Exhibit 4.03


 


CERTIFICATE TO PROVIDE FOR THE DESIGNATION, PREFERENCES,

RIGHTS, QUALIFICATIONS, LIMITATIONS OR

RESTRICTIONS THEREOF, OF THE SERIES C PREFERRED STOCK, 15%

REDEEMABLE NON-CONVERTIBLE SERIES


 


Williams Controls, Inc., a
Delaware corporation (the “Corporation”), hereby certifies that pursuant
to the authority vested in the Board of Directors of the Corporation by the
provisions of its Certificate of Incorporation, and by the provisions of
Section 151 of The General Corporation Law of the State of Delaware, the
Board of Directors adopted the following resolution:


 


RESOLVED, there is hereby
created a series of preferred stock, $.01 par value, of the Corporation,
consisting of 100,000 shares of the authorized, but unissued preferred stock
and designated the “Series C Preferred Stock, 15% Redeemable Non-Convertible
Series” (hereinafter referred to as the “Series C”); and that to the
extent that the terms, relative rights, preferences, qualifications and
limitations of the Series C are not fixed and determined by the Certificate of
Incorporation of the Corporation, as amended, they hereby are fixed and
determined as set forth in Attachment A attached hereto.


 


I, being the duly authorized
officer of the Corporation, do hereby certify under penalty of perjury that the
foregoing resolution amending the Williams Controls, Inc. Certificate of
Incorporation to provide for the designation, preferences, rights,
qualifications, limitations or restrictions thereof, of the Series C Preferred
Stock, 15% Redeemable Non-Convertible Series, is the act and deed of the
Corporation and that the facts stated herein are true and, accordingly, have
hereunto set my hand this 29th day of September, 2004.


 


	
   

  	
  WILLIAMS CONTROLS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis E. Bunday

  	
   

  
	
   

  	
  Name:

  	
  Dennis E. Bunday

  	
   

  
	
   

  	
  Office:

  	
  Chief Financial Officer
  & Secretary

  	
   

  
						



 

















 


ATTACHMENT A


 


CERTIFICATE TO PROVIDE FOR THE DESIGNATION, PREFERENCES,

RIGHTS, QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF,

OF THE SERIES C PREFERRED STOCK, 

15% REDEEMABLE NON-CONVERTIBLE SERIES


 


SECTION 1.                         DESIGNATION, PAR VALUE AND NUMBER. 100,000
shares of authorized preferred stock of the Corporation are hereby constituted
as a series of preferred stock, having a par value of $0.01 per share,
designated as “Series C Preferred Stock, 15% Redeemable Non-Convertible Series”
(hereinafter called “Series C”). 
In accordance with the terms hereof, each share of Series C shall have
the same relative rights as and be identical in all respects with each other
share of Series C.  The Series C may be
issued solely to American Industrial Partners Capital Fund III, L.P. (“AIP”)
in connection with that certain Put and Call Agreement dated September 30,
2004, (the “Put and Call Agreement”) between AIP and the Corporation, or
to any affiliate of AIP to which AIP is permitted to assign and has assigned
its rights under the Put and Call Agreement.


 


SECTION 2.                         DIVIDENDS.


 


(a)                                  Cumulative Dividends. 
When and as declared by the Corporation’s Board of Directors and to the
extent permitted under the General Corporation Law of State of Delaware, the
Corporation shall pay preferential dividends in cash to the holders of shares
of Series C as provided in this Section 2.  Except as otherwise provided herein,
cumulative preferential dividends on each share of Series C shall accrue on a
daily basis at an initial rate (the “Dividend Rate”) of 15% per annum on
the sum of $100 plus accumulated and unpaid dividends thereon.  On the first day of the first full Dividend
Period commencing after the issuance of the Series C, and on the first day of
each Dividend Period thereafter, the Dividend Rate will increase by 0.25%  over the Dividend Rate in effect for the
previous Dividend Period, but in no event shall the Dividend Rate exceed 20%
per annum.  Dividends may be paid in
cash or, at the option of the Corporation, in additional shares of Series C,
and if the Corporation elects to pay any portion of the dividends payable on
the Series C in additional shares of Series C, one (1) share of Series C shall
be issuable for each $100 of accrued but unpaid dividends.  Dividends shall accrue commencing and
including the date of issuance of such share to and including the first to
occur of (i) the date on which the amount payable pursuant to Section 6
on such share is paid to the holder thereof in connection with the liquidation
of the Corporation, (ii) the date on which such share is redeemed by the
Corporation as provided herein or (iii) the date on which such share is
otherwise acquired by the Corporation. Such dividends shall accrue whether or
not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of
dividends.  The date on which the
Corporation initially issues any share shall be deemed to be its “date of
issuance” regardless of the number of times


 

















 


transfer of such share is
made on the stock records maintained by or for the Corporation and regardless
of the number of certificates which may be issued to evidence such share.


 


(b)                                 Dividend Reference Dates.  To
the extent not paid on January 2, April 1, July 1 and
October 1 of each year, beginning on the last day of the first full
Dividend Period commencing after the issuance of the Series C (the “Dividend
Reference Dates”), all dividends which have accrued on each share of Series
C outstanding during the three-month period (or other period in the case of the
initial Dividend Reference Date) ending upon each such Dividend Reference Date
(each such period, a “Dividend Period”) shall be accumulated and shall
remain accumulated dividends with respect to such share until paid to the
holder thereof.


 


(c)                                  Distribution of Partial Dividend Payments. 
Except as otherwise provided herein, if at any time the Corporation pays
less than the total amount of dividends then accrued with respect to the Series
C, such payment shall be distributed pro rata among the holders thereof based
upon the aggregate accrued but unpaid dividends on the shares held by each such
holder.


 


SECTION 3.                         PRIORITY. 
All shares of the Series C shall rank on a parity with each other and
shall be senior to the Corporation’s Common Stock and any other class or series
of stock of the Corporation hereafter created by the Board of Directors the
terms of which do not expressly provide that it ranks senior to the Series C,
in all cases as to the payment of dividends and the distribution of assets upon
the liquidation, dissolution or winding up of the Corporation.


 


SECTION 4.                         OPTIONAL REDEMPTION.


 


(a)                                  Redemption.  The Corporation may at its
option redeem all or any portion of the Series C at any time or from time to
time, in minimum increments of 500 shares, at a price per share equal to $100
plus all accrued but unpaid dividends thereon (each such price shall be
referred to as the “Redemption Price”). 
If the Corporation elects to redeem fewer than all outstanding shares of
Series C at any time, the Corporation shall redeem a ratable portion of the
shares of Series C held by each holder thereof.


 


(b)                                 Notice of Redemption.  The
Corporation shall give written notice by certified mail, return receipt
requested, postage prepaid to each holder of the Series C, at each such
holder’s last address appearing on the books of the Corporation (but no failure
to receive such a notice by any holder, so long as mailed in accordance with
the provisions herein, shall affect the validity of the redemption of any
shares of Series C) at least ten (10) but not more than sixty (60) days prior
to the date fixed for redemption.


 


(c)                                  Rights Following Redemption.  If
notice of redemption shall have been duly given as provided in Section 4(b),
and if, on the redemption date, funds necessary for such redemption have been
deposited in trust with a bank or trust company, or have been set aside, in
trust, by the Corporation, for the purpose of redeeming shares of the Series C,
the shares of the Series C called for redemption shall, as of the close of
business on the redemption date, no longer be transferable on the books of the
Corporation and shall no longer be deemed to be outstanding, the right to
receive dividends thereon shall cease to accrue, and all rights with respect to
such shares so called for redemption shall terminate, except only the right of
the


 


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holders thereof to receive
the Redemption Price, without interest thereon, upon surrender of the
certificates for such shares.


 


(d)                                 Escheat.  In case any holder of shares
of the Series C which shall have been redeemed shall not, within three years of
the date of redemption thereof, claim the amount deposited in trust for the
redemption of such shares, the bank or trust company with which such funds were
deposited, upon request of the Corporation, shall pay over to the Corporation
such unclaimed amount and shall thereupon be relieved of all responsibility in
respect thereof.  The Corporation shall
not be required to hold the amount so paid over to it, or any amount
theretofore set aside by it, in trust after such three-year period, separate
and apart from its other funds, and thereafter the holders of such shares of
the Series C shall look only to the Corporation for payment of the Redemption
Price thereof, without interest.  All
liability of the Corporation to any holder of shares of the Series C for
payment of the Redemption Price for shares of the Series C called for
redemption shall cease and terminate as of the close of business on the fourth
anniversary of the redemption date for such shares.


 


(e)                                  Cancellation of Shares. 
Shares of the Series C redeemed pursuant to this Section 4
shall be canceled by the Corporation and thereafter shall be authorized and
unissued shares of preferred stock, undesignated as to series, subject to
reissuance by the Corporation as shares of any series of preferred stock other
than the Series C.


 


SECTION 5.                         VOTING


 


Except as and only to the
extent expressly required by the Delaware General Corporation Law, the holders
of the Series C shall not have any voting rights.  Subject to the foregoing, with respect to any matter on which the
holders of the Series C shall have voting rights, each share of Series C shall
be entitled to one vote.  Except as
provided by Delaware law, holders of shares of the Series C shall not be
entitled to vote as a separate class.


 


SECTION 6.                         LIQUIDATION


 


(a)                                  Liquidation Preference.  In
the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation (hereinafter collectively called “liquidation”),
before any amount shall be paid to or set aside for, or any assets shall be
distributed among, the holders of shares of Common Stock or of any other equity
security of the Corporation subordinate to the Series C as provided in Section 3
hereof, each holder of a share of the Series C shall be entitled to receive out
of the assets of the Corporation or the proceeds thereof, a preferential
payment in an amount equal to the Redemption Price.


 


(b)                                 Proportional Rights.  In
the event the amount available for distribution as liquidation preference
payments to holders of the Series C and any other stock ranking on a parity
therewith is insufficient to pay the full amount of their respective
preferences, such amount shall be divided among and paid to such holders
ratably in proportion to the respective amounts which would be payable to such
holders if their respective liquidation preferences were to be paid in full.


 


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(c)                                  Insufficient Funds.  In
the event any liquidation preference payment to be made on the shares of the
Series C shall amount in the aggregate to less than the Redemption Price, the
Corporation in its discretion may require the surrender of certificates for
shares of the Series C and issue a replacement certificate or certificates, or
it may require the certificates evidencing the shares in respect of which such
payments are to be made to be presented to the Corporation, or its agent, for
notation thereon of the amounts of the liquidation preference payments made in
respect of such shares.  In the event a
certificate for shares of the Series C on which payment of one or more partial
liquidation preferences has been made is presented for exchange or transfer
shall bear an appropriate notation as to the aggregate amount of liquidation
preference payments theretofore made in respect thereof.


 


(d)                                 Merger or Sale. 
Neither the consolidation or merger of the Corporation into or with any
other entity or entities (whether or not the Corporation is the surviving
entity), nor the sale or transfer by the Corporation of all or any part of its
assets, nor the reduction of the capital stock of the Corporation nor any other
form of recapitalization or reorganization affecting the Corporation shall be
deemed to be a liquidation, dissolution or winding up of the Corporation for
the purposes of this Section 6.


 


SECTION 7.                         REPLACEMENT CERTIFICATES.


 


(a)                                  Mutilated Certificate.  If
any mutilated certificate of Series C is surrendered to the Corporation, the
Corporation shall execute and deliver in exchange therefor a new certificate
for Series C of like tenor and principal amount, bearing a number not
contemporaneously outstanding.


 


(b)                                 Destroyed, Lost or Stolen Certificate.  If
there is delivered to the Corporation (i) evidence to its reasonable
satisfaction of the destruction, loss or theft of any certificate of Series C
and (ii) such reasonable security or indemnity as may be required by it to save
it harmless, then, in the absence of notice to the Corporation that such
certificate of Series C has been acquired by a bona fide purchaser, the
Corporation shall execute and deliver in lieu of any such destroyed, lost or
stolen certificate of Series C, a new certificate of Series C of like tenor and
principal amount and bearing a number not contemporaneously outstanding.


 


(c)                                  Status of New Certificate. 
Upon the issuance of any new certificate of Series C under this Section 7,
the Corporation may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith.  Every new
certificate of Series C issued pursuant to this Section 10 in lieu of any
destroyed, lost or stolen certificate of Series C, shall constitute an original
additional contractual obligation of the Corporation, whether or not the
destroyed, lost or stolen certificate of Series C shall be at any time
enforceable by anyone.  Any new
certificate for Series C delivered pursuant to this Section 7 shall
be so dated that neither gain nor loss in interest shall result from such
exchange.  The provisions of this
Section 7 are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen certificate of Series C.


 


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SECTION 8.                         AMENDMENT AND WAIVER.  No amendment, modification or waiver shall
be binding or effective with respect to any provision of Sections 1 to 9
hereof without the prior written consent of the holders of a majority of the
shares of Series C outstanding at the time such action is taken.


 


SECTION 9.                         NOTICES.  
Except as otherwise expressly provided hereunder, all notices referred
to herein shall be in writing and shall be delivered by registered or certified
mail, return receipt requested and postage prepaid, or by reputable overnight
courier service, charges prepaid, and shall be deemed to have been given when
so mailed or sent (i) to the Corporation, at its principal executive offices
and (ii) to any stockholder, at such holder’s address as it appears in the stock
records of the Corporation (unless otherwise indicated by any such holder).


 


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