<PAGE>
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, $.01 par value
(Title of Class of Securities)
421124-10-8
(CUSIP Number)
Cleveland A. Christophe
TSG Capital Fund II, L.P.
177 Broad Street, 12th Floor
Stamford, Connecticut 06901
(203) 406-1500
_____________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
James B. Carlson
Mayer, Brown & Platt
1675 Broadway, Suite 1900
New York, New York 10019
(212) 506-2515
July 2, 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)
SCHEDULE 13D
CUSIP No. 421124-10-8
_________________________________________________________________
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
TSG Capital Fund II, L.P.
_________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
_________________________________________________________________
(4) SOURCE OF FUNDS
00 (See response to Item 3)
-----------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
__________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES None
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY
EACH 1,406,250
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON
WITH None
(10) SHARED DISPOSITIVE POWER
1,406,250
-----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,250
-----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.6%
-----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
PN
-----------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 421124-10-8
-----------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
TSG Associates II, L.P.
-----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
_________________________________________________________________
(4) SOURCE OF FUNDS
00 (See response to Item 3)
-----------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES None
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY
EACH 1,406,250
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON
WITH None
(10) SHARED DISPOSITIVE POWER
1,406,250
_________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,250
-----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.6%
-----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
PN
-----------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 421124-10-8
_________________________________________________________________
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
TSG Associates II, Inc.
_________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
00 (See response to Item 3)
-----------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES None
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY
EACH 1,406,250
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON
WITH None
(10) SHARED DISPOSITIVE POWER
1,406,250
-----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,250
-----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.6%
-----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
CO
-----------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 421124-10-8
_______________________________________________________________
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Cleveland A. Christophe
_______________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
_______________________________________________________________
(3) SEC USE ONLY
_______________________________________________________________
(4) SOURCE OF FUNDS
00 (See response to Item 3)
---------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
_______________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES None
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY
EACH 1,406,250
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON
WITH None
(10) SHARED DISPOSITIVE POWER
1,406,250
-----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,250
-----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.6%
-----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
IN
-----------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 421124-10-8
-----------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Duane E. Hill
_________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
_________________________________________________________________
(4) SOURCE OF FUNDS
00 (See response to Item 3)
-----------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
-----------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES None
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY
EACH 1,406,250
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON
WITH None
(10) SHARED DISPOSITIVE POWER
1,406,250
-----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,250
-----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.6%
-----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
IN
-----------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 421124-10-8
_________________________________________________________________
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Darryl B. Thompson
_________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
_________________________________________________________________
(4) SOURCE OF FUNDS
00 (See response to Item 3)
-----------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
-----------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES None
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY
EACH 1,406,250
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON
WITH None
(10) SHARED DISPOSITIVE POWER
1,406,250
-----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,250
-----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.6%
-----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
IN
-----------------------------------------------------------------
Item 1. Security and Issuer.
-------------------
This statement on Schedule 13D (the "Statement") relates to the
common stock, par value $.01 per share ("Company Common Stock"), of Hayes
Wheels International, Inc., a Delaware corporation (the "Company"), which
has its principal executive offices at 38481 Huron River Drive, Romulus,
Michigan 48174.
Item 2. Identity and Background.
-----------------------
This Statement is being filed by TSG Capital Fund II, L.P., a
Delaware limited partnership (the "Fund"), TSG Associates II, L.P., a
Delaware limited partnership ("TSG Associates"), TSG Associates II, Inc., a
Delaware corporation ("TSG Inc."), Cleveland A. Christophe, Duane E. Hill
and Darryl B. Thompson (collectively, the "Reporting Persons"). TSG
Associates is the sole general partner of Fund. TSG Inc. is the sole
general partner of TSG Associates. Messrs. Christophe, Hill and Thompson
are each United States citizens and, together, are the holders of all of
the outstanding common stock of TSG Inc. Messrs. Christophe and Hill are
the directors of TSG Inc. Messrs. Christophe, Hill, Thompson and Mark D.
Inglis are the executive officers of TSG Inc. Each of the Reporting
Persons and Mr. Inglis is engaged principally in the business of investing
in securities. The principal business address of each of the Reporting
Persons and Mr. Inglis is 177 Broad Street, 12th Floor, Stamford,
Connecticut 06901.
During the last five years, none of the Reporting Persons or Mr.
Inglis has been convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is 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.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The Company and MWC Holdings, Inc., a Delaware corporation
("Holdings"), entered into the Agreement and Plan of Merger, dated as of
March 28, 1996 (the "Merger Agreement"), pursuant to which, among other
things, on July 2, 1996, Holdings merged with and into the Company (the
"Merger), with the Company continuing as the surviving corporation.
Immediately prior to the Merger, the Company issued and sold to
the Fund, and the Fund purchased (the "Subscription"), (i) 45,000 shares of
Series A Preferred Stock, par value $.01 per share ("Company Preferred
Stock"), of the Company and (ii) 33,750 warrants, with each warrant
entitling the holder thereof to purchase one share of Company Common Stock
at a price of $48.00 during the period commencing on the fourth anniversary
of the Effective Time (as defined in Item 4) and ending on the seventh
anniversary thereof ("Warrants"), in exchange for payment by the Fund of
immediately available funds in the amount of $45,000,000. The Fund
obtained such funds from capital contributions from its partners.
Pursuant to the Merger, the Fund received 31.25 shares of
Company Common stock for each share of Company Preferred Stock owned by the
Fund at the time of the Merger. As a result of the Merger, the Fund
acquired 1,406,250 shares of Company Common Stock in exchange for 45,000
shares of Company Preferred Stock.
Item 4. Purpose of Transaction.
----------------------
As further described in the Joint Proxy Statement, dated May 31,
1996, of the Company and Holdings (the "Joint Proxy Statement"), and the
Merger Agreement, on July 2, 1996, at the effective time (the "Effective
Time"), Holdings merged with and into the Company, with the Company
continuing as the surviving corporation. As a result of the Merger, the
Fund acquired 1,406,250 shares of Company Common Stock, or approximately
12.6% of the shares of Company Common Stock issued and outstanding as of
July 2, 1996 (based upon a total of 11,132,400 shares of Company Common
Stock issued and outstanding upon consummation of the Merger on July 2,
1996, such number being the number of shares of Company Common Stock
expected to be issued and outstanding as of July 2, 1996 as reported in the
Joint Proxy Statement).
The foregoing summary of provisions of the Merger Agreement is
qualified in its entirety by reference to the Merger Agreement attached
hereto as Exhibit B.
Immediately after the Merger, as a result of the Subscription
and the Merger, the Fund owned (i) 1,406,250 shares of Company Common Stock
and (ii) Warrants to purchase 33,750 shares of Company Common Stock.
Immediately after the Merger, the Company and certain holders of
Company Common Stock, including the Fund, entered into a stockholders
agreement (the "Stockholders Agreement") pursuant to which, among other
things, (i) such stockholders (other than Chase Equity Associates and CIBC
WG Argosy Fund 2, L.L.C.) agreed to vote their shares of Company Common
Stock received in the Merger so that the Company's Board of Directors will
consist of nine members, of which one member will be designated by the
Fund, four members will be designated by another stockholder of the
Company, Joseph Littlejohn & Levy Fund II L.P. ("JLL"), one member will be
the Chief Executive Officer of the Company and the remaining three members,
who may not be affiliated with the Company or any of such stockholders,
will be selected by the Company's Board of Directors. The Stockholders
Agreement provides that the respective rights of the Fund and JLL to
designate directors will terminate if any such entity ceases to own at
least 50% of its initial investment. Each stockholder that is a party to
the Stockholders Agreement has also agreed not to acquire any shares of
Company Common Stock if, as a result of such acquisition, such stockholder
would own in excess of 50% of the outstanding shares of Company Common
Stock.
Pursuant to the Stockholders Agreement, such stockholders have
agreed not to transfer any shares of Company Common Stock, other than
pursuant to certain permitted transfers, until the second anniversary of
the Merger. The Stockholders Agreement gives each stockholder a party
thereto holding shares of Company Common Stock received in the Merger with
an aggregate value of $15 million the right (exercisable after the second
anniversary of the Effective Time) to require the Company to register under
the Securities Act of 1933, as amended (the "Securities Act"), the resale
of all or part of such shares at the Company's expense on two occasions.
The Company has agreed to file the reports under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), to enable each such
stockholder to sell its shares of Company Common Stock. Each such
stockholder will be entitled to an unlimited number of piggyback
registrations, which will allow such stockholder to include shares of
Company Common Stock (including shares of Company Common Stock to be issued
upon the exercise of Warrants) held by it in certain registrations of
shares of Company Common Stock effected by the Company (subject to
customary cut-back provisions). In addition to these registration rights,
the Stockholders Agreement will allow stockholders a party thereto to
participate proportionately in any sales by JLL of shares of Company Common
Stock.
The Stockholders Agreement also provides that the Company will
not repurchase any shares of Company Common Stock, other than to fund
employee benefit plans, without the approval of at least 82.5% of the
shares of Company Common Stock subject to the Stockholders Agreement. In
addition, the Stockholders Agreement provides that the Company will file
all necessary reports with the Securities and Exchange Commission ("SEC"),
if applicable, and take whatever action any stockholder a party thereto may
reasonably request to enable such stockholder to sell shares of Company
Common Stock without registration under the Securities Act within the
limitations provided by Rule 144 thereunder. The Stockholders Agreement
may only be amended with the prior written consent of the Company and at
least 82.5% of the shares of Company Common Stock initially subject
thereto. The Stockholders Agreement will terminate on the eighth
anniversary thereof, unless terminated earlier pursuant to its terms.
The foregoing summary of provisions of the Stockholders
Agreement is qualified in its entirety by reference to the Stockholders
Agreement attached hereto as Exhibit C.
The securities of the Company to which this Statement relates
are held by the Fund as an investment. Except as otherwise set forth in
this Statement, the Reporting Persons and Mr. Inglis do not presently have
any plans or proposals which relate to or would result in: (i) the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company; (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (iii) a sale or transfer of a material
amount of assets of the Company or any of its subsidiaries; (iv) any change
in the present Board of Directors or management of the Company, including
any plans or proposals to change the number or term of directors or to fill
any existing vacancies on such Board of Directors; (v) any material change
in the present capitalization or dividend policy of the Company; (vi) any
other material change in the Company's business or corporate structure;
(vii) changes in the Company's Amended and Restated Certificate of
Incorporation or By-laws or other actions which may impede the acquisition
of control of the Company by any person; (viii) causing a class of
securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association; (ix) a
class of equity securities of the Company becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Exchange Act; or (x)
any action similar to any of those enumerated above.
Subject to applicable law and the terms of the Stockholders
Agreement, the Reporting Persons or Mr. Inglis may, individually or
jointly, acquire shares of Company Common Stock or sell some or all of the
shares of the Company Common Stock which may be owned by them from time to
time, depending on their evaluation of the Company's business, prospects
and financial condition, the market for the shares, other opportunities
available to the Reporting Persons or Mr. Inglis, general economic
conditions, money and stock market conditions and other future
developments.
Item 5. Interest in Securities of the Issuer.
------------------------------------
The Fund is the record owner of 1,406,250 shares of Company
Common Stock (the "TSG Shares") and as such has the power to vote and
dispose of the TSG Shares. The TSG Shares constitute approximately 12.6%
of the shares of Company Common Stock issued and outstanding as of July 2,
1996 (based upon a total of 11,132,400 shares of Company Common Stock
issued and outstanding upon consummation of the Merger on July 2, 1996,
such number being the number of shares of Company Common Stock expected to
be issued and outstanding as of July 2, 1996 as reported in the Joint Proxy
Statement).
TSG Associates, as sole general partner of the Fund, TSG Inc.,
as sole general partner of TSG Associates, and Messrs. Christophe, Hill and
Thompson as the holders, together, of all of the outstanding common stock
of TSG Inc., may be deemed to have, or to share, voting and dispositive
power with respect to the TSG Shares and, pursuant to Rule 13d-3(a)
promulgated under the Exchange Act, each may be deemed to be the beneficial
owner of all of the TSG Shares. However, the filing of this Statement
shall not be construed as an admission for the purposes of Sections 13(d)
and 13(g) or under any other provision of the Exchange Act or the rules
promulgated thereunder or for any other purpose that TSG Associates, TSG
Inc. or Messrs. Christophe, Hill, Thompson or Inglis is a beneficial owner
of any of the TSG Shares.
Except as set forth in Item 3 hereof with respect to the
Subscription and in Items 3 and 4 hereof with respect to the Merger, the
Reporting Persons and Mr. Inglis have not affected any transactions in
shares of Company Common Stock during the past 60 days.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
-------------------------------------------------------------
Immediately after the Merger, as a result of the Subscription
and the Merger, the Fund owned 1,406,250 shares of Company Common Stock and
33,750 Warrants.
Immediately after the Merger, the Company and certain holders of
Company Common Stock, including the Fund, entered into the Stockholders
Agreement. Reference is hereby made to the discussion of the Stockholders
Agreement set forth above in response to Item 4, including the summary of
provisions thereof, which is incorporated by reference in its entirety
herein.
Except as set forth in this Statement, none of the Reporting
Persons or Mr. Inglis has any contracts, arrangements, understandings or
relationships (legal or otherwise) with each other or with any person with
respect to any securities of the Company, including but not limited to the
transfer or voting of any of the securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division
of profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit A Joint Filing Agreement, dated as of July 2, 1996, among
the Fund, TSG Associates, TSG Inc. and Messrs. Christophe,
Hill and Thompson.
Exhibit B Agreement and Plan of Merger, dated as of March 28, 1996,
between Holdings and the Company. Incorporated by
reference to Exhibit 2.1 to the Registration Statement on
Form S-4 of Hayes Wheels International, Inc. Registration
No. 333-04909
Exhibit C Stockholders' Agreement, dated as of July 2, 1996, among
the Company, the Fund, Chase Equity Associates, CIBC WG
Argosy Merchant Fund 2, L.L.C., Nomura Holding America,
Inc. and JLL.
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: July 12, 1996
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
Name: Cleveland A. Christophe
Title: President
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: July 12, 1996
TSG ASSOCIATES II, L.P.
By: TSG Associates II, Inc.,
its general partner
By: /s/ Cleveland A. Christophe
Name: Cleveland A. Christophe
Title: President
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: July 12, 1996
TSG ASSOCIATES II, INC.
By:/s/ Cleveland A. Christophe
Name: Cleveland A. Christophe
Title: President
SIGNATURE
After reasonable inquiry and to the best of his knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: July 12, 1996
/s/ Cleveland A. Christophe
Cleveland A. Christophe
SIGNATURE
After reasonable inquiry and to the best of his knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: July 12, 1996
/s/ Duane E. Hill
Duane E. Hill
SIGNATURE
After reasonable inquiry and to the best of his knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: July 12, 1996
/s/ Darryl B. Thompson
Darryl B. Thompson
Exhibit A
Joint Filing Agreement
----------------------
In accordance with Rule 13d-1(f) under the Securities Exchange
Act of 1934, as amended, the undersigned hereby agree to the joint filing
with each other of a statement on Schedule 13D (including all amendments
thereto) (the "Statement") with respect to the common stock, par value $.01
per share, of Hayes Wheels International, Inc., a Delaware corporation, and
further agree that this Joint Filing Agreement be included as an exhibit to
such Statement. In evidence whereof, the undersigned, being duly
authorized, hereby execute this Joint Filing Agreement as of this 2nd day
of July, 1996.
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
Name: Cleveland A. Christophe
Title: President
TSG ASSOCIATES II, L.P.
By: TSG Associates II, Inc.,
its General Partner
By: Cleveland A. Christophe
Name: Cleveland A. Christophe
Title: President
TSG ASSOCIATES II, INC.
By: /s/ Cleveland A. Christophe
Name: Cleveland A. Christophe
Title: President
/s/ Cleveland A. Christophe
Cleveland A. Christophe
/s/ Duane E. Hill
Duane E. Hill
/s/ Darryl B. Thompson
Darryl B. Thompson
EXHIBIT C
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT ("Agreement"), dated as of July 2,
1996, is among Hayes Wheels International, Inc., a Delaware corporation
(the "Company"), Joseph Littlejohn & Levy Fund II, L.P., a Delaware limited
partnership ("JLL"), Chase Equity Associates, a California limited
partnership ("Chase"), CIBC WG Argosy Merchant Fund 2, L.L.C., a Delaware
limited liability company ("Argosy"), Nomura Holding America, Inc., a
Delaware corporation ("Nomura"), and TSG Capital Fund II, L.P., a Delaware
limited partnership ("TSG") (JLL, Chase, Argosy, Nomura and TSG, each being
referred to herein as a "Stockholder" and collectively being referred to
herein as the "Stockholders").
W I T N E S S E T H
WHEREAS, pursuant to Subscription Agreements, each dated March
28, 1996, among each Stockholder, MWC Holdings, Inc., a Delaware
corporation ("Holdings") and the Company ("Subscription Agreements"), each
Stockholder purchased (i) shares of preferred stock, $.01 per share
("Preferred Stock"), and (ii) warrants ("Warrants") to purchase shares of
common stock, par value $.01 per share, of the Company following
consummation of the Merger (as defined below) ("New Company Common
Stock").
WHEREAS, immediately prior to the Merger, JLL owned 281.4815
shares of common stock, par value $.01 per share of Holdings ("Holdings
Common Stock").
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as
of March 28, 1996, by and between Holdings and the Company (the "Merger
Agreement"), Holdings has been merged on the date hereof with and into the
Company (the "Merger"); and
WHEREAS, as a result of the Merger, (i) each share of Holdings
Common Stock issued and outstanding immediately prior to the Merger was
converted into (A) 8231.76 shares of New Company Common Stock and (B)
3029.29 Warrants and (ii) each share of Preferred Stock issued and
outstanding immediately prior to the Merger was converted into 31.25 shares
of New Company Common Stock.
WHEREAS, as a result of the Merger, on the date hereof, each
Stockholder owns (i) the number of shares of New Company Common Stock set
forth in column A opposite such Stockholder's name on Exhibit A hereto and
(ii) the number of Warrants set forth in column B opposite such
Stockholder's name on Exhibit A hereto.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as follows:
ARTICLE I
Certain Definitions
For purposes of this Agreement, the following terms shall have
the following meanings:
(a) The term "Affiliate" shall have the meaning set forth
in Rule 405 promulgated under the Securities Act.
(b) The term "Commission" shall mean the United States
Securities and Exchange Commission or any successor agency.
(c) The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
(d) The term "Indenture" shall mean the Indenture, dated
as of July 2, 1996, by and among the Company, as issuer, the Guarantors
named therein and Comerica Bank, as trustee.
(e) The term "Market Value" shall mean the average of the
closing sales prices of the New Company Common Stock on the New York Stock
Exchange Composite Tape (or as reported on the principal exchange on which
the New Company Common Stock is then listed, which for these purposes
includes the Nasdaq Stock Market) during each of the five (5) consecutive
trading days ending on the trading day immediately prior to the date of any
Demand.
(f) The term "Merger Agreement" shall mean the Agreement
and Plan of Merger, dated as of March 28, 1996, between MWC Holdings, Inc.
and the Company.
(g) The term "Permitted Transferee" shall mean, with
respect to each Person bound by the terms of this Agreement, (i) any other
Stockholder; (ii) in respect of a Stockholder, any affiliate or associate
(as such terms are defined in Rule 405 of the Securities Act) of such
Stockholder or any other Permitted Transferee of such Affiliate; (iii) the
Company; (iv) in the event of the dissolution, liquidation or winding up of
any such Person that is a corporation or a partnership, the partners of a
partnership that is such Person, the stockholders of a corporation that is
such Person or a successor partnership all of the partners of which or a
successor corporation all of the stockholders of which are the Persons who
were the partners of such partnership or the stockholders of such
corporation immediately prior to the dissolution, liquidation or winding up
of such Person; (v) a transferee by testamentary or intestate disposition;
(vi) a transferee by inter vivos transfer to the transferring Person's
spouse, children and/or other lineal descendants; (vii) a trust transferee
by inter vivos transfer, the beneficiaries of which are the transferring
Person, spouse, children and/or other lineal descendants; (viii) a
successor nominee or trustee for the beneficial owner of the Shares for
which such Person acts as nominee or trustee, as the case may be; or (ix)
an institutional lender for money borrowed pursuant to a bona fide pledge
of or the granting of a security interest in such Stockholder's Registrable
Securities; provided, however, that such institutional lender acknowledges
in writing that it agrees to be bound by, and hold the Registrable
Securities being pledged subject to, the terms of this Agreement.
(h) The term "Person" shall mean any individual, firm,
corporation, partnership, limited liability company or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(i) The term "Public Offering" shall mean a public
offering of equity securities of the Company pursuant to an effective
registration statement under the Securities Act, including a public
offering in which Stockholders are entitled to sell Shares pursuant to the
terms of Article V hereof.
(j) The term "Registrable Securities" shall mean (i) the
Shares owned by each Stockholder on the date hereof, as set forth opposite
each Stockholder's name on Exhibit A hereto, (ii) additional shares of New
Company Common Stock issued to one or more of the Stockholders upon the
exercise of the Warrants, and (iii) additional shares of New Company Common
Stock acquired by one or more Stockholders after the date hereof. As to any
particular Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a registration statement registering such
securities under the Securities Act has been declared effective and such
securities have been sold or otherwise transferred by the holder thereof
pursuant to such effective registration statement, or (ii) such securities
are sold in accordance with Rule 144 (or any successor provision)
promulgated under the Securities Act, or (iii) such securities are
transferred under circumstances in which any legend borne by the
certificates for such securities relating to restrictions on
transferability thereof, under the Securities Act or otherwise, is removed
by the Company.
(k) The term "Registration Period" shall mean the period
commencing on the second anniversary of the date hereof and expiring on the
eighth anniversary of this Agreement.
(l) The term "Registration Statement" shall mean the
registration statement filed with the Commission on Form S-4 under the
Securities Act for the purpose of registering the shares of New Company
Common Stock (as defined in the Merger Agreement) and Warrants (as defined
in the Merger Agreement) issued in connection with the Merger (as defined
in the Merger Agreement).
(m) The term "Requisite Amount" shall mean Registrable
Securities having an aggregate Market Value as of the date of any Demand
(as hereinafter defined) of at least $15 million.
(n) The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
(o) The term "Shares" shall mean the shares of New
Company Common Stock owned by each Stockholder on the date hereof, as set
forth opposite each Stockholder's name on Exhibit A hereto, and all shares
of New Company Common Stock acquired by any Stockholder after the date of
this Agreement, including without limitation, shares acquired upon exercise
of the Warrants.
(p) The term "Transfer" shall mean any voluntary or
involuntary attempt to, directly or indirectly through the transfer of
interests in controlled Affiliates or otherwise, offer, sell, assign,
transfer, grant a participation in, pledge or otherwise dispose of any
Shares, or the consummation of any such transactions, or the soliciting of
any offers to purchase or otherwise acquire, or take a pledge of, any of
the Shares, other than hedging or other derivative transactions that hedge
or otherwise relate to investment risks in respect of any of the Shares;
provided, however, that the transfer of an interest in any of the
Stockholders shall not be deemed to be a transfer.
ARTICLE II
Representations and Warranties and Covenants
--------------------------------------------
Section 2.01. Representations and Warranties of the Company.
The Company represents and warrants to each Stockholder as
follows:
(a) Corporate Authority. The Company has full power and
authority to execute, deliver and perform this Agreement;
(b) Due Authorization. This Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except that (i) the enforceability
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting creditors'
rights, (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to certain equitable defenses and
to the discretion of the court before which any proceedings therefor may be
brought, and (iii) the rights to indemnity hereunder may be limited by
federal or state securities laws or the public policy underlying such laws;
(c) No Conflict. The execution, delivery and performance
of this Agreement by the Company do not violate or conflict with or
constitute a default under (i) the Company's certificate of incorporation
and by-laws, (ii) any judgment, order or decree or statute, law, ordinance,
rule or regulation of any governmental entity applicable to the Company or
(iii) any material agreement to which it is a party or by which it or its
property is bound;
(d) Registration Rights. Except as provided herein and
for rights granted pursuant to that certain Registration Rights Agreement,
dated March 28, 1996, among the Company, Varity Corporation, a Delaware
corporation, and its wholly owned subsidiary K-H Corporation, a Delaware
corporation, as of the date hereof, no other party is entitled to any
registration or similar right with respect to any securities of the
Company;
(e) Voting Agreements. Except as set forth herein, the
Company is not aware of any voting trust, voting agreement or arrangement
with respect to any of its voting securities; and
(f) Information in Disclosure Documents and Registration
Statement. None of the information in (i) the Registration Statement or
(ii) the joint proxy statement/prospectus distributed in connection with
the meeting of stockholders of each of MWC Holdings, Inc. ("Holdings") and
the Company to vote upon the Merger (as defined in the Merger Agreement)
(the "Proxy Statement"), in the case of the Registration Statement, at the
time it became effective or, in the case of the Proxy Statement or any
amendments thereof or supplements thereto, at the time of the initial
mailing of the Proxy Statement and any amendments or supplements thereto,
and at the time of the meeting of stockholders of Holdings and the Company
held in connection with the Merger, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The
Registration Statement, as of its effective date, complied as to form in
all material respects with the requirements of the Securities Act, and the
rules and regulations promulgated thereunder, and as of the date of its
initial mailing and as of the date of the Company's stockholders' meeting,
the Proxy Statement complied as to form in all material respects with the
applicable requirements of the Exchange Act, and the rules and regulations
promulgated thereunder. Notwithstanding the foregoing, the representations
and warranties contained in this Section 2.01(f) shall not apply to any
statements or omissions made in reliance upon or in conformity with
information furnished in writing to the Company by a Stockholder expressly
for use therein.
Section 2.02 Representations and Warranties of the Stockholders.
Each Stockholder individually represents and warrants to each
other Stockholder and the Company as follows:
(a) Corporate Authority. The Stockholder has full power
and authority to execute, deliver and perform this Agreement;
(b) Due Authorization. This Agreement has been duly and
validly authorized, executed and delivered by the Stockholder and
constitutes a valid and binding obligation of the Stockholder, enforceable
against the Stockholder in accordance with its terms, except that (i) the
enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting creditors' rights, (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought, and (iii) the rights to indemnity and
contribution hereunder may be limited by federal or state securities laws
or the public policy underlying such laws; and
(c) No Conflict. The execution, delivery and performance
of this Agreement by the Stockholder do not violate or conflict with or
constitute a default under (i) the Stockholder's organizational documents,
(ii) any judgment, order or decree or statute, law ordinance, rule or
regulation of any governmental entity applicable to the Stockholder, or any
material agreement to which it is a party or by which it or its property is
bound.
Section 2.03. Covenants.
The Company covenants to each Stockholder that it will:
(a) Timely file all reports required to be filed by it
under the Exchange Act, and if at any time the Company is not required to
file such reports, it will take such further action as a Stockholder may
reasonably require, including, without limitation, supply and make publicly
available any other information in the possession of or reasonably
obtainable by the Company, with the purpose of allowing such holder to
avail itself of Rule 144 of the Securities Act or any other rule or
regulation of the SEC allowing it to sell securities without registration
under the Securities Act. Upon the request of any Stockholder, the Company
will deliver to such Stockholder a written statement as to its compliance
with such requirements.
(b) Not repurchase, and shall cause each of its
subsidiaries not to repurchase, any shares of New Company Common Stock
(other than shares of New Company Common Stock repurchased to fund employee
benefit plans) without the written approval of the holders of at least
82.5% of the Shares outstanding on the date hereof less any Shares
subsequently Transferred other than to a Person described in clauses (i) or
(ii) of the definition of a Permitted Transferee.
(c) Afford to the Stockholders and their respective
officers, employees, financial advisors, legal counsel, accountants,
consultants and other representatives (except to the extent not permitted
under applicable law as advised by counsel and except as may be limited by
any confidentiality obligations contained in any contract with a third
party) reasonable access during normal business hours during the term of
this Agreement to all of its books and records and its properties and
facilities and, during such period, shall furnish promptly to each
Stockholder periodic financial and other information provided to the Board
or to JLL. Unless otherwise required by law, each Stockholder agrees that
it shall (i) hold in confidence all non-public information so acquired and
(ii) not use any such information as the basis for any market transaction
in the securities of the Company unless and until such is made generally
available to the public.
(d) Indemnify, to the fullest extent permitted by law,
each Stockholder, its officers, directors, employees, advisors, affiliates
and agents, from and against all losses, damages and liabilities which
arise in connection with any action or proceeding relating to the
Registration Statement or the Proxy Statement; provided, however, that the
Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in the Registration
Statement or the Proxy Statement in reliance upon and in conformity with
written information furnished to the Company by any Stockholder expressly
for use therein.
(e) Not, directly or indirectly, enter into or suffer to
exist any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate (including entities in which the Company or
any of its subsidiaries own a minority interest) or holder of 10% or more
of the Company's Common Stock (an "Affiliate Transaction") or extend,
renew, waive or otherwise modify the terms of any Affiliate Transaction
entered into prior to the date hereof unless (i) such Affiliate Transaction
is between or among the Company and/or its subsidiaries; or (ii) the terms
of such Affiliate Transaction are fair and reasonable to the Company or
such subsidiary, as the case may be, and the terms of such Affiliate
Transaction are at least as favorable as the terms which could be obtained
by the Company or such subsidiary, as the case may be, in a comparable
transaction made on an arm's-length basis between unaffiliated parties.
The foregoing provisions of this Section 2.03(e) will not apply to (i) any
Restricted Payment as defined in the Indenture that is not prohibited by
Section 4.13 of the Indenture, (ii) reasonable and customary fees paid by
the Company or its subsidiaries to their respective directors or (iii)
customary investment banking, underwriting, placement agent or financial
advisor fees paid in connection with services rendered to the Company or
its subsidiaries.
ARTICLE III
Board of Directors
------------------
Section 3.01. Composition.
(a) Members. During the term of this Agreement, each of
JLL, TSG and Nomura will use their best efforts to cause the Board of
Directors of the Company (the "Board") to consist of nine (9) members, of
which: (i) four members shall be designees of JLL; (ii) one member shall
be a designee of TSG; (iii) one member shall be the Chief Executive Officer
of the Company; and (iv) the other three members shall be determined by the
Board; provided, however, such members determined by the Board shall not be
affiliated with the Company or any of the Stockholders. During the term of
this Agreement, the Company shall use its best efforts and shall exercise
all authority under applicable law to cause to be elected or appointed, as
the case may be, as directors of the Company a slate of directors
consisting of individuals meeting the requirements of the previous
sentence. Argosy shall be entitled to appoint a representative who shall be
permitted to attend all meetings of the Board of Directors, but who shall
have no voting power. Such representative shall be given the same notice
of any meeting of the Board of Directors as is required to be provided to a
member of the Board of Directors and shall be entitled to participate in
discussions and consult with the Board of Directors. Such representative
shall receive all copies of all documents and shall have the same access to
information provided to members of the Board of Directors, in each case, at
the same time as such members of the Board of Directors. In addition, such
representative shall receive the same compensation or other economic
consideration or benefits, if any, that any member of the Board of
Directors designated pursuant to clause (i) or (ii) of this Section 3.01(a)
receives.
(b) Failure to Designate. In the event that (i) a
Stockholder entitled to designate a nominee for the Board is unable to
designate such a nominee, or (ii) the designee of a Stockholder resigns, in
either case, due to any legal provision or restriction relating to such
Stockholder, such Stockholder shall have the right to designate one Person
to attend, but not vote at, any meeting of the Board.
(c) Removal. No Stockholder shall take any action to
cause the removal of any director designated by any other Stockholder
other than "for cause".
(d) Vacancies. If at any time a vacancy is created on
the Board by reason of the death, removal or resignation (other than
pursuant to Section 3.01(b)) of any director who was nominated and elected
as a director pursuant to Section 3.01(a) above or this Section 3.01(d),
the Stockholders shall, as soon as practicable, vote their Shares or act by
written consent with respect to such Shares to elect the individual
designated to fill such vacancy or vacancies by the Stockholder who
designated such former director to fill such vacancy for the unexpired term
of the director whom such individual is replacing.
(e) Decrease in Shares Held. Notwithstanding anything to
the contrary in this Section 3.01, in the event that any Stockholder
entitled pursuant to Section 3.01(a) to designate one or more individuals
for nomination and election to the Board shall, together with its
affiliates or associates (as such terms are defined in Rule 405 of the
Securities Act), cease to own at least 50% of the Shares owned by such
Stockholder on the date hereof, such Stockholder shall no longer have any
right pursuant to this Agreement to designate any nominees for election to
the Board.
(f) Board Designees. The majority of the directors then
comprising the Board shall have the right to designate nominees to be
elected to the Board for any available directorship as to which no
Stockholder has the right to designate a nominee pursuant to Section
3.01(a) hereof.
(g) Voting Agreement. Each of JLL, TSG and Nomura agrees
that, during the term of this Agreement, (i) it will be present, in person
or represented by proxy, at all stockholder meetings of the Company for the
election of directors, so that all shares of New Company Common Stock,
including the Shares, beneficially owned by it shall be counted for the
purpose of determining the presence of a quorum for the election of
directors at such meetings, and (ii) it shall vote, or act by consent with
respect to, all shares of New Company Common Stock, including the Shares,
beneficially owned by it for the election of the nominees for the Board
nominated by the Board so long as such nominees consist of individuals
meeting the requirements of this Section 3.01. Except as specifically set
forth in this Section 3.01(g), each of JLL, TSG and Nomura shall be
entitled to vote its Shares on all other matters as it deems fit.
Section 3.02. Indemnification.
Immediately following the Merger, the Company shall enter into
indemnification agreements substantially in the form of Exhibit B hereto
with each member of the Board.
ARTICLE IV
Restrictions on Transfer
------------------------
Section 4.01. General Restrictions.
(a) No Stockholder may Transfer any Shares prior to the
second anniversary hereof except for Transfers (i) to any of its Permitted
Transferees; provided, however, that prior to any Transfer of Shares, such
Permitted Transferee shall agree in writing to take such Shares subject to,
and to comply with, all of the provisions of this Agreement, a copy of
which agreement shall be on file with the Secretary of the Company and
shall include the address of such transferee to which notices hereunder
shall be sent, (ii) pursuant to any offer, including a tender or exchange
offer, by any party (including the Company) to purchase all of the
outstanding shares of New Company Common Stock, which offer has been
approved by the Board and (iii) pursuant to any corporate transaction
requiring the approval of the holders of a majority of the shares of
outstanding New Company Common Stock and as to which the requisite approval
of the Stockholders shall have been obtained.
(b) From and after the second anniversary of the Merger
until the expiration or earlier termination of this Agreement, in addition
to Transfers permitted by Section 4.01(a), any Stockholder may Transfer any
or all of its Shares to any other Stockholder or any third party, pursuant
to: (i) paragraphs (e) and (f) of Rule 144 or any similar rule adopted by
the Commission (whether or not paragraph (k) of Rule 144 is applicable);
(ii) a Public Offering; or (iii) any other Transfer; provided, however,
that prior to any Transfer of Shares to a third party pursuant to this
Section 4.01(b)(iii), such third-party transferee shall agree in writing to
take such Shares subject to, and to comply with, the provisions of Section
3.01(g) of this Agreement. Notwithstanding anything stated herein to the
contrary, the Transfer of Shares by either JLL or TSG shall not result in
the assignment of such transferring Stockholder's rights under Section
3.01(a) hereof.
Section 4.02. Compliance with Securities Laws.
Each Stockholder agrees that every Transfer of its Shares shall
comply with all federal and state securities laws applicable to such
transaction. At the request of the Company, the transferring Stockholder
shall deliver to the Company an opinion of counsel, which counsel and
opinion shall be reasonably satisfactory to the Company, to the effect that
the sale, transfer or other disposition satisfies this Section 4.02.
Section 4.03. Transfers Not In Compliance.
In the event of any purported or attempted Transfer of Shares by
a Stockholder that does not comply with this Agreement, the purported
transferee or successor by operation of law shall not be deemed to be a
stockholder of the Company for any purpose and shall not be entitled to any
of the rights of a stockholder, including, without limitation, the right to
vote the Shares or to receive a certificate for the Shares or any dividends
or other distributions on or with respect to the Shares.
Section 4.04. Tag-Along Rights.
Except as provided below, if, at any time during the term of
this Agreement, JLL proposes to directly or indirectly Transfer its Shares
to a Person (other than transfers to (a)persons or entities described in
clauses (ii) or (iv) of the definition of Permitted Transferee or (b)
pursuant to a Public Offering), JLL shall provide the remaining
Stockholders (each a "Notice Recipient") and the Company with not less than
twenty (20) days' prior written notice of such proposed sale, which notice
shall include all of the terms and conditions of such proposed sale and
which shall identify such purchaser (the "Sale Notice"); Each Notice
Recipient shall have the option, exercisable by written notice to JLL
within ten (10) days after the receipt of the Sale Notice, to require JLL
to arrange for such purchaser or purchasers to purchase the same percentage
(the "Percentage") of the Shares then owned by such Notice Recipient as the
ratio of the total number of Shares which are to be sold by JLL pursuant to
the proposed sale to the total number of Shares owned by JLL immediately
prior to such Transfer, or any lesser amount of Shares as such Notice
Recipient shall desire, together with JLL's Shares at the same time as, and
upon the same terms and conditions (including all direct or indirect
consideration or compensation) at which, JLL sells its Shares; provided
that such terms and conditions shall (i) not include a covenant not to
compete or (ii) provide for indemnity or contribution in excess of such
Notice Recipient's proceeds from such sale. If a Notice Recipient shall so
elect, JLL agrees that it shall either (a) arrange for the proposed
purchaser or purchasers to purchase all or a portion (as such Notice
Recipient shall specify) of the same Percentage of the Shares then owned
by such Notice Recipient at the same time as and upon the same terms and
conditions at which JLL sells its Shares (it being understood that in the
event such Notice Recipient's Shares require exercise, conversion or
exchange to effect such sale, such exercise, conversion or exchange may be
made simultaneously with the closing of such sale), and provided that if
such purchaser or purchasers shall elect to purchase only such aggregate
number of Shares as originally agreed with JLL, then the number of Shares
to be sold by JLL and all Notice Recipients electing to participate in the
proposed sale shall be reduced pro rata to such aggregate number, or (b)
not effect the proposed sale to such purchaser or purchasers. In the event
that a Notice Recipient does not exercise its right to participate in such
sale or declines to so participate, JLL shall have 120 days from the date
of such Sale Notice to consummate the transaction on the terms set forth
therein without being required to provide an additional Sale Notice to the
remaining Stockholders. Notwithstanding the foregoing, JLL shall not be
obligated to provide any rights pursuant to this Section 4.04 unless and
until JLL has previously Transferred an aggregate of at least 482,000 of
its Shares.
Section 4.05 Restrictions on New Company Common Stock Acquired After the
Date Hereof.
No Stockholder or any of its controlled or commonly controlled
Affiliates may acquire additional shares of New Company Common Stock if, as
a result of any such acquisition, such Stockholder's ownership (together
with the ownership of any of its controlled or commonly controlled
Affiliates) would be in excess of 50% of the then outstanding shares of New
Company Common Stock. Shares of New Company Common Stock acquired by any
Stockholder after the date of this Agreement shall be treated the same as,
and shall be subject to the same restrictions as, Shares held by such
Stockholder as of the date of this Agreement for purposes of this
Agreement.
ARTICLE V
Registration Rights
-------------------
Section 5.01. Demand Registrations.
(a) Requests for Registration. During the Registration
Period, Stockholders holding the Requisite Amount of Registrable Securities
shall be entitled to make a written request of the Company (a "Demand") for
registration under the Securities Act of all or part of the Registrable
Securities (a "Demand Registration"). Such Demand shall specify: (i) the
aggregate number of Registrable Securities requested to be registered, (ii)
the intended method of distribution in connection with such Demand
Registration to the extent then known and (iii) the identity of the
Stockholder or Stockholders (each, a "Demanding holder") requesting such
Demand. Within ten (10) days after receipt of a Demand, the Company shall
give written notice of such Demand to all other Stockholders and shall
include in such registration all Registrable Securities with respect to
which the Company has received a written request for inclusion therein
within twenty (20) days after the receipt by such Stockholder of the
Company's notice required by this paragraph.
(b) Number of Demands. Each of JLL, TSG, Argosy, Chase
and Nomura shall be entitled to two (2) Demand Registrations; provided,
however, that each Stockholder who is identified as a Demanding holder
shall be deemed to have made a demand with respect to such Demand
Registration.
(c) Satisfaction of Obligations. A registration shall
not be treated as a permitted Demand for a Demand Registration until (i)
the applicable registration statement under the Securities Act has been
filed with the Commission with respect to such Demand Registration (which
shall include any registration statement that is not withdrawn by holders
of Registrable Securities in the circumstances contemplated by Section
5.03), and (ii) such registration statement shall have been maintained
continuously effective for a period of at least ninety (90) days or such
shorter period as all Registrable Securities included therein have been
disposed of thereunder in accordance with the manner of distribution set
forth in such registration statement.
(d) Availability of Short Form Registrations. The
Company shall use its best efforts to comply with the requirements for use
of short form registration for the sale of securities under the Securities
Act.
(e) Restrictions on Demand Registrations. The Company
shall not be obligated (i) in the case of a Demand Registration, to
maintain the effectiveness of a registration statement under the Securities
Act, for a period longer than ninety (90) days or (ii) to effect any Demand
Registration within one hundred eighty (180) days after the effective date
of (A) a "firm commitment" underwritten registration in which all
Stockholders were given "piggyback" rights pursuant to Section 5.02 hereof
(provided that, with respect to such a registration in which such piggyback
rights were exercised, each such Stockholder exercising such piggyback
rights was permitted to include in such registration at least 75% of the
Registrable Securities that such Stockholder sought to include therein) or
(B) any other Demand Registration. In addition, the Company shall be
entitled to postpone (upon written notice to all Stockholders) for up to
ninety (90) days the filing or the effectiveness of a registration
statement in respect of a Demand (but no more than once in any period of
twelve (12) consecutive months) if the Board determines in good faith and
in its reasonable judgment that effecting the Demand Registration in
respect of such Demand would have a material adverse affect on any proposal
or plan by the Company to engage in any debt or equity offering, material
acquisition or disposition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or other similar
transaction. In the event of a postponement by the Company of the filing
or effectiveness of a registration statement in respect of a Demand, the
Demanding holders shall have the right to withdraw such Demand in
accordance with Section 5.03 hereof.
(f) Participation in Demand Registrations. The Company
shall not include any securities other than Registrable Securities in a
Demand Registration, except with the written consent of the holders of the
majority of the Registrable Securities sought to be registered pursuant to
such Demand Registration held by all the Demanding holders. If, in
connection with a Demand Registration, any managing underwriter (or, if
such Demand Registration is not an underwritten offering, a nationally
recognized independent underwriter selected by the Demanding holders of a
majority of the Registrable Securities held by all the Demanding holders
(which such underwriter shall be reasonably acceptable to the Company and
whose fees and expenses shall be borne solely by the Company)) advises the
Company and the Demanding holders of a majority of the Registrable
Securities held by all the Demanding holders that, in its opinion, the
inclusion of all the Registrable Securities and, if authorized pursuant to
this paragraph, other securities of the Company, in each case, sought to be
registered in connection with such Demand Registration would adversely
affect the marketability of the Registrable Securities sought to be sold
pursuant thereto, then the Company shall include in the registration
statement applicable to such Demand Registration only such securities as
the Company and the holders of Registrable Securities sought to be
registered therein ("Demanding Sellers") are advised by such underwriter
can be sold without such an effect (the "Maximum Demand Number"), as
follows and in the following order of priority:
(i) first, the number of Registrable Securities
received pursuant to the Merger (excluding, for these purposes, Registrable
Securities issued upon exercise of Warrants received pursuant to the
Merger) sought to be registered by each Demanding Seller, pro rata in
proportion to the number of Registrable Securities received pursuant to the
Merger sought to be registered by all Demanding Sellers; and
(ii) second, if the number of Registrable Securities
to be included under clause (i) above is less than the Maximum Demand
Number, the number of Registrable Securities received other than pursuant
to the Merger (including, for these purposes, Registrable Securities issued
upon exercise of Warrants received pursuant to the Merger) sought to be
registered by each Demanding Seller, pro rata in proportion to the number
of Registrable Securities not received pursuant to the Merger sought to be
registered by all Demanding Sellers; and
(iii) third, if the number of Registrable Securities
to be included under clauses (i) and (ii) above is less than the Maximum
Demand Number, the number of securities sought to be included by each other
seller, pro rata in proportion to the number of securities sought to be
sold by all such other sellers, which in the aggregate, when added to the
number of securities to be included pursuant to clauses (i) and (ii) above,
equals the Maximum Demand Number.
(g) Selection of Underwriters. If the Demanding holders
of a majority of the Registrable Securities held by all the Demanding
holders request that such Demand Registration be an underwritten offering,
then such holders shall select a nationally recognized underwriter or
underwriters to manage and administer such offering, such underwriter or
underwriters, as the case may be, to be subject to the approval of the
Company's Board of Directors, which approval shall not be unreasonably
withheld or delayed.
(h) Other Registrations. If the Company has received a
Demand and if the applicable registration statement in respect of such
Demand has not been withdrawn or abandoned, the Company will not file or
cause to be effected any other registration of any of its equity securities
or securities convertible or exchangeable into or exercisable for its
equity securities under the Securities Act (other than a registration
relating to the Company employee benefit plans, exchange offers by the
Company or a merger or acquisition of a business or assets by the Company,
including, without limitation, a registration on Form S-4 or S-8 or any
successor form), whether on its own behalf or at the request of any holder
or holders of such securities, until a period of at least ninety (90) days
has elapsed from the effective date of any Demand Registration, unless a
shorter period of time is approved by the Demanding holders of a majority
of the Registrable Securities held by all the Demanding holders.
Notwithstanding the foregoing, the Company shall be entitled to postpone
any such Demand Registration and may file or cause to be effected such
other registration in accordance with the terms of Section 5.01(e) hereof.
Section 5.02 Piggyback Registrations.
(a) Right to Piggyback. During the Registration Period,
whenever the Company proposes to register any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (other than a registration relating to
the Company employee benefit plans, exchange offers by the Company or a
merger or acquisition of a business or assets by the Company including,
without limitation, a registration on Form S-4 or Form S-8 or any successor
form) (a "Piggyback Registration"), the Company shall give all Stockholders
prompt written notice thereof (but not less than ten (10) days prior to the
filing by the Company with the Commission of any registration statement
with respect thereto). Such notice (a "Piggyback Notice") shall specify,
at a minimum, the number of securities proposed to be registered, the
proposed date of filing of such registration statement with the Commission,
the proposed means of distribution, the proposed managing underwriter or
underwriters (if any and if known), and a good faith estimate by the
Company of the proposed minimum offering price of such securities. Upon the
written request of a Stockholder given within ten (10) business days of
such Stockholder's receipt of the Piggyback Notice (which written request
shall specify the number of Registrable Securities intended to be disposed
of by such Stockholder and the intended method of distribution thereof),
the Company shall include in such registration all Registrable Securities
with respect to which the Company has received such written requests for
inclusion.
(b) Priority on Piggyback Registrations. If, in
connection with a Piggyback Registration, any managing underwriter (or, if
such Piggyback Registration is not an underwritten offering, a nationally
recognized independent underwriter selected by the Company (reasonably
acceptable to the holders of a majority of the Registrable Securities
sought to be included in such Piggyback Registration and whose fees and
expenses shall be borne solely by the Company)) advises the Company and the
holders of the Registrable Securities to be included in such Piggyback
Registration, that, in its opinion, the inclusion of all the securities
sought to be included in such Piggyback Registration by the Company, any
Persons who have sought to have shares registered thereunder pursuant to
rights to demand (other than pursuant to so-called "piggyback" or other
incidental or participation registration rights) such registration (such
demand rights being "Other Demand Rights" and such Persons being "Other
Demanding Sellers"), any holders of Registrable Securities seeking to sell
such securities in such Piggyback Registration ("Piggyback Sellers") and
any other proposed sellers, in each case, if any, would adversely affect
the marketability of the securities sought to be sold pursuant thereto,
then the Company shall include in the registration statement applicable to
such Piggyback Registration only such securities as the Company, the Other
Demanding Sellers, and the Piggyback Sellers are so advised by such
underwriter can be sold without such an effect (the "Maximum Piggyback
Number"), as follows and in the following order of priority:
(i) if the Piggyback Registration is an offering on
behalf of the Company and not any Person exercising Other Demand
Rights (whether or not other Persons seek to include securities
therein pursuant to so-called "piggyback" or other incidental or
participatory registration rights) (a "Primary Offering"), then (A)
first, such number of securities to be sold by the Company as the
Company, in its reasonable judgment and acting in good faith and in
accordance with sound financial practice, shall have determined, (B)
second, if the number of securities to be included under clause (A)
above is less than the Maximum Piggyback Number, the number of
Registrable Securities received pursuant to the Merger (excluding,
for these purposes, Registrable Securities issued upon exercise of
Warrants received pursuant to the Merger) sought to be registered by
each Piggyback Seller, pro rata in proportion to the number of
Registrable Securities received pursuant to the Merger sought to be
registered by all the Piggyback Sellers, (C) third, if the number of
securities to be included under clauses (A) and (B) above is less
than the Maximum Piggyback Number the number of Registrable
Securities received other than pursuant to the Merger (including, for
these purposes, Registrable Securities issued upon exercise of
Warrants received pursuant to the Merger) sought to be registered by
each Piggyback Seller, pro rata in proportion to the Registrable
Securities not received in the Merger sought to be registered by all
the Piggyback Sellers and all other proposed sellers, which in the
aggregate, when added to the number of securities to be registered
under clauses (A) and (B) above, equals the Maximum Piggyback Number;
(ii) if the Piggyback Registration is an offering
other than pursuant to a Primary Offering, then (A) first, such
number of securities sought to be registered by each Other Demanding
Seller, pro rata in proportion to the number of securities sought to
be registered by all such Other Demanding Sellers, (B) second, if
the number of securities to be included under clause (A) above is
less than the Maximum Piggyback Number, the number of Registrable
Securities received pursuant to the Merger (excluding, for these
purposes, Registrable Securities issued upon exercise of Warrants
received pursuant to the Merger) sought to be registered by each
Piggyback Seller, pro rata in proportion to the number of Registrable
Securities received pursuant to the Merger sought to be registered by
all the Piggyback Sellers, (C) third, if the number of securities to
be included under clauses (A) and (B) above is less than the Maximum
Piggyback Number, the number of Registrable Securities received other
than pursuant to the Merger (including, for these purposes,
Registrable Securities issued upon exercise of Warrants received
pursuant to the Merger) sought to be registered by each Piggyback
Seller, pro rata in proportion to the Registrable Securities received
other than pursuant to the Merger sought to be registered by all the
Piggyback Sellers and all other proposed sellers, which in the
aggregate, when added to the number of securities to be registered
under clauses (A) and (B) above, equals the Maximum Piggyback Number.
(c) Withdrawal by the Company. If, at any time after
giving written notice of its intention to register any of its securities as
set forth in Section 5.02 and prior to time the registration statement
filed in connection with such registration is declared effective, the
Company shall determine for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to
each Stockholder and thereupon shall be relieved of its obligation to
register any Registrable Securities in connection with such particular
withdrawn or abandoned registration (but not from its obligation to pay the
Registration Expenses in connection therewith as provided herein). In the
event that the Piggyback Sellers of such a registration hold the Requisite
Amount of Registrable Securities, such holders may continue the
registration as a Demand Registration. The continuation of such
registration shall be counted as a Demand for all Stockholders who continue
as participants in such registration.
Section 5.03. Withdrawal Rights.
Any Stockholder having notified or directed the Company
to include any or all of its Registrable Securities in a registration
statement under the Securities Act shall have the right to withdraw any
such notice or direction with respect to any or all of the Registrable
Securities designated for registration thereby by giving written notice to
such effect to the Company prior to the effective date of such registration
statement. In the event of any such withdrawal, the Company shall not
include such Registrable Securities in the applicable registration and such
Registrable Securities shall continue to be Registrable Securities
hereunder. No such withdrawal shall affect the obligations of the Company
with respect to the Registrable Securities not so withdrawn; provided that
in the case of a Demand Registration, if such withdrawal shall reduce the
number of Registrable Securities sought to be included in such registration
below the Requisite Amount, then the Company shall as promptly as
practicable give each holder of Registrable Securities sought to be
registered notice to such effect, referring to this Agreement and
summarizing this Section 5.03, and within five (5) business days following
the effectiveness of such notice, either the Company or the holders of a
majority of the Registrable Securities sought to be registered may, by
written notices made to each holder of Registrable Securities sought to be
registered and the Company, respectively, elect that such registration
statement not be filed or, if theretofore filed, be withdrawn. During such
five (5) business day period, the Company shall not file such registration
statement if not theretofore filed or, if such registration statement has
been theretofore filed, the Company shall not seek, and shall use its best
efforts to prevent, the effectiveness thereof. Any registration statement
withdrawn or not filed (i) in accordance with an election by the Company,
(ii) in accordance with an election by the holders of the majority of the
Registrable Securities sought to be registered pursuant to such Demand
Registration held by all the Demanding holders pursuant to Section 5.01(e)
hereof, (iii) in accordance with an election by the holders of the
majority of the Registrable Securities sought to be registered pursuant to
such Demand Registration held by all the Demanding holders prior to the
effectiveness of the applicable Demand Registration Statement or (iv) in
accordance with an election by the holders of the majority of the
Registrable Securities sought to be registered pursuant to such Demand
Registration held by all the Demanding holders subsequent to the
effectiveness of the applicable Demand Registration Statement, if any
post-effective amendment or supplement to the applicable Demand
Registration Statement contains adverse information regarding the Company
shall not be counted as a Demand. Except as set forth in clause (iv) of the
previous sentence any Demand withdrawn in accordance with an election by
the Demanding holders subsequent to the effectiveness of the applicable
Demand Registration Statement shall be counted as a Demand unless the
Stockholders reimburse the Company for its reasonable out-of-pocket
expenses (but, without implication that the contrary would otherwise be
true, not including any Internal Expenses, as defined below) related to the
preparation and filing of such registration statement (in which event such
registration statement shall not be counted as a Demand hereunder). Upon
the written request of a majority of the Stockholders, the Company shall
promptly prepare a definitive statement of such out-of-pocket expenses in
connection with such registration statement in order to assist such holders
with a determination in accordance with the next preceding sentence.
Section 5.04. Holdback Agreements.
Each Stockholder agrees not to effect any public sale or
distribution (including sales pursuant to Rule 144) of equity securities of
the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the ten (10) day period prior to
the date which the Company has, or in the case of a Demand Registration,
the Demanding holders have, notified the Stockholders that it or they
intend to commence a Public Offering through the sixty (60) day period
immediately following the effective date of any Demand Registration or any
Piggyback Registration (in each case, except as part of such registration),
or, in each case, if later, the date of any underwriting agreement with
respect thereto; provided, however, that the Stockholders shall not be
obligated to comply with this Section 5.04 on more than one (1) occasion in
any nine (9) month period. The holders of 82.5% of the Registrable
Securities included in a Demand Registration may waive the limitation
contained in this paragraph with respect to such Demand Registration.
Section 5.05. Registration Procedures.
(a) Whenever the Stockholders have requested that any
Registrable Securities be registered pursuant to this Agreement (whether
pursuant to Demand Registration or Piggyback Registration), the Company
(subject to its right to withdraw such registration as contemplated by
Section 5.02(c)) shall use its best efforts to effect the registration and
the sale of such Registrable Securities in accordance with the intended
method of disposition thereof and, in connection therewith, the Company
shall as expeditiously as possible:
(i) prepare and file with the Commission a
registration statement with respect to such Registrable Securities on any
form for which the Company then qualifies and is available for the sale of
Registrable Securities to be registered thereunder in accordance with the
intended method of distribution and use its best efforts to cause such
registration statement to become effective within ninety (90) days of the
date hereof;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a continuous period of not less than
ninety (90) days (or, if earlier, until all Registrable Securities included
in such registration statement have been sold thereunder in accordance with
the manner of distribution set forth therein) and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof
as set forth in such registration statement (including, without limitation,
by incorporating in a prospectus supplement or post-effective amendment, at
the request of a seller of Registrable Securities, the terms of the sale of
such Registrable Securities);
(iii) before filing with the Commission any such
registration statement or prospectus or any amendments or supplements
thereto, the Company shall furnish to counsel selected by the Demanding
holders of a majority of the Registrable Securities held by the Demanding
holders, counsel for the underwriter or sales or placement agent, if any,
and any other counsel for holders of Registrable Securities, if any, in
connection therewith, drafts of all such documents proposed to be filed and
provide such counsel with a reasonable opportunity for review thereof and
comment thereon, such review to be conducted and such comments to be
delivered with reasonable promptness;
(iv) promptly (i) notify each seller of Registrable
Securities of each of (x) the filing and effectiveness of the registration
statement and prospectus and any amendment or supplements thereto, (y) the
receipt of any comments from the Commission or any state securities law
authorities or any other governmental authorities with respect to any such
registration statement or prospectus or any amendments or supplements
thereto, and (z) any oral or written stop order with respect to such
registration, any suspension of the registration or qualification of the
sale of such Registrable Securities in any jurisdiction or any initiation
or threatening of any proceedings with respect to any of the foregoing and
(ii) use its best efforts to obtain the withdrawal of any order suspending
the registration or qualification (or the effectiveness thereof) or
suspending or preventing the use of any related prospectus in any
jurisdiction with respect thereto;
(v) furnish to each seller of Registrable
Securities, the underwriters and the sales or placement agent, if any, and
counsel for each of the foregoing, a conformed copy of such registration
statement and each amendment and supplement thereto (in each case,
including all exhibits thereto and documents incorporated by reference
therein) and such additional number of copies of such registration
statement, each amendment and supplement thereto (in such case without such
exhibits and documents) the prospectus (including each preliminary
prospectus) included in such registration statement and prospectus
supplements and all exhibits thereto and documents incorporated by
reference therein and such other documents as such seller, underwriter,
agent or counsel may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Seller;
(vi) if requested by the managing underwriter or
underwriters of any registration or by the Demanding holders of a majority
of the Registrable Securities held by the Demanding holders, subject to
approval of counsel to the Company in its reasonable judgment, promptly
incorporate in a prospectus, supplement or post-effective amendment to the
registration statement such information concerning underwriters and the
plan of distribution of the Registrable Securities as such managing
underwriter or underwriters or such holders reasonably shall furnish to the
Company in writing and request be included therein, including, without
limitation, with respect to the number of Registrable Securities being sold
by such holders to such underwriter or underwriters, the purchase price
being paid therefor by such underwriter or underwriters and with respect to
any other terms of the underwritten offering of the Registrable Securities
to be sold in such offering; and make all required filings of such
prospectus, supplement or post-effective amendment as soon as possible
after being notified of the matters to be incorporated in such prospectus,
supplement or post-effective amendment;
(vii) use its best efforts to register or qualify
such Registrable Securities under such securities or "blue sky" laws of
such jurisdictions as the holders of a majority of Registrable Securities
sought to be registered reasonably request and do any and all other acts
and things which may be reasonably necessary or advisable to enable the
holders of a majority of Registrable Securities sought to be registered to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such holders and keep such registration or
qualification in effect for so long as the registration statement remains
effective under the Securities Act (provided that the Company shall not be
required to (x) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this paragraph, (y)
subject itself to taxation in any such jurisdiction where it would not
otherwise be subject to taxation but for this paragraph or (z) consent to
the general service of process in any jurisdiction where it would not
otherwise be subject to general service of process but for this paragraph);
(viii) notify each seller of such Registrable
Securities, at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, upon the discovery that, or of the
happening of any event as a result of which, the registration statement
covering such Registrable Securities, as then in effect, contains an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or any fact necessary to make the statements therein
not misleading, and promptly prepare and furnish to each such seller a
supplement or amendment to the prospectus contained in such registration
statement so that such Registration Statement shall not, and such
prospectus as thereafter delivered to the purchasers of such Registrable
Securities shall not, contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or any fact
necessary to make the statements therein not misleading;
(ix) cause all such Registrable Securities to be
listed on the New York Stock Exchange and/or any other securities exchange
and included in each established over-the-counter market on which or
through which similar securities of the Company are listed or traded and,
if not so listed or traded, to be listed on the NASD automated quotation
system ("Nasdaq") and if listed on Nasdaq, use its reasonable efforts to
secure designa tion of all such Registrable Securities covered by such
registration statement as a Nasdaq "national market system security" within
the meaning of Rule 11Aa2-1 under the Securities Exchange Act of 1934, as
amended, or, failing that, to secure Nasdaq authorization for such
Registrable Securities;
(x) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or
other agent retained by any such seller or underwriter all financial and
other records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees, attorneys and
independent accountants to supply all information reasonably requested by
any such sellers, underwriters, attorneys, accountants or agents in
connection with such registration statement. Information which the Company
determines, in good faith, to be confidential shall not be disclosed by
such persons unless (x) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in such registration statement,
or (y) the release of such information is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction. Each seller of
Registrable Securities agrees, on its own behalf and on behalf of all its
underwriters, accountants, attorneys and agents, that the information
obtained by it as a result of such inspections shall be deemed confidential
and shall not be used by it as the basis for any market transactions in the
securities of the Company unless and until such is made generally available
to the public. Each seller of Registrable Securities further agrees, on
its own behalf and on behalf of all its underwriters, accountants,
attorneys and agents, that it will, upon learning that disclosure of such
information is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of the information deemed confidential;
(xi) use its best efforts to comply with all
applicable laws related to such registration statement and offering and
sale of securities and all applicable rules and regulations of governmental
authorities in connection therewith (including, without limitation, the
Securities Act and the Exchange Act) and make generally available to its
security holders as soon as practicable (but in any event not later than
fifteen (15) months after the effectiveness of such registration statement)
an earnings statement of the Company and its subsidiaries complying with
Section 11(a) of the Securities Act;
(xii) permit any Stockholder, which Stockholder, in
its sole and exclusive judgment, might be deemed to be an underwriter or
controlling person of the Company, to participate in the preparation of
such registration statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable
judgment of such holder and such holder's counsel should be included;
(xiii) use reasonable best efforts to furnish to each
seller of Registrable Securities a signed counterpart of (x) an opinion of
counsel for the Company and (y) a "comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration
statement, covering such matters with respect to such registration
statement and, in the case of the accountants' comfort letter, with respect
to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountants'
comfort letters delivered to the underwriters in underwritten public
offerings of securities for the account of, or on behalf of, an issuer of
common stock, such opinion and comfort letters to be dated the date of such
opinions and comfort letters are customarily dated in such transactions,
and covering in the case of such legal opinion, such other legal matters
and, in the case of such comfort letter, such other financial matters, as
the holders of a majority of the Registrable Securities being sold may
reasonably request;
(xiv) take all such other actions as the holders of a
majority of the Registrable Securities being sold or the underwriters, if
any, reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities; and
(xv) the Company shall use its best reasonable
efforts so that in lieu of exercising any Warrant prior to or
simultaneously with the filing or the effectiveness of any registration
statement filed pursuant to this Article V, the holder of such Warrant may
sell such Warrant to the underwriter of the offering being registered upon
the undertaking of such underwriter to exercise such Warrant before making
any distribution pursuant to such registration statement and to include the
Common Stock issued upon such conversion among the securities being offered
pursuant to such registration statement. The Company agrees to cause such
Common Stock to be included among the securities being offered pursuant to
such registration statement to be issued within such time as will permit
the underwriter to make and complete the distribution contemplated by the
underwriting.
(b) Underwriting. Without limiting any of the foregoing,
in the event that the offering of Registrable Securities is to be made by
or through an underwriter, the Company shall enter into an underwriting
agreement with a managing underwriter or underwriters containing
representations, warranties, indemnities and agreements customarily
included (but not inconsistent with the agreements contained herein) by an
issuer of common stock in underwriting agreements with respect to offerings
of common stock for the account of, or on behalf of, such issuers. In
connection with the sale of Registrable Securities hereunder, any seller of
such Registrable Securities may, at its option, require that any and all
representations and warranties by, and indemnities and agreements of, the
Company to or for the benefit of such underwriter or underwriters (or which
would be made to or for the benefit of such an underwriter or underwriter
if such sale of Registrable Securities were pursuant to a customary
underwritten offering) be made to and for the benefit of such seller and
that any or all of the conditions precedent to the obligations of such
underwriter or underwriters (or which would be so for the benefit of such
underwriter or underwriters under a customary underwriting agreement) be
conditions precedent to the obligations of such seller in connection with
the disposition of its securities pursuant to the terms hereof (it being
agreed that in connection with any Demand Registration, without limiting
any rights or remedies of the Stockholders, in the event any such condition
precedent shall not be satisfied and, if not so satisfied, shall not be
waived by the holders of a majority of the Registerable Securities to be
included in such Demand Registration, such Demand Registration shall not be
counted as a permitted Demand hereunder). In connection with any offering
of Registrable Securities registered pursuant to this Agreement, the
Company shall (x) furnish to the underwriter, if any (or, if no
underwriter, the sellers of such Registrable Securities), unlegended
certificates representing ownership of the Registrable Securities being
sold, in such denominations as requested and (y) instruct any transfer
agent and registrar of the Registrable Securities to release any stop
transfer order with respect thereto.
(c) Return of Prospectuses. Each seller of Registrable
Securities hereunder agrees that upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
5.05(a)(viii), such seller shall forthwith discontinue such seller's
disposition of Registrable Securities pursuant to the applicable
registration statement and prospectus relating thereto until such seller's
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 5.05(a)(viii) and, if so directed by the Company,
deliver to the Company all copies, other than permanent file copies, then
in such seller's possession of the prospectus current at the time of
receipt of such notice relating to such Registrable Securities. In the
event the Company shall give such notice, the ninety (90)-day period during
which such registration statement must remain effective pursuant to this
Agreement shall be extended by the number of days during the period from
the date of giving of a notice regarding the happening of an event of the
kind described in Section 5.05(a)(viii) to the date when all such sellers
shall receive such a supplemented or amended prospectus and such prospectus
shall have been filed with the Commission.
Section 5.06. Registration Expenses.
All expenses incident to the Company's performance of, or
compliance with, its obligations under this Agreement including, without
limitation, all registration and filing fees, all fees and expenses of
compliance with securities and "blue sky" laws (including, without
limitation, the fees and expenses of counsel for underwriters or placement
or sales agents in connection therewith), all printing and copying
expenses, all messenger and delivery expenses, all fees and expenses of
underwriters and sales and placement agents in connection therewith
(excluding discounts and commissions and the fees and expenses of counsel
therefor), all fees and expenses of the Company's independent certified
public accountants and counsel (including, without limitation, with respect
to "comfort" letters and opinions) (collectively, the "Registration
Expenses") shall be borne by the Company; provided, however, that in the
case of a Piggyback Registration, all incremental costs resulting from
applicable federal and blue sky registration and filing fees, National
Association of Securities Dealers filing fees, the expenses and fees for
listing the securities to be registered on each securities exchange and
included in each established over-the-counter market on which similar
securities issued by the Company are then listed or traded or for listing
on Nasdaq and underwriting discounts and commissions allocable to each
Stockholder selling Registrable Securities shall be borne by such
Stockholder. The Company shall be responsible for the fees and expenses of
one (1) legal counsel retained by all of the Stockholders in the aggregate
in connection with the sale of Registrable Securities. Notwithstanding the
foregoing, the Company shall not be responsible for the fees and expenses
of any additional counsel, or any of the accountants, agents or experts
retained by the Stockholders in connection with the sale of Registrable
Securities. The Company will pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties, the expense of any annual audit and
the expense of any liability insurance) (collectively, "Internal Expenses")
and the expenses and fees for listing the securities to be registered on
each securities exchange and included in each established over-the-counter
market on which similar securities issued by the Company are then listed or
traded or for listing on Nasdaq.
Section 5.07. Indemnification.
(a) By the Company. The Company agrees to indemnify, to
the fullest extent permitted by law, each holder of Registrable Securities
being sold, its officers, directors, employees and agents and each Person
who controls (within the meaning of the Securities Act) such holder or such
an other indemnified Person against all losses, claims, damages,
liabilities and expenses (collectively, the "Losses") caused by, resulting
from or relating to any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or a
fact necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information furnished
to the Company by such holder expressly for use therein or by such holder's
failure to deliver a copy of the registration statement or prospectus or
any amendments or supplements thereto after the Company has furnished such
holder with a sufficient number of copies of the same. In connection with
an underwritten offering and without limiting any of the Company's other
obligations under this Agreement, the Company shall indemnify such
underwriters, their officers, directors, employees and agents and each
Person who controls (within the meaning of the Securities Act) such
underwriters or such an other indemnified Person to the same extent as
provided above with respect to the indemnification of the holders of
Registrable Securities being sold.
(b) By Stockholders. In connection with any registration
statement in which a holder of Registrable Securities is participating,
each such holder will furnish to the Company in writing information
regarding such holder's ownership of Registrable Securities and its
intended method of distribution thereof and, to the extent permitted by
law, shall indemnify the Company, its directors, officers, employees and
agents and each Person who controls (within the meaning of the Securities
Act) the Company or such an other indemnified Person against all Losses
caused by, resulting from or relating to any untrue or alleged untrue
statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission
is caused by and contained in such information so furnished in writing by
such holder; provided, however, that each holder's obligation to indemnify
the Company hereunder shall be apportioned between each holder based upon
the net amount received by each holder from the sale of Registrable
Securities, as compared to the total net amount received by all of the
holders of Registrable Securities sold pursuant to such registration
statement, no such holder being liable to the Company in excess of such
apportionment.
(c) Notice. Any Person entitled to indemnification
hereunder shall give prompt written notice to the indemnifying party of any
claim with respect to which its seeks indemnification; provided, however,
the failure to give such notice shall not release the indemnifying party
from its obligation, except to the extent that the indemnifying party has
been materially prejudiced by such failure to provide such notice.
(d) Defense of Actions. In any case in which any such
action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof the indemnifying
party will not (so long as it shall continue to have the right to defend,
contest, litigate and settle the matter in question in accordance with this
paragraph) be liable to such indemnified party hereunder for any legal or
other expense subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation,
supervision and monitoring (unless such indemnified party reasonably
objects to such assumption on the grounds that there may be defenses
available to it which are different from or in addition to the defenses
available to such indemnifying party, in which event the indemnified party
shall be reimbursed by the indemnifying party for the expenses incurred in
connection with retaining separate legal counsel). An indemnifying party
shall not be liable for any settlement of an action or claim effected
without its consent. The indemnifying party shall lose its right to
defend, contest, litigate and settle a matter if it shall fail to
diligently contest such matter (except to the extent settled in accordance
with the next following sentence). No matter shall be settled by an
indemnifying party without the consent of the indemnified party (which
consent shall not be unreasonably withheld).
(e) Survival. The indemnification provided for under
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified Person and will
survive the transfer of the Registrable Securities and the termination of
this Agreement.
(f) Contribution. If recovery is not available under the
foregoing indemnification provisions for any reason or reasons other than
as specified therein, any Person who would otherwise be entitled to
indemnification by the terms thereof shall nevertheless be entitled to
contribution with respect to any Losses with respect to which such Person
would be entitled to such indemnification but for such reason or reasons.
In determining the amount of contribution to which the respective Persons
are entitled, there shall be considered the Persons' relative knowledge and
access to information concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent any statement or
omission, and other equitable considerations appropriate under the
circumstances. It is hereby agreed that it would not necessarily be
equitable if the amount of such contribution were determined by pro rata or
per capita allocation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not found guilty of such
fraudulent misrepresentation. Notwithstanding the foregoing, no
Stockholder shall be required to make a contribution in excess of the net
amount received by such holder from the sale of Registrable Securities.
ARTICLE VI
Miscellaneous
-------------
(a) Legends. Each of the Stockholders agrees that
substantially the following legends shall be placed on the certificates
representing any Shares owned by them:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF A
STOCKHOLDERS AGREEMENT DATED AS OF JULY 2, 1996, A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF HAYES WHEELS INTERNATIONAL, INC. AND IS
AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR. THE HOLDER
OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE
BOUND BY ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT.
The Company agrees to remove the legend on the Shares upon the resale of
such Shares in accordance with the terms of this Agreement (other than
pursuant to Section 4.01(a)(i) and Section 4.01(b)(iii) hereof).
(b) Specific Performance. Each of the Stockholders
acknowledges and agrees that in the event of any breach of this Agreement,
the non-breaching party or parties would be irreparably harmed and could
not be made whole by monetary damages. The Stockholders hereby agree that
in addition to any other remedy to which they may be entitled at law or in
equity, they shall be entitled to compel specific performance of this
Agreement in any action instituted in any court of the United States or any
state thereof having subject matter jurisdiction for such action.
(c) Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning
or construction of any provisions hereof.
(d) Entire Agreement. This Agreement and the
Subscription Agreement constitute the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein, and
there are no restrictions, promises, representations, warranties,
covenants, conditions or undertakings with respect to the subject matter
hereof, other than those expressly set forth or referred to herein. This
Agreement and the Subscription Agreement supersede all prior agreements and
understandings between the parties hereto with respect to the subject
matter hereof.
(e) Proxy. For so long as this Agreement is in effect,
if any Stockholder fails or refuses to vote that Stockholder's Shares
pursuant to this Agreement, then, without further action by such
Stockholder, each other Stockholder shall have an irrevocable proxy coupled
with an interest to vote such Stockholder's Shares in accordance with this
Agreement, and each Stockholder hereby grants to the other Stockholders
such irrevocable proxy coupled with an interest.
(f) Notices. All notices and other communications
hereunder shall be in writing and shall be delivered personally or by
next-day courier or telecopied with confirmation of receipt, to the parties
at the addresses specified below (or at such other address for a party as
shall be specified by like notice; provided that notices of change of
address shall be effective only upon receipt thereof). Any such notice
shall be effective upon receipt, if personally delivered or telecopied, or
one day after delivery to a courier for next-day delivery.
If to the Company, to:
Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
Telecopier: (313) 942-5199
With copies to: Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
Attn: General Counsel
Telecopier: (313) 942-5199
and
Altheimer & Gray
10 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
Attention: Louis B. Goldman, Esquire
Telecopier: (312) 715-4800
If to JLL, to:
Joseph Littlejohn & Levy
450 Lexington Avenue
New York, New York 10017
Attention: Paul Levy
Telecopier: (212) 286-8624
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Rodney Square
Wilmington, Delaware 19801
Attention: Robert B. Pincus, Esquire
Telecopier: (302) 651-3001
If to Nomura, to:
Nomura Holding America, Inc.
Two World Financial Center
Building B
New York, New York 10281
Attention: Dennis Dolan
Telecopier: (212) 667-1708
If to TSG, to:
TSG Capital Fund II, L.P.
177 Broad Street
Stamford, Connecticut 06901
Attention: Cleveland Christophe
Telecopier: (203) 406-1590
With a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: James B. Carlson, Esquire
Telecopier: (212) 262-1910
If to Argosy, to:
CIBC WG Argosy Merchant Fund II, LLC
1325 Avenue of the Americas
22nd Floor
New York, New York 10019
Attention: Jay Bloom
Telecopier: (212) 664-1429
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Attention: Laurence D. Weltman, Esquire
Telecopier: (212) 832-8111
If to Chase, to:
Chase Capital Partners
380 Madison Avenue
12th Floor
New York, New York 10017
Attention: Brett Ingersoll
Telecopier: (212) 622-3101
With a copy to:
O'Sullivan, Graeve & Karabell
30 Rockefeller Plaza
41st Floor
New York, New York 10012
Attention: John Soydam, Esquire
Telecopier: (212) 408-2420
(g) Applicable Law. The substantive laws of the State of
New York shall govern the interpretation, validity and performance of the
terms of this Agreement, regardless of the law that might be applied under
applicable principles of conflicts of laws.
THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO
DISPUTES HEREUNDER; ALL SUCH DISPUTES 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 AND MAY BE ENTERED AS A JUDGMENT IN A
COURT HAVING JURISDICTION OVER THE PARTIES.
(h) Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of
the remainder of this Agreement in such jurisdiction or the validity,
legality or enforceability of this Agreement, including any such provision,
in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest
extent permitted by law.
(i) Successors; Assigns. The provisions of this
Agreement shall be binding upon the parties hereto and their respective
heirs, successors and permitted assigns. Neither this Agreement nor the
rights or obligations of any Stockholder hereunder may be assigned, except
in connection with the transfer by a Stockholder of shares of New Company
Common Stock to a Permitted Transferee. Any such attempted assignment in
contravention of this Agreement shall be void and of no effect.
(j) Amendments. This Agreement may not be amended,
modified or supplemented unless such modification is in writing and signed
by the Company and the holders of at least 82.5% of the Shares outstanding
on the date hereof less any Shares subsequently Transferred other than to a
Person described in clauses (i) or (ii) of the definition of a Permitted
Transferee.
(k) Waiver. Any waiver (express or implied) of any
default or breach of this Agreement shall not constitute a waiver of any
other or subsequent default or breach.
(l) Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same Agreement.
(m) Recapitalization. In the event that any capital
stock or other securities are issued in respect of, in exchange for, or in
substitution of, any shares of New Company Common Stock by reason of any
reorganization, recapitalization, reclassification, merger, consolidation,
spin-off, partial or complete liquidation, stock dividend, split-up, sale
of assets, distribution to stockholders or combination of the shares of New
Company Common Stock or any other change in the Company's capital
structure, appropriate adjustments shall be made to the terms hereof if
necessary to fairly and equitably preserve the original rights and
obligations of the parties hereto under this Agreement.
(n) Termination. Unless terminated earlier pursuant to
the terms contained herein, this Agreement shall terminate on the eighth
anniversary of the date hereof.
IN WITNESS WHEREOF, the undersigned hereby agrees to be
bound by the terms and provisions of this Stockholders Agreement as of the
date first above written.
HAYES WHEELS INTERNATIONAL, INC.
By:/s/ Daniel M. Sandberg
--------------------------
Name: Daniel M. Sandberg
Title:
JOSEPH LITTLEJOHN & LEVY FUND II, L.P.
By: JLL ASSOCIATES II, L.P.,
its General Partner
By:/s/ Paul S. Levy
--------------------
Name: Paul S. Levy
Title: General Partner
CHASE EQUITY ASSOCIATES, a
California Limited Partnership
By: CHASE CAPITAL PARTNERS,
its General Partner
By:/s/ Donald J. Hofmann
-------------------------
Name: Donald J. Hofmann
Title: General Partner
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By:/s/ Jay Bloom
-------------------
Name: Jay Bloom
Title:
NOMURA HOLDING AMERICA, INC.
By:/s/ Lawrence J. Pomerantz
-----------------------------
Name: Lawrence J. Pomerantz
Title: Executive Managing Director
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
-------------------------------
Name: Cleveland A. Christophe
Title: President
Exhibit A
---------
Column A Column B
-------- --------
Shares of New Warrants to purchase
Name of Company Common New Company
Stockholder Stock Owned (#) Common Stock Held (#)
- ----------- --------------- ---------------------
JLL 4,817,086 912,689
TSG 1,406,250 33,750
Argosy 1,250,000 30,000
Chase 625,000* 15,000**
Nomura 468,750 11,250
- ------------------------------
* Includes 74,513 shares of non-voting New Company Common Stock.
** Consists of Warrants to purchase non-voting New Company Common Stock.
Exhibit B
---------
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of _______________, between Hayes Wheels
International, Inc., a Delaware corporation (the "Company"), and
_______________ the ("Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors the most capable persons available;
WHEREAS, Indemnitee is a director of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against directors of
public companies in today's environment;
WHEREAS, the Restated Certificate of Incorporation (the
"Charter") permits, and the By-laws (the "By-Laws") of the Company require,
the Company to indemnify its directors to the fullest extent permitted by
law and the Indemnitee has agreed to serve as a director of the Company in
part in reliance on such Charter and By-Laws;
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's
service to the Company in an effective manner, the increasing difficulty in
obtaining satisfactory director liability insurance coverage and
Indemnitee's reliance on the aforesaid Charter and By-Laws, and in part to
provide Indemnitee with specific contractual assurance that the protection
afforded by such Charter and By-Laws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of the
Charter and By-Laws or any change in the composition of the Company's Board
of Directors or acquisition transaction relating to the Company), the
Company wishes to provide in this Agreement for the indemnification of and
the advancing of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted by law and as set forth in this Agreement,
and, to the extent insurance is maintained, for the continued coverage of
Indemnitee under the Company's directors' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of
Indemnitee continuing to serve the Company directly or, at its request,
another enterprise, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Certain Definitions:
-------------------
(a) Change in Control: shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended), other than a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company,
is or becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the
Company representing 30% or more of the total voting power
represented by the Company's then outstanding Voting Securities
(other than Joseph Littlejohn & Levy Fund II, L.P. or any of its
affiliates), or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii)
the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity)
at least [80%] of the total voting power represented by the
Voting Securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of
transactions) all or substantially all the Company's assets.
(b) Claim: any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether instituted
by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action, suit
or proceeding, whether civil, criminal, administrative,
investigative or other.
(c) Expenses: include attorneys' fees and all other costs, expenses
and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in
or participate in any Claim relating to any Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the
request of the Company as a director, officer, employee,
trustee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise,
or by reason of anything done or not done by Indemnitee in any
such capacity.
(e) Independent Legal Counsel: an attorney or firm of attorneys,
selected in accordance with the provisions of Section 3, who
shall not have otherwise performed services for the Company, any
of its subsidiaries or Indemnitee within the last two years
(other than with respect to matters concerning the rights of
Indemnitee under this Agreement, or of other indemnitees under
similar indemnity agreements).
(f) Reviewing Party: any appropriate person or body consisting of a
member or members of the Company's Board of Directors or any
other person or body appointed by the Board who is not a party
to the particular Claim for which Indemnitee is seeking
indemnification, or Independent Legal Counsel.
(g) Voting Securities: any securities of the Company which vote
generally in the election of directors.
2. Basic Indemnification Arrangement. (a) In the event Indemnitee
was, is or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant in, a
Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee to the fullest extent permitted by law
as soon as practicable, but in any event no later than thirty days after
written demand is presented to the Company, against any and all Expenses,
judgments, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties or amounts paid
in settlement) of such Claim. If so requested by Indemnitee, the Company
shall advance (within two business days of such request) any and all
Expenses to Indemnitee (an "Expense Advance"). Notwithstanding anything in
this Agreement to the contrary, except as provided in Section 5 hereof,
prior to a Change in Control, Indemnitee shall not be entitled to
indemnification or Expense Advances pursuant to this Agreement in
connection with any Claim initiated by Indemnitee unless the Board of
Directors has authorized or consented to the initiation of such Claim.
(b) Notwithstanding the foregoing, (i) the obligations of the
Company under Section 2(a) shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion, in any
case in which the Independent Legal Counsel referred to in Section 3 hereof
is involved) that Indemnitee would not be permitted to be indemnified under
applicable law, and (ii) the obligation of the Company to make an Expense
Advance pursuant to Section 2(a) shall be subject to the condition that,
if, when and to the extent that the Reviewing Party determines that
Indemnitee would not be permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore
paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure
a determination that Indemnitee should be indemnified under applicable law,
any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or lapsed).
If there has not been a Change in Control, the Reviewing Party shall be
selected by the Board of Directors, and, if there has been such a Change in
Control (other than a Change in Control which has been approved by a
majority of the Company's Board of Directors who were directors immediately
prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 3 hereof. If there has
been no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall have
the right to commence litigation in any court in the State of Delaware
having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the
legal or factual bases therefor, and the Company hereby consents to service
of process and to appear in any such proceeding. Any determination by the
Reviewing Party otherwise shall be conclusive and binding on the Company
and Indemnitee.
3. Change in Control. The Company agrees that, if there is a
Change in Control of the Company (other than a Change in Control which has
been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control), then with respect
to all matters thereafter arising concerning the rights of Indemnitee to
indemnity payments and Expense Advances under this Agreement or any other
agreement or Charter or By-law provision now or hereafter in effect
relating to Claims for Indemnifiable Events, the Company shall seek legal
advice only from Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written
opinion to the Company and Indemnitee as to whether and to what extent the
Indemnitee would be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the Independent Legal Counsel
referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant
hereto.
4. Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys'
fees) and, if requested by Indemnitee, shall (within two business days of
such request) advance such expenses to Indemnitee, which are incurred by
Indemnitee in connection with any action brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Charter or By-Law provision now or
hereafter in effect relating to Claims for Indemnifiable Events and/or (ii)
recovery under any directors' liability insurance policies maintained by
the Company, regardless of whether Indemnitee ultimately is determined to
be entitled to such indemnification, advance expense payment or insurance
recovery, as the case may be.
5. Partial Indemnity, Etc. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has
been successful on the merits or otherwise in defense of any or all Claims
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, Indemnitee
shall be indemnified against all Expenses incurred in connection therewith.
6. Burden of Proof. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder the burden of proof shall be on the Company to
establish that Indemnitee is not so entitled.
7. No Presumptions. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon
a plea of nolo contendere, or its equivalent, shall not create a
presumption that Indemnitee did not meet any particular standard of conduct
or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law. In addition, neither
the failure of the Reviewing Party to have made a determination as to
whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such
belief, prior to the commencement of legal proceedings by Indemnitee to
secure a judicial determination that Indemnitee should be indemnified under
applicable law shall be a defense to Indemnitee's claim or create a
presumption that Indemnitee has not met any particular standard of conduct
or did not have any particular belief.
8. Nonexclusivity, Etc. The rights of the Indemnitee hereunder
shall be in addition to any other rights Indemnitee may have under the
Charter, By-Laws or the Delaware General Corporation Law or otherwise. To
the extent that a change in the Delaware General Corporation Law (whether
by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Charter, By-Laws and
this Agreement, it is the intent of the parties hereto that Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by such
change.
9. Liability Insurance. To the extent the Company maintains an
insurance policy or policies providing directors' liability insurance,
Indemnitee shall be covered by such policy or policies, in accordance with
its or their terms, to the maximum extent of the coverage available for any
Company director.
10. Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual
of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the timely
filing of a legal action within such two-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any
such cause of action such shorter period shall govern.
11. Amendments, Etc. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing
waiver.
12. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company effectively
to bring suit to enforce such rights.
13. No Duplication of Payments. The Company shall not be liable
under this Agreement to make any payment in connection with any Claim made
against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, Charter or By-law provision or
otherwise) of the amounts otherwise indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor
by purchase, merger, consolidation or otherwise to all or substantially all
of the business and/or assets of the Company, spouses, heirs, executors and
personal and legal representatives. This Agreement shall continue in
effect regardless of whether Indemnitee continues to serve as a director of
the Company or of any other enterprise at the Company's request.
15. Severability. The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) is held by a
court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and enforceability of any
such provision in every other respect and of the remaining provisions
hereof shall not be in any way impaired and shall remain enforceable to the
fullest extent permitted by law.
16. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without
giving effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement this ____ day of July, 1996.
HAYES WHEELS INTERNATIONAL, INC.
By ______________________
Name:
Title:
________________________
Indemnitee
