Shareholders' Equity

12 Months Ended

Dec. 31, 2020

Common Stock

Common Stock Outstanding

The Company has authorized 175,000,000 shares ($0.01 par value) of Class A Common Stock at December 31, 2020 and 2019. The Company has authorized 25,000,000 shares ($0.01 par value) of Class B Common Stock at December 31, 2020 and 2019.

Pursuant to the Amended and Restated Certificate of Incorporation, in connection with the Federal-Mogul Acquisition, Class B Common Stock was created, and the Company’s then existing common stock was reclassified as Class A Common Stock during the year ended December 31, 2018.

Total common stock outstanding and changes in common stock issued are as follows:


	Class A Common Stock			Class B Common Stock
	Year Ended December 31			Year Ended December 31
	2020	2019	2018	2020	2019	2018
Shares issued at beginning of period	71,727,061	71,675,379	66,033,509	23,793,669	23,793,669	—
Share issuances(a)	—	—	5,651,177	—	—	23,793,669
Issuance (repurchased) pursuant to benefit plans	640,112	113,916	19,919	—	—	—
Restricted stock forfeited and withheld for taxes	(138,225)	(70,672)	(51,049)	—	—	—
Stock options exercised	—	8,438	21,823	—	—	—
Class B common stock converted to Class A common stock	3,485,215	—	—	(3,485,215)	—	—
Shares issued at end of period	75,714,163	71,727,061	71,675,379	20,308,454	23,793,669	23,793,669

Treasury stock	14,592,888	14,592,888	14,592,888	—	—	—
Total shares outstanding	61,121,275	57,134,173	57,082,491	20,308,454	23,793,669	23,793,669

(a) Represents an aggregate of 29,444,846 shares of Common Stock delivered to AEP in 2018 as the Stock Consideration related to Federal-Mogul Acquisition. Refer to Note 3, “Acquisitions and Divestitures” for additional information.

The rights of the Class A Common Stock and Class B Common Stock are the same, except with respect to voting and conversion. Holders of Class A Common Stock are entitled to one vote per share and holders of Class B Common Stock are not entitled to vote unless a proposed action would diminish their rights, powers or privileges, in which case such action must be unanimously approved by the holders of the Class B Common Stock. Holders of Class A Common Stock have no right to convert their shares into other securities. Each share of Class B Common Stock will automatically convert into a share of Class A Common Stock upon transfer, with limited exceptions. In addition, because the proposed spin-off of the Company’s aftermarket and ride performance business (the “Spin-Off”) did not occur by April 1, 2020, each holder of Class B Common Stock may convert its shares into an equal number of shares of Class A Common Stock, provided that the initial Class B holders would not own, in the aggregate, more than 15 percent of the Class A Common Stock following such conversion.

Class B Common Stock Conversion

Effective April 1, 2020, IEP and its affiliates exercised their right to convert 3,485,215 shares of the Company’s Class B Common Stock into 3,485,215 shares of the Company’s Class A Common Stock.

Subsequent to year-end, IEP and its affiliates converted an additional 5,055,091 shares of the Company's Class B Common Stock into 5,055,091 shares of Class A Common Stock. As of February 16, 2021, IEP and its affiliates hold 9,958,628 shares, or approximately 14.99%, of the Company’s outstanding Class A Common Stock and 15,253,363 shares of the Company’s outstanding Class B Common Stock.

Shareholder Agreement

In connection with the closing of the Federal-Mogul Acquisition, on October 1, 2018, the Company, AEP, IEP, and Icahn Enterprises Holdings L.P. entered into a Shareholders Agreement (the “Shareholders Agreement”). IEP’s representative to the Board under the Shareholders Agreement submitted his resignation effective June 10, 2020.

The Shareholders Agreement contains certain standstill and voting obligations applicable to IEP and its affiliates, which expired on April 1, 2020. In addition, IEP and its affiliates are prohibited from acquiring, offering to acquire, or agreeing to acquire, directly or indirectly, any shares of Class A Common Stock or other securities until April 1, 2021.

Until the later of (i) the expiration of the standstill restrictions referenced above and (ii) the time when IEP and its affiliates cease to own at least 10% of the outstanding shares, IEP and its affiliates may not transfer any shares (a) to certain specified types of investors and (b) in an amount equal to 5% or more of the Class A Common Stock issued and outstanding at the time of such transfer (subject to certain exceptions).

For so long as IEP and its affiliates own at least 10% of the outstanding shares, if the Company proposes to issue any equity securities (other than in an excluded issuance), IEP and its affiliates have certain preemptive rights. The Shareholders Agreement also includes registration rights for IEP.

Share Repurchase Program

We presently have no share repurchase program in place.

During 2015, the Company's Board of Directors approved a share repurchase program, authorizing it to repurchase up to $550 million of its then outstanding Class A Common Stock over a three-year period (“2015 Program”). In February 2017, the Company's Board of Directors authorized the repurchase of up to $400 million of its then outstanding Class A Common Stock over the next three years (“2017 Program”). The 2017 Program included $112 million that remained authorized under the 2015 Program. The Company generally acquires the shares through open market or privately negotiated transactions, and has historically utilized cash from operations. The repurchase program does not obligate the Company to repurchase shares within any specific time or situations. The remaining $231 million authorized for share repurchases under the 2017 Program expired at December 31, 2019. During the years ended December 31, 2019 and 2018, no shares were repurchased under the 2017 Program.

Preferred Stock

The Company had 50,000,000 shares of preferred stock ($0.01 par value) authorized at both December 31, 2020 and 2019. No shares of preferred stock were issued or outstanding at those dates.

Shareholder Rights Plan

On April 15, 2020, the Company's Board of Directors approved a Section 382 Rights Plan, which will expire on the earliest to occur of (i) the close of business on the day following the certification of the voting results of the Company’s 2021 annual meeting of stockholders, if at such stockholder meeting or any other meeting of stockholders of the Company duly held prior to such meeting, a proposal to ratify the Section 382 Rights Plan has not been passed by the requisite vote of the Company’s stockholders; (ii) the date on which the Board of Directors determines in its sole discretion that (x) the Section 382 Rights Plan is no longer necessary for the preservation of material valuable tax attributes or (y) the tax attributes have been fully utilized and may no longer be carried forward; and (iii) the close of business on October 2, 2021.

Pursuant to the Section 382 Rights Plan, our Board of Directors declared a dividend of (i) one preferred share purchase right (a “Class A Right”), payable on April 27, 2020, for each share of Class A Voting Common Stock and (ii) one preferred share purchase right (a “Class B Right” and, together with the Class A Rights, the “Rights”), payable on April 27, 2020, for each share of Class B Non-Voting Common Stock, in each case, outstanding on April 27, 2020 to the stockholders of record on that date. Each Right, which is exercisable only in the event that any person or group acquires 4.9% or more of the Company’s outstanding shares of Class A Voting Common Stock (with certain limited exceptions), would entitle any holder other than the person or group whose ownership position has exceeded the ownership limit to purchase common stock having a value equal to twice the exercise price of the Right, or, at the election of the Board of Directors, to exchange each Right for one share of Class A Common Stock per Class A Right or one share of Class B Non-Voting Common Stock per Class B Right.