Shareholders' Equity

12 Months Ended

Dec. 31, 2019

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, 2019 and 2018. The Company has authorized 25,000,000 shares ($0.01 par value) of Class B Common Stock at December 31, 2019 and 2018.

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
	2019		2018		2017		2019	2018
Shares issued at beginning of period	71,675,379		66,033,509		65,891,930		23,793,669	—
Share issuances^(a)	—		5,651,177		—		—	23,793,669
Issuance (repurchased) pursuant to benefit plans	113,916		19,919		34,760		—	—
Restricted stock forfeited and withheld for taxes	(70,672	)	(51,049	)	(126,682	)	—	—
Stock options exercised	8,438		21,823		233,501		—	—
Shares issued at end of period	71,727,061		71,675,379		66,033,509		23,793,669	23,793,669

Treasury stock	14,592,888		14,592,888		14,592,888		—	—
Total shares outstanding	57,134,173		57,082,491		51,440,621		23,793,669	23,793,669

^(a) Represents an aggregate of 29,444,846 shares of Common Stock delivered to AEP as the Stock Consideration related to Federal-Mogul Acquisition. See 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, if the proposed spin-off of the Company’s aftermarket and ride performance business (the “Spin-Off”) does 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.

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. (“IEH”) entered into a Shareholders Agreement (the “Shareholders Agreement”).

Pursuant to the Shareholders Agreement, a designee of IEP will be nominated to the Company’s board of directors (the “Board”) at each annual meeting of stockholders until the earlier of the Spin-Off date and the date IEP and its affiliates own less than 10% of the outstanding Class A Common Stock and Class B Common Stock, measured as a single class (the “Outstanding Shares”).

The Shareholders Agreement contains standstill and voting obligations applicable to IEP and its affiliates that expire on the earlier of (i) April 1, 2020, if the Spin-Off has not occurred, and (ii) one year after the date on which IEP and its affiliates cease to own at least 5% of the Outstanding Shares. Prior to IEP taking certain specified actions with respect to the Company, IEP must cause its designee to resign from the Board at least 30 days. In addition, IEP and its affiliates are prohibited from directly or indirectly acquiring, offering to acquire, or agreeing to acquire any shares of Class A Common Stock or other securities of the Company until April 1, 2021. If the Spin-Off has not occurred by April 1, 2020, the Shareholders Agreement provides that IEP may convert its shares of Class B Common Stock into Class A Common Stock to the extent the conversion would not result in IEP and its affiliates owning more than 15% of the Company's Class A Common Stock following the conversion.

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

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. No new share repurchase programs were authorized by the Board of Directors in 2019 or 2018.

During the years ended December 31, 2019 and 2018, no shares were repurchased under the 2017 Program. The Company purchased 2,936,950 shares during the year ended December 31, 2017 through open market purchases at a total cost of $169 million, at an average price of $57.57 per share. The remaining $231 million authorized for share repurchases under the 2017 Program expired at December 31, 2019.

Preferred Stock

The Company had 50,000,000 shares of preferred stock ($0.01 par value) authorized at both December 31, 2019 and 2018. No shares of preferred stock were issued or outstanding at those dates.