Exhibit 4
OPTION AGREEMENT
AMONG
XXXXX WHEELS INTERNATIONAL, INC.,
XXXXXX XXXXX-XXXXXXX
AND
XXXX XXXXXX-XXXXXX
DATED AS OF
JULY 30, 1997
Page 18 of 32 Pages
OPTION AGREEMENT
OPTION AGREEMENT, dated as of July 30, 1997 (the
"Agreement"), among:
X. Xxxxx Wheels International, Inc., a corporation
organized under the laws of the State of Delaware ("HWI");
B. Xxxxxx Xxxxx-Xxxxxxx, an individual residing
in the Federal Republic of Germany; and
C. Xxxx Xxxxxx-Xxxxxx, an individual residing in
the Federal Republic of Germany.
Xxxxxx Xxxxx-Xxxxxxx and Xxxx Xxxxxx-Xxxxxx are
referred to herein, individually, as a "Stockholder" and,
together, as the "Stockholders." HWI and the Stockholders are
referred to herein, individually, as a "Party" and, collectively,
as the "Parties."
WHEREAS, the Stockholders own 1,628,800 shares (the
"Shares") of Common Stock, par value $.01 per share, of HWI
("Common Stock"), free and clear of any and all Liens (as defined
herein);
NOW, THEREFORE, in consideration of the foregoing, and
of the mutual covenants and agreements set forth herein, the
Parties hereby agree as follows:
ARTICLE I
OPTION
Section 1 Grant of Option. Each Stockholder hereby
grants to HWI an irrevocable option (the "Option") to:
(a) purchase all of the Shares held by such Stockholder
("Purchase Option"); or
(b) require such Stockholder to include all of the
Shares held by such Stockholder ("Call Option") in any public
offering of equity securities of HWI (a "Public Offering");
in each case, on the terms and subject to the conditions set forth
herein.
Page 19 of 32 Pages
Section 2 Exercise of Option.
(a) At any time prior to the termination of this
Agreement, HWI may exercise the Option, in whole but not in part,
by giving written notice of such exercise (the "Exercise Notice")
to the Stockholders at least ten days prior to the date (the
"Option Closing Date") for the closing of any purchase and sale
of the Shares pursuant to the Option (the "Closing"). The Closing
shall take place at the offices of Skadden, Arps, Slate, Xxxxxxx
& Xxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m.,
local time, on the day specified in such notice or at such other
place, and at such other time or date as the Parties may agree.
At the Closing, each Stockholder shall deliver the number of
Shares specified in the Exercise Notice and held by such
Stockholder by delivery of certificates evidencing such Shares,
properly endorsed by such Stockholder and accompanied by such
stock powers and other documents as may be necessary to transfer
record ownership of such Shares on the stock transfer books of
HWI, against payment therefor as specified in Section 1.3.
Notwithstanding any Exercise Notice hereunder, the Company shall
not be deemed to have exercised the Purchase Option or the Call
Option unless and until the Closing shall have occurred
hereunder.
(b) Notwithstanding any provision hereof to the
contrary, each of HWI's right to exercise, and each Stockholder's
obligation to sell any Shares pursuant to, the Option hereunder
is subject to the conditions that (i) any Closing with respect to
such Shares must take place (A) on or prior to November 30, 1997
and (B) in connection with a Public Offering for a number of
shares at least equal to the number of Shares and (ii) the
requisite consent under the Stockholders Agreement (as defined
below) shall have been obtained.
Section 3 Purchase Price.
(a) At the Closing of the Purchase Option exercise,
HWI shall deliver to each Stockholder funds in an aggregate
amount equal to (a) $30 multiplied by (b) the total number of
Shares sold by such Stockholder to HWI (the "Purchase Option
Price"), by wire transfer of New York Clearing House funds to an
account designated by such Stockholder in writing at least three
days prior to the Closing Date.
(b) At the Closing of the Call Option exercise:
(i) in the event that the net proceeds per share
("Net Proceeds Per Share") payable by the underwriters in respect
of each Share sold in a Public Offering pursuant to the Call
Option is less than $30, HWI shall deliver to such Stockholder
funds in an aggregate amount equal to (A) the amount by which $30
is greater than such Net Proceeds Per Share multiplied by (B) the
total number of Shares sold by such Stockholder in the Public
Offering pursuant to the Call Option, by wire transfer of New
Page 20 of 32 Pages
York Clearing House funds to an account designated by such
Stockholder in writing at least three days prior to the Closing
Date; and
(ii) in the event that the Net Proceeds Per Share
payable by the underwriters in respect of each Share sold in a
Public Offering pursuant to the Call Option is greater than $30,
then such Stockholder shall cause the underwriters of such Public
Offering to deliver to HWI funds in an aggregate amount equal to
(A) the amount by which such Net Proceeds Per Share is greater
than $30 multiplied by (B) the total number of Shares sold by
such Stockholder in the Public Offering pursuant to the Call
Option, by wire transfer of New York Clearing House funds to an
account designated by HWI in writing at least three days prior to
the Closing Date. In no event and under no circumstances shall
any Stockholder be entitled to receive more than $30 for any
Share sold in a Public Offering pursuant to any Call Option.
Section 4 Adjustments. If at any time the outstanding
shares of Common Stock are changed into a different number of shares
or a different class by reason of any reclassification,
recapitalization, split-up, combination, exchange of shares or
readjustment or if a stock dividend therein is declared with a
record date prior to the termination of this Agreement, then the
number of Shares subject to the Option and the applicable per
Share consideration to be paid by HWI upon exercise of the Option
(but not the total purchase price) shall be appropriately and
equitably adjusted.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF EACH STOCKHOLDER
Each Stockholder, as to herself, hereby represents and
warrants to HWI as follows:
Section 1 Authority. Such Stockholder has the requisite
power, capacity and authority to execute and deliver this Agreement,
to perform her obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by such Stockholder and, assuming the due
authorization, execution and delivery hereof by HWI, constitutes
the valid and binding obligation of such Stockholder, enforceable
against such Stockholder in accordance with its terms.
Section 2 Title to Shares.
(a) Such Stockholder has good and marketable title to
the number of Shares set forth opposite such Stockholder's name
in Annex 1, free and clear of any and all liens, encumbrances,
security interests, mortgages or pledges (collectively, "Liens").
Page 21 of 32 Pages
(b) At any Closing, with respect to each Share to be
sold, assigned, transferred and conveyed by such Stockholder,
upon delivery and payment to such Stockholder of the Purchase
Option Price or the Net Proceeds Per Share, as the case may be,
for such Share in accordance with Article II hereof, the
purchaser thereof will acquire good and valid title to such
Share, free and clear of any and all Liens.
Section 3 No Violation; Consents and Approvals.
(a) The execution and delivery of this Agreement by
such Stockholder do not, and the performance of this Agreement by
such Stockholder and the consummation of the transactions
contemplated hereby will not, (i) conflict with or violate any
law, order, judgment or decree applicable to such Stockholder, or
(ii) other than the Amended and Restated Stockholders Agreement
dated as of June 30, 1997 (the "Stockholders Agreement"), result
in any breach of, or constitute a default (or an event that with
notice or lapse of time or both would constitute a default) under
any agreement to which such Stockholder is a party.
(b) The execution and delivery of this Agreement by such
Stockholder do not, and the performance by such Stockholder of
this Agreement and the consummation of the transactions
contemplated hereby will not, require such Stockholder to obtain
any consent, approval, waiver, authorization or permit of, or to
make any filing or registration with or notification to
("Consent"), any nation or government, or any state or other
political subdivision thereof, any entity, authority or body
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government,
including any government authority, agency, department, board,
commission or instrumentality of the United States, any state of
the United States or any political subdivision thereof, the
Federal Republic of Germany or any political subdivision thereof,
or any other nation, or any court, tribunal or arbitrator
("Governmental Entity"), or any third party, other than under the
Stockholders Agreement and under federal and state securities
laws.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HWI
HWI hereby represents and warrants to the Stockholders
as follows:
Section 1 Corporate Organization; Subsidiaries. HWI is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
Section 2 Authorization; No Violation; Consents
and Approvals.
Page 22 of 32 Pages
(a) HWI has the requisite corporate power and
corporate authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. Other than filings under
federal and state securities laws, the execution, delivery and
performance of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by
the Board of Directors of HWI and no other corporate proceeding
on the part of HWI is required to authorize the execution,
delivery and performance hereof, and the consummation of the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by HWI and, assuming the due
authorization, execution and delivery hereof by each Stockholder,
constitutes the valid and binding obligation of HWI, enforceable
against HWI in accordance with its terms.
(b) The execution and delivery of this Agreement by
HWI do not, and the performance of this Agreement by HWI and the
consummation of the transactions contemplated hereby, will not,
(i) conflict with or violate the certificate of incorporation or
by-laws, in each case as amended or restated to date, of HWI,
(ii) conflict with or violate any law, judgment, order or decree
applicable to HWI, or (iii) other than the Stockholders
Agreement, result in any breach of, or constitute a default (or
an event that with notice or lapse of time or both would
constitute a default) under any agreement to which HWI is a
party, other than, with respect to clause (iii) above, such
conflicts, violations, breaches and defaults as could not
reasonably be expected, individually or in the aggregate, to
impair in any material respect HWI's ability to perform its
obligations hereunder or to consummate the transactions
contemplated hereby.
(c) The execution and delivery of this Agreement by
HWI do not, and the performance by HWI of this Agreement and the
consummation of the transactions contemplated hereby, will not,
require HWI to obtain any Consent of any Governmental Entity, or
any third party, except for the Stockholders Agreement, under
federal and state securities laws and such Consents, the failure
of which to obtain or make could not reasonably be expected,
individually or in the aggregate, to impair in any material
respect HWI's ability to perform its obligations hereunder or to
consummate the transactions contemplated hereby.
ARTICLE IV
COVENANTS OF THE PARTIES
Section 1 Information from the Stockholders. The Stock-
holders shall use their respective reasonable best efforts promptly
to provide HWI with all information concerning the Stockholders
requested by HWI and required to be included in the registration
statement relating to any Public Offering in which Shares are to
be sold.
Page 23 of 32 Pages
Section 2 Cooperation; Further Action. In the event that,
prior to or after the Closing, any action is necessary or
desirable to carry out the purposes of this Agreement, including
entering into any customary agreements with underwriters of any
Public Offering in which the Shares are included, each Party
shall take, and shall cause its directors, officers, employees,
representatives (including, in the case of the Stockholders,
their director designees on the Board of Directors of HWI) and
agents, as the case may be, to take, all such necessary actions
including the execution and delivery of such further instruments
and documents as may reasonably be requested by any Party for
such purposes or otherwise to complete or perfect the
transactions contemplated hereby. The Stockholders agree to fully
cooperate with HWI and the underwriters of any Public Offering in
which the Shares are included.
Section 3 Legend. Upon execution and delivery of this
Agreement, the Stockholders shall promptly after the date hereof
submit to HWI the stock certificate or stock certificates
representing the Shares and substantially the following legend
shall be placed thereon:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS AND CONDITIONS OF THE OPTION AGREEMENT
DATED AS OF JULY 30, 1997 AMONG XXXXX WHEELS
INTERNATIONAL, INC., XXXXXX XXXXX-XXXXXXX AND XXXX
XXXXXX-XXXXXX, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF XXXXX WHEELS INTERNATIONAL, INC. AND IS
AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST
THEREFOR.
Section 4 Stockholders Agreement. Each Party, and each
of Xxxxxxxx Xxxxxxx and Xxxxx Xxxxx-Xxxxxxx, hereby irrevocably
consents to the transactions contemplated hereby for purposes of
the Stockholders Agreement; and HWI shall use its reasonable best
efforts to obtain the required consent under the Stockholders
Agreement from each other party thereto.
Section 5 Mutual Release. To the fullest extent permitted by
applicable law, each Party, and the respective directors, officers,
employees, representatives, agents, successors and permitted assigns
of any Party, if any, and each of Xxxxxxxx Xxxxxxx, Xxxxx Xxxxx-
Xxxxxxx and H.K.L., L.L.C., hereby irrevocably and unconditionally
releases and discharges each other Party, and each of Xxxxxxxx
Xxxxxxx, Xxxxx Xxxxx-Xxxxxxx and H.K.L., L.L.C., and the respective
directors, officers, employees, representatives, agents,
successors and permitted assigns of any Party, if any, from any
and all liability which such person or entity now has or may
hereafter have against any such other person or entity, and to
the extent applicable, any of its directors, officers,
Page 24 of 32 Pages
employees, representatives or agents, arising out of, based
upon or relating to the purchase by the Stockholders of the
Shares from K-H Corporation pursuant to the letter agreement
dated July 23, 1997, a true, correct and complete copy of which
has been furnished to HWI, or the transactions expressly provided
for herein.
ARTICLE V
TERMINATION
Section 1 Termination. This Agreement shall terminate at
the earlier of (a) 11:59 p.m., New York City time, on November 30,
1997 or (b) immediately following any Closing hereunder.
Section 2 Effect of Termination. Upon termination of
this Agreement pursuant to this Article V, this Agreement and the
transactions contemplated hereby shall be deemed abandoned (and
HWI shall promptly deliver to the Stockholders a certificate or
certificates representing the Shares not theretofore sold
hereunder without the legend thereon described in Section 4.3)
and this Agreement shall forthwith become null and void, except
that the provisions of Sections 4.4 and 4.5 and Article V shall
survive any termination of this Agreement; provided, however,
that nothing in this Agreement shall relieve any party from
liability for any willful breach of this Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 1 Amendment and Modification. This Agreement may
be amended, modified or supplemented only by written agreement of
all Parties.
Section 2 Notices. All notices and other communications
required or permitted hereunder shall be in writing and shall be
deemed to have been duly given on the date delivered, if
delivered personally, on the fifth business day after being
mailed by registered or certified international airmail (postage
prepaid, return receipt requested) or on the second business day
after being sent by reputable overnight courier (delivery
prepaid), in each case, to the parties at the following
addresses, or on the date sent and confirmed by electronic
transmission to the telecopier number specified below (or at such
other address or telecopier number for a party as shall be
specified by notice given in accordance with this Section):
(a) if to any Stockholder, to:
Herrn Xxxxx-Xxxxx Lemmerz
Page 25 of 32 Pages
x/x Xxxxxxx Xxxxxxx XxxX
Xxxxxxxx 0000
53621 Konigswinter
Federal Republic of Germany
Tel: x00-0000-00-0
Fax: x00-0000-00-000
with a copy to:
Xxxxxxxx & Partner
Attention: Xx. Xxxxxxx Xxxxxxxx
Xxxxxxxxxxxxx Xxxxx 000
00000 Xxxx,
Xxxxxxx Xxxxxxxx of Germany
Tel: x00-000-00000-0
Fax: x00-000-00000-00
and
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Attention: Xxxxxxx X. Xxxxx, Esq.
0 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Tel: x0-000-000-0000
Fax: x0-000-000-0000
(b) if to HWI, to:
Xxxxx Wheels International, Inc.
Attention: Xxxxxx X. Xxxxxxxx, Esq.
00000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
X.X.X.
Tel: x0-000-000-0000
Fax: x0-000-000-0000
Page 26 of 32 Pages
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
X.X.X.
Tel: x0-000-000-0000
Fax: x0-000-000-0000
Section 3 Parties in Interest; Assignment. This Agreement
shall be binding upon and inure solely to the benefit of each Party
hereto and its respective successors and permitted assigns, and
except for Section 4.4 and 4.5 hereof, no provision of this
Agreement, express or implied, is intended to or shall confer
upon any other person or entity any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, directly or indirectly,
by any Party without the prior written consent of the other
Parties.
Section 4 Counterparts. This Agreement may be executed
in counterparts, each of which when executed shall be deemed to be
an original and all of which taken together shall constitute one
and the same agreement.
Section 5 Interpretation. The article and section
headings contained in this Agreement are solely for the purpose
of reference, are not part of the agreement of the Parties and
shall not in any way affect the meaning or interpretation of this
Agreement.
Section 6 Entire Agreement. This Agreement constitutes
the entire agreement of the Parties and supersedes all prior
agreements and undertakings, both written and oral, between or
among the Parties, or any of them, with respect to the subject
matter hereof.
Section 7 Specific Performance. Each Party hereto
acknowledges that money damages would be both incalculable and an
insufficient remedy for any breach of this Agreement by such
Party and that any such breach of this Agreement would cause the
other Party or Parties hereto irreparable harm. Accordingly, each
Party hereto also agrees that, in the event of any breach or
threatened breach of the provisions of this Agreement by such
Party, the other Party or Parties hereto shall be entitled to
equitable relief without the requirement of posting a bond or
other security, including in the form
Page 27 of 32 Pages
of injunctions and orders for specific performance, in addition
to all other remedies available to such other Parties at law
or in equity.
Section 8 Governing Law. This Agreement shall be governed
by the laws of the State of New York, without regard to conflicts of
law principles.
[SIGNATURE PAGE FOLLOWS]
Page 28 of 32 Pages
IN WITNESS WHEREOF, HWI and each Stockholder have duly
executed and delivered this Agreement as of the day and year
first written above.
XXXXX WHEELS INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
/s/ Xxxxxx Xxxxx-Xxxxxxx
--------------------------------
Xxxxxx Xxxxx-Xxxxxxx
/s/ Xxxx Xxxxxx-Xxxxxx
--------------------------------
Xxxx Xxxxxx-Xxxxxx
ACKNOWLEDGED AND AGREED
(solely for purposes of
Sections 4.4 and 4.5 hereof):
/s/ Xxxxxxxx Xxxxxxx
---------------------------
Xxxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxx-Xxxxxxx
---------------------------
Xxxxx Xxxxx-Xxxxxxx
ACKNOWLEDGED AND AGREED
(solely for purposes of Section 4.5):
H.K.L., L.L.C.
By: /s/ Xxxxx Xxxxx-Xxxxxxx
-----------------------------------
Xxxxx Xxxxx-Xxxxxxx
Page 29 of 32 Pages
ANNEX I
Ownership of Shares
Holder Number of Shares
------ ----------------
Xxxxxx Xxxxx-Xxxxxxx 814,400
Xxxx Xxxxxx-Xxxxxx 814,400
Page 30 of 32 Pages
