SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Hayes Wheels International, Inc.
(Name of Issuer)
Common Stock, par value, $.01 per share
(Title of Class and Securities)
420804106
(CUSIP Number of Class of Securities)
Richard W. Tuley
MWC Holdings, Inc.
2501 Woodlake Circle
Okemos, Michigan 48864
(517) 337-5700
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Robert B. Pincus
Skadden, Arps, Slate, Meagher & Flom
One Rodney Square
Wilmington, Delaware 19801
(302) 651-3000
March 28, 1996
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the
subject of this Statement because of Rule 13d-1(b)(3) or
(4), check the following: ( )
Check the following box if a fee is being paid with this
Statement: (x )
CUSIP No. 420804106 13D
___________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MWC Holdings, Inc.
___________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) ( )
(b) ( )
___________________________________________________________________________
3 SEC USE ONLY
___________________________________________________________________________
4 SOURCE OF FUNDS*
WC, BK
___________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
( )
Not applicable
___________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
___________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 8,144,000**
BENEFICIALLY _______________________________________________
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING _______________________________________________
9 SOLE DISPOSITIVE POWER
PERSON 8,144,000**
WITH ______________________________________________
10 SHARED DISPOSITIVE POWER
-0-
___________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
8,144,000**
___________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
( )
___________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
46.3%
___________________________________________________________________________
14 TYPE OF REPORTING PERSON*
HC
___________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
** Beneficial ownership of these shares is being reported
solely as a result of the Stock Option Agreement
described in Items 4 and 6 hereof. The option ("Option")
granted to MWC Holdings, Inc. ("Holdings") pursuant to
the Stock Option Agreement has not yet become
exercisable. Upon exercise of the Option, if any,
Holdings will have sole voting and dispositive power over
the shares acquired pursuant thereto. Prior to the
exercise or termination of the Option, Holdings has been
granted a proxy to vote the shares covered by the Option
on certain matters, and therefore may be deemed to have
shared voting power over such shares. Holdings expressly
disclaims beneficial ownership of these shares pursuant
to Rule 13d-4 under the Securities Exchange Act of 1934,
as amended. See Item 5 hereof.
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the Common Stock, par
value $0.01 per share (the "Company Common Stock"), of Hayes
Wheels International, Inc. (the "Company"). The principal
executive offices of the Company, a corporation organized and
existing under the laws of the State of Delaware, are located at
38481 Huron River Drive, Romulus, Michigan 48174.
ITEM 2. IDENTITY AND BACKGROUND.
(a),(b),(c),(f) This Schedule 13D is being filed by
MWC Holdings, Inc. ("Holdings"), a corporation organized and
existing under the laws of the State of Delaware. The principal
offices of Holdings are located at 2501 Woodlake Circle, Okemos,
Michigan 48864. Holdings is both a designer and producer of
wheels and brakes for the automotive and commercial highway
markets, and supplies these products primarily to original
equipments manufacturers located in North America. Holdings also
sells its commercial highway wheels and brakes to the after-
market through original equipment service organizations and a
network of warehouse distributors. Holdings operates through its
wholly-owned subsidiary Motor Wheel Corporation, an Ohio
corporation ("MWC").
Each executive officer and each director of Holdings is
a citizen of the United States. The name, business address and
present principal occupation of each executive officer, director
and ten percent beneficial owner is set forth in Exhibit 1.A to
this Schedule 13D and is specifically incorporated herein by
reference.
Joseph, Littlejohn & Levy Fund II L.P. ("JLLF") became
the beneficial owner of 281.4815 shares, or 74.6%, of the common
stock of Holdings on November 7, 1995. JLLF is managed by
Joseph, Littlejohn & Levy, a partnership in which Peter A.
Joseph, Angus C. Littlejohn, Jr. and Paul S. Levy are the general
partners.
Other than executive officers, directors, and ten
percent beneficial owners set forth in Exhibit 1.A, there are no
persons or corporations controlling or ultimately in control of
Holdings.
(d),(e) During the past five years, to the best of
Holdings knowledge, neither Holdings nor any of its executive
officers or directors has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), nor been
a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding
been subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws, and which judgement, decree
or final order was not subsequently vacated.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to a Stock Option Agreement dated as of March
28, 1996 (the "Stock Option Agreement") among Varity
Corporation("Varity"), Varity's wholly-owned subsidiary K-H
Corporation (together with Varity, the "Stockholder") and
Holdings, Stockholder has granted to Holdings an irrevocable
option to purchase the shares of Company Common Stock covered by
this Schedule 13D upon the occurrence of certain events and
subject to certain conditions (the "Option"). Pursuant to the
Option, Holdings has the right to purchase all of Stockholder's
shares of Company Common Stock (the "Shares"), upon the
occurrence of certain events, at a price of $32.00 per share, or
such higher price as may be paid to holders of Company Common
Stock pursuant to the Merger (as defined in Item 4). The
exercise of the Option at a price of $32 per share for the number
of Shares currently covered thereby would require aggregate funds
of $260,608,000. Holdings currently anticipates that, should the
Option become exercisable and should Holdings decide to exercise
the Option, Holdings would obtain the required funds from
Holdings and MWC's general corporate funds and amounts to be
available under potential future debt or equity financings, the
terms of which have not yet been determined.
The Option was granted by Stockholder as a condition of
and in consideration for Holdings entering into an Agreement and
Plan of Merger, dated as of March 28, 1996, by and among Holdings
and the Company (the "Merger Agreement").
A copy of the Stock Option Agreement is included as
Exhibit 1.B to this Schedule 13D and is incorporated herein by
reference. The foregoing description is qualified in its
entirety by reference to such exhibit.
ITEM 4. PURPOSE OF TRANSACTION.
(a),(b),(c),(f),(j)
The Merger
Simultaneously with the execution of the Stock Option
Agreement, Holdings and the Company entered into the Merger
Agreement, pursuant to which, and subject to the terms and
conditions thereof, Holdings would be merged with and into
Company (the "Merger"). Under the Merger Agreement, at the
effective time of the Merger (the "Effective Time"), (a) each
outstanding share of Company Common Stock (other than shares
owned by the Company or its subsidiaries, or shares as to which
appraisal rights under Delaware law have been perfected) shall be
converted into (i) $28.80 in cash and (ii) one-tenth of one share
of new common stock of the Company (the "New Common Stock"), (b)
each outstanding share of Series A Preferred Stock of the Company
("Company Preferred Stock"), which shares will be issued to
certain investors (including JLLF) (the "Investors") immediately
prior to the Merger pursuant to the terms of Subscription
Agreements (as hereinafter defined) among each Investor, Holdings
and the Company, shall be converted into the right to receive
31.25 shares of New Common Stock, and (c) each outstanding share
of Holdings Common Stock (other than shares owned by Holdings or
its subsidiaries, or shares as to which appraisal rights under
Delaware law have been perfected) will be converted into (i)
8,231.76 shares of New Common Stock and (ii) 3,029.29 warrants
(the "Warrants") to purchase one share of New Common Stock at a
price of $48.00 per share subject to the terms of such Warrant.
The foregoing description is qualified in its entirety by
reference to such exhibit.
Consummation of the transactions contemplated by the
Merger Agreement is subject to satisfaction or waiver of certain
conditions, including, among others, the approval of the Merger
by the stockholders of Holdings and the Company, the receipt of
requisite financing and the receipt of certain regulatory
approvals. The Merger Agreement and the transactions
contemplated by the Merger will be submitted for approval at the
Special Meetings of the stockholders of Holdings and the Company.
A copy of the Merger Agreement is included as Exhibit
1.C to this Schedule 13D and is incorporated herein by reference.
The foregoing description is qualified in its entirety by
reference to such exhibit.
Stock Option Agreement
The Option was granted by Stockholder as a condition of
and in consideration for Holdings entering into the Merger
Agreement. Reference is made to Item 6 for a more detailed
summary of the terms of the Stock Option Agreement.
(d) Pursuant to Exhibit H to the Merger Agreement, at
the Effective Time, the directors of the Surviving Corporation
(as defined in the Merger Agreement) shall consist of (i) the
Chief Executive Officer of the Company (currently Ranko Cucuz),
(ii) four designees of JLLF, (iii) a designee of TSG Capital Fund
II, L.P. ("TSG"), (iv) a designee of CIBC WG Argosy Merchant Fund
II, LLC ("CIBC") and (v) two individuals not affiliated with the
Company or the Investors, each until their respective successors
are duly elected or appointed in the manner provided in the
Certificate of Incorporation or by-laws of the Surviving
Corporation. Exhibit H may be supplemented or amended by
Holdings from time to time prior to the Merger, except that the
number of directors may not be increased and the directors must
include not less than two independent directors and the Chief
Executive Officer of the Company. At the Effective Time, the
Certificate of Incorporation and by-laws of the Surviving
Corporation will be amended to provide for a classified board of
directors divided into three classes. The initial term of Class
1 directors will be one year, the initial term of Class 2
directors will be two years, and the initial term of Class 3
directors will be three years. Thereafter, each director will
serve for a three-year term and until such director's successor
has been duly elected and qualified.
Capitalization and Financing
The amounts necessary to consummate the Merger and the
transactions contemplated thereby and to pay all expenses to be
incurred by Holdings and the Company in connection therewith will
be financed with (i) proceeds from bank borrowings by senior
secured credit facilities with a group of banks to be led by
Canadian Imperial Bank of Commerce and Merrill Lynch Capital
Corporation, which provide for aggregate commitments of up to
$645 million, (ii) the proceeds of an offering by the Company of
approximately $200 million of subordinated indebtedness to be
issued by the Company in a public offering or private placement
prior to the Effective Time and (iii) the sale of $200 million of
the Company's Series A Preferred Stock (the "Company Preferred
Stock") and Warrants to purchase New Common Stock to the
Investors pursuant to the Subscription Agreements (as hereinafter
defined).
The Company has entered into subscription agreements,
dated as of March 28, 1996 (the "Subscription Agreements") with
the Investors, including JLLF, TSG and CIBC, providing for the
purchase by such Investors immediately prior to the Effective
Time (and subject to consummation of the Merger) of an aggregate
of 200,000 newly issued shares of Company Preferred Stock and
150,000 Warrants for an aggregate purchase price of $200 million.
In the event that the Merger is not consummated within two
business days of the initial issuance of the Company Preferred
Stock, the Company is required to redeem such Company Preferred
Stock in the manner set forth in the Subsription Agreements. The
sale of $200 million of the Company Preferred Stock will be a
condition to the obligations of the lenders under the senior
secured credit facilities.
A copy of the form of Stock Subscription Agreements is
included as Exhibit 1.D to this Schedule 13D and is specifically
incorporated herein by reference. The foregoing description is
qualified in its entirety by reference to such exhibit.
(e) The Merger Agreement provides that prior to the
Effective Time, the Company may not pay dividends on Company
Common Stock other than regular quarterly dividends not exceeding
$.015 per share. After completion of the Merger, it is expected
that the terms of the Surviving Corporation's debt financing will
limit the payment of dividends on the New Common Stock.
(g) At the Effective Time, the by-laws and Certificate
of Incorporation of the Company will be amended and restated as
discussed in paragraph (d) above and, in addition, will provide
for advance notice for stockholder proposals and director
nominations, will provide for a classified board and will not
require the approval of independent directors for any matters.
As so amended, the Certificate of Incorporation and by-laws will
be adopted as the Certificate of Incorporation and by-laws of the
Surviving Corporation.
(h), (i) The Company Common Stock is now listed, and
following the Merger, it is expected that the New Common Stock
will be listed, for trading on the New York Stock Exchange. If
such listing is not available, the Company will apply to have the
New Common Stock listed on the Nasdaq National Market.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a),(b),(c) Holdings may be deemed to be the
beneficial owner of all the shares of Company Common Stock,
currently 8,144,000 shares (representing approximately 46.3% of
the currently outstanding shares of Company Common Stock) that
are subject to the Option. As provided in the Stock Option
Agreement, Holdings may only exercise the Option upon the
occurrence of certain events, none of which has occurred. See
Item 6 hereof. Under the terms of the Stock Option Agreement,
Stockholder also granted to Paul S. Levy and Marcos A. Rodriguez,
directors of Holdings, an irrevocable proxy to vote all shares
subject to the Option in favor of the Merger Agreement and
against any proposal or transaction which could prevent or delay
the consummation of the transactions contemplated by the Stock
Option Agreement or the Merger Agreement. Because the Option is
not presently exercisable, Holdings expressly disclaims
beneficial ownership of any of the shares of Company Common Stock
that are subject to the Option. To the best knowledge of
Holdings, none of the persons listed in Exhibit 1.A hereto
beneficially owns any shares of Company Common Stock. Except as
described in this Schedule 13D, neither Holdings nor, to the best
of its knowledge, any of the persons listed in Exhibit 1.A hereto
has effected any transactions in shares of Company Common Stock
during the past 60 days.
(d) Not applicable
(e) Not applicable
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
Stock Option Agreement
Set forth below is a general description of the Stock
Option Agreement. Such description is qualified in its entirety
by reference to the Stock Option Agreement, a copy of which has
been included as Exhibit 1.B hereto and is incorporated by
reference herein.
The Option will become exercisable at any time after
the earlier of (i) Stockholder's breach of any material
obligation under the Stock Option Agreement, (ii) Holdings'
discovery of any material misrepresentation or breach of material
warranty by Stockholder under the Stock Option Agreement, (iii)
public disclosure of or Holdings learning of (a) certain
acquisitions, tender offers or proposals for acquisition of more
than 15% of the outstanding shares of Company Common Stock or a
material portion of the assets of the Company, (b) certain other
agreements regarding a merger, liquidation, recapitalization or
similar transaction involving the Company or (c) the Company
Board having publicly modified or withdrawn its recommendation of
the Merger, or failing to reconfirm its recommendation within two
business days of a written request by Holdings.
Upon any reclassification, split-up, stock dividend,
exchange of shares or other similar change in the outstanding
shares of Company Common Stock prior to the termination of the
Stock Option Agreement, the number of shares subject to the
Option and the applicable exercise price will be appropriately
adjusted so that Holdings will receive upon exercise of the
Option the equivalent amount of shares or property that it would
have received had it exercised the Option immediately prior to
such event.
Stockholder has agreed during the term of the Stock
Option Agreement not to (i) transfer or agree to transfer the
Shares, except pursuant to the Merger, (ii) grant any proxy or
power of attorney with respect to the Shares or (iii) deposit the
Shares into a voting trust or enter into a voting agreement with
respect to the Shares. Further, Stockholder has agreed to have a
restrictive legend placed on its shares of Company Common Stock
and to have a stop transfer order placed on such shares with the
transfer agent and registrar of the shares of Company Common
Stock.
Pursuant to the Stock Option Agreement, Stockholder has
agreed not to directly or indirectly solicit or participate in
any discussions with any party other than Holdings regarding a
takeover proposal for the Company, and to immediately notify
Holdings of any such proposal. Stockholder has also granted to
certain directors of Holdings a proxy to, among other things,
vote in favor of the Merger Agreement. See Item 5 (a), (b), (c).
Holdings has agreed with Stockholder not to modify the
Merger Agreement without the prior written consent of
Stockholder, and, in the event Holdings has the right to
terminate the Merger Agreement pursuant to certain provisions
thereof, to immediately so terminate unless Stockholder has
consented in writing to Holdings not terminating the Merger
Agreement (Stockholder is not a party to the Merger Agreement).
In the event that the Option is exercised, the Merger is not
consummated and, during the twelve-month period commencing on the
date of exercise, Holdings disposes of all or any portion of the
shares acquired pursuant to the Option for a price higher than
the exercise price, under the terms of the Stock Option Agreement
Holdings is required to pay to Stockholder in respect of each
share disposed of an amount equal to the excess of the highest
per share price received in such sale over the exercise price.
To the extent Holdings has not otherwise exercised the
Option pursuant to its terms, the Stock Option Agreement will
terminate on the earlier of (i) the Effective Time of the Merger,
(ii) 5 business days after the termination of the Merger
Agreement in accordance with its terms, (iii) the termination of
the Merger Agreement pursuant to its terms if Holdings is not
entitled to the payment of termination fees thereunder, (iv) any
modification, amendment, alteration or supplement of the Merger
Agreement, or any failure of Holdings to terminate the Merger
Agreement, in violation of Section 6.1 thereof or (v) 12:01 a.m.
on August 16, 1996.
Merger Agreement
Set forth below is a summary description of selected
provisions of the Merger Agreement. Such description is
qualified in its entirety by reference to the Merger Agreement, a
copy of which has been included as Exhibit 1.C hereto and is
incorporated by reference herein.
At the Effective Time of the Merger, each share of
Company Common Stock, Company Preferred Stock and Holdings Common
Stock then outstanding will be converted into the consideration
described in Item 4 hereof.
The Merger Agreement provides that subject to the
approval and adoption of the Merger Agreement by the stockholders
of Holdings and the Company, and compliance with (or waiver of)
certain other conditions, including expiration or termination of
the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, a certificate of merger will
be filed with the Secretary of State of the State of Delaware
pursuant to which Holdings will be merged with and into the
Company. The Company will be the Surviving Corporation after the
Merger.
The Merger Agreement provides that, in the event that
Holdings exercises the Option, Holdings agrees that: (i) it
will, within one year from the date of exercise of the Option,
commence an offer (the "Offer") to purchase all of the
outstanding Company Common Stock not owned by Holdings for
consideration with a fair market value of not less than $32 per
share and will consummate such offer within 60 days from the date
of commencement thereof; (ii) neither Holdings nor any of its
affiliates will acquire beneficial ownership of any additional
shares of Company Common Stock (and shall dispose of any other
such shares beneficially owned by Holdings or its affiliates
other than the shares acquired pursuant to the Option) until it
has consummated the Offer and purchased all shares validly
tendered pursuant thereto; and (iii) in the event that the Offer
is not commenced and consummated within 425 days following the
purchase of the Shares and the Company increases the Board of
Directors by two members and appoints one designee of Holdings to
the Company's Board, Holdings will, for a one-year period (the
"Standstill Period"), vote all shares in favor of certain
alternative transactions proposed by the Board of Directors the
result of which will be the receipt by stockholders of the
Company of consideration with a fair market value of not less
than $32 per share, cooperate in connection with such alternative
transactions and not attempt to gain further influence over the
Company. All such standstill restrictions will lapse if an
alternative transaction is not consummated during the Standstill
Period.
The Merger Agreement may be terminated at any time
prior to the Effective Time by mutual consent of the Company and
Holdings, or by either party if (i) any permanent injunction or
action by any governmental entity preventing consummation of the
Merger becomes final and nonappealable and the party seeking to
terminate has used reasonable best efforts to overturn such
injunction or action; (ii) the Merger has not been consummated on
or before August 15, 1996; or (iii) the stockholders of the
Company or Holdings do not approve the Merger Agreement at their
respective Special Meetings; unless, in the case of clauses (ii)
and (iii), such failure is a result of the action or failure to
act of the party seeking to terminate, where such action or
failure to act constitutes a breach of the Merger Agreement. In
addition, the Merger Agreement may be terminated by the Company
if (i) the Board of Directors of the Company shall reasonably
determine that an acquisition proposal for the Company
constitutes a Superior Proposal (as defined in the Merger
Agreement), and the Company shall have given notice to Holdings
and complied with certain other provisions; or (ii) Holdings
breaches in any material respect any representation, warranty,
covenant or agreement in the Merger Agreement, which failure has
not been cured within 30 days after notice is given or is
incapable of being cured.
The Merger Agreement may be terminated by Holdings if
(i) the Company breaches any material representation, warranty,
covenant or agreement in any material respect in the Merger
Agreement, which breach cannot be cured or has not been cured
within 45 days after notice is given; or (ii) the Company Board
withdraws or modifies in a manner adverse to Holdings its
approval or recommendation of the Merger or fails to reconfirm
such recommendation within 5 business days of a reasonable
request by Holdings for such confirmation.
Both parties also agree to use their reasonable best
efforts to take all necessary actions to consummate the Merger in
a timely fashion. In the event the Merger Agreement is
terminated under certain circumstances, the Company will be
obligated to pay Holdings a fee of $20 million in cash plus
Holdings' out-of-pocket expenses, not to exceed $5 million, in
connection with the Merger Agreement.
Pursuant to a Letter Agreement, dated March 28, 1996
(the "Letter Agreement") among Holdings and each of the
Investors, Holdings has agreed to (i) pay to each Investor a
proportional share of any termination fees paid to Holdings
pursuant to the Merger Agreement, (ii) if the Merger is not
consummated, share on a proportional basis all unreimbursed costs
and expenses incurred by the Investors and Holdings in connection
with the Merger, the Subscription Agreements and the transactions
contemplated thereby and (iii) give each Investor the right to
purchase a proportional number of shares subject to the Option if
Holdings determines to exercise such Option. In addition,
pursuant to the Letter Agreement, Holdings agreed not to enter
into any Merger financing, amend or modify the Merger Agreement
or exercise any right thereunder without the consent of Investors
holding subscriptions for no less than 80.5% of the aggregate
subscription pursuant to the Subscription Agreements, which
consent may not be unreasonably withheld. The Letter Agreement
is included as Exhibit 1.E hereto and is incorporated herein by
reference. The foregoing description is qualified in its
entirety by reference to such exhibit.
Warrant Agreement
In connection with the issuance pursuant to the Merger
Agreement and the Subscription Agreements of Warrants to purchase
up to 1,300,000 shares of New Common Stock, the Company will
enter into a Warrant Agreement prior to the Effective Time. Each
Warrant will entitle the registered holder to purchase one share
of New Common Stock at a price of $48.00 per share during the
period commencing on the fourth anniversary of the Effective Time
until the seventh anniversary of the Effective Time, and such
Warrants are not transferrable at any time before the third
anniversary of the Effective Time. In the event of any
consolidation with or merger of the Company into another
corporation or of any sale, transfer or lease of all or
substantially all of the property of the Company, the holders of
each Warrant will have the same rights with respect to such
Warrants after such event as in effect immediately prior to such
event.
A form of Warrant Agreement is included as Exhibit 1.F
to this Schedule 13D and is specifically incorporated herein by
reference. The foregoing description is qualified in its
entirety by reference to such exhibit.
Stockholders Agreement
Pursuant to the Subscription Agreements, the Company
and the New Investors have agreed to enter into a stockholders
agreement at the Effective Time which will provide that the
Investors will vote their shares of New Common Stock so that the
Board of Directors of the Surviving Corporation will consist of
nine members, of which four members will be designated by JLLF,
one member designated by each of TSG and CIBC, one member will be
the Chief Executive Officer of the Surviving Corporation and the
remaining two members will be selected by the remaining members
of the Board of Directors of the Surviving Corporation and may
not be affiliated with the Surviving Corporation or any of the
Investors. In addition, each Investor will agree not to transfer
its shares of New Common Stock prior to the second anniversary of
the Merger (other than to certain permitted transferees) and not
to acquire additional shares of New Common Stock if such
acquisition would cause such Investor to own in excess of 50% of
the outstanding shares of New Common Stock. The Investors will
be granted the right to participate proportionately in any sales
by JLLF of shares of New Common Stock, subject to certain
exceptions; and the Surviving Corporation will not repurchase any
shares of New Common Stock, with certain exceptions, without the
approval of holders of at least 82.5% of shares of New Common
Stock issued pursuant to the Subscription Agreements. The
Stockholders Agreement will provide that each Investor will be
entitled to two "demand" registration rights and unlimited
"piggyback" registration rights with respect to its shares of New
Common Stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed as part of this
Schedule 13D:
EXHIBIT 1.A: Name, business address and present principal
occupation of each executive officer and director
of MWC Holdings, Inc. and name and business
address of all ten percent beneficial owners.
EXHIBIT 1.B: Stock Option Agreement, dated as of March 28,
1996, by and among Varity Corporation, K-H
Corporation and MWC Holdings, Inc. is incorporated
by reference to Exhibit 10.3 to the Hayes Wheels
International, Inc. Form 8-K, dated March 28,
1996.
EXHIBIT 1.C: Agreement and Plan of Merger, dated as of March
28, 1996, between MWC Holdings, Inc. and Hayes
Wheels International, Inc. is incorporated by
reference to Exhibit 2 to the Hayes Wheels
International, Inc. Form 8-K, dated March 28,
1996.
EXHIBIT 1.D: Form of Subscription Agreements, each dated March
28, 1996, between each Investor and Hayes Wheels
International, Inc. is incorporated by reference
to Exhibit 10.1 to the Hayes Wheels International,
Inc. Form 8-K, dated March 28, 1996.
EXHIBIT 1.E: Letter Agreement, dated March 28, 1996, among MWC
Holdings, Inc., Joseph Littlejohn & Levy Fund II
LP, TSG Capital Fund II, L.P., CIBC WG Argosy
Merchant Fund II, LLC, Chemical Equity Associates,
A California Limited Partnership and Nomura
Holding America, Inc.
EXHIBIT 1.F: Proposed Form of Warrant Agreement, to be entered
into between Hayes Wheels International, Inc. and
the Warrant Agent is incorporated by reference to
Exhibit 10.2 to the Hayes Wheels International,
Inc. Form 8-K, dated March 28, 1996.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
MWC HOLDINGS, INC.
By: /S/ Richard W. Tuley
Name: Richard W. Tuley
Title: President and CEO
EXHIBIT 1.A
DIRECTORS, EXECUTIVE OFFICERS AND
TEN PERCENT STOCKHOLDERS
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name and
positions with MWC Holdings, Inc. ("Holdings") of each of
the Directors and executive officers of Holdings.
Additional information with respect to each such
individual is contained below under "Background of
Directors and Executive Officers."
Name Positions
Richard W. Tuley1 President and Director
John R. Kinstler1 Vice President
Thomas R. Collins1 Vice President and
Treasurer
Dale R. Martin1 Secretary
Peter A. Joseph2 Director
Angus C. Littlejohn, Jr.2 Director
Paul S. Levy2 Director
Marcos A. Rodriguez2 Director
BACKGROUND OF DIRECTORS AND EXECUTIVE OFFICERS
MR. TULEY has been President of Holdings and
Motor Wheel Corporation ("MWC") since May 1995.
Previously, he was Chief Operating Officer since
September 1994, and Executive Vice President and General
Manager - Commercial Highway Products of MWC since 1991.
He was Chief Financial Officer of MWC from 1982, when he
joined MWC, through 1991. He has served as a Director
of Holdings since December 1986.
MR. KINSTLER has been Executive Vice President
of Engineering of MWC since September 1994. He was Vice
President of Manufacturing from 1992 through September
1994 and Executive Vice President of Engineering and
Quality from 1989 through 1992.
MR. COLLINS has been Vice President and
Treasurer of Holdings since 1986 and Vice President,
Treasurer and Chief Financial Officer of MWC since
October 1991.
MR. MARTIN has been Secretary of Holdings since
1986 and Vice President, Secretary and General Counsel of
MWC since 1989.
1 The business address of these persons is 2501
Woodlake Circle, Okemos, Michigan 48864.
2 The business address of these persons is 450
Lexington Avenue, Suite 3350, New York, New York
10017.
MR. JOSEPH has been a General Partner of Joseph
Littlejohn & Levy since 1988. Mr. Joseph has been a
Director of Holdings since November 1995. Mr. Joseph
serves on the Board of Directors of Foodbrands America,
Inc., OrNda HealthCorp, Lancer and Fairfield
Manufacturing Co., Inc. Mr. Joseph is also President and
Secretary of Lancer and Vice President and Secretary of
Fairfield.
MR. LITTLEJOHN has been a General Partner of
Joseph Littlejohn & Levy since 1988. Mr. Littlejohn has
been a Director of Holdings since November 1995. Mr.
Littlejohn serves on the Board of Directors of Foodbrands
America, Inc., OrNda Health Corp, Lancer and Fairfield
Manufacturing Co., Inc. In addition, Mr. Littlejohn is
Vice Chairman and Chief Financial Officer of Lancer and
Vice President of Fairfield.
MR. LEVY has been a General Partner of Joseph
Littlejohn & Levy since 1988. Mr. Levy has been a
Director of Holdings since November 1995. Mr. Levy
serves as Chief Executive Officer and Chairman of the
Board of Directors of Lancer and as a member of the Board
of Directors of Foodbrands America, Inc., OrNda
HealthCorp and Fairfield Manufacturing Co., Inc. Mr.
Levy is also Vice President and Assistant Secretary of
Fairfield.
MR. RODRIGUEZ has been a Principal of Joseph
Littlejohn & Levy since 1992 and served in various other
positions with Joseph Littlejohn & Levy since 1989. Mr.
Rodriguez has been a Director of Holdings since November
1995.
TEN PERCENT STOCKHOLDERS
Percent of
Amount and Outstanding
Nature of Stock of
Beneficial Holdings
Name Ownership Common Stock
Joseph Littlejohn & Levy Fund II L.P. . . 281.4815 74.6%
c/o Joseph Littlejohn & Levy
450 Lexington Avenue, Suite 3350
New York, NY 10017
Peter A. Joseph . . . . . . . . . . . . . 281.48151 74.6%
Angus C. Littlejohn, Jr. . . . . . . . . 281.48151 74.6%
Paul S. Levy . . . . . . . . . . . . . . 281.48151 74.6%
1 Messrs. Joseph, Littlejohn and Levy are General Partners of
Joseph Littlejohn & Levy which is the manager of Joseph
Littlejohn & Levy Fund II L.P. Each of Messrs. Joseph,
Littlejohn and Levy disclaim beneficial ownership of any shares
of Holdings Common Stock held by Joseph Littlejohn & Levy Fund II
L.P. Certain information regarding Messrs. Joseph, Littlejohn
and Levy is set forth above under "Background of Directors and
Executive Officers."
EXHIBIT 1.E
March 28, 1996
Joseph Littlejohn & Levy Fund II LP
450 Lexington Avenue
Suite 3350
New York, New York 10022
TSG Capital Fund II, L.P.
177 Broad Street
12th Floor
Stamford, Connecticut 06901
CIBC WG Argosy Merchant Fund II, LLC
1325 Avenue of the Americas
22nd Floor
New York, New York 10019
Chemical Equity Associates,
A California Limited Partnership
380 Madison Avenue
12th Floor
New York, New York 10017
Nomura Holding America, Inc.
Two World Financial Center
Building B
New York, New York 10281
Gentlemen:
Reference is made to those certain Subscription
Agreements, dated as of March 28, 1996 (the "Subscription
Agreements"), among MWC Holdings, Inc., a Delaware
corporation ("Holdings"), Hayes Wheels International,
Inc., a Delaware corporation (the "Company"), and the
Investors (as defined in the Subscription Agreements),
pursuant to which the Investors have subscribed to
purchase an aggregate of 200,000 shares of preferred
stock, par value $.01 per share (the "Company Preferred
Stock"), of the Company in connection with the merger
(the "Merger") of Holdings with and into the Company
pursuant to an Agreement and Plan of Merger, dated as of
March 28, 1996, by and between Holdings and the Company
(the Merger Agreement").
This letter agreement reflects certain
agreements among Holdings and the Investors with respect
to the Investors' subscription to purchase shares of
Company Preferred Stock pursuant to the Subscription
Agreements.
1. Expenses and Termination Fees. Any
termination fees paid by the Company pursuant to Section
8.2(b) of the Merger Agreement shall be shared among
Holdings and the Investors such that the Investors and
Holdings shall receive a percentage of such termination
fees equal to (i) each Investor's subscription commitment
pursuant to its Subscription Agreement (or, in the case
of Holdings, $100 million) divided by (ii) $300 million
(such percentage being referred to herein as the
"Subscription Percentage"). In addition, if the Merger
is not consummated, all costs and expenses incurred by
any of the Investors or Holdings in connection with the
Merger, the Subscription Agreements and the transactions
contemplated thereby, including, without limitation,
legal fees, accounting fees and related fees and
expenses, to the extent not reimbursed by the Company,
shall be shared among Holdings and the Investors in
accordance with their relevant Subscription Percentages.
Each Investor agrees to promptly pay its proportionate
share of all such expenses. In the event that Holdings
determines to exercise its option to purchase common
stock, par value $.01 per share (the "Company Common
Stock"), of the Company pursuant to the Stock Option
Agreement (the "Option Agreement"), dated March 28, 1996
between Holdings and Varity Corporation, a Delaware
corporation, each Investor shall be entitled to purchase
from Holdings, on the same terms and conditions, the
number of shares of Company Common Stock underlying such
option in accordance with such Investor's Subscription
Percentage; provided, however, that each Investor that
exercises such option shall be bound by the terms and
provisions of the Option Agreement.
2. Amendments and Waivers to Merger Agreement
and Financing Documents. Holdings agrees that it will
not (i) enter into any documentation with any bank or
other lending institution with respect to financing the
Merger ("Financing Documentation"), (ii) amend, modify or
supplement, or waive any condition to, the Merger
Agreement or any Financing Documentation in connection
with the Merger or (iii) exercise any right it may have
under the Merger Agreement, without the prior consent of
Investors subscribing for not less than $161 million of
Company Preferred Stock, which consent shall not be
unreasonably withheld or delayed.
3. Miscellaneous. This letter agreement may
be amended, modified or supplemented only by a written
instrument executed by Holdings and parties subscribing
for not less than $161 million of Company Preferred
Stock. All notices and other communications hereunder
shall be given as provided in the Subscription
Agreements. The laws of the State of New York shall
govern the interpretation, validity and performance of
the terms of this letter agreement, regardless of the law
that might be applied under applicable principles of
conflicts of law. All disputes hereunder shall be
settled by binding arbitration pursuant to the rules of
the American Arbitration Association in New York City,
New York and the order of such arbitrators shall be final
and binding on all parties hereto. This letter agreement
may be executed in counterparts, each of which shall be
deemed to be an original, but all of which shall
constitute one and the same instrument.
If the foregoing accurately reflects your
agreement with respect to the subject matter hereof,
please sign in the space provided below, whereupon this
letter agreement shall become your binding agreement with
respect to the subject matter hereof.
Sincerely,
MWC HOLDINGS, INC.
By: /s/ Richard W. Tuley
Its: President and CEO
Accepted and Agreed as of
the Date First Written Above
JOSEPH LITTLEJOHN & LEVY FUND II LP
By: JLL Associates II, L.P.
By: /s/ Paul S. Levy
Its: Partner
TSG CAPITAL FUND II, L.P.
By: TSG Associates II, L.P., its General Partner
By: TSG Associates II, Inc., its General Partner
By: /s/ Cleveland A. Christophe
Its: Managing Partner
CIBC WG ARGOSY MERCHANT FUND II, LLC
By: /s/ Andrew R. Heyer
Its: Managing Director
CHEMICAL EQUITY ASSOCIATES,
A CALIFORNIA LIMITED PARTNERSHIP
By: /s/ Donald Hofmann
Its: General Partner
NOMURA HOLDING AMERICA, INC.
By: /s/ Lawrence Pomerantz
Its: Exec. Managing Director
