the aggregate, 80 percent
of each class of outstanding Nonvoting Stock. Each Option may be exercised at
any time after receipt of an applicable Option Notice and prior to the
applicable Issuance Event Date by the delivery to Associates of a written
notice to such effect specifying (i) the number of shares of Class B Common
Stock or Nonvoting Stock, as the case may be, to be purchased by Ford, or any
of the Ford Entities and (ii) a calculation of the exercise price for such
shares. Upon any such exercise of either Option, Associates will, prior to
the
applicable Issuance Event Date, deliver to Ford (or any Ford Entity designated
by Ford), against payment therefor, certificates (issued in the name of Ford
or
its permitted assignee hereunder or as directed by Ford) representing the
shares of Class B Common Stock or Nonvoting Stock, as the case may be, being
purchased upon such exercise. Payment for such shares shall be made by wire
transfer or intrabank transfer of immediately-available funds to such account
as shall be specified by Associates, for the full purchase price for such
shares.
2.4. Effect of Failure to Exercise. Except as provided in
Section 2.6, any failure by Ford to exercise either Option, or any exercise
for
less than all shares purchasable under either Option, in connection with any
particular Issuance Event shall not affect Ford's right to exercise the
relevant Option in connection with any subsequent Issuance Event.
2.5. Initial Public Offering. Notwithstanding the
foregoing,
Ford shall not be entitled to exercise the Class B Common Stock Option in
connection with the Initial Public Offering of the Class A Common Stock if,
upon the completion of the Initial Public Offering, including the full
exercise
of all underwriters' over-allotment options granted in connection therewith,
the Ownership Percentage would be no less than 80%.
2.6. Termination of Options. The Options shall terminate
upon the occurrence of any Issuance Event that, after considering Ford's
response thereto and to any other Issuance Events, results in the Ownership
Percentage being less than 45%, other than any Issuance Event in violation of
this Agreement. Each Option, or any portion thereof assigned to any Ford
Entity other than Ford, also shall terminate in the event that the Person to
whom such Option, or such portion thereof has been transferred, ceases to be a
Ford Entity for any reason whatsoever.
<PAGE>
<PAGE> 9
ARTICLE III
REGISTRATION RIGHTS
3.1. Demand Registration - Registrable Securities.
(a) Upon written notice provided at any time after the Initial Public
Offering
Date from any Holder of Registrable Securities requesting that Associates
effect the registration under the Securities Act of any or all of the
Registrable Securities held by such Holder, which notice shall specify the
intended method or methods of disposition of such Registrable Securities,
Associates shall use its best efforts to effect the registration under the
Securities Act and applicable state securities laws of such Registrable
Securities for disposition in accordance with the intended method or methods
of
disposition stated in such request (including in a Rule 415 Offering, if
Associates is then eligible to register such Registrable Securities on Form
S-3
(or a successor form) for such offering); provided that:
(i) with respect to any registration statement filed,
or to be filed, pursuant to this Section 3.1, if Associates shall
furnish to the Holders of Registrable Securities that have made such
request a certified resolution of the Board of Directors of
Associates
(adopted by the affirmative vote of a majority of the directors not
designated by the Ford Entities) stating that in the Board of
Directors' good faith judgment it would (because of the existence of,
or in anticipation of, any acquisition or financing activity, or the
unavailability for reasons beyond Associates's reasonable control of
any required financial statements, or any other event or condition of
similar significance to Associates) be significantly disadvantageous
(a "Disadvantageous Condition") to Associates for such a registration
statement to be maintained effective, or to be filed and become
effective, and setting forth the general reasons for such judgment,
Associates shall be entitled to cause such registration statement to
be withdrawn and the effectiveness of such registration statement
terminated, or, in the event no registration statement has yet been
filed, shall be entitled not to file any such registration statement,
until such Disadvantageous Condition no longer exists (notice of
which
Associates shall promptly deliver to such Holders). Upon receipt of
any such notice of a Disadvantageous Condition, such Holders shall
forthwith discontinue use of the prospectus contained in such
registration statement and, if so directed by Associates, each such
Holder will deliver to Associates all copies, other than permanent
file copies then in such Holder's possession, of the prospectus then
covering such Registrable Securities current at the time of receipt
of
such notice; provided, that the filing of any such registration
statement may not be delayed for a period in excess of six months due
to the occurrence of any particular Disadvantageous Condition;
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<PAGE> 10
(ii) after any Ford Ownership Reduction, the Holders of
Registrable Securities may collectively exercise their rights under
this Section 3.1 (through notice delivered by Holders owning in the
aggregate a majority in economic interest of the Registrable
Securities then held by Holders) on not more than three occasions (it
being acknowledged that prior to any Ford Ownership Reduction, there
shall be no limit to the number of occasions on which such Holders
(other than any Ford Transferees and their Affiliates (other than
Ford
Entities)) may exercise such rights);
(iii) Except as otherwise provided herein, the Holders
of
Registrable Securities shall not have the right to exercise
registration rights pursuant to this Section 3.1 within the 180-day
period following the registration and sale of Registrable Securities
effected pursuant to a prior exercise of the registration rights
provided in this Section 3.1; and
(iv) the Holders of Registrable Securities shall not have
the right to exercise registration rights pursuant to this Section
3.1
within the 180-day period following the effective date of the
Registration Statement in connection with the Initial Public
Offering.
(b) Notwithstanding any other provision of this Agreement to
the contrary, a registration requested by a Holder of Registrable Securities
pursuant to this Section 3.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of paragraph (a) above), (i) unless it
has become effective, (ii) if after it has become effective such registration
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court for any reason other than a
misrepresentation or an omission by such Holder and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth in the
related registration statement or (iii) if the conditions to closing specified
in the purchase agreement or underwriting agreement entered into in connection
with such registration are not satisfied or waived other than by reason of
some
act or omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this
Section 3.1 shall involve, in whole or in part, an underwritten offering, the
Holders of a majority of the Registrable Securities to be registered shall
have
the right to designate an underwriter or underwriters reasonably acceptable to
Associates as the lead or managing underwriters of such underwritten offering
and, in connection with each registration pursuant to this Section 3.1, such
Holders may select one counsel reasonably acceptable to Associates to
represent
all such Holders.
<PAGE>
<PAGE> 11
(d) Associates shall have the right to cause the
registration
of additional equity securities for sale for its account, the account of any
Associates Entity or any existing or former directors, officers or employees
of
the Associates Entities in any registration of Registrable Securities
requested
by the Holders pursuant to paragraph (a) above; provided, however, that if the
registration and sale of such additional equity securities would require Ford
or any Ford Entity to exercise the Options to maintain the then-current
Ownership Percentage or ownership of 80% of each class of outstanding
Nonvoting
Stock, then the number of such additional equity securities shall be reduced
so
that exercise of the Options would not be necessary for Ford or any Ford
Entity
to maintain such ownership levels and, provided, further, that if such Holders
are advised in writing (with a copy to Associates) by a nationally recognized
investment banking firm selected by such Holders reasonably acceptable to
Associates (which shall be the lead underwriter or a managing underwriter in
the case of an underwritten offering) that, in such firm's good faith view,
all
or a part of such additional equity securities cannot be sold and the
inclusion
of such additional equity securities in such registration would be likely to
have an adverse effect on the price, timing or distribution of the offering
and
sale of the Registrable Securities then contemplated by any Holder, the
registration of such additional equity securities or part thereof shall not be
permitted. The Holders of the Registrable Securities to be offered may
require
that any such additional equity securities be included in the offering
proposed
by such Holders on the same conditions as the Registrable Securities that are
included therein. In the event that the number of Registrable Securities
requested to be included in a registration statement by the Holders thereof
exceeds the number which, in the good faith view of such investment banking
firm, can be sold without adversely affecting the price, timing, distribution
or sale of securities in the offering, the number shall be allocated pro rata
among the requesting Holders on the basis of the relative number of
Registrable
Securities then held by each such Holder (provided that any number in excess
of
a Holder's request may be reallocated among the remaining requesting Holders
in
a like manner).
3.2. Piggyback Registration. In the event that Associates
at
any time after the Initial Public Offering Date proposes to register any of
its
Common Stock, any other of its equity securities or securities convertible
into
or exchangeable for its equity securities (collectively, including Common
Stock, "Other Securities") under the Securities Act, whether or not for sale
for its own account, in a manner that would permit registration of
Registerable
Securities for sale for cash to the public under the Securities Act, it shall
at each such time give prompt written notice to each Holder of Registrable
Securities of its intention to do so and of the rights of such Holder under
this Section 3.2. Subject to the terms and conditions hereof, such notice
shall offer each such Holder the opportunity to
<PAGE>
<PAGE> 12
include in such registration statement such number of Registerable Securities
as such Holder may request. Upon the written request of any such Holder made
within 15 days after the receipt of Associates' notice (which request shall
specify the number of Registrable Securities intended to be disposed of and
the
intended method of disposition thereof), Associates shall use its best efforts
to effect, in connection with the registration of the Other Securities, the
registration under the Securities Act of all Registerable Securities which
Associates has been so requested to register, to the extent required to permit
the disposition (in accordance with such intended method of disposition
thereof) of the Registrable Securities so requested to be registered;
provided,
that:
(a) if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the effective date of
the registration statement filed in connection with such registration,
Associates shall determine for any reason not to register the Other
Securities,
Associates may, at its election, give written notice of such determination to
such Holders and thereupon Associates shall be relieved of its obligation to
register such Registrable Securities in connection with the registration of
such Other Securities, without prejudice, however, to the rights of the
Holders
of Registrable Securities immediately to request that such registration be
effected as a registration under Section 3.1 to the extent permitted
thereunder;
(b) if the registration referred to in the first sentence of
this Section 3.2 is to be an underwritten registration on behalf of
Associates,
and a nationally recognized investment banking firm selected by Associates
advises Associates in writing that, in such firm's good faith view, all or a
part of such Registrable Securities cannot be sold and the inclusion of all or
a part of such Registrable Securities in such registration would be likely to
have an adverse effect upon the price, timing or distribution of the offering
and sale of the Other Securities then contemplated, Associates shall include
in
such registration: (i) first, all Other Securities Associates proposes to
sell
for its own account ("Company Securities"), (ii) second, up to the full number
of Registrable Securities held by Holders constituting Ford Entities that are
requested to be included in such registration (Registrable Securities that are
so held being sometimes referred to herein as "Holder Securities") in excess
of
the number of Company Securities to be sold in such offering which, in the
good
faith view of such investment banking firm, can be sold without adversely
affecting such offering (and (x) if such number is less than the full number
of
such Holder Securities, such number shall be allocated by Ford among such Ford
Entities and (y) in the event that such investment banking firm advises that
less than all of such Holder Securities may be included in such offering, such
Ford Entities may withdraw their request for registration of their Registrable
Securities under this Section 3.2 and 90 days subsequent to the effective date
of
<PAGE>
<PAGE> 13
the registration statement for the registration of such Other Securities
request that such registration be effected as a registration under Section 3.1
to the extent permitted thereunder), (iii) third, up to the full number of
Registrable Securities held by Holders (other than Ford Entities) of
Registrable Securities that are requested to be included in such registration
in excess of the number of Company Securities and Holder Securities to be sold
in such offering which, in the good faith view of such investment banking
firm,
can be so sold without so adversely affecting such offering (and (x) if such
number is less than the full number of such Registrable Securities, such
number
shall be allocated pro rata among such Holders on the basis of the number of
Registrable Securities requested to be included therein by each such Holder
and
(y) in the event that such investment banking firm advises that less than all
of such Registrable Securities may be included in such offering, such Holders
may withdraw their request for registration of their Registrable Securities
under this Section 3.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities request
that such registration be effected as a registration under Section 3.1 to the
extent permitted thereunder) and (iv) fourth, up to the full number of the
Other Securities (other than Company Securities), if any, in excess of the
number of Company Securities and Registrable Securities to be sold in such
offering which, in the good faith view of such investment banking firm, can be
so sold without so adversely affecting such offering (and, if such number is
less than the full number of such Other Securities, such number shall be
allocated pro rata among the holders of such Other Securities (other than
Company Securities) on the basis of the number of securities requested to be
included therein by each such Holder);
(c) if the registration referred to in the first sentence of
this Section 3.2 is to be an underwritten secondary registration on behalf of
holders of Other Securities (the "Other Holders"), and the lead underwriter or
managing underwriter advises Associates in writing that in their good faith
view, all or a part of such additional securities cannot be sold and the
inclusion of such additional securities in such registration would be likely
to
have an adverse effect on the price, timing or distribution of the offering
and
sale of the Other Securities then contemplated, Associates shall include in
such registration the number of securities (including Registrable Securities)
that such underwriters advise can be so sold without adversely affecting such
offering, allocated pro rata among the Other Holders and the Holders of
Registrable Securities on the basis of the number of securities (including
Registrable Securities) requested to be included therein by each Other Holder
and each Holder of Registrable Securities; provided, that if such registration
statement is to be filed at any time after a Ford Ownership Reduction, if such
Other Holders have requested that such registration statement be filed
pursuant
to demand registration rights granted to them by Associates, Associates
<PAGE>
<PAGE> 14
shall include in such registration (i) first, Other Securities sought to be
included therein by the Other Holders pursuant to the exercise of such demand
registration rights, (ii) second, the number of Holder Securities sought to be
included in such registration in excess of the number of Other Securities
sought to be included in such registration by the Other Holders which in the
good faith view of such investment banking firm, can be so sold without so
adversely affecting such offering (and (x) if such number is less than the
full
number of such Holder Securities, such number shall be allocated by Ford among
such Ford Entities and (y) in the event that such investment banking firm
advises that less than all of such Holder Securities may be included in such
offering, such Ford Entities may withdraw their request for registration of
their Registrable Securities under this Section 3.2 and 90 days subsequent to
the effective date of the registration statement for the registration of such
Other Securities request that such registration be effected as a registration
under Section 3.1 to the extent permitted thereunder) and (iii) third, the
number of Registrable Securities sought to be included in such registration by
Holders (other than Ford Entities) of Registrable Securities in excess of the
number of Other Securities and the number of Holder Securities sought to be
included in such registration which, in the good faith view of such investment
banking firm, can be so sold without so adversely affecting such offering (and
(x) if such number is less than the full number of such Registrable
Securities,
such number shall be allocated pro rata among such Holders on the basis of the
number of Registrable Securities requested to be included therein by each such
Holder and (y) in the event that such investment banking firm advises that
less
than all of such Registrable Securities may be included in such offering, such
Holders may withdraw their request for registration of their Registrable
Securities under this Section 3.2 and 90 days subsequent to the effective date
of the registration statement for the registration of such Other Securities
request that such registration be effected as a registration under Section 3.1
to the extent permitted thereunder);
(d) Associates shall not be required to effect any
registration of Registrable Securities under this Section 3.2 incidental to
the
registration of any of its securities in connection with mergers,
acquisitions,
exchange offers, subscription offers, dividend reinvestment plans or stock
option or other executive or employee benefit or compensation plans; and
(e) no registration of Registrable Securities effected under
this Section 3.2 shall relieve Associates of its obligation to effect a
registration of Registrable Securities pursuant to Section 3.1.
3.3. Expenses. Except as provided herein, Associates shall
pay all Registration Expenses with respect to a particular offering (or
proposed offering). Notwithstanding the foregoing, each Holder and Associates
shall be responsible for its own
<PAGE>
<PAGE> 15
internal administrative and similar costs, which shall not constitute
Registration Expenses.
3.4. Registration and Qualification. If and whenever
Associates is required to effect the registration of any Registrable
Securities
under the Securities Act as provided in Sections 3.1 or 3.2, Associates shall
as promptly as practicable:
(a) prepare, file and use its reasonable best efforts to
cause to become effective a registration statement under the Securities Act
relating to the Registrable Securities to be offered;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities until the earlier of (A) such
time as all of such Registrable Securities have been disposed of in accordance
with the intended methods of disposition set forth in such registration
statement and (B) the expiration of six months after such registration
statement becomes effective; provided, that such six-month period shall be
extended for such number of days that equals the number of days elapsing from
(x) the date the written notice contemplated by paragraph (f) below is given
by
Associates to (y) the date on which Associates delivers to the Holders of
Registrable Securities the supplement or amendment contemplated by paragraph
(f) below;
(c) furnish to the Holders of Registrable Securities and to
any underwriter of such Registrable Securities such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and any summary prospectus), in conformity with the requirements of
the Securities Act, such documents incorporated by reference in such
registration statement or prospectus, and such other documents, as the Holders
of Registrable Securities or such underwriter may reasonably request, and upon
request a copy of any and all transmittal letters or other correspondence to
or
received from, the SEC or any other governmental agency or self-regulatory
body
or other body having jurisdiction (including any domestic or foreign
securities
exchange) relating to such offering;
(d) use its reasonable best efforts to register or qualify
all Registrable Securities covered by such registration statement under the
securities or blue sky laws of such U.S. jurisdictions as the Holders of such
Registrable Securities or any underwriter to such Registrable Securities shall
request, and use its reasonable best efforts to obtain all appropriate
registrations, permits and consents in connection therewith, and
<PAGE>
<PAGE> 16
do any and all other acts and things which may be necessary or advisable to
enable the Holders of Registrable Securities or any such underwriter to
consummate the disposition in such jurisdictions of its Registrable Securities
covered by such registration statement; provided, that Associates shall not
for
any such purpose be required to qualify generally to do business as a foreign
corporation in any such jurisdiction wherein it is not so qualified or to
consent to general service of process in any such jurisdiction;
(e) (i) use its best efforts to furnish to each Holder of
Registrable Securities included in such registration (each, a "Selling
Holder")
and to any underwriter of such Registrable Securities an opinion of counsel
for
Associates addressed to each Selling Holder and dated the date of the closing
under the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement) and (ii)
use its best efforts to furnish to each Selling Holder a "cold comfort" letter
addressed to each Selling Holder and signed by the independent public
accountants who have audited the financial statements of Associates included
in
such registration statement, in each such case covering substantially the same
matters with respect to such registration statement (and the prospectus
included therein) as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities and such other matters as the Selling Holders may
reasonably request and, in the case of such accountants' letter, with respect
to events subsequent to the date of such financial statements;
(f) as promptly as practicable, notify the Selling Holders
in
writing (i) at any time when a prospectus relating to a registration pursuant
to Sections 3.1 or 3.2 is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in
such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated
therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading and (ii) of any request by the SEC
or any other regulatory body or other body having jurisdiction for any
amendment of or supplement to any registration statement or other document
relating to such offering, and in either such case, at the request of the
Selling Holders prepare and furnish to the Selling Holders a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading;
<PAGE>
<PAGE> 17
(g) if reasonably requested by the lead or managing
underwriters, use its best efforts to list all such Registrable Securities
covered by such registration on each securities exchange and automated
inter-dealer quotation system on which a class of common equity securities of
Associates is then listed;
(h) to the extent reasonably requested by the lead or
managing underwriters, send appropriate officers of Associates to attend any
"road shows" scheduled in connection with any such registration, with all
out-of-pocket costs and expense incurred by Associates or such officers in
connection with such attendance to be paid by Associates; and
(i) furnish for delivery in connection with the closing of
any offering of Registrable Securities pursuant to a registration effected
pursuant to Sections 3.1 or 3.2 unlegended certificates representing ownership
of the Registrable Securities being sold in such denominations as shall be
requested by the Selling Holders or the underwriters.
3.5. Conversion of Other Securities, Etc. In the event that
any Holder offers any options, rights, warrants or other securities issued by
it or any other Person that are offered with, convertible into or exercisable
or exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue
to
be eligible for registration pursuant to Sections 3.1 and 3.2.
3.6. Underwriting; Due Diligence. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant
to a registration requested under this Article III, Associates shall enter
into
an underwriting agreement with such underwriters for such offering, which
agreement will contain such representations and warranties by Associates and
such other terms and provisions as are customarily contained in underwriting
agreements of Associates to the extent relevant and as are customarily
contained in underwriting agreements generally with respect to secondary
distributions to the extent relevant, including, without limitation,
indemnification and contribution provisions substantially to the effect and to
the extent provided in Section 3.7, and agreements as to the provision of
opinions of counsel and accountants' letters to the effect and to the extent
provided in Section 3.4(e). The Selling Holders on whose behalf the
Registrable Securities are to be distributed by such underwriters shall be
parties to any such underwriting agreement and the representations and
warranties by, and the other agreements on the part of, Associates to and for
the benefit of such underwriters, shall also be made to and for the benefit of
such Selling Holders. Such underwriting agreement shall also contain such
representations and warranties by such Selling Holders and such other terms
and
provisions as are customarily contained in underwriting agreements with
respect
to secondary distributions, when relevant, including, without limitation,
indemnification and
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<PAGE> 18
contribution provisions substantially to the effect and to the extent provided
in Section 3.7.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article III, Associates shall give the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records and such opportunities to discuss the business of Associates with its
officers and the independent public accountants who have certified the
financial statements of Associates as shall be necessary, in the opinion of
such Holders and such underwriters or their respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
3.7. Indemnification and Contribution. (a) In the case of
each offering of Registrable Securities made pursuant to this Article III,
Associates agrees to indemnify and hold harmless, to the extent permitted by
law, each Selling Holder, each underwriter of Registrable Securities so
offered
and each Person, if any, who controls any of the foregoing Persons within the
meaning of the Securities Act and the officers, directors, affiliates,
employees and agents of each of the foregoing, against any and all losses,
liabilities, costs (including reasonable attorney's fees and disbursements),
claims and damages, joint or several, to which they or any of them may become
subject, under the Securities Act or otherwise, including any amount paid in
settlement of any litigation commenced or threatened, insofar as such losses,
liabilities, costs, claims and damages (or actions or proceedings in respect
thereof, whether or not such indemnified Person is a party thereto) arise out
of or are based upon any untrue statement by Associates or alleged untrue
statement by Associates of a material fact contained in the registration
statement (or in any preliminary or final prospectus included therein) or in
any offering memorandum or other offering document relating to the offering
and
sale of such Registrable Securities prepared by Associates or at its
direction,
or any amendment thereof or supplement thereto, or in any document
incorporated
by reference therein, or any omission by Associates or alleged omission by
Associates to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however
that
Associates shall not be liable to any Person in any such case to the extent
that any such loss, liability, cost, claim or damage arises out of or relates
to any untrue statement or alleged untrue statement, or any omission, if such
statement or omission shall have been made in reliance upon and in conformity
with information relating to a Selling Holder, another holder of securities
included in such registration statement or underwriter furnished to Associates
by or on behalf of such Selling Holder, other holder or underwriter
specifically for use in the registration statement (or in any preliminary or
final prospectus
<PAGE>
<PAGE> 19
included therein), offering memorandum or other offering document, or any
amendment thereof or supplement thereto. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Selling Holder, any other holder or any underwriter and shall survive the
transfer of such securities. The foregoing indemnity agreement is in addition
to any liability that Associates may otherwise have to each Selling Holder,
other holder or underwriter of the Registrable Securities or any controlling
person of the foregoing and the officers, directors, affiliates, employees and
agents of each of the foregoing; provided, further, that, in the case of an
offering with respect to which a Selling Holder has designated the lead or
managing underwriters (or a Selling Holder is offering Registrable Securities
directly, without an underwriter), this indemnity does not apply to any loss,
liability, cost, claim or damage arising out of or relating to any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary prospectus or offering memorandum if a copy of a final prospectus
or offering memorandum was not sent or given by or on behalf of any
underwriter
(or such Selling Holder or other holder, as the case may be) to such Person
asserting such loss, liability, cost, claim or damage at or prior to the
written confirmation of the sale of the Registrable Securities as required by
the Securities Act and such untrue statement or omission had been corrected in
such final prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this
Agreement, each Selling Holder, by exercising its registration rights
hereunder, agrees to indemnify and hold harmless, and to cause each
underwriter
of Registrable Securities included in such offering (in the same manner and to
the same extent as set forth in Section 3.7(a)) to agree to indemnify and hold
harmless, Associates, each other underwriter who participates in such
offering,
each other Selling Holder or other holder with securities included in such
offering and in the case of an underwriter, such Selling Holder or other
holder, and each Person, if any, who controls any of the foregoing within the
meaning of the Securities Act and the officers, directors, affiliates,
employees and agents of each of the foregoing, against any and all losses,
liabilities, costs (including reasonable attorney's fees and disbursements),
claims and damages to which they or any of them may become subject, under the
Securities Act or otherwise, including any amount paid in settlement of any
litigation commenced or threatened, insofar as such losses, liabilities,
costs,
claims and damages (or actions or proceedings in respect thereof, whether or
not such indemnified Person is a party thereto) arise out of or are based upon
any untrue statement or alleged untrue statement by such Selling Holder or
underwriter, as the case may be, of a material fact contained in the
registration statement (or in any preliminary or final prospectus included
therein) or in any offering memorandum or other offering document relating to
the offering and sale of such Registrable Securities prepared by
<PAGE>
<PAGE> 20
Associates or at its direction, or any amendment thereof or supplement
thereto,
or any omission by such Selling Holder or underwriter, as the case may be, or
alleged omission by such Selling Holder or underwriter, as the case may be, of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
such untrue statement of a material fact is contained in, or such material
fact
is omitted from information relating to such Selling Holder or underwriter, as
the case may be, furnished to Associates by or on behalf of such Selling
Holder
or underwriter, as the case may be, specifically for use in such registration
statement (or in any preliminary or final prospectus included therein),
offering memorandum or other offering document, or any amendment thereof or
supplement thereto. The foregoing indemnity is in addition to any liability
which such Selling Holder or underwriter, as the case may be, may otherwise
have to Associates, or controlling persons and the officers, directors,
affiliates, employees, and agents of each of the foregoing; provided, however,
that, in the case of an offering made pursuant to this Agreement with respect
to which Associates has designated the lead or managing underwriters (or
Associates is offering securities directly, without an underwriter), this
indemnity does not apply to any loss, liability, cost, claim, or damage
arising
out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary prospectus or offering
memorandum if a copy of a final prospectus or offering memorandum was not sent
or given by or on behalf of any underwriter (or Associates, as the case may
be)
to such Person asserting such loss, liability, cost, claim or damage at or
prior to the written confirmation of the sale of the Registrable Securities as
required by the Securities Act and such untrue statement or omission had been
corrected in such final prospectus or offering memorandum.
(c) Each party indemnified under paragraph (a) or (b) above
shall, promptly after receipt of notice of a claim or action against such
indemnified party in respect of which indemnity may be sought hereunder,
notify
the indemnifying party in writing of the claim or action; provided, that the
failure to notify the indemnifying party shall not relieve it from any
liability that it may have to an indemnified party on account of the indemnity
agreement contained in paragraph (a) or (b) above otherwise than under such
subsection. If any such claim or action shall be brought against an
indemnified party, and it shall have notified the indemnifying party thereof,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified party and indemnifying parties may exist in respect
of
such claim, the indemnifying party shall be entitled to participate therein,
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory to
the indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party). After notice from
the indemnifying party to the indemnified party
<PAGE>
<PAGE> 21
of its election to assume the defense of such claim or action, the
indemnifying
party shall not be liable to the indemnified party under this Section 3.7 for
any legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. If the indemnifying party does not assume the defense of such
claim or action, it is understood that the indemnifying party shall not, in
connection with any one such claim or action or separate but substantially
similar or related claims or actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to one
separate firm of local attorneys in each such jurisdiction) at any time for
all
such indemnified parties. Any indemnifying party against whom indemnity may
be
sought under this Section 3.7 shall not be liable to indemnify an indemnified
party if such indemnified party settles such claim or action without the
consent of the indemnifying party, which consent shall not be unreasonably
withheld.
(d) If the indemnification provided for in this Section 3.7
shall for any reason be unavailable (other than in accordance with its terms)
to an indemnified party in respect of any loss, liability, cost, claim or
damage referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, cost, claim or
damage in such proportion as shall be appropriate to reflect (i) the relative
benefits received by the indemnifying party on the one hand and the
indemnified
party on the other hand or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law or if the indemnified party failed to give
the notice required under paragraph (c) above, the relative benefits and the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other with respect to the statements or omissions which resulted
in such loss, liability, cost, claim or damage as well as any other relevant
equitable considerations. The relative benefits received by the indemnifying
party and the indemnified party shall be deemed to be in the same respective
proportion as the net proceeds (before deducting expenses) of the offering
received by such party (or, in the case of an underwriter, such underwriter's
discounts and commissions) bear to the aggregate offering price of the
Registrable Securities or Other Securities. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, but not by reference to any indemnified party's stock
ownership in Associates. The amount paid or payable by an indemnified party
as
a result of the loss, cost, claim, damage or liability, or action in respect
thereof,
<PAGE>
<PAGE> 22
referred to above in this paragraph (d) shall be deemed to include, for
purposes of this paragraph (d), any legal or other expenses reasonably
incurred
by such indemnified party in connection with investigating or defending any
such action or claim. No person guilty of fraudulent misrepresentation
(within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) Indemnification and contribution similar to that
specified in the preceding paragraphs of this Section 3.7 (with appropriate
modifications) shall be given by Associates, the Selling Holders and
underwriters with respect to any required registration or other qualification
of securities under any state law or regulation or governmental authority.
(f) The obligations of the parties under this Section 3.7
shall be in addition to any liability which any party may otherwise have to
any
other party.
3.8. Rule 144 and Form S-3. Commencing 90 days after the
Initial Public Offering Date, Associates shall use its best efforts to ensure
that the conditions to the availability of Rule 144 set forth in paragraph (c)
thereof shall be satisfied. Upon the request of any Holder of Registrable
Securities, Associates will deliver to such Holder a written statement as to
whether it has complied with such requirements. Associates further agrees to
use its reasonable efforts to cause all conditions to the availability of Form
S-3 (or any successor form) under the Securities Act of the filing of
registration statements under this Agreement to be met as soon as practicable
after the Initial Public offering Date. Notwithstanding anything contained in
this Section 3.8, Associates may deregister under Section 12 of the Securities
Exchange Act of 1934, as amended, if it then is permitted to do so pursuant to
said Act and the rules and regulations thereunder.
3.9. Transfer of Registration Rights. Any Holder may
transfer all or any portion of its rights under Article III to any transferee
of a number of Registrable Securities owned by such Holder exceeding three
percent (3%) of the outstanding class or series of such securities at the time
of transfer (each transferee that receives such minimum number of Registrable
Securities, a "Transferee"); provided, that each Transferee of Registrable
Securities (other than Ford Entities) to which Registrable Securities are
transferred, sold or assigned directly by a Ford Entity (such Transferee, a
"Ford Transferee"), together with any Affiliate of such Ford Transferee (and
any subsequent direct or indirect Transferees of Registrable Securities from
such Ford Transferee and any Affiliates thereof) shall be entitled to request
the registration of Registrable Securities pursuant to this Section 3.9 only
once prior to a Ford Ownership Reduction and thereafter shall only be entitled
to request the registration of Registrable Securities pursuant to Section
<PAGE>
<PAGE> 23
3.1(a)(ii) and, provided, further, that no Transferee shall be entitled to
request registration pursuant to this Section 3.9 for an amount of Registrable
Securities equal to less than $50,000,000. Any transfer of registration
rights pursuant to this Section 3.9 shall be effective upon receipt by
Associates of (i) written notice from such Holder stating the name and address
of any Transferee and identifying the number of Registrable Securities with
respect to which the rights under this Agreement are being transferred and the
nature of the rights so transferred and (ii) a written agreement from such
Transferee to be bound by the terms of this Article III and Sections 5.3, 5.4,
5.9, 5.10, and 5.12 of this Agreement. The Holders may exercise their rights
hereunder in such priority as they shall agree upon among themselves.
3.10. Holdback Agreement. If any registration pursuant to
this Article III shall be in connection with an underwritten public offering
of
Registrable Securities, each Selling Holder agrees not to effect any public
sale
or distribution, including any sale under Rule 144, of any equity security of
Associates or any security convertible into or exchangeable or exercisable for
any equity security of Associates, in the case of Registrable Securities
(otherwise than through the registered public offering then being made),
within
7 days prior to or 90 days (or such lesser period as the lead or managing
underwriters may permit) after the effective date of the registration
statement
(or the commencement of the offering to the public of such Registrable
Securities in the case of Rule 415 offerings). Associates hereby also so
agrees; provided, that, subject to Section 3.6(a) hereof, Associates shall not
be so restricted from effecting any public sale or distribution of any
security
in connection with any merger, acquisition, exchange offer, subscription
offer,
dividend reinvestment plan or stock option or other executive or employee
benefit or compensation plan.
3.11. Registration of Preferred Stock. Associates agrees
that it shall from time to time enter into one or more agreements with Ford
and/or the Class B Transferee, if any, in form and substance reasonably
satisfactory to the parties thereto, granting to Ford or the Class B
Transferee, as the case may be, registration rights for the registration of
any
shares of preferred stock of Associates that may hereafter be owned, directly
or indirectly, by Ford or the Class B Transferee, as the case may be,
substantially upon the same terms and conditions as those contained in Article
III for the benefit of Ford.
ARTICLE IV
CERTAIN COVENANT AND AGREEMENTS
4.1. No Violations. (a) For so long as the Ownership
Percentage is equal to or greater than 50%, Associates covenants and agrees
that it will not take any action or enter into any commitment or agreement
which may reasonably be anticipated to result, with or without notice and with
or without lapse of time
<PAGE>
<PAGE> 24
or otherwise, in a contravention or event of default by any Ford Entity of (i)
any provisions of applicable law or regulation, including but not limited to
provisions pertaining to the Internal Revenue Code of 1986, as amended, or the
Employee Retirement Income Security Act of 1974, as amended, (ii) any
provision
of Ford's, Ford Holdings, Inc.'s or FFSG's certificate of incorporation or
bylaws, (iii) any credit agreement or other material instrument binding upon
Ford, Ford Holdings, Inc. or FFSG or (iv) any judgment, order or decree of any
governmental body, agency or court having jurisdiction over Ford, Ford
Holdings, Inc. or FFSG or any of their respective assets.
(b) Associates and Ford agree to provide to the other any
information and documentation requested by the other for the purpose of
evaluating and ensuring compliance with Section 4.1(a) hereof.
(c) Notwithstanding the foregoing Sections 4.1(a) and
4.1(b),
nothing in this Agreement is intended to limit or restrict in any way Ford's
right's as a shareholder of Associates.
4.2. Confidentiality. Except as required by law, regulation
or legal or judicial process, Ford agrees that neither it nor any Ford Entity
nor any of their respective directors, officers or employees will without the
prior written consent of Associates disclose to any Person any material,
non-public information concerning the business or affairs of Associates
acquired from any director, officer or employee of Associates (including any
director, officer or employee of Associates who is also a director, officer or
employee of Ford).
ARTICLE V
MISCELLANEOUS
5.1. Limitation of Liability. Neither Ford nor Associates
shall be liable to the other for any special, indirect, incidental or
consequential damages of the other arising in connection with this Agreement.
5.2. Subsidiaries. Ford agrees and acknowledges that Ford
shall be responsible for the performance by each Ford Entity of the
obligations
hereunder applicable to such Ford Entity.
5.3. Amendments. This Agreement may not be amended or
terminated orally, but only by a writing duly executed by or on behalf of the
parties hereto. Any such amendment shall be validly and sufficiently
authorized for purposes of this Agreement if it is signed on behalf of Ford
and
Associates by any of their respective presidents or vice presidents.
5.4. Term. This Agreement shall remain in effect until all
Registrable Securities held by Holders have been transferred by them to
Persons
other than Transferees; provided,
<PAGE>
<PAGE> 25
that the provisions of Section 3.7 shall survive any such expiration.
5.5. Severability. If any provision of this Agreement or
the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement or such provision
of the application of such provision to such party or circumstances, other
than
those to which it is so determined to be invalid, illegal or unenforceable,
shall remain in full force and effect to the fullest extent permitted by law
and shall not be affected thereby, unless such a construction would be
unreasonable.
5.6. Notices. All notices and other communications required
or permitted hereunder shall be in writing, shall be deemed duly given upon
actual receipt, and shall be delivered (a) in person, (b) by registered or
certified mail, postage prepaid, return receipt requested or (c) by facsimile
or other generally accepted means of electronic transmission (provided that a
copy of any notice delivered pursuant to this clause (c) shall also be sent
pursuant to clause (b)), addressed as follows:
(a) if to Associates, to:
Associates First Capital Corporation
250 East Carpenter Freeway
Irving, Texas 75062
Attention: General Counsel
Telecopy No.: 214-541-5798
(b) If to Ford, to:
Ford Motor Company
The American Road
Dearborn, Michigan 48121
Attention: Secretary
Telecopy No.: 313-337-9591
or to such other addresses or telecopy numbers as may be specified by
like notice to the other parties.
5.7. Further Assurances. Ford and Associates shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such instruments and take such other action as may be
necessary or advisable to carry out their obligations under this
Agreement and under any exhibit, document or other instrument
delivered pursuant hereto.
5.8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original
instrument, but all of
<PAGE>
<PAGE> 26
which together shall constitute but one and the same agreement.
5.9. Governing Law. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and
governed by, the laws of the State of Delaware.
5.10. Entire Agreement. This Agreement constitutes the
entire understanding of the parties hereto with respect to the
subject
matter hereof.
5.11. Class B Transferee. Associates agrees that it shall
enter into an agreement with the Class B Transferee (as defined in
Associates' Restated Certificate of Incorporation), if any, in form
and substance reasonably satisfactory to the Class B Transferee and
Associates (i) granting to the Class B Transferee options for the
purchase of Class B Common Stock and Nonvoting Stock substantially
upon the same terms and conditions as those contained in Article II,
(ii) granting to the Class B Transferee registration rights for the
registration of Registrable Securities substantially upon the same
terms and conditions as those contained in Article III for the
benefit
of Ford and (iii) containing other covenants and agreement for the
benefit of the Class B Transferee that are substantially similar to
the other covenants and agreements contained in this Agreement for
the
benefit of Ford; provided, that such agreement shall contain terms
(including covenants and agreements of the Class B Transferee) for
the
benefit of Associates that are substantially similar to the terms
(including the covenants and agreements of Ford) for the benefit of
Associates contained herein.
5.12. Successors. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their
respective
successors and assigns. Nothing contained in this Agreement, express
or implied, is intended to confer upon any other person or entity any
benefits, rights or remedies.
5.13. Specific Performance. The parties hereto acknowledge
and agree that irreparable damage would occur in the event that any
of
the provisions of this Agreement were not performed in accordance
with
their specific terms or were otherwise breached. Accordingly, it is
agreed that they shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court of
competent
jurisdiction in the United States or
<PAGE>
<PAGE> 27
any state thereof, in addition to any other remedy to which they may
be entitled at law or equity.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
Ford Motor Company
By:/S/ John A. Rintamaki
------------------------------
Name: John A. Rintamaki
Title:Secretary
Associates First Capital Corporation
By:/S/Chester D. Longenecker
------------------------------
Name:Chester D. Longenecker
Title:Executive Vice President
<PAGE>
<PAGE>1 EXHIBIT 10.2
TAX SHARING AGREEMENT
THIS TAX SHARING AGREEMENT dated as of January 1, 1996 is made
and entered into by Ford Motor Company, a Delaware corporation ("FORD") and
Associates First Capital Corporation, a Delaware corporation ("ASSOCIATES")and
the Associates Affiliates.
RECITALS
WHEREAS, Ford is the common parent corporation of an affiliated group
of corporations within the meaning of Section 1504(a) of the Internal Revenue
Code of 1986, as amended (the "CODE") and of combined groups as defined under
similar laws of other jurisdictions ("FORD GROUP") and Associates and the
Associates Affiliates are members of such groups; and
WHEREAS, the groups of which Ford is the common parent and Associates
and the Associates Affiliates are members file or intend to file Consolidated
Returns and Combined Returns; and
WHEREAS, Ford and Associates desire to provide for the allocation of
liabilities, procedures to be followed, and other matters with respect to
certain taxes for taxable periods beginning after December 31, 1995.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS
1.1. "AMT PENALTY" means, with respect to any taxable year, the
amount determined under Section 2.3(d)(1) of this Agreement.
1.2. "ASSOCIATES AFFILIATE" means any corporation or other entity
directly or indirectly controlled by Associates which is includible in the
Associates Group.
1.3. "ASSOCIATES GROUP" means the affiliated group of corporations
as defined in Section 1504(a) of the Code, or similar group of entities as
defined under similar laws of other jurisdictions, of which Associates would
be
the common parent if it were not a subsidiary of Ford, and any corporation or
other entity which may be or become a member of such group from time to time.
1.4. "ASSOCIATES GROUP COMBINED TAX LIABILITY" means, with respect
to
any taxable year, the Associates Group's liability for Non-Federal Combined
Taxes as determined under Section 2.4 of this Agreement.
1.5. "ASSOCIATES GROUP FEDERAL INCOME TAX LIABILITY" means, with
respect to any taxable year, the Associates Group's liability for Federal
Income Taxes as determined under Section 2.3 of this Agreement.
1.6. "AUDIT" includes any audit, assessment of Taxes, other
examination by any Tax Authority, proceeding, or appeal of such proceeding
relating to Taxes, whether administrative or judicial.
<PAGE> 2
1.7. "CREDITABLE FOREIGN TAXES" means the foreign taxes paid,
accrued
or deemed paid by members of the Associates Group that could be allowable as a
credit under Section 901 of the Code.
1.8. "COMBINED GROUP" means a group of corporations or other
entities
that files a Combined Return.
1.9. "COMBINED RETURN" means any Tax Return with respect to
Non-Federal Taxes filed on a consolidated, combined (including nexus
combination, worldwide combination, domestic combination, line of business
combination or any other form of combination) or unitary basis wherein one or
more members of the Associates Group join in the filing of a Tax Return with
Ford or a Ford subsidiary that is not also a member of the Associates Group.
1.10. "CONSOLIDATED GROUP" means the affiliated group of
corporations
within the meaning of Section 1504(a) of the Code of which Ford is the common
parent and which includes the Associates Group.
1.11. "CONSOLIDATED RETURN" means any Tax Return with respect to
Federal Income Taxes filed by Ford and its subsidiaries pursuant to Section
1501 of the Code.
1.12. "DECONSOLIDATION" means any event pursuant to which the
Associates and the Associates Group cease to be includible in the Consolidated
Group or the Combined Group.
1.13. "DECONSOLIDATION DATE" means the close of business on the day
on which a Deconsolidation occurs. Unless otherwise required by the relevant
Tax Authority or a court of competent jurisdiction, Ford and Associates, for
itself and the Associates Group, agree to file all Tax Returns, and to take
all
other actions, relating to Federal Income Taxes or Non-Federal Combined Taxes
in a manner consistent with the position that the Associates and the
Associates
Group are includible in the Consolidated Group and the Combined Group for all
days from the date hereof through and including a Deconsolidation Date.
1.14. "ESTIMATED TAX INSTALLMENT DATE" means the installments due
dates prescribed in Section 6655(c) of the Code (presently April 15, June 15,
September 15 and December 15).
1.15. "FEDERAL INCOME TAXES" means any tax imposed under Subtitle A
of the Code (including the taxes imposed by Sections 11, 55, 59A, and 1201(a)
of the Code), including any interest, additions to tax, or penalties
applicable
thereto, and any other income based United States federal taxes which are
hereinafter imposed upon corporations.
<PAGE>
<PAGE> 3
1.16. "FINAL DETERMINATION" means (a) the final resolution of any
tax
(or other matter) for a taxable period, including any related interest or
penalties, that, under applicable law, is not subject to further appeal,
review
or modification through proceedings or otherwise, including (1) by the
expiration of a statute of limitations (giving effect to any extension, waiver
or mitigation thereof) or a period for the filing of claims for refunds,
amended returns, appeals from adverse determinations, or recovering any refund
(including by offset), (2) by a decision, judgment, decree, or other order by
a
court of competent jurisdiction, which has become final and unappealable, (3)
by a closing agreement or an accepted offer in compromise under Section 7121
or
7122 of the Code, or comparable agreements under laws of other jurisdictions,
(4) by execution of an Internal Revenue Service Form 870 or 870AD, or by a
comparable form under the laws of other jurisdictions (excluding, however, any
such form that reserves (whether by its terms or by operation of law) the
right
of the taxpayer to file a claim for refund and/or the right of the Taxing
Authority to assert a further deficiency), or (5) by any allowance of a refund
or credit, but only after the expiration of all periods during which such
refund or credit may be recovered (including by way of offset) or (b) the
payment of tax by any member of the Consolidated Group or Combined Group with
respect to any item disallowed or adjusted by a Taxing Authority provided that
Ford determines that no action should be taken to recoup such payment.
1.17. "FOREIGN TAX AMOUNT" means, with respect to any taxable year,
the amount determined under Section 2.5 of this Agreement.
1.18. "NON-FEDERAL COMBINED TAXES" means any Non-Federal Taxes with
respect to which a Combined Return is filed.
1.19. "NON-FEDERAL SEPARATE TAXES" means any Non-Federal Tax that is
not a Non-Federal Combined Tax.
1.20. "NON-FEDERAL TAXES" includes all state and local charges,
fees,
levies, imposts, duties, or other assessments of a similar nature, including
without limitation, income, alternative or add-on minimum, gross receipts,
excise, employment, sales, use, transfer, license, payroll, franchise,
severance, stamp, occupation, windfall profits, withholding, Social Security,
unemployment, disability, ad valorem, estimated, highway use, commercial rent,
capital stock, paid up capital, recording, registration, property, real
property gains, value added, business license, custom duties, or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld by
any Tax Authority (excluding any governmental agency of the United States)
including any interest, additions to tax, or penalties applicable thereto.
1.21. "PRE-DECONSOLIDATION PERIOD" means a taxable period ending on
or prior to the Deconsolidation Date.
1.22. "PRO FORMA ASSOCIATES GROUP COMBINED RETURN" means a pro forma
non-federal combined tax return or other schedule prepared pursuant to Section
2.4 of this Agreement.
1.23. "PRO FORMA ASSOCIATES GROUP CONSOLIDATED RETURN" means a pro
forma consolidated federal income tax return prepared pursuant to Section 2.3
of this Agreement.
1.24. "POST-DECONSOLIDATION PERIOD" means a taxable period beginning
after the Deconsolidation Date.
3<PAGE>
<PAGE> 4
1.25. "REDETERMINATION AMOUNT" means, with respect to any taxable
year, the amount determined under Section 3.8 of this Agreement.
1.26. "STRADDLE PERIOD" means a taxable period beginning on or prior
to and ending after the Deconsolidation Date.
1.27. "TAX ASSET" means any net operating loss, net capital loss,
investment tax credit, foreign tax credit, charitable deduction or any other
deduction, credit or tax attribute which could reduce taxes (including without
limitation deductions and credits related to alternative minimum taxes).
1.28. "TAX AUTHORITY" includes the Internal Revenue Service and any
state, local, or other governmental authority responsible for the
administration of any Taxes.
1.29. "TAXES" means Federal Income Taxes and Non-Federal Taxes.
1.30. "TAX RETURN" means any return, declaration, statement, report,
schedule, certificate, form, information return or any other document (and any
related or supporting information) including an amended tax return required to
be supplied to, or filed with, a Tax Authority with respect to Taxes.
SECTION 2. TAX SHARING
2.1. ASSOCIATES LIABILITY FOR FEDERAL INCOME TAXES AND NON-FEDERAL
COMBINED TAXES. Each taxable year, Associates shall pay to Ford an amount
equal to the sum of the Associates Group Federal Income Tax Liability and the
Associates Group Combined Tax Liability for such taxable year.
2.2 FORD LIABILITY FOR FOREIGN TAX AMOUNT. With respect to each
taxable year, Ford shall pay to Associates an amount equal to the Foreign Tax
Amount for such taxable year.
2.3. ASSOCIATES GROUP FEDERAL INCOME TAX LIABILITY. (a) IN
GENERAL.
With respect to any taxable year, the Associates Group Federal Income Tax
Liability shall be the sum, for such taxable year, of (1) the Associates
Group's liability for Federal Income Taxes as determined on the Pro Forma
Associates Group Consolidated Return, (2) any interest, penalties and other
additions to such taxes, and (3) any AMT Penalty, less any credit for any AMT
Penalty for a prior taxable year.
(b) PRO FORMA FEDERAL RETURN. Each taxable year, Ford shall prepare
or cause to be prepared a pro forma consolidated federal income tax return for
the Associates Group ("Pro Forma Associates Group Consolidated Return") as if
the Associates Group were not and never were part of the Consolidated Group,
but rather were a separate affiliated group of corporations of which the
Associates were the common parent filing a consolidated federal income tax
return pursuant to Section 1501 of the Code.
(c) OPERATING RULES. The Pro Forma Associates Group Consolidated
Return shall be prepared:
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<PAGE> 5
(1) reflecting the elections, methods of accounting, and
positions with respect to specific items made or used in the Consolidated
Return;
(2) taking into account any deduction or credit for Tax
Assets, excluding Creditable Foreign Taxes;
(3) without regard to any graduated rates of tax; and
(4) reflecting transactions with members of the Consolidated
Group that are not also members of the Associates Group according to the
provisions of the consolidated return regulations promulgated under the Code
governing intercompany transactions (no item (including income, gains,
losses,
deductions and credits) of any member of the Consolidated Group that is not a
member of the Associates Group shall otherwise be taken into account).
(d) AMT PENALTY. (1) IN GENERAL. For any taxable year with
respect
to which the Consolidated Group is subject to the alternative minimum tax
imposed under Section 55 of the Code or is allowed any amount as a credit
under
Section 53 of the Code, the AMT Penalty shall equal (i) the amount by which
(A) the sum of the Associates Group's adjustments, as defined in Section 56 of
the Code, and preferences, as defined in Section 57 of the Code, exceeds (B)
10% of the Associates Group's taxable income, as defined in Section 63(a) of
the Code, each as determined on the Pro Forma Associates Group Consolidated
Return for such taxable year, multiplied by (ii) the rate specified in Section
55(b)(1)(B)(i) of the Code.
(2) CREDIT FOR PRIOR AMT PENALTY. The AMT Penalty for any
taxable year shall be allowed as a credit in computing the Associates Group
Federal Income Tax Liability for any subsequent taxable year with respect to
which the Consolidated Group no longer has available any amount that could be
allowable as a credit under Section 53 of the Code.
2.4. ASSOCIATES GROUP COMBINED TAX LIABILITY. (a) IN GENERAL. With
respect to any taxable year, the Associates Group Combined Tax Liability shall
be the sum, for such taxable year, of (1) the Associates Group's liability for
Combined Taxes as determined on the Pro Forma Associates Group Combined
Return, (2) any interest, penalties and other additions to such taxes
(b) PRO FORMA COMBINED RETURN. Each taxable year, Ford shall
prepare or cause to be prepared a pro forma combined tax return or other
schedule for the Associates Group ("Pro Forma Associates Group Combined
Return")
determined as if the Associates Group were not and never were part of the
Combined Group, but rather were a separate group of which the Associates were
the common parent filing a combined tax return.
(c) OPERATING RULES. The Pro Forma Associates Group Combined Return
shall be prepared by reference to:
(1) the Associates Group's taxable income or loss from Line
28 of the Pro Forma Associates Group Consolidated Return, adjusted to take
into
account (i) those members of the Associates Group which are included in the
Combined Return, (ii) net operating loss carryforwards, and (iii) material
adjustments necessary to reflect the laws of the applicable jurisdiction
(e.g., to exclude "subpart F income" and "gross-up");
<PAGE>
<PAGE> 6
(2) apportionment factors determined by taking into account
only those members of the Associates Group which are included in the Combined
Return; and
(3) the highest applicable tax rate without regard to any graduated rates.
(d) ADDITIONAL OPERATING RULES. The following additional provisions
shall apply in determining the Associates Group Combined Tax Liability:
(1) Ford shall not pay the Associates Group for any Tax
Asset
relating to any Non-Federal Combined Tax, including any net operating loss
carrybacks or carryovers, not otherwise taken into account under Section
2.4(b)
of this Agreement;
(2) the Associates Group liability with respect to
unemployment taxes for which a Combined Return is filed shall be the lesser of
(i) the liability for such taxes of the members of the Associates Group which
are included in the Combined Return determined utilizing the tax rate
applicable to the Combined Return and (ii) the liability for such taxes of the
members of the Associates Group which are included in the Combined Return
determined as if such members of the Associates Group were not and never were
part of the Combined Group, but rather were a separate group filing a combined
unemployment tax return.
2.5. FOREIGN TAX CREDIT. (a) IN GENERAL. With respect to each
taxable year, the Foreign Tax Amount shall be the amount of actual tax savings
(adjusted to reflect cumulative savings), if any, realized for such taxable
year by the Consolidated Group (taking into account carrybacks and
carryforwards) with respect to Creditable Foreign Taxes.
(b) AMOUNT. (1) GENERAL RULE. The amount of any such tax savings
for a taxable year shall be determined either (i) by comparing the
Consolidated
Group's foreign tax credit computed by taking into account the Associates
Group
to the Consolidated Group's foreign tax credit computed without taking into
account the Associates Group, or (ii) if a deduction is claimed for Creditable
Foreign Taxes, by comparing the Consolidated Group's liability for Federal
Income Taxes computed by taking into account such Creditable Foreign Taxes to
the Consolidated Group's liability for Federal Income Taxes computed without
taking into account such Creditable Foreign Taxes.
(2) LIMITATIONS. In no event shall the amount determined
under Section 2.5(b)(1)(i) of this Agreement for a taxable year exceed the
amount of Creditable Foreign Taxes taken into account during such taxable
year.
In addition, the amount of Creditable Foreign Taxes taken into account during
a
taxable year shall be reduced, as Ford determines may be appropriate, to the
extent such Creditable Foreign Taxes have been reflected in Ford's
consolidated
financial statements for periods prior to the date of this Agreement.
(3) REDUCTION FOR DEFICIT IN OTHER TAXABLE YEARS. If, for
any taxable year, the Consolidated Group's foreign tax credit computed without
taking into account the Associates Group exceeds the Consolidated Group's
foreign tax credit computed by taking into account the Associates Group, the
amount of such excess shall be applied against and reduce the Foreign Tax
Amount for any other taxable year (after taking into account any reduction in
such Foreign Tax Amount by reason of such an excess in a prior taxable year)
covered by this Agreement. If Ford has already paid Associates the Foreign
Tax
Amount for a taxable year and such amount is<PAGE>
<PAGE> 7
subsequently reduced under this Section 2.5(b)(3), Associates shall pay to
Ford the amount of such reduction.
SECTION 3. PAYMENT OF TAXES AND TAX SHARING AMOUNTS
3.1. FEDERAL INCOME TAXES. Ford shall pay to the Internal Revenue
Service all Federal Income Taxes, if any, of the Consolidated Group (including
the Associates Group) due and payable for all Pre-Deconsolidation Periods.
3.2. NON-FEDERAL COMBINED TAXES. Ford shall pay to the appropriate
Tax Authorities all Non-Federal Combined Taxes, if any, of the Combined Group
(including the Associates Group) due and payable for all Pre-Deconsolidation
Periods and Straddle Periods.
3.3. NON-FEDERAL SEPARATE TAXES. Associates shall pay to the
appropriate Tax Authorities all Non-Federal Separate Taxes, if any, of the
Associates Group due and payable for all Pre-Deconsolidation Periods and
Straddle Periods.
3.4. OTHER FEDERAL TAXES. The parties shall each pay to the
appropriate governmental authorities all of their respective Federal Taxes
(excluding Federal Income Taxes for Pre-Deconsolidation Periods, which are
governed by Section 3.1 of this Agreement), if any, due and payable for all
Pre-Deconsolidation Periods, Straddle Periods, and Post- Deconsolidation
Periods.
3.5. TAX SHARING INSTALLMENT PAYMENTS. (a) FEDERAL INCOME TAXES.
Not later than five business days prior to each Estimated Tax Installment Date
with respect to any Pre-Deconsolidation Period or Straddle Period, Ford shall
determine under Section 6655 of the Code the estimated amount of the related
installment of the Associates Group Federal Income Tax Liability. Associates
shall then pay to Ford not later than such Estimated Tax Installment Date the
amount thus determined.
(b) NON-FEDERAL COMBINED TAXES. Not later than November 15 of each
taxable year with respect to any Pre- Deconsolidation Period or Straddle
Period, Ford shall deliver to Associates an estimate of the Associates Group
Combined Tax Liability for the taxable year determined by using the previous
year's apportionment factors. Associates shall then pay to Ford, not later
than 10 business days after receipt of such estimate, the amount thus
determined.
3.6. TAX SHARING TRUE-UP PAYMENTS. (a) FEDERAL INCOME TAXES. Not
later than 30 business days after the Consolidated Return is filed with
respect
to any Pre-Deconsolidation Period or Straddle Period, Ford shall deliver to
Associates a Pro Forma Associates Group Consolidated Return or other
comparable
schedule reflecting the Associates Group Federal Income Tax Liability. Not
later than 5 business days after the date such pro forma or other schedule is
delivered, Associates shall pay to Ford, or Ford shall pay to Associates, as
appropriate, an amount equal to the difference, if any, between the Associates
Group Federal Income Tax Liability for the taxable year and the aggregate
amount paid by Associates with respect to such taxable year under Section
3.5(a) of this Agreement.
(b) NON-FEDERAL COMBINED TAXES. Not later than November 15
following
each taxable year with respect to any Pre-Deconsolidation Period or Straddle
Period, Ford shall deliver to Associates a Pro Forma Associates Group Combined
Return or other comparable schedule
<PAGE>
<PAGE> 8
reflecting the Associates Group Combined Tax Liability for the taxable year.
Not later than 10 business days following delivery of such pro forma or other
schedule, Associates shall pay to Ford, or Ford shall pay to Associates, as
appropriate, an amount equal to the difference, if any, between the Associates
Group Combined Tax Liability for the taxable year and the amount paid by
Associates with respect to such taxable year under Section 3.5(b) of this
Agreement.
3.7. FOREIGN TAX AMOUNTS. (a) IN GENERAL. Not later than 30
business days after the Consolidated Return is filed with respect to any
Pre-Deconsolidation Period or Straddle Period, Ford shall deliver to
Associates
a schedule reflecting the amounts required to be paid under this Section 3.7.
(b) GENERAL RULE. Ford shall pay to Associates the Foreign Tax
Amount, if any, with respect to a taxable year in two installments.
(1) Not later than 5 business days after the date the
schedule is delivered, Ford shall pay to Associates the first installment. The
first installment shall be an amount equal to the lesser of the amount of tax
savings for such taxable year computed (i) under the principles of Section
2.5(b) of this Agreement without taking into account carrybacks from, or
deficits in, succeeding taxable years, or (ii) under the principles of Section
2.5(b) of this Agreement as if the Associates Group were not and never were
part of the Consolidated Group, but rather were a separate affiliated group of
corporations of which the Associates were the common parent filing a
consolidated federal income tax return pursuant to Section 1501 of the Code,
applying the principles of Section 2.3(c) of this Agreement (other than the
exclusion of Creditable Foreign Taxes under Section 2.3(c)(2) of this
Agreement) and without taking into account carrybacks from, or deficits in,
succeeding taxable years.
(2) Ford shall pay Associates the second installment upon
the
earlier of (i) the date at which the ability to claim a credit for such
Creditable Foreign Taxes for such taxable year would expire under Section
904(c) of the Code if unutilized, or (ii) the Deconsolidation Date. The
second
installment shall be an amount equal to the difference, if any, between the
Foreign Tax Amount for such taxable year and the amount paid to Associates in
the first installment under Section 3.7(b)(1) of this Agreement for such
taxable year.
(c) TRUE-UP PAYMENTS. If, for any reason (including a carryback
from, or a deficit in, a succeeding taxable year, but excluding a
redetermination taken into account under Section 3.8 of this Agreement), the
Foreign Tax Amount for a taxable year is reduced, Associates shall pay to
Ford,
not later than 5 business days after the date the schedule is delivered, an
amount equal to the difference, if any, between the amounts Ford has paid to
Associates for such taxable year under Section 3.7(b) of this Agreement and
the
amount Ford would have paid to Associates under Section 3.7(b) of this
Agreement taking into account such reduction.
3.8. REDETERMINATION AMOUNTS. (a) IN GENERAL. In the event of any
redetermination of any item of income, gain, loss, deduction or credit of any
member of the Consolidated Group or Combined Group as a result of a Final
Determination or any settlement or compromise with any Tax Authority
(including
any amended tax return or claim for refund filed by Ford), Associates shall
pay
Ford or Ford shall pay Associates, as the case may be, the Redetermination
Amount.
(b) COMPUTATION. The Redetermination Amount shall be the
difference,
<PAGE>
<PAGE> 9
if any, between all amounts previously determined under Section 2 of this
Agreement and all amounts that would have been determined under Section 2 of
this Agreement taking such redetermination into account (including any
additions to tax or penalties applicable thereto), together with interest for
each day calculated (1) with respect to redeterminations affecting Federal
Income Taxes, at the rate determined, in the case of payment by Associates,
under Section 6621(a)(1) of the Code and, in the case of payment by Ford,
under
Section 6621(a)(2) of the Code, and (2) with respect to redeterminations
affecting Non-Federal Combined Taxes, under similar laws, if any, of other
jurisdictions.
(c) PAYMENT. Ford shall deliver to Associates a schedule reflecting
the computation of any Redetermination Amount with respect to any taxable
year.
Not later than 5 days after the date such schedule is delivered, Associates
shall pay Ford, or Ford shall pay Associates such Redetermination Amount,
provided however, that in no event shall any Redetermination Amount
attributable to any Foreign Tax Amount be paid earlier than the date provided
in Section 3.7 of this Agreement.
3.9. INTEREST. Payments under this Section 3 that are not made
within the prescribed period shall thereafter bear interest at the Federal
short-term rate established pursuant to Section 6621 of the Code.
SECTION 4. PROCEDURAL MATTERS
4.1. AGENT; PREPARATION AND FILING OF RETURNS. Ford shall be the
sole and exclusive agent of Associates and any member of the Associates Group
in any and all matters relating to (a) Federal Income Taxes of the
Consolidated
Group and (b) any Non-Federal Combined Taxes for all Pre-Deconsolidation
Periods and Straddle Periods. Ford shall have the sole and exclusive
responsibility for the preparation and filing of any (a) Consolidated Return
or
(b) Combined Return for all Pre-Deconsolidation Periods and Straddle Periods.
In its sole discretion, Ford shall have the exclusive right with respect to
any
such Consolidated Return or Combined Return (a) to determine (1) the manner in
which such Tax Return shall be prepared and filed, including, without
limitation, the manner in which any item of income, gain, loss, deduction or
credit shall be reported, (2) whether any extensions may be requested, (3) the
elections that will be made by any member of the Consolidated Group or
Combined
Group, and (4) whether any amended tax returns should be filed, (b) to
control,
contest, and represent the interests of the Consolidated Group and Combined
Group in any Audit and to resolve, settle, or agree to any adjustment or
deficiency proposed, asserted or assessed as a result of any Audit, (c) to
file, prosecute, compromise or settle any claim for refund, and (d) to
determine whether any refunds, to which the Consolidated Group or Consolidated
Group may be entitled, shall be paid by way of refund or credited against the
tax liability of the Consolidated Group and Combined Group. Associates, for
itself and its subsidiaries, hereby irrevocably appoints Ford as its agent and
attorney-in-fact to take such action (including the execution of documents) as
Ford may deem appropriate to effect the foregoing.
4.2. FURNISHING INFORMATION. Each member of the Associates Group
shall (a) furnish to Ford in a timely manner such information and documents as
Ford may reasonably request for purposes of (1) preparing any original or
amended Consolidated Return or Combined Return, (2) contesting or defending
any
Audit, and (3) making any determination or computation necessary or
appropriate
under this Agreement, (b) cooperate in any Audit of any Consolidated Return or
Combined Return, (c) retain and provide on demand books, records,
documentation
or other information relating to any tax return until the later of (1) the
expiration of the applicable statute
<PAGE>
<PAGE> 10
of limitations (giving effect to any extension, waiver, or mitigation thereof)
and (2) in the event any claim is made under this Agreement for which such
information is relevant, until a Final Determination with respect to such
claim, and (d) take such action as Ford may deem appropriate in connection
therewith. Ford shall provide the Associates Group any assistance reasonably
required in providing any information requested pursuant to this Section 4.2.
4.3. EXPENSES. Associates shall reimburse Ford for any outside
legal
and accounting expenses incurred by Ford in the course of the conduct of any
Audit regarding the tax liability of the Combined Group or Consolidated Group,
and for any other expense incurred by Ford in the course of any litigation
relating thereto, to the extent such costs are reasonably attributable to the
Associates Group and provided Ford has conferred with Associates as to the
portion of the Audit relating to the Associates Group. Notwithstanding the
foregoing, Ford shall have the sole discretion to control, contest, represent,
file, prosecute, challenge or settle any Audit.
SECTION 5. DECONSOLIDATION
5.1. CONTINUING COVENANTS. Associates, for itself and the
Associates
Affiliates, covenants that on or after a Deconsolidation it will not, nor will
it cause or permit any member of the Associates Group to make or change any
tax
election, change any accounting method, amend any tax return or take any tax
position on any tax return, take any action, omit to take any action or enter
into any transaction that results in any increased tax liability or reduction
of any Tax Asset of the Ford Group in respect of any Pre-Deconsolidation
Period or Straddle Period.
5.2 REATTRIBUTION OF TAX ASSETS. In the event of a Deconsolidation,
Ford may, at its option, elect to reattribute to itself certain Tax Assets of
the Associates Group pursuant to Treasury Regulations Section 1.1501-20(g) or
similar provisions of other jurisdictions. If Ford makes such an election,
Associates shall comply with any applicable requirements, including those of
Treasury Regulations Section 1.1502-20(g)(5).
5.3. CARRYBACKS. Ford agrees to pay to Associates the actual tax
benefit received by the Ford Group from the use in any Pre-Deconsolidation
Period of a carryback of any Tax Asset of the Associates Group from a Post-
Deconsolidation Period. Such benefit shall be considered equal to the lesser
of (a) the amount Ford would have paid Associates had such Tax Asset arisen in
a Pre-Deconsolidation Period and (b) the excess of (1) the amount of Federal
Income Taxes imposed on the Consolidated Group or the amount of Combined Taxes
imposed on the Combined Group, as the case may, that would have been payable
by
the Consolidated Group or Combined Group in the absence of such carryback over
(2) the amount of Federal Income Taxes or Combined Taxes, as the case may be,
actually paid. Payment of the amount of such benefit shall be made within 90
days of the filing of the applicable tax return for the taxable year in which
the Tax Asset is utilized. If subsequent to the payment by Ford to Associates
of any such amount, there shall be (a) a Final Determination which results in
a
disallowance or a reduction of the Tax Asset so carried back or (b) a
reduction
in the amount of the benefit realized by the Ford Group as a result of any
other Tax Asset that arises in a Post- Deconsolidation Period, Associates
shall
repay to Ford, within 90 days of such event any amount which would not have
been payable to Associates pursuant to this Section 5.3 had the amount of the
benefit been determined in light of these events. Associates shall hold Ford
harmless for any penalty, addition to tax or interest payable by any member of
the Ford Group as a result of any such event. Any such amount shall be paid
by
Associates to Ford within 90 days of the payment by Ford or any member of the
Consolidated
<PAGE>
<PAGE> 11
Group or Combined Group of any such penalty, addition to tax, or interest.
Nothing in this Section 5.3 shall require Ford to file a claim for refund of
Federal Income Taxes or Combined Taxes.
5.4. CREDIT FOR REMAINING AMT PENALTY. Ford agrees to pay to
Associates an amount equal to the aggregate AMT Penalties for all
Pre-Deconsolidation Periods that have not been allowed as a credit under
Section 2.3(d)(2) of this Agreement, reduced by the amounts allowable as a
credit under Section 53 of the Code attributable to the Associates Group, at
such time as a credit for such AMT Penalties would be allowed under the
principles of Section 2.3(d)(2) of this Agreement with respect to any
Post-Deconsolidation Period.
SECTION 6. MISCELLANEOUS
6.1. TERM. This Agreement shall expire upon the Deconsolidation
Date; provided, however, that all rights and obligations arising hereunder
with
respect to a Pre-Deconsolidation Period or Straddle Period shall survive until
they are fully effectuated or performed and, provided, further, that
notwithstanding anything in this Agreement to the contrary, all rights and
obligations arising hereunder with respect to a Post-Deconsolidation Period
shall remain in effect and its provisions shall survive for the full period of
all applicable statutes of limitation (giving effect to any extension, waiver
or mitigation thereof).
6.2. ALLOCATIONS. All computations with respect to the
Pre-Deconsolidation Period ending on the Deconsolidation Date, the immediately
following taxable period of Associates and the Associates Group and any
Straddle Period shall be made pursuant to the principles of Treasury
Regulations Section 1.1502-76(b), taking into account such elections
thereunder
as Ford, in its sole discretion, shall make.
6.3. CHANGES IN LAW. Any reference to a provision of the Code or a
similar law of another jurisdiction shall include a reference to any successor
provision to such provision.
6.4. CONFIDENTIALITY. Each party shall hold and cause its advisors
and consultants to hold in strict confidence, unless compelled to disclose by
judicial or administrative process or, in the opinion of its counsel, by other
requirements of law, all information (other than any such information relating
solely to the business or affairs of such party) concerning the other parties
hereto furnished it by such other party or its representatives pursuant to
this
Agreement (except to the extent that such information can be shown to have
been
(a) previously known by the party to which it was furnished, (b) in the public
domain through no fault of such party, or (c) later lawfully acquired from
other sources not under a duty of confidentiality by the party to which it was
furnished), and each party shall not release or disclose such information to
any other person, except its auditors, attorneys, financial advisors, bankers
and other consultants who shall be advised of and agree to be bound by the
provisions of this Section 6.4. Each party shall be deemed to have satisfied
its obligation to hold confidential information concerning or supplied by the
other party if it exercises the same care as it takes to preserve
confidentiality for its own similar information.
6.5. SUCCESSORS. This Agreement shall be binding on and inure to
the
benefit of any successor, by merger, acquisition of assets or otherwise, to
any
of the parties hereto (including any
<PAGE>
<PAGE> 12
successor of Ford and Associates succeeding to the tax attributes of such
party
under Section 381 of the Code), to the same extent as if such successor had
been an original party.
6.6. AUTHORIZATION, ETC. Each of the parties hereto hereby
represents and warrants that it has the power and authority to execute,
deliver
and perform this Agreement, that this Agreement has been duly authorized by
all
necessary corporate action on the part of such party, that this Agreement
constitutes a legal, valid and binding obligation of each such party and that
the execution, delivery and performance of this Agreement by such party does
not contravene or conflict with any provision of law or of its charter or
bylaws or any agreement, instrument or order binding on such party.
6.7. ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements. Notwithstanding the foregoing, the Tax
Allocation Agreement, dated August 31, 1992, and State Tax Allocation
Agreement, dated February 4, 1993, among Ford Holdings, Inc. and its
subsidiaries, shall continue to apply to taxable periods ending on or before
December 31, 1995.
6.8. SECTION CAPTIONS. Section captions used in this Agreement are
for convenience and reference only and shall not affect the construction of
this Agreement.
6.9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan without giving
effect to laws and principles relating to conflicts of law.
6.10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
6.11. WAIVERS AND AMENDMENTS. This Agreement shall not be waived,
amended or otherwise modified except in writing, duly executed by all of the
parties hereto.
6.12. SEVERABILITY. In case any one or more of the provisions in
this Agreement should be invalid, illegal or unenforceable, the enforceability
of the remaining provisions hereof will not in any way be effected or impaired
thereby.
6.13. NO THIRD PARTY BENEFICIARIES. This Agreement is solely for
the
benefit of the parties to this Agreement and the other members of the
Affiliated Group and should not be deemed to confer upon third parties any
remedy, claim, liability, reimbursement, claim of action or other rights in
excess of those existing without this Agreement.
12<PAGE>
<PAGE> 13
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by a duly authorized officer as of the date first
above written.
FORD MOTOR COMPANY
By /S/ Dennis E. Ross
-----------------------------------
Name: Dennis E. Ross
Title:Chief Tax Officer
ASSOCIATES FIRST CAPITAL CORPORATION
on behalf of itself and its
subsidiaries
By /S/ Roy A. Guthrie
-----------------------------------
Name: Roy A. Guthrie
Title:Executive Vice President,
Comptroller and Chief Accounting
Officer
<PAGE>
<PAGE> 1 EXHIBIT 10.3
May 1, 1996
Associates First Capital Corporation
250 E. Carpenter Freeway
Irving, TX 75062
Dear Sirs:
Management Trademark Agreement
This letter shall serve to confirm the agreement between you ("AFCC")
and
us ("Ford") under which Ford will provide certain management, financial,
administrative and insurance services to you.
1. Services to be Provided. Except at otherwise provided by separate
agreement of the parties, when and as reasonably requested by AFCC or its
subsidiaries, Ford shall provide, or cause to be provided, to AFCC assistance,
advice and services in respect of the following matters:
(a) Management and other technical and professional (e.g., legal and tax)
support;
(b) Accounting and bookkeeping, including policies, principles and procedures,
budget and cost controls, and audit programs;
(c) Pension asset management;
(d) Sales, marketing and operational planning, including providing AFCC with
Ford customer data to facilitate cross-marketing; and
(e) Incurance coverage under Ford's property and casualty insurance policies
such as liability, crime, property, workers' compensation and directors and
officers insurance.
2. Fees for Services. With respect to the services enumerated in
Section 1(a) through (d) above, an annual fee of $3.5 million shall be paid by
AFCC to Ford in equal quarterly installments on the last business day of
March,
June, September and December of each year during the term of this Agreement,
commencing March 29, 1996. Such fee shall be adjusted upward or downward each
year to reflect any increase or decrease in the Consumer Price Index for the
immediately prior calendar year, as published by the U. S. Department of
Labor.
With respect to incurance coverage provided pursuant to Section 1(e) above,
AFCC shall pay to Ford its proportional share of the premium costs of such
coverages. Ford shall from time to time provide written notice to AFCC of
<PAGE>
<PAGE> 2
-2-
the portion of the insurance premium paid by Ford that are attributable to
AFCC, whereupon AFCC shall promptly pay such amounts.
3. Termination. Ford and AFCC may terminate this Agreement at any
time
so desired, at will and without cause, by giving the other party at least 180
days' prior written notice; provided, if at any time Ford ceases to own
(either
directly or indirectly) more than 50% of the outstanding voting stock of AFCC
or ceases for any reason, as determined in Ford's reasonable discretion, to
have effective control of AFCC, then this Agreement shall terminate
automatically. In the event of termination hereof other than at the end of a
calendar year, AFCC shall pay a pro rata portion of the fees provided for in
Section 2 hereof for the tat portion of the claendar year during which this
Agreement was in effect. However, there will be no return of insurance
premiums for any mid-policy cancellation; Further, AFCC will be responsible
for
any future retroactive premium adjustments for the periods AFCC participated
in
Ford's insurance programs.
If the provisions hereof are acceptable, please confirm you acceptance
by signing, dating and returning to us the copy of this letter enclosed for
that purpose.
Sincerely,
FORD MOTOR COMPANY
BY: /S/ John A. Rintamaki
---------------------
John A. Rintamaki
Secretary
AGREED AND ACCEPTED:
ASSOCIATES FIRST CAPITAL CORPORATION
By: /S/ Chester D. Longenecker
---------------------------
Name:Chester D. Longenecker
Title: Executive Vice President
<PAGE>
<PAGE> 1 EXHIBIT 10.4
TRADEMARK AGREEMENT
THIS AGREEMENT, effective February 1, 1996 is by and between
FORD Motor Company, a corporation organized and existing under the laws of the
State of Delaware, having a principal place of business at The American Road,
Dearborn, Michigan 48126 (hereinafter "FORD"), and Associates First Capital
Corporation, a corporation organized and existing under the laws of the State
of Delaware, having a principal place of business at 250 Carpenter Freeway,
Irving, Texas 75062 (hereinafter "THE ASSOCIATES").
WHEREAS:
A. FORD is the owner of the FORD trademark, whether represented
in the FORD script-in-oval style, FORD in block letter style, or otherwise
(hereinafter "Licensed Trademark");
B. THE ASSOCIATES is an indirect subsidiary of FORD;
C. THE ASSOCIATES and its subsidiaries wish to carry on in the
United States a trademark branded credit card business and through its
wholly-owned subsidiary, FORD Consumer Finance Corporation ("FCFC"), a home
equity lending business and a manufactured housing lending business (hereafter
Licensed Goods and Services") using the Licensed Trademark, and additionally
wish to use the name "FORD" (hereinafter Licensed Name) for general corporate
identification purposes (e.g., on business cards stationary, signage, etc.)
D. The parties hereto desire that the THE ASSOCIATES should be
authorized to use the Licensed Trademark in connection with the marketing of
the Licensed Goods and Services and should be authorized to use the Licensed
Name for general corporate identification purposes, in the United States, on
the following terms and conditions.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. In consideration of the promises and the undertakings
hereinafter set forth, FORD hereby grants to THE ASSOCIATES, for the term of
this Agreement, a nonexclusive license to use a) the
Licensed Trademark in the United States on and in connection with the Licensed
Goods and Services, and b) the Licensed Name for general corporate
identification purposes.
2. THE ASSOCIATES shall not use the Licensed Trademark in
association with any goods or services other than the Licensed Goods and
Services, and shall not use the Licensed Name except for general corporate
identification purposes.
3. THE ASSOCIATES shall permit, or procure permission for, FORD
or its authorized representative, at all reasonable times, to enter the
premises of THE ASSOCIATES for the purpose of inspecting the records relating
to the Licensed Goods and Services and the use of the Licensed Name.
4. In consideration of the license granted by FORD to THE
ASSOCIATES hereby, THE ASSOCIATES agrees to pay to FORD an annual royalty for
each calendar year during the term of this Agreement. Such royalty shall be
an amount equal to (i) one basis point (0.0001) multiplied by (ii) THE
ASSOCIATES' total domestic assets at December 31 of the previous calendar
year, as set forth in or derived from THE ASSOCIATES' audited consolidated
financial statements for such prior calendar year. Such royalty shall be
payable in quarterly installments on the last business day of each calendar
quarter of the calendar year for which the royalty is being paid, beginning
March 29, 1996.
<PAGE>
<PAGE> 2 -2-
By way of example, if THE ASSOCIATES' total domestic assets at December 31,
1995
were $35,000,000,000, the annual royalty due for 1996 would be $3,500,000
and the quarterly installment due on March 29, 1996 would be $875,000.
The royalty shall be reviewed by the parties at the end of each
five-year period during the term of this Agreement and shall be increased or
decreased or the basis for its calculation shall be changed if the parties
determine (based on the advice of an independent appraiser selected by the
parties) that the then existing royalty is not reflective of the market value
of the license granted hereby. Any such change in the royalty shall be set
forth in an amendment hereto in writing.
5. If the Licensed Goods and Services associated with the
Licensed Trademark supplied by THE ASSOCIATES and/or the use of the Licensed
Name by THE ASSOCIATES do not in the opinion of FORD, or its authorized
representative, conform in any respect with standards of quality set by FORD,
FORD shall so inform THE ASSOCIATES and THE ASSOCIATES shall, except as to
trademark branded credit cards which shall be replaced in accordance with
paragraph ten (10), thereafter,
with reasonable efforts cease its use within thirty (30) days of the Licensed
Trademark and/or Licensed Name on those non-conforming Licensed Goods and
Services so identified by FORD.
6. THE ASSOCIATES shall use and display a) the Licensed
Trademark and b) the Licensed Name only in a manner previously approved by
FORD. FORD hereby acknowledges its approval of the current use by THE
ASSOCIATES of the Licensed Trademark and the Licenses Name. THE ASSOCIATES
acknowledges that FORD shall have the right to change with prior notice the
approved manner in which the Licensed Trademark and Licensed Name may be used
and displayed. FORD shall so inform THE ASSOCIATES of the change and THE
ASSOCIATES shall, except as to trademark branded credit cards which shall be
replaced in accordance with Paragraph ten (10), make the change or cease use
within ninety (90) days.
7. THE ASSOCIATES recognizes FORD's title to the Licensed
Trademark and License Name and shall not at any time during the term of this
Agreement do or suffer to be done any act or thing that will in any way impair
the rights of FORD in and to the Licensed Trademark or Licensed Name by virtue
of the rights hereby granted to THE ASSOCIATES or through THE ASSOCIATES' use
of the Licensed Trademark and Licensed Name, it being the intention of the
parties hereto that all uses of the Licensed Trademark and License Name by THE
ASSOCIATES shall at all time inure to the benefit of FORD.
8. THE ASSOCIATES agrees to indemnify and hold FORD harmless
against all actions, claims, liabilities, costs, demands, and expenses to the
extent they arise out of or result from or are based upon FORD being
threatened
or sued with respect to any controversy that arises from THE ASSOCIATES' use
of the Licensed Trademark.
9. FORD or THE ASSOCIATES may terminate this Agreement at any
time so desired, at will and without cause, by giving the other party at least
one hundred and eighty (180) days prior written notice; provided, however, if
at any time FORD ceases to own (either directly or indirectly) more than fifty
percent (50%) of the voting stock of THE ASSOCIATES or ceases for any reason,
as determined in its reasonable discretion, to have effective control of THE
ASSOCIATES, then this Agreement shall terminate automatically.
<PAGE>
<PAGE> 3
- 3 -
10. Upon termination of this Agreement, for whatever reason,
THE
ASSOCIATES shall within ninety (90) days cease all uses of the Licensed
Trademark and Licensed Name, however, THE ASSOCIATES, shall not be required to
replace trademark branded credit cards except as such replacement occurs in
the
normal course of business on the normal expiration date of each such trademark
branded credit card, but in any event not beyond two (2) years from the date
of
termination.
11. This Trademark Agreement supersedes all prior agreements.
AS WITNESSES the hands of the duly authorized officers of the
parties hereto as follows:
ASSOCIATES FIRST CAPITAL FORD MOTOR COMPANY
CORPORATION
By: /s/Chester D. Longenecker By:/S/ John M. Rintamaki
-------------------------- --------------------------------
Title: Executive Vice President Title:Secretary
----------------------- -----------------------------
<PAGE>
<PAGE> 1 Exhibit 10.5(a)
AGREEMENT, dated as of the 16TH day of November,1995 (the "Agreement"),
between ASSOCIATES CORPORATION OF NORTH AMERICA (A Texas Corporation), a
corporation existing under laws of the State of Texas (the "Company"), and
Keith
W. Hughes (the "Executive").
WITNESSETH
WHEREAS, the Company and the Executive desire to enter into an
agreement
relating to the employment of the Executive for a period of three years from
date of this Agreement,
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 Effective on the date of the Agreement, the Executive hereby
agrees to serve, upon the terms and conditions herein contained, as an
executive of the Company, a wholly-owned subsidiary of Ford Motor Company. The
Executive shall have such duties as the Board of Directors of the Company may
determine.
1.2 The term of employment under this Agreement shall commence on
the
date of this Agreement and, subject to the terms hereof, shall terminate on
the
day prior to the third anniversary of such date. The full three-year period is
referred to as the "Employment Term."
1.3 During the Executive's employment hereunder, the Executive shall
devote the Executive's best efforts and substantially all the Executive's
business time and services to the business and affairs of the Company.
2. SALARY
2.1 During the Executive's employment hereunder, the Executive shall
be entitled to receive a base salary at the rate of $440,000 per annum,
payable
in accordance with the Company's payroll policy from time to time in effect.
2.2 The Company may, in its sole discretion, increase the
Executive's
per annum base salary.
3. BONUSES
During the Executive's employment hereunder, the Executive shall be
eligible to receive bonuses on the terms specified in any bonus plan
applicable
to executives of the Company.
4. TERMINATION
The employment of the Executive hereunder may be terminated by the
Company by fifteen (15) days' written notice given at any time, with or
without
Cause. As used herein, the term "Cause" shall be limited to (a) action by the
Executive involving willful malfeasance, (b) the Executive's unreasonable
neglect or refusal to perform the executive duties assigned to the Executive
under this Agreement, (c) the Executive being convicted of a felony, or (d)
the
Executive engaging in any activity that is directly or indirectly in
competition with the Company or any affiliate or in any activity that is
inimical to the best interests of the Company or any affiliate; provided that
the determination of Cause shall be made by the Company's Board of Directors.
If the Company terminates the Executive's employment for Cause, all the
<PAGE>
<PAGE> 2 -2-
Company's obligations shall thereupon cease and terminate. In the event that
the Executive's employment is terminated by the
Company other than for Cause, the Executive (or in the event of the
Executive's
death, the Executive's estate or designated beneficiary, but only as to (i)
below) shall be entitled to continue to receive, for the duration of the
Employment Term, in lieu of any other compensation and benefits provided for
herein, (i) an amount, payable monthly, equal to the Executive's then current
monthly base salary, plus an amount payable annually under the Company's
Corporate Annual Performance Plan (CAPP) and Long-Term Performance Plan (LTPP)
that averages performance over the three performance periods immediately
preceding the annual payment, in accordance with the terms thereof in effect
from time to time and (ii) at the Company's expense, life insurance and
medical, dental and disability benefits at least comparable to those provided
by the Company to the Executive on the date of termination of employment. In
addition, the Company shall provide the Executive with an additional benefit
equal to the difference between (x) and (y), where (x) is the amount of
benefit
that the Executive would have received from the Company's pension plan (the
"Plan") if the Executive had continued to participate in the Plan until the
end
of the Employment Term, and (y) the amount of benefit that the Executive shall
actually receive from the Plan. Any additional pension benefit to which the
Executive may be entitled shall be payable at the same time and in the same
manner as permitted under the terms of the Plan. The additional benefit is not
subject to sale, transfer, or assignment by the Executive. All payments of the
additional benefit shall be payable from the general assets of the Company.
Notwithstanding any other provision, the right of the Executive to any
benefits provided in this Agreement shall cease if the Board of Directors of
the Company shall determine that the Executive either before or after
termination of employment has engaged in any activity that is directly or
indirectly in competition with any activity of the Company or any affiliate,
unless waived by the Board of Directors of the Company, or has engaged in any
activity that is inimical to the best interests of the Company or any
affiliate.
5. PERMANENT DISABILITY OR DEATH
In the event of the Executive's permanent disability as defined in the
long-term disability plan applicable to employees of the Company on the date
hereof ("Permanent Disability") while employed hereunder during the Employment
Term, the Executive shall continue to receive compensation equal to the
Executive's then current base salary plus the bonus referred to in Section
4(i)
for a period of six months after the determination of Permanent Disability or
until the end of the Employment Term, whichever shall last occur, less any
amounts received through any disability or salary continuation plan provided
pursuant to Section 7 hereof. In the event of the Executive's death while
employed hereunder during the Employment Term, the Executive's estate or
designated beneficiaries shall continue to receive compensation equal to the
Executive's then current base salary plus the bonus referred to in Section
4(i)
until the end of the Employment Term or one year from death, whichever is
later. In the event of the Executive's Permanent Disability or death as
specified in this Section 5, the employment of the Executive and all
obligations of the Company hereunder (other than the obligation (i) for the
compensation specified in this Section 5, and (ii) to pay amounts for which
the
Company is responsible under applicable benefit plans, policies and practices
in the event of death or Permanent Disability) shall terminate.
6. EXPENSES
During the Executive's employment hereunder, the Executive is
authorized
to incur reasonable expenses for promoting the business of the Company,
<PAGE>
<PAGE> 3 -3-
including expenses for travel and similar items, in accordance with the
Company's policy as in effect from time to time. The Company will reimburse
the
Executive for all such reasonable expenses in accordance with Company policy
upon presentation by the Executive from time to time of an itemized account of
such expenditure.
7. EXECUTIVE BENEFITS
7.1 During the Executive's employment hereunder, the Executive shall
be included in any and all plans providing benefits for (a) the Company's
employees generally and (b) the Company's executives of comparable status. In
furtherance and not in limitation of the foregoing, throughout the Employment
Term, the Company shall provide to the Executive life insurance, medical,
dental, disability and other employee welfare benefits and defined benefit
pension plan benefits which, on an overall basis, shall be no less favorable
to
the Executive than those in effect for employees of the Company from time to
time.
7.2 During the Executive's employment hereunder, the Executive shall
be a participant, to the extent eligible thereunder, in all incentive, profit
sharing, bonus, stock option, or other similar or comparable plans applicable
to Company executives of a similar class and station, in accordance with the
terms thereof in effect from time to time.
8. RESTRICTIVE COVENANTS
8.1 The Executive agrees to execute and deliver from time to time
the
Company's standard confidentiality, conflict of interest and proprietary
information agreements.
8.2 The Executive and the Executive's agents will not, during the
12-month period following any termination of employment hereunder, or in
contemplation of termination of employment, induce, entice or solicit any
employee of the Company or its affiliates, to leave employment with the
Company
or its affiliates.
9. NOTICE
All notices or communications hereunder shall be in writing, addressed
as follows:
To the Company:
Associates Corporation of North America
250 East Carpenter Freeway
Irving, Texas 75062
Attention: General Counsel
To the Executive:
Keith W. Hughes
5500 Chatham Hill
Dallas, TX 75220
Any notice or communication shall be sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other
address as a party may designate in writing from time to time), and the actual
date of receipt, as shown by the receipt therefore, shall determine the time
at
<PAGE>
<PAGE> 4 -4-
which notice was given.
10. SEPARABILITY
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such provision shall be modified, to the
extent practical, consistent with the intent of the parties, in order to
render
it enforceable, but such invalidity or unenforceability shall not affect the
remaining provisions hereof, which shall remain in full force and effect.
11. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of
the Company. Neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Executive, and any
such
attempted assignment or hypothecation shall be void. This Agreement shall be
assignable by the Company in connection with any transfer of all or
substantially all of the Company's business or any transfer of a portion of
the
Company's business for which the Executive has responsibility; provided,
however, that the Company shall remain responsible for all the obligations of
the Company set forth herein.
12. ENTIRE AGREEMENT; AMENDMENT
This Agreement represents the entire agreement of the parties relating
to its subject matter and shall supersede any and all previous written or oral
employment agreements between the Company or any of its affiliates and the
Executive. This Agreement may be modified or amended only by a writing signed
by both parties hereto.
13. GOVERNING LAW
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
/S/ Keith W. Hughes
-------------------------
Keith W. Hughes
ASSOCIATES CORPORATION OF NORTH AMERICA
(A Texas Corporation)
By:/S/Chester D. Longenecker
Its: Executive Vice President<PAGE>
<PAGE>
<PAGE> 1 Exhibit 10.5(b)
AGREEMENT, dated as of the 16TH day of November,1995 (the "Agreement"),
between ASSOCIATES CORPORATION OF NORTH AMERICA (A Texas Corporation), a
corporation existing under laws of the State of Texas (the "Company"), and
Harold D. Marshall (the "Executive").
WITNESSETH
WHEREAS, the Company and the Executive desire to enter into an
agreement
relating to the employment of the Executive for a period of three years from
date of this Agreement,
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 Effective on the date of the Agreement, the Executive hereby
agrees to serve, upon the terms and conditions herein contained, as an
executive of the Company, a wholly-owned subsidiary of Ford Motor Company. The
Executive shall have such duties as the Board of Directors of the Company may
determine.
1.2 The term of employment under this Agreement shall commence on
the
date of this Agreement and, subject to the terms hereof, shall terminate on
the
day prior to the third anniversary of such date. The full three-year period is
referred to as the "Employment Term."
1.3 During the Executive's employment hereunder, the Executive shall
devote the Executive's best efforts and substantially all the Executive's
business time and services to the business and affairs of the Company.
2. SALARY
2.1 During the Executive's employment hereunder, the Executive shall
be entitled to receive a base salary at the rate of $347,000 per annum,
payable
in accordance with the Company's payroll policy from time to time in effect.
2.2 The Company may, in its sole discretion, increase the
Executive's
per annum base salary.
3. BONUSES
During the Executive's employment hereunder, the Executive shall be
eligible to receive bonuses on the terms specified in any bonus plan
applicable
to executives of the Company.
4. TERMINATION
The employment of the Executive hereunder may be terminated by the
Company by fifteen (15) days' written notice given at any time, with or
without
Cause. As used herein, the term "Cause" shall be limited to (a) action by the
Executive involving willful malfeasance, (b) the Executive's unreasonable
neglect or refusal to perform the executive duties assigned to the Executive
under this Agreement, (c) the Executive being convicted of a felony, or (d)
the
Executive engaging in any activity that is directly or indirectly in
competition with the Company or any affiliate or in any activity that is
inimical to the best interests of the Company or any affiliate; provided that
the determination of Cause shall be made by the Company's Board of Directors.
If the Company terminates the Executive's employment for Cause, all the
<PAGE>
<PAGE> 2 -2-
Company's obligations shall thereupon cease and terminate. In the event that
the Executive's employment is terminated by the
Company other than for Cause, the Executive (or in the event of the
Executive's
death, the Executive's estate or designated beneficiary, but only as to (i)
below) shall be entitled to continue to receive, for the duration of the
Employment Term, in lieu of any other compensation and benefits provided for
herein, (i) an amount, payable monthly, equal to the Executive's then current
monthly base salary, plus an amount payable annually under the Company's
Corporate Annual Performance Plan (CAPP) and Long-Term Performance Plan (LTPP)
that averages performance over the three performance periods immediately
preceding the annual payment, in accordance with the terms thereof in effect
from time to time and (ii) at the Company's expense, life insurance and
medical, dental and disability benefits at least comparable to those provided
by the Company to the Executive on the date of termination of employment. In
addition, the Company shall provide the Executive with an additional benefit
equal to the difference between (x) and (y), where (x) is the amount of
benefit
that the Executive would have received from the Company's pension plan (the
"Plan") if the Executive had continued to participate in the Plan until the
end
of the Employment Term, and (y) the amount of benefit that the Executive shall
actually receive from the Plan. Any additional pension benefit to which the
Executive may be entitled shall be payable at the same time and in the same
manner as permitted under the terms of the Plan. The additional benefit is not
subject to sale, transfer, or assignment by the Executive. All payments of the
additional benefit shall be payable from the general assets of the Company.
Notwithstanding any other provision, the right of the Executive to any
benefits provided in this Agreement shall cease if the Board of Directors of
the Company shall determine that the Executive either before or after
termination of employment has engaged in any activity that is directly or
indirectly in competition with any activity of the Company or any affiliate,
unless waived by the Board of Directors of the Company, or has engaged in any
activity that is inimical to the best interests of the Company or any
affiliate.
5. PERMANENT DISABILITY OR DEATH
In the event of the Executive's permanent disability as defined in the
long-term disability plan applicable to employees of the Company on the date
hereof ("Permanent Disability") while employed hereunder during the Employment
Term, the Executive shall continue to receive compensation equal to the
Executive's then current base salary plus the bonus referred to in Section
4(i)
for a period of six months after the determination of Permanent Disability or
until the end of the Employment Term, whichever shall last occur, less any
amounts received through any disability or salary continuation plan provided
pursuant to Section 7 hereof. In the event of the Executive's death while
employed hereunder during the Employment Term, the Executive's estate or
designated beneficiaries shall continue to receive compensation equal to the
Executive's then current base salary plus the bonus referred to in Section
4(i)
until the end of the Employment Term or one year from death, whichever is
later. In the event of the Executive's Permanent Disability or death as
specified in this Section 5, the employment of the Executive and all
obligations of the Company hereunder (other than the obligation (i) for the
compensation specified in this Section 5, and (ii) to pay amounts for which
the
Company is responsible under applicable benefit plans, policies and practices
in the event of death or Permanent Disability) shall terminate.
6. EXPENSES
During the Executive's employment hereunder, the Executive is
authorized
to incur reasonable expenses for promoting the business of the Company,
<PAGE>
<PAGE> 3 -3-
including expenses for travel and similar items, in accordance with the
Company's policy as in effect from time to time. The Company will reimburse
the
Executive for all such reasonable expenses in accordance with Company policy
upon presentation by the Executive from time to time of an itemized account of
such expenditure.
7. EXECUTIVE BENEFITS
7.1 During the Executive's employment hereunder, the Executive shall
be included in any and all plans providing benefits for (a) the Company's
employees generally and (b) the Company's executives of comparable status. In
furtherance and not in limitation of the foregoing, throughout the Employment
Term, the Company shall provide to the Executive life insurance, medical,
dental, disability and other employee welfare benefits and defined benefit
pension plan benefits which, on an overall basis, shall be no less favorable
to
the Executive than those in effect for employees of the Company from time to
time.
7.2 During the Executive's employment hereunder, the Executive shall
be a participant, to the extent eligible thereunder, in all incentive, profit
sharing, bonus, stock option, or other similar or comparable plans applicable
to Company executives of a similar class and station, in accordance with the
terms thereof in effect from time to time.
8. RESTRICTIVE COVENANTS
8.1 The Executive agrees to execute and deliver from time to time
the
Company's standard confidentiality, conflict of interest and proprietary
information agreements.
8.2 The Executive and the Executive's agents will not, during the
12-month period following any termination of employment hereunder, or in
contemplation of termination of employment, induce, entice or solicit any
employee of the Company or its affiliates, to leave employment with the
Company
or its affiliates.
9. NOTICE
All notices or communications hereunder shall be in writing, addressed
as follows:
To the Company:
Associates Corporation of North America
250 East Carpenter Freeway
Irving, Texas 75062
Attention: General Counsel
To the Executive:
Harold D. Marshall
3900 Euclid Avenue
Dallas, TX 75205
Any notice or communication shall be sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other
address as a party may designate in writing from time to time), and the actual
date of receipt, as shown by the receipt therefore, shall determine the time
at
<PAGE>
<PAGE> 4 -4-
which notice was given.
10. SEPARABILITY
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such provision shall be modified, to the
extent practical, consistent with the intent of the parties, in order to
render
it enforceable, but such invalidity or unenforceability shall not affect the
remaining provisions hereof, which shall remain in full force and effect.
11. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of
the Company. Neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Executive, and any
such
attempted assignment or hypothecation shall be void. This Agreement shall be
assignable by the Company in connection with any transfer of all or
substantially all of the Company's business or any transfer of a portion of
the
Company's business for which the Executive has responsibility; provided,
however, that the Company shall remain responsible for all the obligations of
the Company set forth herein.
12. ENTIRE AGREEMENT; AMENDMENT
This Agreement represents the entire agreement of the parties relating
to its subject matter and shall supersede any and all previous written or oral
employment agreements between the Company or any of its affiliates and the
Executive. This Agreement may be modified or amended only by a writing signed
by both parties hereto.
13. GOVERNING LAW
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
/S/ Harold D. Marshall
-------------------------
Harold D. Marshall
ASSOCIATES CORPORATION OF NORTH AMERICA
(A Texas Corporation)
By:/S/Keith W. Hughes
Its: Chairman of the Board
<PAGE>
<PAGE> 1 Exhibit 10.5(c)
AGREEMENT, dated as of the 13TH day of September,1995 (the
"Agreement"),
between ASSOCIATES CORPORATION OF NORTH AMERICA (A Texas Corporation), a
corporation existing under laws of the State of Texas (the "Company"), and
Joseph M. McQuillan (the "Executive").
WITNESSETH
WHEREAS, the Company and the Executive desire to enter into an
agreement
relating to the employment of the Executive for a period of three years from
date of this Agreement,
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 Effective on the date of the Agreement, the Executive hereby
agrees to serve, upon the terms and conditions herein contained, as an
executive of the Company, a wholly-owned subsidiary of Ford Motor Company. The
Executive shall have such duties as the Board of Directors of the Company may
determine.
1.2 The term of employment under this Agreement shall commence on
the
date of this Agreement and, subject to the terms hereof, shall terminate on
the
day prior to the third anniversary of such date. The full three-year period is
referred to as the "Employment Term."
1.3 During the Executive's employment hereunder, the Executive shall
devote the Executive's best efforts and substantially all the Executive's
business time and services to the business and affairs of the Company.
2. SALARY
2.1 During the Executive's employment hereunder, the Executive shall
be entitled to receive a base salary at the rate of $320,000 per annum,
payable
in accordance with the Company's payroll policy from time to time in effect.
2.2 The Company may, in its sole discretion, increase the
Executive's
per annum base salary.
3. BONUSES
During the Executive's employment hereunder, the Executive shall be
eligible to receive bonuses on the terms specified in any bonus plan
applicable
to executives of the Company.
4. TERMINATION
The employment of the Executive hereunder may be terminated by the
Company by fifteen (15) days' written notice given at any time, with or
without
Cause. As used herein, the term "Cause" shall be limited to (a) action by the
Executive involving willful malfeasance, (b) the Executive's unreasonable
neglect or refusal to perform the executive duties assigned to the Executive
under this Agreement, (c) the Executive being convicted of a felony, or (d)
the
Executive engaging in any activity that is directly or indirectly in
competition with the Company or any affiliate or in any activity that is
inimical to the best interests of the Company or any affiliate; provided that
the determination of Cause shall be made by the Company's Board of Directors.
If the Company terminates the Executive's employment for Cause, all the
<PAGE>
<PAGE> 2 2
Company's obligations shall thereupon cease and terminate. In the event that
the Executive's employment is terminated by the
Company other than for Cause, the Executive (or in the event of the
Executive's
death, the Executive's estate or designated beneficiary, but only as to (i)
below) shall be entitled to continue to receive, for the duration of the
Employment Term, in lieu of any other compensation and benefits provided for
herein, (i) an amount, payable monthly, equal to the Executive's then current
monthly base salary, plus an amount payable annually under the Company's
Corporate Annual Performance Plan (CAPP) and Long-Term Performance Plan (LTPP)
that averages performance over the three performance periods immediately
preceding the annual payment, in accordance with the terms thereof in effect
from time to time and (ii) at the Company's expense, life insurance and
medical, dental and disability benefits at least comparable to those provided
by the Company to the Executive on the date of termination of employment. In
addition, the Company shall provide the Executive with an additional benefit
equal to the difference between (x) and (y), where (x) is the amount of
benefit
that the Executive would have received from the Company's pension plan (the
"Plan") if the Executive had continued to participate in the Plan until the
end
of the Employment Term, and (y) the amount of benefit that the Executive shall
actually receive from the Plan. Any additional pension benefit to which the
Executive may be entitled shall be payable at the same time and in the same
manner as permitted under the terms of the Plan. The additional benefit is not
subject to sale, transfer, or assignment by the Executive. All payments of the
additional benefit shall be payable from the general assets of the Company.
Notwithstanding any other provision, the right of the Executive to any
benefits provided in this Agreement shall cease if the Board of Directors of
the Company shall determine that the Executive either before or after
termination of employment has engaged in any activity that is directly or
indirectly in competition with any activity of the Company or any affiliate,
unless waived by the Board of Directors of the Company, or has engaged in any
activity that is inimical to the best interests of the Company or any
affiliate.
5. PERMANENT DISABILITY OR DEATH
In the event of the Executive's permanent disability as defined in the
long-term disability plan applicable to employees of the Company on the date
hereof ("Permanent Disability") while employed hereunder during the Employment
Term, the Executive shall continue to receive compensation equal to the
Executive's then current base salary plus the bonus referred to in Section
4(i)
for a period of six months after the determination of Permanent Disability or
until the end of the Employment Term, whichever shall last occur, less any
amounts received through any disability or salary continuation plan provided
pursuant to Section 7 hereof. In the event of the Executive's death while
employed hereunder during the Employment Term, the Executive's estate or
designated beneficiaries shall continue to receive compensation equal to the
Executive's then current base salary plus the bonus referred to in Section
4(i)
until the end of the Employment Term or one year from death, whichever is
later. In the event of the Executive's Permanent Disability or death as
specified in this Section 5, the employment of the Executive and all
obligations of the Company hereunder (other than the obligation (i) for the
compensation specified in this Section 5, and (ii) to pay amounts for which
the
Company is responsible under applicable benefit plans, policies and practices
in the event of death or Permanent Disability) shall terminate.
6. EXPENSES
During the Executive's employment hereunder, the Executive is
authorized
<PAGE>
<PAGE> 3 -3-
to incur reasonable expenses for promoting the business of the Company,
including expenses for travel and similar items, in accordance with the
Company's policy as in effect from time to time. The Company will reimburse
the
Executive for all such reasonable expenses in accordance with Company policy
upon presentation by the Executive from time to time of an itemized account of
such expenditure.
7. EXECUTIVE BENEFITS
7.1 During the Executive's employment hereunder, the Executive shall
be included in any and all plans providing benefits for (a) the Company's
employees generally and (b) the Company's executives of comparable status. In
furtherance and not in limitation of the foregoing, throughout the Employment
Term, the Company shall provide to the Executive life insurance, medical,
dental, disability and other employee welfare benefits and defined benefit
pension plan benefits which, on an overall basis, shall be no less favorable
to
the Executive than those in effect for employees of the Company from time to
time.
7.2 During the Executive's employment hereunder, the Executive shall
be a participant, to the extent eligible thereunder, in all incentive, profit
sharing, bonus, stock option, or other similar or comparable plans applicable
to Company executives of a similar class and station, in accordance with the
terms thereof in effect from time to time.
8. RESTRICTIVE COVENANTS
8.1 The Executive agrees to execute and deliver from time to time
the
Company's standard confidentiality, conflict of interest and proprietary
information agreements.
8.2 The Executive and the Executive's agents will not, during the
12-month period following any termination of employment hereunder, or in
contemplation of termination of employment, induce, entice or solicit any
employee of the Company or its affiliates, to leave employment with the
Company
or its affiliates.
9. NOTICE
All notices or communications hereunder shall be in writing, addressed
as follows:
To the Company:
Associates Corporation of North America
250 East Carpenter Freeway
Irving, Texas 75062
Attention: General Counsel
To the Executive:
Joseph M. McQuillan
4417 Windsor Ridge Drive
Irving, TX 75038
Any notice or communication shall be sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other
address as a party may designate in writing from time to time), and the actual
date of receipt, as shown by the receipt therefore, shall determine the time
at
<PAGE>
<PAGE> 4 -4-
which notice was given.
10. SEPARABILITY
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such provision shall be modified, to the
extent practical, consistent with the intent of the parties, in order to
render
it enforceable, but such invalidity or unenforceability shall not affect the
remaining provisions hereof, which shall remain in full force and effect.
11. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of
the Company. Neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Executive, and any
such
attempted assignment or hypothecation shall be void. This Agreement shall be
assignable by the Company in connection with any transfer of all or
substantially all of the Company's business or any transfer of a portion of
the
Company's business for which the Executive has responsibility; provided,
however, that the Company shall remain responsible for all the obligations of
the Company set forth herein.
12. ENTIRE AGREEMENT; AMENDMENT
This Agreement represents the entire agreement of the parties relating
to its subject matter and shall supersede any and all previous written or oral
employment agreements between the Company or any of its affiliates and the
Executive. This Agreement may be modified or amended only by a writing signed
by both parties hereto.
13. GOVERNING LAW
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
/S/ JOSEPH M. MCQUILLAN
-------------------------
JOSEPH M. MCQUILLAN
ASSOCIATES CORPORATION OF NORTH AMERICA
(A Texas Corporation)
By:/S/Keith W. Hughes
Its: Chairman of the Board
<PAGE>
<PAGE> 1 Exhibit 10.5(d)
AGREEMENT, dated as of the 13TH day of September,1995 (the
"Agreement"),
between ASSOCIATES CORPORATION OF NORTH AMERICA (A Texas Corporation), a
corporation existing under laws of the State of Texas (the "Company"), and
Chester D. Longenecker (the "Executive").
WITNESSETH
WHEREAS, the Company and the Executive desire to enter into an
agreement
relating to the employment of the Executive for a period of three years from
date of this Agreement,
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 Effective on the date of the Agreement, the Executive hereby
agrees to serve, upon the terms and conditions herein contained, as an
executive of the Company, a wholly-owned subsidiary of Ford Motor Company. The
Executive shall have such duties as the Board of Directors of the Company may
determine.
1.2 The term of employment under this Agreement shall commence on
the
date of this Agreement and, subject to the terms hereof, shall terminate on
the
day prior to the third anniversary of such date. The full three-year period is
referred to as the "Employment Term."
1.3 During the Executive's employment hereunder, the Executive shall
devote the Executive's best efforts and substantially all the Executive's
business time and services to the business and affairs of the Company.
2. SALARY
2.1 During the Executive's employment hereunder, the Executive shall
be entitled to receive a base salary at the rate of $219,000 per annum,
payable
in accordance with the Company's payroll policy from time to time in effect.
2.2 The Company may, in its sole discretion, increase the
Executive's
per annum base salary.
3. BONUSES
During the Executive's employment hereunder, the Executive shall be
eligible to receive bonuses on the terms specified in any bonus plan
applicable
to executives of the Company.
4. TERMINATION
The employment of the Executive hereunder may be terminated by the
Company by fifteen (15) days' written notice given at any time, with or
without
Cause. As used herein, the term "Cause" shall be limited to (a) action by the
Executive involving willful malfeasance, (b) the Executive's unreasonable
neglect or refusal to perform the executive duties assigned to the Executive
under this Agreement, (c) the Executive being convicted of a felony, or (d)
the
Executive engaging in any activity that is directly or indirectly in
competition with the Company or any affiliate or in any activity that is
inimical to the best interests of the Company or any affiliate; provided that
the determination of Cause shall be made by the Company's Board of Directors.
If the Company terminates the Executive's employment for Cause, all the
<PAGE>
<PAGE> 2 -2-
Company's obligations shall thereupon cease and terminate. In the event that
the Executive's employment is terminated by the
Company other than for Cause, the Executive (or in the event of the
Executive's
death, the Executive's estate or designated beneficiary, but only as to (i)
below) shall be entitled to continue to receive, for the duration of the
Employment Term, in lieu of any other compensation and benefits provided for
herein, (i) an amount, payable monthly, equal to the Executive's then current
monthly base salary, plus an amount payable annually under the Company's
Corporate Annual Performance Plan (CAPP) and Long-Term Performance Plan (LTPP)
that averages performance over the three performance periods immediately
preceding the annual payment, in accordance with the terms thereof in effect
from time to time and (ii) at the Company's expense, life insurance and
medical, dental and disability benefits at least comparable to those provided
by the Company to the Executive on the date of termination of employment. In
addition, the Company shall provide the Executive with an additional benefit
equal to the difference between (x) and (y), where (x) is the amount of
benefit
that the Executive would have received from the Company's pension plan (the
"Plan") if the Executive had continued to participate in the Plan until the
end
of the Employment Term, and (y) the amount of benefit that the Executive shall
actually receive from the Plan. Any additional pension benefit to which the
Executive may be entitled shall be payable at the same time and in the same
manner as permitted under the terms of the Plan. The additional benefit is not
subject to sale, transfer, or assignment by the Executive. All payments of the
additional benefit shall be payable from the general assets of the Company.
Notwithstanding any other provision, the right of the Executive to any
benefits provided in this Agreement shall cease if the Board of Directors of
the Company shall determine that the Executive either before or after
termination of employment has engaged in any activity that is directly or
indirectly in competition with any activity of the Company or any affiliate,
unless waived by the Board of Directors of the Company, or has engaged in any
activity that is inimical to the best interests of the Company or any
affiliate.
5. PERMANENT DISABILITY OR DEATH
In the event of the Executive's permanent disability as defined in the
long-term disability plan applicable to employees of the Company on the date
hereof ("Permanent Disability") while employed hereunder during the Employment
Term, the Executive shall continue to receive compensation equal to the
Executive's then current base salary plus the bonus referred to in Section
4(i)
for a period of six months after the determination of Permanent Disability or
until the end of the Employment Term, whichever shall last occur, less any
amounts received through any disability or salary continuation plan provided
pursuant to Section 7 hereof. In the event of the Executive's death while
employed hereunder during the Employment Term, the Executive's estate or
designated beneficiaries shall continue to receive compensation equal to the
Executive's then current base salary plus the bonus referred to in Section
4(i)
until the end of the Employment Term or one year from death, whichever is
later. In the event of the Executive's Permanent Disability or death as
specified in this Section 5, the employment of the Executive and all
obligations of the Company hereunder (other than the obligation (i) for the
compensation specified in this Section 5, and (ii) to pay amounts for which
the
Company is responsible under applicable benefit plans, policies and practices
in the event of death or Permanent Disability) shall terminate.
6. EXPENSES
During the Executive's employment hereunder, the Executive is
authorized
to incur reasonable expenses for promoting the business of the Company,
<PAGE>
<PAGE> 3 -3-
including expenses for travel and similar items, in accordance with the
Company's policy as in effect from time to time. The Company will reimburse
the
Executive for all such reasonable expenses in accordance with Company policy
upon presentation by the Executive from time to time of an itemized account of
such expenditure.
7. EXECUTIVE BENEFITS
7.1 During the Executive's employment hereunder, the Executive shall
be included in any and all plans providing benefits for (a) the Company's
employees generally and (b) the Company's executives of comparable status. In
furtherance and not in limitation of the foregoing, throughout the Employment
Term, the Company shall provide to the Executive life insurance, medical,
dental, disability and other employee welfare benefits and defined benefit
pension plan benefits which, on an overall basis, shall be no less favorable
to
the Executive than those in effect for employees of the Company from time to
time.
7.2 During the Executive's employment hereunder, the Executive shall
be a participant, to the extent eligible thereunder, in all incentive, profit
sharing, bonus, stock option, or other similar or comparable plans applicable
to Company executives of a similar class and station, in accordance with the
terms thereof in effect from time to time.
8. RESTRICTIVE COVENANTS
8.1 The Executive agrees to execute and deliver from time to time
the
Company's standard confidentiality, conflict of interest and proprietary
information agreements.
8.2 The Executive and the Executive's agents will not, during the
12-month period following any termination of employment hereunder, or in
contemplation of termination of employment, induce, entice or solicit any
employee of the Company or its affiliates, to leave employment with the
Company
or its affiliates.
9. NOTICE
All notices or communications hereunder shall be in writing, addressed
as follows:
To the Company:
Associates Corporation of North America
250 East Carpenter Freeway
Irving, Texas 75062
Attention: General Counsel
To the Executive:
Chester D. Longenecker
1160 Taylor Street
Southlake, TX 76092
Any notice or communication shall be sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other
address as a party may designate in writing from time to time), and the actual
date of receipt, as shown by the receipt therefore, shall determine the time
at
<PAGE>
<PAGE> 4 -4-
which notice was given.
10. SEPARABILITY
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such provision shall be modified, to the
extent practical, consistent with the intent of the parties, in order to
render
it enforceable, but such invalidity or unenforceability shall not affect the
remaining provisions hereof, which shall remain in full force and effect.
11. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of
the Company. Neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Executive, and any
such
attempted assignment or hypothecation shall be void. This Agreement shall be
assignable by the Company in connection with any transfer of all or
substantially all of the Company's business or any transfer of a portion of
the
Company's business for which the Executive has responsibility; provided,
however, that the Company shall remain responsible for all the obligations of
the Company set forth herein.
12. ENTIRE AGREEMENT; AMENDMENT
This Agreement represents the entire agreement of the parties relating
to its subject matter and shall supersede any and all previous written or oral
employment agreements between the Company or any of its affiliates and the
Executive. This Agreement may be modified or amended only by a writing signed
by both parties hereto.
13. GOVERNING LAW
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
/S/ CHESTER D. LONGENECKER
-------------------------
CHESTER D. LONGENECKER
ASSOCIATES CORPORATION OF NORTH AMERICA
(A Texas Corporation)
By:/S/Keith W. Hughes
Its: Chairman of the Board
<PAGE>
<PAGE>1 EXHIBIT 10.7
ASSOCIATES FIRST CAPITAL CORPORATION
EQUITY DEFERRAL PLAN
Effective January 1, 1996
<PAGE>
<PAGE> 2
Associates First Capital Corporation
EQUITY DEFERRAL PLAN
1. PURPOSE
The purpose of the Plan is to link the interests of Plan
Participants with the stockholders of the Company by
crediting amounts required to be deferred under the
Company's PSAR Plan to Accounts established under this Plan
and treating the Accounts of such Participants as if they
were invested in shares of Class A Common Stock from the
date of the IBO to the date Accounts are paid in full or
this Plan is terminated.
2. DEFINITIONS
(a) "Account" means the unfunded bookkeeping record
maintained by the Company reflecting a Participant's
Deferred Amount, adjusted for earnings, gains,
accretions, losses and all other adjustments provided
for in this Plan.
(b) "Account Balance" means, as of any specified date, the
total value of the Participant's Account.
(c) "Board" means the Board of Directors of the Company.
(d) "Class A Common Stock" means the Class A Common Stock
of the Company.
(e) "Change in Control" of the Company shall be deemed to
have occurred (as of a particular day, as specified by
the Board) upon the occurrence of any event described
in this Section 2(e) as constituting a Change in
Control.
A Change in Control will be deemed to have occurred as
of the first day any one (1) or more of the following
have occurred.
(i) Any merger, consolidation or similar combination
with or involving the Company, as of the date of
the conclusion of such event, other than a merger,
consolidation or similar combination of the
Company with Ford or any of its affiliates.
(ii) Any transaction or series of transactions that
results in the sale or divestiture of all or
substantially all of the Company's assets, as of
the conclusion of such transaction or series of
transactions.
(iii) Any capital reorganization, transaction or
series of transactions that results in Ford
and its affiliates owning common stock of the
Company having less than 50% of the combined
voting power of the outstanding capital <PAGE>
<PAGE> 3
stock of the Company, as of the date of the
conclusion of such reorganization,
transaction or series of transactions.
(iv) The successful completion of a public offering, or
distribution to the public by dividend or spinoff,
that results in Ford and its affiliates owning
Common Stock of the Company having less than 50%
of the combined voting power of the outstanding
capital stock of the Company.
(f) "Closing Date" means the first date on which the
Company issues its Class A Common Stock pursuant to
the IBO.
(g) "Committee" means the Compensation Committee of the
Board or such other Committee appointed by the Board to
administer the Plan.
(h) "Company" means Associates First Capital Corporation, a
Delaware corporation.
(i) "Deferred Amount" means the amount credited to an
Account established under this Plan for the Participant
under the terms of the PSAR Plan and any accrued
earnings or losses.
(j) "Disability" has the meaning ascribed to such term in a
Participant's governing long-term disability plan
provided by the Company.
(k) "Effective Date" means January 1, 1996, which is the
effective date of this Plan.
(l) "Employee" means any person (including an officer)
actively employed by the Company or an affiliate of the
Company on a full-time, salaried basis.
(m) "IBO" means the Company's initial public offering of
its Class A Common Stock occurring during 1996.
(n) "Participant" means, individually, a participant of the
PSAR Plan who was, pursuant the terms of the PSAR Plan,
required to defer to this Plan one-half of the amount
to be cashed out for such person's PSAR Shares granted
in 1995. A list of such Participants is attached
hereto as Exhibit A.
(o) "Plan" means the Associates First Capital Corporation
Equity Deferral Plan, as amended.
(p) "PSAR" means Phantom Stock Appreciation Right.
(q) "PSAR Shares " means PSAR Shares granted under the
terms of the PSAR Plan.<PAGE>
<PAGE> 4
(r) "PSAR Plan" means the Associates First Capital
Corporation Phantom Stock Appreciation Right Plan, as
amended.
(s) "Retirement" has the meaning ascribed to such term in
the Company's Pension Plan as it exists from time to
time.
3. ADMINISTRATION
The Plan shall be administered by the Committee, which shall
have full authority and discretion to interpret the Plan, to
establish regulations and procedures relating to the Plan,
and to make all other determinations and take all other
actions necessary or appropriate for the proper
administration of the Plan. The Committee's interpretation
of the Plan, and all actions taken within the scope of its
authority, shall be final and binding on the Company, its
stockholders, Participants, Employees, former Employees and
their beneficiaries in the absence of manifest error.
4. ELIGIBILITY AND PARTICIPATION
(a) Mandatory Deferral of PSAR Plan Amounts to This Plan.
The terms of this Plan shall apply with respect to
deferred amounts from the PSAR Plan attributable to
Participants. If Closing Date does not occur by
December 31, 1996, Accounts will be paid out as soon as
practicable after December 31, 1996, with interest as
described in Section 4(c).
(b) Crediting of Deferred Amounts to Participants'
Accounts.
Each Participant's Deferred Amount will be credited, as
of the date such Amount would otherwise be distributed
to each Participant under the terms of the PSAR Plan,
to an Account established under this Plan for each
Participant. Each Participant's Account will be
adjusted for earnings, gains, accretions and losses as
provided in Sections 4(c) and 4(d) hereof until the
date the Participant's Account Balance is cashed out
pursuant to Sections 4(e), 4(f) or 7(a) hereof.
(c) Crediting of Interest to the Closing Date of the IBO.
Each Participant's Account will be credited with
interest at the "prime rate" of interest in effect from
time to time, as determined by the Committee, during
the period from the date the Participant's Deferred
Amount is credited to the Participant's Account to the
Closing Date or the termination of employment of the
Participant prior to such Closing Date for any reason.
(d) Deemed Investment of Accounts in Class A Common Stock
and Value Determination.
<PAGE>
<PAGE> 5
(i) During the period commencing on the Closing Date
and ending on the date a Participant's Account
Balance is distributed in full, as determined
under Sections 4(e), 4(f) or 7(a) hereof, each
Participant's Account shall be deemed to be
invested in shares of Class A Common Stock.
(ii) As of the Closing Date each Participant's Account
shall be deemed to be invested in the number of
shares of Class A Common Stock determined by
dividing (A) the Participant's Account Balance as
of the Closing Date, by (B) the offering price of
one share of Class A Common Stock under the IBO.
Whole and fractional phantom shares of Class A
Common Stock shall be credited to the
Participant's Account.
(iii) The value of dividends paid and other
distributions made with respect to Class A
Common Stock shall be credited to a
Participant's Account on the payment date for
such dividends or distributions based on the
number of whole and fractional phantom shares
of Class A Common Stock credited to the
Participant's Account as of the record date
for the dividend or other distribution. Cash
dividend equivalents shall be deemed to be
immediately reinvested in additional phantom
shares of Class A Common Stock based on the
closing price of Class A Common Stock sold
regular way on the principal stock exchange
on which Class A Common Stock is traded on
the day that such dividend or distribution is
paid or if such day is not a trading day, the
first trading day immediately preceding such
dividend or distribution payment date. Stock
dividends, stock distributions of any class
of stock other than Class A Common Stock,
property dividends or property distributions
shall be valued by the Committee as of the
payment date thereof and be deemed
immediately reinvested in additional shares
of Class A Common Stock based on the closing
price of Class A Common Stock sold regular
way on the principal stock exchange on which
Class A Common Stock is traded on the day
that such dividend or distribution is paid,
or if such day is not a trading day, the
first trading day immediately preceding such
dividend or distribution payment date.
(iv) The value of a Participant's Account Balance as of
any date after the Closing Date shall be equal to
the number of shares of Class A Common Stock
credited to the Participant's Account as of such
date multiplied by the closing price of Class A
Common Stock sold regular way on the principal
stock exchange on which Class A Common Stock is
traded on the trading day immediately preceding
<PAGE>
<PAGE> 6
such valuation date.
(v) In the event of any change in capitalization of
the Company, such as a stock split, stock dividend
or combination of shares or a corporate
transaction, such as any merger, consolidation,
separation, including a spin-off, or other
distribution of stock or property of the Company,
any reorganization (whether or not such
reorganization comes within the definition of such
term in Code Section 368) or any partial or
complete liquidation of the Company, such
adjustment shall be made in the number of shares
of Class A Common Stock in which each Account is
deemed to be invested, as may be determined to be
appropriate and equitable by the Committee, in its
sole discretion, to prevent dilution or
enlargement of Account Balances which would
otherwise result from any such change in the
capitalization of the Company in the absence of an
adjustment.
(e) Payment of Account Balances.
Subject to Sections 4(f), 4(g), 5 and 7(a) hereof, the
Company must pay each Participant's Account in a lump
sum in cash equivalent to the value of the Account
Balance to such Participant on the fifth (5th)
anniversary of the Closing Date.
(f) Acceleration of Payment of Account Balances.
(x) The Company may distribute all or any portion of a
Participant's Account Balance at any time(s) prior
to the date specified in Section 4(e) hereof if
the Committee concludes, in its sole discretion,
that events such as changes in the federal tax
laws or applicable accounting principles or
practices have rendered continue deferral of such
amount undesirable either for the Company or the
Participant.
(y) The Company must distribute all of a Participant's
Account Balance at any time prior to the date
specified in Section 4(e) hereof under any of the
following circumstances:
(i) If the Company incurs a Change in Control and
the Participant's employment agreement with
the Company or a subsidiary that is or was in
effect on June 1, 1996, requires or would
have required distribution of the
Participant's Account Balance; or
(ii) If a Participant's employment with the
Company or a subsidiary is terminated for any
reason, including but not limited to death,
Disability and Retirement, prior to the
payment date described in Section 4(e)
hereof.
<PAGE>
<PAGE> 7
(g) Prohibition on Accelerated Payment of Account Balances.
In no event may payment of any portion of a
Participant's Account Balance be accelerated in any
manner other than as expressly provided herein.
5. DESIGNATION OF BENEFICIARY
A Participant may designate a beneficiary or beneficiaries
who, in the event of the Participant's death prior to full
payment of the Participant's Account Balance, shall receive
payment of the Participant's Account Balance due under the
Plan. Such designation shall be made by the Participant on
a form prescribed by the Committee. The Participant may, at
any time, change or revoke such designation. A beneficiary
designation, or revocation of a prior beneficiary
designation, will be effective only if it is signed by the
Participant and received by the Company. If the Participant
does not designate a beneficiary or the beneficiary dies
prior to receiving any payment of the Account Balance, the
Account Balance payable under the Plan shall be paid to the
Participant's estate. If the beneficiary dies after
receiving any payment of the Account Balance, any amounts
remaining to be paid shall be paid to the beneficiary's
estate.
6. AMENDMENTS
The Board may at any time and from time to time in its sole
discretion alter, amend, suspend or terminate this Plan in
whole or in part; provided, however, that no such amendment
which adversely affects a Participant's rights to or
interest in the Account Balance credited prior to the date
of the amendment shall be effective unless the Participant
shall have agreed thereto.
7. TERMINATION
(a) The Board may terminate this Plan in whole or in part
at any time in its sole discretion for any reason. In
the case of such a termination, notwithstanding any
other provisions of the Plan to the contrary, the
Company shall distribute the Account Balance valued as
of the date of termination in accordance with Section
4(d) hereof, to each Participant in a lump sum payment
of cash not later than sixty (60) days after the date
of termination.
(b) This Plan terminates when no Accounts are outstanding
under the Plan.
8. MISCELLANEOUS PROVISIONS
(a) Nothing in this Plan will interfere with or limit in
any way the right of the Company or its affiliates to
terminate any Participant's employment at any time for
any reason, nor confer upon any Participant any right
to continue in the employ of the Company or its
affiliates.
<PAGE>
<PAGE> 8
(b) A Participant's right and interest under the Plan may
not be assigned or transferred, except as provided in
Section 5 hereof, and any attempted assignment or
transfer shall be null and void and shall extinguish,
in the Committee's discretion, the Company's obligation
under the Plan to pay the portion of the Participant's
Account Balance subject to such attempted assignment or
transfer.
(c) The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund, or
to make any other segregation of assets, to assure
payment of the Account Balances.
9. WITHHOLDING AND PAYMENTS
The Company shall have the right to deduct from any amount
to be paid to any Participant or beneficiary hereunder any
taxes or other amounts required by law to be withheld.
10. GOVERNING LAW
To the extent not preempted by federal law, this Plan and
all agreements hereunder shall be construed in accordance
with the laws of the State of Texas.
<PAGE>
<PAGE> 1 EXHIBIT 10.8
Long-Term Equity Compensation Plan
Associates First Capital Corporation
April 1, 1996
<PAGE>
<PAGE> 2 Contents
Page
Article 1. Establishment, Objectives, and Duration 1
Article 2. Definitions 1
Article 3. Administration 4
Article 4. Shares Subject to the Plan and Maximum Awards5
Article 5. Eligibility and Participation 5
Article 6. Stock Options 6
Article 7. Stock Appreciation Rights 7
Article 8. Restricted Stock 9
Article 9. Performance Units and Performance Shares 10
Article 10. Performance Measures 12
Article 11. Beneficiary Designation 12
Article 12. Deferrals 13
Article 13. Rights of Employees 13
Article 14. Amendment, Modification, and Termination 13
Article 15. Withholding 14
Article 16. Successors 14
Article 17. Legal Construction 14<PAGE>
<PAGE> 3
Associates First Capital Corporation
Long-Term Equity Compensation Plan
Article 1. Establishment, Objectives, and Duration
1.1. Establishment of the Plan. Associates First Capital
Corporation, a Delaware corporation (hereinafter referred to as the
"Company"), hereby establishes an incentive compensation plan to be
known as the "Associates First Capital Corporation Long-Term Equity
Compensation Plan" (hereinafter referred to as the "Plan"), as set forth
in this document. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, Performance Shares and Performance Units.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of April 1, 1996 (the "Effective Date") and shall remain in
effect as provided in Section 1.3 hereof.
1.2. Objectives of the Plan. The objectives of the Plan are
to optimize the profitability and growth of the Company through
incentives which are consistent with the Company's goals and which link
the personal interests of Participants to those of the Company's
stockholders; to provide Participants with an incentive for excellence
in individual performance; and to promote teamwork among Participants.
The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of
Participants who make significant contributions to the Company's success
and to allow Participants to share in the success of the Company.
1.3. Duration of the Plan. The Plan shall commence on the
Effective Date, as described in Section 1.1 hereof, and shall remain in
effect, subject to the right of the Board of Directors to amend or
terminate the Plan at any time pursuant to Article 14 hereof, until all
Awards granted hereunder are satisfied by the issuance of Shares and/or
the payment of cash. However, in no event may an Award be granted under
the Plan on or after March 31, 2006.
Article 2. Definitions Whenever used in the Plan, the following terms
shall have the meanings set forth below, and when the meaning is
intended, the initial letter of the word shall be capitalized:
2.1. "Award" means, individually or collectively, a grant
under this Plan of Nonqualified Stock Options, Incentive Stock Options,
Stock Appreciation Rights, Restricted Stock, Performance Shares or
Performance Units. <PAGE>
<PAGE> 4
2.2. "Award Agreement" means an agreement entered into by the
Company and each Participant setting forth the terms and provisions
applicable to Awards granted under this Plan.
2.3. "Beneficial Owner" or "Beneficial Ownership" shall have
the meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
2.4. "Board" or "Board of Directors" means the Board of
Directors of the Company.
2.5. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
2.6. "Committee" means the Compensation Committee of the
Board, as specified in Article 3 herein, or such other Committee
appointed by the Board pursuant to Section 3.1 to administer the Plan
with respect to grants of Awards.
2.7. "Company" means Associates First Capital Corporation, a
Delaware corporation, including any and all Subsidiaries, and any
successor thereto as provided in Article 18 herein.
2.8. "Director" means any individual who is a member of the
Board of Directors of the Company.
2.9. "Disability" shall have the meaning ascribed to such
term in the Participant's governing long-term disability plan, or if no
such plan exists, at the discretion of the Committee.
2.10. "Effective Date" shall have the meaning ascribed to
such term in Section 1.1 hereof.
2.11. "Employee" means any full-time, active employee of the
Company. Directors who are not employed by the Company shall not be
considered Employees under this Plan.
2.12. "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor act thereto.
2.13. "Fair Market Value" shall be determined on the basis of
the closing sale price at which shares have been sold regular way on the
principal securities exchange on which the Shares are traded on the
relevant date or, if there is no sale on the relevant date, then on the
last previous day on which there was such a sale, provided that Fair
Market Value for any initial grants made under the Plan concurrent with
or contingent upon the consummation of the initial public offering price
of Shares in 1996 will be at a price equal to the initial public
offering price of Shares covered by such initial public offering.
<PAGE>
<PAGE> 5
2.14. "Freestanding SAR" means an SAR that is granted
independently of any Options, as described in Article 7 herein.
2.15. "Incentive Stock Option" or "ISO" means an option to
purchase Shares granted under Article 6 herein and which is designated
as an Incentive Stock Option and which is intended to meet the
requirements of Code Section 422.
2.16. "Insider" shall mean an individual who is, on the
relevant date, an officer, director or beneficial owner of ten percent
(10%) or more of any class of the Company's equity securities that is
registered pursuant to Section 12 of the Exchange Act, all as defined
under Section 16 of the Exchange Act.
2.17. "Named Executive Officer" means a Participant who, as
of the date of vesting and/or payout of an Award, as applicable, is one
of the group of "covered employees," as defined in the regulations
promulgated under Code Section 162(m), or any successor statute.
2.18. "Nonemployee Director" means an individual who is a
member of the Board of Directors of the Company but who is not an
Employee of the Company.
2.19. "Nonqualified Stock Option" or "NQSO" means an option
to purchase Shares granted under Article 6 herein and which is not
intended to meet the requirements of Code Section 422.
2.20. "Option" means an Incentive Stock Option or a
Nonqualified Stock Option, as described in Article 6 herein.
2.21. "Option Price" means the price at which a Share may be
purchased by a Participant pursuant to an Option.
2.22. "Participant" means an Employee who has outstanding an
Award granted under the Plan. The term "Participant" shall not include
Nonemployee Directors.
2.23. "Performance-Based Exception" means the
performance-based exception from the tax deductibility limitations of
Code Section 162(m).
2.24. "Performance Share" means an Award granted to a
Participant, as described in Article 9 herein.
2.25. "Performance Unit" means an Award granted to a
Participant, as described in Article 9 herein.
2.26. "Period of Restriction" means the period during which
the transfer of Shares of Restricted Stock is limited in some way (based
on the passage of time, the achievement of performance goals, or upon
the occurrence of other events as determined by the Committee,
<PAGE>
<PAGE> 6
at its discretion), and the Shares are subject to a substantial risk of
forfeiture, as provided in Article 8 herein.
2.27. "Person" shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, including a "group" as defined in Section 13(d) thereof.
2.28. "Restricted Stock" means an Award granted to a
Participant pursuant to Article 8 herein.
2.29. "Retirement" shall have the meaning ascribed to such
term in the Company's tax-qualified retirement plan.
2.30. "Shares" means the shares of Class A common stock of
the Company.
2.31. "Stock Appreciation Right" or "SAR" means an Award,
granted alone or in connection with a related Option, designated as an
SAR, pursuant to the terms of Article 7 herein.
2.32. "Subsidiary" means any corporation, partnership, joint
venture, or other entity in which the Company has a majority voting
interest (including all divisions, affiliates, and related entities),
provided that for ISOs "Subsidiary" has the meaning set forth in Code
Section 422.
2.33. "Tandem SAR" means an SAR that is granted in connection
with a related Option pursuant to Article 7 herein, the exercise of
which shall require forfeiture of the right to purchase a Share under
the related Option (and when a Share is purchased under the Option, the
Tandem SAR shall similarly be canceled).
Article 3. Administration
3.1. The Committee. The Plan shall be administered initially
by a committee appointed by the Board which shall be comprised of
persons who are outside directors pursuant to Section 162(m) of the
Code. After the initial public offering of Shares in 1996, the Plan
shall be administered by the Compensation Committee of the Board
consisting of not less than two (2) Directors who meet the
"disinterested administration" requirements of Rule 16b-3 under the
Exchange Act, or by any other Committee appointed by the Board, provided
the members of such Committee meet such requirements.
3.2. Authority of the Committee. Except as limited by law or
by the Certificate of Incorporation or Bylaws of the Company, and
subject to the provisions herein, the Committee shall have full power to
determine which Employees shall be granted Awards under the Plan;
determine the sizes and types of Awards; determine the terms and
conditions of Awards in a manner consistent with the Plan; construe and
interpret the Plan and any agreement or instrument entered into under
the Plan as they apply to
<PAGE>
<PAGE> 7
Employees; establish, amend, or waive rules and regulations for the Plan's
administration as they apply to Employees; and (subject to the provisions of
Article14 herein) amend the terms and conditions of any outstanding Award to
the extent such terms and conditions are within the discretion of the
Committee
as provided in the Plan. Further, the Committee shall make all other
determinations
which may be necessary or advisable for the administration of the Plan, as the
Plan applies to Employees. As permitted by law, the Committee may delegate its
authority as identified herein.
3.3. Decisions Binding. All determinations and decisions made
by the Committee pursuant to the provisions of the Plan and all related
orders and resolutions of the Board shall be final, conclusive and
binding on all persons, including the Company, its stockholders,
Employees, Participants, and their estates and beneficiaries.
Article 4. Shares Subject to the Plan and Maximum Awards
4.1. Number of Shares Available for Grants.
(a) Subject to adjustment as provided in Section
4.3 herein, the maximum number of Shares with respect
to which Awards may be granted to Participants under
the Plan shall be six percent (6%) of the Company's total
outstanding shares of all classes of common stock of the
Company as of the tenth (10th) business day following the
consummation of the 1996 initial public offering of its Class
A Common Stock. Shares issued under the Plan may be either
authorized but unissued shares, treasury shares or any
combination thereof.
(b) The maximum aggregate number of Shares that
may be granted to any oneindividual under the Plan in
any one calendar year as Stock Options, with or
without Tandem Stock Appreciation Rights, or stand
alone Stock Appreciation Rights, shall be four hundred
thousand (400,000).
4.2. Lapsed Awards. If any Award granted under this Plan is
canceled, terminates, expires, or lapses for any reason without the
issuance of Shares or payment in respect therefor (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or
the termination of a related Option upon exercise of the corresponding
Tandem SAR), any Shares subject to such Award again shall be available
for the grant of an Award under the Plan to the fullest extent permitted
under Rule 16b-3 of the Exchange Act and Sections 422 and 162(m) of the
Code.
4.3. Adjustments in Authorized Shares. In the event of any
change in corporate capitalization, such as a stock split, stock
dividend or combination of shares or a corporate transaction, such as
any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization
(whether or not such reorganization comes within the definition of such
term in Code Section 368) or any partial or complete liquidation of the
Company, such adjustment shall be made in the number and class of Shares
which may be delivered under Section 4.1, in the number and class of
and/or price of Shares subject to outstanding Awards granted under the
Plan, and in the Award limits set forth in subsections 4.1(a) and
4.1(b), as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any
Award shall always be a whole number.
<PAGE>
<PAGE> 8
Article 5. Eligibility and Participation
5.1. Eligibility. Persons eligible to participate in this Plan
include officers and certain key salaried Employees of the Company with
potential to contribute to the success of the Company or its
Subsidiaries, including Employees who are members of the Board.
5.2. Actual Participation. Subject to the provisions of the
Plan, the Committee may, from time to time, select from all eligible
Employees, those to whom Awards shall be granted and shall determine the
nature and amount of each Award.
Article 6. Stock Options
6.1. Grant of Options. Subject to the terms and provisions of
the Plan, Options may be granted to Employees in such number, and upon
such terms, and at any time and from time to time as shall be determined
by the Committee.
6.2. Award Agreement. Each Option grant shall be evidenced by
an Award Agreement that shall specify the Option Price, the duration of
the Option, the number of Shares to which the Option pertains, and such
other provisions as the Committee shall determine. The Award Agreement
also shall specify whether the Option is intended to be an ISO within
the meaning of Code Section 422, or an NQSO whose grant is intended not
to fall under the provisions of Code Section 422.
6.3. Option Price. The Option Price for each grant of an
Option under this Plan shall be at least equal to one hundred percent
(100%) of the Fair Market Value of a Share on the date the Option is
granted.
6.4. Duration of Options. Each Option granted to a
Participant shall expire at such time as the Committee shall determine
at the time of grant; provided, however, that no Option shall be
exercisable later than the tenth (10th) anniversary date of its grant.
6.5. Exercise of Options. Options granted under this Article
6 shall be exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance approve, which
need not be the same for each grant or for each Participant.
6.6. Payment. Options granted under this Article 6 shall be
exercised by the delivery of a written notice of exercise to the
Company, setting forth the number of Shares with respect to which the
Option is to be exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to
the Company in full either: (a) in cash or its equivalent, or (b) by
tendering previously acquired Shares <PAGE>
<PAGE> 9
having an aggregate Fair Market
Value at the time of exercise equal to the total Option Price (provided
that the Shares which are tendered must have been held by the
Participant for at least six (6) months prior to their tender to satisfy
the Option Price), or (c) by a combination of (a) and (b).
The Committee also may allow cashless exercise as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities
law restrictions, or by any other means which the Committee determines
to be consistent with the Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as
practicable after receipt of a written notification of exercise and full
payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based
upon the number of Shares purchased under the Option(s).
6.7. Restrictions on Share Transferability. The Committee may
impose such restrictions on the transfer of any Shares acquired pursuant
to the exercise of an Option granted under this Article 6 as it may deem
advisable, including, without limitation, restrictions under applicable
Federal securities laws, under the requirements of any stock exchange or
market upon which such Shares are then listed and/or traded, and under
any blue sky or state securities laws applicable to such Shares.
6.8. Termination of Employment. Each Participant's Option Award
Agreement shall set forth the extent to which the Participant shall have
the right to exercise the Option following termination of the
Participant's employment with the Company. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in
the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may
reflect distinctions based on the reasons for termination of employment.
6.9. Nontransferability of Options.
(a) Incentive Stock Options. No ISO granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws
of descent and distribution. Further, all ISOs granted to a
Participant under the Plan shall be exercisable during his or
her lifetime only by such Participant or the Participant's
legal guardian or representative.
(b) Nonqualified Stock Options. Except as otherwise
provided in a Participant's Award Agreement, no NQSO granted
under this Article 6 may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than
by will or by the laws of descent and distribution. Further,
except as otherwise provided in a Participant's Award
Agreement, all NQSOs granted to a Participant under this
Article 6 shall be exercisable during his or her lifetime only
by such Participant or the Participant's legal guardian or
representative.
<PAGE>
<PAGE> 10
Article 7. Stock Appreciation Rights
7.1. Grant of SARs. Subject to the terms and conditions of the
Plan, SARs may be granted to Employees at any time and from time to time
as shall be determined by the Committee. The Committee may grant
Freestanding SARs, Tandem SARs, or any combination of these forms of
SAR.
The Committee shall have complete discretion in determining the
number of SARs granted to each Participant (subject to Article 4 herein)
and, consistent with the provisions of the Plan, in determining the
terms and conditions pertaining to such SARs.
The grant price of a Freestanding SAR shall equal the Fair Market
Value of a Share on the date of grant of the SAR. The grant price of
Tandem SARs shall equal the Option Price of the related Option.
7.2. Exercise of Tandem SARs. Tandem SARs may be exercised for
all or part of the Shares subject to the related Option upon the
surrender of the right to exercise the equivalent portion of the related
Option. A Tandem SAR may be exercised only with respect to the Shares
for which its related Option is then exercisable.
Notwithstanding any other provision of this Plan to the contrary,
with respect to a Tandem SAR granted in connection with an ISO: (i) the
Tandem SAR will expire no later than the expiration of the underlying
ISO; (ii) the value of the payout with respect to the Tandem SAR may be
for no more than one hundred percent (100%) of the difference between
the Option Price of the underlying ISO and the Fair Market Value of the
Shares subject to the underlying ISO at the time the Tandem SAR is
exercised; and (iii) the Tandem SAR may be exercised only when the Fair
Market Value of the Shares subject to the ISO exceeds the Option Price
of the ISO.
7.3. Exercise of Freestanding SARs. Freestanding SARs may be
exercised upon whatever terms and conditions the Committee, in its sole
discretion, imposes upon them.
7.4. SAR Agreement. Each SAR grant shall be evidenced by an
Award Agreement that shall specify the grant price, the term of the SAR,
and such other provisions as the Committee shall determine.
7.5. Term of SARs. The term of an SAR granted under the Plan
shall be determined by the Committee, in its sole discretion; provided,
however, that such term shall not exceed ten (10) years.
7.6. Payment of SAR Amount. Upon exercise of an SAR, a
Participant shall be entitled to receive payment from the Company in an
amount determined by multiplying:
(a) The difference between the Fair Market Value of a
Share on the date of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is
exercised.
<PAGE>
<PAGE> 11
At the discretion of a Participant, the payment upon SAR exercise
may be in cash, in Shares of equivalent value, or in some combination
thereof, subject to the availability of Shares to the Company.
7.7. Rule 16b-3 Requirements. Notwithstanding any other
provision of the Plan, the Committee may impose such conditions on
exercise of an SAR (including, without limitation, the right of the
Committee to limit the time of exercise to specified periods) as may be
required to satisfy the requirements of any exemption from the liability
provisions of Section 16 of the Exchange Act (or any successor rule).
7.8. Termination of Employment. Each SAR Award Agreement shall
set forth the extent to which the Participant shall have the right to
exercise the SAR following termination of the Participant's employment
with the Company or a Subsidiary. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with a Participant, need not be uniform among all
SARs issued pursuant to the Plan, and may reflect distinctions based on
the reasons for termination of employment.
7.9. Nontransferability of SARs. Except as otherwise provided
in a Participant's Award Agreement, no SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participant's
Award Agreement, all SARs granted to a Participant under the Plan shall
be exercisable during his or her lifetime only by such Participant or
the Participant's legal guardian or representative.
Article 8. Restricted Stock
8.1. Grant of Restricted Stock. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to
time, may grant Shares of Restricted Stock to Employees in such amounts
as the Committee shall determine.
8.2. Restricted Stock Agreement. Each Restricted Stock grant
shall be evidenced by a Restricted Stock Award Agreement that shall
specify the Period(s) of Restriction, the number of Shares of Restricted
Stock granted, and such other provisions as the Committee shall
determine.
8.3. Transferability. Except as provided in this Article 8,
the Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction established by the
Committee and specified in the Restricted Stock Award Agreement, or upon
earlier satisfaction of any other conditions, as specified by the
Committee in its sole discretion and set forth in the Restricted Stock
Award Agreement. All rights with respect to the Restricted Stock granted
to a Participant under the Plan shall be available during his or her
lifetime only to such Participant.
<PAGE>
<PAGE> 12
8.4. Other Restrictions. Subject to Article 11 herein, the
Committee shall impose such other conditions and/or restrictions on any
Shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, a requirement that Participants
pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional, and/or individual), time-based restrictions
on vesting following the attainment of the performance goals, and/or
restrictions under applicable Federal or state securities laws.
The Company or its designee shall retain the certificates
representing Shares of Restricted Stock in the Company's possession
until such time as all conditions and/or restrictions applicable to such
Shares have been satisfied.
Except as otherwise provided in this Article 8, Shares of
Restricted Stock covered by each Restricted Stock grant made under the
Plan shall become freely transferable by the Participant after the last
day of the applicable Period of Restriction.
8.5. Voting Rights. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may
exercise full voting rights with respect to those Shares.
8.6. Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted
hereunder may be credited with regular cash dividends paid with respect
to the underlying Shares while they are so held. The Committee may apply
any restrictions to the dividends that the Committee deems appropriate.
Without limiting the generality of the preceding sentence, if the grant
or vesting of Restricted Shares granted to a Named Executive Officer is
designed to comply with the requirements of the Performance-Based
Exception, the Committee may apply any restrictions it deems appropriate
to the payment of dividends declared with respect to such Restricted
Shares, such that the dividends and/or the Restricted Shares maintain
eligibility for the Performance-Based Exception.
In the event that any dividend constitutes a "derivative security"
or an "equity security" pursuant to Rule 16(a) under the Exchange Act,
such dividend shall be subject to a vesting period equal to the
remaining vesting period of the Shares of Restricted Stock with respect
to which the dividend is paid.
8.7. Termination of Employment. Each Restricted Stock Award
Agreement shall set forth the extent to which the Participant shall have
the right to receive unvested Restricted Shares following termination of
the Participant's employment with the Company. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in
the Award Agreement entered into with each Participant, need not be
uniform among all Shares of Restricted Stock issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination
of employment; provided, however that, except in the cases of
terminations by the Company connected with a Change in Control (as
defined in the Award Agreement) and terminations by reason of death or
Disability, <PAGE>
<PAGE> 13
the vesting of Shares of Restricted Stock which qualify for
the Performance-Based Exception and which are held by Named Executive
Officers shall occur at the time they otherwise would have, but for the
employment termination.
Article 9. Performance Units and Performance Shares
9.1. Grant of Performance Units/Shares. Subject to the terms
of the Plan, Performance Units and/or Performance Shares may be granted
to Employees in such amounts and upon such terms, and at any time and
from time to time, as shall be determined by the Committee.
9.2. Value of Performance Units/Shares. Each Performance Unit
shall have an initial value that is established by the Committee at the
time of grant. Each Performance Share shall have an initial value equal
to the Fair Market Value of a Share on the date of grant. The Committee
shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of
Performance Units/Shares that will be paid out to the Participant. For
purposes of this Article 9, the time period during which the performance
goals must be met shall be called a "Performance Period."
9.3. Earning of Performance Units/Shares. Subject to the terms
of this Plan, after the applicable Performance Period has ended, the
holder of Performance Units/Shares shall be entitled to receive payout
on the number and value of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function
of the extent to which the corresponding performance goals have been
achieved.
9.4. Form and Timing of Payment of Performance Units/ Shares.
Payment of earned Performance Units/Shares shall be made in a single
lump sum as soon as practicable following the close of the applicable
Performance Period. Subject to the terms of this Plan, the Committee, in
its sole discretion, may pay earned Performance Units/Shares in the form
of cash or in Shares (or in a combination thereof) which have an
aggregate Fair Market Value equal to the value of the earned Performance
Units/Shares at the close on the last day of the applicable Performance
Period. Such Shares may be granted subject to any restrictions deemed
appropriate by the Committee.
At the discretion of the Committee, Participants may be entitled
to receive dividend equivalents payable in cash representing any
dividends declared with respect to Shares in connection with grants of
Performance Units and/or Performance Shares which have not yet been
distributed to Participants (such equivalents shall be subject to the
same accrual, forfeiture, and payout restrictions as apply to dividends
earned with respect to Shares of Restricted Stock, as set forth in
Section 8.6 herein).
9.5. Termination of Employment Due to Death, Disability, or
Retirement. Unless determined otherwise by the Committee and set forth
in the Participant's Award Agreement, in the event the employment of a
Participant is terminated by reason of death, Disability, or Retirement
during a Performance Period, the Participant shall receive a <PAGE>
<PAGE> 14
payout of the Performance Units/Shares which is prorated, as specified by
the
Committee in its discretion.
Payment of earned Performance Units/Shares shall be made at a time
specified by the Committee in its sole discretion and set forth in the
Participant's Award Agreement. Notwithstanding the foregoing, with
respect to Named Executive Officers who retire during a Performance
Period, payments shall be made at the same time as payments are made to
Participants who did not terminate employment during the applicable
Performance Period.
9.6. Termination of Employment for Other Reasons. In the event
that a Participant's employment terminates for any reason other than
those reasons set forth in Section 9.5 herein, all Performance
Units/Shares shall be forfeited by the Participant to the Company unless
determined otherwise by the Committee, as set forth in the Participant's
Award Agreement.
9.7. Nontransferability. Except as otherwise provided in a
Participant's Award Agreement, Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further,
except as otherwise provided in a Participant's Award Agreement, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's
legal representative.
Article 10. Performance Measures
Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set
forth in this Article 10, the attainment of which may determine the
degree of payout and/or vesting with respect to Awards to Named
Executive Officers which are designed to qualify for the
Performance-Based Exception, the performance measure(s) to be used for
purposes of such grants of Awards shall be chosen from among profits,
net income (either before or after taxes), share price, earnings per
share, total shareholder return, return on assets, return on equity,
operating income, return on capital or investments or economic value
added.
The Committee shall have the discretion to adjust the
determinations of the degree of attainment of the preestablished
performance goals; provided, however, that Awards which are designed to
qualify for the Performance-Based Exception, and which are made to or
held by Named Executive Officers, may not be adjusted upward (the
Committee shall retain the discretion to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing performance measures
without obtaining shareholder approval of such changes, the Committee
shall have sole discretion to make such changes without obtaining
shareholder approval. In addition, in the event that the Committee
determines that it is advisable to grant Awards which shall not qualify
for the Performance-Based Exception, the Committee may make such grants
without satisfying the requirements of Code Section 162(m).
<PAGE>
<PAGE> 15
Article 11. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case
of his or her death before he or she receives any or all of such
benefit. Each such designation shall revoke all prior designations by
the same Participant, shall be in a form prescribed by the Company, and
will be effective only when filed by the Participant in writing with the
Company during the Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall
be paid to the Participant's estate.
Article 12. Deferrals
The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares
that would otherwise be due to such Participant by virtue of the
exercise of an Option or SAR, the lapse or waiver of restrictions with
respect to Restricted Stock, or the satisfaction of any requirements or
goals with respect to Performance Units/Shares. If any such deferral
election is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals.
Article 13. Rights of Employees
13.1. Employment. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to
continue in the employ of the Company.
13.2. Participation. No Employee shall have the right to be
selected to receive an Award under this Plan, or, having been so
selected, to be selected to receive a future Award.
Article 14. Amendment, Modification, and Termination
14.1. Amendment, Modification, and Termination. Subject to
Section 14.3, the Board may at any time and from time to time, alter,
amend, suspend or terminate the Plan in whole or in part; provided,
however, that no amendment which requires shareholder approval in order
for the Plan to continue to comply with Rule 16b-3 under the Exchange
Act, including any successor to such Rule, shall be effective unless
such amendment shall be approved by the requisite vote of shareholders
of the Company entitled to vote thereon.
14.2. Adjustment of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. Subject to Section 14.3, the Committee
may make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4.3
hereof) affecting the Company or the financial statements of the Company
or of changes in applicable laws, regulations, or accounting principles,
whenever the <PAGE>
<PAGE> 16
Committee determines that such adjustments are appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan; provided that no
such adjustment shall be authorized to the extent that such authority
would be inconsistent with the Plan's meeting the requirements of
Section 162(m) of the Code, as from time to time amended.
14.3. Awards Previously Granted. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any
Award previously granted under the Plan, without the written consent of
the Participant holding such Award.
14.4. Compliance with Code Section 162(m). At all times when
Code Section 162(m) is applicable, all Awards granted under this Plan
shall comply with the requirements of Code Section 162(m); provided,
however, that in the event the Committee determines that such compliance
is not desired with respect to any Award or Awards available for grant
under the Plan, then compliance with Code Section 162(m) will not be
required. In addition, in the event that changes are made to Code
Section 162(m) to permit greater flexibility with respect to any Award
or Awards available under the Plan, the Committee may, subject to this
Article 14, make any adjustments it deems appropriate.
Article 15. Withholding
15.1. Tax Withholding. The Company shall have the power and
the right to deduct or withhold, or require a Participant to remit to
the Company, an amount sufficient to satisfy Federal, state, and local
taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of this Plan.
15.2. Share Withholding. With respect to withholding required
upon the exercise of Options or SARs, upon the lapse of restrictions on
Restricted Stock, or upon any other taxable event arising as a result of
Awards granted hereunder, Participants may elect, subject to the
approval of the Committee, to satisfy the withholding requirement, in
whole or in part, by having the Company withhold Shares having a Fair
Market Value on the date the tax is to be determined equal to the
statutory total tax (using the Federal Supplemental wage rate, and state
or local equivalent as well as any FICA or Medicare taxes) which could
be imposed on the transaction. All such elections shall be irrevocable,
made in writing, signed by the Participant, and shall be subject to any
restrictions or limitations that the Committee, in its sole discretion,
deems appropriate.
Article 16. Successors
All obligations of the Company under the Plan with respect to
Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all
or substantially all of the business and/or assets of the Company.
<PAGE>
<PAGE> 17
Article 17. Legal Construction
17.1. Gender and Number. Except where otherwise indicated by
the context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular shall
include the plural.
17.2. Severability. In the event any provision of the Plan
shall be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan, and the
Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.
17.3. Requirements of Law. The granting of Awards and the
issuance of Shares under the Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required.
17.4. Securities Law Compliance. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions or Rule 16b-3 or its successors under the 1934 Act. To the
extent any provision of the plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.
17.5. Governing Law. To the extent not preempted by Federal
law, the Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the state of Texas.
<PAGE>
EXHIBIT 12
ASSOCIATES FIRST CAPITAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Millions)
Three Months Ended
March 31
1996 1995
Fixed Charges (a)
Interest expense $580.5 $509.2
Implicit interest in rent 4.8 4.4
Total fixed charges $585.3 $513.6
Earnings (b)
Earnings before provision for income
taxes $316.8 $273.8
Fixed charges 585.3 513.6
Earnings, as defined $902.1 $787.4
Ratio of Earnings to Fixed Charges 1.54 1.53
(a) For purposes of such computation, the term "fixed charges" represents
interest expense and a portion of rentals representative of an implicit
interest factor for such rentals.
(b) For purposes of such computation, the term "earnings" represents earnings
before provision for income taxes, plus fixed charges.
<PAGE>
<TABLE> <S> <C>
<PAGE>
<PAGE>
<ARTICLE> 5
<LEGEND>
0 MEANS NOT APPLICABLE OR NOT SEPARATELY DISCLOSED. This schedule contains
summary financial information extracted from the Company's unaudited
supplemental combined financial statements as of March 31, 1996 and the three
months then ended and is qualified in its entirety by reference to such
supplemental combined financial statements.
</LEGEND>
<CIK> 0000007974
<NAME> ASSOCIATES FIRST CAPITAL CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 458
<SECURITIES> 932
<RECEIVABLES> 41,071
<ALLOWANCES> 1,369
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 42,525
<CURRENT-LIABILITIES> 0
<BONDS> 37,920
<COMMON> 47
0
0
<OTHER-SE> 3,042
<TOTAL-LIABILITY-AND-EQUITY> 42,525
<SALES> 1,645
<TOTAL-REVENUES> 1,645
<CGS> 0
<TOTAL-COSTS> 1,328
<OTHER-EXPENSES> 495
<LOSS-PROVISION> 252
<INTEREST-EXPENSE> 581
<INCOME-PRETAX> 317
<INCOME-TAX> 125
<INCOME-CONTINUING> 192
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 192
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
