CIT » Topics » Change of Control

This excerpt taken from the CIT 8-K filed Oct 19, 2009.
Change of Control
 
If a Change of Control occurs, each holder of notes will have the right to require CIT or CIT Funding, as applicable, to repurchase all or any part (equal to consideration per 2,000 principal amount of notes and integral multiples of consideration per 1,000 principal amount of notes in excess thereof) of that holder’s notes pursuant to a Change of Control Offer on the terms set forth in the indentures. In the Change of Control Offer, CIT or CIT Funding, as applicable, will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest, if any, on the notes repurchased to the date of purchase, subject to the rights of holders of notes on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control, CIT or CIT Funding, as applicable, will mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the indentures and described in such notice.
 
CIT or CIT Funding, as applicable, will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indentures, CIT or CIT Funding, as applicable, will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the indentures by virtue of such compliance.


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On the Change of Control Payment Date, CIT or CIT Funding, as applicable, will, to the extent lawful:
 
(1) accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;
 
(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and
 
(3) deliver or cause to be delivered to the trustee the notes properly accepted together with an officers’ certificate stating the aggregate principal amount of notes or portions of notes being purchased by CIT or CIT Funding, as applicable.
 
The paying agent will promptly mail to each holder of notes properly tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any. CIT or CIT Funding, as applicable, will publicly announce the results of the Change of Control Offer on or as soon as reasonably practicable after the Change of Control Payment Date.
 
The provisions described above that require CIT or CIT Funding, as applicable, to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the indentures are applicable. Except as described above with respect to a Change of Control, the indentures do not contain provisions that permit the holders of the notes to require that CIT or CIT Funding, as applicable, repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.
 
CIT or CIT Funding, as applicable, will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indentures applicable to a Change of Control Offer made by CIT or CIT Funding, as applicable, and purchases all notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to the indentures as described above under the caption “— Optional Redemption,” unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
 
The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of CIT or CIT Funding, as applicable, and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require CIT or CIT Funding, as applicable, to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of CIT or CIT Funding, as applicable, and its Subsidiaries taken as a whole to another Person or group may be uncertain.
 
This excerpt taken from the CIT 8-K filed Oct 2, 2009.
Change of Control
 
If a Change of Control occurs, each holder of notes will have the right to require CIT or CIT Funding, as applicable, to repurchase all or any part (equal to $2,000 and integral multiples of $1,000 in excess thereof) of that holder’s notes pursuant to a Change of Control Offer on the terms set forth in the indentures. In the Change of Control Offer, CIT or CIT Funding, as applicable, will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest on the notes repurchased to the date of purchase, subject to the rights of holders of notes on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control, CIT or CIT Funding, as applicable, will mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the indentures and described in such notice.
 
CIT or CIT Funding, as applicable, will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indentures, CIT will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the indentures by virtue of such compliance.
 
On the Change of Control Payment Date, CIT or CIT Funding, as applicable, will, to the extent lawful:
 
(1) accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;


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(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and
 
(3) deliver or cause to be delivered to the trustee the notes properly accepted together with an officers’ certificate stating the aggregate principal amount of notes or portions of notes being purchased by CIT or CIT Funding, as applicable.
 
The paying agent will promptly mail to each holder of notes properly tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any. CIT or CIT Funding, as applicable will publicly announce the results of the Change of Control Offer on or as soon as reasonably practicable after the Change of Control Payment Date.
 
The provisions described above that require CIT or CIT Funding, as applicable to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the indentures are applicable. Except as described above with respect to a Change of Control, the indentures do not contain provisions that permit the holders of the notes to require that CIT or CIT Funding, as applicable repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.
 
CIT or CIT Funding, as applicable will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indentures applicable to a Change of Control Offer made by CIT or CIT Funding, as applicable and purchases all notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to the indentures as described above under the caption “— Optional Redemption,” unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
 
The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of CIT and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require CIT or CIT Funding, as applicable to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of CIT or CIT Funding, as applicable and its Subsidiaries taken as a whole to another Person or group may be uncertain.
 
This excerpt taken from the CIT 8-K filed Sep 11, 2009.
Change of Control” means, unless consented to by the Lenders Steering Committee (including pursuant to an Approved Restructuring Plan), (i) a Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (a) shall have acquired beneficial ownership or control of 35.0% or more on a fully diluted basis of the voting and/or economic interest in the Capital Stock of Company or (b) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of Company; or (ii) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of Company cease to be occupied by Persons who either (a) were members of the board of directors of Company on the Closing Date or (b) were nominated for election by the board of directors of Company, a majority of whom were directors on the Closing Date or whose election or nomination for election was previously approved by a majority of such directors; or (iii) any “change of control” (or similar event, however denominated) shall occur under and as defined in any indenture or agreement in respect of Indebtedness in a principal amount in excess of $100,000,000 to which Company or any Restricted Subsidiary is a party.
 
This excerpt taken from the CIT 8-K filed Jul 30, 2009.
Change of Control” means, unless consented to by the Lenders Steering Committee (including pursuant to an Approved Restructuring Plan), (i) a Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (a) shall have acquired beneficial ownership or control of 35.0% or more on a fully diluted basis of the voting and/or economic interest in the Capital Stock of Company or (b) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of Company; or (ii) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of Company cease to be occupied by Persons who either (a) were members of the board of directors of Company on the Closing Date or (b) were nominated for election by the board of directors of Company, a majority of whom were directors on the Closing Date or whose election or nomination for election was previously approved by a majority of such directors; or (iii) any “change of control” (or similar event, however denominated) shall occur under and as defined in any indenture or agreement in respect of Indebtedness in a principal amount in excess of $100,000,000 to which Company or any Restricted Subsidiary is a party.
 
This excerpt taken from the CIT DEF 14A filed Apr 1, 2009.

Change of Control

     In the event of a Change of Control (as defined in the LTIP) of CIT, the Compensation Committee may take steps it considers appropriate, including

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accelerating vesting, modifying an award to reflect the Change of Control, or providing that outstanding awards will be assumed, or substituted for, by the surviving corporation or permitting or requiring participants to surrender options and stock appreciation rights in exchange for a cash payout equal to the difference between the highest price paid in the Change of Control and the exercise price. Generally, unless the Compensation Committee determines otherwise at the time of grant, the default treatment of outstanding awards upon a Change of Control is as follows:

  • options and stock appreciation rights immediately vest in full and remain exercisable until the second anniversary of the participant’s termination of employment or, if earlier, the expiration of the award’s initial term;

  • restrictions imposed on restricted stock and restricted stock units immediately lapse;

  • the performance targets with respect to performance units, performance stock, or other awards that vest upon satisfaction of performance objectives shall be deemed attained at target levels; and

  • the vesting of all other awards that are specified with respect to shares shall be accelerated.

Under the LTIP, the following events generally result in a Change of Control:

  • one individual or entity acquires at least 35% of the voting power of CIT (the Prior Plan requires that one individual or entity acquire more than 50% of the voting power of CIT);

  • a majority of CIT directors are replaced by directors not approved by the Board;

  • there is a merger or consolidation of CIT that results in new stockholders having at least 50% of the voting power of CIT;

  • there is a sale of all or substantially all of CIT’s assets; or

  • CIT stockholders approve a plan of liquidation or dissolution.

This excerpt taken from the CIT 8-K filed Jun 16, 2008.

Change of Control

        In the event Mr. Mason’s employment is terminated without cause or by him for good reason following a change in control, the executive will receive a payment equal to two and one-half times his annual base salary plus two and one-half times his average annual bonus plus a pro rata average annual bonus based on the number of months of service in the year of termination. In addition, Mr. Mason will be paid the dollar value of any portion of his guaranteed equity awards that have not been granted, and he is entitled to full accelerated vesting with respect to his outstanding equity compensation awards.

This excerpt taken from the CIT 10-Q filed May 12, 2008.

     4.5. Change of Control

            If a Participant’s Separation from Service is as a result of the Participant being terminated by the Company (or any successor thereto) without Cause or the Participant resigning for Good Reason within three years following the date of the “Change of Control,” then notwithstanding the Participant’s period of Benefit Service, the Participant shall be eligible to receive a retirement benefit based on his Final Base Compensation, and years of Benefit Service accrued through the date of his Separation from Service, which amount shall be payable in accordance with Section 4.3 above. For purposes of this Section 4.5, a Participant with less than 10 years of Benefit Service shall be eligible to receive an annual benefit in the form of a straight life annuity equal to 5% of Final Base Compensation for each year of Benefit Service accrued through the date of Separation from Service reduced by the sum of the offset amounts set forth in Section 3.1(b) above, which benefit shall be paid in accordance with Section 4.3 based on his age at his Separation from Service.

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Notwithstanding the foregoing, however, if a Participant has less than five years of Benefit Service on the date of his Separation from Service, no benefit shall be payable to such Participant under the Plan.

This excerpt taken from the CIT DEF 14A filed Mar 25, 2008.

Change of Control

        In the event of a Change of Control (as defined in Annex A) of CIT, the Compensation Committee may take steps it considers appropriate, including accelerating vesting, modifying an award to reflect the Change of Control, or providing that outstanding awards will be assumed, or substituted for, by the surviving corporation or permitting or requiring participants to surrender options and stock appreciation rights in exchange for a cash payout equal to the difference between the highest price paid in the Change of Control and the exercise price. Generally, unless the Compensation Committee determines otherwise at the time of grant, the default treatment of outstanding awards upon a Change of Control is as follows:

options and stock appreciation rights immediately vest in full and remain exercisable until the second anniversary of the participant’s termination of employment or, if earlier, the expiration of the award’s initial term;
restrictions imposed on restricted stock and restricted stock units immediately lapse;
the performance targets with respect to performance units, performance stock, or other awards that vest upon satisfaction of performance objectives shall be deemed attained at target levels; and
the vesting of all other awards that are specified with respect to shares shall be accelerated.

        Under the LTIP, the following events generally result in a Change of Control:

one individual or entity acquires at least 35% of the voting power of CIT (the Prior Plan requires that one individual or entity acquire more than 50% of the voting power of CIT);
a majority of CIT directors are replaced by directors not approved by the Board;
there is a merger or consolidation of CIT that results in new stockholders having at least 50% of the voting power of CIT;
there is a sale of all or substantially all of CIT’s assets; or
CIT stockholders approve a plan of liquidation or dissolution.
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