THIRD RESTATED CERTIFICATE OF INCORPORATION
OF
UNITED AUTO GROUP, INC.
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ARTICLE I
NAME
The name of the corporation is: United Auto Group, Inc. (the
"Corporation").
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the Corporation's registered office in the State of Delaware is
1013 Centre Road, in the City of Wilmington, County of New Castle. The name of
the Corporation's registered agent at such address is The Prentice-Hall
Corporation System, Inc.
ARTICLE III
PURPOSE
The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the State of Delaware
(the "DGCL").
ARTICLE IV
CAPITAL
1. Designation.
The total number of shares of capital stock which the
Corporation shall have the authority to issue is 61,225,000, consisting of:
(i) 40,000,000 shares of Voting Common Stock, par value $0.0001 per share (the
"VOTING COMMON STOCK"); (ii) 1,125,000 shares of Non-voting Common Stock, par
value $0.0001 per share (the "NON-VOTING COMMON STOCK"); (iii) 20,000,000
shares of Class C Common Stock, par value $0.0001 per share (the "CLASS C
COMMON STOCK" and, collectively with the Voting Common Stock, and the
Non-voting Common Stock, the "COMMON STOCK"); and (iv) 100,000 shares of
Preferred Stock, par value $0.0001 per share.
All shares of Common Stock issued and outstanding shall be
identical and shall entitle the holders thereof to the same rights and
privileges, except as otherwise provided in this Article IV. Holders of shares
of Common Stock shall not have preemptive or other rights to subscribe for
additional shares of Common Stock or for any other securities of the
Corporation.
The Preferred Stock may be issued from time to time in one
or more series. The Board of Directors of the Corporation (the "Board") is
expressly authorized at any time, and from time to time, to provide for the
issuance of shares of Preferred Stock in one or more series, for such
consideration (not less than its par value) and with such designations,
powers, preferences and relative, participating, optional or other special
rights, and such qualifications, limitations or restrictions, as shall be
determined by the Board and fixed by resolution or resolutions adopted by the
Board providing for the number of shares in each such series.
2. Voting Power of Common Stock.
(a) Except as otherwise required by law, each holder of Voting Common
Stock shall be entitled to vote on all matters and shall be entitled to one
vote for each share of Voting Common Stock standing in such holder's name on
the books of the Corporation determined as of the record date for the
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determination of stockholders entitled to vote on such matters or, if no such
record date is established, at the date such vote is taken.
(b) Except as provided in this Section 2 or as otherwise required by
law, no holder of Non-voting Common Stock shall be entitled to vote such stock
on any matter on which the stockholders of the Corporation shall be entitled
to vote, and shares of Non-voting Common Stock shall not be included in
determining the number of shares voting or entitled to vote on any such
matters.
(c) Except as provided in this Section 2 or as otherwise required by
law, each holder of Class C Common Stock shall be entitled to one-tenth of one
vote for each share of Class C Common Stock standing in such holder's name on
the books of the Corporation determined as of the record date for the
determination of stockholders entitled to vote on such matters or, if no such
record date is established, at the date such vote is taken, and each share of
Class C Common Stock shall be counted as one-tenth of one share in determining
the number of shares voting or entitled to vote on any such matters.
(d) Except as otherwise provided in this Section 2 or as otherwise
required by law, the holders of shares of Voting Common Stock and Class C
Common Stock and, on any matter on which the holders of shares of Non-voting
Common Stock are entitled to vote, the holders of shares of Non-voting Common
Stock, shall vote together as a single class; provided, however, that the
holders of shares of Non-voting Common Stock or Class C Common Stock shall be
entitled to vote as a separate class on any amendment, repeal or modification
of any provision of this Certificate of Incorporation that adversely affects
the powers, preferences or special rights of the holders of the Non-voting
Common Stock or Class C Common Stock, respectively.
3. Certain Provisions relating to Common Stock.
(a) Subject to and upon compliance with the provisions of this
Section 3, any Regulated Stockholder (as hereinafter defined) shall be
entitled to convert, at any time and from time to time, any or all of the
shares of Voting Common Stock held by such stockholder into an equal number of
shares of Non-voting Common Stock.
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(b) Subject to and upon compliance with the provisions of this
Section 3, each holder of Non-voting Common Stock shall be entitled to
convert, at any time and from time to time, any or all of the shares of
Non-voting Common Stock held by such stockholder into an equal number of
shares of Voting Common Stock; provided, however, that no holder of shares of
Non-Voting Common Stock shall be entitled to convert any such shares to the
extent that, as a result of such conversion, such holder and its Affiliates
(as hereinafter defined), directly or indirectly, would own, control or have
the power to vote (i) a greater number of shares of Voting Common Stock or
other securities of any kind issued by the Corporation than such holder and
its Affiliates shall be permitted to own, control or have power to vote under
any law, regulation, rule or other requirement of any governmental authority
at the time applicable to such holder or its Affiliates or (ii) with respect
to a holder or Affiliate that is subject to regulation under the insurance
laws of any jurisdiction, 5% or more of the outstanding voting capital stock
of the Corporation.
(c) To exercise its conversion privilege pursuant to this Section 3,
a holder of Common Stock shall surrender the certificate or certificates
representing the shares of Common Stock being converted (the "CONVERTING
SHARES") to the Corporation's transfer agent and shall give written notice to
the Corporation and its transfer agent that such holder elects to convert the
Converting Shares into an equal number of shares of the class into which such
shares may be converted (the "CONVERTED SHARES"). Such notice shall also state
the name or names (with address or addresses) and denominations in which the
certificate or certificates for Converted Shares are to be issued. The
Corporation shall promptly notify each Regulated Stockholder (that has
previously informed the Corporation in writing of its status as a Regulated
Stockholder) of its receipt of such notice. The certificate or certificates
for Converting Shares shall be accompanied by proper assignment thereof to the
Corporation or in blank. The date when such written notice is received by the
Corporation's transfer agent, together with the certificate or certificates
representing the Converting Shares, shall be the "CONVERSION DATE." As
promptly as possible after the Conversion Date, the Corporation shall issue
and deliver to the holder of the Converting Shares, or on its written order,
such certificate or certificates as it may request for the Converted Shares
issuable upon such conversion, and the Corporation shall deliver to the
converting holder a certificate (which shall contain such
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legends as were set forth on the surrendered certificate or certificates)
representing any shares which were represented by the certificate or
certificates that were delivered to the Corporation in connection with such
conversion but which were not converted, provided, however, that if such
conversion is subject to part (d) of this Section 3, the Corporation shall not
issue such certificate or certificates until the expiration of the Deferral
Period (as hereinafter defined) referred to therein. Such conversion, to the
extent permitted by the close of business on the Conversion Date, and at such
time the rights of the holder of the Converting Shares as such holder shall
cease (except that, in the case of a conversion subject to part (d) of this
Section 3, the conversion shall be deemed effective upon the expiration of the
Deferral Period referred to therein), and the person or persons in whose name
or names the certificate or certificates for the Converted Shares shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the Converted Shares. Upon the issuance of shares in
accordance with this Section 3, such Converted Shares shall be deemed to be
duly authorized, validly issued, fully paid and non-assessable.
(d) The Corporation shall not convert or directly or indirectly
redeem, purchase or otherwise acquire any shares of Voting Common Stock or any
other class of capital stock of the Corporation or take any other action
affecting the voting rights of such shares if such action will increase the
percentage of any class of outstanding voting securities owned or controlled
by any Regulated Stockholder (other than any such stockholder which requested
that the Corporation take such action or which otherwise waives in writing its
rights under part (d) of this Section 3) unless the Corporation gives written
notice (the "DEFERRAL NOTICE") of such action to each Regulated Stockholder
(that has previously informed the Corporation in writing of its status as a
Regulated Stockholder). The Corporation shall defer making any such
conversion, redemption, purchase or other acquisition, or taking any such
other action, for a period of 30 days (the "DEFERRAL PERIOD") after giving the
Deferral Notice in order to allow each Regulated Stockholder to determine
whether it wishes to convert or take any other action with respect to the
Common Stock it owns, controls or has the power to vote, and if any such
Regulated Stockholder then elects to convert any shares of Voting Common Stock
it shall notify the Corporation in writing within 20 days of the issuance of
the Deferral Notice, in which case the Corporation shall (i) defer taking the
pending action until the end of the Deferral Period, (ii) promptly notify from
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time to time each other Regulated Stockholder of each proposed conversion and
the proposed transactions and (iii) effect the conversions requested by all
Regulated Stockholders in response to the notices issued pursuant to part (d)
of this Section 3 at the end of the Deferral Period.
(e) If the Corporation shall in any manner subdivide (by stock split,
stock dividend or otherwise) or combine (by reverse stock split or otherwise)
the outstanding shares of the Voting Common Stock, the Non-voting Common Stock
or the Class C Common Stock, the outstanding shares of each other class of
Common Stock shall be subdivided or combined, as the case may be, to the same
extent, share and share alike, and effective provision shall be made for the
protection of the conversion rights hereunder.
If, at any time and from time to time, there shall be a capital
reorganization of the Voting Common Stock (other than a change in par value or
from par value to no par value or from no par value to par value as a result
of any stock dividend or subdivision, split-up or combination of shares) or a
merger or consolidation of the Corporation with or into another corporation,
or sale of all or substantially all of the Corporation's properties and
assets, then, as part of such reorganization, merger, consolidation or sale,
provision shall be made so that each holder of any shares of Non-voting Common
Stock shall thereafter be entitled to receive upon conversion of any such
shares, so long as the conversion right hereunder with respect to such shares
would exist had such event not occurred, the number of shares of stock or
other securities or property of the Corporation, or of the successor
corporation resulting from such merger, consolidation or sale, to which such
holder would have been entitled if such holder had converted such shares
immediately prior to such capital reorganization, merger, consolidation or
sale. In the event of such a merger, consolidation or sale, effective
provision shall be made in the certificate of incorporation of the successor
corporation or otherwise for the protection of the conversion rights of the
shares of Non-voting 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 shares of Voting Common Stock into
which such Non-voting Common Stock could have been converted immediately prior
to such event. The Corporation shall not be a party to any reorganization,
merger or consolidation pursuant to which any Regulated Stockholder would be
required to take (i) any voting securities
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which would cause such holder to violate any law, regulation or other
requirement of any governmental body applicable to such holder or (ii) any
securities convertible into voting securities which if such conversion took
place would cause such holder to violate any law, regulation or other
requirement of any governmental body applicable to such holder, other than
securities which are specifically provided to be convertible only in the event
that such conversion may occur without any such violation.
(f) The Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Voting Common Stock, Non-voting
Common Stock or its treasury shares, solely for the purpose of effecting the
conversion of shares of Voting Common Stock and Non-voting Common Stock, such
number of shares of such class as shall from time to time be sufficient to
effect the conversion of all then outstanding shares of Voting Common Stock
that are entitled to so convert and all then outstanding shares of Non-voting
Common Stock.
(g) The issuance of certificates for shares of any class of Common
Stock upon conversion of shares of any other class of Common Stock pursuant to
this Section 3 shall be made without charge to the holders of such shares for
any issuance tax in respect thereof or other cost incurred by the Corporation
in connection with such conversion and the related issuance of shares of
Common Stock; provided, however, that the Corporation shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
holder of the Common Stock converted.
(h) "AFFILIATE" shall mean with respect to any person, any
other person, directly or indirectly controlling, controlled by
or under common control with such person. For the purpose of the
above definition, the term "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
used with respect to any person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
"REGULATED STOCKHOLDER" shall mean (i) any stockholder that is
subject to the provisions of Regulation Y of the Board of
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Governors of the Federal Reserve System (12 C.F.R. Part 225) or any successor
to such regulation ("REGULATION Y") and to which shares of Common Stock of the
Corporation were issued pursuant to the warrants issued to J.P. Morgan Capital
Corporation, so long as such stockholder shall hold such shares of Common
Stock or shares issued upon conversion(s) of such shares, (ii) any stockholder
that is subject to regulation under the New York Insurance Law and to which
shares of Common Stock of the Corporation were issued pursuant to the warrants
issued to The Equitable Life Assurance Society of the United States, so long
as such stockholder shall hold such shares of Common Stock or shares issued
upon conversion(s) of such shares, (iii) any Affiliate of any such Regulated
Stockholder that is a transferee of any such shares of Common Stock of the
Corporation, so long as such Affiliate shall hold, and only with respect to,
such shares of Common Stock or shares issued upon conversion of such shares
and (iv) any person to which such Regulated Stockholder or any of its
Affiliates has transferred such shares, so long as such transferee shall hold,
and only with respect to, any shares transferred by such stockholder or
Affiliates or any shares issued upon conversion of such shares but only if
such person (or any Affiliate of such person) is (A) subject to the provisions
of Regulation Y or (B) subject to regulation under the insurance laws of any
jurisdiction.
ARTICLE V
BOARD OF DIRECTORS
Except as otherwise provided by law, the number of directors which
shall constitute the Board shall be as set forth in the Bylaws of the
Corporation. Elections of directors need not be by written ballot. The
directors of the Corporation shall be divided into three classes: Class I,
Class II and Class III. The number of directors in each class shall be divided
equally so far as possible among the three Classes. The initial Class I, Class
II and Class III directors shall be designated and the terms of the Board
shall be as follows:
(i) Class I directors shall be elected to serve until
the 1997 Annual Meeting of Stockholders,
(ii) Class II directors shall be elected to serve until
the 1998 Annual Meeting of Stockholders, and
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(iii) Class III directors shall be elected to serve
until the 1999 Annual Meeting of Stockholders,
and until their successors shall be duly elected and qualified. At each annual
election of directors, beginning with the 1997 annual election, the successors
to the directors of each class whose term shall expire at such meeting shall
be elected to hold office for a term of three years from the date of their
election and until their successors shall be duly elected and qualified. In
case of any increase or decrease in the number of directors,
the increase or decrease shall be apportioned by the directors among the
several classes as nearly equally as possible; provided, however, that any
decrease in the number of directors which shall cause a director to be removed
prior to the expiration of his term shall be subject to the provisions of the
next succeeding paragraph of this Article V.
Anything herein to the contrary notwithstanding, the provisions of
this Article V shall apply only to directors elected by holders of Voting
Common Stock together with holders of all other classes of the Corporation's
capital stock voting as a single class therewith on the election of directors.
If holders of any class of the Corporation's capital stock have the right to
elect directors voting as a separate class and such right be then in effect,
the maximum number of directors of the Corporation shall be increased by the
number of directors which such holders may so elect and upon termination of
such right the number shall be reduced to the extent it was previously so
increased.
Notwithstanding any other provisions of this Certificate of
Incorporation or the Bylaws (and notwithstanding the fact that some lesser
percentage may be specified by law), the affirmative vote of the holders of
2/3 or more of the outstanding shares of capital stock of the Corporation
entitled to vote on such amendment, alteration, change or repeal (considered
for this purpose as one class) shall be required to amend, alter, change or
repeal this Article V.
ARTICLE VI
BYLAWS
In furtherance and not in limitation of the powers conferred
by statute, the Board is expressly authorized to make,
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alter or repeal Bylaws of the Corporation (except insofar as Bylaws adopted by
the stockholders shall otherwise provide).
ARTICLE VII
AGREEMENT WITH CREDITORS
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under
the provisions of Section 291 of Title 8 of the DGCL or on the application of
trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the DGCL, order
a meeting of the creditors or class of creditors, and/or of the stockholders
or class of stockholders of the Corporation, as the case may be, to be
summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization
of the Corporation as a consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made, be
binding on all the creditors or class of creditors, and/or on all stockholders
or class of stockholders of the Corporation, as the case may be, and also on
the Corporation.
ARTICLE VIII
NO STOCKHOLDER ACTION WITHOUT MEETING
Any action required or permitted to be taken at an annual or special
meeting of the Corporation's stockholders may be taken only at such duly
called annual or special meeting.
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ARTICLE IX
INDEMNIFICATION
The Corporation shall indemnify to the fullest extent permitted under
and in accordance with the laws of the State of Delaware any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative by reason of the fact that he is or was a director, officer,
trustee, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, trustee, employee or agent
of or in any other capacity with another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
Expenses incurred in defending a civil or criminal action,
suit or proceeding shall (in the case of any action, suit or proceeding
against a director of the Corporation) or may (in the case of any action, suit
or proceeding against an officer, trustee, employee or agent) be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board upon receipt of an undertaking by or on
behalf of the indemnified person to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Corporation as
authorized in this Article IX.
The indemnification and other rights set forth in this
Article IX shall not be exclusive of any provisions with respect thereto in
the Bylaws or any other contract or agreement between the Corporation and any
director, officer, trustee, employee or agent of the Corporation.
Neither the amendment nor repeal of this Article IX, nor the
adoption of any provision of this Certificate of Incorporation inconsistent
with this Article IX, shall eliminate or reduce the effect of this Article IX
in respect of any matter occurring before such amendment, repeal or adoption
of an
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inconsistent provision or in respect of any cause of action, suit or claim
relating to any such matter which would have given rise to a right of
indemnification or right to receive expenses pursuant to this Article IX, if
such provision had not been so amended or repealed or if a provision
inconsistent therewith had not been so adopted.
ARTICLE X
ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS
To the fullest extent permitted by the DGCL, as the same
presently exists or may hereafter be amended, no director shall be personally
liable to the Corporation or to any stockholder for monetary damages for
breach of fiduciary duty as a director, except for any matter in respect of
which such director (a) shall be liable under Section 174 of the DGCL or any
amendment thereto or successor provision thereto, or (b) shall be liable by
reason that, in addition to any and all other requirements for liability, he
(A) shall have breached his duty of loyalty to the Corporation or its
stockholders, (B) shall not have acted in good faith or, in failing to act,
shall not have acted in good faith, (C) shall have acted in a manner involving
intentional misconduct or a knowing violation of law or, in failing to act,
shall have acted in a manner involving intentional misconduct or a knowing
violation of law or (d) shall have derived an improper personal benefit.
Any repeal or modification of this Article X shall no
adversely affect any right or protection of a director with respect to any act
or omission occurring prior to such repeal or modification. If the DGCL is
amended after the date of incorporation to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the DGCL, as so amended.
ARTICLE XI
SEVERABILITY
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If any provisions contained in this Certificate of
Incorporation shall for any reason be held invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
invalidate this entire Certificate of Incorporation or any other provisions
hereof. Such provision shall be deemed to be modified to the extent necessary
to render it valid and enforceable and if no such modification shall render it
valid and enforceable, then this Certificate of Incorporation shall be
construed as if not containing such provision.
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