EXHIBIT (d)(3)
October 16, 2002
Xxxxxx X. Xxxxxxxx
Xxxxxxxx Racing, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Re: Championship Auto Racing Teams, Inc.
Dear Xxxxx:
The purpose of this letter is to set forth the understanding between
Championship Auto Racing Teams, Inc. ("CART") and Xxxxxx X. Xxxxxxxx and all
entities directly or indirectly controlled by you as defined by the requirements
of Section 13(d)(3) of the Securities Exchange Act of 1934 as amended (the
"Act").
It is CART's understanding that you currently own 3,377,600 shares of
CART stock, which represents approximately 23% of the outstanding shares of CART
based on its currently issued and outstanding shares of 14,718,000 ("Current
Shareholdings"). It is our understanding that you may wish to purchase, in block
purchases or in the open market up to an additional 287,182 shares of CART
("Additional Shares").
As you are aware, CART has adopted a Stockholder's Rights Agreement
that provides, in part, that certain rights may be issued to the Company's
shareholders in the event that an Acquiring Person acquires more than 15% of
CART's outstanding common stock, or publicly announces a tender offer to do so
or engages in certain other "Change of Control" actions. The Board of Directors
of CART has amended the Rights Agreement to permit you to acquire 3,377,600
shares and is willing to further amend the Rights Agreement to permit you to
acquire an additional 287,182 shares provided that, with respect to those
Additional Shares, you agree to the following terms and conditions, which are
consistent with the September 11, 2002 agreement which you previously signed:
A. For purposes of this agreement, a "Strategic Transaction"
shall include: (i) the merger, consolidation, sale of
substantially all of the assets of CART to another entity not
controlled by the existing CART shareholders or similar
transactions; or (ii) the solicitation, initiation of a tender
offer as defined under Section 14 of the Act; or (iii) the
solicitation of proxies seeking Board representation or the
removal of any directors or a change in the composition or
size of the Board of Directors of CART; or (iv) the making of
any request to amend or waive any provision of the
Stockholder's Rights Agreement.
B. With respect to any Strategic Transaction, you and your
affiliates agree that, for a period of three (3) years from
the date hereof any Additional Shares will be voted in
accordance with the recommendation of the then existing Board
of Directors of CART on any such transaction. In addition, to
the extent that the Strategic Transaction includes a proposal,
either by
Xxxxxx X. Xxxxxxxx
October 16, 2002
Page 2
merger, consolidation, sale of substantially all of the assets
of CART, tender offer or otherwise, the result of which would
be that CART common stock or assets are exchanged for other
securities or consideration, then you agree that such
Additional Shares will be exchanged on the same basis as other
common stock of CART, provided that such transaction is
approved by the then existing Board of Directors of CART.
It is the intention of this agreement to restrict your voting and
disposition of your Additional Shares consistent with the terms of this
agreement, but not to limit your rights with respect to voting or disposition of
your Current Shareholdings, except the New Shares which are subject to your
letter agreement of September 11, 2002. This agreement shall not restrict your
right to sell your Additional Shares in the ordinary course not involving a
Strategic Transaction.
If this agreement is acceptable to you, please execute a copy of this
agreement and return it to my attention at your earliest convenience. Please be
advised, that the result of this agreement will be that an amendment to the
Company's Stockholder's Rights Agreement will be prepared, filed with the
Securities and Exchange Commission and a press release will be issued advising
CART shareholders that this action has taken place.
If you have any questions, please call me at your convenience.
Sincerely yours,
Championship Auto Racing Teams, Inc.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx,Chief Financial Officer
The terms and conditions of this agreement are accepted and agreed to this 16th
day of October, 2002
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
