CERTIFICATE OF DESIGNATIONS, PREFERENCES, AND
RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL
RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
OF
REDEEMABLE EXCHANGEABLE CUMULATIVE PREFERRED STOCK
OF
AFTERMARKET TECHNOLOGY CORP.
______________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________________
Aftermarket Technology Corp., a Delaware corporation (the "Corporation"),
certifies that pursuant to the authority contained in Article IV of its
Certificate of Incorporation, and in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware, its
Board of Directors, by unanimous written consent of the Board of Directors
dated as of December 13, 1996, adopted the following resolution creating a
series of its Preferred Stock, par value $0.01 per share, designated as
Redeemable Exchangeable Cumulative Preferred Stock:
WHEREAS, in connection with the future merger of Aftermarket Technology
Holdings Corp., a Delaware corporation and the Corporation's parent
("Holdings"), with and into the Corporation with the Corporation as the
surviving corporation (the "Merger"), each outstanding share of preferred
stock of Holdings will be converted into one share of preferred stock of the
Corporation; and
WHEREAS, the Certificate of Incorporation of the Corporation authorizes
a class of shares known as Preferred Stock, par value $0.01 per share, to be
issuable from time to time in one or more series;
RESOLVED, that pursuant to the authority expressly granted to and vested
in the Board of Directors of the Corporation by the provisions of the
Certificate of Incorporation, the Board hereby creates a series of the class
of authorized Preferred Stock of the Corporation, and hereby fixes the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof as
follows:
1. DESIGNATION, ISSUANCE AND STATED VALUE. The designation of the
series of Preferred Stock authorized by this resolution shall be "Redeemable
Exchangeable Cumulative Preferred Stock" (the "Redeemable Preferred Stock").
The number of shares of Redeemable Preferred Stock issuable hereunder shall
be 200,000. The shares of Redeemable Preferred Stock shall be issued by the
Corporation in such amounts, at such times and to such persons as shall be
specified by the Corporation's Board of Directors, from time to time. For
the purposes hereof, the "Stated Value" of each share of Redeemable Preferred
Stock (regardless of its par value) shall be $100 plus an amount equal to the
accrued but unpaid dividends with respect to a share of Redeemable Exchange
Cumulative Preferred Stock, par value $0.01 per share, of Holdings as of the
effective date of the Merger, which Stated Value shall be proportionately
increased or decreased for any stock consolidation or stock split,
respectively, of the outstanding shares of Redeemable Preferred Stock.
2. RANK. The Redeemable Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and dissolution, rank
junior to all classes and series of stock of the Corporation now or hereafter
authorized, issued or outstanding (collectively, the "Senior Securities")
other than the Corporation's "Junior Securities." For the purposes hereof,
"Junior Securities" means all series and classes of common stock, $.01 par
value per share (the "Common Stock"), of the Corporation, and such classes or
series of stock of the Corporation as shall be designated as junior to the
Redeemable Preferred Stock. The Corporation shall not issue any series or
class of stock ranking senior to the Redeemable Preferred Stock without the
affirmative vote of a majority of the outstanding shares of Redeemable
Preferred Stock.
3. DIVIDENDS.
(a) AMOUNT. On the last business day of June in each calendar year
(the "Dividend Accrual Date"), the holder of record of each share of the
Redeemable Preferred Stock as their names appear in the stock register of the
Corporation on such date shall become entitled to receive (when, as and if
declared by the Board of Directors of the Corporation) a dividend (the
"Annual Dividend") equal to the sum of (i) ten percent (10%) of the Stated
Value of such share (pro-rated for any portion of a full year that such share
shall have been issued and outstanding) plus (ii) ten percent (10%) of the
Unpaid Dividend Amount (as defined below) as of the previous Dividend Accrual
Date. The Unpaid Dividend Amount with respect to each share of the
Redeemable Preferred Stock shall be equal to the aggregate of all Annual
Dividends that the holder of such share shall have theretofore become
entitled to receive for such share but that shall not have been declared and
paid by the Board of Directors of the Corporation.
(b) ACCUMULATION AND TIME OF PAYMENT. Dividends on each share of
the Redeemable Preferred Stock shall be cumulative and shall accrue from day
to day, whether or not earned or declared, commencing with the date of issue
of such share. Dividends shall be payable annually, when, as and if declared
by the Board of Directors of the Corporation.
2
(c) PAYMENT OF ACCUMULATED DIVIDENDS. Accumulated dividends not
paid on prior Dividend Accrual Dates may be declared by the Board of
Directors and paid to the holders of record of outstanding shares of
Redeemable Preferred Stock as their names shall appear on the stock register
of the Corporation on a record date to be established by the Board of
Directors, which record date shall be not more than sixty (60) nor less than
thirty (30) days preceding the date of payment, whether or not such date is a
Dividend Accrual Date. Holders of outstanding shares of Redeemable Preferred
Stock shall not be entitled to receive any dividends in excess of the full
cumulative dividends to which such holders are entitled as provided in this
Section 3.
(d) RESTRICTIONS ON PAYMENT OF DIVIDENDS. Notwithstanding anything
contained herein to the contrary, no dividends on shares of Redeemable
Preferred Stock shall be declared by the Board of Directors or paid or set
apart for payment by the Corporation: (i) unless, prior to or concurrently
with such declaration, payment or setting apart, all accrued and unpaid
dividends, if any, on shares of Senior Securities shall have been paid or
declared and set apart for payment through the dividend payment period with
respect to such Senior Securities which next precedes or coincides with the
Dividend Accrual Date; or (ii) at such time as such declaration, payment or
setting apart is prohibited by the Delaware General Corporation Law (the
"DGCL"); or (iii) at such time as the terms and provisions of any contract or
other agreement of the Corporation or any of its subsidiaries entered into or
assumed providing financing (including acquisition financing) or working
capital to the Corporation or any of its subsidiaries (whether or not entered
into prior to, at or after the issuance of the Redeemable Preferred Stock),
specifically prohibits such declaration, payment or setting apart for payment
or provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder.
4. RESTRICTIONS ON JUNIOR PAYMENTS. So long as any shares of
Redeemable Preferred Stock are outstanding, the Corporation shall not (a)
declare, pay or set apart for payment any dividend on, or make any
distribution in respect of, Junior Securities or any warrants, rights, calls
or options exercisable or convertible into any Junior Securities, either
directly or indirectly, whether in cash, obligations or shares of the
Corporation or other property (other than distributions or dividends solely
in the form of a particular class or series of Junior Securities, or
warrants, rights or options exercisable for such Junior Securities, to
holders of such Junior Securities), (b) make any payment on account of, or
set apart for payment money for a sinking or other similar fund for, the
purchase, redemption, retirement or other acquisition for value of any of, or
redeem, purchase, retire or otherwise acquire for value any of, the Junior
Securities (other than as a result of a reclassification of Junior Securities
or the exchange or conversion of one class or series of Junior Securities for
or into another class or series of Junior Securities) or any warrants,
rights, calls or options exercisable for or convertible into any of the
Junior Securities, or (c) permit any corporation or other entity directly or
indirectly controlled by the Corporation to purchase, redeem, retire or
otherwise acquire for value any of the Junior Securities or any warrants,
rights, calls or options exercisable for or convertible into any Junior
Securities; PROVIDED, HOWEVER, that the restrictions of this Section 4 may be
waived by the affirmative vote of a majority of the
3
outstanding shares of Redeemable Preferred Stock; PROVIDED FURTHER, HOWEVER,
that the restrictions of this Section 4 shall not apply to the repurchase or
redemption of shares of Common Stock or Redeemable Preferred Stock under that
certain Stockholders Agreement dated as of July 18, 1994 among Holdings and
certain of its stockholders, optionholders and warrantholders, to which the
Corporation will become a party at the effective time of the Merger, as the
same may be supplemented, amended or otherwise modified from time to time,
(i) out of the net cash proceeds derived by the Corporation out of a prior or
substantially contemporaneous issuance of Junior Securities or (ii) for an
aggregate purchase price not to exceed the lesser of (A) 25% of the net
income of Holdings and its subsidiaries for the period commencing July 1,
1994 through the effective time of the Merger plus 25% of the net income of
the Corporation and its subsidiaries for the period commencing at the
effective time of the Merger through the date of determination, in each case
determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied for such periods, and (B)
$1,000,000.
5. LIQUIDATION PREFERENCE.
(a) THE LIQUIDATION PREFERENCE. In the event of any voluntary or
involuntary liquidation, dissolution or winding up the affairs of the
Corporation, the holders of shares of Redeemable Preferred Stock then
outstanding shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, whether such assets are
capital or surplus and whether or not any dividends are declared, an amount
equal to the Stated Value for each share outstanding plus an amount equal to
all accrued but unpaid dividends thereon to the date fixed for liquidation,
dissolution or winding up (the "Liquidation Preference"), before any payment
shall be made or any assets distributed to the holders of Junior Securities.
If the assets of the Corporation are not sufficient to pay in full the
liquidation payments payable to the holders of outstanding shares of the
Redeemable Preferred Stock and any series of preferred stock or any other
class of stock on a parity, as to rights on liquidation, dissolution or
winding up, with the Redeemable Preferred Stock, then the holders of all such
shares shall share ratably in such distribution of assets in accordance with
the amount that would be payable on such distribution if the amounts to which
the holders of outstanding shares of Redeemable Preferred Stock and the
holders of outstanding shares of such other securities are entitled were paid
in full. Nothing herein contained shall be deemed to prevent redemption of
shares of the Redeemable Preferred Stock by the Corporation in the manner
provided in Section 6. The liquidation payment with respect to each
outstanding fractional share of Redeemable Preferred Stock shall be equal to
a ratably proportionate amount of the liquidation payment with respect to
each outstanding share of Redeemable Preferred Stock. All payments for which
this Section 5 provides shall be in cash, property (valued at its fair market
value, as determined by an independent nationally recognized investment
banking firm) or a combination thereof; PROVIDED, HOWEVER, that no cash shall
be paid to holders of Junior Securities unless each holder of the outstanding
shares of Redeemable Preferred Stock has been paid in cash the full amount
of the Liquidation Preference to which such holder is entitled as provided
herein. After payment of the full amount of the Liquidation Preference to
which each holder is entitled, such holders of shares
4
of Redeemable Preferred Stock will not be entitled to any further
participation in any distribution of the assets of the Corporation.
(b) EVENTS NOT CONSTITUTING LIQUIDATION. For the purposes of this
Section 5, neither the voluntary sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into any other corporation
shall be deemed to be a voluntary or involuntary liquidation, dissolution or
winding up of the Corporation.
6. REDEMPTION.
(a) OPTIONAL REDEMPTION. Subject to the restrictions set forth in
Section 6(c) hereof, the Corporation may, at the option of the Board of
Directors, at any time or from time to time, in whole or in part, redeem the
shares of Redeemable Preferred Stock at the time outstanding, at a redemption
price equal to the Stated Value per share, together with an amount equal to
accrued and unpaid dividends thereon to the date fixed for such redemption.
(b) MANNER OF REDEMPTION. No prior notice of redemption of
outstanding shares of Redeemable Preferred Stock pursuant to Section 6(a) to
the holders of record of outstanding shares of Redeemable Preferred Stock
selected for redemption shall be required. If, as a result of a redemption,
a holder would be left with a fraction of a share of Redeemable Preferred
Stock, the Corporation shall redeem the number of shares of such holder that
it otherwise would redeem rounded up or down, in the Corporation's sole
discretion, to the nearest whole number.
(c) RESTRICTIONS ON REDEMPTIONS. No shares of Redeemable Preferred
Stock shall be redeemed in whole or part under Sections 6(a) or 6(b) hereof:
(i) at any time that such redemption is prohibited by the DGCL; (ii) at any
time that the terms and provisions of any contract or other agreement of the
Corporation or any of its subsidiaries entered into or assumed providing
financing (including acquisition financing) or working capital to the
Corporation or any of its subsidiaries (whether or not entered into prior to,
at or after the issuance of the Redeemable Preferred Stock), specifically
prohibits such redemption or provides that such redemption would constitute a
breach thereof or a default thereunder; (iii) unless, prior to or
concurrently with such redemption, all unpaid and accrued dividends on Senior
Securities for dividend periods preceding or ending on the redemption date
have been paid in full or have been declared and set aside for payment in
full; or (iv) at any time that the Corporation shall be in default in respect
of any of its redemption obligations on or under Senior Securities.
(d) PRIORITY AS TO JUNIOR SECURITIES. The Corporation shall take
no action that would otherwise require the Corporation to redeem any
outstanding shares of Redeemable Preferred Stock pursuant to Section 6(a)
hereof (each a "Redemption Obligation")
5
if at such time the Corporation is unable to discharge its Redemption
Obligation; PROVIDED, HOWEVER, that if the Corporation fails to discharge any
Redemption Obligation (without regard as to the circumstances pursuant to
which such Redemption Obligation arose), (x) the Redemption Obligation shall
be discharged as soon as the Corporation is able to discharge such Redemption
Obligation, and (y) so long as such Redemption Obligation shall be
outstanding but shall not be fully discharged, the Corporation shall not (i)
declare, pay or set apart for payment any dividend on, or make any
distribution in respect of, the Junior Securities or any warrants, rights,
calls or options exercisable for or convertible into any of the Junior
Securities, either directly or indirectly, whether in cash, obligations or
shares of the Corporation or other property (other than distributions or
dividends of a particular class or series of Junior Securities, or warrants,
rights or options exercisable for such Junior Securities, to holders of such
Junior Securities), or (ii) make any payment on account of, or set apart for
payment money for a sinking or other similar fund for, the purchase,
redemption, retirement or other acquisition for value of any of, or redeem,
purchase, retire or otherwise acquire for value any of, the Junior Securities
(other than as a result of a reclassification of Junior Securities or the
exchange or conversion of one class or series of Junior Securities for or
into another class or series of Junior Securities, other than through the use
of the proceeds of a substantially contemporaneous sale of other Junior
Securities) or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Securities, or (iii) permit any
corporation or other entity directly or indirectly controlled by the
Corporation to purchase, redeem, retire or otherwise acquire for value any of
the Junior Securities or any warrants, rights, calls or options exercisable
for or convertible into any of the Junior Securities. Notwithstanding the
immediately preceding sentence, the restrictions of this Section 6(d) shall
not apply to the repurchase or redemption of shares of the Corporation's
capital stock in accordance with Section 4 hereof.
7. EXCHANGE. The Redeemable Preferred Stock is exchangeable to the
extent of funds legally available for the redemption thereof on the date of
exchange, at the sole option of the Corporation, in whole or in part from
time to time, on or after January 1, 1995, for the Corporation's Subordinated
Exchange Debentures due July 31, 2006 (the "Exchange Debentures"). The
Exchange Debentures shall be issued pursuant to an indenture, the form of
which shall have been approved by the Corporation and the holders of a
majority of the then outstanding shares of Redeemable Preferred Stock.
Holders of the outstanding shares of Redeemable Preferred Stock will be
entitled to receive $100.00 principal amount of the Exchange Debentures in
exchange for each share of Redeemable Preferred Stock held by them at the
time of exchange and, at the option of the Corporation, cash or such
principal amount of the Exchange Debentures equal to all accrued but unpaid
dividend amounts at the time of the exchange. Such holders may receive
Exchange Debentures in amounts less than $100.00 as may be necessary due to
the issuance of fractional shares of Redeemable Preferred Stock. The
Corporation will cause the Exchange Debentures to be authenticated as of the
date on which the exchange is effective and dated the Dividend Accrual Date
that coincides with the date of exchange.
6
8. PROCEDURE FOR REDEMPTION OR EXCHANGE.
(a) SELECTION. In the event that fewer than all of the outstanding
shares of Redeemable Preferred Stock are to be redeemed or exchanged pursuant
to Section 6 or 7 hereof, the number of shares to be redeemed or exchanged,
shall be determined by the Board of Directors at its sole option and shall be
redeemed or exchanged pro rata among all holders of the Redeemable Preferred
Stock.
(b) NOTICE. If the Corporation exchanges shares of Redeemable
Preferred Stock, notice of every exchange of shares of Redeemable Preferred
Stock shall be mailed by first class mail, postage prepaid, not less than
thirty (30) days nor more than sixty (60) days prior to the exchange date
addressed to the holders of record of the shares to be exchanged at their
respective last addresses as they shall appear on the books of the
Corporation; PROVIDED, HOWEVER, that the failure to give such notice or any
defect therein or in the mailing thereof shall not affect the validity of the
exchange of any shares so to be exchanged except as to the holder to whom the
Corporation has failed to give such notice or except as to the holder to whom
such notice was defective. Each such notice shall state: (i) the exchange
date; (ii) that shares of Redeemable Preferred Stock are to be exchanged and,
if less than all the shares held by such holder are to be exchanged, the
number of such shares to be exchanged; (iii) the exchange price; (iv) the
place or places where certificates for such shares are to be surrendered for
payment of the exchange price; and (v) that dividends on the shares to be
exchanged will cease to accrue on such redemption date.
(c) EFFECT OF REDEMPTION OR EXCHANGE. From and after the
redemption date or as of the exchange date, dividends on the shares of
Redeemable Preferred Stock so called for redemption or exchange shall cease
to accrue, and said shares shall no longer be deemed to be outstanding and
shall be retired and shall have the status of authorized but unissued shares
of preferred stock, unclassified as to series, and shall not be reissued as
shares of Redeemable Preferred Stock, and all rights of the holders thereof
as stockholders of the Corporation (except the right to receive from the
Corporation the redemption price as provided in Section 6 or the Exchange
Debentures upon exchange and any accrued and unpaid dividends, in cash or
Exchange Debentures as provided in Section 7) shall cease and terminate. In
the event of redemption, if prior to the date of redemption all said funds
necessary for such redemption shall have been irrevocably deposited in trust,
for the account of the holders of the shares of the Redeemable Preferred
Stock to be redeemed (and so as to be and continue to be available therefor),
with a bank or trust company thereupon and without awaiting the redemption
date, all shares of the Redeemable Preferred Stock with respect to which such
deposit shall have been so made, shall be deemed to be no longer outstanding
and all rights with respect to such shares of the Redeemable Preferred Stock
shall forthwith upon such deposit in trust cease and terminate (except the
right of the holders thereof on or after the redemption date to receive from
such deposit the amount payable upon the redemption). In case the holders of
shares of the Redeemable Preferred Stock that shall have been called for
redemption shall not within two years (or any longer period if required by
law) after the redemption date claim any amount so deposited in trust for the
redemption of such shares, such
7
bank or trust company shall, upon demand and if permitted by applicable law,
pay over to the Corporation any such unclaimed amount so deposited with it
and shall thereupon be relieved of all responsibility in respect thereof, and
thereafter the holders of such shares shall, subject to applicable escheat
laws, look only to the Corporation for payment of the redemption price
thereof. Upon surrender of the certificates for any shares so redeemed or
exchanged (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require), the redemption price provided
in Section 6 or the Exchange Debentures and any cash to be delivered by the
Corporation pursuant to Section 6 shall be delivered to the registered holder
of such certificates. In case fewer than all the shares represented by any
such certificate are redeemed or exchanged, a new certificate shall be issued
representing the unredeemed or unexchanged shares without cost to the holder
thereof.
9. VOTING RIGHTS. Except as specifically set forth herein or in the
DGCL, the holders of shares of Redeemable Preferred Stock shall not be
entitled to any voting rights with respect to any matters voted upon by
stockholders of the Corporation.
10. SECTION HEADINGS. Section headings are for convenience of reference
only and shall not constitute a part of this Certificate or be referred to in
connection with the interpretation or construction hereof.
8
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed, signed and acknowledged by Mark C. Hardy, its Vice President, and
to be attested by John C. Kent, its Secretary, this 13th day of December,
1996.
/s/ MARK C. HARDY
-------------------------------------
Mark C. Hardy, Vice President
Attest: /s/ JOHN C. KENT
- -------------------------------------
John C. Kent, Secretary
9