Exhibit 3.1
STATE OF DELAWARE PAGE 1
OFFICE OF THE SECRETARY OF STATE
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I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "WINDWARD AUTOMOTIVE COMPONENTS INTERNATIONAL, INC.", CHANGING
ITS NAME FROM "WINDWARD AUTOMOTIVE COMPONENTS INTERNATIONAL, INC." TO "J. L
FRENCH AUTOMOTIVE CASTINGS, INC.", FILED IN THIS OFFICE ON THE SIXTEENTH DAY OF
MARCH, A.D. 1998, AT 11:15 O'CLOCK A.M.
/s/ Edward Freel
--------------------------------
EDWARD FREEL, SECRETARY OF STATE
2819248 8100 AUTHENTICATION: 9765829
991208568 DATE: 05-25-99
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
WINDWARD AUTOMOTIVE COMPONENTS INTERNATIONAL, INC.
WINDWARD AUTOMOTIVE COMPONENTS INTERNATIONAL, INC., a Delaware
corporation (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is WINDWARD AUTOMOTIVE COMPONENTS
INTERNATIONAL, INC. The original Certificate of Incorpora tion of the
Corporation was filed with the Secretary of State of the State of Delaware on
November 10, 1997 under the name Windward Automotive Components International,
Inc. and was amended and restated on January 12,1998.
2. This Amended and Restated Certificate of Incorporation of
WINDWARD AUTOMOTIVE COMPONENTS INTERNATIONAL, INC. further amends and restates
the provisions of the Amended and Restated Certificate of Incorporation of the
Corporation and was duly adopted in accordance with Sections 242 and 245 of the
General Corporation Law of the State of Delaware and by unanimous written
consent of the Stockholders in accordance with Section 228 of the General
Corporation Law of the State of Delaware.
3. The text of the Amended and Restated Certificate of
Incorporation is to read in its entirety as follows:
FIRST: The name of the corporation is J. L. FRENCH AUTOMOTIVE
CASTINGS, INC.
SECOND: The registered office of the Corporation in the State of
Delaware is located at: 1209 Orange Street, in the City of Wilmington, County of
New Castle. The registered agent of the Corporation at that address is The
Corporation Trust Company.
THIRD: The purpose of 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").
FOURTH: The following provisions are inserted regarding the capital
stock of the Corporation:
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A. AUTHORIZED SHARES. The total number of shares which the
Corporation is authorized to issue is 453,000 shares. 450,000 shares shall be
designated Common Stock, par value $0.000 1 per share (the "COMMON STOCK"), of
which 300,000 shares shall be designated Class A Common Stock (the "CLASS A
COMMON STOCK"), 75,000 shares shall be designated Class B Common Stock (the
"CLASS B COMMON STOCK"), 50,000 shares shall be designated Class C Common Stock
(the "CLASS C COMMON STOCK") and 25,000 shares shall be designated Class D
Common Stock (the "CLASS D COMMON STOCK"). 3,000 shall be designated Preferred
Stock, par value $.0001 per share (the "Preferred Stock"), of which 1,500 shares
shall be designated Series A Convertible Preferred Stock (the "SERIES A
PREFERRED STOCK"), and 1,500 shares shall be designated Series B Redeemable
Preferred Stock (the "Series B Preferred Stock").
The terms, limitations and relative rights and preferences of the
classes and certain series of Common Stock and Preferred Stock of the
Corporation are as hereinafter set forth.
B. POWERS, PREFERENCES AND RIGHTS OF THE COMMON STOCK. The powers,
preferences and rights of the Class A Common Stock, the Class B Common Stock,
the Class C Common Stock and the Class D Common Stock and the qualifications,
limitations or restrictions thereof are as follows:
1. VOTING.
(a) CLASS A COMMON STOCK. Each share of Class A
Common Stock shall entitle the holder thereof to one (1) vote.
(b) CLASS B COMMON STOCK. Each share of Class B
Common Stock shall entitle the holder thereof to one (1) vote.
(c) CLASS C COMMON STOCK. The shares of Class C
Common Stock shall be non-voting shares except to the extent that a class vote
is required under the DGCL and except that the consent of the holders of at
least a majority of the shares of Class C Common Stock then outstanding shall be
necessary to permit, effect or validate (x) the issuance of any series of
capital stock of the Corporation, other than the Class A Common Stock, the Class
B Common Stock, the Class C Common Stock, the Class D Common Stock, the Series A
Preferred Stock or the Series B Preferred Stock which is on a parity with or
senior as to liquidation to the Class C Common Stock; or (y) the repeal,
amendment or other change in this Amended and Restated Certificate of
Incorporation in a manner which would increase or decrease the aggregate number
of authorized shares of Class C Common Stock, increase or decrease the par value
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per share of the Class C Common Stock, or alter or change the powers,
preferences or rights of the Class C Common Stock in any adverse respect.
(d) CLASS D COMMON STOCK. Each share of Class D
Common Stock shall entitle the holder thereof to ten (10) votes.
2. CONVERSION OF SHARES.
(a) CONVERSION OF CLASS B COMMON STOCK.
(i) Except as provided in Section 13.2(b) of this
Article FOURTH, upon the TRANSFER of any shares of Class B Common Stock
to any holder who is subject to, or whose Affiliates (as defined in
Regulation Y of the Board of Governors of the Federal Reserve System (12
C.F.R. 225) or any successor to such regulation ("REGULATION T") are
subject to the limitation of the Rank Holding Company Act of 1956, as
amended, or the International Banking Act of 1978, as amended, (together,
the "BANKING REGULATIONS") (such holder shall be hereinafter referred to
as a "REGULATED HOLDER"), such Regulated Holder of the Class B Common
Stock so transferred shall have the right, but not the obligation, to
convert such shares of Class B Common Stock to shares of Class C Common
Stock on a one share for one share basis by providing written notice to
the Corporation (the "CONVERSION TO NON-VOTING") and each such conversion
shall be deemed to have been effected as of the close of business on the
date on which such notice has been received.
(ii) Upon the Conversion to Non-Voting of the shares of
Class B Common Stock pursuant to Section B.2 (a)(i) of this Article
FOURTH, (such number of shares so converted are hereinafter referred to
as the "Conversion Number") a number of shares of Class B Common Stock,
equal to the lesser of (x) the number of outstanding shares of Class B
Common Stock held by persons who are not Regulated Holders or (y) the
quotient obtained by dividing the Conversion Number by 9 (nine), shall be
converted into shares of Class D Common Stock as described in the
following sentences. The holder of the shares subject to the Conversion
to Non-Voting shall specify in writing to the Corporation the names (and
amounts) of any affiliate of such holder (which designated affiliate is
permitted by the Banking Regulations to own such shares of Class D Common
Stock) whose shares of Class B Common Stock are to be converted into
Class D Common Stock pursuant to this clause (ii) which specification
shall be approved by each holder of Class B Common Stock specified
therein; provided that
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if such specification is not made or approved, the shares of Class B
Common Stock to be converted into Class D Common Stock pursuant to this
Section B.2(a)(ii) shall be allocated among all of the holders of Class B
Common Stock, other than to any holder of Class B Common Stock who is a
Regulated Holder and would be in violation of the Banking Regulations,
pro-rata based on their relative ownership of Class B Common Stock.
(b) CONVERSION OF CLASS C COMMON STOCK. In connection with the
occurrence (or the expected occurrence, as described herein) of any of the
following events (each such event shall be hereinafter referred to as a
"CONVERSION EVENT"):
(i) any registered underwritten public offering of
common equity securities of the Corporation; or
(ii) any sale of securities of the Corporation to a
person or group of related persons (such sale being within the meaning of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) if,
after such sale, such person or group of persons in the aggregate would
own or control securities of the Corporation (excluding any shares of
Class C Common Stock being converted and disposed of in connection with
such Conversion Event) which possess in the aggregate, the ordinary
voting power to elect a majority of the Corporation's directors; or
(iii) any sale of securities of the Corporation to a
person or group of persons(such sale being within the meaning of the
Exchange Act) if, after such sale, such person or group of persons would
not in the aggregate, own, control or have the right to acquire more than
two percent (2%) of the outstanding securities of any class of voting
securities of the Corporation; or
(iv) a merger, consolidation or similar transaction
involving the Corporation if, after such transaction, a person or group
of persons in the aggregate would own or control securities of the
Corporation which possess in the aggregate the ordinary voting power to
elect a majority of the Corporation's directors (provided that the
transaction has been approved by the Board of Directors of the
Corporation or a committee thereof and by the holders of a majority of
the Common Stock then outstanding (excluding all shares of Class C Common
Stock), provided, further, that if such transaction is approved in
accordance with the provisions of this Section B.2(b)(iv) of this
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Article FOURTH, then the holders of the Class C Common Stock acknowledge
that such transaction will not alter or change the powers, preferences or
rights of Class C Common Stock in any adverse manner);
each holder of shares of Class C Common Stock shall be entitled at any time and
from time to time to convert into an equal number of shares of Class A Common
Stock any of such holder's Class C Common Stock which are being (or are expected
to be) distributed, disposed of or sold in connection with such Conversion
Event. Each holder of shares of Class C Common Stock shall be entitled to
convert its shares of Class C Common Stock in connection with any Conversion
Event if such holder reasonably believes that such Conversion Event shall be
consummated. A written request for conversion from any holder of Class C Common
Stock to the Corporation stating such holder's reasonable belief that a
Conversion Event shall occur shall be a conclusive determination thereof and
shall obligate the Corporation to effect such conversion in a timely manner so
as to enable each such holder to participate in such Conversion Event. If any
shares of Class C Common Stack are converted into shares of Class A Common Stock
in connection with a Conversion Event and such shares of Class A Common Stock
are not actually distributed, disposed of or sold pursuant to such Conversion
Event, such shares of Class A Common Stock shall be promptly converted back into
the same number of shares of Class C Common Stock. To the extent that the
percentage of Class A Common Stock or Class B Common Stock held by a Regulated
Holder is reduced solely as a result of the issuance of additional capital stock
of the Corporation, any shares of Class C Common Stock held by such Regulated
Holder after giving effect to such issuance may be converted into shares of
Class A Common Stock or Class B Common Stock, on a one share for one share
basis, provided that the resulting percentage of Class A Common Stock or Class B
Common Stock, respectively, held by such Regulated Holder after such issuance
and conversion does not exceed the percentage of Class A Common Stock or Class B
Common Stock, respectively, held by such Regulated Holder prior to such issuance
and conversion. In addition, if, due to a change of law or regulation, a holder
of Class C Common Stock is no longer deemed to be a Regulated Holder, any shares
of Class C Common Stock held by such holder may be converted into shares of
Class A Common Stock or Class B Common Stock on a one share for one share basis.
(c) CONVERSION OF CLASS D COMMON STOCK. One-ninth of an outstanding
share of Class D Common Stock shall automatically, without any further act or
deed on the part of the Corporation or any other person, be converted into one
ninth of a share of Class A Common Stock or Class B Common Stock respectively,
on a one share for one share basis, immediately upon, and concurrently with, the
conversion of each share of Class C Common
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Stock into a share of Class A Common Stock, pursuant to Section B.2(b) of this
Article FOURTH or in accordance with the last sentence thereof, into Class A
Common Stock or Class B Common Stock, as the case may be. If, however, any
shares or fraction of a share of Class A Common Stock are converted back into
the same number of shares or fraction of a share of Class C Stock because such
shares or fraction of a share of Class A Common Stock were not actually
distributed, disposed of or sold pursuant to a Conversion Event as provided in
Section B.2(b) of this Article FOURTH, then any shares or fraction of a share of
Class D Common Stock which converted into shares or fraction of a share of Class
A Common Stock pursuant to this Section B.2(c) shall be promptly converted back
into the same number of shares or fraction of a share of Class D Common Stock.
Unless otherwise specified in a writing delivered by the holder of the shares or
fraction of a share of Class C Common Stock being converted pursuant to Section
B.2(b) of this Article FOURTH, the number of shares or fraction of a share of
Class D Common Stock of each holder of Class D Common Stock which shall be
converted into a share or fraction of a share of Class A Common Stock or Class B
Common Stock pursuant to this Section B.2(c) shall be determined by multiplying
the aggregate number of shares or fractions of a share of Class D Common Stock
to be converted pursuant to this Section B.2(c) times a fraction, the numerator
of which is the number of shares of Class D Common Stock held by such holder,
and the denominator of which is the total number of shares of Class D Common
Stock outstanding. In addition, shares of Class D Common Stock may be converted
into shares of Class A Common Stock, at the option of the holder thereof, at any
time or from time to time, on a one share for one share basis.
(d) CONVERSION OF CLASS B COMMON STOCK. Shares of Class B Common
Stock may be converted into shares of Class A Common Stock, at the option of the
holder thereof, at any time or from time to time, on a one share for one share
basis.
(e) CONVERSION PROCEDURE ISSUANCE OF CERTIFICATES
(i) Unless otherwise provided for in connection with a
Conversion Event, each conversion of shares of Class C Common Stock into
shares of Class A Common Stock or Class B Common Stock pursuant to
Section B.2(b) and each conversion of Class B Common Stock into shares of
Class A Common Stock pursuant to B.2(d) shall be effected by the
surrender of the certificates representing the shares to be converted at
the principal office of the Corporation (or such other office or agency
of the Corporation as the Corporation may designate by notice in writing
to the holders of the Class C Common Stock and Class B Common Stock) at
any time during normal business hours, together
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with a written notice by the holder of such shares of Class C Common
Stock or Class B Common Stock stating that such holder desires to convert
such shares. Such notice shall also state the name or names (with
addresses) and denominations in which the certificate or certificates for
such shares of Class A Common Stock or Class B Common Stock are to be
issued and shall include instructions for reasonable delivery thereof.
Each conversion of Class B Common Stock to Class A Common Stock and,
unless otherwise provided for in connection with a Conversion Event, each
conversion of Class C Common Stock to Class A Common Stock or Class B
Common Stock shall be deemed to have been effected as of the close of
business on the date on which such certificates representing such Class B
Common Stock or Class C Common Stock have been surrendered and such
notice has been received. At such time, the rights of the holder of the
surrendered shares of Class B Common Stock or Class C Common Stock as
such holder shall cease, and the person in whose name the certificates
for the shares of Class A Common Stock or Class B Common Stock will be
issued upon such conversion shall be deemed to have become the holder of
record of the shares of Class A Common Stock or Class B Common Stock
represented thereby. Promptly after the surrender of the certificates and
the receipt of written notice, the Corporation shall issue and deliver in
accordance with the surrendering holder's instructions, the certificates
for the shares of Class A Common Stock or Class B Common Stock issuable
upon such conversion, and certificates representing any surrendered
shares of Class B Common Stock or Class C Common Stock which were
delivered to the Corporation in connection with such conversion but which
were not requested to be converted and, therefore, were not converted.
(ii) Each conversion of shares of Class B Common Stock
into shares of Class C Common Stock or Class D Common Stock pursuant to
Section B.2(a) of this Article FOURTH shall be effected by the surrender
of the certificates representing the shares of Class B Common Stock to be
converted at the principal office of the Corporation (or such other
office or agency of the Corporation as the Corporation may designate by
notice in writing to the holders of the Class B Common Stock) at any time
during normal business hours, together, in the case of the conversion of
Class B Common Stock into Class C Common Stock pursuant to Section
B.2(a)(i), with a written notice by the holder of such shares of Class B
Common Stock stating that such holder desires to convert such shares;
PROVIDED, that the conversion of shares of Common Stock from one class to
another pursuant to Section B.2(a) of this Article FOURTH shall be deemed
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effective as provided in Section B.2(a)(i) of this Article FOURTH whether
or not the certificates representing such shares indicate the proper
class designation.
(iii) Each holder of any shares of Class D Common Stock
which are automatically converted into shares of Class A Common Stock
pursuant to Section B.2(c) of this Article FOURTH shall tender
certificates representing such shares to the Corporation promptly for
reissuance with the post-conversion class designation; PROVIDED, that the
conversion of Class D Common Stock into Class A Common Stock pursuant to
Section B.2(c) of this Article FOURTH shall occur automatically and be
effective whether or not the certificates, representing such shares
indicate the proper class designation.
(iv) The issuance of certificates for any class of
Common Stock upon conversion from any other class of Common Stock shall
be made without charge to the holders of such Common Stock for any
documentary, stamp or similar issue or transfer tax due on the issue of
Common Stock upon the conversion. The holder, however, shall pay to the
Corporation the amount of any tax which is due (or shall establish to the
satisfaction of the Corporation the payment thereof or that no such
payment is due) if the shares are to be issued in the name other than the
name of such holder.
(v) The Corporation shall reserve and at all times
shall have reserved out of its authorized but unissued Common Stock
solely for the purpose of issuance upon the conversion of any shares of
Common Stock in accordance with this Section B.2, such number of shares
of Class A Common Stock, Class B Common Stock, Class C Common Stock and
Class D Common Stock respectively, as may be issuable upon such
conversion. All shares of Common Stock issuable upon any conversion
pursuant to this Section B.2 shall, when issued, constitute duly and
validly issued, fully paid and nonassessable shares of Common Stock. The
Corporation shall use its reasonable best effort to assure that all such
shares of Common Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any
domestic securities exchange upon which shares of Common Stock of the
relevant class may be listed (except for official notice of issuance
which shall be immediately transmitted by the Corporation upon issuance).
(vi) The Corporation shall not close its books against
the transfer of Common Stock in any manner which would interfere
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with the timely conversion of any Common Stock pursuant to this Section
B.2. The Corporation shall assist and cooperate with any holder of shares
of Common Stock required to make any governmental filings or obtain any
governmental approval prior to or in connection with any conversion of
Common Stock hereunder (including, without limitation, making any filings
required to be made by the Corporation).
3. DIVIDENDS. Subject to the rights of the holders of
Preferred Stock or any other class or series of stock having a preference as to
dividends over the Common Stock then outstanding, the holders of Common Stock
will be entitled pursuant to receive, to the extent permitted by law, and to
share equally and ratably, share for share, to the exclusion of the holders of
any and all series of Preferred Stock, such dividends as may be declared from
time to time by the Board of Directors. No dividends shall be paid on the Class
A Common Stock, the Class B Common Stock, the Class C Common Stock or the Class
D Common Stock, whether in cash, property or shares of stock of the Corporation,
unless the same dividend shall be payable on each share of Class A Common Stock,
Class B Common Stock, Class C Common Stock and Class D Common Stock; PROVIDED
that if dividends so declared are payable in shares of Common Stock, dividends
will be declared which are payable at the same rate on all series of Common
Stock, and the dividends on the Class A Common Stock will be paid in Class A
Common Stock, the dividends on the Class B Common Stock will be paid in Class B
Common Stock, the Dividends on the Class C Common Stock will be paid in Class C
Common Stock and the Dividends on the Class D Common Stock will be paid in Class
D Common Stock.
4. OTHER POWERS, PREFERENCES AND RIGHTS.
(a) The Class A Common Stock, the Class B Common
Stock, the Class C Common Stock and the Class D Common Stock are subject to all
the powers, preferences and rights of the Preferred Stock as may be stated in
this Amended and Restated Certificate of Incorporation of the Corporation.
(b) Except as otherwise required by law or expressly
provided for in this Amended and Restated Certificate of Incorporation, the
powers, preferences and rights of the Class A Common Stock, the Class B Common
Stock, the Class C Common Stock, and the Class D Common Stock and the
qualifications, limitations or restrictions thereof, shall in all respects be
identical.
5. STOCK ADJUSTMENTS. The Corporation shall not be a party to
or effect any merger, consolidation, reorganization, reclassification or
recapitalization pursuant to which any Regulated Holder would be required to
receive, or which would result in such Regulated Holder owning or controlling
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any of the following if, and to the extent, it would constitute a violation cf
the Banking Regulations: (a) any voting securities which would cause such holder
to hold more than 4.999% (or 24.999% in the case of Windward/Merchant, L.P.
either alone or in the aggregate with Windward/Merban, L.P. and CS First Boston
Merchant Investments 1995/96, L.P.) of the outstanding shares of any Class of
voting securities, (b) any securities convertible into voting securities which
if such conversion took place would cause such holder to hold more than 4.999%
(or 24 999% in the case of Windward/Merchant, L.P. either alone or in the
aggregate with Windward/Merban, L.P. and CS First Boston Merchant Investments
1995/96, L.P.) of the outstanding shares of any Class of voting securities other
than securities which are specifically provided to be convertible only in the
event that such conversion may occur without any violation of Regulation Y or
(c) with Windward/Merchant L.P., Windward/Merban, L.P. and CS First Boston
Merchant Investments 1995/96, L.P. in the aggregate more than 24.999% of the
total outstanding shares of Common Stock. The term "Class" shall have the
meaning determined by reference to Regulation Y and all authoritative
interpretations of Regulation Y. In the event of any merger, consolidation,
reorganization, reclassification or recapitalization, effective provision shall
be made in the certificate of incorporation of the resulting or surviving
corporation or otherwise for the protection of the conversion rights of the
Class A Common Stock, Class B Common Stock, Class C Common Stock and Class D
Common Stock 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 Class A Common Stock, Class B Common Stock, Class C Common Stock
or Class D Common Stock, respectively. In case securities or property other than
Class A Common Stock, Class B Common Stock, Class C Common Stock or Class D
Common Stock shall be issuable or deliverable upon conversion as aforesaid, then
all references in this Section B.5 shall be deemed to apply, so far as
appropriate and as nearly as may be, to such other securities or property.
Subject to the foregoing, the Corporation will not be a party to or effect any
merger, consolidation, reorganization, reclassification or recapitalization
which the holders of any class of Common Stock or any Regulated Holder of shares
of any class of Common Stock is treated adversely relative to the other holders
of Common Stock.
6. LIQUIDATION. In the event of any liquidation, dissolution
or winding up of the affairs of the Corporation, whether voluntary or otherwise,
after payment shall have been made to the holders of any Preferred Stock, the
holders of Class A Common Stock, Class B Common Stock, Class C Common Stock and
Class D Common Stock shall be entitled to share ratably according to the number
of shares of Class A Common Stock, Class B Common Stock, Class C Common Stock
and Class D Common Stock held by them in the remaining assets of the Corporation
available for distribution to its stockholders.
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7. DESIGNATION OF ADDITIONAL SHARES OF CLASS A COMMON STOCK,
CLASS B COMMON STOCK, CLASS C COMMON STOCK AND CLASS D COMMON STOCK.
(a) The Board of Directors of the Corporation is
expressly authorized at any time, and from time to time, to provide for the
issuance of Class A Common Stock, Class B Common Stock, Class C Common Stock or
Class D Common Stock, at any time, and from time to time, from shares of Common
Stock not previously designated as to class as shall be stated and expressed in
the resolution or resolutions providing for the issue thereof adopted by the
Board of Directors.
(b) Each share of Common Stock is issued by the
Corporation, if reacquired by the Corporation (whether by repurchase or other
means, including conversion by the holder thereof), shall, except to the extent
prohibited by the DGCL, upon such reacquisition resume the status of authorized
and unissued shares of Common Stock, undesignated as to class and available for
designation and issuance by the Corporation in accordance with paragraph (a) of
this Section B.7.
C. POWERS, PREFERENCES AND RIGHTS OF THE SERIES A PREFERRED STOCK.
The powers, preferences and rights of the Series A Preferred Stock, and the
qualifications, limitations or restrictions thereof, are as follows:
1. RANK. The Series A Preferred Stock shall, with respect to
dividend rights and rights of liquidation, winding up and dissolution, rank (i)
on a party with the Series B Preferred Stock and (ii) senior to all other equity
securities of the Corporation, including all classes of the Corporation's Common
Stock and all subsequently issued preferred stock of the Corporation (all of
such equity securities of the Corporation to which the Series A Preferred Stock
and the Series B Preferred Stock rank senior, including, without limitation, the
Common Stock, are collectively referred to herein as the "JUNIOR SECURITIES").
2. DIVIDENDS.
(a) The holders of shares of Series A Preferred Stock
will be entitled to receive dividends at the per share rate of $700.00 per annum
per share. Such dividends shall be cumulative from the date commencing on the
day after the last Dividend Payment Date (as defined below) with respect to the
Series A Preferred Stock of French Holdings, Inc. on which dividends were paid
prior to the effective time (the "Effective Time") of the merger between French
Acquisition Corp. and French Holdings, Inc. (the "Last Dividend Payment Date"),
and shall be payable, when, as and if declared by the Board of Directors out of
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funds of the Corporation legally available therefor, in cash, at the per share
rate of $700.00 per annum, or $175 .00 per quarter for each of the quarterly
periods ending on the last day of March, June, September and December of each
year (each a "Dividend Payment Date"), and no more, payable in arrears on each
succeeding April 1, July 1, October I and January 1, respectively; PROVIDED
that: (i) if any such payment date is not a Business Day then such dividend
shall be payable on the next Business Day, and (ii) accumulated and unpaid
dividends for any prior quarterly period may be paid at any time. The term
"BUSINESS DAY" whenever used herein with reference to the Preferred Stock means
a day other than a Saturday, Sunday or day on which banking institutions in New
York or Wisconsin are authorized or required to remain closed. Such dividends
shall accrue and be cumulative from the Last Dividend Payment Date, whether or
not there are funds legally available for the payment of dividends on any
Dividend Payment Date. Each such dividend shall be paid to the holders of record
of the shares of Series A Preferred Stock as they appear on the share register
of the Corporation on such record date, not more than 60 days nor less than 10
days preceding the Dividend Payment Date, as shall be fixed by the Board of
Directors or a duly authorized committee thereof.
(b) If dividends are not paid in full, or declared in
full and sums set apart for the payment thereof, upon the shares of Series A
Preferred Stock and Series B Preferred Stock, all dividends declared upon shares
of Series A Preferred Stock and shares of Series B Preferred Stock shall be paid
or declared pro rata so that in all cases the amount of dividends paid or
declared per share on the Series A Preferred Stock and the Series B Preferred
Stock shall bear to each other the same ratio that unpaid accumulated dividends
per share, including dividends accrued or in arrears, if any, on the shares of
Series A Preferred Stock and the shares of Series B Preferred Stock bear to each
other. Unless and until full cumulative dividends on the shares of Series A
Preferred Stock in respect of all past quarterly dividend periods have been
paid, and the full amount of dividends on the shares of Series A Preferred Stock
in respect of the then current quarterly dividend period shall have been or are
contemporaneously declared in full and sums set aside for the payment thereof,
(i) no dividends shall be paid or declared and set aside for payment or other
distribution made upon any of the Junior Securities, other than in shares of, or
warrants or rights to acquire, Junior Securities; and (ii) no shares of Junior
Securities or Series B Preferred Stock shall be redeemed, retired, purchased or
otherwise acquired for any consideration (or any payment made to or available
for a sinking fund for the redemption of any such shares) by the Corporation or
any subsidiary of the Corporation (except by conversion into or exchange for
shares of Junior Securities or pursuant to a Management Repurchase Note
delivered in accordance with the provisions of the Stockholders Agreement or an
Outside Director/Employee Stockholder Agreement). Holders of shares of Series A
Preferred Stock shall not be entitled to
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any dividends, whether payable in cash, property or shares of capital stock, in
excess of full accrued and cumulative dividends as herein provided. No interest
or sum of Money in lieu of interest shall be payable in respect of any dividend
payment or payments on the shares of Series A Preferred Stock, that may be in
arrears.
The terms "accrued dividends," "dividends accrued" and "dividends
arrears," whenever used herein with reference to shares of Preferred Stock shall
be deemed to mean an amount which shall be equal to dividends thereon at the
annual dividend rates per share for the respective series from the date or dates
on which such dividends commence to accrue to the end of the then current
quarterly dividend period for such Preferred Stock (or, in the case of
redemption, to the date of redemption), whether or not earned or declared and
whether or not assets for the Corporation are legally available therefor, less
the amount of all such dividends paid, or declared in full and sums set aside
for the payment thereof, upon such shares of Preferred Stock.
(c) Dividends payable on the shares of Series A
Preferred Stock for any period less than a full quarterly dividend period shall
be computed on the basis of a 360-day year of twelve 30-day months and the
actual number of days elapsed in the period for which payable.
3. OPTIONAL REDEMPTION AND MANDATORY REDEMPTION.
(a) The shares of Series A Preferred Stock are
redeemable in cash at the option of the Corporation by resolution of its Board
of Directors, in whole or from time to time in part:
(i) at any time upon giving notice as provided in
Section C.3(e) of this Article FOURTH, provided that the holders of a
majority of the outstanding shares of Series A Preferred Stock consent to
such redemption, at a redemption price equal to the sum of (A) $10,000
for each share of Series A Preferred Stock called for redemption plus (B)
all dividends accrued and unpaid on the shares of Series A Preferred
Stock up to the date fixed for redemption, (such price, plus such
dividends accrued and unpaid, shall be hereinafter referred to as the
"SERIES A PREFERRED REDEMPTION PRICE"); or
(ii) at any time on or after April 2, 2001 at the
Series A Preferred Redemption Price, upon giving notice as provided in
Section C.3(e) of this Article FOURTH.
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(b) To the extent any shares of Series A Preferred
Stock have not been redeemed pursuant to Section C.3(a) of this Article FOURTH
by April 2,2006 (the "SERIES A PREFERRED MANDATORY REDEMPTION DATE"), the
Corporation shall, on the Series A Preferred Mandatory Redemption Date, redeem
all shares of Series A Preferred Stock then outstanding at the Series A
Preferred Redemption Price. The Series A Preferred Redemption Price shall be
payable in cash.
(c) If, for any reason, the Corporation shall fail to
discharge its mandatory redemption obligations pursuant to Section C.3(b) of
this Article FOURTH, such purchase obligations shall be discharged as soon as
the Corporation is able to discharge such obligations. If and so long as any
mandatory redemption obligations with respect to the shares of the Series A
Preferred Stock shall not be fully discharged, the Corporation shall not,
directly or indirectly:
(i) declare or pay any dividend on any Junior
Securities or make any payment on account of, or set apart money for, a
sinking or other analogous fund for the purchase, redemption or other
retirement of, or purchase, redeem or retire, any Junior Securities, make
any distribution in respect of Junior Securities, either directly or
indirectly and whether in cash or property or in obligations or shares of
the Corporation (other than in Junior Securities); or
(ii) purchase or redeem (except in either case for
consideration payable in Junior Securities) any Junior Securities then
outstanding.
Dividends shall continue to accrue on a cumulative basis with
respect to any shares of Series A Preferred Stock subject to a mandatory
redemption obligation that has not been discharged by the Corporation pursuant
to Section C.3(b) of this Article FOURTH.
(d) If less than all of the outstanding shares of
Series A Preferred Stock are to be redeemed, the number of shares to be redeemed
shall be determined by the Board of Directors, and the shares to be redeemed
shall be determined pro rata or by lot or in such other manner and subject to
such regulations as the Board of Directors in its sole discretion shall
prescribe.
(e) At least 10 days but not more than 60 days prior to
the date fixed for any optional redemption of shares of Series A Preferred Stock
pursuant to Section C.3(a) of this Article FOURTH or the Series A Preferred
Mandatory Redemption Date (such date for optional redemption together with the
Series A Preferred Mandatory Redemption Date shall be hereinafter referred to as
14
the "SERIES A PREFERRED REDEMPTION DATE"), a written notice shall be mailed to
each holder of record of shares of Series A Preferred Stock to be redeemed in a
postage prepaid envelope addressed to such holder at such holder's post office
address as shown on the records of the Corporation, notifying such holder of the
Series A Preferred Mandatory Redemption Date or the election of the Corporation
to redeem such shares, stating the date fixed for redemption thereof, specifying
the Series A Preferred Redemption Price and the then effective conversion rate,
and calling upon such holder to surrender to the Corporation on the Series A
Preferred Redemption Date at the place designated in such notice and the
certificate or certificates representing the number of shares specified in such
notice of redemption. On or after the Series A Preferred Redemption Date, each
holder of shares of Series A Preferred Stock to be redeemed shall surrender the
certificate or certificates for such shares to the Corporation at the place
designated in such notice, and against such surrender the Series A Preferred
Redemption Price of such shares shall be paid to or on the order of the person
whose name appears on such certificate or certificates as the owner thereof, and
each surrendered certificate shall be canceled. In case less than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares.
(f) If a notice of redemption has been given pursuant
to Section C.3(e) of this Article FOURTH and any holder of shares of Series A
Preferred Stock shall, prior to the close of business on the last Business Day
preceding the Series A Preferred Redemption Date, give written notice to the
Corporation pursuant to Section C.6 of this Article FOURTH of the conversion of
any or all of the shares to be redeemed held by such holder (accompanied by a
certificate or certificates for such shares, a duly executed notice of election
to convert and instruments of transfer and such taxes, stamps, funds or other
evidence of payment, as required by Section C.6 of this Article FOURTH), then
such redemption shall not become effective as to such shares to be converted,
such conversion shall become effective as provided in Section C.6 of this
Article FOURTH and any monies deposited or set aside by the Corporation for the
redemption of such shares of converted Series A Preferred Stock shall revert to
the general funds of the Corporation.
(g) From and after the Series A Preferred Redemption
Date (unless default shall be made by the Corporation in payment in full of the
Series A Preferred Redemption Price), all dividends on the shares of Series A
Preferred Stock designated for redemption in such notice shall cease to accrue,
and all rights of the holders thereof as stockholders of the Corporation, except
the right to receive the Series A Preferred Redemption Price of such shares
(including all accrued and unpaid dividends up to the Series A Preferred
Redemption Date) upon the surrender of certificates representing the same, shall
cease and terminate
15
and such shares shall not thereafter be transferred (except with the consent of
the Corporation) on the books of the Corporation and shall not be deemed to be
outstanding for any purpose whatsoever.
(h) Shares of Series A Preferred Stock redeemed,
repurchased or retired pursuant to the provisions of this Section C.3 or
surrendered to the Corporation upon conversion shall thereupon be retired and
may not be reissued.
4. VOTING RIGHTS. Except as otherwise provided in Section C.7
of this Article FOURTH or as required under the DGCL, the holders of shares of
Series A Preferred Stock shall not be entitled to vote on any matter submitted
to a vote of stockholders of the Corporation. Any vote expressly required by
Section C.7 of this Article FOURTH or by the DGCL may be given in person or by
proxy, either in writing without a meeting or by vote at any meeting called for
such purpose.
5. LIQUIDATION RIGHTS.
(a) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or otherwise,
the holders of shares of Series A Preferred Stock shall be entitled to receive,
out of the assets of the Corporation available for distribution to its
stockholders, in cash, the amount of $10,000 for each share of Series A
Preferred Stock, plus an amount equal to all dividends accrued and unpaid on
each such share up to the date fixed for distribution, before any distribution
shall be made to the holders of shares of Junior Securities. If upon any
liquidation, dissolution or winding up of the Corporation, the assets
distributable among the holders of shares of Series A Preferred Stock and the
shares of Series B Preferred Stock are insufficient to permit the payment in
full to the holders of all such shares of all preferential amounts payable to
such holders, then the entire assets of the Corporation so distributable shall
be distributed ratably among the holders of the shares of Series A Preferred
Stock and the shares of Series B Preferred Stock in proportion to the respective
amounts that would be payable per share if such assets were sufficient to permit
payment in full.
(b) The holder of any shares of Series A Preferred
Stock shall not be entitled to receive any payment owed for such shares under
this Section C.5 until such holder shall cause to be delivered to the
Corporation (i) the certificate(s) such shares and (ii) transfer instrument(s)
satisfactory to the Corporation and sufficient to surrender such shares to the
Corporation free of any adverse interest.
16
(c) After the payment of the full preferential amounts
provided for herein to the holders of shares of Series A Preferred Stock such
holders shall not be entitled to any other or further participation in the
distribution of the assets of the Corporation.
6. CONVERSION.
(a) OPTIONAL CONVERSION. Each share of Series A
Preferred Stock shall be convertible, at the option of the holder thereof, at
any time after the date of issuance of such share into: (i) 2.26372 fully paid
and nonassessable shares of Class A Common Stock, or, if such share of Series A
Preferred Stock is held by a Regulated Holder, 2.26372 fully paid and
nonassessable shares of Class 13 Common Stock, as the case may be (in each case,
the "Common Stock Conversion Shares"), and (ii) one fully paid and nonassessable
share of Series B Preferred Stock (the "Series B Conversion Shares"). However,
the Common Stock Conversion Shares and the Series B Conversion Shares shall be
subject to adjustment from time to time in accordance with Section C.6(d) of
this Article FOURTH.
(b) AUTOMATIC CONVERSION. Each share of Series A
Preferred Stock shall automatically convert into shares of fully paid and
nonassessable Class A Common Stock or Class B Common Stock, as applicable,
and Series B Preferred Stock, without any further action required on the part
of the holder thereof, either:
(i) immediately prior to the closing of the
Corporation's initial underwritten public offering pursuant to a
Registration Statement filed with and declared effective by the
Securities Exchange Commission under the Securities Act of 1933 (the
"Securities Act"), which is an IPO Event; or
(ii) any consolidation or merger to which the
Corporation is a party other than a merger in which the Corporation is
the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or par
value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination) in, outstanding
shares of Common Stock or Series A Preferred Stock; or(
(iii) any sale or conveyance of all or substantially
all of the property or business of the Corporation as an entirety
(including, in the case of any of the foregoing events, any statutory
exchange of securities with another corporation.
17
The number of shares of Class A Common Stock or Class B Common
Stock, as applicable, issuable upon such automatic conversion of a share of
Series A Preferred Stock shall be equal to the Common Stock Conversion Shares as
in effect at such time and the number of shares of Series B Preferred Stock
shall be equal to the Series B Conversion Shares as in effect at such time.
(c) MECHANICS OF CONVERSION. Before any holder of
Series A Preferred Stock shall be entitled to convert the same into shares of
Class A Common Stock or Class B Common Stock, as applicable, and Series B
Preferred Stock, such holder shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for Series A Preferred Stock and shall give written notice by mail,
postage prepaid, to the Corporation at its principal corporate off ice of the
election to convert the same, and shall state therein the name or names in which
the certificate or certificates for shares of Class A Common Stock or Class B
Common Stock, as applicable, and Series B Preferred Stock are to be issued. The
Corporation shall, as soon as practicable thereafter, issue and deliver at such
office to such holder of Series A Preferred Stock, or to the nominee or nominees
of such holder, a certificate or certificate for the number of shares of Class A
Common Stock or Class B Common Stock, as the case may be, and Series B Preferred
Stock to which such holder shall be entitled as aforesaid. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of such surrender of the shares of Series A Preferred Stock to be
converted, and the person or persons entitled to receive the shares of Class A
Common Stock or Class B Common Stock, as applicable, and Series B Preferred
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Class A Common Stock or Class B
Common Stock, as applicable, and Series B Preferred Stock as of such date. If
the conversion is in connection with an underwritten offering of securities
registered pursuant to the Securities Act, the conversion may, at the option of
any holder tendering Series A Preferred Stock for conversion, be conditioned
upon the closing with the underwriter of the sale of securities pursuant to such
offering, in which event the person converting such Series A Preferred Stock
shall not be deemed to have converted such Series A Preferred Stock until
immediately prior to the closing of such sale of securities and the person(s)
entitled to receive the Class A Common Stock or Class B Common Stock, as
applicable, and Series B Preferred Stock issuable upon such conversion of Series
A Preferred Stock shall not be deemed to be record holders of such Class A
Common Stock or Class B Common Stock and Series B Preferred Stock until
immediately prior to the closing of such sale of securities. No payment or
adjustment shall be made on conversion for any dividends payable on the Class A
Common Stock or Class B Common Stock, as the case may be, delivered on
conversion. Effective as of any conversion, the Corporation shall be
18
excused from paying any dividends on the shares converted, except for any
dividends accrued and unpaid through the day of conversion.
(d) ANTIDILUTION PROVISIONS. The Common Stock
Conversion Shares and the Series B Conversion Shares shall be subject to
adjustment from time to time as follows:
(i) STOCK DIVIDENDS; STOCK SPLITS; REVERSE STOCK
SPLITS; RECLASSIFICATIONS. In case the Corporation shall (A) pay a
dividend or make any other distribution with respect to its Class A
Common Stock or Class B Common Stock in shares of its capital stock, (B)
subdivide its outstanding Class A Common Stock or Class B Common Stock,
(C) combine its outstanding Class A Common Stock or Class B Common Stock
into a smaller number of shares, or (D) issue any shares of its capital
stock in a reclassification of the Class A Common Stock or Class B Common
Stock (including any such reclassification in connection with a merger
consolidation or other business combination in which the Corporation is
the continuing corporation) then the Common Stock Conversion Shares
issuable upon conversion of a share of Series A Preferred Stock
immediately prior to the record date for such dividend or distribution or
the effective date of such subdivision or combination shall be adjusted
so that the holder of a share of Series A Preferred Stock shall
thereafter be entitled to receive the kind and number of shares of Class
A Common Stock or Class B Common Stock, as applicable, or other
securities of the Corporation that shareholder would have owned or have
been entitled to receive after the happening of any of the events
described above, had such share of Series A Preferred Stock been
converted immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this Section
C.6 (d)(i) shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
(ii) RIGHTS; OPTIONS; WARRANTS.
(A) In case the Corporation shall issue rights,
options, warrants or convertible or exchangeable securities (other than a
convertible or exchangeable security subject to Section C.6(d)(i) of this
Article FOURTH) to all holders of its Common Stock, entitling them to
subscribe for or purchase shares of Common Stock at a price per share of
Common Stock that is lower (at the close of business on the Business Day
immediately prior to the record date for such issuance) than the Current
Market Value per share of Class A Common Stock or
19
Class B Common Stock, as applicable, then the Common Stock Conversion
Shares thereafter issuable upon the conversion of a share of Series A
Preferred Stock shall be determined by multiplying the Common Stock
Conversion Shares theretofore issuable upon the conversion of a share of
Series A Preferred Stock by a fraction, of which the numerator shall be
the number of shares of Common Stock Outstanding on a Fully Diluted Basis
on the date of issuance of such rights, options, warrants or convertible
or exchangeable securities, plus the number of additional shares of
Common Stock to be issued upon exercise, conversion or exchange of such
rights, options, warrants or convertible or exchangeable securities and
of which the denominator shall be the number of shares of Common Stock
Outstanding on a Fully Diluted Basis on the date of issuance of such
rights, options, warrants or convertible or exchangeable securities, plus
the number of shares of Common Stock which the aggregate consideration to
be received by the Corporation in connection with such issuance would
purchase at the then Current Market Value per share of Class A Common
Stock or Class B Common Stock, as applicable.
(B) For purposes of this Section C.6(d)(ii), the
consideration received by the Corporation in connection with the issuance
of rights, options, warrants or convertible or exchangeable securities
shall be deemed to be the consideration received by the Corporation for
such rights, options, warrants or convertible or exchangeable securities,
plus the consideration or premiums stated in such rights, options,
warrants or convertible or exchangeable securities to be paid for the
shares of Common Stock covered thereby.
(C) Any adjustment pursuant to this Section C.6(d)(ii)
shall be made whenever any such rights, options, warrants or convertible
or exchangeable securities are issued, but shall also become effective
retroactively in respect of conversions made between the record dates for
the determination of stockholders entitled to receive such rights,
options, warrants or convertible or exchangeable securities and the date
such rights, options, warrants or convertible or exchangeable securities
are issued.
(D) For purposes of adjustments under this Section
C.6(d)(ii), if the Corporation shall issue rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe
for or purchase shares of Common Stock for a consideration consisting, in
whole or in part, of property other than cash or its equivalent, then in
determining the "price per share of Class A Common Stock or Class B
20
Common Stock" and the "consideration" receivable by or payable to the
Corporation for purposes of the first sentence of this Section
C.6(d)(ii), the Board of Directors of the Corporation shall determine, in
good faith, the fair value of such property. In case the Corporation
shall issue rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of
Common Stock, together with one or more other securities as part of a
unit at a price per unit, then in determining the "price per share of
Class A Common Stock or Class B Common Stock", as applicable, and the
"consideration" receivable by or payable to the Corporation for purposes
of the first sentence of this Section C.6(d)(ii), the Board of Directors
of the Corporation shall determine, in good faith., the fair value of the
right, options, warrants or convertible or exchangeable securities then
being sold as pan of such unit.
(iii) ISSUANCE OF COMMON STOCK AT LOWER VALUES.
(A) In case the Corporation shall, in a transaction in
which Section C.6(d)(ii) of this Article FOURTH is inapplicable, issue or
sell shares of Common Stock or rights, options (other than options issued
pursuant to the J. L. French Automotive Castings, Inc. 1998 Performance
Stock Option Plan, the J. L. French Automotive Castings, Inc. 1998 Stock
Option Plan and any other option plan adopted by the Board of Directors
after the date hereof for employees), warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
shares of Common Stock at a price per share of Common Stock that is lower
than the then Current Market Value per share of the Class A Common Stock
or Class B Common Stock, as the case may be, in effect immediately prior
to such sale or issuance, then the Common Stock Conversion Shares
thereafter issuable upon the conversion of a share of Series A Preferred
Stock shall be determined by multiplying the Common Stock Conversion
Shares theretofore issuable upon the conversion of a share of Series A
Preferred Stock by a fraction, of which the numerator shall be the number
of shares of Common Stock Outstanding on a Fully Diluted Basis on the
date of issuance of such shares of Common Stock or rights, options,
warrants or convertible or exchangeable securities, plus the number of
additional shares of Common Stock offered for subscription or purchase or
to be issued upon exercise, conversion or exchange of such rights,
options, warrants or convertible or exchangeable securities and of which
the denominator shall be the number of shares of Common Stock Outstanding
on a Fully Diluted Basis on the date of issuance of such shares of Common
Stock or rights, options, warrants or convertible or
21
exchangeable securities, plus the number of shares of Common Stock which
the aggregate consideration to be received by the Corporation in
connection with such issuance would purchase at the then Current Market
Value per share of Class A Common Stock or Class B Common Stock, as
applicable.
(B) For purposes of such adjustments under this Section
C.6(d)(ii), the shares of Common Stock which the holder of any such
rights, options, warrant or convertible or exchangeable securities shall
be entitled to subscribe for or purchase shall be deemed to be issued and
outstanding as of the date of the sale and issuance of the rights,
warrants or convertible or exchangeable securities and the consideration
received by the Corporation therefor shall be deemed to be the
consideration received by the Corporation for such rights, options,
warrants or convertible or exchangeable securities, plus the
consideration or premiums stated in such rights, options, warrants or
convertible or exchangeable securities to be paid for the shares of
Common Stock covered thereby.
(C) In case the Corporation shall issue and sell shares
of Common Stock or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
shares of Common Stock for a consideration consisting, in whole or in
part, of property other than cash or its equivalent, then in determining
the "price per share of Class A Common Stock or Class B Common Stock", as
applicable, and the "consideration" receivable by or payable to the
Corporation for purposes of the first sentence, of this Section
C.6(d)(iii), the Board of Directors of the Corporation shall determine,
in good faith, the fair value of such property. In case the Corporation
shall issue and sell rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
shares of Common Stock, together with one or more other securities as
part of a unit at a price per unit, then in determining the "price per
share of Class A Common Stock or Class B Common Stock", as applicable,
and the "consideration" receivable by or payable to the Corporation for
purposes of the first sentence of this Section C.6(d)(iii), the Board of
Directors of the Corporation shall determine, in good faith, the fair
value of the rights, options, warrants or convertible or exchangeable
securities then being sold as part of such unit.
(iv) DISTRIBUTIONS OF CASH, DEBT ASSETS, SUBSCRIPTION
RIGHTS OR CONVERTIBLE SECURITIES.
22
(A) In case the Corporation shall fix a record date for
the making of a distribution to all holders of shares of its Common Stock
of cash, evidences of indebtedness of the Corporation, assets or
securities (excluding those referred to in Section C.6(d)(ii) of this
Article FOURTH and excluding cash dividends which are not Extraordinary
Dividends) (any such cash, evidences of indebtedness, assets or
securities, the "Assets or Securities"), then, at the election of the
Corporation, either (I) the Common Stock Conversion Shares theretofore
issuable after such record date upon conversion of a share of Series A
Preferred Stock shall be adjusted by multiplying the Common Stock
Conversion Shares theretofore issuable upon the conversion of a share of
Series A Preferred Stock immediately prior to such record date by a
fraction, the numerator of which shall be the then Current Market Value
per share of Class A Common Stock or Class B Common Stock, as applicable,
at the close of business on the Business Day immediately prior to the
record date for such distribution and the denominator of which shall be
the then Current Market Value per share of Class A Common Stock or Class
B Common Stock, as applicable, at the close of business on the Business
Day immediately prior to the record date for such distribution less an
amount equal to the then fair value (as determined by the Board of
Directors of the Corporation acting in good faith) of the Assets or
Securities applicable to one share of Class A Common Stock or Class B
Common Stock, as applicable, or (II) adequate provision shall be made so
that in the event of a conversion of a share of Series A Preferred Stock
the Holder of the Series A Preferred Stock shall have the right to
receive, in addition to Common Stock Conversion Shares, at the election
of the Corporation, either (A) the Assets or Securities to which such
holder would have been entitled as a holder of Class A Common Stock or
Class B Common Stock, as applicable, if such holder had converted such
holder's share of Series A Preferred Stock immediately prior to the
record date for such distribution or (B) the cash equivalent of such
Assets or Securities.
(B) If the Corporation elects to adjust the number of
Common Stock Conversion Shares issuable upon the conversion of a share of
Series A Preferred Stock pursuant to Section C.6(d)(iv)(A)(I) of this
Article FOURTH, such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of
distribution retroactive to the record date for the determination of
stockholders entitled to receive such distribution; PROVIDED that the
Corporation shall deliver to any holder that converts a share of Series A
Preferred Stock after any such record date, but prior to the related
23
distribution, a due bill or other appropriate instrument evidencing such
holder's right to receive such distribution upon its occurrence.
(C) Notwithstanding the foregoing, the Corporation
shall not elect the adjustment provided for in Section C.6(d)(iv)(A)(I)
of this Article FOURTH if the then fair value (as determined by the Board
of Directors of the Corporation acting in good faith) of the Assets or
Securities applicable to one share of Common Stock is equal to or greater
than the then Current Market Value per share of Class A Common Stock or
Class B Common Stock, as applicable, at the close of business on the
Business Day immediately prior to the record date for such distribution.
(v) EXPIRATION OF RIGHTS, OPTIONS AND CONVERSION
PRIVILEGES. Upon the expiration of any rights, options, warrants or
conversion or exchange privileges that have previously resulted in an
adjustment hereunder, if any thereof shall not have been exercised, the
Common Stock Conversion Shares issuable upon the conversion of a share of
Series A Preferred Stock shall, upon such expiration, be readjusted and
shall thereafter, upon any future conversion, be such as they would have
been had they been originally adjusted (or had the original adjustment
not been required, as the case maybe) as if (A) the only shares of Common
Stock so issued were the shares of Common Stock, if any, actually issued
or sold upon the exercise of such rights, options, warrants or conversion
or exchange rights and (B) such shares of Common Stock, if any, were
issued or sold for the consideration actually received by the Corporation
upon such exercise plus the consideration, if any, actually received by
the Corporation for issuance, sale or grant of all such rights, options,
warrants or conversion or exchange rights whether or not exercised;
PROVIDED that no such readjustment shall have the effect of decreasing
the Common Stock Conversion Shares by a number, in excess of the number
of the adjustment initially made in respect to the issuance, sale or
grant of such rights, options, warrants or conversion or exchange rights.
(vi) NO ADJUSTMENT FOR ORDINARY DIVIDENDS. Except as
otherwise provided in this Section C.6(d), no adjustment in respect of
any ordinary dividends declared and paid on Common Stock, or on any other
capital stock of the Corporation, shall be made to the Common Stock
Conversion Shares.
(vii) DE MINIMIS ADJUSTMENTS. Except as provided in
Section C.6(d)(iii) of this Article FOURTH with reference to
24
adjustments required by such Section C.6(d)(iii) of this Article FOURTH,
no adjustment in the shares of Common Stock Conversion Shares issuable
hereunder shall be required unless cumulative adjustments would require
an increase or decrease of at least one percent (1%) in the number of
shares of Class A Common Stock or Class B Common Stock, as applicable,
issuable upon the conversion of a share of Series A Preferred Stock;
PROVIDED that any adjustments which by reason of this Section C.6(d)(vii)
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations shall be made and
rounded to the nearest one-thousandth of a share (with calculations of
five ten-thousandth and above rounded up, and calculations less than five
ten-thousandth rounded down).
(viii) OTHER ADJUSTMENTS. In the event that at any
time, as a result of an adjustment made pursuant to this Section C.6(d),
the registered holders of the Series A Preferred Stock shall become
entitled to receive any securities of the Corporation other than shares
of Class A Common Stock or Class B Common Stock, as applicable,
thereafter the number of such other securities so receivable upon the
conversion of a share of Series A Preferred Stock shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares of
Class A Common Stock or Class B Common Stock, as applicable, contained in
this Section C.6(d).
(ix) OTHER DILUTIVE EVENTS. In case any event shall
occur as to which the other provisions of this Section C.6(d) are not
strictly applicable but the failure to make any adjustment would not
fairly protect the conversion rights of the Series A Preferred Stock in
accordance with the essential intent and principles of this Section
C.6(d), then, in each such case, the Corporation shall appoint a firm of
independent certified public accountants of recognized national standing
(which may be the regular auditors of the Corporation),which shall give
their opinion upon the adjustment, if any, on a basis consis tent with
the essential intent and principles established in this Section C.6(d),
necessary to preserve, without dilution, the conversion rights of this
Section C.6(d). Upon receipt of such opinion, the Corporation will
promptly mail a copy thereof to each record holder of Series A Preferred
Stock and shall make the adjustments described therein.
(e) NO IMPAIRMENT. Corporation will not, by amendment
of its Amended and Restated Certificate of Incorporation or through any
25
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation but will at all times in good faith assist in the
carrying out of all the provisions of this Section C.6 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of Series A Preferred Stock against impairment.
(f) FRACTIONAL SHARES, CERTIFICATES AS TO ADJUSTMENTS.
Prior to an IPO Event, fractional shares of Class A Common Stock or Class B
Common Stock, as applicable, and Series B Preferred Stock may be issued upon
conversion of shares of Series A Preferred Stock. After an IPO Event, no
fractional shares shall be issued upon conversion of shares of Series A
Preferred Stock. After an IPO Event, if one or more shares of Series A Preferred
Stock shall be presented for conversion at the same time by the same
stockholder, the number of full shares of Class A Common Stock or Class B Common
Stock, as applicable, and Series B Preferred Stock which shall be issuable upon
the conversion thereof shall be computed on the basis of the aggregate number of
shares of Class A Common Stock or Class B Common Stock, as applicable, and
Series B Preferred Stock to be issued upon conversion of the Series A Preferred
Stock so presented. If any fraction of shares of Class A Common Stock or Class B
Common Stock, as applicable, or Series B Preferred Stock would, except for the
provisions of this Section C.6(f), be issuable on the conversion of shares of
Series A Preferred Stock, the Corporation shall pay an amount in cash equal to
the Current Market Value of one share of the Class A Common Stock or Class B
Common Stock, as applicable, or one share of Series B Preferred Stock, as the
case may be, on the Business Day immediately preceding the date the share of
Series A Preferred Stock is presented for conversion multiplied by such
fraction. Upon the occurrence of each adjustment or readjustment of the Common
Stock Conversion Shares pursuant to this Section C.6, the Corporation at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each holder of shares of Series A Preferred
Stock a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any time of any holder of Series
A Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Common Stock Conversion Shares and Preferred Stock Conversion Shares at the time
in effect, and (iii) the number of shares of Class A Common Stock or Class B
Common Stock, as applicable, and Series B Preferred Stock and the amount, if
any, of other property which at the time would be received upon the conversion
of shares of Series A Preferred Stock.
26
(g) NOTICES OF RECORD DATE. In the event that the
Corporation shall propose at any time:
(i) to declare any dividend or distribution upon its
Common Stock, whether or not a regular cash dividend and whether or not
out of earnings or earned surplus;
(ii) to offer for subscription pro rata to the holder
of any class or series of its stock any additional shares of stock of any
class or series or other rights;
(iii) to effect any reclassification or
recapitalization of its Common Stock outstanding involving a change in
the Common Stock;
(iv) to merge or consolidate with or into any other
corporation or other entity or person, or sell, lease or convey all or
substantially all its property or business, or to liquidate, dissolve or
wind up; or
(v) any firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act
covering the offer and sale of Class A Common Stock for the account of
the Corporation;
then, in connection with each such event, the Corporation shall send to the
holder of Series A Preferred Stock:
(A) at least twenty days' prior written notice of the
date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of
Common Stock shall be entitled thereto) or for determining rights to vote
in respect of the matters referred to in (iii) and (iv) above; and
(B) in the case of the matters referred to in (iii),
(iv) and (v) above, at least twenty days' prior written notice of the
date when the same shall take place (and specifying the date on which the
holders of Common Stock shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon the
occurrence of such event).
Each written notice shall be delivered personally or given by
United States mail, return receipt requested, postage prepaid, addressed to the
27
holders of Series A Preferred Stock at the address for each such holder as shown
on the books of the Corporation.
(h) TRANSFER TAXES. If a holder converts shares of
Series A Preferred Stock, the Corporation shall pay any documentary, stamp or
similar issue or transfer tax due on the issue of Class A Common Stock or Class
B Common Stock, as applicable, and Series B Preferred Stock upon the conversion.
The holder, however, shall pay to the Corporation the amount of any tax which is
due (or shall establish to the satisfaction of the Corporation the payment
thereof or that no such payment is due) if the shares are to be issued in a name
other than the name of such holder.
(i) RESERVATION OF SHARES. The Corporation shall
reserve and shall at all times have reserved out of its authorized but unissued
shares of Class A Common Stock, Class D Common Stock and Series B Preferred
Stock, solely for the purpose of effecting the conversion of Series A Preferred
Stock, enough shares of Class A Common Stock, Class B Common Stock and Series B
Preferred Stock to permit the conversion of the then outstanding shares of
Series A Preferred Stock. All shares of Class A Common Stock or Class B Common
Stock, as applicable, and Series B Preferred Stock which may be issued upon
conversion of shares of Series A Preferred Stock shall be validly issued, fully
paid and nonassessable. The Corporation shall from time to time, in accordance
with the laws of the State of Delaware, increase the authorized number of shares
of Class A Common Stock, Class B Common Stock or Series B Preferred Stock if at
any time the number of shares of Class A Common Stock, Class B Common Stock or
Series B Preferred Stock, as the case may be, authorized but not outstanding
shall not be sufficient to permit conversion of all then-outstanding shares of
Series A Preferred Stock. In order that the Corporation may issue shares of
Class A Common Stock or Class B Common Stock, as applicable, and Series B
Preferred Stock upon conversion of shares of Series A Preferred Stock, the
Corporation shall use its reasonable best effort to assure that all such shares
of Class A Common Stock, Class B Common Stock and Series B Preferred Stock may
be so issued without violation of any applicable law or governmental regulations
or any requirements of any domestic securities exchange upon which shares of
Common Stock or Preferred Stock of the relevant series may be listed (except for
official notice of issuance which shall be immediately transmitted by the
corporation upon issuance).
(j) In the event that as a result of an adjustment made
pursuant to Section C.6(c)(viii) of this Article FOURTH, the holder of any
shares of Series A Preferred Stock thereafter surrendered for conversion shall
become entitled to receive any shares of capital stock of the Corporation other
than shares of Class A Common Stock or Class B Common Stock, thereafter the
number of
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such other shares so receivable upon conversion of any shares of Series A
Preferred Stock shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Class A Common Stock and Class B Common Stock contained in this Section C.6.
(k) In the event that there are any stock dividends,
stock splits, reverse stock splits, reclassifications or similar transactions to
the Series B Preferred Stock, the Series B Conversion Shares shall be
appropriately adjusted to reflect such stock dividend, stock split, reverse
stock split reclassification or similar transaction.
7. LIMITATIONS. In addition to any other rights provided by
applicable law, so long as any shares of Series A Preferred Stock are
outstanding, the Corporation shall not, without the affirmative vote, or the
written consent as provided by law, of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting separately as a class,
(a) create, authorize or issue any class or series of
Preferred Stock or any other class of capital stock ranking either as to payment
of dividends or distribution of assets upon liquidation, dissolution or winding
up of the affairs of the Corporation on a parity with, or having preference or
priority over, the Series A Preferred Stock (other than the Series B Preferred
Stock), or
(b) change the powers, preferences or rights with
respect to the Series A Preferred Stock so as to affect the Series A Preferred
Stock adversely; PROVIDED, HOWEVER, any vote which would adversely affect the
amount or timing of the payment of dividends on the Series A Preferred Stock,
the amount or timing of the payment of the Series A Redemption Price, any
amounts paid pursuant to Section C.5 of this Article FOURTH, the computation of
the Series A Conversion Shares or the computation of the Series B Conversion
Shares would require the affirmative vote of the holders of all of the
outstanding shares of Series A Preferred Stock; and PROVIDED, FURTHER, (except
as otherwise required by applicable law) nothing herein contained shall require
such a vote or consent in connection with (i) any increase in the total number
of authorized shares of Common Stock, or (ii) the authorization or increase of
any class or series of shares ranking, as to dividends and in liquidation,
dissolution or winding up of the affairs of the Corporation, junior to the
Series A Preferred Stock; PROVIDED that no such vote or written consent of the
holders of the shares of Series A Preferred Stock shall be required if, at or
prior to the time when the issuance of any such shares ranking on
29
a parity with, or having preference or priority over, the Series A Preferred
Stock is to be made or any such change is to take effect, as the case may be,
provision is made for the redemption of all the then outstanding shares of
Series A Preferred Stock.
8. DIVIDEND RECEIVED DEDUCTION. For federal income tax
purposes, the Corporation shall report distributions on the Series A Preferred
Stock as dividends, to the extent of the Corporation's current and accumulated
earnings and profits (as determined for federal income tax purposes). In
addition, the Corporation covenants not to take any action voluntarily which
could reasonably be expected to cause dividends on the Series A Preferred Stock
to fail to be eligible for the dividend received deduction pursuant to Section
243 of the Internal Revenue Code of 1986, as amended from time to time (the
"Code").
9. CERTAIN DEFINITIONS. The following terms shall have the
meanings ascribed to them below:
"BUSINESS DAY" means any day other than a Saturday or a Sunday or a
day on which commercial banking institutions in New York or Wisconsin are
authorized or required by law to remain closed. Any reference to "days" (unless
Business Days are specified) shall mean calendar days.
"CURRENT MARKET VALUE" means on any date specified herein, the
amount per share of the Class A Common Stock or Class B Common Stock, as
applicable, equal to (a) the last sale price of such Class A Common Stock or
Class B Common Stock, regular way, on such date or, if no such sale takes place
on such date, the average of the closing bid and asked prices thereof on such
date, in each case as officially reported on the principal national securities
exchange on which such Class A Common Stock or Class B Common Stock, as
applicable, is then listed or admitted to trading or (b) if such Class A Common
Stock or Class B Common Stock, as applicable, is not then listed or admitted to
trading on any national securities exchange but is designated as a national
market system security by the NASD, the last trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
Class A Common Stock or B Common Stock, as applicable, is not so designated, the
average of the closing bid and asked price of the Class A Common Stock or Class
B Common Stock as applicable, on such date as shown by the NASD automated
quotation system, or (d) if such Class A Common Stock or Class B Common Stock,
as applicable, is not then listed or admitted to trading on any national
exchange or quoted in the over-the-counter market, the Fair Market Value (as
defined in the Stockholders Agreement). Any determination made in good faith by
the Corporation's Board of Directors as to the Current Market Value of the Class
A Common Stock or Class E Common Stock shall be binding on the Corporation and
all Holders.
30
"OUTSIDE DIRECTOR/EMPLOYEE STOCKHOLDER AGREEMENT" has the meaning
specified in the Stockholders Agreement.
"EXTRAORDINARY DIVIDEND" means any dividend or other distribution
of cash or other property (other than Common Stock) made with respect to Common
Stock which the Board of Directors declare generally to be other than an
ordinary dividend.
"IPO EVENT" has the meaning specified in the Stockholders
Agreement.
"MANAGEMENT REPURCHASE NOTE" has the meaning specified in the
Stockholders Agreement.
"NASD" means The National Association of Securities Dealers.
"OUTSTANDING ON A FULLY DILUTED BASIS" means an amount equal to the
total outstanding number of shares of Common Stock assuming the conversion or
exchange of all outstanding shares of securities convertible or exchangeable
into Common Stock of the Corporation and the exercise of all warrants, options
and other rights (including, without limitation, employee stock options (other
than options issued pursuant to the J. L. French Automotive Castings, Inc. 1998
Performance Stock Option Plan)) to purchase shares of Common Stock of the
Corporation.
"STOCKHOLDERS AGREEMENT" means the Amended and Restated
Stockholders Agreement, dated as of March 16, 1998, among the Corporation,
Windward Capital Associates, LP. ("Windward"), Windward/Park WACI, L.L.C.,
Windward/Park JLF LLC, Windward/Merchant, L.P., Windward/Merban, L.P.,
Windward/Northwest, L.P, Windward/Badger WACI, L.L.C., Windward/Badger JLF LLC,
CS First Boston Merchant Investments 1995/96, L.P., Charles M. WaIdon and such
other persons or entities who or which become parties to such Stockholders
Agreement pursuant to the terms thereof, as such agreement may be amended,
supplemented or otherwise modified from time to time after the date hereof.
"WINDWARD GROUP" has the meaning specified in the Stockholders
Agreement.
D. POWERS, PREFERENCES AND RIGHTS OF THE SERIES B PREFERRED STOCK.
No shares of Series B Preferred Stock shall be issued except pursuant to the
conversion of the Series A Preferred Stock. The powers, preferences and rights
of the Series B Preferred Stock, and the qualifications, limitations, or
restrictions thereof, are as follows:
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1. RANK. The Series B Preferred Stock shall, with respect to
dividend rights and rights of liquidation, winding up and dissolution, rank (i)
on a parity with the Series A Preferred Stock and (ii) senior to any of the
Junior Securities.
2. DIVIDENDS.
(a) The holders of shares of Series B Preferred Stock
will be entitled to receive, when, as and if declared by the Board of Directors
out of funds of the Corporation legally available therefor, cumulative cash
dividends at the per share rate of $700 per annum, or $175 per quarter for each
of the quarterly periods ending on the last day of March, June, September and
December of each year, and no more, payable in arrears on each succeeding April
1, July 1, October 1 and January 1, respectively, commencing on the first
dividend payment date after the date of original issue; PROVIDED that: (i) if
any such payment date is not a Business Day then such dividend shall be payable
on the next Business Day, and (ii) accumulated and unpaid dividends for any
prior quarterly period may be paid at any time. Such dividends shall accrue and
be cumulative from the date of original issue of each share of Series B
Preferred Stock, whether or not there are funds legally available for the
payment of dividends on any payment date. Each such dividend shall be paid to
the holders of record of the shares of Series B Preferred Stock as they appear
on the share register of the Corporation on such record date, not more than 60
days nor less than 10 days preceding the dividend payment date, as shall be
fixed by the Board of Directors or a duly authorized committee thereof.
(b) If dividends are not paid in full, or declared in
full and sums set apart for the payment thereof, upon the shares of Series B
Preferred Stock and Series A Preferred Stock, all dividends declared upon shares
of Series B Preferred Stock and shares of Series A Preferred Stock shall be paid
or declared pro rata so that in all cases the amount of dividends paid or
declared per share on the Series B Preferred Stock and the Series A Preferred
Stock shall bear to each other the same ratio that unpaid accumulated dividends
per share, including dividends, accrued or in arrears, if any, on the shares of
Series B Preferred Stock and the shares of Series A Preferred Stock bear to each
other. Unless and until full cumulative dividends on the shares of Series B
Preferred Stock in respect of all past quarterly dividend periods have been
paid, and the full amount of dividends on the shares of Series B Preferred Stock
in respect of the then current quarterly dividend period shall have been or are
contemporaneously declared in full and sums set aside for the payment thereof,
(i) no dividends shall be paid or declared and set aside for payment or other
distribution made upon any of the Junior Securities, other than in shares of, or
warrants or rights to acquire, Junior
32
Securities; and (ii) no shares of Junior Securities or shares of Series A
Preferred Stock shall be redeemed, retired, purchased or otherwise acquired for
any consideration (or any payment made to or available for a sinking fund for
the redemption of any such shares) by the Corporation or any subsidiary of the
Corporation (except by conversion into or exchange for shares of Junior
Securities or pursuant to a Management Repurchase Note delivered in accordance
with the provisions of the Stockholders Agreement or an Outside
Director/Employee Stockholder Agreement). Holders of shares of Series B
Preferred Stock shall not be entitled to any dividends, whether payable in cash,
property or shares of capital stock, in excess of full accrued and cumulative
dividends as herein provided. No interest or sum of money in lieu of interest
shall be payable in respect of any dividend payment or payments on the shares of
series B Preferred Stock that may be in arrears.
(c) Dividends payable on the shares of Series B
Preferred Stock for any period less than a full quarterly dividend period shall
be computed on the basis of a 360-day year of twelve 30-day months and the
actual number of days elapsed in the period for which payable.
3. OPTIONAL REDEMPTION AND MANDATORY REDEMPTION.
(a) The shares of Series B Preferred Stock are
redeemable at the option of the Corporation by resolution of its Board of
Directors, in whole or from time to time in part, at any time upon giving notice
as provided in Section D.3(f) of this Article FOURTH at a redemption price in
cash equal to the sum of (A) $10,000 for each share of Series B Preferred Stock
called for redemption plus (B) all dividends accrued and unpaid thereon up to
the date fixed for redemption, (such price, plus such dividends accrued and
unpaid, shall be hereinafter referred to as the"Series B Preferred Redemption
Price").
(b) The shares of Series B Preferred Stock shall be
redeemed in cash at the Series B Preferred Redemption Price if any of the
following events shall occur (such events shall be hereinafter referred to as
the "MANDATORY EVENT REDEMPTION DATE"):
(i) in the event of the closing of a firm commitment,
underwritten public offering pursuant to an effective registration
statement under the Securities Act covering the offer and sale of shares
of Common Stock for the account of the Corporation which is an IPO Event;
or
(ii) any consolidation or merger to which the
Corporation is a party other than a merger in which the Corporation is
33
the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or par
value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination) in, outstanding
shares of Common Stock or Series B Preferred Stock, or
(iii) any sale or conveyance of all or substantially
all of the property or business of the Corporation as an entirety
(including, in the case of any of the foregoing events, any statutory
exchange of securities with another corporation).
(c) If a redemption pursuant to this Section D.3(a) or
(b) of this Article FOURTH has not occurred by March 31, 2006 (the "SERIES B
PREFERRED MANDATORY REDEMPTION DATE"), the Corporation shall, on the Series B
Preferred Mandatory Redemption Date, redeem all shares, of Series B Preferred
Stock outstanding at the Series B Preferred Redemption Price. The Series B
Preferred Redemption Price shall be payable in cash.
(d) If, for any reason, the Corporation shall fail to
discharge its mandatory redemption obligations pursuant to Section D.3(b) or (c)
of this Article FOURTH, such purchase obligations shall be discharged as soon as
the Corporation is able to discharge such obligations. If and so long as any
mandatory redemption obligations with respect to the shares of the Series B
Preferred Stock shall not be fully discharged, the Corporation shall not,
directly or indirectly:
(i) declare or pay any dividend on any Junior
Securities or make any payment on account of, or set apart money for, a
sinking or other analogous fund for the purchase, redemption or other
Retirement of, or purchase, redeem or retire, any Junior Securities, make
any distribution in respect of Junior Securities, either directly or
indirectly and whether in cash or property or in obligations or shares of
the Corporation (other than in Junior Securities);or
(ii) purchase or redeem (except in either case for
consideration payable in Junior Securities) any Junior Securities then
outstanding (other than pursuant to a Management Repurchase Note
delivered in accordance with the provisions of the Stockholders Agreement
or an Outside Director/Employee Stockholder Agreement).
Dividends shall continue to accrue on a cumulative basis with
respect to any shares of Series B Preferred Stock subject to a mandatory
redemption obligation that has not been discharged by the Corporation pursuant
to Section D.3(b) or (c) of this Article FOURTH.
34
(e) If less than all of the outstanding shares of
Series B Preferred Stock are to be redeemed, the number of shares to be redeemed
shall be determined by the Board of Directors, and the shares to be redeemed
shall be determined pro rata or by lot or in such other manner and subject to
such regulations as the Board of Directors in its sole discretion shall
prescribe.
(f) At least 10 days but not more than 60 days prior to
a Mandatory Event Redemption Date, the Series B Preferred Mandatory Redemption
Date or the date fixed for any optional redemption of shares of Series B
Preferred Stock (such date for optional redemption together with the Mandatory
Event Redemption Date and the Series B Preferred Mandatory Redemption Date,
shall be hereinafter referred to as the "SERIES B PREFERRED REDEMPTION DATE"), a
written notice shall be mailed to each holder of record of shares of Series B
Preferred Stock to be redeemed and each holder of record of shares of Series A
Preferred Stock which such shares have automatically been converted into shares
of Series B Preferred Stock but which such shares have not yet been issued, in a
postage prepaid envelope addressed to such holder at such holder's post office
address as shown on the records of the Corporation, notifying such holder of the
Mandatory Event Redemption Date, the Series B Preferred Mandatory Redemption
Date or the election of the Corporation to redeem such shares, stating the date
fixed for redemption thereof, specifying the Series B Preferred Redemption
Price, and calling upon such holder to surrender to the Corporation on the
Series B Preferred Redemption Date at the place designated in such notice and
the certificate or certificates representing the number of shares specified in
such notice of redemption. On or after the Series B Preferred Redemption Date,
each holder of shares of Series B Preferred Stock to be redeemed and each holder
of record of shares of Series A Preferred Stock which such shares have
automatically been converted into shares of Series B Preferred Stock, but which
such shares have not yet been issued, shall surrender the certificate or
certificates for such shares to the Corporation at the place designated in such
notice, and against such surrender the Series B Preferred Redemption Price of
such shares shall be paid to or on the order of the person whose name appears on
such certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled. In case less than all the shares represented by
any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.
(g) From and after the Series B Preferred Redemption
Date (unless default shall be made by the Corporation in payment in full of the
Series B Preferred Redemption Price), all dividends on the shares of Series B
Preferred Stock designated for redemption in such notice shall cease to accrue,
and all rights of the holders thereof as stockholders of the Corporation, except
the right to receive the Series B Preferred Redemption Price of such shares
(including all
35
accrued and unpaid dividends up to the Series B Preferred Redemption Date) upon
the surrender of certificates representing the same, shall cease and terminate,
and such shares shall not thereafter be transferred (except with the consent of
the Corporation) on the books of the Corporation and shall not be deemed to be
outstanding for any purpose whatsoever.
(h) Shares of Series B Preferred Stock redeemed,
repurchased or retired pursuant to the provisions of this Section D.3 or
surrendered to the Corporation upon conversion shall thereupon be retired and
may not be reissued.
4. VOTING RIGHTS. Except as otherwise provided in Section D.
7 of this Article FOURTH or as required under the DGCL, the holders of shares of
Series B Preferred Stock shall not be entitled to vote on any matter submitted
to a vote of stockholders of the Corporation. Any vote expressly required by
Section D.7 of this Article FOURTH or by the DGCL may be given in person or by
proxy, either in writing without a meeting or by vote at any meeting called for
such purpose.
5. LIQUIDATION RIGHTS.
(a) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or otherwise,
the holders of shares of Series B Preferred Stock shall be entitled to receive,
out of the assets of the Corporation available for distribution to its
stockholders, in cash, the amount of $10,000 for each share of Series B
Preferred Stock, plus an amount equal to all dividends accrued and unpaid on
each such share up to the date fixed for distribution, before any distribution
shall be made to the holders of shares of Junior Securities. If upon any
liquidation, dissolution or winding up of the Corporation, the assets
distributable among the holders of shares of Series B Preferred Stock and shares
of Series A Preferred Stock are insufficient to permit the payment in full to
the holders of all such shares of all preferential amounts payable to such
holders, then the entire assets of the Corporation so distributable shall be
distributed ratably among the holders of the shares of Series B Preferred Stock
and the shares of Series A Preferred Stock in proportion to the respective
amounts that would be payable per share if such assets were sufficient to permit
payment in full.
(b) The holder of any shares of Series B Preferred
Stock shall not be entitled to receive any payment for such shares under this
Section D.5 until such holder shall cause to be delivered to the Corporation (i)
the certificate(s) representing such shares and (ii) transfer instrument(s)
satisfactory to
36
the Corporation and sufficient to surrender such shares to the Corporation free
of any adverse interest.
(c) After the payment of the full preferential amounts
provided for herein to the holders of shares of Series B Preferred Stock, such
holders shall be entitled to no other or further participation in the
distribution of the assets of the Corporation.
6. The holders of shares of Series B Preferred Stock shall
have no right to convert any such shares into shares of Common Stock or any
other securities of the Corporation.
7. LIMITATIONS. In addition to any other rights provided by
applicable law, so long as any shares of Series B Preferred Stock are
outstanding, the Corporation shall not, without the affirmative vote, or the
written consent as provided by law, of the holders of at least two-thirds of the
outstanding shares of Series B Preferred Stock, voting separately as a class:
(a) create, authorize or issue any class or series of
Preferred Stock or any other class of capital stock ranking either as to payment
of dividends or distribution of assets upon liquidation, dissolution or winding
up of the affairs of the Corporation on a parity with, or having preference or
priority over, the Series B Preferred Stock (other than the Series A Preferred
Stock); or
(b) change the powers, preferences or rights with
respect to the Series B Preferred Stock so as to affect the Series B Preferred
Stock adversely; PROVIDED, HOWEVER, any vote which would adversely affect the
amount or timing of the payment of the dividends on the Series B Preferred
Stock, the amount or timing of the payment of the Series B Redemption Price or
any amounts paid pursuant to Section D-5 of this Article FOURTH would require
the affirmative vote of the holders of all of the outstanding shares of Series B
Preferred Stock; and PROVIDED, FURTHER, (except as otherwise required by
applicable law) nothing herein contained shall require such a vote or consent in
connection with (i) any increase in the total number of authorized shares of
Common Stock, or (ii) the authorization or increase of any class or series of
shares ranking, as to dividends and in liquidation, dissolution or winding up of
the affairs of the Corporation, junior to the Series B Preferred Stock; PROVIDED
that no such vote or written consent of the holders of the shares of Series B
Preferred Stock shall be required if, at or prior to the time when the issuance
of any such shares ranking on a parity with, or having preference or priority
over, the Series B Preferred Stock is to be made or any such change is to take
effect, as the case may be, provision is made for the redemption of all the then
outstanding shares of Series B Preferred Stock.
37
8. DIVIDEND RECEIVED DEDUCTION. For federal income tax
purposes, the Corporation shall report distributions on the Series B Preferred
Stock as dividends, to the extent of the Corporation's current and accumulated
earnings and profits (as determined for federal income tax purposes). In
addition, the Corporation covenants not to take any action voluntarily which
could reasonably be expected to cause dividends on the Series B Preferred Stock
to fail to be eligible for the dividend received deduction pursuant to Section
243 of the Code.
FIFTH: The following provisions are inserted for the management of
the business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation, and of
its directors and stockholders:
A. MANAGEMENT OF CORPORATION. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors. In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, subject, nevertheless, to the provisions of the DGCL, this
Amended and Restated Certificate of Incorporation, and any By-Laws adopted by
the stockholders; PROVIDED that no By-Laws hereafter adopted by the stockholders
shall invalidate any prior act of the directors which would have been valid if
such By-Laws had not been adopted.
B. NUMBER AND ELECTION OF DIRECTORS. The number of directors of the
Corporation shall be as from time to time fixed by, or in the manner provided
in, the By-Laws of the Corporation. Election of directors need not be by written
ballot unless the By-Laws so provide.
C. SPECIAL VOTING REQUIREMENTS OF BOARD OF DIRECTORS AND COMMITTEE
OF THE BOARD OF DIRECTORS. In addition to any requirement under the DGCL, except
as specifically provided for in the Stockholders Agreement the approval of the
members of the Board of Directors (or any committee of the Board of Directors)
that are Windward Nominees (as such term is defined in the Stockholders
Agreement) acting by majority vote (or by written consent) is required in order
for the Board of Directors (or any committee of the Board of Directors) to take
any action or for the Company to take any action for which Board of Directors
approval is required. Any committee of the Board of Directors shall include, as
a majority of its members, Windward Nominees, unless Windward consents
otherwise.
38
D. AMENDMENT, ETC. OF THIS AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
E. AMENDMENT OF THE BY-LAWS. In furtherance and not in limitation
of the power conferred by statute, the Board of Directors is expressly
authorized to make, alter, amend, change, add to or repeal the By-Laws of the
Corporation, subject to any specific limitation on such power contained in any
By-Laws adopted by the stockholders.
F. ACTION BY WRITTEN CONSENT. Any action required or permitted to
be taken by the stockholders of the Corporation must be effected at an annual or
special meeting of the stockholders of the Corporation; PROVIDED, THAT, the
stockholders of the Corporation may take action, without prior notice (except as
provided below) and without a vote, by written consent in lieu of a meeting, to
the extent that any such written consent (a) is signed by the holders of
outstanding shares having not less than the minimum number of votes that would
be necessary to authorize or take the action at a meeting at which all shares
entitled to vote on the action were present and voted (the "Consenting Holders"
and each a "Consenting Holder"), if Windward or its Permitted Transferees (as
defined in the Stockholders Agreement) (but only if such signing party is at
such time a stockholder of the Corporation entitled to vote on such matter) is a
Consenting Holder and (b) is otherwise permitted pursuant to the provisions of
the DGCL; PROVIDED, FURTHER, that (i) notice of such action must be given by the
Consenting Holder to the other stockholders of the Corporation at least one
business day prior to the approval of any such action, and (ii) any such action
taken by stockholders by written consent as provided herein shall have the
effect as if it had been effected at an annual or special meeting.
G. MEETINGS OF STOCKHOLDERS; BOOKS OF THE CORPORATION. Meetings of
stockholders may be held within or without the State of Delaware, as the By-Laws
may provide. The books of the Corporation may be kept (subject to any provision
contained in the DGCL) outside the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors or in the By-Laws
of the Corporation.
SIXTH: No director 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 liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholder, (ii) for acts or omissions not in
good faith or which
39
involve intentional misconduct or a knowing violation of law, (iii) pursuant to
Section 174 of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit. Any repeal or modification of the
foregoing provision of this Article SIXTH shall not adversely affect any right
or protection of a director of the Corporation in respect of any act or omission
occurring prior to the time of such repeal or modification. The provisions of
this Article SIXTH shall not be deemed to limit or preclude indemnification of a
director by the Corporation for any liability as a director that has not been
eliminated by the provisions of this Article SIXTH.
IN WITNESS WHEREOF, this Amended and Restated Certificate of
Incorporation is executed this 16th day of March, 1998.
WINDWARD AUTOMOTIVE COMPONENTS
INTERNATIONAL INC.
By: /s/ James D. Abstrom
---------------------------
40
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
J. L. FRENCH AUTOMOTIVE CASTINGS, INC.
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
-----------------------------------------------------
J. L. French Automotive Castings, Inc., a Delaware corporation
(hereinafter called the "Corporation"), does hereby certify as follows:
FIRST: Article Four of the Corporation's Certificate of
Incorporation is hereby amended to read in its entirety as set forth below:
ARTICLE FOUR
The total number of shares of stock which the Corporation has
authority to issue is 75,500, consisting of:
(i) 20,000 shares of Class A Common Stock, par value $0.01 per
share (the "CLASS A COMMON");
(ii) 30,000 shares of Class B common Stock, par value $0.01 per
share (the "CLASS B COMMON");
(iii) 2,000 shares of Class C Common Stock, par value $0.01 per
share (the "CLASS C COMMON");
(iv) 15,000 shares of Class D-1 Common Stock, par value $0.01
per share (the "CLASS D-1 COMMON");
(v) 7,500 shares of Class D-2 Non-Voting Common Stock, par
value $0.01 per share (the "CLASS D-2" COMMON"); and
(vi) 1,000 shares of Class E Common Stock, par value $0.01 per
share (the "CLASS E COMMON").
The Class D-1 Common and Class D-2 Common are referred to
collectively as the "CLASS D COMMON," and the Class A Common, Class B Common,
Class C Common, Class D Common and Class E Common and any other common stock
issued hereafter are referred to collectively as the "COMMON STOCK." Capitalized
terms used but not otherwise defined in this Article Four are defined in Section
II.
I. TERMS APPLICABLE TO THE COMMON STOCK.
Except as otherwise provided in this Section I or as otherwise
required by applicable law, all shares of Class A Common, Class B Common, and
Class C Common, Class D Common and Class E Common shall be identical in all
respects and shall entitle the holders thereof to the same rights and
privileges, subject to the same qualifications, limitations and restrictions.
Part 1. VOTING RIGHTS.
Except as otherwise provided in this Section I or as otherwise
required by applicable law, all holders of Class A Common, Class B Common,
Class C Common, Class D-1 Common and Class E Common shall be entitled to one
vote per share on all matters to be voted on by the Corporation's
stockholders and the holders of Class D-2 Common shall not be entitled to
vote on such matters. The holders of Class A Common, Class B Common, Class C
Common, Class D-1 Common and Class E Common shall vote together as a single
class.
Part 2. DISTRIBUTIONS.
2A. CLASS A COMMON. The holders of Class A Common shall be
entitled to receive, as a group, a percentage of all Distributions made to
holders of Common Stock, such percentage to be determined by dividing (i) the
number of shares of Class A Common outstanding on the record date for the
applicable Distribution, by (ii) the number of shares of Common Stock
outstanding on the record date for the applicable Distribution. The
Distributions to the holders of Class A Common shall be distributed ratably
among holders of Class A Common on a per share basis.
2B. CLASS B COMMON AND CLASS C COMMON. At the same time as
Distributions are made pursuant to paragraph 2A above, the holders of Class B
Common and Class C Common shall be entitled to receive, as a group, a percentage
of all Distributions made to holders of Common Stock, such percentage to be
determined by dividing (i) the number of outstanding shares of Class B Common
and Class C Common on the record date for the applicable Distribution, by (ii)
the number of shares of Common Stock outstanding on the record date for the
applicable Distribution (the "B/C DISTRIBUTIONS"). The B/C Distributions shall
be distributed to the holders of Class B Common and Class C Common in the
following priority:
(i) The holders of Class B Common shall be entitled to receive
all B/C Distributions, ratably based upon the aggregate Unreturned Original Cost
and Unpaid Yield of the Class B Common held by each such holder, until such time
as the holders of Class B Common, as a class, receive Distributions equal to the
sum of (A) the aggregate Unreturned Original Cost of the Class B Common and (B)
the aggregate Unpaid Yield on the Class B Common. The Distributions made
pursuant to this paragraph 2B(i) to holders of the Class B
-2-
Common shall first be designated as a payment of Yield on and then as a return
of Original Cost of the Class B Common.
(ii) Following the Distributions described in paragraph 2B(i)
above, the holders of Class C Common shall be entitled to receive all B/C
Distributions, ratably based upon the aggregate Unreturned Original Cost and
Unpaid Yield of the Class C Common held by each such holder, until such time as
the holders of Class C Common, as a class, receive Distributions equal to the
sum of (A) the aggregate Unreturned Original Cost of the Class C Common and (B)
the aggregate Unpaid Yield on the Class C Common. The Distributions made
pursuant to this paragraph 2B(ii) to holders of the Class C Common shall first
be designated as a payment of Yield on and then as a return of Original Cost of
the Class C Common.
(iii) Following the Distributions described in paragraph 2B(ii)
above, and at the same time as Distributions in paragraph 2B(iv) below, the
holders of Class B Common shall be entitled to receive, as a class, a percentage
of all B/C Distributions, such percentage to be determined by dividing (A) the
sum of (x) the aggregate Unreturned Original Cost of Onex Loss Investment Stock
and (y) the aggregate Unpaid Yield on Onex Loss Investment Stock, by (B) the sum
of (x) the aggregate Unreturned Original Cost of Loss Investment Stock and (y)
the aggregate Unpaid Yield on Loss Investment Stock, until such time an the
holders of Class B Common receive, as a class, Distributions equal to the excess
of (C) the sum of (x) the aggregate Unreturned Original Cost of Onex Loss
Investment Stock and (y) the aggregate Unpaid Yield on Onex Loss Investment
Stock over (D) the aggregate Disposition Value of Onex Loss Investment Stock.
The Distributions made pursuant to this paragraph 2B(iii) to holders of the
Class B Common shall be distributed ratably, based upon the number of
outstanding shares of Class B Common held by each such holder, and shall be
designated first as payment of Yield on and then as a return of Original Cost of
the Onex Loss Investment Stock.
(iv) Following the Distributions described in paragraph 2B(ii)
above, and at the same time as Distributions in paragraph 2B(iii) above, the
holders of Class C Common shall be entitled to receive, as a class, a percentage
of all B/C Distributions, such percentage to be determined by dividing (A) the
sum of (x) the aggregate Unreturned Original Cost of J2R Loss Investment Stock
and (y) the aggregate Unpaid Yield on J2R Loss Investment Stock, by (B) the sum
of (x) the aggregate Unreturned Original Cost of Loss Investment Stock and (y)
the aggregate Unpaid Yield on Loss Investment Stock, until such time as the
holders of Class C Common receive, as a class, Distributions equal to the excess
of (C) the sum of (x) the aggregate Unreturned Original Cost of J2R Loss
Investment Stock and (y) the aggregate Unpaid Yield on J2R Loss Investment Stock
over (D) the aggregate Disposition Value of J2R Loss Investment Stock. The
Distributions made pursuant to this paragraph 2B(iv) to holders of Class C
Common shall be distributed ratably, based upon the number of outstanding shares
of Class C Common held by each such holder, and shall be designated first as
payment of Yield on and then as a return of Original Cost of the J2R Loss
Investment Stock.
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(v) Following the Distributions described in paragraph 2B(iii)
and 2B(iv) above, the holders of Class C Common shall be entitled to receive all
B/C Distributions, ratably based upon the number of shares of Class C Common
held by each such holder, until such time as the holders of Class C Common
receive, as a class, Distributions equal to 25% of all Distributions made by all
Portfolio Companies that were designated (according to the distributing
Portfolio Company's Certificate of Incorporation) as payment of Yield on the
Class B Common.
(vi) Following the Distributions described in paragraph 2B(v)
above, and at the same time as Distributions in paragraph 2B(vii) below, the
holders of Class B Common shall be entitled to receive, as a class, a percentage
of all B/C Distributions, such percentage to be determined by dividing (A) the
sum of (x) the aggregate Unreturned Original Cost of Onex PLI Stock and (y) the
aggregate Unpaid Yield on Onex PLI Stock, by (B) the sum of (x) the aggregate
Unreturned Original Cost of PLI Stock and (y) the aggregate Unpaid Yield on PLI
Stock, until such time as the holders of Class B Common and Class C Common, as a
group, receive Distributions equal to the Shortfall. The Distributions made
pursuant to this paragraph 2B(vi) to holders of the Class B Common shall be
distributed ratably, based upon the number of outstanding shares of Class B
Common held by each such holder, and shall be designated first as a payment of
Yield on and then as a return of Original Cost of the Onex PLI Stock.
(vii) Following the Distributions described in paragraph 2B(v)
above, and at the same time as distributions in paragraph 2B(vi) above, the
holders of Class C Common shall be entitled to receive, as a class, a percentage
of all B/C Distributions, such percentage to be determined by dividing (A) the
sum of (x) the aggregate Unreturned Original Cost of J2R PLI Stock and (y) the
aggregate Unpaid Yield on J2R PLI Stock, by (B) the sum of (x) the aggregate
Unreturned Original Cost of PLI Stock and (y) the aggregate Unpaid Yield on PLI
Stock, until such time as the holders of Class B Common and Class C Common, as a
group, receive Distributions equal to the Shortfall. The Distributions made
pursuant to this paragraph 2B(vii) to holders of the Class C Common shall be
distributed ratably, based upon the number of outstanding shares of Class C
Common held by each such holder, and shall be designated first as a payment of
Yield on and then as a return of Original Cost of the J2R PLI Stock.
(viii) Following the Distributions described in paragraphs 2B(vi)
and 2B(vii) above, (A) the holders of Class B Common shall be entitled to
receive 80% of the B/C Distributions ratably, based upon the number of
outstanding shares of Class B Common held by each such holder and (B) the
holders of Class C Common shall be entitled to receive 20% of the B/C
Distributions ratably, based upon the number of outstanding shares of Class C
Common held by each such holder.
2C. CLASS D COMMON AND CLASS E COMMON. At the same time as
Distributions are made pursuant to paragraph 2A and 2B above, the holders of
Class D Common and Class E Common shall be entitled to receive, as a group, a
percentage of all Distributions made to holders of Common Stock, such percentage
to be determined by dividing (i) the number
-4-
of outstanding shares of Class D Common and Class E Common on the record date
for the applicable Distribution, by (ii) the number of shares of Common Stock
outstanding on the record date for the applicable Distribution (the "D/E
DISTRIBUTIONS"). The D/E Distributions shall be distributed to the holders of
Class D Common and Class E Common in the following priority:
(i) The holders of Class D Common shall be entitled to receive
all D/E Distributions, ratably based upon the aggregate Unpaid Class D/E Yield
of the Class D Common held by such holder, until such time as the holders of
Class D Common receive, as a group, Distributions equal to the Unpaid Class D/E
Yield on Class D Common. The Distributions made pursuant to this paragraph 2C(i)
to holders of Class D Common shall be designated as a payment of Class D/E
Yield.
(ii) Following the Distributions described in paragraph 2C(i)
above, the holders of Class E Common shall be entitled to receive all D/E
Distributions, ratably based upon the aggregate Unpaid Class D/E Yield of the
Class E Common held by such holder, until such time as the holders of Class E
Common receive, as a class, Distributions equal to the Unpaid Class D/E Yield on
Class E Common. The Distributions made pursuant to this paragraph 2C(ii) to
holders of Class E Common shall be designated as a payment of class D/E Yield.
(iii) Following the Distributions described in paragraph 2C(ii)
above, the holders of Class D Common shall be entitled to receive all D/E
Distributions, ratably based upon the aggregate Unreturned Original D/E Cost of
the Class D Common held by such holder, until such time as the holders of Class
D Common, as a group, receive Distributions equal to the aggregate Unreturned
Original D/E Cost of the Class D Common. The Distributions made pursuant to this
paragraph 2C(iii) to holders of the Class D Common shall be designated as a
return of Original D/E Cost of the Class D Common.
(iv) Following the Distributions described in paragraph 2C(iii)
above, the holders of Class E Common shall be entitled to receive all D/E
Distributions, ratably based upon the aggregate Unreturned Original D/E Cost of
the Class E Common held by such holder, until such time as the holders of Class
E Common, as a class, receive Distributions equal to the aggregate Unreturned
Original D/E Cost of the Class E Common. The Distributions made pursuant to this
paragraph 2C(iv) to holders of the Class E Common shall be designated as a
return of Original D/E Cost of the Class E Common.
(v) Following the Distributions described in paragraph
2C(iv) above, the holders of Class E Common shall be entitled to receive all
D/E Distributions, ratably based upon the number of shares of Class E Common
held by each such holder, until such time as the holders of Class E Common
receive, as a class, Distributions equal to 25% of all Distributions that
were designated as payment of Class D/E Yield on the Class D Common.
(vi) Following the Distributions described in paragraph 2C(v)
above, (A) the holders of Class D Common shall be entitled to receive 80% of the
D/E Distributions ratably,
-5-
based upon the number of outstanding shares of Class D Common held by each such
holder and (B) the holders of Class E Common shall be entitled to receive 20% of
the D/E Distributions ratably, based upon the number of outstanding shares of
Class E Common held by each such holder.
Part 3. CONVERSION.
3A. CONVERSION OF CLASS D-2 COMMON.
(i) In connection with the occurrence (or the expected
occurrence as described in (iii) below) of any Conversion Event, each holder of
Class D-2 Common shall be entitled to convert into an equal number of shares of
Class D-1 Common any or all of the shares of such holder's Class D-2 Common
being (or expected to be) distributed, disposed of or sold in connection with
such Conversion Event.
(ii) For purposes of this paragraph 3A, a "Conversion Event"
shall mean (a) any public offering or public sale of securities of the
Corporation (including a public offering registered under the Securities Act of
1933 and a public sale pursuant to Rule 144 of the Securities and Exchange
Commission or any similar rule then in force), (b) any sale of securities of the
Corporation to a person or group of persons (within the meaning of the
Securities Exchange Act of 1934, as amended (the "1934 Act")) if, after such
sale, such person or group of persons in the aggregate would own or control
securities which possess in the aggregate the ordinary voting power to elect a
majority of the Corporation's directors (provided that such sale has been
approved by the Corporation's Board of Directors or a committee thereof), (c)
any sale of securities of the Corporation to a person or group of persons
(within the meaning of the 1934 Act) if, after such sale, such person or group
of persons in the aggregate would own or control securities of the Corporation
(excluding any Class D-2 Common being converted and disposed or in connection
with such Conversion Event) which possess in the aggregate the ordinary voting
power to elect a majority of the Corporation's directors, (d) any sale of
securities of the Corporation to a person or group of persons (within the
meaning of the 1934 Act) if, after such sale, such person or group of persons
would not, in the aggregate, own, control or have the right to acquire more than
two percent (2%) of the outstanding securities of any class of voting securities
of the Corporation, and (e) a merger, consolidation or similar transaction
involving the Corporation if, after such transaction, a person or group of
persons (within the meaning of the 1934 Act) in the aggregate would own or
control securities which possess in the aggregate the ordinary voting power to
elect a majority of the surviving corporation's directors (provided that the
transaction has been approved by the Corporation's Board of Directors or a
committee thereof). For purposes of this paragraph 3A, a "person" shall include
any natural person and any corporation, partnership, joint venture, trust,
unincorporated organization and any other entity or organization.
(iii) Each holder of Class D-2 Common shall be entitled to
convert shares of Class D-2 Common in connection with any Conversion Event if
such holder reasonably believes
-6-
that such Conversion Event shall be consummated, and a written request for
conversion from any holder of Class D-2 Common to the Corporation stating such
holder's reasonable belief that a Conversion Event shall occur shall be
conclusive and shall obligate the Corporation to effect such conversion in a
timely manner so as to enable each such holder to participate in such Conversion
Event. The Corporation shall not cancel the shares of Class D-2 Common so
converted before the tenth day following such Conversion Event and shall reserve
such shares until such tenth day for reissuance in compliance with the next
sentence. If any shares of Class D-2 Common are converted into shares of Class
D-1 Common in connection with a Conversion Event and such shares of Class D-1
Common are not actually distributed, disposed of or sold pursuant to such
Conversion Event, such shares of Class D-1 Common shall be promptly converted
back into the same number of shares of Class D-2 Common.
3B. CONVERSION PROCEDURE.
(i) Each conversion of shares of Class D-2 Common into
shares of Class D-1 Common will be effected by the surrender of the
certificate or certificates representing the shares to be converted at the
principal executive office of the Corporation (or such other office or agency
of the Corporation as the Corporation may designate by notice in writing to
the holders of the Class D-2 Common) at any time during normal business
hours, together with a written notice by the holder of the shares represented
by such certificate or certificates starting that such holder desires to
convert such shares, or a stated number of such shares, into shares of Class
D-1 Common and that upon such conversion such holder and its Affiliates will
not directly or indirectly own, control or have the power to vote a greater
quantity of securities of any kind issued by the Corporation than such holder
and its Affiliates are permitted to own, control or have the power to vote
under any applicable law, regulation, rule or other requirement of any
governmental authority (and such statement will obligate the Corporation to
issue such shares of Class D-1 Common). Such conversion will be deemed to
have been effected as of the close of business on the date on which such
certificate or certificates have been surrendered and such written notice has
been received, and at such time the rights of the holder of the converted
shares of Class D-2 Common as such holder will cease and the person or
persons in whose name or names the certificate or certificates for shares of
Class D-1 Common are to be issued upon such conversion will be deemed to have
become the holder or holders of record of the shares of Class D-1 Common
represented thereby.
(ii) Promptly after such surrender and the receipt of such
written notice, the Corporation will issue and deliver in accordance with the
surrendering holder's instructions (i) the certificate or certificates for the
shares of Class D-1 Common issuable upon such conversion and (ii) a certificate
representing any shares of Class D-2 Common which were represented by the
certificate or certificates delivered to the Corporation in connection with such
conversion but which were not converted.
(iii) The Corporation will at all times reserve and keep
available out of its authorized but unissued shares of Class D-1 Common, solely
for the purpose of issue upon the
-7-
conversion of the Class D-2 Common as provided in this Part 3, such number of
shares as shall be issuable upon the conversion of all then outstanding shares
of Class D-2 Common (assuming that all such shares are held by persons entitled
to convert such shares into shares of Class D-1 Common).
(iv) The issuance of certificates for shares of Class D-1 Common
upon conversion of shares of Class D-2 Common will 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 issuance. The
Corporation will not close its books against the transfer of its Common Stock in
any manner which would interfere with the timely conversion of the Class D-2
Common.
Part 4. STOCK SPLITS AND STOCK DIVIDENDS.
The Corporation shall not in any manner subdivide (by stock split,
stock dividend or otherwise), or combine (by stock split, stock dividend or
otherwise) the outstanding Common Stock of one class unless the outstanding
Common Stock of the other classes shall be proportionately subdivided or
combined. All such subdivisions and combinations shall be payable only in Class
A Common to the holders of Class A Common, in Class B Common to the holders of
Class B Common, in Class C Common to the holders of Class C Common, in Class D-1
Common to the holders of Class D-1 Common, in Class D-2 Common to the holders of
Class D-2 Common and in Class E Common to the holders of Class E Common. In no
event shall a stock split or stock dividend be designated as a payment of Yield,
a payment of Class D/E Yield, a return of Original Cost or a return of Original
D/E Cost.
Part 5. REGISTRATION OF TRANSFER.
The Corporation shall keep at its principal office (or such
other place as the Corporation reasonably designates) a register for the
registration of shares of Common Stock. Upon the surrender of any certificate
representing shares of any class of Common Stock at such place, the
Corporation shall, at the request of the registered holder of such
certificate, execute and deliver a new certificate or certificates in
exchange therefor representing in the aggregate the number of shares of such
class represented by the surrendered certificate, and the Corporation
forthwith shall cancel such surrendered certificate. Each such new
certificate will be registered in such name and will represent such number of
shares of such class as is requested by the holder of the surrendered
certificate and shall be substantially identical in form to the surrendered
certificate. The issuance of new certificates shall be made without charge to
the holders of the surrendered certificates for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
issuance.
Part 6. REPLACEMENT.
-8-
Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder will be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of any class of Common Stock, and in the case of
any such lose, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Corporation (provided that if the holder is a financial
institution or other institutional investor its own agreement will be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
Part 7. NOTICES.
All notices referred to herein shall be in writing, shall be
delivered personally, sent by telecopy or mailed by first class mail, postage
prepaid, and shall be deemed to have been given when so delivered, sent or
mailed to the Corporation at its principal executive offices and to any
stockholder at such holder's address as it appears in the stock records of the
Corporation (unless otherwise specified in a written notice to the Corporation
by such holder).
Part 8. AMENDMENT AND WAIVER.
No amendment or waiver of any provision of this Section I shall
be effective without the prior written consent of the holders of a majority
of the then outstanding shares of the Class A Common, Class B Common, Class C
Common, Class D Common and Class E Common each voting as a separate class;
provided that any provisions of part 2B of this Section I and any definitions
in Section II applicable thereto may be amended or waived with the prior
consent of both the holders of a majority of the then outstanding shares of
Class B Common and the holders of a majority of the then outstanding shares
of Class C Common each voting as a separate class and that any provisions of
part 2C of this Section I; provided, further, that any provisions of Part 2C
of this Section I and any definitions in Section II applicable thereto may be
amended or waived with the prior consent of both the holders of a majority of
the then outstanding shares of Class D Common and the holders of a majority
of the then outstanding shares of Class E Common each voting as a separate
class.
II. DEFINITIONS.
"AFFILIATE" means, with respect to any Person, any individual,
corporation, partnership or other entity which, directly or indirectly,
controls, or is controlled by or is under common control with such Person or any
of its Subsidiaries.
"CLASS D/E YIELD" means a yield on each share of Class D Common
and Class E Common that will accrue and accumulate at the rate of 20.0% per
annum of the Unreturned Original D/E Cost thereof, which yield shall accumulate
and compound if not paid at least
-9-
annually. In computing the amount of Class D/E Yield accrued in respect of a
fractional year, such amount shall be computed on the basis of a 365 day year
and actual number of days elapsed.
"CO-INVESTMENT AGREEMENT" means that certain Co-Investment
Agreement, dated as of March 30, 1990, between Onex TMB Investments Inc., an
Ontario corporation (and together with its affiliates (as defined in the
Co-Investment Agreement) and successors, "Onex"), and J2R Corporation, a
Delaware corporation (and together with its affiliates (as defined in the
Co-Investment Agreement) and successors, "J2R"), as amended from time to time.
"DISPOSITION VALUE" of any share of any Loss Investment means an
amount equal to (a) the amount realized on disposition of such share in
connection with the disposition by Onex of the Onex Loss Investment Stock of the
issuer of such share or (b) if no amount is realized on such share in connection
with such disposition, the fair market value (as determined in good faith by the
Board of Directors of the Corporation) of such share on its Loss Investment
Date. The Disposition Value of any share shall not exceed its Unpaid Yield and
Unreturned Original Cost.
"DISTRIBUTION" means each distribution made by the Corporation
to holders of Common Stock, whether in cash, property, or securities of the
Corporation and whether by dividend, liquidating distributions or otherwise;
provided that neither of the following shall be a Distribution: (a) any
redemption or repurchase by the Corporation of any shares of Common Stock for
any reason or (b) any recapitalization or exchange of any shares of Common
Stock, or any subdivision (by stock split, stock dividend or otherwise) or
any combination (by stock split, stock dividend or otherwise) of any
outstanding shares of Common Stock.
"J2R LOSS INVESTMENT STOCK" means any common stock originally
issued by any Loss Investment to J2R or its Affiliates that has rights and
preferences substantially similar to those of the Class C Common.
"J2R PLI STOCK" means any common stock originally issued by any
Potential Loss Investment to J2R or its Affiliates that has rights and
preferences substantially similar to those of the Class C Common.
"LOSS INVESTMENT" means any Portfolio Company designated as a Loss
Investment by Onex in accordance with the terms set forth in the Co-Investment
Agreement.
"LOSS INVESTMENT DATE" as to any share of common stock means the
date on which the issuer of such share is designated as a Loss investment by
Onex, in accordance with the terms set forth in the Co-Investment Agreement.
"LOSS INVESTMENT STOCK" means any Onex Loss Investment Stock or
J2R Loss Investment Stock.
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"ONEX LOSS INVESTMENT STOCK" means any common stock originally
issued by any Loss Investment to Onex or its Affiliates that has rights and
preferences substantially similar to those of the Class B Common.
"ONEX PLI STOCK" means any common stock originally issued by any
Potential Loss Investment to Onex or its Affiliates that has rights and
preferences substantially similar to those of the Class B Common.
"ORIGINAL COST" of any share of any class of common stock of any
Portfolio Company as of any particular date will be equal to the amount of cash
originally paid for such shares when they were issued.
"ORIGINAL D/E COST" of any share of the Class D Common and the
Class E Common of the Corporation as of any particular date will be equal to the
amount of cash originally paid for such shares when they were issued.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, a limited liability company and a governmental entity or any
department, agency or political subdivision thereof.
"PORTFOLIO COMPANY" means a Person that has issued Securities that
were originally owned by Onex or its Affiliates and J2R or its Affiliates
pursuant to the Co-Investment Agreement.
"POTENTIAL LOSS INVESTMENT" means any Portfolio Company designated
as a Potential Loss Investment by Onex in accordance with the terms set forth in
the Co-Investment Agreement.
"PLI STOCK" means any Onex PLI Stock or J2R PLI Stock.
"SECURITIES" shall mean "securities" as defined in section 2(1) of
the Securities Act of 1933, as amended.
"SHORTFALL" means an amount equal to the excess, if any of (a) the
sum of (i) the Unreturned Original Cost of such stock and (ii) the Unpaid Yield
on such stock over (b) the aggregate fair market value of PLI Stock as
determined in accordance with the Co-Investment Agreement.
"SUBSIDIARY" shall mean with respect to any Person, any
corporation of which the shares of stock having a majority of the general voting
power in electing the board of directors are, at the time as of which any
determination in being made, owned by such Person either directly or indirectly
through Subsidiaries.
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"UNPAID CLASS D/E YIELD" of any share of Class D Common and Class
E Common means an amount equal to the excess, if any, of (a) the aggregate Class
D/E Yield accrued and accumulated on such share over (b) the aggregate amount of
Distributions made by the Corporation that are designated as payment of Class
D/E Yield on such share.
"UNPAID YIELD" of any share of common stock of any Portfolio
Company means an amount equal to the excess, if any, of (a) the aggregate Yield
accrued and accumulated on such share over (b) the aggregate amount of
distributions made by all Portfolio Companies that are designated (according to
the distributing Portfolio Company's Certificate of Incorporation) as payment of
Yield on such share. In no event shall any amount paid to a stockholder in
exchange for or with respect to the stock of a Portfolio Company be treated as
payment of Unpaid Yield (other than a distribution made by such Portfolio
Company or a distribution made by another Portfolio Company with respect to the
stock of such Portfolio Company).
"UNRETURNED ORIGINAL COST" of any share of common stock of any
Portfolio Company means an amount equal to the excess, if any, of (a) the
Original Cost of such share over (b) the aggregate amount of distributions
made by all Portfolio Companies that are designated (according to the
distributing Portfolio Company's Certificate of Incorporation) as a return of
Original Cost of such share. In no event shall any amount paid to a
stockholder in exchange for or with respect to the stock of a Portfolio
Company be treated as payment of Unreturned Original Cost (other than a
distribution made by such Portfolio Company or by another Portfolio Company
with respect to the stock of such Portfolio Company).
"UNRETURNED ORIGINAL D/E COST" of any share of Class D Common and
Class E Common means an amount equal to the excess, if any, of (a) the Original
D/E Cost of such share over (b) the aggregate amount of Distributions made by
the Corporation that are designated as a return of Original D/E Cost of such
share.
"YIELD" means a yield on each share of common stock of any
Portfolio Company that will accrue and accumulate at the rate of 20.0% per annum
of the Unreturned Original Cost thereof, which yield shall accumulate and
compound if not paid at least annually; provided however, that the Yield on any
share shall cease accruing, accumulating and compounding on the Loss Investment
Date of such share. In computing the amount of Yield accrued in respect of a
fractional year, such amount shall be computed on the basis of a 365 day year
and actual number of days elapsed.
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SECOND: The foregoing amendment was duly adopted in accordance
with Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, J. L. French Automotive Castings, Inc. has
caused this Certificate to be duly executed in its corporate name this 21st day
of April, 1999.
J. L. French Automotive Castings, Inc.
By: /s/ Thomas C. Dinolfo
---------------------------------
Name: Thomas C. Dinolfo
Title: Treasurer & CFO
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CERTIFICATE OF CORRECTION FILED TO CORRECT
A CERTAIN ERROR IN THE CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF
INCORPORATION OF
J.L. FRENCH AUTOMOTIVE CASTINGS, INC.
FILED IN THE OFFICE OF THE SECRETARY OF STATE OF DELAWARE
ON APRIL 21, 1999
J.L. French Automotive Castings, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
1. The name of the corporation is J.L. French Automotive Castings,
Inc.
2. That a Certificate of Amendment to the Certificate of
Incorporation was filed by the Secretary of State of Delaware on
April 21, 1999 and that said Certificate requires correction as
permitted by Section 103 of the General Corporation Law of the
State of Delaware.
3. The inaccuracy or defect of said Certificate to be corrected is as
follows:
a. The total number of shares of stock which the Corporation
has authority to issue was incorrectly listed in the first
sentence of Article Four. The total number of shares of
stock which the Corporation has authority to issue should
be listed as 82,500.
b. The amount of authorized Class C Common Stock and Class E
Common Stock was incorrectly listed in the first sentence
of Article Four. The amount of authorized Class C Common
Stock should be listed as 6,000 shares and the amount of
authorized Class E Common Stock should be listed as 4,000
shares.
4. The first sentence of Article Four of the Certificate of Amendment
to the Certificate of Incorporation is corrected to read as
follows:
ARTICLE FOUR
The total number of shares of stock which the Corporation has
authority to issue is 82,500, consisting of:
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(i) 20,000 shares of Class A Common Stock, par value $0.01 per
share (the "CLASS A COMMON");
(ii) 30,000 shares of Class B Common Stock, par value $0.01 per
share (the "CLASS B COMMON");
(iii) 6,000 shares of Class C Common Stock, par value $0.01 per
share (the "CLASS C COMMON");
(iv) 15,000 shares of Class D-1 Common Stock, par value $0.01
per share (the "CLASS D-1 COMMON");
(v) 7,500 shares of Class D-2 Non-Voting Common Stock, par
value $0.01 per share (the "CLASS D-2 COMMON"); and
(vi) 4,000 shares of Class E Common Stock, par value $0.01 per
share (the "CLASS E COMMON").
* * * * *
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IN WITNESS WHEREOF, said Carl E. Nelson, its Vice President and
Secretary, has executed this Certificate of Correction on this 20th day of May,
1999.
J.L. French Automotive Castings, Inc.
By
------------------------------------
/s/ Carl E. Nelson, Vice President &
Secretary
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CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
J.L. FRENCH AUTOMOTIVE CASTINGS, INC.
* * * *
ADOPTED IN ACCORDANCE WITH THE PROVISIONS OF Section 242 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
* * * *
Charles Waldon, being the President of J.L. French Automotive
Castings, Inc., a corporation duly organized and existing under and by virtue of
the General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY as follows:
FIRST: The Board of Directors of the Corporation adopted the
resolution set forth below proposing an amendment to the Certificate of
Incorporation of the Corporation (the "Amendment") and directed that the
Amendment be submitted to the holders of the issued and outstanding shares of
Common Stock of the Corporation entitled to vote thereon for their consideration
and approval:
RESOLVED, that the Certificate of Incorporation of the Corporation
be, and hereby is, amended in accordance with Section 242 of the General
Corporation Law of the State of Delaware by replacing the first two
paragraphs of ARTICLE FOUR in respect of the authorized capital stock of
the Corporation and substituting therefor the paragraphs as set forth on
EXHIBIT A attached hereto and made a part hereof; it being understood
that Sections I and II of ARTICLE FOUR shall be unaffected by this
amendment.
SECOND: The Amendment was duly adopted in accordance with Section
228 and Section 242 of the General Corporation Law of the State of Delaware by
the sole holders of the issued and outstanding shares of the Common Stock of the
Corporation entitled to vote thereon.
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IN WITNESS WHEREOF, the undersigned does hereby certify under
penalties of perjury that this Certificate of Amendment to the Certificate of
Incorporation of the Corporation is the act and deed of the undersigned and the
facts stated herein are true and accordingly has hereunto set his hand this 14th
day of October, 1999.
J.L. FRENCH AUTOMOTIVE
CASTINGS INC.,a Delaware corporation
By:
-----------------------------
/s/ Charles Waldon
President
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EXHIBIT A
ARTICLE FOUR
The total number of shares of stock which the Corporation
has authority to issue is 120,000 consisting of:
(i) 20,000 shares of Class A Common Stock, par value $0.01 per
share (the "CLASS A- COMMON");
(ii) 30,000 shares of Class B Common Stock, par value $0.01 per
share (the "CLASS B COMMON");
(iii) 20,000 shares of Class C Common Stock, par value $0.01 per
share (the "CLASS C COMMON");
(iv) 15,000 shares of Class D-1 Common Stock, par value $0.01
per share (the "CLASS D-1 COMMON");
(v) 15,000 shares of Class D-2 Common Stock, par value $0.01
per share (the "CLASS D-2 COMMON"); and
(vi) 20,000 shares of Class E Common Stock, par value $0.01 per
share (the "CLASS E COMMON").
The Class D-1 Common and Class D-2 Common are referred to
collectively as the "CLASS D COMMON" and the Class A Common, Class B Common,
Class C Common, the Class D Common and Class E Common and any other common stock
issued hereafter are referred to collectively as the "Common Stock." Capitalized
terms used but not otherwise defined in this Article Four are defined in Section
II.
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