EXHIBIT 4.1
FORM OF STOCK OPTION EXCHANGE AGREEMENT
This Stock Option Exchange Agreement is entered
into as of July 1, 1996 among Hayes Wheels International,
Inc. (the "Company") and ______________ (the "Optionee").
WHEREAS, pursuant to the Company's 1992 Stock
Incentive Plan (the "Stock Plan"), the Company has
granted to the Optionee options (the "Options") to
purchase the number of common shares of the Company
("Company Common Stock") set forth on Schedule A hereto
at the exercise price or prices set forth opposite such
number of shares of Company Common Stock;
WHEREAS, MWC Holdings, Inc. and the Company
have entered into an Agreement and Plan of Merger (the
"Merger Agreement"), pursuant to which MWC Holdings, Inc.
shall merge (the "Merger") with and into the Company;
WHEREAS, Section 2.6 of the Merger Agreement
provides that, prior to the Effective Time (as defined in
the Merger Agreement), the Optionee shall elect to
receive, in whole or in part, either (a) an amount in
cash equal to the difference between (i) the product of
(1) the number of shares of Company Common Stock subject
to such Option and (2) $32, and (ii) the aggregate
exercise price of such Option (a "Cash-Out") or (b) a
vested option to purchase shares of New Company Common
Stock (as defined in the Merger Agreement) in the same
amount and at the same exercise price as applied to the
Option (a "Roll-Over")(all capitalized terms used but not
otherwise defined herein shall have the meanings ascribed
to such terms in the Merger Agreement);
WHEREAS, the Company and the Optionee desire to
enter into this Agreement to provide that, in addition to
the provisions of Section 2.6 of the Merger Agreement, at
the Effective Time the Optionee may elect to have certain
of such Options, which Options are set forth on Schedule
A hereto, cancelled by the Company and, in consideration
thereof, the Company shall issue to the Optionee shares
of New Company Common Stock as provided herein; and
NOW, THEREFORE, in consideration of the mutual
promises and agreements contained herein, the adequacy
and sufficiency of which are hereby acknowledged, the
Company and the Optionee hereby agree as follows:
1. REPRESENTATION OF OPTIONEE. The Optionee
represents that part 1 of Schedule A hereto contains a
true and complete list of all unexercised Options, both
exercisable and unexercisable, currently held by
Optionee.
2. NEW COMPANY STOCK VALUE. For purposes of
this Agreement, each share of New Company Common Stock
shall be deemed to have a value of $32.
3. "STOCK-OUT" OF OPTIONS.
(a) The Optionee hereby agrees to the
cancellation at the Effective Time of each of the Options
designated by the Optionee on part 2 of Schedule A hereto
(collectively, the "Stock-Out Options") and, in
consideration thereof, the Company shall issue to the
Optionee at the Effective Time that number of shares of
New Company Common Stock equal to (i) the difference
between (A) the product of (x) the number of shares of
Company Common Stock subject to such Stock-Out Option and
(y) $32, and (B) the aggregate exercise price of such
Stock-Out Option divided by (ii) 32 (the resulting shares
of New Company Common Stock hereinafter referred to as
the "Stock-Out Shares"). In the event Optionee shall be
entitled to a fractional share of New Company Common
Stock as a result of the above calculation, Optionee
shall be paid cash for such fractional shares in the
amount of $32 times the amount of such fractional shares.
(b) Additional Payment. At the Effective
Time, the Company shall pay to the Optionee (in respect
of the Stock-Out Shares only) an additional amount in a
cash lump sum (the "Gross-Up Payment") such that the net
amount (taking into account the Stock-Out Shares, the
Gross-Up Payment and applicable taxes) retained by the
Optionee pursuant to Section 3(a) hereof is equal to the
value of the Stock-Out Shares as of the Effective Time.
The Optionee acknowledges that the Company has
the right to withhold from the Gross-Up Payment any
amounts necessary to satisfy its withholding obligations
under applicable law.
For purposes of determining the amount of the
Gross-Up Payment, the Optionee shall be deemed to pay
federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the
state and locality of the Optionee's residence on the
Effective Date, net of the maximum reduction in federal
income taxes which could be obtained from deduction of
such state and local taxes.
4. ROLL-OVER AND CASH-OUT OF OPTIONS. (a) In
accordance with the terms of the Merger Agreement, in
exchange for each Option designated on part 3 of Schedule
A hereto (collectively, the "Rollover Options"), the
Company shall issue to the Optionee a vested option to
purchase New Company Common Stock in the same amount and
at the same exercise price as applied to the Rollover
Option, but otherwise subject to the terms of the
Company's 1992 Stock Incentive Plan and the agreement
under which such Rollover Option was granted, except that
all references to the Company shall be deemed to be
references to the Surviving Corporation (each such
option, a "New Company Option").
(b) In accordance with the terms of the Merger
Agreement, the Optionee hereby agrees that each Option
not designated on Schedule A hereto as a Stock-Out Option
or a Rollover Option (collectively, the "Cash-Out
Options") shall be cancelled at the Effective Time and,
in consideration thereof, the Company shall pay to the
Optionee at the Effective Time a lump sum amount in cash
equal to the difference between (i) the excess of (A) the
product of (x) the number of Company Common Shares
subject to such Cash-Out Option and (y) $32, over (B) the
aggregate exercise price of such Cash-Out Option, and
(ii) any amounts to be withheld by the Company in respect
of its obligations under applicable law. No Gross-Up
Payment shall be made in respect of any cash amounts paid
to the Optionee in consideration for the cancellation of
any Cash-Out Option or the cash paid for fractional
shares pursuant to Section 3(a) hereof.
5. CALCULATION OF BENEFITS. All calculations
in respect of payments to be made or benefits to be
provided under this Agreement shall be performed at the
Company's expense by Coopers & Lybrand, LLP.
6. TERMINATION OF AGREEMENT. This Agreement
shall terminate and shall be of no further force or
effect if the Merger Agreement shall be terminated and
the Merger shall not become effective pursuant to the
terms thereof.
7. SUCCESSORS; BINDING AGREEMENT. This
Agreement shall inure to the benefit of and be
enforceable by or against the Optionee and his personal
or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees and by or
against the Company and their respective successors and
assigns.
8. NOTICES. All notices and other
communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been duly
given when personally delivered, when delivered by
courier or overnight express service or five days after
having been sent by certified or registered mail, postage
prepaid, addressed (a) if to the Optionee, to the
Optionee's address set forth in the records of the
Company, or if to the Company, to Hayes Wheels
International, Inc., 38481 Huron River Drive, Romulus,
Michigan 48174, Attn: General Counsel, or (b) to such
other address as any party may have furnished to the
other parties in writing in accordance herewith, except
that notices of change of address shall be effective only
upon receipt.
9. GOVERNING LAW; VALIDITY. The
interpretation, construction and performance of this
Agreement shall be governed by and construed and enforced
with the internal laws of the State of Delaware without
regard to the applicable principles of conflicts of laws.
The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or
enforceability of any of the other provisions of this
Agreement, which other provisions shall remain in full
force and effect.
10. COUNTERPARTS. This Agreement may be
executed in two or more counterparts, each of which shall
be deemed to be an original and all of which together
shall constitute one and the same instrument.
11. MISCELLANEOUS. No provision of this
Agreement may be modified or waived unless such
modification or waiver is agreed to in writing and
executed by the Optionee and by a majority of the members
of the Compensation Committee. No waiver by any party
hereto at any time of any breach by another party hereto
of, or failure to comply with, any condition or provision
of this Agreement to be performed or complied with by
such other party shall be deemed a waiver of any similar
or dissimilar conditions or provisions at the same or at
any prior or subsequent time. Failure by the Optionee or
the Company to insist upon strict compliance with any
provision of this Agreement or to assert any right which
the Optionee or the Company may have hereunder shall not
be deemed to be a waiver of such provision or right or
any other provision of or right under this Agreement.
12. EFFECTIVE DATE. The effectiveness of this
Agreement is subject to the occurrence of both of the
following: (a) approval of this Agreement by the board
of directors of the Company and (b) the effective date of
a registration statement in respect of the Stock-Out
Shares filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended. The
Company shall have its legal counsel provide to the
Company a legal opinion that upon delivery and exchange
of the Stock-Out Options hereunder that the Stock-Out
Shares have been properly registered.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized officer
and the Optionee has executed this Agreement as of the
day and year first above written.
HAYES WHEELS INTERNATIONAL, INC.
By:_____________________________
OPTIONEE:
________________________________
SCHEDULE A
1. SCHEDULE OF OPTIONS
Date of Grant Number of Shares Exercise Price
LIST ALL GRANTS, BOTH EXERCISABLE AND UNEXERCISABLE
2. STOCK-OUT OPTIONS
Date of Grant Number of Shares Exercise Price
LIST OPTIONS WHICH OPTIONEE WISHES TO HAVE "STOCKED OUT"
3. ROLLOVER OPTIONS
Date of Grant Number of Shares Exercise Price
LIST OPTIONS WHICH OPTIONEE WISHES TO HAVE "ROLLED OVER"