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The following is an excerpt from a S-1 SEC Filing, filed by CHAMPIONSHIP AUTO RACING TEAMS INC on 12/23/1997.
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Sales of significant amounts of the Common Stock in the public market after this Offering could adversely affect the market price of the Company's Common Stock. After the Offering, 14,533,000 shares of Common Stock (15,218,950 shares if the Underwriters' over-allotment option is exercised in full) will be outstanding. In addition to the 4,573,000 shares of Common Stock offered hereby (5,258,950 shares if the Underwriters' over-allotment option is exercised in full), a total of 8,560,000 shares of Common Stock have been held by non-affiliates for more than one year but less than two years, or by affiliates for more than one year and, therefore, will be eligible for sale, beginning 90 days after the date of this Prospectus, subject to the volume limitations of Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), the Underwriters' lock-up and an agreement among stockholders. The approximately 1,400,000 remaining shares have been held for less than one year and are not yet eligible for sale. In addition to the 10,200,000 shares of Common Stock outstanding, the Company has reserved an additional 2,000,000 and 100,000 shares of Common Stock for issuance pursuant to the Stock Option Plan and the Director Option Plan, respectively, which shares will be registered under the Securities Act, and will be freely transferable.

No prediction can be made as to the effect that resale of shares of Common Stock, or the availability of shares of Common Stock for resale, will have on the market price of the Common Stock prevailing from time to time. The resale of substantial amounts of Common Stock, or the perception that such resales may occur, could adversely affect prevailing market prices of the Common Stock. The Company's officers, directors and current stockholders have agreed not to sell their shares (approximately 9,960,000 shares) for a period of 180 days from the date of this Prospectus without the prior written consent of the representatives of the Underwriters. In addition, each of the current stockholders have signed an agreement which restricts their ability to sell any shares of Common Stock for a period of one year from the date of this Prospectus. See "Shares Eligible for Future Sale" and "Underwriting."


The General Corporation Law of the State of Delaware contains certain provisions which may delay or prevent an attempt by a third party to acquire control of the Company. In addition, certain provisions of the Company's Certificate of Incorporation and Bylaws authorize the issuance of preferred stock, and establish advance notice requirements for director nominations and actions to be taken at stockholder meetings. These provisions could discourage or impede a tender offer, proxy contest or other similar transaction involving control of the Company, which transaction might be viewed favorably by minority stockholders. In addition, the severance provisions of employment agreements with certain members of management could impede an attempted change of control of the Company. The Company has adopted a Stockholder Rights Plan which may have the effect of impeding a hostile attempt to acquire control of the Company. See "Description of Capital Stock -- Delaware Law" and "Certain Charter and By-Law Provisions."



The Company may issue preferred stock in the future without stockholder approval and upon such terms and conditions, and having such rights, privileges and preferences, as the Board of Directors may determine. The rights of the holders of Common Stock will be subject and subordinate to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock could have the effect of making it more difficult for a third party to acquire, or discouraging a third party from acquiring, a majority of the outstanding voting stock of the Company. The Company has no outstanding preferred stock and no present plans to issue any shares of preferred stock. See "Description of Capital Stock -- Preferred Stock."