THIRD RESTATED CERTIFICATE OF INCORPORATION
OF
UNITED AUTO GROUP, INC.
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ARTICLE I
NAME
The name of the corporation is: United Auto Group, Inc. (the
"Corporation").
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the Corporation's registered office in the State of
Delaware is 32 Loockerman Square, Suite L-100 in the City of Dover, County of
Kent. The name of the Corporation's registered agent at such address is The
Prentice Hall Corporation System, Inc.
ARTICLE III
PURPOSE
The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware (the "DGCL").
ARTICLE IV
CAPITAL
1. DESIGNATION.
The total number of shares of capital stock which the Corporation
shall have the authority to issue is 41,225,000, consisting of: (i) 40,000,000
shares of Voting Common Stock, par value $0.0001 per share (the "VOTING COMMON
STOCK"), (ii) 1,125,000 shares of Non-voting Common Stock, par value $0.0001 per
share (the "NON-VOTING COMMON STOCK" and, collectively with the Voting Common
Stock, the "COMMON STOCK"); and (iii) 100,000 shares of Preferred Stock, par
value $0.0001 per share.
All shares of Common Stock issued and outstanding shall be identical
and shall entitle the holders thereof to the same rights and privileges, except
as otherwise provided in this Article IV. Holders of shares of Common Stock
shall not have
preemptive or other rights to subscribe for additional shares of Common Stock or
for any other securities of the Corporation.
The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors of the Corporation (the "Board") is expressly
authorized at any time, and from time to time, to provide for the issuance of
shares of Preferred Stock in one or more series, for such consideration (not
less than its par value) and with such designations, powers, preferences and
relative, participating, optional or other special rights, and such
qualifications, limitations or restrictions, as shall be determined by the Board
and fixed by resolution or resolutions adopted by the Board providing for the
number of shares in each such series.
2. VOTING POWER OF COMMON STOCK.
Except as otherwise required by law, each holder of Voting Common Stock
shall be entitled to vote on all matters and shall be entitled to one vote for
each share of Voting Common Stock standing in such holder's name on the books of
the Corporation determined as of the record date for the determination of
stockholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken. Except as provided in this Section
2 or as otherwise required by law, no holder of Non-voting Common Stock shall be
entitled to vote such stock on any matter on which the stockholders of the
Corporation shall be entitled to vote, and shares of Non-voting Common Stock
shall not be included in determining the number of shares voting or entitled to
vote on any such matters. Except as otherwise provided in this Section 2 or as
otherwise required by law, the holders of shares of Voting Common Stock and, on
any matter on which the holders of shares of Non-voting Common Stock are
entitled to vote, the holders of shares of Non-voting Common Stock, shall vote
together as a single class; PROVIDED, HOWEVER, that the holders of shares of
Non-voting Common Stock shall be entitled to vote as a separate class on any
amendment, repeal or modification of any provision of this Certificate of
Incorporation that adversely affects the powers, preferences or special rights
of the holders of the Non-voting Common Stock.
3. CONVERSION OF COMMON STOCK.
(a) Subject to and upon compliance with the provisions of this Section 3,
any Regulated Stockholder (as hereinafter defined) shall be entitled to convert,
at any time and from time to time, any or all of the shares of Voting Common
Stock held by such stockholder into an equal number of shares of Non-voting
Common Stock.
(b) Subject to and upon compliance with the provisions of this Section 3,
each holder of Non-voting Common Stock shall be entitled to convert, at any time
and from time to time, any or
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all of the shares of Non-voting Common Stock held by such stockholder into an
equal number of shares of Voting Common Stock; PROVIDED HOWEVER, that no holder
of shares of Non-Voting Common Stock shall be entitled to convert any such
shares to the extent that, as a result of such conversion, such holder and its
Affiliates (as hereinafter defined), directly or indirectly, would own, control
or have the power to vote (i) a greater number of shares of Voting Common Stock
or other securities of any kind issued by the Corporation than such holder and
its Affiliates shall be permitted to own, control or have power to vote under
any law, regulation, rule or other requirement of any governmental authority at
the time applicable to such holder or its Affiliates or (ii) with respect to a
holder or Affiliate that is subject to regulation under the insurance laws of
any jurisdiction, 5% or more of the outstanding voting capital stock of the
Corporation.
(c) To exercise its conversion privilege, a holder of Common Stock
shall surrender the certificate or certificates representing the shares of
Common Stock being converted (the "CONVERTING SHARES") to the Corporation's
transfer agent and shall give written notice to the Corporation and its
transfer agent that such holder elects to convert the Converting Shares into
an equal number of shares of the class into which such shares may be
converted (the "CONVERTED SHARES"). Such notice shall also state the name or
names (with address or addresses) and denominations in which the certificate
or certificates for Converted Shares are to be issued. The Corporation shall
promptly notify each Regulated Stockholder (that has previously informed the
Corporation in writing of its status as a Regulated Stockholder) of its
receipt of such notice. The certificate or certificates for Converting
Shares shall be accompanied by proper assignment thereof to the Corporation
or in blank. The date when such written notice is received by the
Corporation's transfer agent, together with the certificate or certificates
representing the Converting Shares, shall be the "CONVERSION DATE." As
promptly as possible after the Conversion Date, the Corporation shall issue
and deliver to the holder of the Converting Shares, or on its written order,
such certificate or certificates as it may request for the Converted Shares
issuable upon such conversion, and the Corporation shall deliver to the
converting holder a certificate (which shall contain such legends as were set
forth on the surrendered certificate or certificates) representing any shares
which were represented by the certificate or certificates that were delivered
to the Corporation in connection with such conversion but which were not
converted, PROVIDED, HOWEVER, that if such conversion is subject to part (d)
of this Section 3, the Corporation shall not issue such certificate or
certificates until the expiration of the Deferral Period (as hereinafter
defined) referred to therein. Such conversion, to the extent permitted by the
close of business on the Conversion Date, and at such time the rights of the
holder of the Converting Shares as such holder shall cease (except that, in
the case of a conversion subject to part (d) of this Section 3,
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the conversion shall be deemed effective upon the expiration of the Deferral
Period referred to therein), and the person or persons in whose name or names
the certificate or certificates for the Converted Shares shall be issuable
upon such conversion shall be deemed to have become the holder or holders of
record of the Converted Shares. Upon the issuance of shares in accordance
with this Section 3, such Converted Shares shall be deemed to be duly
authorized, validly issued, fully paid and non-assessable.
(d) The Corporation shall not convert or directly or indirectly redeem,
purchase or otherwise acquire any shares of Voting Common Stock or any other
class of capital stock of the Corporation or take any other action affecting the
voting rights of such shares if such action will increase the percentage of any
class of outstanding voting securities owned or controlled by any Regulated
Stockholder (other than any such stockholder which requested that the
Corporation take such action or which otherwise waives in writing its rights
under part (d) of this Section 3) unless the Corporation gives written notice
(the "DEFERRAL NOTICE") of such action to each Regulated Stockholder (that has
previously informed the Corporation in writing of its status as a Regulated
Stockholder). The Corporation shall defer making any such conversion,
redemption, purchase or other acquisition, or taking any such other action, for
a period of 30 days (the "DEFERRAL PERIOD") after giving the Deferral Notice in
order to allow each Regulated Stockholder to determine whether it wishes to
convert or take any other action with respect to the Common Stock it owns,
controls or has the power to vote, and if any such Regulated Stockholder then
elects to convert any shares of Voting Common Stock it shall notify the
Corporation in writing within 20 days of the issuance of the Deferral Notice, in
which case the Corporation shall (i) defer taking the pending action until the
end of the Deferral Period, (ii) promptly notify from time to time each other
Regulated Stockholder of each proposed conversion and the proposed transactions
and (iii) effect the conversions requested by all Regulated Stockholders in
response to the notices issued pursuant to part (d) of this Section 3 at the end
of the Deferral Period.
(e) If the Corporation shall in any manner subdivide (by stock split,
stock dividend or otherwise) or combine (by reverse stock split or otherwise)
the outstanding shares of the Voting Common Stock or the Non-voting Common
Stock, the outstanding shares of each other class of Common Stock shall be
subdivided or combined, as the case may be, to the same extent, share and share
alike, and effective provision shall be made for the protection of the
conversion rights hereunder.
If, at any time and from time to time, there shall be a capital
reorganization of the Common Stock (other than a change in par value or from par
value to no par value or from no par value to par value as a result of any
stock dividend or subdivision, split-up or combination of shares) or a merger or
consolidation of the Corporation with or into another
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corporation, or sale of all or substantially all of the Corporation's properties
and assets, then, as part of such reorganization, merger, consolidation or sale,
provision shall be made so that each holder of any shares of Common Stock,
irrespective of class, shall thereafter be entitled to receive upon conversion
of any such shares, so long as the conversion right hereunder with respect to
such shares would exist had such event not occurred, the number of shares of
stock or other securities or property of the Corporation, or of the successor
corporation resulting from such merger, consolidation or sale, to which such
holder would have been entitled if such holder had converted such shares
immediately prior to such capital reorganization, merger, consolidation or sale.
In the event of such a merger, consolidation or sale, effective provision shall
be made in the certificate of incorporation of the successor corporation or
otherwise for the protection of the conversion rights of the shares of Common
Stock of each class that shall be applicable, as nearly as reasonably may be, to
any such other shares of stock and other securities and property deliverable
upon conversion of shares of Common Stock into which such Common Stock could
have been converted immediately prior to such event. The Corporation shall not
be a party to any reorganization, merger or consolidation pursuant to which any
Regulated Stockholder would be required to take (i) any voting securities which
would cause such holder to violate any law, regulation or other requirement of
any governmental body applicable to such holder or (ii) any securities
convertible into voting securities which if such conversion took place would
cause such holder to violate any law, regulation or other requirement of any
governmental body applicable to such holder, other than securities which are
specifically provided to be convertible only in the event that such conversion
may occur without any such violation.
(f) The Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Voting Common Stock, Non-voting Common
Stock or its treasury shares, solely for the purpose of effecting the conversion
of shares of Voting Common Stock and Non-voting Common Stock, such number of
shares of such class as shall from time to time be sufficient to effect the
conversion of all then outstanding shares of Voting Common Stock that are
entitled to so convert and all then outstanding shares of Non-voting Common
Stock.
(g) The issuance of certificates for shares of any class of Common Stock
upon conversion of shares of any other class of Common Stock shall be made
without charge to the holders of such shares for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Common Stock; PROVIDED,
HOWEVER, that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the Common Stock
converted.
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(h) "AFFILIATE" shall mean with respect to any person, any other person,
directly or indirectly controlling, controlled by or under common control with
such person. For the purpose of the above definition, the term "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise.
"REGULATED STOCKHOLDER" shall mean (i) any stockholder that is subject to
the provisions of Regulation Y of the Board of Governors of the Federal Reserve
System (12 C.F.R. Part 225) or any successor to such regulation ("REGULATION
Y") and to which shares of Common Stock of the Corporation were issued pursuant
to the warrants issued to J.P. Morgan Capital Corporation, so long as such
stockholder shall hold such shares of Common Stock or shares issued upon
conversion(s) of such shares, (ii) any stockholder that is subject to
regulation under the New York Insurance Law and to which shares of Common Stock
of the Corporation were issued pursuant to the warrants issued to The Equitable
Life Assurance Society of the United States, so long as such stockholder shall
hold such shares of Common Stock or shares issued upon conversion(s) of such
shares, (iii) any Affiliate of any such Regulated Stockholder that is a
transferee of any shares of Common Stock of the Corporation, so long as such
Affiliate shall hold, and only with respect to, such shares of Common Stock or
shares issued upon conversion of such shares and (iv) any person to which such
Regulated Stockholder or any of its Affiliates has transferred such shares, so
long as such transferee shall hold, and only with respect to, any shares
transferred by such stockholder or Affiliates or any shares issued upon
conversion of such shares but only if such person (or any Affiliate of such
person) is (A) subject to the provisions of Regulation Y or (B) subject to
regulation under the insurance laws of any jurisdiction.
ARTICLE V
BOARD OF DIRECTORS
Except as otherwise provided by law, the number of directors which shall
constitute the Board shall be as set forth in the Bylaws of the Corporation.
Elections of directors need not be by written ballot. The directors of the
Corporation shall be divided into three classes: Class I, Class II and Class
III. The number of directors in each class shall be divided equally so far as
possible among the three Classes. The initial Class I, Class II and Class III
directors shall be designated and the terms of the Board shall be as follows:
(i) Class I directors shall be elected to serve until the 1997
Annual Meeting of Stockholders,
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(ii) Class II directors shall be elected to serve until the 1998
Annual Meeting of Stockholders, and
(iii) Class III directors shall be elected to serve until the
1999 Annual Meeting of Stockholders,
and until their successors shall be duly elected and qualified. At each annual
election of directors, beginning with the 1997 annual election, the successors
to the directors of each class whose term shall expire at such meeting shall be
elected to hold office for a term of three years from the date of their election
and until their successors shall be duly elected and qualified. In case of any
increase or decrease in the number of directors, the increase or decrease shall
be apportioned by the directors among the several classes as nearly equally as
possible; PROVIDED, HOWEVER, that any decrease in the number of directors which
shall cause a director to be removed prior to the expiration of his term shall
be subject to the provisions of the next succeeding paragraph of this Article V.
Anything herein to the contrary notwithstanding, the provisions of this
Article V shall apply only to directors elected by holders of Voting Common
Stock together with holders of all other classes of the Corporation's capital
stock voting as a single class therewith on the election of directors. If
holders of any class of the Corporation's capital stock have the right to elect
directors voting as a separate class and such right be then in effect, the
maximum number of directors of the Corporation shall be increased by the number
of directors which such holders may so elect and upon termination of such right
the number shall be reduced to the extent it was previously so increased.
Notwithstanding any other provisions of this Certificate of Incorporation
or the Bylaws (and notwithstanding the fact that some lesser percentage may be
specified by law), the affirmative vote of the holders of 2/3 or more of the
outstanding shares of capital stock of the Corporation entitled to vote on such
amendment, alteration, change or repeal (considered for this purpose as one
class) shall be required to amend, alter, change or repeal this Article V.
ARTICLE VI
BYLAWS
In furtherance and not in limitation of the powers conferred by
statute, the Board is expressly authorized to make, alter or repeal Bylaws of
the Corporation (except insofar as Bylaws adopted by the stockholders shall
otherwise provide).
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ARTICLE VII
AGREEMENT WITH CREDITORS
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the DGCL or on the application of
trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the DGCL, order a
meeting of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of the Corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all stockholders or class of
stockholders of the Corporation, as the case may be, and also on the
Corporation.
ARTICLE VIII
NO STOCKHOLDER ACTION WITHOUT MEETING
Any action required or permitted to be taken at an annual or special
meeting of the Corporation's stockholders may be taken only at such duly called
annual or special meeting.
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ARTICLE IX
INDEMNIFICATION
The Corporation shall indemnify to the fullest extent permitted under and
in accordance with the laws of the State of Delaware any person who was or is a
party or is threatened to be made a party to 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 a director, officer,
trustee, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, trustee, employee or agent of
or in any other capacity with another corporation, partnership, joint venture,
trust or other enterprise, 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.
Expenses incurred in defending a civil or criminal action, suit or
proceeding shall (in the case of any action, suit or proceeding against a
director of the Corporation) or may (in the case of any action, suit or
proceeding against an officer, trustee, employee or agent) be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board upon receipt of an undertaking by or on
behalf of the indemnified person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Corporation as
authorized in this Article IX.
The indemnification and other rights set forth in this Article IX
shall not be exclusive of any provisions with respect thereto in the Bylaws or
any other contract or agreement between the Corporation and any director,
officer, trustee, employee or agent of the Corporation.
Neither the amendment nor repeal of this Article IX, nor the adoption
of any provision of this Certificate of Incorporation inconsistent with this
Article IX, shall eliminate or reduce the effect of this Article IX in respect
of any matter occurring before 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 which would have given rise to a right of
indemnification or right to receive expenses pursuant to this Article IX, if
such provision had not been so amended or repealed or if a provision
inconsistent therewith had not been so adopted.
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ARTICLE X
ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS
To the fullest extent permitted by the DGCL, as the same presently
exists or may hereafter be amended, no director shall be personally liable to
the Corporation or to any stockholder 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 DGCL 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 (A) shall have
breached his duty of loyalty to the Corporation or its stockholders, (B) shall
not have acted in good faith or, in failing to act, shall not have acted in good
faith, (C) 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 (d) shall have
derived an improper personal benefit.
Any repeal or modification of this Article X shall no adversely affect
any right or protection of a director with respect to any act or omission
occurring prior to such repeal or modification. If the DGCL is amended after
the date of incorporation 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 DGCL, as so amended.
ARTICLE XI
SEVERABILITY
If any provisions contained in this Certificate of Incorporation
shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not invalidate this entire
Certificate of Incorporation or any other provisions hereof. Such provision
shall be deemed to be modified to the extent necessary to render it valid and
enforceable and if no such modification shall render it valid and enforceable,
then this Certificate of Incorporation shall be construed as if not containing
such provision.
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