-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IMjtegteXZb3Zz6yhF5Iu4KCZlyPxWN5K0tEBvvVdSl3jfLewq7OVVEPfMbbViLN prsJdqUzceaRbOKJQ9w0nA== 0000950117-96-001234.txt : 19961016 0000950117-96-001234.hdr.sgml : 19961016 ACCESSION NUMBER: 0000950117-96-001234 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19961001 ITEM INFORMATION: Changes in control of registrant ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961015 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AT&T CAPITAL CORP /DE/ CENTRAL INDEX KEY: 0000897708 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 223211453 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11237 FILM NUMBER: 96642906 BUSINESS ADDRESS: STREET 1: 44 WHIPPANY ROAD CITY: MORRISTOWN STATE: NJ ZIP: 07962-1982 BUSINESS PHONE: 2013973000 MAIL ADDRESS: STREET 1: 44 WHIPPANY RD CITY: MORRISTOWN STATE: NJ ZIP: 07962 8-K 1 AT&T CAPITAL CORP. 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: October 1, 1996 AT&T CAPITAL CORPORATION A Delaware Commission File I.R.S. Employer Corporation No. 1-11237 No. 22-3211453 44 Whippany Road, Morristown, New Jersey 07962-1983 Telephone Number (201) 397-3000 2 Form 8-K October 1, 1996 Item 1. CHANGES IN CONTROL OF THE REGISTRANT On October 1, 1996, AT&T Capital Corporation (the "Registrant") consummated a merger (the "Merger") with Antigua Acquisition Corporation, a Delaware corporation ("Merger Sub"), pursuant to an Agreement and Plan of Merger (the "Merger Agreement") among the Registrant, AT&T Corp. ("AT&T"), the former indirect owner of approximately 86% of the Registrant's outstanding common stock, par value $.01 per share (the "Common Stock"), Hercules Limited, a Cayman Islands corporation ("Holdings"), and Merger Sub, a majority-owned subsidiary of Holdings. Pursuant to the Merger Agreement, Merger Sub was merged with and into the Registrant, with the Registrant continuing its corporate existence under Delaware law as the surviving corporation (the "Surviving Corporation"). As a result of the Merger, stockholders of the Registrant have the right to receive $45 in cash for each outstanding share of the Registrant's Common Stock (other than shares held by the Registrant or Holdings or any subsidiary of Holdings). Twenty-seven members of the Registrant's senior management (the "Management Offerees") were offered the opportunity to participate in the Management Share Exchange (as defined below). Immediately prior to the effective time of the Merger, Merger Sub consummated a share exchange (the "Management Share Exchange") with certain members of the Registrant's management (the "Management Investors"), including Thomas C. Wajnert, Chairman of the Board and Chief Executive Officer of the Registrant, and 23 other members of the Registrant's senior management, in which those Management Investors exchanged an aggregate of 650,441 shares of the Registrant's Common Stock (or approximately $29 million in value, based on the $45 per share price to which such Management Investors would have otherwise been entitled in connection with the Merger) for newly issued shares of Merger Sub's common stock of equal value (which became shares of Surviving Corporation's common stock upon consummation of the Merger). Of the three Management Offerees who did not elect to participate in the Management Share Exchange, two of such persons (both of whom participated in the Registrant's Corporate Leadership Team) ceased their employment with the Registrant after the consummation of the Merger. As a result of the Merger and the Management Share Exchange, all of the outstanding Common Stock of the Registrant is currently directly or indirectly owned by (i) the Management Investors and (ii) GRS Holding Company Limited, a private United Kingdom holding corporation engaged in the U.K. rail leasing business ("GRSH"), which on a fully diluted basis is approximately 85% beneficially owned by Nomura International plc ("Nomura"), a wholly owned subsidiary of The Nomura Securities Co., Ltd., and 9.5% beneficially owned by Babcock & Brown Holdings Inc., a San Francisco based leasing, asset and project financing advisory company. The Management Investors own approximately 3.3% of the Common Stock (or approximately 5.5% on a fully diluted basis), and GRSH indirectly owns approximately 96.7% of the Common Stock (or approximately 94.5% on a fully diluted basis). The total amount of funds required to consummate the Merger (the "Merger Consideration") was approximately $2,160 million, which amount represents the sum of the aggregate purchase price for the outstanding shares of the Registrant's Common Stock and the aggregate amount needed to cash-out the Registrant's stock options in accordance with the Merger 3 Form 8-K October 1, 1996 Agreement. The Merger Consideration was funded by (i) a loan (the "Interim Loan") from Goldman Sachs Credit Partners L.P. in the amount of approximately $1,255 million, which loan bears interest at an annual fixed rate of 5.6375%, matures on October 30, 1996 and was repaid by the Registrant on October 15, 1996 from a portion of the proceeds of offerings of equipment receivable-backed securities by affiliates of the Registrant (the "Asset Securitization"), and (ii) equity contributions (collectively, the "Equity Contributions") received from (a) capital contributions made to Merger Sub by Holdings in the aggregate amount of $871 million (b) the Management Share Exchange by the Management Investors of approximately $29 million and (c) the settlement of approximately $5 million of recourse loans to senior executives. The Interim Loan contains certain customary representations, warranties, defaults and covenants, including a restriction on dividend payments by the Registrant, as well as a mandatory prepayment requirement based on the Registrant's receipt of proceeds from the Asset Securitization. Following the effective time of the Merger, the Registrant's Board of Directors increased from two to six and includes Hiromi Yamaji, Guy Hands, John Appleton, Jeff Nash and David Banks, all of whom are currently officers, directors or affiliates of Nomura, and Thomas C. Wajnert, the Chairman of the Board and Chief Executive Officer of the Registrant. The current intention is that the Board of Directors of the Registrant will be increased shortly after the Merger to include a total of eight members, with at least one of the two additional directors being a person whose principal occupation is related to Nomura and/or Holdings or certain of their affiliates. Also, within three to six months after the Merger, the Board of Directors will be further increased to a total of eleven members, with at least two of the three additional directors expected to be persons independent of the Registrant, Nomura and Holdings. The Registrant anticipates that Nomura and certain of its affiliates will receive customary banking and other fees from the Surviving Corporation from time to time for services rendered to the Surviving Corporation and its affiliates, including, without limitation, securitization transactions, acquisitions, dispositions and other transactions. A copy of the Registrant's press release dated October 1, 1996 is attached hereto as Exhibit No. 99 and is incorporated herein by reference. Item 5. OTHER EVENTS In anticipation of a $200 million issuance of preferred securities by an affiliate of the Registrant, which is expected to close by October 31, 1996, this Form 8-K includes the Registrant's unaudited consolidated financial statements and related notes at and for the nine months ended September 30, 1996. In addition, unaudited pro forma financial statements and related explanatory notes reflecting the impact of the Merger and related transactions have been included under Item 7. Financial Statements and Exhibits of this Form 8-K. The unaudited pro forma consolidated balance sheet is presented assuming the Merger and the related transactions occurred as of September 30, 1996. The unaudited pro forma consolidated statements of income reflect the effects of the Merger and the related transactions as if the Merger and such related transactions had occurred on January 1, 1995. 4 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands, except per share amounts) (Unaudited) For the Three Months For the Nine Months Ended September 30, Ended September 30, 1996 1995 1996 1995 -------- -------- -------- -------- Revenues: Finance revenue $ 52,393 $ 46,793 $ 149,357 $ 127,825 Capital lease revenue 169,148 150,427 492,357 428,097 Rental revenue on operating leases (A) 179,894 141,800 505,380 411,169 Equipment sales 24,012 10,375 72,608 27,356 Other revenue, net 45,162 46,486 150,792 146,204 -------- -------- --------- --------- Total Revenues 470,609 395,881 1,370,494 1,140,651 -------- -------- --------- --------- Expenses: Interest 120,288 106,086 350,359 300,891 Operating and administrative 126,762 116,456 375,172 351,443 Depreciation on operating leases 117,394 88,328 329,336 259,487 Cost of equipment sales 21,018 9,896 61,677 25,195 Provision for credit losses 22,918 20,681 71,454 60,359 -------- -------- --------- --------- Total Expenses 408,380 341,447 1,187,998 997,375 -------- -------- --------- --------- Income before income taxes 62,229 54,434 182,496 143,276 Provision for income taxes 21,762 21,962 67,206 57,810 -------- -------- --------- --------- Net Income $ 40,467 $ 32,472 $ 115,290 $ 85,466 ======== ======== ========= ========= (Continued) 5 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Continued) (Dollars in Thousands, except per share amounts) (Unaudited) For the Three Months For the Nine Months Ended September 30, Ended September 30, 1996 1995 1996 1995 -------- -------- -------- ------- Earnings per common share and common share equivalent: Earnings Per Share $ .85 $ .69 $ 2.43 $ 1.82 ======== ======== ======== ======== Weighted average shares outstanding (thousands): 47,565 47,195 47,497 47,063 ======== ======== ======== ======== (A) Includes $22,821 and $26,174 for the three months ended September 30, 1996 and 1995, respectively, and $67,224 and $66,398 for the nine months ended September 30, 1996 and 1995, respectively, from AT&T Corp.("AT&T") and its affiliates. The accompanying notes are an integral part of these consolidated financial statements. 6 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) September 30, 1996 December 31, (Unaudited) 1995 ---------- ------------ ASSETS: Cash and cash equivalents $ 18,574 $ 3,961 Net investment in finance receivables 2,017,835 1,800,636 Net investment in capital leases 6,503,112 6,187,131 Investment in operating leases, net of accumulated depreciation of $716,763 in 1996 and $642,728 in 1995 1,284,868 1,117,636 Deferred charges and other assets 427,211 431,895 ---------- ---------- Total Assets $10,251,600 $ 9,541,259 ========== ========== LIABILITIES AND SHAREOWNERS' EQUITY: Liabilities: Short-term notes, less unamortized discount of $271 in 1996 and $9,698 in 1995 $ 3,021,459 $ 2,212,351 Deferred income taxes 498,927 555,296 Income taxes and other payables 545,467 581,000 Payables to AT&T and affiliates 71,478 360,429 Medium- and long-term debt 4,896,467 4,716,058 Commitments and contingencies ----------- ----------- Total Liabilities $ 9,033,798 $ 8,425,134 ----------- ----------- (Continued) 7 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (Dollars in Thousands) September 30, 1996 December 31, (Unaudited) 1995 ------------- ------------ Shareowners' Equity: Common stock, one cent par value: Authorized 100,000,000 shares, issued and outstanding, 47,097,447 shares in 1996 and 46,968,810 shares in 1995 $ 471 $ 470 Additional paid-in capital 786,163 783,244 Recourse loans to senior executives (20,923) (20,512) Foreign currency translation adjustments (2,804) (2,173) Retained earnings 454,895 355,096 ---------- ---------- Total Shareowners' Equity 1,217,802 1,116,125 ---------- ---------- Total Liabilities and Shareowners' Equity $10,251,600 $ 9,541,259 ========== ========== The accompanying notes are an integral part of these consolidated financial statements. 8 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited) For The Nine Months Ended September 30, 1996 1995* ---------- ---------- CASH FLOW FROM OPERATING ACTIVITIES: Net income $ 115,290 $ 85,466 Noncash items included in income: Depreciation and amortization 344,459 303,412 Deferred taxes (17,034) 30,983 Provision for credit losses 71,454 60,359 Gain on receivables securitizations (5,041) - Gain on SBA and other loan sales (8,833) (7,467) (Increase) decrease in deferred charges and other assets (63,976) 74,293 Decrease in income taxes and other payables (109,789) (32,583) Increase (decrease) in payables to AT&T and affiliates 1,782 (3,170) ----------- ----------- Net Cash Provided by Operating Activities 328,312 511,293 ----------- ----------- CASH FLOW FROM INVESTING ACTIVITIES: Purchase of businesses, net of cash acquired - (292,590) Purchase of finance asset portfolios (148,109) (14,937) Financings and lease equipment purchases (4,170,561) (3,819,016) Principal collections from customers, net of amounts included in income 3,041,912 2,871,692 Cash proceeds from receivables securitizations 128,830 81,475 Cash proceeds from SBA and other loan sales 119,890 92,047 ----------- ----------- Net Cash Used for Investing Activities $(1,028,038) $(1,081,329) ----------- ----------- (Continued) 9 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Dollars in Thousands) (Unaudited) For The Nine Months Ended September 30, 1996 1995* ------------ ----------- CASH FLOW FROM FINANCING ACTIVITIES: Increase (decrease)in short-term notes, net $ 790,842 $ (224,397) Additions to medium and long-term debt 1,288,102 1,604,370 Repayments of medium and long-term debt (1,101,718) (906,495) (Decrease) increase in payables to AT&T and affiliates (247,397) 56,164 Dividends paid (15,490) (14,070) --------- --------- Net Cash Provided by Financing Activities 714,339 515,572 --------- --------- Net Increase (decrease) in Cash and Cash Equivalents 14,613 (54,464) Cash and Cash Equivalents at Beginning of Period 3,961 54,464 --------- --------- Cash and Cash Equivalents at End of Period $ 18,574 $ 0 ========= ========= Non-Cash Investing and Financing Activities: In the first nine months of 1996 and 1995, the Company entered into capital lease obligations of $24,456 and $20,496, respectively, for equipment that was subleased. In the first nine months of 1996 and 1995, the Company assumed debt of $3,384 and $472,952, respectively, in conjunction with acquisitions. * Certain 1995 amounts have been restated to conform to the 1996 presentation. The accompanying notes are an integral part of these consolidated financial statements. 10 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by AT&T Capital Corporation and its subsidiaries ("AT&T Capital" or the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and, in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations, financial position and cash flows for each period shown. The results for interim periods are not necessarily indicative of financial results for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995 and the current year's previously issued Form 10-Qs. 2. Shareowners' Equity On April 19, 1996 and July 19, 1996, the Company's Board of Directors declared dividends of $.11 per share. The dividends were paid on May 31, 1996 and August 30, 1996, respectively, to shareowners of record as of the close of business on May 10, 1996 and August 9, 1996, respectively. 3. Recent Pronouncements Effective January 1, 1996, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation". This statement establishes financial accounting and reporting standards for stock-based employee compensation plans. It allows companies to choose either 1) a fair value method of valuing stock-based compensation plans which will affect reported net income, or 2) to continue to follow the existing accounting rules for stock option accounting but disclose what the impacts would have been had the fair value method been adopted. The Company adopted the disclosure alternative which requires annual disclosure of the pro forma net income and earnings per share amounts assuming the fair value method was adopted on January 1, 1995. As a result, the adoption of this standard did not have any impact on the Company's consolidated financial statements. In June 1996, the Financial Accounting Standards Board issued SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". This statement requires that liabilities and derivatives incurred or obtained by transferors as part of a transfer of financial assets be initially measured at fair value, if practical. It 11 Form 8-K October 1, 1996 also requires that servicing assets and other retained interests in the transferred assets be measured by allocating the previous carrying amount between the assets sold, if any, and retained interests, if any, based on their relative fair values at the date of the transfer. This statement is effective for transfers and servicing of financial assets and extinguishment of liabilities occurring after December 31, 1996 and application is prospective. Management does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements. 4. Recent Events On September 20, 1995, AT&T announced a plan to pursue the public or private sale of its remaining 86% interest in AT&T Capital. On such date, AT&T also announced a plan to separate (the "Separation") into three publicly-held stand-alone global businesses (AT&T, Lucent Technologies Inc. ("Lucent") and NCR Corporation ("NCR"). In connection with the Separation, AT&T spun-off its entire remaining equity interest in Lucent to AT&T shareowners on September 30, 1996. The Separation is targeted by AT&T to be completed by the end of 1996, subject to certain conditions. For a more detailed discussion of AT&T's restructuring plans see Note 16 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. In the second quarter of 1996, the Company executed an Operating Agreement with each of Lucent and NCR, and entered into letter agreements with Lucent and NCR regarding the applicability to Lucent and NCR of specified provisions of the License Agreement and the Intercompany Agreement between the Company and AT&T. The full texts of such Operating Agreements and letter agreements with Lucent and NCR have been filed with the SEC. The Company has paid a sales assistance fee ("SAF") to Lucent, which fee is related to the volume of the Company's Lucent-related business. Under the terms of its Operating Agreement with the Company, Lucent is prohibited from accepting a SAF from any other provider of leasing services. In early 1996, following Lucent's request, the Company agreed to pay a substantial increase in the SAF for 1995, both as an absolute amount and as a percentage of volumes attributable to Lucent. After giving effect to the increase, the SAF paid by the Company to Lucent for 1995 was approximately double the 1994 fee. The Company and Lucent recently agreed to a modified formula for calculating the SAF for the remaining years of the term of Lucent's Operating Agreement (retroactive to January 1, 1996). The revised formula is expected to result in aggregate annual SAF which are approximately double the amounts that would have been paid if the pre-1995 formula had been maintained. On June 5, 1996, AT&T Capital entered into an Agreement and Plan of Merger ("the Merger Agreement") dated as of June 5, 1996, with AT&T, Hercules Limited ("Hercules") and Antigua Acquisition Corporation ("Antigua"). Hercules is owned by Hercules Holdings (UK) Limited, which in turn is a wholly-owned subsidiary of GRS Holding Company, Ltd., a U.K. rail leasing business. 12 Form 8-K October 1, 1996 On September 30, 1996 the Company, pursuant to a Gross Profit Tax Deferral Interest Free Loan Agreement (the "GPTD Agreement") between the Company and AT&T, made a payment of $247.4 million to AT&T for full repayment of such loans. The GPTD Agreement required the Company to repay such loans immediately prior to the Company no longer being a member of AT&T's consolidated group for federal income tax purposes. Also on September 30, 1996, pursuant to the Merger Agreement, the Company made a $35.0 million payment to AT&T in exchange for AT&T assuming all tax liabilities associated with Federal and combined state taxes for periods prior to the consummation of the merger ("the Merger"). 5. Subsequent Events On October 1, 1996, the Merger was consummated and AT&T Capital's shareowners received the rights to $45 in cash for each outstanding share of the Company's common stock. The total purchase price for the Company's outstanding shares and stock options was approximately $2,160 million. Upon consummation of the Merger, Merger Sub, a wholly-owned subsidiary of Hercules, was merged with and into the Company. In the future, it is expected that the Company will increase its utilization of lease and loan receivable securitizations as a source of debt financing. For the pro forma impacts of the Merger, refer to Item 7. Financial Statements and Exhibits included in this Form 8-K. The Merger and the related transactions had a significant impact on the Company's financial position and results of operations. Had the Merger and related transactions occurred on September 30, 1996, the Company's total assets, debt, total liabilities and shareowners' equity would have been $8.1 billion, $6.6 billion, $7.4 billion and $.7 billion, respectively, and the net income for the three and nine months ended September 30, 1996 would have been $86.0 million and $160.8 million, respectively. Such related transactions include: (i) Tax Deconsolidation from AT&T, as defined in the Company's 1995 Annual Report on Form 10-K, (ii) effects of an Internal Revenue Service Code of 1986, Section 338(h)(10) election, (iii) deferred tax effects relating to the Merger and the Section 338(h)(10) election and similar elections under certain state and local laws, (iv) the $3.1 billion (Portfolio Assets of $3.4 billion, less residuals not securitized) securitization of lease and loan receivables (which includes $.3 billion of receivables previously sold and recently repurchased by the Company) which occurred on October 15, 1996, (v) the purchase of outstanding common stock pursuant to the Merger Agreement, and (vi) the issuance of short-term notes and the incurrence of liabilities for payments under certain benefit plans, other payments to certain employees and for Merger related transaction costs. The consolidated financial statements reflect, and the future consolidated financial statements of the Company will reflect, the historical cost of the Company's assets and liabilities. Adjustments to the Company's consolidated financial statements to reflect the fair value 13 Form 8-K October 1, 1996 of the Company's assets and liabilities as of the merger date ("push down" accounting) will not be reflected due to the existence of substantial publicly traded debt of the Company. Item 7. FINANCIAL STATEMENTS AND EXHIBITS (b) Pro Forma Financial Information (1) Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 1996 (2) Unaudited Pro Forma Consolidated Statement of Income for the twelve months ended December 31, 1995 (3) Unaudited Pro Forma Consolidated Statement of Income for the nine months ended September 30, 1996 (c) Exhibits 2 Certificate of Merger, filed October 1, 1996. 3(i) Restated Certificate of Incorporation of AT&T Capital Corporation, filed September 27, 1996. (ii) AT&T Capital Corporation Amended and Restated By-Laws, dated October 1, 1996. 99 AT&T Capital Corporation Press Release issued October 1, 1996. 14 Form 8-K October 1, 1996 AT&T Capital Corporation and Subsidiaries UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma consolidated balance sheet and statements of income of AT&T Capital Corporation ("Capital" or the "Company") are based on the historical Consolidated Financial Statements of AT&T Capital Corporation and Subsidiaries at September 30, 1996 and for the nine months then ended and for the year ended December 31, 1995. On June 5, 1996, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement"). The Merger was consummated on October 1, 1996 (the "Merger"). The pro forma consolidated balance sheet is presented assuming the Merger and the related transactions (Tax Deconsolidation from AT&T, as defined in the Company's 1995 Annual Report on Form 10-K, effects of an Internal Revenue Code of 1986, Section 338(h)(10) election, deferred tax effects relating to the Merger and the Section 338(h)(10) election and similar elections under certain state and local laws, issuance of $200 million preferred securities of a consolidated entity, a $3.1 billion (Portfolio Assets of $3.4 billion, less residuals not securitized) initial securitization of lease and loan receivables (which includes $.3 billion of receivables previously sold and recently repurchased by the Company), the purchase of outstanding common stock pursuant to the Merger Agreement, the issuance of short-term notes to fund both payments under certain benefit plans and other payments to certain employees and Merger related transaction costs) occurred as of September 30, 1996. The pro forma consolidated statements of income reflect the effects of the Merger and the related transactions (Tax Deconsolidation from AT&T, an anticipated increase in the Company's borrowing costs, issuance of the above-mentioned preferred securities of a consolidated entity, the reduction in revenues and expenses associated with the above-mentioned securitization, the termination of certain contracts and agreements between the Company and AT&T which will increase operating and administrative expenses, and other increases in operating and administrative expenses) as if the Merger and such related transactions had occurred on January 1, 1995. The pro forma consolidated financial statements reflect, and the future consolidated financial statements of the Company will reflect, the historical cost of the Company's assets and liabilities. Adjustments to the Company's consolidated financial statements to reflect the fair value of the Company's assets and liabilities as of the Merger date ("push down" accounting) will not be made due to the existence of substantial publicly traded debt of the Company. The following pro forma financial information is unaudited and should be read in conjunction with the accompanying notes thereto and with the Consolidated Financial Statements included in the Company's 1995 Annual Report on Form 10-K, second quarter 1996 Quarterly Report on Form 10-Q and the consolidated financial statements included in Item 5 - Other Events included in this Form 8-K. The pro forma financial information is not necessarily indicative of either the financial position or the results of operations that would have been achieved had the Merger and the related transactions actually occurred on the dates referred to above, nor is it necessarily indicative of the results of future operations, because such unaudited pro forma financial information is based on estimates of financial effects that may prove to be inaccurate over time. 15 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (Dollars in Thousands) September 30, PRO FORMA 1996(1) ADJUSTMENTS(2) PRO FORMA ---------- -------------- --------- ASSETS: Cash and cash equivalents $ 18,574 $ 18,574 Net investment in finance receivables 2,017,835 $ (108,300)(7) 1,909,535 Net investment in capital leases 6,503,112 (2,725,900)(7) 3,777,212 Net investment in operating leases, net of accumulated depreciation 1,284,868 1,284,868 Deferred charges and other assets 427,211 167,150 (3) 860,861 266,500 (7) Receivable from AT&T - 280,000 (3) 280,000 ----------- ------------ ---------- Total Assets $10,251,600 $(2,120,550) $8,131,050 =========== ============ ========== LIABILITIES AND SHAREOWNERS' EQUITY: Liabilities: Short-term notes $ 3,021,459 $ (200,000)(4) 1,514,859 60,800 (5) 11,300 (6) (1,378,700)(7) Deferred income taxes 498,927 (498,927)(3) - Income taxes and other payables 545,467 263,500 (3) 756,467 (32,700)(5) (19,800)(7) Payables to AT&T and affiliates 71,478 71,478 Medium and long-term debt 4,896,467 4,896,467 Commitments and contingencies ---------- -------- ---------- Total Liabilities $ 9,033,798 (1,794,527) $7,239,271 Company-obligated preferred securities of subsidiary $200,000 (4) $200,000 (Continued) 16 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (Dollars in Thousands) (Continued) September 30, PRO FORMA 1996 (1) ADJUSTMENTS(2) PRO FORMA ----------- -------------- --------- Shareowners' Equity: Common stock $ 471 $ 429 (7) $ 900 Additional paid-in capital 786,163 682,577 (3) 624,206 (844,534)(7) Recourse loans to senior executives (20,923) 5,500 (7) (15,423) Foreign currency translation adjustments (2,804) (2,804) Retained earnings 454,895 (28,100)(5) 84,900 (11,300)(6) (330,595)(7) ---------- ---------- --------- Total Shareowners' Equity 1,217,802 (526,023) 691,779 ---------- ---------- --------- Total Liabilities and Shareowners' Equity $10,251,600 $(2,120,550) $8,131,050 ========== =========== ========= The accompanying explanatory notes are an integral part of this pro forma consolidated balance sheet. 17 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES EXPLANATORY NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET At September 30, 1996 (Dollars in Thousands) (1) The historical balance sheet at September 30, 1996 reflects the issuance of short-term notes to (a) repay the $247.4 million interest-free loans AT&T Corp. ("AT&T") made to the Company pursuant to the Gross Profit Tax Deferral Interest Free Loan Agreement and (b) fund the payment of $35.0 million to AT&T in exchange for AT&T assuming all tax liabilities associated with Federal and combined state taxes for periods prior to the Merger. (2) The pro forma consolidated balance sheet reflects a significant securitization of lease and loan receivables effected on October 15, 1996 in connection with the financing of the Merger but does not reflect the Company's proposed future strategy of increasing the periodic securitization of lease and loan receivables as a funding source subsequent to the Merger. The amount of lease and loan receivables currently anticipated to be securitized annually is expected to be approximately 30% of annual financing volumes. (3) Reflects the election under Section 338(h)(10) of the Internal Revenue Service Code and similar elections under certain state and local laws. Under these elections the Merger is deemed to be an asset sale for tax purposes resulting in the Company being able to reflect its assets and liabilities at fair value for tax purposes (i.e. a step-up in basis), and the excess Merger consideration over book basis is tax deductible over time. Such an adjustment substantially eliminates existing deferred tax liabilities at the Merger date and creates a net deferred tax asset. The pro forma tax adjustment is calculated using an assumed combined Federal and state statutory income tax rate of approximately 39.0%. In addition, AT&T has agreed to reimburse the Company for lost tax depreciation in the amount of approximately $280 million. The lost tax depreciation resulted from the Section 338 (h)(10) election and the related deemed sale of assets for tax purposes. This amount is offset by an increase in the Company's current tax liability. The Company is also entitled to a tax deduction for the cash-out of the Company's stock options by Hercules. The tax benefit of such payment is reflected as a reduction to the Company's current tax liability of $16.5 million. (4) Reflects the issuance of $200 million preferred securities of a consolidated entity of the Company assuming that (i) the securities are perpetual in nature, and (ii) the net cash proceeds are used to repay short-term notes. This transaction is expected to occur by October 31, 1996. (5) Reflects the issuance of short-term notes to fund the accelerated payout and additional amounts due under the Company's Share Performance Incentive Plan ("SPIP"), payments to certain officers of the Company to waive certain of their rights under the Company's Leadership Severance Plan and certain other termination and other payments and the related tax effect at the assumed combined Federal and state statutory income tax rate of 39.55%. 18 Form 8-K October 1, 1996 (6) Reflects the issuance of short-term notes to fund the Company's Merger transaction costs of approximately $11.3 million. (7) Reflects the $3.1 billion asset securitization of lease and loan receivables which occurred on October 15, 1996, the purchase of Company common stock, and the issuance of new common stock. The pro forma balance sheet reflects the associated: (i)reduction in the net investment in finance receivables and capital leases to reflect the assets sold, (ii) an increase in deferred charges and other assets reflecting the reclassification of equipment residual values associated with the assets sold and establishment of a cash collateral account, (iii) a net reduction of short-term notes reflecting the cash proceeds received from the asset securitization net of the amount required to purchase Company common stock, (iv) a net decrease in income taxes and other payables to adjust securitization-related reserves, (vi) an increase in common stock to reflect the new capitalization structure of the Company, (vii) the reduction of additional paid in capital resulting from the retirement of common stock acquired, net of the effects of the Section 338(h)(10) election under the I.R.S. Code and the deferred tax effects relating to the Merger and such election, (viii) the reduction of recourse loans to senior executives to reflect the settlement of such loans, and (ix) the reduction of retained earnings to reflect the retirement of the Company common stock. Included in this asset securitization is a $24.0 million payment to Nomura for services provided and expenses incurred ($3.0 million of which was paid to Babcock & Brown) in connection with this securitization. Proceeds of $1,255 million received under an Interim Loan together with the equity contribution relating to the Merger (approximately $860 million), were used to purchase outstanding common stock of the Company. The Interim Loan was repaid using a portion of the proceeds of the October 15, 1996 initial securitization. 19 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME (Dollars in Thousands, except per share amounts) For the Year Ended December 31, Pro Forma 1995 Adjustments(1) Pro Forma ------------ ----------- --------- Revenues: Finance revenue $ 174,523 $ (13,500)(4)$ 161,023 Capital lease revenue 586,141 (304,400)(4) 281,741 Rental revenue on operating leases 560,964 560,964 Equipment sales 48,724 48,724 Other revenue, net 206,683 15,300 (4) 247,083 25,100 (5) --------- --------- --------- Total Revenues 1,577,035 (277,500) 1,299,535 --------- --------- --------- Expenses: Interest 411,040 7,400 (2) 347,840 (70,600)(3) Operating and administrative 473,663 5,900 (6) 479,563 Depreciation on operating leases 354,509 354,509 Cost of equipment sales 43,370 43,370 Provision for credit losses 86,214 86,214 --------- --------- --------- Total Expenses 1,368,796 (57,300) 1,311,496 --------- --------- --------- Company-obligated preferred securities of subsidiary 18,000 (7) 18,000 Income (Loss) before income taxes 208,239 (238,200) (29,961) Provision (benefit) for income taxes 80,684 (94,208)(8) (13,524) --------- -------- ---------- Net Income (Loss) $ 127,555 $(143,992) $ (16,437) ========= ========= ========== Primary earnings (loss) per share $ .60 $ (0.18) --------- ---------- Number of shares (000's) (9) 212,319 90,000 --------- ---------- Fully diluted earnings (loss) per share $ .60 $ (0.18) --------- ---------- Number of shares (000's) (9) 213,548 92,158 --------- ---------- The accompanying explanatory notes are an integral part of this pro forma consolidated income statement 20 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES EXPLANATORY NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME For the Year Ended December 31, 1995 (Dollars in Thousands) (1) The unaudited pro forma consolidated statement of income for the year ended December 31, 1995 does not reflect the Company's proposed future strategy of increasing the periodic securitization of lease and loan receivables as a funding source subsequent to the Merger. The amount of lease and loan receivables currently anticipated to be securitized annually is expected to be 30% of annual financing volumes. In addition, the pro forma consolidated statement of income does not reflect nonrecurring items such as (i) the $84.9 million after-tax gain associated with the $3.1 billion securitization of lease and loan receivables, which occurred on October 15, 1996, (ii) the $28.1 million after-tax expense relating to accelerated payout of the Company's SPIP related to the Merger and other payments to certain officers of the Company, and (iii) the $11.3 million after-tax expense relating to the Company's Merger related and other transaction costs. See Notes 5, 6, and 7 to the pro forma consolidated balance sheet. Since the recurring effects of securitizing lease and loan receivables as well as the underlying assumptions can be material, the following 1995 pro forma adjustments and pro forma net income would have resulted assuming (i) the gain relating to the October 15, 1996 asset securitization is included in the results of operations, (ii) various levels of such asset securitization, and (iii) other securitization and other pro forma assumptions have been adjusted for such change in securitization levels, but otherwise remain constant: For the Year Ended December 31, Pro Forma 1995 Adjustments Pro Forma ----------- ----------- ---------- Net income, pro forma adjustments and the pro forma net income as shown in the pro forma consolidated statement of income for the year ended December 31, 1995 $127,555 $(143,992) $(16,437) ======= ========= ======= Securitization sensitivity (in $250 million increments), including the non-recurring gain: $3,057 million $127,555 $ (59,100) $ 68,455 $2,807 million $127,555 $ (57,900) $ 69,655 $2,557 million $127,555 $ (56,400) $ 71,155 $2,307 million $127,555 $ (54,800) $ 72,755 $2,057 million $127,555 $ (53,200) $ 74,355 $1,807 million $127,555 $ (51,600) $ 75,955 21 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES EXPLANATORY NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME For the Year Ended December 31, 1995 (Dollars in Thousands) (Continued) (2) The Merger will likely increase the Company's borrowing costs. While it is difficult to predict the response of investors to the Company's medium and long-term note and commercial paper programs and, therefore, it is difficult to quantify such effect of the Merger with reasonable accuracy, the Company has estimated an increase in borrowing costs of 20 basis points relating to its commercial paper program and 25 basis points relative to its medium and long-term debt issuances. The increase in interest expense was calculated using the 1995 average commercial paper balance outstanding and the 1995 issuances of medium and long-term debt multiplied by the respective incremental interest costs. To illustrate the Company's sensitivity to interest rates, had the increase in such borrowing costs been 10 basis points lower or higher than the above mentioned respective increases, the Company's interest expense adjustment would have been $4.1 million or $10.7 million, respectively. (3) Reflects the net reduction of interest expense as a result of the following items, as adjusted for the increased borrowing costs as a result of the Merger. See (2) above. Interest Expense Item Increase (Decrease) - -------------------------------------------- ------------------- - - Net proceeds from the proposed $3.1 billion asset securitization of lease and loan receivables and the issuance of preferred securities net of amounts used to purchase outstanding Company common stock $ (94,000) - - Repayment of the interest free loans AT&T made to the Company pursuant to the Gross Profit Tax Deferral Interest Free Loan Agreement* 14,600 - - Securitization reserves recorded at present value 2,400 - - Payment to AT&T to assume all tax liabilities of Federal and combined state taxes for periods prior to the Merger 2,100 - - Fund the accelerated payout and additional amounts due under the Company's SPIP and other payments 3,600 - - Merger related and other transaction costs 700 --------- 22 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES EXPLANATORY NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME For the Year Ended December 31, 1995 (Dollars in Thousands) (Continued) Net reduction in interest expense $ (70,600) ========= * The amount is calculated using the 1995 average outstanding interest-free loan balance. (4) Reflects the net reduction in the Company's capital lease and finance revenue as a result of the securitization. In addition, the Company will recognize the interest income on the cash collateral account as well as the excess spread amount (since it was recorded at its present value) both of which are associated with such securitization. (5) Reflects the recognition of the expected servicing fees associated with servicing the securitized lease and loan receivables. (6) Reflects the incremental recurring costs in the Company's operating and administrative expenses, including services for telecommunications, certain information processing, travel, human resource, real estate, express mail and insurance services as a result of the Company no longer being entitled to the discounts applicable to AT&T and its subsidiaries or received directly from AT&T. In addition, the amount includes annual fees of $3.0 million that will be paid to Nomura. (7) Reflects dividends to be paid on preferred securities issued by a consolidated entity of the Company. (8) Reflects the tax effect of the foregoing estimated adjustments at the assumed combined Federal and state statutory income tax rate of 39.55%. (9) The number of shares used for the historical earnings per share was restated to reflect the 4.5 to 1 stock split. The number of shares outstanding following the Merger was 90 million. 23 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME (Dollars in Thousands, except per share amounts) For the Nine Months Ended September 30, Pro Forma 1996 Adjustments(1)Pro Forma ------------ ----------- --------- Revenues: Finance revenue $ 149,357 $ (7,300)(4) $142,057 Capital lease revenue 492,357 (165,200)(4) 327,157 Rental revenue on operating leases 505,380 505,380 Equipment sales 72,608 72,608 Other revenue, net 150,792 8,300 (4) 172,692 13,600 (5) ---------- ---------- --------- Total Revenues 1,370,494 (150,600) 1,219,894 ---------- ---------- --------- Expenses: Interest 350,359 9,900 (2) 309,059 (51,200)(3) Operating and administrative 375,172 4,400 (6) 379,572 Depreciation on operating leases 329,336 329,336 Cost of equipment sales 61,677 61,677 Provision for credit losses 71,454 71,454 --------- --------- ---------- Total Expenses 1,187,998 (36,900) 1,151,098 --------- --------- --------- Company-obligated preferred securities of subsidiary - 13,500 (7) 13,500 Income (Loss) before income taxes 182,496 (127,200) 55,296 Provision (benefit) for income taxes 67,206 (50,308)(8) 16,898 -------- --------- --------- Net Income (Loss) $115,290 $(76,892) $ 38,398 ======== ========= ========= Primary Earnings Per Share $ .54 $ 0.43 -------- --------- Number of shares (000's) (9) 213,737 90,000 -------- --------- Fully diluted earnings per share $ .54 $ 0.42 -------- --------- Number of shares (000's) (9) 214,020 92,158 -------- --------- The accompanying explanatory notes are an integral part of this pro forma consolidated income statement. 24 Form 8-K October 1, 1996 AT&T CAPITAL CORPORATION AND SUBSIDIARIES EXPLANATORY NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME For the Nine Months Ended September 30, 1996 (Dollars in Thousands) (1) The unaudited pro forma consolidated statement of income for the nine months ended September 30, 1996 does not reflect the effects of the Company's proposed future strategy of increasing the periodic securitization of lease and loan receivables as a funding source subsequent to the Merger. The amount of lease and loan receivables currently anticipated to be securitized annually is expected to be 30% of annual financing volume. In addition, the September 30, 1996 pro forma consolidated income statement does not reflect non-recurring items. See Note 1 to the pro forma consolidated income statement for the year ended December 31, 1995 and Notes 5, 6, and 7 to the pro forma consolidated balance sheet. Since the recurring effects of securitizing lease and loan receivables as well as the underlying assumptions can be material, Note 1 to the pro forma consolidated income statement for the year ended December 31, 1995 illustrates such sensitivity. In addition, the impacts of the October 15, 1996 initial securitization on the historical financial statements decreases over time as the balance of the securitized lease and loan receivables outstanding amortizes. For example, the reduction to finance and capital lease revenue for the nine months ended September 30, 1996 was less than three quarters of what the reduction was for the year ended 1995. (2) The Merger will likely increase the Company's borrowing costs. While it is difficult to predict the response of investors to the Company's medium and long-term note and commercial paper programs and, therefore, it is difficult to quantify the effect of such Merger with reasonable accuracy, the Company has estimated an increase in borrowing costs of 20 basis points relating to its commercial paper program and 25 basis points relative to its medium and long term debt issuances. The increase in interest expense was calculated using the 1996 average commercial paper balance outstanding and the 1995 full year and the year-to-date September 30, 1996 issuances of medium and long-term debt multiplied by the respective incremental interest costs. To illustrate the Company's sensitivity to interest rates, had the increase in such borrowing costs been 10 basis points lower or higher than the above mentioned respective increases, the Company's interest expense adjustment would have been $5.7 million or $14.1 million, respectively. (3) Reflects the net reduction of interest expense as a result of the following items, as adjusted for the increased borrowing costs as a result of the Merger. See (2) above. Interest Expense Item Increase (Decrease) - -------------------------------------------- ------------------- - - Net proceeds from the proposed $3.1 billion asset securitization of lease and loan receivables and the issuance of preferred securities net of amounts used to purchase outstanding Company common stock $ (67,700) 25 Form 8-K October 1, 1996 - - Repayment of the interest free loans AT&T made to the Company pursuant to the Gross Profit Tax Deferral Interest Free Loan Agreement* 10,600 - - Securitization reserves recorded at present value 1,300 - - Payment to AT&T to assume all tax liabilities of Federal and combined state taxes for periods prior to the Merger 1,500 - - Fund the accelerated payout and additional amounts due under the Company's SPIP and other payments 2,600 - - Merger related and other transaction costs 500 --------- Net reduction in interest expense $ (51,200) ========= * The amount is calculated using the 1996 average outstanding interest-free loan balance. (4) Reflects the reduction in the Company's capital lease and finance revenue as a result of the securitization. In addition, the Company will recognize the interest income on the cash collateral account as well as the excess spread amount (since it was recorded at its present value) both of which are associated with such securitization. (5) Reflects the recognition of the expected servicing fees associated with servicing the securitized lease and loan receivables. (6) Reflects the incremental recurring costs in the Company's operating and administrative expenses, including services for telecommunications, certain information processing, travel, human resource, real estate, express mail and insurance services as a result of the Company no longer being entitled to the discounts applicable to AT&T and its subsidiaries or received directly from AT&T. In addition, the amount includes annual fees of $3.0 million that will be paid to Nomura. (7) Reflects dividends to be paid on preferred securities issued by a consolidated entity of the Company. (8) Reflects the tax effect of the foregoing estimated adjustments at the assumed combined Federal and state statutory income tax rate of 39.55%. (9) The number of shares used for the historical earnings per share was restated to reflect the 4.5 to 1 stock split. The number of shares outstanding following the Merger was 90 million. 26 Form 8-K October 1, 1996 SIGNATURES 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. AT&T CAPITAL CORPORATION /s/ Edward M. Dwyer ----------------------- By: Edward M. Dwyer Senior Vice President and Chief Financial Officer October 15, 1996 27 Form 8-K October 1, 1996 EXHIBIT INDEX Exhibit No. 2 Certificate of Merger, filed October 1, 1996. 3(i) Restated Certificate of Incorporation of AT&T Capital Corporation, filed September 27, 1996. (ii) AT&T Capital Corporation Amended and Restated By-Laws, dated October 1, 1996. 99 AT&T Capital Corporation Press Release issued October 1, 1996. EX-2 2 EXHIBIT 2 CERTIFICATE OF MERGER OF ANTIGUA ACQUISITION CORPORATION INTO AT&T CAPITAL CORPORATION UNDER SECTION 251 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE Pursuant to Section 251(c) of the General Corporation Law of the State of Delaware, AT&T Capital Corporation, a Delaware corporation (the "Corporation"), hereby certifies the following information relating to the merger of Antigua Acquisition Corporation, a Delaware Corporation ("Merger Sub"), with and into the Corporation (the "Merger"): FIRST: The names of the constituent corporations in the Merger (the "Constituent Corporations") and their states of incorporation are as follows: Name State AT&T Capital Corporation Delaware Antigua Acquisition Corporation Delaware SECOND: The Agreement and Plan of Merger, dated as of June 5, 1996, among the Corporation, AT&T Corp., a New York corporation, Hercules Limited, a Cayman Island corporation, and Merger Sub (as amended by the First Amendment to the Agreement and Plan of Merger, dated as of August 20, 1996, the "Merger Agreement"), setting forth the terms and conditions of the Merger, has been approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations in 2 accordance with the provisions of Section 251 of the General Corporation Law of the State of Delaware. Written consent has been given in accordance with Section 228 of the General Corporation Law of the State of Delaware and written notice has been given in accordance with such Section. THIRD: The name of the surviving corporation in the Merger shall be AT&T Capital Corporation (the "Surviving Corporation"). FOURTH: The certificate of incorporation of the Corporation as in effect immediately prior to the Merger shall be the restated certificate of incorporation of the Surviving Corporation, except that Articles First through Twelfth are hereby deleted in their entirety and replaced with the provisions set forth in Annex A hereto. FIFTH: The executed Merger Agreement is on file at the principal place of business of the Surviving Corporation, located at 44 Whippany road, Morristown, New Jersey 07962. SIXTH: A copy of the Merger Agreement will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of record of either of the Constituent Corporations. SEVENTH: This Certificate of Merger, and the Merger provided for herein, shall be effective as of the time of filing with the Secretary of State of Delaware on October 1, 1996. 3 IN WITNESS WHEREOF, this Certificate of Merger has been executed on the 1st day of October, 1996. AT&T CAPITAL CORPORATION By: /s/ Thomas C. Wajnert -------------------------- Thomas C. Wajnert Chairman and Chief Executive Officer EX-3 3 EXHIBIT 3(I) RESTATED CERTIFICATE OF INCORPORATION OF AT&T CAPITAL CORPORATION AT&T 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 21, 1992, HEREBY CERTIFIES that this Restated Certificate of Incorporation restating, integrating and amending its Certificate of Incorporation was duly proposed by its Board of Directors and adopted by its stockholders in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware. FIRST: The name of the Corporation is: AT&T Capital Corporation (the "Corporation"). SECOND: The registered office of the Corporation is located at 1013 Centre Road, in the City of Wilmington, County of New Castle, in the State of Delaware. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the "GCL") . FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is 150,000,000 shares of Common Stock, each having a par value of $.0l per share, and 10,000,000 shares of Preferred Stock, each having a par value of $.0l per share. FIFTH: A. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors consisting of not fewer than two nor more than fifteen directors, the exact number of directors to be determined from time to time by resolution adopted by affirmative vote of a majority of the total number of directors that the Corporation would have if there were no vacancies in the Board of Directors (the "Whole Board"). A director shall hold office until the next annual meeting of stockholders and until his successor shall be elected, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Subject to the rights of the holders of any series of Preferred Stock, any vacancy on the Board of Directors may be filled only in accordance with Section 223 of the GCL. Election of directors need not be by written ballot unless the By-Laws so provide. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. B. Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect one or more directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation applicable thereto (including the resolutions adopted by the Board of Directors pursuant to Article FOURTH). The number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number of directors fixed by or pursuant to Section A of this Article FIFTH. SIXTH: A. The Corporation shall indemnify to the fullest extent permitted under and in accordance with the GCL, as it currently exists or as it may hereafter be amended, any person who was or is a party to (or witness in) or is threatened to be made a party to (or witness in) any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was a director or officer of the Corporation serving (or who has agreed to serve) at the request of the Corporation as a director, officer, trustee, employee or agent of or in any other capacity with respect to another corporation, partnership, joint venture, trust or other enterprise (in any of the foregoing capacities, a "Representative of the Corporation"), or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify to the same extent any person who was or is a party to (or witness in) or is threatened to be made a party to (or witness in) any such action, suit or proceeding by reason of the fact that he is or was or has agreed to become an employee or agent of the Corporation, or is or was an employee or agent of the Corporation serving (or who has agreed to serve) at the request of the Corporation as a Representative of the Corporation, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. B. Expenses (including attorney fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding shall (in the case of any action, suit or proceeding against a director or officer of the Corporation) or may (in the case of any action, suit or proceeding against an employee, agent or Representative of the Corporation) be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors upon receipt of an undertaking by or on behalf of the indemnified person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article SIXTH. C. The indemnification and other rights set forth in this Article SIXTH shall not be exclusive of any provisions with respect thereto in the By-Laws or any other contract or agreement between the Corporation and any officer, director, employee or agent or Representative of the Corporation, and shall inure to the benefit of the estate or personal representative of any person indemnified hereunder. D. Neither the amendment nor repeal of Section A, B or C of this Article SIXTH nor the adoption of any provision of this Restated Certificate of Incorporation inconsistent with such Section A, B or C shall eliminate or reduce the effect of Sections A, B and C of this Article SIXTH in respect of any matter arising or relating to any actions or omissions occurring prior to such amendment, repeal or adoption of an inconsistent provision or in respect of any cause of action, suit or claim relating to any such matter that would have given rise to a right of indemnification or right to receive payments of expenses pursuant to Section A, B or C of this Article SIXTH if such provision had not been so amended or repealed or if a provision inconsistent therewith had not been so adopted. E. No director of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for any matter in respect of which such director (a) shall be liable under Section 174 of the GCL or any amendment thereto or successor provision thereto, or (b) shall be liable by reason that, in addition to any and all other requirements for liability, he: (i) shall have breached his duty of loyalty to the Corporation or its stockholders; (ii) shall not have acted in good faith or, in failing to act, shall not have acted in good faith; (iii) shall have acted in a manner involving intentional misconduct or a knowing violation of law or, in failing to act, shall have acted in a manner involving intentional misconduct or a knowing violation of law; or (iv) shall have derived an improper personal benefit. If the GCL is amended 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 GCL as so amended. Neither the amendment nor repeal of this Section E nor the adoption of any provision of this Restated Certificate of Incorporation inconsistent with this Section E shall eliminate or reduce the effect of this Section E in respect of any matter arising or relating to any actions or omissions occurring prior to such amendment, repeal or adoption of an inconsistent provision. SEVENTH: A. Any action required or permitted to be taken by the stockholders of the Corporation may be effected without a meeting of such stockholders by a consent in writing by such stockholders in accordance with Section 228 of the GCL. B. At any annual meeting or special meeting of stockholders of the Corporation, only such business shall be conducted as shall have been brought before such meeting in the manner provided in the By-Laws. C. The Board of Directors shall have the express power, without a vote of stockholders, to adopt any By-Law consistent with this Restated Certificate of Incorporation and all By-Laws adopted by vote of the stockholders of the Corporation, and to amend, alter or repeal the By-Laws of the Corporation other than any By-Laws adopted by vote of the stockholders of the Corporation, except to the extent that the By-Laws or this Restated Certificate of Incorporation otherwise provide. The Board of Directors may exercise such power upon the affirmative vote of a majority of the whole Board. Stockholders may adopt any By-Law, or amend, alter or repeal the By-Laws of the Corporation, in each case consistent with this Restated Certificate of Incorporation, upon the affirmative vote of the holders of at least a majority of the voting power of the Voting Stock then outstanding, voting together as a single class. EIGHTH: The Corporation reserves the right to amend or repeal any provision contained in this Restated Certificate of Incorporation in the manner now or hereafter prescribed by the laws of the State of Delaware, and all rights herein conferred upon stockholders or directors are granted subject to this reservation. IN WITNESS WHEREOF, AT&T Capital Corporation has caused this Certificate to be signed on this 26th day of September, 1996 in its name and attested by its duly authorized officers. AT&T CAPITAL CORPORATION By: /s/ Jeff Nash ------------------------- Name: Jeff Nash Title: Secretary EX-3 4 EXHIBIT 3(II) AT&T CAPITAL CORPORATION AMENDED AND RESTATED BY-LAWS OCTOBER 1, 1996 BY-LAWS OF ANTIGUA ACQUISITION CORPORATION (hereinafter called the "Company") ARTICLE I OFFICES Section 1. Registered Office. The registered office of the Company shall be in the City of Dover, County of Kent, State of Delaware. Section 2. Other Offices. The Company may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. Place of Meetings. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Each meeting of the stockholders shall be chaired by the Chairman of the Board of Directors or his designee. Section 2. Annual Meeting. The Annual Meeting of Stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meeting the stockholders shall elect by a plurality vote a Board of Directors, and transact such other business as may properly be brought before the meeting. Written notice of the Annual Meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. Any previously scheduled Annual Meeting of Stockholders may be postponed by resolution of the Board of Directors upon notice given on or prior to the date previously scheduled for such meeting. Section 3. Special Meetings. Unless otherwise prescribed by law or by the Restated Certificate of Incorporation of the Company Special Meetings of Stockholders, for any purpose or purposes, may be called by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, (iii) the Secretary or (iv) the Chairman of the Executive Committee, and shall be called by any such officer at the request in writing of a majority of the entire Board of Directors. Such request shall state the purpose or purposes of the proposed meeting. Written notice of a Special Meeting of Stockholders stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. Except as otherwise required by law or by the Restated Certificate of Incorporation, no business shall be transacted at any Special Meeting of Stockholders other than the items of business stated in the notice of meeting. If the Chairman of a Special Meeting of Stockholders determines that any business proposed to be conducted at such meeting was not properly brought before such meeting in accordance with the foregoing procedures, the Chairman shall declare to such meeting that such business was not properly brought before such meeting, and such business shall not be transacted. Section 4. Quorum. Except as otherwise provided by law or by the Restated Certificate of Incorporation or any agreement executed by the Company's stockholders, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting of the place, date and hour of the adjourned meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting. Section 5. Voting. Unless otherwise required by law, the Restated Certificate of Incorporation, these By-Laws or any agreement executed by the Company's stockholders, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder or such other vote, if any, as shall be set forth in the Restated Certificate of Incorporation. Such votes may be cast in person or by duly executed proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the 2 officer of the Company presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot. Section 6. List of Stockholders Entitled to Vote. The Secretary of the Company shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten 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 list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Company who is present. Section 7. Stock Ledger. The stock ledger of the Company shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 6 of this Article II or the books of the Company, or to vote in person or by proxy at any meeting of stockholders. Section 8. Business at Annual Meetings. No business may be transacted at an Annual Meeting of Stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting of Stockholders by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the Annual Meeting of Stockholders by any stockholder of the Company who is a stockholder of record on the date of the giving of the notice provided for in this Section 8 and on the record date for the determination of stockholders entitled to vote at such annual meeting. ARTICLE III DIRECTORS Section 1. Number and Election of Directors. The Board of Directors shall consist of not less than two nor more than fifteen members, the exact number of which shall be fixed from time to time by resolution adopted by the affirmative vote of a majority of the total number of directors that the Company would have if there were no vacancies in the Board of Directors. Any director may resign at any time by delivering a written notice of resignation, signed by such director, to the Board of Directors or the Chief Executive Officer. Unless otherwise specified therein, such resignation shall take effect upon delivery. Directors need not be stockholders. 3 Section 2. Vacancies. Any vacancy on the Board of Directors may be filled in accordance with Section 223 of the General Corporation Law of the State of Delaware. Section 3. Duties and Powers. The business of the Company shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Company and do all such lawful acts and things as are not by statute or by the Restated Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. Section 4. Meetings. The Board of Directors of the Company may hold meetings, both regular and special, either within or without the State of Delaware. Each meeting of the Board of Directors shall be chaired by the Chairman of the Board of Directors, who shall be a director chosen by a majority of the entire Board, or, in his absence, by the Vice Chairman of the Board of Directors, if any, who shall also be a director chosen by a majority of the entire Board, or, in their absence, by such director as shall be chosen by a majority of the directors in attendance at such meeting. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, the Vice Chairman, the Chief Executive Officer, the President or any director. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone or telegram on twenty-four (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances. Section 5. Quorum. Except as may be otherwise specifically provided by law, the Restated Certificate of Incorporation or these By-Laws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 6. Actions by Consent. Unless otherwise provided by the Restated Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, by written consent of all the members of the Board of Directors or such committee, as the case may be, which consent may be executed in counterparts, and the writing or writings shall be filed with the minutes of proceedings of the Board of Directors or such committee. 4 Section 7. Meetings by Means of Conference Telephone. Unless otherwise provided by the Restated Certificate of Incorporation or these By-Laws, members of the Board of Directors of the Company, or any committee thereof, 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 7 shall constitute presence in person at such meeting. Section 8. Committees. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Company. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent allowed by law and provided in the resolution establishing such committee or in the charter for such Committee approved by the Board of Directors from time to time, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Company. Each committee shall keep regular minutes and report to the Board of Directors when appropriate. Section 9. Compensation. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary or retainer as director. No such payment shall preclude any director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings or acting as chairman of any committee. 5 ARTICLE IV OFFICERS Section 1. General. The officers of the Company shall be chosen by the Board of Directors and shall include a Chief Executive Officer, a Secretary and a Treasurer. The Board of Directors, in its discretion, may also choose one or more other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Restated Certificate of Incorporation or these By-Laws. The officers of the Company need not be stockholders of the Company nor need such officers be directors of the Company. The Chairman of the Board of Directors, in such capacity, shall not be considered an officer of the Company. Section 2. Election. The Board of Directors shall elect the officers of the Company who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Company shall hold office until their successors are chosen and qualified, or until their earlier death, resignation or removal. Subject to the next sentence, any vacancy by death, resignation, removal or otherwise occurring in any office of the Company shall be filled by the Board of Directors. The Company's Chief Executive Officer, and any officer designated by the Chief Executive Officer, may appoint and remove officers of the Company from time to time; provided, however, that the following officers can be elected or removed only by the Board of Directors or its Executive Committee: the Chief Executive Officer, any senior or executive vice president, the Secretary and the Treasurer Section 3. Voting Securities Owned by the Company. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Company may be executed in the name of and on behalf of the Company by the Chief Executive Officer, the Treasurer or the Secretary and any such officer may, in the name of and on behalf of the Company, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any Company in which the Company may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Company might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons. Section 4. Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Company, shall have general and active supervision, and plenary power, over all the business and affairs of the Company, subject to the control of the Board of Directors, shall be responsible for the general management and direction of all the business and affairs of the Company to execute, in the name and on behalf of the Company, all bonds, mortgages, contracts and other instruments of the Company which may be authorized by the Board of Directors. The Chief Executive 6 Officer shall also perform such other duties and may exercise such other powers as are incident to his office or as from time to time may be assigned to him by these By-Laws or by the Board of Directors. Section 5. Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for each standing committee when required by such committee. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors, or the Chief Executive Officer. If the Secretary shall be unable or shall refuse to cause to be given notice of any meeting of the stockholders or special meeting of the Board of Directors, and if there be no Assistant Secretary, then the Board of Directors, the Chairman of the Board of Directors, or the Chief Executive Officer may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Company and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Company and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be. In addition, the Secretary shall, promptly upon receipt of a request for indemnification from any person pursuant to Section 3 of Article VIII, advise the Board of Directors in writing of the receipt of such request. Section 6. Treasurer. Subject at all times to the control of the Board of Directors and the Chief Executive Officer, the Treasurer shall have custody of, and be responsible for, the corporate funds and securities and shall invest the same in his discretion and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Company as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer or the President, and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Company. The Treasurer shall perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer from time to time may prescribe. Section 7. Assistant Secretaries. Except as may be otherwise provided in these By-Laws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of 7 Directors, the Chief Executive Officer, or the Secretary, and in the absence of the Secretary or in the event of his disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary. Section 8. Assistant Treasurers. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the Chief Executive Officer, or the Treasurer, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. Section 9. Other Officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Company the power to choose such other officers and to prescribe their respective duties and powers. Section 10. Removal and Resignation; Vacancies. Any officer may be removed for or without cause at any time by the Board of Directors. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors or the Chief Executive Officer. Unless otherwise specified therein, such resignation shall take effect upon delivery. ARTICLE V STOCK Section 1. Form of Certificates. Every holder of stock in the Company shall be entitled to have a certificate signed, in the name of the Company (i) by the Chief Executive Officer and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Company, certifying the number of shares owned by him in the Company. Section 2. Signatures. Where a certificate is countersigned by (i) a transfer agent other than the Company or its employee, or (ii) a registrar other than the Company or its employee, any other signature on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if he or it were such officer, transfer agent or registrar at the date of issue. Section 3. Lost Certificates. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Company 8 alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Company a bond in such sum as it may direct as indemnity against any claim that may be made against the Company with respect to the certificate alleged to have been lost, stolen or destroyed. Section 4. Transfers. Stock of the Company shall be transferable in the manner prescribed by law and in these By-Laws. Transfers of stock shall be made on the books of the Company only by the person named in the certificate or by his attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be cancelled before a new certificate shall be issued. 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 any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty days nor less than ten days before the date of such meeting, nor more than sixty days prior to any such other corporate action. 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. Section 6. Beneficial Owners. 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, and for all other purposes, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. 9 ARTICLE VI NOTICES Section 1. Notices. Whenever written notice is required by law, the Restated Certificate of Incorporation or these By-Laws to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at his address as it appears on the records of the Company, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, facsimile, telex, cable or nationally recognized overnight courier. Section 2. Waivers of Notice. Whenever any notice is required by law, the Restated Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, and, in the case of a waiver of notice of a meeting, whether or not the business to be transacted at or the purposes of such meeting is set forth in such waiver, shall be deemed equivalent thereto. The attendance of any person at any meeting, in person or, in the case of a meeting of stockholders, by proxy, shall constitute a waiver of notice of such meeting except where such person attends such meeting for the express purpose of objecting at the beginning of such meeting to the transaction of any business on the grounds that such meeting is not duly called or convened. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends. Dividends upon the capital stock of the Company, subject to the provisions of the Restated Certificate of Incorporation, if any, may be declared by the Board of Directors or the Executive Committee at any regular or special meeting, and may be paid in cash, in property, or in shares of capital stock. Before payment of any dividend, there may be set aside out of any funds of the Company available for dividends such sum or sums as the Board of Directors or the Executive Committee from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Company, or for any proper purpose, and the Board of Directors or the Executive Committee may modify or abolish any such reserve. Section 2. Disbursements. All checks or demands for money and notes of the Company shall be signed by such officer or officers or such other person or persons as may be provided by these By-laws or as the Board of Directors may from time to time designate or approve. 10 Section 3. Fiscal Year. The fiscal year of the Company shall be the calendar year unless otherwise fixed by resolution of the Board of Directors. Section 4. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Company, the year of its organization and the words "Corporate Seal--Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE VIII INDEMNIFICATION Section 1. Power to Indemnify in Actions, Suits or Proceedings other Than Those by or in the Right of the Company. Subject to Section 3 of this Article VIII, the Company shall, to the fullest extent permitted by applicable law, indemnify any person who was or is a party to (or witness in) or is threatened to be made a party to (or witness in) any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action or suit by or in the right of the Company) by reason of the fact that he is or was or has agreed to become a director or officer of the Company, or is or was a director or officer of the Company serving (or has agreed to serve) at the request of the Company as a director or officer, employee, trustee or agent of or in any other capacity with respect to another Company, partnership, joint venture, trust, employee benefit plan or other enterprise (in any of the foregoing capacities, a "Representative of the Company"), or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party to (or witness in) or is threatened to be made a party to (or witness in) any such action, suit or proceeding by reason of the fact that he is or was or has agreed to become an employee or agent of the Company, or is or was serving (or has agreed to serve) at the request of the Company as a Representative of the Company, costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement (collectively, "Expenses") actually and reasonably incurred by him in connection with such action, suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, have reasonable cause to believe that his conduct was unlawful. Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Company. Subject to Section 3 of this Article VIII, the Company shall, to the fullest extent permitted by applicable law, indemnify any person who was or is a 11 party to (or witness in) or is threatened to be made a party to (or witness in) any threatened, pending or completed action, suit or proceeding by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Company, or is or was a director or officer of the Company serving (or has agreed to serve) at the request of the Company as a Representative of the Company, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party to (or witness in) or is threatened to be made a party to (or witness in) any such action, suit or proceeding by reason of the fact that he is or was or has agreed to become an employee or agent of the Company, or is or was an employee or agent of the Company serving (or has agreed to serve) at the request of the Company as a Representative of the Company, against Expenses actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such Expenses which the Delaware Court of Chancery or such other court shall deem proper. Section 3. Authorization of Indemnification; Procedures. Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the person seeking indemnification is proper in the circumstances because he has met the applicable requirements set forth in Section 1 or Section 2 of this Article VIII, as the case may be. A person, seeking indemnification under this Article VIII shall submit to the Secretary of the Company a written request including such documentation and information as is reasonably available to person and reasonably necessary to determine whether and to what extent such person is entitled to indemnification (the "Supporting Documentation"). In the case of indemnification sought pursuant to the first sentence of subsection (I) of paragraph A of the Sixth Article of the Company's Restated Certificate of Incorporation ("Mandatory Indemnification), such determination shall be made not later than 60 calendar days after receipt by the Company of such request together with the Supporting Documentation (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by majority vote of the stockholders. If no such determination has been made within 60 calendar days after receipt by the Company of the request therefor together with the Supporting Documentation, such person shall be deemed entitled to Mandatory Indemnification, unless (x) such person misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation, or (y) such 12 indemnification is prohibited by law. Notwithstanding the foregoing, to the extent that a director or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, he shall be indemnified against Expenses actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case. If a determination shall have been made or deemed to have been made, pursuant to this Section 3, or pursuant to the preceding sentence is not required to be made, that any person seeking Mandatory Indemnification is entitled to such indemnification, the Company shall be obligated to pay the amounts constituting such indemnification within five days after such determination has been made or deemed to have been made and shall be conclusively bound by such determination unless (A) such person misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by law. In the event that (x) advancement of Expenses is not timely made pursuant to Section 6 or (y) payment of Mandatory Indemnification is not made within five calendar days after a determination of entitlement to indemnification has been made or deemed to have been made such person shall be entitled to seek judicial enforcement, in any court of competent jurisdiction, of the Company's obligations to pay such advancement of Expenses or Mandatory Indemnification. Notwithstanding the foregoing, the Company may bring an action, in an appropriate court in the State of Delaware or any other court of competent jurisdiction, contesting the right of any person to receive Mandatory Indemnification hereunder due to the occurrence of an event or a condition described in subclause (A) or (B) of the second preceding sentence (a "Disqualifying Event"); provided, however, that in any such action the Company shall have the burden of proving the occurrence of such Disqualifying Event. Section 4. Good Faith Defined. For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Company or another enterprise, or on information supplied to him by the officers of the Company or another enterprise in the course of their duties, or on the advice of legal counsel for the Company or another enterprise or on information or records given or reports made to the Company or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or another enterprise, unless the Company shall sustain the burden of proof that such person had actual knowledge that such records, books of account, information, advice or reports were incorrect in a material respect. The term "another enterprise" as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Company as a Representative of the Company. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may 13 be deemed to have met the applicable standard of conduct set forth in Sections 1 or 2 of this Article VIII, as the case may be. Section 5. Actions for Mandatory Indemnification. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director or officer shall, after the 60 calendar day period referred to in Section 3 of this Article VIII has elapsed, be entitled to seek an adjudication of his entitlement to Mandatory Indemnification under this Article VIII either, at his sole option, in (i) any court of competent jurisdiction in the State of Delaware or (ii) an arbitration to be conducted by a single arbitrator pursuant to the then applicable rules of the American Arbitration Association. The basis of any such indemnification shall be a determination by such court or arbitrator that indemnification of the director or officer is proper in the circumstances because he has met the applicable requirements set forth in Sections 1 or 2 of this Article VIII, as the case may be. It shall be a defense to any such adjudication (other than an adjudication brought to enforce a claim for the advance of Expenses under Section 6 of this Article VIII where the required undertaking, if any, has been received by the Company) that the claimant has not met the requirements set forth in Section 1 or 2 of this Article VIII, but the burden of proving such defense shall be on the Company. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such claim for indemnification or create a presumption that the director or officer seeking indemnification has not met any applicable requirement for Mandatory Indemnification. The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 5 that the procedures and presumptions of this Article VIII are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Article. Notice of any adjudication for Mandatory Indemnification pursuant to this Section 5 shall be given to the Company promptly upon the filing of the application for such adjudication. If successful, in whole or in part, the director or officer seeking Mandatory Indemnification shall also be entitled to be paid the expenses of prosecuting such adjudication. Section 6. Expenses Payable in Advance. Expenses incurred by a director or officer in defending or investigating any threatened or pending action, suit or proceeding shall be paid by the Company in advance of the final disposition of such action, suit or proceeding within five business days after the receipt by the Company of a statement or statements from such director or officer requesting such advance or advances from time to time. Such statement or statements shall reasonably evidence such Expenses and shall include or be accompanied by (i) a certificate of such director of officer to the effect that such person in good faith believes that he is entitled to be indemnified by the Company pursuant to this Article VIII for such Expenses and (ii) an undertaking by or on behalf of such director or officer to repay such amount or amounts if it shall ultimately be determined that he is not entitled to be indemnified by the Company as authorized in this Article VIII. Such Expenses incurred by other 14 employees and agents of the Company may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. The Board of Directors may authorize the Company's counsel to represent such person in any action, suit or proceeding, whether or not the Company is a party to such action, suit or proceeding. Section 7. Nonexclusivity of Indemnification and Advancement of Expenses. The indemnification and advancement of Expenses provided by or granted pursuant to this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of Expenses may be entitled under the Restated Certificate of Incorporation, any By-Law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Company that indemnification of the persons specified in Sections 1 and 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Sections 1 or 2 of this Article VIII but whom the Company has the power or obligation to indemnify under the provisions of the General Corporation Law of the State of Delaware, or otherwise. Section 8. Insurance. The Company may, to the fullest extent permitted by applicable law, purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director, officer, employee or agent of the Company, or is or was a director, officer, employee or agent of the Company serving at the request of the Company as a Representative of the Company against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Company would have the power or the obligation to indemnify him against such liability under the provisions of this Article VIII. Section 9. Certain Definitions. For purposes of this Article VIII, references to "fines" shall include any excise taxes assessed on or against a person with respect to any employee benefit plan; and references to "serving at the request of the Company" shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "in or not opposed to the best interests of the Company" as referred to in this Article VIII. Section 10. Survival of Indemnification and Advancement of Expenses; Contract Right. The indemnification and advancement of Expenses provided by, or granted pursuant to, this Article VIII shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The indemnification provisions of this 15 Article VIII shall be deemed to be a contract between the Company and each director, officer, employee and agent who serves in any such capacity at any time while these provisions are in effect, and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a "contract right" may not be modified retroactively without the consent of such director, officer, employee or agent. Section 11. Limitation on Indemnification. Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 hereof), the Company shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Company. Section 12. Severability. If this Article VIII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify each director or officer and may indemnify each employee or agent of the Company as to Expenses with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company, to the fullest extent permitted by any applicable portion of this Article VIII that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE IX AMENDMENTS Section 1. Amendments. The Board of Directors shall have the express power, without a vote of stockholders, to adopt any By-Law, and to amend, alter or repeal these By-Laws, except to the extent that these By-Laws or the Restated Certificate of Incorporation otherwise provide. The Board of Directors may exercise such power upon the affirmative vote of a majority of the entire Board of Directors. Stockholders may not adopt any By-Law, nor amend, alter or repeal these By-Laws of the Company, except upon the affirmative vote of the holders of at least a majority of the votes entitled to be cast by the holders of all then outstanding shares of stock of the Company entitled to vote generally in the election of directors, voting together as a single class. 16 ARTICLE X CONSTRUCTION Section 1. Construction. In the event of any conflict between the provisions of these By-Laws as in effect from time to time and the provisions of the Restated Certificate of Incorporation of the Company as in effect from time to time, the provisions of such Restated Certificate of Incorporation shall be controlling. Section 2. Entire Board of Directors. As used in this Article X and in these By-Laws generally, the term "entire Board of Directors" means the total number of directors which the Company would have if there were no vacancies in the Board of Directors. 17 EX-99 5 EXHIBIT 99 1 Form 8-K October 1, 1996 Exhibit 99 Consortium Completes Purchase of AT&T Capital For Immediate Release: October 1, 1996 - -------------------------------------- Morristown, NJ - AT&T Capital Corporation today announced the completion of its merger with a majority-owned subsidiary of GRS Holding Company Ltd. ("GRSH"), owner of a U.K. rail leasing company. Following the merger, the company is owned by a leasing consortium composed of certain members of AT&T Capital's senior management, led by Chairman and CEO Tom Wajnert and GRSH. As a result of the merger, stockholders of AT&T Capital will receive $45 in cash for each outstanding share of the company's common stock. Instructions concerning the exchange of shares for cash will be mailed shortly to the company's stockholders of record by First Chicago Trust Company of New York, the paying agent. The company will continue under the name, "AT&T Capital Corporation" and will maintain its headquarters in Morristown, New Jersey. -----END PRIVACY-ENHANCED MESSAGE-----