1


     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1997JUNE 11, 1999

                                                      REGISTRATION NO. 333-
================================================================================333-78697
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                AMENDMENT NO. 1


                                       TO

                                    FORM S-4
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------

                       HAYES WHEELSLEMMERZ INTERNATIONAL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                    DELAWARE
                        (STATE OR OTHER JURISDICTION OF
                         INCORPORATION)INCORPORATION OR ORGANIZATION)

                                      3714
                          (PRIMARY STANDARD INDUSTRIAL
                          CLASSIFICATION CODE NUMBER)

                                   13-3384636
                                (I.R.S. EMPLOYER
                             IDENTIFICATION NUMBER)


                             38481 HURON RIVER15300 CENTENNIAL DRIVE


                           ROMULUS,NORTHVILLE, MICHIGAN 48174, (313) 941-200048167


                                 (734) 737-5000

  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------


NAME, ADDRESS AND TELEPHONE NUMBER JURISDICTION PRIMARY STANDARD INDUSTRY I.R.S. EMPLOYER OF ADDITIONAL REGISTRANT OF ORGANIZATION CLASSIFICATION CODE NUMBER IDENTIFICATION NO. - ------------------------------------------------------------------------------------------------------ Hayes Lemmerz International- Delaware 3714 33-0042337 California, Inc. 14500 Firestone Blvd. La Mirada, California 90605 (714) 994-0150 Hayes Lemmerz International- Delaware 3312 58-2046122 Georgia, Inc. 1215 Palmour Drive Gainesville, Georgia 30501 (770) 535-6783 Hayes Lemmerz International- Delaware 3714 62-1240825 Indiana, Inc. 1870 Riverfork Drive Huntington, Indiana 46750 (219) 356-7001 Hayes Lemmerz International- Delaware 3714 38-3281831 Mexico, Inc. 15300 Centennial Drive Northville, Michigan 48167 (734) 737-5000 Hayes Lemmerz International- Michigan 3714 38-1799246 Michigan, Inc. 2440 Highland Road Howell, Michigan 48843 (517) 546-3441 Hayes Lemmerz International- Ohio 3714 38-1741793 Ohio, Inc. 15300 Centennial Drive Northville, Michigan 48167 (734) 737-5000 HL Ohio Sub, Inc. Delaware 3599 38-3086380 15300 Centennial Drive Northville, Michigan 48167 (734) 737-5000
------------------------ WILLIAM D. SHOVERS HAYES WHEELS INTERNATIONAL -- CALIFORNIA, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 33-0042337 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 14500 FIRESTONE BLVD., LA MIRADA, CALIFORNIA, (714) 994-0150 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- GEORGIA, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3312 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 58-2046122 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 1215 PALMOUR DRIVE, GAINESVILLE, GEORGIA 30501, (770) 535-6783 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- INDIANA, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 62-1240825 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 1870 RIVERFORK DRIVE, HUNTINGTON, INDIANA 46750, (219) 356-7001 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- MEXICO, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 38-3281831 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- MICHIGAN, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MICHIGAN (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 38-1799246 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 2440 HIGHLAND ROAD, HOWELL, MICHIGAN 48843, (517) 546-3441 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ MOTOR WHEEL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) OHIO (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 38-1741793 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ MWC ACQUISITION SUB, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3599 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 38-3086380 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ DANIEL M. SANDBERG, ESQ. VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY HAYES WHEELSLEMMERZ INTERNATIONAL, INC. 38481 HURON RIVER15300 CENTENNIAL DRIVE ROMULUS,NORTHVILLE, MICHIGAN 48174, (313) 941-200048167 (734) 737-5000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ COPYCOPIES TO: ROBERT B. PINCUS, ESQ. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP ONE RODNEY SQUARE WILMINGTON, DELAWARE 19801,19899 (302) 651-3000 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement becomes effective.Statement. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] ------------------------ CALCULATION OF REGISTRATION FEE
================================================================================================================================= PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED BE REGISTERED PER SECURITY(1) OFFERING PRICE(1) REGISTRATION FEE(1) - --------------------------------------------------------------------------------------------------------------------------------- 9 1/8% Series B Senior Subordinated Notes Due 2007........................................ $250,000,000 100% $250,000,000 $ 75,757.57 - --------------------------------------------------------------------------------------------------------------------------------- 9 1/8% Series B Senior Subordinated Notes Due 2007........................................ $150,000,000 100% $150,000,000 $ 45,454.54 - --------------------------------------------------------------------------------------------------------------------------------- Guarantees of the 9 1/8% Series B Subordinated Notes Due 2007(2).............. -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total..................................... $400,000,000 100% $400,000,000 $121,212.11 =================================================================================================================================
(1) Determined in accordance withIf this form is filed to register additional securities for an offering pursuant to Rule 457(f) promulgated462(b) under the Securities Act of 1933, as amended. (2) No separate consideration will be receivedcheck the following box and list the Securities Act registration statement number of the earlier effective registration statement for the Guarantees,same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and therefore, no additionallist the Securities Act registration fee is required. ------------------------statement number of the earlier effective registration statement for the same offering. [ ] THE REGISTRANTSREGISTRANT HEREBY AMENDAMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTSREGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PROSPECTUS HAYES WHEELSLEMMERZ INTERNATIONAL, INC. FORM S-4 CROSS-REFERENCE SHEET
ITEM NUMBER AND CAPTION HEADING IN PROSPECTUS ----------------------- --------------------- A. INFORMATION ABOUT THE TRANSACTION 1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus.... Registration Statement Cover; Outside Front Cover Page of Prospectus 2. Inside Front and Outside Back Cover Pages of Prospectus................................ Inside Front and Outside Back Cover Pages of Prospectus; Incorporation of Certain Documents by Reference; Available Information 3. Risk Factors, Combined Ratio of Earnings to Fixed Charges and Other Information....... Prospectus Summary; Risk Factors 4. Terms of the Transaction.................... Prospectus Summary; The Exchange Offer; Description of the Notes; Certain Federal Income Tax Considerations 5. Pro Forma Financial Information............. Prospectus Summary 6. Material Contacts With the Company Being Acquired.................................. * 7. Additional Information Required For Reoffering by Persons and Parties Deemed to be Underwriters........................ * 8. Interests of Named Experts and Counsel...... Legal Matters; Experts 9. Disclosure of Commission Position on Indemnification For Securities Act Liabilities............................... * B. INFORMATION ABOUT THE REGISTRANT 10. Information with Respect to S-3 Registrants............................... Incorporation of Certain Documents by Reference; Prospectus Summary 11. Incorporation of Certain Information by Reference................................. Incorporation of Certain Documents by Reference; Available Information 12. Information with Respect to S-2 or S-3 Registrants............................... * 13. Incorporation of Certain Information by Reference................................. * 14. Information With Respect to Registrants Other Than S-3 or S-2 Registrants......... * C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED 15. Information With Respect to S-3 Companies... * 16. Information with Respect to S-2 or S-3 Companies................................. * 17. Information With Respect to Companies Other Than S-2 or S-3 Companies................. * D. VOTING AND MANAGEMENT INFORMATION 18. Information of Proxies, Consents or Authorizations Are to be Solicited........ * 19. Information if Proxies, Consents or Authorizations Are Not to be Solicited, or in an Exchange Offer...................... Incorporation of Certain Documents by Reference; Available Information
- --------------------------- * Omitted as inapplicable. 3 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. SUBJECT TO COMPLETION, DATED AUGUST 25, 1997 PROSPECTUS [HAYES WHEELS INTERNATIONAL, INC. LOGO] OFFER FOREXCHANGE ALL OUTSTANDING 98 1/8%4% SENIOR SUBORDINATED NOTES DUE 2007 IN EXCHANGE2008 FOR 98 1/8%4% SERIES B SENIOR SUBORDINATED NOTES DUE 2007 OF HAYES WHEELS INTERNATIONAL, INC.2008 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1997,JULY 16, 1999, UNLESS EXTENDED Hayes Wheels International, Inc.,WE EXTEND IT. We are offering a Delaware corporation (the "Company"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Lettertotal of Transmittal (which together constitute the "Exchange Offer"), to exchange an aggregate principal amount of up to (i) $250,000,000 outstanding 98 1/8%4% Series B Senior Subordinated Notes, due 2007 (the "New June Notes")which are registered with the Securities and Exchange Commission, to all holders of the Company for a like principal amount of the issued and outstanding 9our 8 1/8%4% Senior Subordinated Notes due 2007Notes. We refer to this prospectus and the letter of transmittal that were issued byaccompanies it as the Company in an offering under Rule 144A ofexchange offer. We refer to the Securities Act of 1933, as amended (the "Securities Act"), which closed June 30, 1997 (the "Old June Notes"), and (ii) $150,000,000 outstanding 98 1/8%4% Series B Senior Subordinated Notes due 2007 (the "New July Notes" and, collectively withbeing offered in the New Juneexchange offer as the new notes. We refer to the 8 1/4% Senior Subordinated Notes that can be exchanged for new notes as the "New Notes") for a likeold notes. Terms of the Exchange Offer: - - We will issue up to $250,000,000 aggregate principal amount of new notes. - - The exchange offer expires at 5:00 p.m., New York City time, on July 16, 1999, unless we extend it. - - We will exchange all outstanding old notes that are validly tendered and not withdrawn prior to the issued and outstanding 9 1/8% Senior Subordinated Notes due 2007 that were issued by the Company in an offering under Rule 144Aexpiration of the Securities Act which closed July 22, 1997 (the "Old July Notes" and, collectively withexchange offer. - - You may withdraw tenders of old notes at any time prior to the Old June Notes,expiration of the "Old Notes"),exchange offer. - - We believe that the exchange of notes will not be a taxable exchange for U.S. federal income tax purposes but you should see "Important United States Federal Tax Considerations" on page 70 for more information. - - We will not receive any cash proceeds from the respective holders thereof (the "Holders").exchange offer. - - The terms of the New Notesnew notes are substantially identical in all material respects to the Old Notes,outstanding old notes, except that select transfer restrictions and registration rights relating to the New Notesold notes do not include transfer restrictions, registration rights and Additional Interest (as defined herein) provisions included in the Old Notes. As used in this Prospectus, unless the context requires otherwise, referencesapply to the "Notes" refer to the Old Notes and the New Notes, references to the "June Notes" refer to the Old June Notes and the New June Notes, and references to the "July Notes" refer to the Old July Notes and the New July Notes.new notes. - - The Old Notesold notes are, and the New Notes will be, general unsecured obligations of the Company, subordinated in right of payment to all existing and future Senior Indebtedness (as defined herein) of the Company. The Old Notes are, and the New Notesnew notes will be, unconditionally guaranteed on an unsecured senior subordinated basis, as to payment of principal, premium, if any, and interest, jointly, and severally, by certain of the Company'sour material domestic subsidiaries (the "Guarantors"). Asas of April 30, 1997, after giving effect to the consummation of the Lemmerz Transactions (as defined herein), the Company and the Guarantors would have had approximately $322.7 million of Senior Indebtedness outstanding. Interest on the New June Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Old June Notes surrendered in exchange therefor or, (ii) if the Old June Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Old June Notes, from June 30, 1997. Interest on the New July Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Old July Notes surrendered in exchange therefor or, (ii) if the Old July Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Old July Notes, from July 22, 1997. (continued on page 2)December 15, 1998. SEE "RISK FACTORS" BEGINNING ON PAGE 15 OF THIS PROSPECTUS14 FOR A DESCRIPTIONDISCUSSION OF CERTAIN RISKS TO BE CONSIDERED BY HOLDERS WHO TENDERSHOULD CONSIDER BEFORE TENDERING THEIR OLD NOTES IN THE EXCHANGE OFFER. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BYNOTES. NEITHER THE SECURITIES AND EXCHANGE COMMISSION ORNOR ANY STATE SECURITIES COMMISSION NOR HAS THEAPPROVED OR DISAPPROVED OF THESE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACYADEQUACY OR ADEQUACYACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectusprospectus is , 1997.June 11, 1999. 4 (Continued from front cover page) The New Notes are being offered hereunder in order to satisfy certain obligations of the Company contained in the Registration Rights Agreement dated as of June 30, 1997, by and among the Company, the Guarantors and CIBC Woody Gundy Securities Corp. ("CIBC"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc., Morgan Stanley & Co. Inc. and Salomon Brothers Inc (collectively, the "Initial Purchasers of the Old June Notes"), and the Registration Rights Agreement dated as of July 22, 1997, by and among the Company, the Guarantors, CIBC and Merrill Lynch (the "Initial Purchasers of the Old July Notes" and, together3 WHERE YOU CAN FIND ADDITIONAL INFORMATION We have filed with the Initial Purchasers of the Old June Notes, the "Initial Purchasers"). Based on interpretations by the staff of the Securities and Exchange Commission (the "Commission"), as set forth in no-action letters issued to third parties, the Company believes that the New Notes issued pursuanta registration statement on Form S-4 (together with all amendments and exhibits to the Exchange Offer in exchange forregistration statement, referred to as the Old Notes may be offered for resale, resold and otherwise transferred by Holders thereof (other than any such Holder which is an "affiliate" of the Company within the meaning of Rule 405registration statement) under the Securities Act ), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such Holders' business and such Holders have no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of such New Notes. The Company, however, does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination1933, as amended, with respect to the Exchange Offer asnew notes offered in such other circumstances. Each Holder, other than a broker-dealer, must acknowledge that it is not engaged in,this prospectus. This prospectus does not intend to engage in, and has no arrangement or understanding with any person to participatecontain all the information which is contained in the distribution of New Notes. If any Holder is an affiliate ofregistration statement. You will find additional information about us and the Company, is engaged in or intends to engage in or has any arrangement with any person to participatenew notes in the distributionregistration statement. Any statements made in this prospectus concerning the provisions of legal documents are not necessarily complete and you should read the New Notes to be acquired pursuantdocuments that are filed as exhibits to the Exchange Offer, such Holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives New Notes for its own account pursuantstatement. We are subject to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resaleinformation reporting requirements of the New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." The Company will not receive any proceeds from the Exchange Offer. The Company will pay all of the expenses incident to the Exchange Offer. Tenders of Old Notes pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. If the Company terminates the Exchange Offer and does not accept for exchange any Old Notes, the Company will promptly return Old Notes to the Holders thereof. See "The Exchange Offer." The Old Notes are eligible for trading in the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") market. Prior to the Exchange Offer, there has been no public market for the Old Notes or New Notes. Although the Initial Purchasers have informed the Company that they intend to make a market in the New Notes, they are not obligated to do so and any such market making may be discontinued at any time without notice. If a market for the New Notes should develop, the New Notes could trade at a discount from their principal value. The Company does not currently intend to list the New Notes on any securities exchange or to seek approval for quotations through any automated quotation systems. There can be no assurance that a market for the New Notes will develop. Until (90 days after the date of this Prospectus), dealers affecting transactions in the New Notes, whether or not participating in the Exchange Offer, may be required to deliver a Prospectus. This obligation is in addition to the obligation of dealers to deliver a Prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. 5 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company incorporates by reference herein the following documents filed with the Commission pursuant to the Securities Exchange Act of 1934, as amended, (the "Exchange Act"): I.and in accordance with these requirements, we file periodic reports, proxy statements and other information with the Commission. You may copy and inspect the registration statement and our periodic reports, proxy statements and other information we file with the Commission at the public reference room maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain information on the operation of the public reference room by calling the Commission at 1-800-SEC-0330. The Company's Annual Report on Form 10-Ksame information will be available for inspection and copying at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661. The Commission also maintains a Web site at http://www.sec.gov which provides online access to reports, proxy statements and other information regarding registrants that file electronically with the Commission. If we are not required to be subject to the reporting requirements of the Exchange Act in the future, we will still be required, under the indenture for the fiscal year ended January 31, 1997; II. The Company's Quarterly Report on Form 10-Q fornew notes, to continue to file with the fiscal quarter ended April 30, 1997; III. The Company's Current Reports on Form 8-K dated June 6, 1997, June 20, 1997, June 30, 1997Commission and July 16, 1997; IV. The Company's Proxy Statement forto furnish to holders of the 1997 Annual Meeting of Stockholders, dated September , 1997; and V. The Company's Registration Statement on Form S-3, File No. 333-31669, as amended. Allnew notes the information, documents and other reports specified in Sections 13 and 15(d) of the Exchange Act. You may request a copy of any Commission filings, and any information required by Rule 144A(d)(4) under the Securities Act during any period in which we are not subject to Section 13 or 15(d) of the Exchange Act, at no cost, by contacting: Hayes Lemmerz International, Inc. 15300 Centennial Drive Northville, Michigan 48167 Attention: Director of Investor Relations (734) 737-5000 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Commission allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information filed with the Commission will update and supersede this information. We incorporate by reference any future filings made with the Company pursuant toCommission under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectusprospectus and prior tountil the termination of the Exchange Offer, shall be deemed to be incorporatedthis offering. We incorporate by reference into this Prospectus and to be a part hereof from the dates of filing of suchfollowing documents or reports. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Each Guarantor is a wholly owned, direct or indirect, subsidiary of the Company. The Guarantors have fully and unconditionally guaranteed the Notes on a joint and several basis. No separate financial statements of the Guarantors have been included or incorporated by reference herein because management of the Company and each Guarantor has determined that such information is not material to investors. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST, WHICH SHOULD BE DIRECTED TO HAYES WHEELS INTERNATIONAL, INC., 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, ATTENTION: DIRECTOR OF INVESTOR RELATIONS, TELEPHONE (313) 942-8716. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LESS THAN FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER. ------------------------ AVAILABLE INFORMATION The Company is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the Commission. The reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and are available at the Commission's Regional Offices at Seven World Trade Center, 13th Floor, New York, New York 10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of such materials may be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains a Web site at http://www.sec.gov that contains reports, proxy statements and other information. While any Notes remain outstanding, the Company will make available, upon request, to any holder and any prospective purchaser of the Notes the information required by Rule 144A(d)(4) under the Securities Act during any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act. Any such requests should be mailed to Hayes Wheels International, Inc., 38481 Huron River Drive, Romulus, Michigan 48174, Attention: Director of Investor Relations, telephone (313) 942-8716. The Company and the Guarantors have filed with the Commission a registration statementunder the Exchange Act: - our annual report on Form S-4 (the "Registration Statement") (of which this Prospectus is a part) under10-K for the Securities Actfiscal year ended January 31, 1999; - our current reports on Form 8-K dated February 3, 1999 (filed February 18, 1999), December 7, 1998 (filed December 10, 1998), and November 19, 1998 (filed November 23, 1998); and - our proxy statement, dated May 12, 1999, for registrationour annual meeting of the New Notes offered hereby. This Prospectus does not contain all the information set forth in the 2stockholders to be held on June 17, 1999. i 6 Registration Statement and the exhibits thereto, certain parts of which are omitted in accordance with the Rules and Regulations of the Commission. Reference is hereby made to the Registration Statement and related exhibits for further information with respect to the Company and the securities offered hereby. For information with respect to the Company and the securities offered by this Prospectus, reference is made to the Registration Statement and the exhibits filed or incorporated as a part thereof, which are on file at the offices of the Commission and may be obtained upon payment of the fee prescribed by the Commission, or may be examined without charge at the offices of the Commission. Statements contained in this Prospectus, or in any document incorporated in this Prospectus by reference, as to the contents of any contract or other document referred to herein or therein are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement or such other document, each such statement being qualified in all respects by such reference. ------------------------ THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF THE COMPANY. THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) EXPECTED COST SAVINGS FROM THE LEMMERZ ACQUISITION (AS DEFINED HEREIN) CANNOT BE FULLY REALIZED; (2) COMPETITIVE PRESSURE IN THE COMPANY'S INDUSTRY INCREASES SIGNIFICANTLY; (3) COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE BUSINESSES OF THE COMPANY ARE GREATER THAN EXPECTED; AND (4) GENERAL ECONOMIC CONDITIONS ARE LESS FAVORABLE THAN EXPECTED. FURTHER INFORMATION ON OTHER FACTORS WHICH COULD AFFECT THE FINANCIAL RESULTS OF THE COMPANY AND SUCH FORWARD LOOKING STATEMENTS IS INCLUDED IN THE SECTION HEREIN ENTITLED "RISK FACTORS" AND IN THE ANNUAL REPORT ON FORM 10-K, THE QUARTERLY REPORT ON FORM 10-Q AND THE CURRENT REPORTS ON FORM 8-K, OF THE COMPANY, INCORPORATED HEREIN BY REFERENCE. ------------------------ Unless otherwise indicated, financial information in this Prospectus with respect to Lemmerz (as defined herein) is expressed in dollars or in Deutsche Mark ("marks" or "DM"). Amounts stated in dollars, unless otherwise indicated, have been translated from marks in accordance with GAAP (as defined herein) and should not be construed as representations that the mark amounts actually represent such dollar amounts or could have been converted into dollars at the rate indicated. Assets and liabilities denominated in marks are translated at the rate of exchange in effect on the balance sheet date and income and expenses are translated at the average rates of exchange prevailing during the year. 3 74 PROSPECTUS SUMMARY The following summary highlights selected information from this prospectus and may not contain all of the information that is a summaryimportant to you. This prospectus includes specific terms of certainthe notes we are offering as well as information contained elsewhereregarding our business and detailed financial data. We encourage you to read this entire prospectus. As used in this Prospectusprospectus, unless the context otherwise requires, "we," "us," "our," "Hayes" or in the documents incorporated herein by reference. Reference is made"company" refer to Hayes Lemmerz International, Inc. (formerly known as Hayes Wheels International, Inc.) and this summary is qualified in its entirety by, the more detailed information contained elsewhere in this Prospectus or in the documents incorporated herein by reference.our consolidated subsidiaries. All references to fiscal years of the CompanyHayes in this Prospectusprospectus or in the documents incorporated herein by reference refer to years commencing on February 1 of suchthat year and ending January 31 of the following year. Unless the context otherwise requires, the term the "Company""CMI" refers to Hayes WheelsCMI International, Inc. and its subsidiaries on, a combined basis after giving effect to the Lemmerz Acquisition (as defined herein), the term "Lemmerz" refers to Lemmerz Holding GmbHMichigan corporation, and its subsidiaries, which waswe acquired by the Company on June 30, 1997,February 3, 1999. HAYES LEMMERZ INTERNATIONAL, INC. We are a leading supplier of a wide variety of automotive components to original equipment manufacturers of passenger cars, light trucks and the term "Hayes" referscommercial highway vehicles. We refer to Hayes Wheels International, Inc.original equipment manufacturers as OEMs. The products which we manufacture and its subsidiaries before the Lemmerz Acquisition. The term "Motor Wheel" refers to Motor Wheel Corporation, a wholly owned subsidiarysupply include wheels manufactured from both aluminum and steel, brake components such as rotors and drums, suspension components such as crossmembers, subframes, knuckles, spindles and control arms, powertrain components, which consist primarily of the Company,intake and the term "Motor Wheel Transactions" refers to the series of related transactions which were consummated on July 2, 1996, pursuant to which Motor Wheel became a subsidiary of Hayes. THE COMPANY The Company isexhaust manifolds, and commercial highway wheels, hubs and drums. We are the world's largest manufacturer of automotive wheels, supplying approximately 30%32% and 23% of the automotive wheels in North America and Europe, respectively, andfor our 1998 fiscal year. We are also is the largest global supplier of wheels to original equipment manufacturers ("OEMs")OEMs of passenger cars, light trucks and commercial highway vehicles. The Company'sIn addition, we are a leading producer of automotive foundation brake products, suspension components and powertrain components in North America. Our principal customers for wheel and brakeour OEM products consistin our 1998 fiscal year consisted of every major OEM in North America, Europe and Japan, including General Motors, Ford, Chrysler (the three of which comprised approximately 57% of the Company's pro forma combined 1996 net sales),DaimlerChrysler, BMW, Renault, Fiat, Volkswagen, Porsche, Mercedes-Benz, Audi, Volvo, Citroen, Peugeot, Skoda, Seat, Toyota, Mazda, Nissan, Honda, Mitsubishi, Suzuki and Isuzu. The CompanyGeneral Motors, Ford and DaimlerChrysler comprised approximately 60% of our pro forma combined fiscal 1998 net sales. We also hashave over 300 commercial highway vehicle customers in North America and Europe, including Trailmobile, Dana/Mack, Mercedes-Benz, Iveco, Strick, Great Dane Trailers, Freightliner, PACCAR, Volvo/GM, Renault and Western Star. The CompanyWe also producesproduce a variety of non-wheel and non-brake cast aluminum products for the automotive, heating equipment and constructiongeneral machinery industries. Sales of automotive wheel andwheels, brake products, suspension components and powertrain components comprised approximately 76%86% of the Company'sour pro forma combined net sales in fiscal 1996 (69%1998 (58% wheels, 5% brake components, 12% suspension components and 7% brake11% powertrain components), with the remaining 24%14% comprised of commercial highway wheel and brake products (18%(10%) and non-wheel aluminum castings (6%(4%). The Company is1 5 We are the #1 or #2 independent manufacturer of itsour primary products in the following markets in which it competes.we compete. The following table below sets forth the Company'sour estimated pro forma combined market position for our products in North America, Europe and EuropeSouth America in 1996:fiscal 1998:
MARKET POSITION -------- NORTH AMERICA Automotive Steel Wheels -Wheels-- Including Production by OEMs...... #1 Automotive Cast Aluminum Wheels............................. #2 Automotive Fabricated Aluminum Wheels....................... #1 Automotive Full-Face Cast (FFC(R)) Wheels................... #1 Automotive Brake Rotors and Drums -Drums-- Excluding Production by OEMs...................................................... #2 Automotive Suspension Components -- Excluding Production by OEMs...................................................... #1 Engine Manifolds............................................ #1 Commercial Highway Wheels................................... #2 Commercial Highway Brake Hubs and Drums..................... #1 EUROPE Automotive Steel Wheels -Wheels-- Including Production by OEMs...... #2 Automotive Cast Aluminum Wheels............................. #1 Commercial Highway Wheels................................... #2 SOUTH AMERICA Automotive Steel Wheels..................................... #2 Automotive Cast Aluminum Wheels............................. #1 Commercial Highway Wheels................................... #2#1
The Company hasWe have a global presence with 40 manufacturing facilities in 12 countries, including the United States, Germany, Italy, Spain, the Netherlands, Belgium, the Czech Republic, Turkey, Brazil, South Africa, Mexico and India. We have also been active in developing strategic alliances around the world. These include a 58% owned subsidiary in the Czech Republic andWe have nine strategic manufacturing joint ventures located in the United States, Mexico, Brazil, 4 8 Venezuela, Portugal, Canada, India, Turkey, Thailand and the United States. The CompanyNorway. We also maintainsmaintain technical relationships in Thailand and South AfricaColombia and a sales and engineering office in Japan. As automotive suppliers continue to consolidate worldwide, the Company intendswe intend to strengthen and expand itsour leadership position in meetingto meet the global sourcing, quality and engineering requirements of itsour customers. The Company'sWe expect that the CMI acquisition of Lemmerz, which was consummated on June 30, 1997 (the "Lemmerz Acquisition") has createdwill create significant growth opportunities for the Company,us, resulting from the following: (i)- the combinationwide variety of Hayes' strengthsproducts we can offer (wheels, brake components and suspension and structural components) will enable us to supply a suspension module for automotive applications to our customers. In the module concept, vehicles will be designed and built in steelmodules, which will then be assembled into the entire vehicle. The suspension module consists of the wheels, mechanical brake components and aluminum wheel manufacturing in North Americavarious suspension, wheel-end and Europe with Lemmerz's steel and cast aluminum wheel manufacturing expertise in Europe; (ii) the complementary nature of Hayes' and Lemmerz's respective customer bases; (iii) the combination of Hayes' commercial highway vehicle business in North America with Lemmerz's in Europe; and (iv)structural components; - the expansion of the Company's full product line resultingmarket we serve from the $6 billion wheel market to the $50 billion market for suspension components and assemblies; - the strengthening of our position with key automotive customers in a rapidly consolidating market; - the utilization of our global presence to expand sales of those products formerly produced by CMI (suspension and powertrain components) outside of North America; 2 6 - the ability to share innovative products and processes across passenger cars, light trucks and commercial highway vehicles worldwide.worldwide; and - the exploitation of growth opportunities in the rapidly expanding market for aluminum and lightweight materials. In addition to revenue enhancement, management believesthese strategic benefits, we believe that the Lemmerz AcquisitionCMI acquisition will ultimately result in annual cost savings of at least $21$42 million, primarily as a result of capacity optimization, raw materialsynergies, including the consolidation of selling, general, administrative and engineering facilities, improvement of manufacturing productivity, combination of purchasing savingspower and overhead savings. These anticipated Lemmerz Acquisition-related cost savings arean increase in addition tosales by combining the $42 million savings related to the rationalizationmarketing efforts anticipated to be realized as part of the Motor Wheel Transactions, of which $13 million have been realized through the end of the first quarter of fiscal 1997.two companies. BUSINESS STRATEGY The Company believesWe believe that it iswe are well-positioned to realize growth in sales, EBITDA (as defined in the section of this prospectus entitled "Description of the Notes -- Definitions") and net income. The Company will continueWe plan to build upon itsdevelop our position as a leading full-line supplier of wheels and brake componentssuspension modules to the global transportation industry and expects to enhance this position by integrating the Europeanour operations with those of Lemmerz. In addition to creating significant anticipated cost savings and other efficiencies, the Company believes that the Lemmerz Acquisition provides it with the opportunity to materially extend its automotive and commercial highway wheel and brake product offerings in Europe. The Company expectsCMI. We expect to maintain itsour leadership position by continuing to offer innovative new products to increase sales and enhance operating results. The Company expectsWe expect to continue itsour growth and enhance itsour market leadership by continuing to implement a strategy based on the following elements: - SYSTEMS APPROACH. Due to our broad manufacturing capabilities and product offerings, we are one of a small number of manufacturers with the ability to act as a single-source supplier of the suspension module and its various components. In addition, we are committed to becoming a provider of complete suspension modules for our OEM customers. We believe that OEMs are increasingly seeking to reduce the number of suppliers from which they source parts and to develop relationships with suppliers that can offer integrated systems and modules. The CMI acquisition has enabled us to expand our aluminum product lines and has added product lines for suspension components, such as crossmembers, subframes, knuckles, spindles and control arms, and powertrain components, which consist primarily of intake and exhaust manifolds. The CMI acquisition is a major step toward our strategic goal of developing suspension modules for our OEM customers. - ENHANCING STRONG RELATIONSHIPS WITH OEMS AND PURSUING NEW CONTRACTS. The Company hasIn a marketplace that is becoming increasingly global and in which the supply base is rapidly consolidating, we have developed strong relationships with our OEM customers and intendsintend to continue to build upon strong relationships with its OEM customers whichthese relationships. This will enable itus to identify business opportunities in the early stages of vehicle design. The Company hasWe have an excellent reputation for quality, service and innovation and, as a result, we have established a leadership position as an OEM supplier of automotive and commercial highway wheels and brakes, by maintaining an excellent reputation forand automotive suspension and powertrain components. We are a Tier 1 supplier to the OEMs (that is, a supplier that designs, engineers, manufactures and conducts quality servicecontrol tests on our products) and innovation. The Company believeswe believe that itsthis early involvement in the design and engineering of new wheel and brake products as a Tier I supplier has afforded itus a competitive advantage in securing new business and will continue to do so in the future. The Company hasWe have obtained significant firm orders on a number of high-volume vehicle platforms for the periods 19971999 through 20002001 for incremental new business in North America and Europe. The Company's enhanced global presence resulting fromIn addition, as a result of the Lemmerz Acquisition should strengthen its abilityCMI acquisition, we are positioned to offer worldwide sourcing options to its customers.become a leading supplier of suspension modules. - CONTINUING FOCUS ON NEW PRODUCT INNOVATION. The Company believesWe believe that it haswe have an established reputation for developing product and manufacturing process innovations. For example, the Company iswe are the leading producer of fabricated aluminum wheels, which are 20% lighter than cast 3 7 aluminum wheels. The Company hasWe also recentlyhave introduced Full Face Cast ("FFC(TM)"(FFC(R)) wheels, which are lightweight, highly styled wheels that combine a cast aluminum face with a fabricated aluminum rim. The Company isWe are also responsible for several steel wheel product and process innovations, including the development and introduction of a lightweight steel wheel which is 10% toapproximately 15% lighter than a traditional steel wheel. The Company intendsWe also have a world-class technical center in Ferndale, Michigan, and we lead the industry in the use of aluminum technology for wheel-end, structural and suspension components, as well as the use of aluminum and polymers for intake and exhaust manifolds. We intend to continue itsour efforts to develop innovative wheel and brake products and manufacturing processes to better serve customers globally and improve the Company'sour product mix with higher margin wheel and brake products. 5 9 - CAPITALIZING ON COMPLEMENTARY NATURE OF BUSINESSES. The Lemmerz AcquisitionCMI acquisition provides the Companyus with the opportunity to expand sales and increase market penetration due to the complementary nature of Hayes'our and Lemmerz'sCMI's businesses. The Company intendsWe intend to improve itsour future performance by: (i) utilizing Lemmerz's complementary customer relationshipsby offering automotive customers a complete suspension module assembly for easy installation in the customer's assembly plant. In addition, prior to increaseour acquisition of CMI, substantially all of CMI's revenues came from the salessale of Hayes' innovativeits products in Europe; (ii) utilizing Lemmerz's expertiseNorth America. We intend to market CMI's suspension and powertrain components through our existing customer base in lightweight steel wheels inareas outside of North America; (iii) drawing on Hayes' expertise in the design and manufacture of lightweight aluminum wheels to bring greater efficiencies to Lemmerz's aluminum wheel operations; (iv) capitalizing on Lemmerz's leadership position in the design and manufacture of wheels for commercial highway vehicles in the European market to increase Hayes' sales of such products in both Europe and North America; (v) attaining additional automotive wheel and brake component sales to OEMs worldwide by building on the Company's existing relationships and enhanced global position; and (vi) reducing costs of materials through further economies of scale.America. - BENEFITTING FROM CONTINUED INDUSTRY CONSOLIDATION. The worldwide wheel manufacturingautomotive supplier industry is fragmented, particularly in Europe, where independent producers dominate. The Company believesWe believe that as OEMs continue to outsource and reduce the number of suppliers, there will be further consolidation in this industry and opportunities for further consolidationsupply of this industry. The Company believesmodules to the OEMs. We believe that, through itsour established presence in these markets especially as a result of the Lemmerz Acquisition, it isand our strong relationships with OEMs worldwide, we are in a favorable position to take advantage of future industry consolidation. The Company intendsWe have substantial experience in completing and integrating acquisitions within the automotive parts industry and believe this experience will help us select and pursue acquisition opportunities that can enhance our product base, expand our global manufacturing network and further capitalize on our customer base and technological resources. We intend to pursue selected acquisition opportunities compatible with itsour business strategy in North America, Europe, South America and Asia that would further expand itsour product offerings or geographical reach. - ENHANCING PRESENCE IN EMERGING MARKETS. Having established a leadership position in North America and Europe, the Company planswe plan to enhance itsour market position in emerging markets. In October 1996, Hayes increased its ownership in Hayes Wheels Autokola NH, a.s. ("Autokola"),the past two years, we have acquired, or taken a strategic low-cost manufacturing joint venturemajority position at, facilities in the Czech Republic, from 45% to 58%. The Company believes that its Autokola facility will increase the Company's flexibilityBrazil, Mexico, South Africa and improve its economies in serving its expanded European steel wheel customers. The Company maintainsIndia. We maintain additional strategic manufacturing joint ventures in Mexico, Brazil, Venezuela, the United States, Mexico, Venezuela, Thailand, India, Canada, Turkey, Portugal and Portugal,Norway, as well as technical relationships in Thailand and South Africa. The Company believes that its expandedColombia. We believe our worldwide manufacturing and strategic joint venture presence resulting from the Lemmerz Acquisition will enhance itsour ability to meet the global sourcing needs of itsour customers. - CAPITALIZING ON COST-SAVING OPPORTUNITIES. The Company has aggressively pursued facility rationalization programs and other cost-saving opportunities, including the closure of the Mendota, Illinois and Ypsilanti, Michigan facilities, which were announced prior to the Motor Wheel Transactions. Subsequent to the Motor Wheel Transactions, the Company identified further cost rationalization programs, including the closing of Motor Wheel's former headquarters in Okemos, Michigan and the Company's Romulus, Michigan wheel plant. The savings related to the Motor Wheel Transactions, including those initially targeted and subsequently identified, total $42 million, approximately $13 million of which have been realized through the end of the first quarter of fiscal 1997. Management expects the remaining $29 million of such savings to be fully reflected in the Company's fiscal 1998 financial results. In addition, management expectsWe expect actions undertaken in connection with the acquisition of Lemmerz AcquisitionHolding GmbH, which we acquired on June 30, 1997, to result in annual cost savings of at least $21 million, of which approximately $15 million have been realized as of April 30, 1999, and which are anticipated to be fully reflected in the Company'sour fiscal 19992000 financial results. The CompanyAs described above, we anticipate at least $42 million of synergies as part of the CMI acquisition, which are anticipated to be fully reflected in our fiscal 2003 financial results. We will continue to optimize the use of itsour manufacturing capacity and seek further cost savings. THE LEMMERZ4 8 As of June 14, 1999, our principal executive offices will be located at 15300 Centennial Drive, Northville, Michigan 48167 and our telephone number will be (734) 737-5000. CMI ACQUISITION On June 30, 1997, HayesFebruary 3, 1999, we acquired Lemmerz,CMI. Following the acquisition, CMI became our wholly-owned subsidiary. Under the acquisition agreement, we agreed to pay an aggregate of $605 million for CMI, of which priorapproximately $129 million was used to its acquisition by Hayes, wasrepay the leading full-line designer and manufactureroutstanding indebtedness of steel and aluminum wheels for passenger cars, light trucks and commercial highway vehicles in Europe. Hayes acquired Lemmerz in exchange forCMI at the payment to the shareholders of Lemmerz (the "Lemmerz Shareholders") of (i) $200 million in cash (the "Cash Consideration") and (ii) a total of five million sharestime of the Company's Series A Convertible Participating Preferred 6 10 Stock, par value $.01 per share (the "Series A Preferred Stock"),acquisition, and the balance of which upon receipt of stockholder approval at the Company's Annual Meeting of Stockholders currently scheduledwas paid to be held on October 22, 1997 (the "1997 Annual Meeting"), will automatically convert (the "Conversion") into five million sharesCMI's then-existing stockholders. The cash portion of the common stock, par value $.01 per share,consideration, the refinancing of existing CMI indebtedness and the fees and expenses of the Company (the "Common Stock"). Stockholders who currently hold approximately 58%acquisition of CMI were financed with the outstanding Common Stock have delivered irrevocable proxies to Mr. Horst Kukwa-Lemmerz, oneproceeds of the Lemmerz Shareholders who has agreed to vote such shares in favor of the Conversion at the 1997 Annual Meeting. Immediately after the Conversion, the shares of Common Stock received by the Lemmerz Shareholders in the Conversion will constitute approximately 16.6% of the then outstanding Common Stock. As used herein, "Lemmerz Transactions" means (i) the Lemmerz Acquisition, (ii) the financing thereof, including the execution of the Amended Credit Agreement (as defined herein)our senior secured credit facilities and the issuance of the Old June Notes (the proceeds of which were used to finance the Lemmerz Acquisition and refinance certain indebtedness under the Amended Credit Agreement), (iii) the issuanceold notes. For a summary of the Old July Notes (the proceedsterms of which were used to refinance certain indebtedness under the Amendedcredit facility, see the section of this prospectus entitled "Description of Our Credit Agreement) and (iv) the public offering of an aggregate of 3,779,502 shares of Common Stock (excluding the over-allotment options granted by the Company to the underwriters of such offering) by the Company and certain selling stockholders, which was consummated on August 26, 1997 (the "Equity Offering"). In connection with the Lemmerz Acquisition, the Company has proposed to change its name to Hayes Lemmerz International, Inc. This proposal will be submitted to the Company's stockholders at the 1997 Annual Meeting. RECENT DEVELOPMENTS On July 25, 1997, the Company announced that it had agreed to purchase the assets of Bosch Braking Systems Corporation's heavy-duty hub-and-drum and medium- and heavy-duty steel wheel businesses. These two businesses had combined 1996 sales of approximately $44 million. The Company believes that this acquisition, which is expected to close during the third quarter of 1997, will complement its commercial highway vehicle wheel and brake business. 7Facility." 5 119 THE EXCHANGE OFFER Securities Offered......... Up to (i)OLD NOTES..................... $250,000,000 aggregate principal amount of New June Notes and (ii) $150,000,0008 1/4% senior subordinated notes due 2008, which were issued on December 15, 1998. NEW NOTES..................... We are offering up to $250,000,000 aggregate principal amount of New July Notes.8 1/4% Series B senior subordinated notes due 2008 in an offering which has been registered under the Securities Act. The terms of the New Notesnew notes are substantially identical in all material respects with the termsto those of the Old Notes,old notes, except that the terms of the New Notes do not include certain transfer restrictions and registration rights relating to the old notes do not apply to the new notes, and Additional Interest provisions, as summarized below underif the exchange offer is not completed by August 17, 1999, the interest rate on the old notes will increase by 50 basis points, and by an additional 25 basis points for each subsequent 90-day period until the exchange offer is completed, up to a maximum additional interest rate of 200 basis points per annum in excess of 8 1/4%. See the section of the prospectus entitled "Description of the Notes -- Registration Rights." The Exchange Offer......... The New June Notes and New July Notesrights" for more information. EXCHANGE OFFER................ We are being offeredoffering to issue the new notes in exchange for a like principal amount of Old June Notes and Old July Notes, respectively, thatthe old notes. The old notes were not registered with the Commission. We are properly tendered and accepted. The issuance ofoffering to issue the New Notes is intendednew notes to satisfy our obligations of the Company contained in the Registration Rights Agreements (as defined herein). Forregistration agreement we entered into when we sold the old notes in transactions pursuant to Rule 144A under the Securities Act. You may tender your old notes by following the procedures for tendering, seestated in the section of this prospectus entitled "The Exchange Offer." Tenders, Expiration Date; Withdrawal............... The Exchange Offer will expire at 5:00 p.m., New York City time, on , 1997, or such later date and time to which it is extended (the "Expiration Date"). Each Holder tendering Old Notes must acknowledge that it is not engaging in, nor intends to engage in, a distribution of the New Notes. The tender of Old Notes pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. Any Old Notes not accepted for exchange for any reason will be returned without expense to the tendering Holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer. Federal Income Tax Consequences............. The exchange of Old Notes for New Notes pursuant to the Exchange Offer will not result in any income, gain or loss for federal income tax purposes. See "Certain Federal Income Tax Considerations." Use of Proceeds............ There will be no proceeds to the Company from the exchange pursuant to the Exchange Offer. The net proceeds to the Company from the sale of the Old Notes were used to partially fund the Lemmerz Acquisition and to refinance certain Indebtedness under the Amended Credit Agreement. Exchange Agent............. The Bank of New York is serving as the Exchange Agent in connection with the Exchange Offer (the "Exchange Agent"). CONSEQUENCES OF EXCHANGING OLD NOTES PURSUANT TO THE EXCHANGE OFFERRESALES....................... Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, generally Holders of Old Notes (other than any Holder which is an "affiliate" ofwe believe that the Company withinnew notes you receive in the meaning of Rule 405 under the Securities Act) who exchange their Old Notes for New Notes pursuant to the Exchange Offeroffer may offer such New Notesbe offered for resale, resell such New Notes, andresold or otherwise transfer such New Notestransferred without compliance with the registration and prospectus delivery provisions of the Securities Act; provided that such New NotesAct. However, you will not be able to freely transfer the new notes if: - you are acquiredan "affiliate" (as defined in Rule 405 under the Securities Act) of our company; - you are not acquiring the new notes in the exchange offer in the ordinary course of the Holders' business and such Holders, other than brokers-dealers, are not engaged in, do not intend to engage in, andyour business; - you have noan arrangement or understanding with any person to participate in athe distribution of such New Notes. The Company, however, does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer(as defined in the context of a no-action letter and there can be no assurance that the staffSecurities Act) of the Commission would makenew notes you will receive in the exchange offer; or - you are a similar determination with respect to the Exchange Offer as in such other circumstances. 8 12 Each broker-dealer that receives New Notesnew notes for its own account in the exchange offer in exchange for Old Notes must acknowledgeold notes that such Old Notes were acquired by such broker-dealer as a result of market making activitiesmarket-making or other trading activities. 6 10 If you fall within one of the exceptions listed above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction involving the new notes. TENDERS; EXPIRATION DATE...... The exchange offer will expire at 5:00 p.m., New York City time, on July 16, 1999, unless we extend it. By tendering your old notes, you represent to us: - that you are not an "affiliate" (as defined in Rule 405 under the Securities Act) of our company; - that any new notes you receive in the exchange offer are being acquired by you in the ordinary course of your business; - that, at the time of commencement of the exchange offer, neither you nor, to your knowledge, anyone receiving new notes from you, has any arrangement or understanding with any person to participate in the distribution (as defined in the Securities Act) of the new notes in violation of the Securities Act; - if you are not a broker-dealer, that you are not engaged in, and do not intend to engage in, the distribution (as defined in the Securities Act) of the new notes; and - if you are a broker-dealer, that you will receive the new notes for your own account in exchange for old notes that were acquired by you as a result of your market-making or other trading activities and that ityou will deliver a prospectus in connection with any resale of such New Notes. Seethe new notes you receive. For further information regarding resales of the new notes by participating broker-dealers, see the section of this prospectus entitled "Plan of Distribution." To comply withWITHDRAWAL; NON-ACCEPTANCE.... You may withdraw any old notes tendered in the securities laws of certain jurisdictions, it may be necessary to qualify for sale or register thereunder the New Notesexchange offer at any time prior to offering5:00 p.m., New York City time, on July 16, 1999. If we decide for any reason not to accept any old notes for exchange, the old notes will be returned to the registered holder at our expense promptly after the expiration or selling such New Notes.termination of the exchange offer. In the case of old notes tendered by book-entry transfer into the exchange agent's account at The Depository Trust Company, any withdrawn or unaccepted old notes will be credited to the tendering holder's account at The Depository Trust Company. See "The Exchange Offer -- Terms of the exchange offer; Period for tendering old notes" and "The Exchange Offer -- Withdrawal rights." CONDITIONS TO THE EXCHANGE OFFER......................... The exchange offer is subject to customary conditions, which we may waive. Please read the Guarantors have agreedsection of this prospectus entitled "The Exchange Offer -- Conditions to use their best efforts,the exchange 7 11 offer" for more information regarding conditions to the exchange offer. GUARANTEED DELIVERY PROCEDURES.................... If you are a registered holder of the old notes and wish to tender your old notes in the exchange offer, but (1) the old notes are not immediately available, (2) time will not permit your old notes or other required documents to reach the exchange agent before the expiration of the exchange offer, or (3) the procedure for book-entry transfer cannot be completed prior to the expiration of the exchange offer, you may tender old notes by following the procedures described below under the section of this prospectus entitled "The Exchange Offer -- Guaranteed delivery procedures." SPECIAL PROCEDURES FOR BENEFICIAL OWNERS............. If you are a beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your old notes in the exchange offer, you should promptly contact the person in whose name the old notes are registered and instruct that person to tender on your behalf. If you wish to tender in the exchange offer on your own behalf, prior to completing and executing the letter of transmittal and delivering your old notes, you must either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the person in whose name the old notes are registered. IMPORTANT UNITED STATES FEDERAL TAX CONSIDERATIONS.... Your exchange of old notes for new notes pursuant to the Registration Rights Agreementsexchange offer will not result in any gain or loss to you for federal income tax purposes. See "Important United States Federal Tax Considerations." USE OF PROCEEDS............... We will receive no proceeds from the exchange offer. EXCHANGE AGENT................ The Bank of New York is the exchange agent for the exchange offer. The address and subjecttelephone number of the exchange agent are set forth under the heading "The Exchange Offer -- Exchange agent" of this prospectus. SHELF REGISTRATION STATEMENT..................... Under select circumstances, some holders of old notes (including holders who are not permitted to certain specified limitations therein, to register or qualifyparticipate in the New Notes held by broker-dealers forexchange offer or salewho may not freely resell new notes received in the exchange offer) may require us to file, and cause to become effective, a shelf registration statement under the securities or blue sky lawsSecurities Act which would cover resales of such jurisdictions as any such holder of such New Notes reasonably requests in writing. Unlessold notes by these holders. See the Company is so requested, the Company does not intend to register or qualify the salesection of the Newprospectus entitled "Description of the Notes in any such jurisdictions.-- Registration rights." 8 12 CONSEQUENCES OF NOT EXCHANGING OLD NOTES If a Holder of Old Notes doesyou do not exchange such Old Notes for New Notes pursuant toyour old notes in the Exchange Offer, such Old Notesexchange offer, your old notes will continue to be subject to provisions of the Indenture (as defined herein) governing such Old Notes regarding transfer and exchange of the Old Notes and the restrictions on transfer containedset forth in the legend on the Old Notes.certificate for your old notes. In general, Old Notesyou may not beoffer or sell your old notes only if they are registered under, offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or offered or sold in a transaction not subject to, the Securities Act and applicable state securities laws. The Company doesWe do not currently anticipate that it will take any actionintend to register Old Notesthe old notes under the Securities Act. Under certain circumstances, however, holders of old notes, including holders who are not permitted to participate in the exchange offer or who may not freely resell new notes received in the exchange offer, may require us to file and cause to become effective a shelf registration statement which would cover resales of old notes by their holders. See the sections of the prospectus entitled "The Exchange Offer -- Consequences of Failureexchanging or failing to Exchange"exchange old notes" and "Description of the Notes -- Registration Rights.rights." 9 13 SUMMARY DESCRIPTION OF THE NEW NOTES The terms of the New Notesnew notes and the Old Notesold notes are identical in all material respects, except that the New Notes do not include certain transfer restrictions and registration rights relating to the old notes do not apply to the new notes and Additional Interest provisions includedthat if the exchange offer is not completed by August 17, 1999, the interest rate on the old notes will increase by 50 basis points, and by an additional 25 basis points for each subsequent 90-day period until the exchange offer is completed, up to a maximum additional interest rate of 200 basis points per annum in the Old Notes. See "Descriptionexcess of the Notes -- Registration Rights." Except as described below, the New June Notes and the New July Notes8 1/4%. SECURITIES OFFERED............ We are identical in all material respects. Securities Offered.........offering up to $250,000,000 aggregate principal amount of 98 1/8%4% Series B Senior Subordinated Notessenior subordinated notes due 2007 and $150,000,000 principal amount of 9 1/8% Series B Senior Subordinated Notes due 2007. Maturity Date.............. July2008, which have been registered under the Securities Act. MATURITY DATE................. December 15, 2007. Interest Rate.............. The New Notes will bear interest at a rate of 9 1/8% per annum. Interest Payment Dates..... Interest will be payable semiannually on each January2008. INTEREST PAYMENT DATES........ Each June 15 and JulyDecember 15, commencingbeginning on JanuaryJune 15, 1998. Ranking.................... The New Notes will1999. OPTIONAL REDEMPTION AFTER FIVE YEARS.................. Except in the case of certain equity offerings by us, we cannot choose to redeem the notes until December 15, 2003. At any time after December 15, 2003 (which may be general unsecured obligationsmore than once), we can choose to redeem some or all of the Company subordinate in right of payment to all existing and future Senior Indebtedness (as defined herein) of the Company, including indebtedness under the Amended Credit Agreement and senior in right of payment to all other subordinated indebtedness of the Company. The New Notes will rank pari passu with the Old Notes and the $250 million principal amount of 11% Notes (as defined herein).notes at certain specified prices, plus accrued interest. OPTIONAL REDEMPTION AFTER EQUITY OFFERINGS.............. At April 30, 1997, after giving pro forma effect to the Lemmerz Transactions, the Company and the Guarantors would have had approximately $322.7 million of Senior Indebtedness outstanding. Guarantees................. The New Notes will be unconditionally guaranteed, on a senior subordinated basis, as to the payment of principal, premium, if any, and interest, jointly and severally (the "Guarantees"), by the Guarantors which will consist of certain of the Company's material domestic subsidiaries. The Guarantees will be subordinate to all Senior Indebtedness of the respective Guarantors. Optional Redemption........ The New Notes will be redeemable at the option of the Company, in whole or in part, at any time on or after July(which may be more than once) before December 15, 2002 at the redemption prices set forth herein, together with accrued and unpaid interest thereon2001, we can choose to the date of redemption. In addition, the Company, at its option, may redeem in the aggregatebuy back up to 35% of the original principal amount of June Notes and/or July Notes at any time prior to July 15, 2000, at a redemption price equal to 109.125% of the principal amount thereof, plus accrued and unpaid interest thereon to the redemption date,outstanding notes with the Net Cash Proceeds (as defined herein) ofmoney that we raise in one or more Equity Offerings (as defined herein); provided, however, that at least (i) $162.5 million aggregate principalpublic equity offerings, as long as: - we pay 108.25% of the face amount of June Notes and (ii) $97.5 million aggregate principal amount of July Notes, as the case may be, remain outstanding and that such redemption occursnotes, plus interest; - we buy the notes back within 60 days followingof completing the closing of any such Equity Offering. Change of Control.......... In the event of a Change of Control (as defined herein), the Company will be required to make an offer to purchase all outstanding Notesequity offering; and - at a price equal to 101%least 65% of the notes originally issued remain outstanding afterwards ($162.5 million in principal amount thereof, plus accrued and unpaid interest to the dateamount). 9 13 CHANGE OF CONTROL OFFER....... If we go through a change of purchase. See "Description of the Notes -- Change of Control Offer." There can be no assurance that 10 14 the Company will have sufficient funds or will be contractually permitted by outstanding Senior Indebtedness to pay the required purchase price for all Notes tendered by holders upon a Change of Control. Certain Covenants.......... The Indentures contain covenants for the benefit of thecontrol, we must give holders of the Notesnotes the opportunity to sell us their notes at 101% of their face amount, plus accrued interest. We might not be able to pay you the required price for notes you present to us at the time of a change of control, because: - we might not have enough funds at that among other things, restricttime; or - the abilityterms of our senior debt may prevent us from paying. CERTAIN COVENANTS............. The indenture governing the notes limits what we (and most or all of our subsidiaries) may do. The provisions of the Company and its Restricted Subsidiaries (as defined herein)indenture limit our ability to: (i)- incur additional Indebtedness; (ii)more debt; - pay dividends and make distributions; (iii)- issue stock of subsidiaries; (iv)- make certain investments; (v)- repurchase stock; (vi)- create liens; (vii)- enter into transactions with affiliates; (viii)- merge or consolidate the Company or the Guarantors;consolidate; and (ix)- transfer orand sell assets. These covenants are subject to a number of important exceptions. See "Description of the Notes -- Certain Covenants.Notes." Use of Proceeds............ The CompanyUSE OF PROCEEDS............... We will not receive any proceeds from the Exchange Offer. The net proceedsexchange offer. We used the money raised from the saleissuance of the Old Notes wereold notes to repay outstanding indebtedness under our then-existing senior credit facility. Upon the consummation of the CMI acquisition, we entered into a new senior credit facility providing for term loan borrowings of $450 million and a $650 million revolving credit facility. We used the proceeds of this new credit facility to partially fund the Lemmerz Acquisitionacquire CMI and to repay outstanding Indebtedness under the Amended Credit Agreement.certain existing indebtedness of CMI and our then-existing senior indebtedness. For more complete information regardingabout the New Notes, includingnotes, see the definitionssection of certain capitalized terms used above, seethis prospectus entitled "Description of the Notes." RISK FACTORS Prospective purchasers of the New NotesYou should carefully consider the information set forth under the caption "Risk Factors,"Factors" and all other information set forth in this Prospectus, in evaluating an investment in the New Notes. 11prospectus before tendering your old notes. 10 1514 HAYES SUMMARY HISTORICAL FINANCIAL INFORMATION The following summary historical financial information is derived from the consolidated historicalour audited financial statements. Our audited financial statements as of HayesJanuary 31, 1999 and Lemmerz1998, and the unaudited pro forma financial information is derived from the pro forma combined condensed financial datafor each of the Company incorporated by reference herein. The historical consolidated financial statements of Hayes for each yearyears in the three-year period ended January 31, 1997 were audited1999, are incorporated by KPMG Peat Marwick LLP. The historical consolidated financial statements of Lemmerz for each yearreference in the two-year period ended December 31, 1996 were audited by KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. The financial information of Hayes for the three-month periods ended April 30, 1997 and 1996, and the financial information of Lemmerz for the three-month period ended March 31, 1997, is unaudited, but in the opinion of management, reflects all adjustments necessary for a fair presentation of such information.this prospectus. The information provided below should be read in conjunction with theour consolidated financial statements and related notes theretoand our management's discussion and analysis of Hayesfinancial condition and Lemmerz, which areresults of operations incorporated by reference herein.in this prospectus.
THREE MONTHS ENDED YEAR ENDED JANUARY 31, APRIL 30, ------------------------------------------- ------------------ PRO FORMA HAYES---------------------------------------------------- 1995 1996 1997 1997 (A) 1996 1997 -----1998 1999 ---- ---- ---- --------- ---- ---- (UNAUDITED) (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Net sales.......................................sales................................... $537.6 $611.1 $ 778.2 $ 913.1 $156.2 $ 250.2$1,269.8 $1,672.9 Cost of goods sold (b).......................... 441.4sold.......................... 441.1 513.4 675.2 795.9 133.6 212.21,053.7 1,383.1 Marketing, general and administration (c)....... 28.6 29.7 35.9 43.6 7.8 11.2administration....... 24.3 27.1 28.8 52.5 71.0 Engineering and product development (c).........development......... 5.1 4.7 7.2 8.1 1.8 2.311.7 20.2 Depreciation and amortization...................amortization............... 29.6 32.7 44.4 50.9 8.8 14.865.3 87.8 Other income, net...............................net........................... (0.8) (1.5) (4.5) (5.3) (0.5) (0.7)(10.8) (5.4) Interest expense, net (d).......................net....................... 13.4 15.0 48.5 73.6 3.6 18.490.4 94.9 Net income (loss).......................................................... 29.9 28.4 (72.9) (88.2) 6.1 3.831.4 43.7 OTHER DATA: EBITDA (e)(f)EBITDA(a)................................... $ 92.9 $ 97.5 $ 120.7123.2 $ 133.6215.3 $ 22.3 $ 40.0275.8 Capital expenditures............................expenditures........................ 39.9 43.4 71.4 73.3 23.4 16.790.9 134.3 Ratio of earnings to fixed charges (g)..........charges(b)....... 4.2x 3.6x -- -- 3.3x 1.3x1.6x 1.9x BALANCE SHEET DATA (AT END OF PERIOD): Total assets....................................assets................................ $589.6 $633.9 $1,183.1 $1,183.1 $648.9 $1,153.4$1,758.9 $2,110.9 Total debt...................................... 123.0debt.................................. 112.7 133.1 715.8 715.8 153.8 711.6920.6 1,033.2 Stockholders' equity (deficit)................................ 216.4 245.4 (41.1) (41.1) 251.1 (40.1)161.5 220.9
YEAR ENDED THREE MONTHS YEAR ENDED THREE MONTHS DECEMBER 31, ENDED DECEMBER 31, ENDED ------------------ MARCH 31, ---------------------- MARCH 31, LEMMERZ 1995 1996 1997 1995 1996 1997 ------- ---- ---- ---- ---- ---- ---- (UNAUDITED) (UNAUDITED) (U.S. GAAP AND DM IN MILLIONS) (U.S. GAAP AND DOLLARS (H) IN MILLIONS) STATEMENT OF OPERATIONS DATA: Net sales................................. $671.2 $691.4 $179.5 $468.1 $459.8 $108.2 Cost of goods sold........................ 545.8 567.9 146.0 380.7 377.7 88.0 Marketing, general and administration..... 82.6 75.5 17.4 57.6 50.2 10.5 Engineering and product development....... 12.8 12.6 3.3 8.9 8.4 2.0 Depreciation and amortization............. 44.3 44.0 10.8 30.9 29.3 6.5 Interest expense, net..................... 11.2 8.0 1.8 7.8 5.3 1.1 Net income................................ 23.8 13.8 5.5 16.6 9.2 3.3 OTHER DATA: EBITDA (e)................................ $ 91.9 $ 87.7 $ 26.0 $ 64.1 $ 58.3 $ 15.7 Capital expenditures...................... 70.4 44.2 10.6 42.8 25.0 6.4 BALANCE SHEET DATA (AT END OF PERIOD): Total assets.............................. $649.8 $641.8 $651.5 $453.3 $412.8 $392.8 Total debt................................ 120.3 130.8 124.7 83.9 84.1 75.2 Shareholders' equity...................... 163.1 170.4 173.2 113.8 109.6 104.4
(see footnotes on the following page) 12 16 - ------------------------- (a) Represents full year results assuming the Motor Wheel Transactions occurred on February 1, 1996. (b) Pro forma data includes a $4.6 million adjustment as a result of the acquisition of Motor Wheel related to the effects of purchase accounting adjustments and adjustments to reflect adoption of Hayes' accounting policies and pension and post-retirement benefit cost assumptions. (c) Pro forma data includes a $0.4 million adjustment related to savings from personnel reductions at Motor Wheel's Okemos, Michigan corporate headquarters announced and implemented prior to the consummation of the Motor Wheel Transactions and the effects of purchase accounting adjustments. (d) Pro forma data reflects the pro forma interest expense assuming the Motor Wheel Transactions occurred on February 1, 1996. (e) EBITDA should not be construed as a substitute for income from operations, net income or cash flow from operating activities for the purpose ofwhen analyzing the Company'sour operating performance, financial position and cash flows. The Company hasWe have presented EBITDA because it is commonly used by investors to analyze and compare companies on the basis of operating performance and to determine a company's ability to service debt. See the section of the prospectus entitled "Description of the Notes -- Certain Definitions." (f) Pro forma data includes a $3.1 million adjustment related to savings from personnel reductions at Motor Wheel's Okemos, Michigan corporate headquarters announced and implemented prior to the consummation of the Motor Wheel Transactions and the effects of purchase accounting adjustments. (g) The ratio of earnings to fixed charges for the fiscal years ended January 31, 1993 and 1994 were 1.2x and 3.9x, respectively.(b) For the fiscal year ended January 31, 1997, earnings were insufficient to cover fixed charges by $102.0 million. On a pro forma basis for the fiscal year ended January 31, 1997, earnings were insufficient to cover fixed charges by $122.6 million. (h) Statement of Operations and Other Data were translated using the average DM/U.S. dollar exchange rate for the respective year or three-month period (1.4338 for 1995; 1.5037 for 1996; 1.6586 for 1997). Balance Sheet Data were translated using the ending DM/U.S. dollar exchange for the respective year or three-month period (1.4335 for 1995; 1.5548 for 1996; 1.6779 for 1997). 1311 1715 CMI SUMMARY UNAUDITED PRO FORMAHISTORICAL FINANCIAL DATAINFORMATION The following table sets forth certain unaudited pro formasummary historical financial data for the Company for the year ended Januaryinformation is derived from CMI's audited financial statements. CMI's audited financial statements as of May 31, 1998 and 1997, and for each of the three-monthyears in the three-year period ended April 30, 1997, whichMay 31, 1999, are presented to reflect the pro forma effect of the Lemmerz Transactions and the Motor Wheel Transactions.incorporated by reference in this prospectus. The unaudited pro forma statement of operations data give effect to the Lemmerz Transactions and the Motor Wheel Transactions as if they had occurred on February 1, 1996. The unaudited pro forma balance sheet data give effect to the Lemmerz Transactions as if they had occurred on April 30, 1997. The unaudited pro forma combined financial data do not purport to be indicative of the results of operations or financial position of the Company that would have actually been obtained had the Lemmerz Transactions and the Motor Wheel Transactions been completed as of February 1, 1996, or which may be obtained in the future. The unaudited pro forma combined financial data (i) have been derived from andinformation provided below should be read in conjunction with the pro forma combined condensed financial data and the notes thereto incorporated by reference in this Prospectus and (ii) should be read in conjunction with the separate historical consolidatedCMI's financial statements of Hayes and Lemmerz and the notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations incorporated by reference herein.related notes.
COMPANY PRO FORMA COMPANY PRO FORMA YEAR ENDED THREE MONTHS ENDED JANUARYMAY 31, ---------------------------------------------- 1994 1995 1996 1997 (A) APRIL 30, 1997(A) -------------------- ------------------1998 ---- ---- ---- ---- ---- (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Net sales................................................... $1,372.9 $ 358.4sales........................................ $439.4 $561.2 $618.3 $549.4 $573.9 Cost of goods sold.......................................... 1,158.7 297.3sold............................... 372.9 493.3 547.7 462.1 467.9 Marketing, general and administration....................... 98.5 22.9administration............ 35.3 36.2 36.5 37.9 42.3 Engineering and product development......................... 16.5 4.3development.............. 7.3 11.2 12.5 12.6 13.9 Depreciation and amortization............................... 70.0 19.6amortization.................... 11.3 14.6 31.0 38.7 38.5 Other (income) expense, net...................... (1.6) (8.1) (1.7) (3.4) 1.6 Interest expense, net....................................... 96.3 24.1net............................ 5.4 4.6 8.3 8.8 7.3 Net income (loss)........................................... (68.1) 6.3income....................................... 20.5 13.6 10.6 18.8 22.4 OTHER DATA: EBITDA (b)..................................................(a)....................................... $ 191.933.7 $ 55.7 Cash interest expense, net.................................. 90.2 22.433.5 $ 52.6 $ 75.5 $ 88.3 Capital expenditures........................................ 98.3 23.1expenditures............................. 27.0 19.6 48.0 34.0 35.1 BALANCE SHEET DATA (AT END OF PERIOD): Total assets......................................................................... $1,783.1assets..................................... $303.7 $401.5 $388.1 $411.4 $411.8 Total debt........................................................................... 972.7debt....................................... 113.9 179.2 185.0 188.5 167.7 Stockholders' equity................................................................. 115.3equity............................. 105.4 120.0 130.1 146.0 165.4
- ------------------------- (a) The pro forma financial data do not reflect (i) any cost savings related to or synergies that are expected to result from the Lemmerz Acquisition, (ii) future unrealized cost savings related to, or synergies that are expected to result from, the Motor Wheel Transactions or (iii) any cost savings related to the closing of Hayes' Romulus facility. (b) EBITDA should not be construed as a substitute for income from operations, net income or cash flow from operating activities for the purpose ofwhen analyzing the Company'sour operating performance, financial position and cash flows. The Company hasWe have presented EBITDA because it is commonly used by investors to analyze and compare companies on the basis of operating performance and to determine a company's ability to service debt. See the section of the prospectus entitled "Description of the Notes -- Certain Definitions." 12 16 SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA The table below sets forth certain unaudited pro forma financial data for our company for the fiscal year ended January 31, 1999. The unaudited pro forma combined statement of operations for the year ended January 31, 1999 is presented to reflect the pro forma effect of the CMI acquisition and related financing and the 1998 acquisitions (defined below), as if they had occurred on February 1, 1998. The unaudited pro forma combined balance sheet data as of January 31, 1999 give effect to the CMI acquisition as if it had occurred on January 31, 1999. The unaudited pro forma financial data do not purport to be indicative of our results of operations or financial position that we would have actually obtained had any of the transactions referred to above been completed as of the dates indicated, or which may be obtained in the future. The pro forma financial data do not reflect any cost savings related to, or synergies that are anticipated to result from, the CMI acquisition. The unaudited pro forma financial data have been derived from, and should be read in conjunction with, the "Unaudited Pro Forma Combined Financial Data" and the related notes included elsewhere in this prospectus and should be read in conjunction with the separate historical consolidated financial statements of Hayes and CMI and related notes and Hayes' managements' discussion and analysis of financial condition and results of operations incorporated by reference in this prospectus. On March 4, 1998, we acquired 35% of the equity of Automotive Overseas Investments (Pty) Ltd. ("AOI"). On July 13, 1998, we acquired an additional 16% of the equity in AOI, thereby giving us majority control of AOI. On March 16, 1998, we acquired the remaining 50% of the equity of Aluminum Wheel Technology, Inc. On May 19, 1998, we acquired an additional 51.1% of the equity of Borlem S.A. Empreendimentos Industriais S.A., increasing our equity ownership of Borlem to approximately 99%. On June 10, 1998, we acquired MIN-CER, S.A. de C.V. On August 14, 1998, we acquired an additional 60% of the equity of Kalyani Lemmerz Limited, increasing our equity ownership of Kalyani to 85%. We refer to these acquisitions as the 1998 acquisitions.
PRO FORMA YEAR ENDED JANUARY 31, 1999 ---------------- (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Net sales................................................... $2,294.9 Cost of goods sold.......................................... 1,880.3 Marketing, general and administration....................... 118.1 Engineering and product development......................... 35.0 Interest expense, net....................................... 154.3 Net income.................................................. 35.0 BALANCE SHEET DATA (AT END OF PERIOD): Total assets................................................ $2,813.7 Total debt.................................................. 1,664.2 Stockholders' equity........................................ 220.9
13 1817 RISK FACTORS Holders of Old NotesYou should consider carefully the following risks and all of the information set forth and incorporated by reference herein. See "Available Information" and "Incorporation of Documents By Reference." Holders should particularly evaluate the following risksin this prospectus before tendering their Old Notesyour old notes in the Exchange Offer, although theexchange offer. The risk factors set forth below (other than the first two risk factors)"-- There are consequences should you choose not to exchange notes") are generally applicable to the New Notesold notes as well as the Old Notes.new notes. THERE ARE CONSEQUENCES OF FAILURESHOULD YOU CHOOSE NOT TO EXCHANGE Issuance of the New Notes inNOTES. If you do not exchange your old notes for the Old Notes pursuant tonew notes in the Exchange Offerexchange offer, you will be made following the prior satisfaction, or waiver, of the conditions set forth in "The Exchange Offer -- Certain Conditions to the Exchange Offer" and only after a timely receipt by the Exchange Agent of such Old Notes and a properly completed and duly executed Letter of Transmittal in respect of such Old Notes and all other required documents. Therefore, Holders of Old Notes desiring to tender such Old Notes in exchange for New Notes should allow sufficient time to ensure timely delivery. Neither the Exchange Agent nor the Company is under any duty to give notification of defects or irregularities with respect to the tenders of Old Notes for exchange. Old Notes that are not tendered or are tendered but not accepted will, following the consummation of the Exchange Offer, continue to be subject to the provisionsrestrictions on transfer of the Indenture regarding transfer and exchange of such Old Notes, the existing restrictions upon transfer thereof set forthyour old notes described in the legend on your old notes. The restrictions on transfer of your old notes arise because we issued the Old Notes and in the Offering Memorandums dated June 19, 1997 and July 16, 1997, as the case may be, relating to the Old June Notes and the Old July Notes (the "Offering Memorandums"). Except in certain limited circumstances with respect to certain types of Holders of Old Notes, the Company will have no further obligation to provide for the registrationold notes under the Securities Act of such Old Notes. In general, Old Notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemptionexemptions from, or in a transactiontransactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company does not currently anticipate that it will take any action to registerIn general, you may only offer or sell the Old Notesold notes if they are registered under the Securities Act and applicable state securities laws, or blue sky laws. REQUIREMENTS FOR TRANSFER OF NEW NOTES Based on interpretations byoffered and sold under an exemption from these requirements. We do not intend to register the staff of the Commission, as set forth in no-action letters issued to third parties, the Company believes that the New Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be offered for resale, resold or otherwise transferred by Holders thereof (other than any such Holder which is an "affiliate" of the Issuer within the meaning of Rule 405old notes under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquiredAct. In addition, if you exchange your old notes in the ordinary course of such Holders' businessexchange offer for the exchange notes, you may be deemed to have received restricted securities and, such Holders have no arrangement with any personif so, will be required to participate in the distribution (within the meaning of the Securities Act) of such New Notes. Each Holder, other than a broker-dealer, must acknowledge that it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of New Notes. If any Holder is an affiliate of the Company, is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the New Notes to be acquired pursuant to the Exchange Offer, such Holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transactions. Each broker-dealer that receives New Notestransaction. To the extent old notes are tendered and accepted in the exchange offer, the trading market, if any, for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will notold notes would be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market making activities or other trading activities. The Company has agreed that starting on the Expiration Date and ending on the close of business of the 180th day following the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." However, to comply with the 15 19 securities laws of certain jurisdictions, if applicable, the New Notes may not be offered or sold unless they have been registered or qualified for sale in such jurisdictions or an exemption from registration or qualification is available and is complied with. The Company has agreed, pursuant to the Registration Rights Agreements and subject to certain specified limitations therein, to use its best efforts to register or qualify the New Notes for offer or sale under the securities or blue sky laws of such jurisdiction as any holder of the New Notes reasonably requests in writing. Unless the Company is so requested, the Company does not intend to take any action to register or qualify the sale of the New Notes in any such jurisdictions.adversely affected. See "The Exchange Offer -- Consequences of Failureexchanging or failing to Exchange.exchange old notes." SIGNIFICANTOUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT THE FINANCIAL HEALTH OF OUR COMPANY AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THESE NOTES. At April 30, 1997, the Company's1999, our actual long-term debt was $972.7$1,615.7 million and itsour total stockholders' equity was $115.3 million on a pro forma basis after giving effect to the Lemmerz Transactions. The Company's$193.0 million. Our high degree of leverage may have important consequences for the Company, including that: (i) theus, including: - our ability of the Company to obtain additional financing for acquisitions, working capital, capital expenditures or other purposes, if necessary, may be impaired or such financing may not be available on terms favorable to the Company; (ii)us; - a substantial portion of the Company'sour cash flow will be used to pay the Company'sour interest expense and debt amortization, which will reduce the funds that would otherwise be available to the Companyus for itsour operations and future business opportunities; (iii)- a substantial decrease in our net operating cash flows or an increase in our expenses of the Company could make it difficult for the Companyus to meet itsour debt service requirements and force itus to modify itsour operations; (iv) the Company- we may be more highly leveraged than itsour competitors, which may place itus at a competitive disadvantage; and (v) the Company's- our high degree of leverage may make itus more vulnerable to a downturn in itsour business or the economy generally. Our ability to pay interest on the notes and to satisfy our other debt obligations will depend upon our future operating performance and our ability to obtain additional debt or equity financing. Prevailing economic conditions and financial, business and other factors, many of which are beyond our control, will affect our ability to make these payments. If in the future we cannot generate sufficient cash from operations to make scheduled payments on the notes or to meet our other obligations, we will need to refinance, obtain additional financing or sell assets. We cannot assure you that our business will generate cash flow, or that we will be able to obtain funding sufficient to satisfy our debt service 14 18 requirements. Any inability of the Companyours to service itsour indebtedness or obtain additional financing, as needed, would have a material adverse effect on us. RESTRICTIONS AND COVENANTS IN OUR DEBT AGREEMENTS LIMIT OUR ABILITY TO TAKE CERTAIN ACTIONS. Our amended credit agreement and our debt agreements, which consist of the Company. RESTRICTIVE DEBT COVENANTS The Company's Amended Credit Agreement, the Indentures and the indentureindentures governing the Company's 11% Senior Subordinated Notes, due 2006 (the "11% Notes") (collectively, the "Debt Instruments")9 1/8% Notes and these notes, contain a number of significant covenants that, among other things, restrict theour ability of the Company to (i)to: - declare dividends or redeem or repurchase capital stock, (ii)stock; - prepay, redeem or purchase debt, including the Notes, (iii)notes; - incur liens and engage in sale-leaseback transactions, (iv)transactions; - make loans and investments, (v)investments; - incur additional indebtedness, (vi)indebtedness; - amend or otherwise alter debt and other material agreements, (vii)agreements; - make capital expenditures, (viii)expenditures; - engage in mergers, acquisitions and asset sales, (ix)sales; - enter into transactions with affiliatesaffiliates; and (x)- alter the business it conducts. Thewe conduct. If we are unable to comply with these covenants, there would be a default under our debt agreements. If we were unable to repay the amounts owed under our debt agreements, these defaults, if not waived, could result in acceleration of our indebtedness and our bankruptcy. Upon consummation of the CMI acquisition, we entered into a credit facility providing for (a) term loan borrowings of $450 million and (b) a $650 million revolving credit facility, the proceeds of which facility we used to acquire CMI and to repay certain existing indebtedness of CMI and our then-existing senior indebtedness. See "Description of Other Indebtedness." All of our material domestic subsidiaries guarantee our indebtedness outstanding under the Amended Credit Agreement is guaranteed by all of the Company's material domestic subsidiaries andamended credit agreement, which is secured by a first priority lien on substantially all of theour properties and assets of the Company and itsour respective domestic subsidiaries, now owned or acquired later, includinglater. This lien includes a pledge of all of the shares of the Company'sour respective existing and future domestic subsidiaries and up to 65% of the shares of the Company'sour existing and future foreign subsidiaries which are owned by the Companywe own or which one of itsour domestic subsidiaries.subsidiaries owns. In addition, under the Amended Credit Agreement, the Company is also requiredamended credit agreement requires us to comply with financial covenants with respect to (i) a maximum leverage ratio, (ii) a minimum interest coverage ratio and (iii) a minimum fixed charge coverage ratio. If the Companywe were unable to borrow under its Amended Credit Agreementour amended credit agreement due to a default or failure to meet certain specified borrowing base prerequisites for borrowing, itwe could be left without sufficient liquidity. SUBORDINATIONliquidity and the lenders could seize substantially all of the assets securing these borrowings. YOUR RIGHT TO RECEIVE PAYMENT ON THESE NOTES IS JUNIOR TO ALL OF OUR SENIOR INDEBTEDNESS AND POSSIBLY ALL OF OUR FUTURE BORROWINGS. FURTHER, THE GUARANTEES OF THESE NOTES ARE JUNIOR TO ALL OF OUR GUARANTORS' EXISTING SENIOR INDEBTEDNESS AND POSSIBLY TO ALL OF THEIR FUTURE BORROWINGS. The New Notesnotes rank behind all of our senior indebtedness. The guarantees will be unsecured and subordinated to the prior payment in fullall senior indebtedness of all Senior Indebtedness whether currently existing or hereafter incurred.our guarantors. In addition, the New Notesnotes will rank pari passuequally in right of payment with the 11% Notes and the Old9 1/8% Notes. As a result, upon any distribution to our creditors or the creditors of our guarantors in a bankruptcy, liquidation or reorganization, the holders of any senior 15 19 indebtedness will be entitled to be paid in full in cash before we will make any payments on these notes or the guarantees. At April 30, 1997, on a pro forma basis and after giving effect to1999, the Lemmerz Transactions, theactual aggregate outstanding principal amount of all Senior Indebtednesssenior indebtedness was approximately $714.2 million. We also may incur additional senior indebtedness and the guarantors may incur additional guarantor senior indebtedness consistent with the terms of our debt agreements. In the event of our bankruptcy, liquidation or dissolution, our assets would havebe available to pay obligations on the notes only after all payments had been approximately $322.7 million.made on our senior indebtedness. Similarly, in the event of bankruptcy, liquidation or dissolution of any guarantor, its assets would be available to pay obligations on the notes only after all payments had been made on its guarantor senior indebtedness. We cannot assure you that sufficient assets will remain to make any payments on the notes. In addition, certain events of default under our senior indebtedness would prohibit us from making any payments on the notes. YOUR RIGHT TO RECEIVE PAYMENTS ON THESE NOTES COULD BE ADVERSELY AFFECTED IF ANY OF OUR NON-GUARANTOR SUBSIDIARIES DECLARE BANKRUPTCY, LIQUIDATE OR REORGANIZE. Some but not all of our subsidiaries will guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of the Company,non-guarantor subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us. At April 30, 1999, these notes would have been effectively junior to $673.9 million of liabilities of these non-guarantor subsidiaries. The non-guarantor subsidiaries generated 53% of our consolidated revenues for the Companyquarter ended April 30, 1999 and held 63% of our consolidated assets as of April 30, 1999. WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE CHANGE OF CONTROL OFFER REQUIRED BY THE INDENTURE. Upon the occurrence of certain specific kinds of change of control events, we will be availablerequired to offer to repurchase all outstanding notes. However, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes or that restrictions in our amended credit agreement, new credit facility or other debt agreements will not allow such repurchases. See the section of the prospectus entitled "Description of the Notes -- Change of control offer." FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID GUARANTEES AND REQUIRE NOTEHOLDERS TO RETURN PAYMENTS RECEIVED FROM GUARANTORS. Although laws differ among various jurisdictions, in general, under fraudulent conveyance laws, a court could subordinate or avoid any guarantee if it found that the guarantee was incurred with actual intent to hinder, delay or defraud creditors or the guarantor did not receive fair consideration or reasonably equivalent value for the guarantee and the guarantor was any of the following: - insolvent or was rendered insolvent because of the guarantee; - engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or - intended to incur, or believed that it would incur, debts beyond its ability to pay obligations onat maturity. If a court avoided a guarantee as a result of fraudulent conveyance, or held it unenforceable for any other reason, noteholders would cease to have a claim against the Newguarantor and would be solely creditors of ours. 16 20 Notes only after all Senior Indebtedness has been paid in full, and there may not be sufficient assets remaining to pay amounts due on any or all of the New Notes. In addition, the Company may not pay principal or premium, if any, or interest on the New Notes if any Senior Indebtedness is not paid when due or any other default on any Senior Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms, unless, in either case, such amount has been paid in full or the default has been cured or waived and such acceleration has been rescinded. Further, if any default occurs with respect to certain Senior Indebtedness and certain other conditions are satisfied, the Company may not make any payments on the New Notes for a designated period of time. Finally, if any judicial proceeding is pending with respect to any such default in payment on any Senior Indebtedness, or other default with respect to certain Senior Indebtedness, or if the maturity of the New Notes is accelerated because of a default under the Indentures and such default constitutes a default with respect to any Senior Indebtedness, the Company may not make any payment on the New Notes. INCREASE INTHE EXPOSURE TO VARIABLE INTEREST RATES;RATES AND FOREIGN CURRENCY FLUCTUATIONS MAY AFFECT OUR FINANCIAL HEALTH. A significant portion of theour indebtedness of the Company bears interest at variable rates. Although the Company haswe have entered into interest rate protection agreements to limit itsour exposure to increases in such interest rates, suchthese agreements do not eliminate such exposure to variable rates. Any increase in the interest rates on the Company'sour indebtedness will reduce funds available to the Companyus for itsour operations and future business opportunities and will exacerbate the consequences of the Company'sour leveraged capital structure. As a result of the Lemmerz Acquisition, the Company is likely to experienceacquisition, we have experienced increased foreign currency exchange gains and losses in the ordinary course of itsour business due to the increase in itsour operations outside the United States. As a result, fluctuations in the exchange rate between the U.S. dollar, the DMdeutsche mark and the currencies of other countries in which the Company conducts itswe conduct our business may have a material impact on the Company'sour financial condition or results of operations. In addition, fluctuations in foreign currency exchange rates may affect our results of operations and the value of our foreign assets, which in turn may adversely affect reported earnings and, accordingly, the comparability of period-to- period results of operations. Changes in currency exchange rates may affect the relative prices at which we and foreign competitors sell products in the same market. In addition, changes in the value of the relevant currencies may affect the cost of certain items required in our operations. While the Company engageswe engage in foreign currency hedging transactions which moderate the overall effect of such currency exchange rate fluctuations, the Company expectswe expect that suchthese fluctuations will continue, and there can be no assurance that the Companywe will be successful in itsour hedging activities or that such exchange ratethese fluctuations will not otherwise have a material adverse effect on the Company'sour financial condition or results of operations, or cause significant fluctuations in quarterly results of operations. DEPENDENCE ONTHE LOSS OF ANY OF OUR MAJOR CUSTOMERS The CompanyCOULD AFFECT OUR FINANCIAL HEALTH. We derived approximately 57%60% of itsour pro forma combined 1996 net salesfiscal 1998 revenues from General Motors, Ford and Chrysler. The Company hasDaimlerChrysler. We have been a supplier to these companies for many years, and we continually engagesengage in efforts to improve and expand on itsour relations with each of suchthese companies. There can be no assurance, however,We cannot guarantee that the Companywe will maintain or improve these relationships or that the Companywe will continue to supply these customers at current levels. The loss of a significant portion of sales to General Motors, Ford or ChryslerDaimlerChrysler could have a material adverse effect on the Company'sour business. Furthermore, General Motors and Ford manufacture a significant portion of their own steel wheel requirements and Ford, to a limited extent, manufactures aluminum wheels for its own use. Although General Motors and Ford have indicated that they will continue to rely on outside suppliers, they may increase their internal production of wheels, which could reduce the market for the Company'sour products and have an adverse effect on the Company. CYCLICAL NATURE OFus. THE INDUSTRY TheIN WHICH WE OPERATE IS DEPENDENT UPON THE ECONOMY AND OTHER IMPORTANT FACTORS. Our principal operations of the Company are directly related to domestic and foreign automotive and commercial highway vehicle production. Industry sales and production are cyclical and can be affected by the strength of the economy generally, or in specific regions such as North America or Europe, by prevailing interest rates and by other factors which may have an effect on the level of the Company'sour sales. 17 21 LABOR RELATIONSA HIGH PERCENTAGE OF OUR CUSTOMERS' EMPLOYEES AND CERTAIN OF OUR EMPLOYEES ARE UNIONIZED OR COVERED BY COLLECTIVE BARGAINING AGREEMENTS. Some employees of our major customers and some of our employees are unionized. At April 30, 1997,1999, approximately 28%7% of the Company'sour employees in the United States were represented by the United Auto Workers ("UAW") or United Steel Workers ("USW").Workers. Collective bargaining agreements with the UAW or USWthese unions affecting these 17 21 employees expire at various times through 19972002 and 1998.2003. As is common in many European jurisdictions, substantially all of the Company'sour employees in Europe are covered by country-wide collective bargaining agreements, expiring at various times through 1998. Certain employees of the Company's major customers are unionized.agreements. While the Company believeswe believe that itsour relations with itsour employees are satisfactory, a dispute between the Companyus and itsour employees, or between any of itsour major customers and such customers'that customer's employees, could have a material adverse effect on us. For example, the Company. CHALLENGESrecent General Motors strike, which took place in July and August of 1998, resulted in decreased sales for us of approximately $36 million and decreased EBITDA of approximately $10 million. WE MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE OUR OPERATIONS WITH THOSE OF BUSINESS INTEGRATIONCMI. The full benefits of the Lemmerz AcquisitionCMI acquisition will require the integration of each company'sour and CMI's administrative, finance, sales and marketing organizations, the coordination of each company's sales efforts, and the implementation of appropriate operations, financial and management systems and controls in order to capture the efficiencies and the cost reductions that are expected to result therefrom. This willfrom the merger. The process of integrating these businesses may result in unforeseen operating difficulties and may require substantial attention from the Company's management team. The diversionmembers of management attention, as well as any other difficulties which may be encountered in the transition and integration process, could have an adverse impact on the revenue and operating results of the Company. There can be no assuranceour senior management. We cannot assure you that the Companywe will be able to integrate successfully the operations of Hayes and Lemmerz successfully. On June 10, 1997,these businesses or achieve the Company filed a notification with the German Federal Cartel Office regarding the Lemmerz Acquisition. On or about July 11, 1997, the Federal Cartel Office notified the Companysynergies that it intended to conduct a more detailed examination of the Lemmerz Acquisition. In connection therewith, the Federal Cartel Office has requested from the Company additional information regarding the Company's markets and sales, and has also requested related information from certain of the Company's competitors and customers. All of the information requested from the Company was submitted on August 15, 1997. Thereafter, the Federal Cartel Office may elect to conduct additional inquiries regarding this matter. In the event the Federal Cartel Office elects at that time to proceed with this matter, there can be no assurances that any actions taken or required to be taken by the Federal Cartel Office will not have a material adverse effect on the Company. LIMITED RECOURSEwe expect. WE ARE SUBJECT TO SELLERS The Company's recourse to the Lemmerz Shareholders under the indemnification provisions of the Lemmerz Acquisition agreement is extremely limited. Accordingly, unanticipated events or liabilities related to the Lemmerz business could materially and adversely affect the Company. POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES The Company's operationsLIABILITIES. We are subject to various foreign, federal, state and local environmental laws, ordinances, and regulations, including those governing discharges into the air and water, the storage, handling and disposal of solid and hazardous wastes, the remediation of soil and groundwater contaminated by petroleum products or hazardous substances or wastes, and the health and safety of employees ("Environmental Laws").our employees. Under certain Environmental Lawsof these laws, ordinances or regulations, a current or previous owner or operator of property may be liable for the costs of removal or remediation of certain hazardous substances or petroleum products on, under, or in suchits property, without regard to whether the owner or operator knew of, or caused, the presence of the contaminants, and regardless of whether the practices that resulted in the contamination were legal at the time they occurred. The presence of, or failure to remediate properly, such substances may adversely affect the ability to sell or rent such property or to borrow using such property as collateral. Persons who generate, arrange for the disposal or treatment of, or dispose of hazardous substances may be liable for the costs of investigation, remediation or removal of suchthese hazardous substances at or from the disposal or treatment facility, regardless of whether the such facility is owned or operated by suchthat person. Additionally, the owner of a site may be subject to common law claims by third parties based on damages and costs resulting from 18 22 environmental contamination emanating from a site. ComplianceWe believe that we are in material compliance with Environmental Laws, stricter interpretationsenvironmental laws, ordinances and regulations and do not anticipate any material adverse effect on our earnings or competitive position relating to environmental matters. It is possible that future developments could lead to material costs of or amendments to such laws, or more vigorous enforcement policies by regulatory agencies with respect to them may require material expenditures by the Company.environmental compliance for us. The nature of the Company'sour current and former operations and the history of industrial uses at some of itsour facilities expose the Companyus to the risk of liabilities or claims with respect to environmental and worker health and safety matters which could have a material adverse effect on our financial health. WE CANNOT BE SURE THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THESE NOTES. There is no existing trading market for the Company's financial conditionnew notes. We do not intend to apply for listing or resultsquotation of operations. LACK OF A PUBLIC MARKET FOR THE NOTES; RESTRICTIONS ON TRANSFERABILITY The New Notesthe new notes on any exchange. Therefore, we do not know the extent to which investor interest will constitutelead to the development of a trading market or how liquid that market might be, nor can we make any assurances regarding the ability of new issue of securities with no established trading market.note holders to sell their new notes or the price at which the new notes might be sold. Although the Initial Purchasersinitial purchasers have informed the Companyus that they currently intend to make a market in the New Notes,new notes, they are not obligated to do so, and any such market making18 22 market-making may be discontinued at any time without notice. Accordingly, there canAs a result, the market price of the new notes could be no assuranceadversely affected. Historically, the market for non-investment grade debt, such as the new notes, has been subject to disruptions that have caused substantial volatility in the prices of such securities. Any such disruptions may have an adverse effect on holders of the new notes. YEAR 2000 ISSUES MAY NEGATIVELY AFFECT US. We have developed plans to address our exposure in all critical information technology, or IT, and non-IT systems to computer programs which identify years with two digits instead of four. Such programs may recognize the year 2000 as the year 1900. We are also assessing the year 2000 capabilities of our critical suppliers, customers and key service providers to determine, to the developmentextent possible, whether our operations will be adversely impacted by these companies. We primarily rely on packaged software applications which are year 2000 compliant. We have substantially completed the testing of these applications and have confirmed that they are year 2000 compliant. We are also testing all internally developed IT software for year 2000 compliance. We anticipate that this process will be completed by the end of the second quarter of fiscal 1999. We are continuing to assess all critical non-IT systems for year 2000 compliance. Non-IT systems include, among other things, manufacturing equipment, telephone systems and heating and cooling systems. We have prepared an inventory of all critical non-IT systems and manufacturers to determine year 2000 compliance. This process was completed during the first quarter of fiscal 1998. As of January 31, 1999, the costs we have incurred directly related to becoming year 2000 compliant are approximately $3.0 million and the costs which we expect to incur after January 31, 1999 are approximately $2.0 million. Our year 2000 remediation effort has not postponed any IT projects, the delay of which would have a material adverse effect on our business, financial condition or liquidityresults of operations. We are not entirely year 2000 compliant at this time, but we have targeted the end of the third quarter of fiscal 1999 to have all critical business and production processes ready. Although we are striving to be completely year 2000 compliant, year 2000 issues may still negatively affect us. Based on our progress to date, however, we believe that such impact, if any, will not have a material adverse impact on our business, financial condition or results of operations. We cannot guarantee that this will be so. Although we have contacted critical suppliers, customers and key service providers to determine their level of year 2000 compliance, a lack of year 2000 readiness at these companies could adversely impact our operations. We have developed a program for monitoring year 2000 risk in our supply chain and have mailed supplier year 2000 self-assessment questionnaires to critical suppliers and key service providers. The full extent of any marketsuch adverse impact, if any, is impossible to determine. We are attempting to mitigate any possible adverse impact by identifying alternate suppliers where possible. We may also increase our inventory of crucial materials in anticipation of possible disruptions. We have developed contingency plans for all critical business and production processes, which we believe will help to minimize our year 2000 risk. 19 23 FORWARD-LOOKING STATEMENTS We make "forward-looking statements" throughout this prospectus. Whenever you read a statement that is not simply a statement of historical fact (such as when we describe what we "believe," "expect" or "anticipate" will occur, and other similar statements), you must remember that our expectations may not be correct, even though we believe they are reasonable. We do not guarantee that the transactions and events described in this prospectus will happen as described (or that they will happen at all). You should read this prospectus completely and with the understanding that actual future results may be materially different from what we expect. We will not update these forward-looking statements, even though our situation may change in the future. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: - competitive pressure in our industry increases significantly; - general economic conditions are less favorable than expected; - our dependence on the automotive industry (which has historically been cyclical); - changes in the financial markets affecting our financial structure and our cost of capital and borrowed money; - the uncertainties inherent in international operations and foreign currency fluctuations; and - difficulties which may be encountered in the integration of our operations with those of CMI. USE OF PROCEEDS We will not receive any cash proceeds from the issuance of the new notes in the exchange offer. We will receive old notes in like principal amount in exchange for the Notes.issuance of the new notes in the exchange offer. We will cancel all old notes surrendered in exchange for new notes in the exchange offer. The New Notesnet proceeds from the offering of the old notes were $244.0 million, after deducting discounts and expenses. We used the net proceeds to permanently reduce outstanding indebtedness under the amended credit agreement. The indebtedness repaid bore interest at varying rates from 4.5% to 6.5% and was due at various dates through January 15, 2005. In connection with the CMI acquisition, we entered into a credit facility providing for (a) term loan borrowings of $450 million and (b) a $650 million revolving credit facility, the proceeds of which facility we used to acquire CMI and to repay certain existing indebtedness of CMI and our then-existing senior indebtedness. See "Description of Our Credit Facility." 20 24 PRO FORMA CAPITALIZATION The following table sets forth the capitalization of our company as of January 31, 1999 (a) on an actual basis for Hayes, (b) on an actual basis for CMI as of November 30, 1998 and (c) on a pro forma basis as adjusted to give effect to the CMI acquisition and related financing as if these transactions had occurred on January 31, 1999. You should read this table in conjunction with the Unaudited Pro Forma Combined Financial Data and related notes, Hayes' management's discussion and analysis of financial condition and results of operations, Hayes' and CMI's consolidated financial statements and related notes incorporated by reference in this prospectus and CMI's consolidated financial statements for the three- and six-month periods ended November 30, 1998 and 1997 included in this prospectus.
HAYES CMI PRO ACTUAL ACTUAL PRO FORMA FORMA JANUARY 31, 1999 NOVEMBER 30, 1998 ADJUSTMENTS COMBINED ---------------- ----------------- ----------- -------- New Credit Facility................ $ -- $ -- $631.0 $ 631.0 11% Notes.......................... 250.0 -- -- 250.0 9 1/8% Notes....................... 400.0 -- -- 400.0 8 1/4% Notes....................... 250.0 -- -- 250.0 Other debt......................... 88.4 139.9 (139.9) 88.4 -------- ------ ------ -------- Total long-term debt.......... 988.4 139.9 491.1 1,619.4 Stockholders' equity............... 220.9 171.8 (171.8) 220.9 -------- ------ ------ -------- Total capitalization.......... $1,209.3 $311.7 $319.3 $1,840.3 ======== ====== ====== ========
21 25 HAYES SELECTED HISTORICAL FINANCIAL INFORMATION The following selected historical financial information is derived from our audited financial statements. Our audited financial statements as of January 31, 1999 and 1998, and for each of the years in the three-year period ended January 31, 1999, are incorporated by reference in this prospectus. The information provided below should be read in conjunction with our consolidated financial statements and related notes and our management's discussion and analysis of financial condition and results of operations included in this prospectus.
YEAR ENDED JANUARY 31, --------------------------------------------------------- 1995 1996 1997 1998 1999 ---- ---- ---- ---- ---- (DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA) STATEMENT OF OPERATIONS DATA: Net sales................................... $537.6 $611.1 $ 778.2 $1,269.8 $1,672.9 Depreciation and amortization............... 29.6 32.7 44.4 65.3 87.8 Interest expense, net....................... 13.4 15.0 48.5 90.4 94.9 Earnings (loss) before extraordinary loss... 29.9 28.4 (65.5) 31.4 52.0 Extraordinary loss.......................... -- -- 7.4 -- 8.3 Net income (loss)........................... 29.9 28.4 (72.9) 31.4 43.7 BALANCE SHEET DATA (AT END OF PERIOD): Total assets................................ $589.6 $633.9 $1,183.1 $1,758.9 $2,110.9 Long-term debt.............................. 112.7 129.0 710.2 897.0 988.4 Stockholders' equity (deficit).............. 216.4 245.4 (41.1) 161.5 220.9 DILUTED PER SHARE DATA: Earnings (loss) before extraordinary loss... $ 0.85 $ 0.81 $ (2.36) $ 1.12 $ 1.60 Extraordinary loss, net of tax.............. -- -- (0.27) -- (0.25) Earnings (loss) per share................... 0.85 0.81 (2.63) 1.12 1.35 Dividends declared per share................ 0.03 0.03 0.015 -- -- Average shares outstanding (in thousands)... 35,148 35,148 27,703 28,132 32,411
22 26 CMI SELECTED HISTORICAL FINANCIAL INFORMATION The following selected historical financial information is derived from CMI's audited financial statements. CMI's audited financial statements as of May 31, 1998 and 1997, and for each of the years in the three-year period ended May 31, 1999, are incorporated by reference in this prospectus. The information provided below should be read in conjunction with CMI's financial statements and related notes.
YEAR ENDED MAY 31, ------------------------------------------ 1994 1995 1996 1997 1998 ---- ---- ---- ---- ---- (DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA) INCOME STATEMENT DATA: Net sales........................................ $439.4 $561.2 $618.3 $549.4 $573.9 Depreciation and amortization.................... 11.3 14.6 31.0 38.7 38.5 Interest expense, net............................ 5.4 4.6 8.3 8.8 7.3 Net income....................................... 20.5 13.6 10.6 18.8 22.4 BALANCE SHEET DATA: Total assets..................................... $303.7 $401.5 $388.1 $411.4 $411.8 Long-term debt................................... 113.9 179.2 185.0 188.5 167.7 Stockholders' equity............................. 105.4 120.0 130.1 146.0 165.4 PER SHARE DATA: Net income per share............................. $ 4.05 $ 2.69 $ 2.09 $ 3.72 $ 4.53 Average shares outstanding (in thousands)........ 5,062 5,062 5,074 5,045 4,934
23 27 UNAUDITED PRO FORMA COMBINED FINANCIAL DATA We have prepared our Unaudited Pro Forma Combined Statement of Operations for the fiscal year ended January 31, 1999 to illustrate the estimated effect of the CMI acquisition and related financing and the 1998 acquisitions. The Pro Forma Statement of Operations gives effect to the CMI acquisition and related financing and the 1998 acquisitions as if they had occurred on February 1, 1998. We have prepared our Unaudited Pro Forma Combined Balance Sheet as of January 31, 1999 to illustrate the estimated effect of the CMI acquisition and related financing as if these transactions had occurred on January 31, 1999 (the "Pro Forma Balance Sheet" and, together with the Pro Forma Statement of Operations, the "Pro Forma Financial Statements"). The Pro Forma Financial Statements do not reflect any anticipated cost savings from the CMI acquisition or any synergies that are anticipated to result from the CMI acquisition, and we cannot assure you that any such cost savings or synergies will occur. The Pro Forma Financial Statements do not purport to be indicative of our results of operations or financial position that we would have actually obtained had the transactions been completed as of the assumed dates and for the period presented, or which may be obtained in the future. The pro forma adjustments are described in the accompanying notes and are based upon available information and certain assumptions that Hayes and CMI believe are reasonable. The Pro Forma Financial Statements should be read in conjunction with the separate historical consolidated financial statements of Hayes and CMI and related notes, Hayes' management's discussion and analysis of financial condition and results of operations incorporated by reference in this prospectus and CMI'S consolidated financial statements for the three- and six-month periods ended November 30, 1998 and 1997 included in this prospectus. The CMI acquisition is being accounted for by the purchase method of accounting. Under purchase accounting, the total purchase price will be allocated to the tangible and intangible assets and liabilities of CMI based upon their respective fair values as of the effective time of the CMI acquisition based on valuations and other studies which are not yet available. A preliminary allocation of the purchase price has been made to major categories of assets and liabilities in the accompanying Pro Forma Financial Statements based on available information. The actual allocation of purchase price and the resulting effect on income from operations may differ significantly from the pro forma amounts included in this prospectus. These pro forma adjustments represent our management's preliminary determination of purchase accounting adjustments and are based upon available information and certain assumptions that we believe to be reasonable. Consequently, the amounts reflected in the Pro Forma Financial Statements are subject to change, and the final amounts may differ substantially. 24 28 UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS (YEAR ENDED JANUARY 31, 1999)
CMI HAYES TWELVE YEAR MONTHS ENDED ENDED JANUARY 31, 1998 NOVEMBER 30, PRO FORMA PRO FORMA 1999 ACQUISITIONS 1998 ADJUSTMENTS COMBINED(A) ----------- ------------ ------------ ----------- ----------- (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) Net sales...................... $1,672.9 $73.8 $569.9 $(21.7)(d) $2,294.9 Cost of goods sold............. 1,383.1 63.9 462.0 (1.2)(b) (9.8)(c) (17.7)(d) 1,880.3 -------- ----- ------ ------ -------- Gross profit................... 289.8 9.9 107.9 7.0 414.6 Marketing, general and administration............... 71.0 9.9 44.2 (7.0)(d) 118.1 Engineering and product development.................. 20.2 0.7 14.1 -- 35.0 Amortization of intangibles.... 16.6 -- -- 1.5(b) 8.0(c) 26.1 Other (income) expense, net.... (5.4) (0.8) 1.2 (1.4)(d) (6.4) -------- ----- ------ ------ -------- Earnings from operations..... 187.4 0.1 48.4 5.9 241.8 Equity in (earnings) loss of subsidiaries................. (0.6) -- 8.6 -- 8.0 Interest expense, net.......... 94.9 4.3 7.3 47.8(e) 154.3 -------- ----- ------ ------ -------- Earnings (loss) before taxes on income, minority interest and extraordinary loss...................... 93.1 (4.2) 32.5 (41.9) 79.5 Income tax provision (benefit).................... 39.1 (0.9) 11.9 (15.9) 34.2(f) -------- ----- ------ ------ -------- Earnings (loss) before minority interest and extraordinary loss........ 54.0 (3.3) 20.6 (26.0) 45.3 Minority interest.............. 2.0 -- -- -- 2.0 -------- ----- ------ ------ -------- Earnings (loss) before extraordinary loss........ 52.0 (3.3) 20.6 (26.0) 43.3 Extraordinary loss............. 8.3 -- -- -- 8.3 -------- ----- ------ ------ -------- Net income (loss)............ $ 43.7 $(3.3) $ 20.6 $(26.0) $ 35.0 ======== ===== ====== ====== ======== DILUTED PER SHARE DATA: Net income..................... $ 1.35 $ 1.08 Diluted average shares outstanding (in thousands)... 32,411 32,411 Ratio of earnings to fixed charges (g).................. 1.5x
25 29 NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS (a) For purposes of preparing the Unaudited Pro Forma Combined Statement of Operations for the fiscal year ended January 31, 1999, our historical financial information for the fiscal year ended January 31, 1999 was combined with the historical financial information for the 1998 acquisitions for the period of time from January 1, 1998 to their date of acquisition and the historical financial information for CMI for the twelve months ended November 30, 1998. (b) The 1998 acquisitions were accounted for by the purchase method of accounting. Under purchase accounting, the total purchase price for each acquisition was allocated to the tangible and intangible assets and liabilities of the acquired companies based upon their respective fair values as of the effective date of the acquisition based upon valuations and other studies. The following presents the effect of the purchase accounting adjustments and adjustments to reflect adoption of our accounting policies on the Pro Forma Statements of Operations (dollars in millions):
YEAR ENDED JANUARY 31, 1999 -------------------- COST OF SALES MG&A ------------- ---- Depreciation.......................................... $(1.2) $ -- Amortization of intangible assets and goodwill........ -- 1.5 ----- ---- Total increase (decrease)........................ $(1.2) $1.5 ===== ====
Upon consummation of the acquisitions, the fair value of assets acquired was depreciated over 25 years for buildings and 12 years for equipment, consistent with Hayes' depreciation policy for used equipment and Hayes' estimate of the remaining economic life of the assets. Other intangibles assets and goodwill are amortized over their estimated useful lives, not to exceed 40 years. (c) The CMI acquisition is being accounted for by the purchase method of accounting. Under purchase accounting, the total purchase price will be allocated to the tangible and intangible assets and liabilities of CMI based upon their respective fair values as of the effective time of the CMI acquisition based upon valuations and other studies which are not yet available. A preliminary allocation of the purchase price has been made to major categories of assets and liabilities based on available information. The actual allocation of purchase price and the resulting effect on income from operations may differ significantly from the pro forma amounts included in this prospectus. The following presents the effect of the purchase accounting adjustments and adjustments to reflect adoption of Hayes' accounting policies on the Pro Forma Statements of Operations (dollars in millions):
YEAR ENDED JANUARY 31, 1999 -------------------- COST OF SALES MG&A ------------- ---- Depreciation.......................................... $(9.8) $ -- Amortization of intangible assets and goodwill........ -- 8.0 ----- ---- Total increase (decrease)................... $(9.8) $8.0 ===== ====
The adjustments for estimated pro forma depreciation and amortization of intangible assets and goodwill are based on their estimated fair values. Property, plant and equipment is expected to be depreciated over the estimated useful life of the assets. CMI's current annual depreciation expense is approximately $38.1 million. Upon consummation of the acquisition, the fair value of assets acquired was estimated to be $236.7 million. This amount will be depreciated over 25 years for buildings and 12 years for equipment, consistent with Hayes' depreciation policy for 26 30 used equipment and Hayes' estimate of the remaining economic life of the assets ($28.3 million of annual depreciation expense). Other intangible assets and goodwill are expected to be eligible for trading by qualified buyers inamortized over their estimated useful lives, not to exceed 40 years. For pro forma purposes, a 35-year composite amortization life has been used. (d) Represents financial information of certain subsidiaries of CMI which were sold prior to the PORTAL market. The Company does not intend to apply for listingconsummation of the New NotesCMI acquisition. (e) Represents adjustments to interest expense assuming the CMI acquisition and related financing and the 1998 acquisitions occurred on any securities exchange orFebruary 1, 1998 (dollars in millions):
YEAR ENDED JANUARY 31, 1999 ----------- PRO FORMA INTEREST RATE AMOUNT EXPENSE ---- ------ --------- Pro Forma Capitalization: New bank debt............................. 7.200% $631.0 $ 45.4 Asset securitization...................... 5.850 100.0 5.9 Other indebtedness........................ Various 162.0 8.6 11% Notes................................. 11.000 250.0 27.5 9 1/8% Notes.............................. 9.125 400.0 36.5 8 1/4% Notes.............................. 8.250 250.0 20.6 Amortization of debt issuance costs and other interest expense.................... 9.8 ------ Total pro forma interest expense....... 154.3 Historical interest expense................. (106.5) ------ Pro forma adjustment................... $ 47.8 ======
(f) Reflects income tax effects of the pro forma adjustments assuming a combined effective statutory income tax rate of 43%. (g) For the purpose of computing this ratio, earnings consist of earnings before taxes on income and fixed charges. Fixed charges consist of interest expense, amortization of deferred debt issuance costs and one-third of rental expense. 27 31 UNAUDITED PRO FORMA COMBINED BALANCE SHEET
HAYES CMI JANUARY 31, NOVEMBER 30, PRO FORMA PRO FORMA 1999 1998 ADJUSTMENTS COMBINED ----------- ------------ ----------- --------- (IN MILLIONS OF DOLLARS) Cash and cash equivalents.............. $ 51.3 $ 7.2 $ (0.2)(d) $ 58.3 Receivables............................ 181.6 84.6 (8.7)(d) 257.5 Inventories............................ 166.6 72.4 (1.9)(d) 237.1 Prepaid expenses and other............. 22.8 7.7 (2.4)(d) 28.1 -------- ------ ------- -------- Current assets.................... 422.3 171.9 (13.2) 581.0 Net property, plant, and equipment..... 878.0 181.2 (7.4)(d) 40.0(a) 1,091.8 Deferred tax assets.................... 76.7 -- -- 76.7 Unamortized debt issuance costs........ 28.0 -- 22.0(b) 50.0 Goodwill and other intangible assets... 629.6 2.6 279.2(a) 911.4 Other noncurrent assets................ 76.3 33.3 (6.8)(d) 102.8 -------- ------ ------- -------- Total assets...................... $2,110.9 $389.0 $ 313.8 $2,813.7 ======== ====== ======= ======== Bank borrowings and current portion of long-term debt....................... $ 57.1 $ 20.3 $ (20.3)(a),(b) $ 57.1 Accounts payable and accrued liabilities.......................... 456.7 72.9 (5.4)(d) 524.2 -------- ------ ------- -------- Current liabilities............... 513.8 93.2 (25.7) 581.3 Pension and other long-term liabilities.......................... 329.1 -- -- 329.1 Minority interest...................... 12.6 -- -- 12.6 Deferred tax liability, net............ 58.4 4.4 (0.1)(d) 62.7 Senior subordinated notes.............. 901.5 -- -- 901.5 Long-term debt......................... 74.6 119.6 (119.6)(a),(b) 74.6 Term Loan Facilities................... -- -- 631.0(b) 631.0 -------- ------ ------- -------- Total liabilities................. 1,890.0 217.2 485.6 2,592.8 Paid in capital........................ 236.8 -- -- 236.8 Capital stock.......................... 0.3 0.5 (0.5)(a),(c) 0.3 Retain earnings (deficit).............. (7.1) 171.3 (149.4)(a),(c) (21.9)(d) (7.1) Accumulated other comprehensive income............................... (9.1) -- -- (9.1) -------- ------ ------- -------- Total stockholders' equity........ 220.9 171.8 (171.8) 220.9 -------- ------ ------- -------- Total liabilities and stockholders' equity......... $2,110.9 $389.0 $ 313.8 $2,813.7 ======== ====== ======= ========
28 32 NOTES TO THE PRO FORMA COMBINED BALANCE SHEET (a) The purchase price and estimated preliminary adjustments to historical book value of CMI as a result of the CMI acquisition are as follows (dollars in millions): Purchase price in excess of net assets acquired: Cash consideration........................................ $ 605.0 Fees and expenses......................................... 4.0 Repayment of CMI indebtedness............................. (139.9) Book value of net assets acquired......................... (149.9) ------- Purchase price in excess of net assets acquired........... $ 319.2 ======= Preliminary allocation of purchase price in excess of net assets acquired: Increase in property, plant and equipment to estimated fair value............................................. $ 40.0 Estimated goodwill and other intangibles.................. 279.2 ------- Total................................................ $ 319.2 =======
(b) Reflects the estimated sources and uses of funds for quotation through the National AssociationCMI acquisition and the related financing, assuming these transactions occurred at January 31, 1999 (dollars in millions): Sources of funds -- New bank debt........................... $631.0 ====== Uses of funds: Net cash consideration for CMI acquisition................ 465.1 Repayment of CMI indebtedness............................. 139.9 Fees and expenses (including deferred financing costs).... 26.0 ------ Total uses of funds.................................. $631.0 ======
(c) The adjustments to capital stock and retained earnings as a result of Securities Dealers Automated Quotation System ("NASDAQ"). The Exchange Offer is not conditioned upon any minimum or maximum aggregate principal amountthe CMI acquisition are as follows (dollars in millions): Capital stock: Elimination of CMI pre-business combination capital stock.................................................. $ 0.5 Retained earnings: Elimination of CMI pre-business combination retained earnings............................................... $149.4
(d) Represents financial information of Notes being tendered for exchange. No assurance can be given ascertain subsidiaries of CMI which were sold prior to the liquidityconsummation of the trading market for the Notes, or, in the case of non-tendering holders of Old Notes, the trading market for the Old Notes following the new exchange offer. The liquidity of, and trading market for, the New Notes also may be adversely affected by general declines in the market for similar securities. Such a decline may adversely affect such liquidity and trading markets independent of the financial performance of, and prospects for, the Company. 19CMI acquisition. 29 2333 THE EXCHANGE OFFER TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES The Old June Notes were sold by the CompanySubject to the Initial Purchasers of the Old June Notes on June 30, 1997 (the "June Issue Date") pursuant to a Purchase Agreement, dated June 19, 1997, and the Old July Notes were sold by the Company to the Initial Purchasers of the Old July Notes on July 22, 1997 (the "July Issue Date") pursuant to a Purchase Agreement, dated July 16, 1997. Upon the terms and subject to the conditions set forth in this Prospectusprospectus and in the accompanying Letterletter of Transmittal (which together constitute the Exchange Offer), the Companytransmittal, we will accept for exchange Old Notesold notes which are properly tendered on or prior to the Expiration Dateexpiration date and not withdrawn as permitted below. As used herein,in this prospectus, the term "Expiration Date""expiration date" means 5:00 p.m., New York City time, on , 1997;July 16, 1999; provided, however, that if the Company,we, in itsour sole discretion, hashave extended the period of time forduring which the Exchange Offerexchange offer is open, the term "Expiration Date""expiration date" means the latest time and date to which we extend the Exchange Offer is extended.exchange offer. As of the date of this Prospectus,prospectus, $250,000,000 aggregate principal amount of the Old June Notes is outstanding and $150,000,000 aggregate principal amount of the Old July Notes isold notes are outstanding. This Prospectus, together withprospectus and the Letterletter of Transmittal, istransmittal are first being sent on or about the date of this Prospectus,June 11, 1999, to all Holdersholders of Old Notesold notes known to the Company. The Company'sus. Our obligation to accept Old Notesold notes for exchange pursuant to the Exchange Offerexchange offer is subject to certain conditions as set forth below under "-- Certain Conditions to the Exchange Offer.exchange offer." The CompanyWe expressly reservesreserve the right, at any time or from time to time, and subject to its obligations under the Registration Rights Agreements, to extend the period of time during which the Exchange Offerexchange offer is open, and thereby delay acceptance for exchange of any Old Notes,old notes, by giving oral or written notice of such extension to the Holders thereof.old note holders as described below. During any such extension, all Old Notesold notes previously tendered will remain subject to the Exchange Offerexchange offer and may be accepted for exchange by us. We will return at no expense to the Company. Any Old Notesholder any old notes not accepted for exchange for any reason will be returned without expense to the tendering Holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer.exchange offer. Old Notesnotes tendered in the Exchange Offerexchange offer must be in denominations of principal amount of $1,000 and any integral multiple thereof. The Companymultiples of $1,000. If any of the events specified in "-- Conditions to the exchange offer" should occur, we expressly reservesreserve the right to amend or terminate the Exchange Offer,exchange offer, and not to accept for exchange any Old Notesold notes not theretoforealready accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified below under "Certain Conditions to the Exchange Offer." The Companyexchange. We will give oral or written notice of any extension, amendment, non-acceptance or termination to the Holders of the Old Notesold note holders as promptly as practicable, such notice inpracticable. In the case of anyan extension to be issued by means ofwe will issue a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.expiration date. Following consummation of the exchange offer, we may, in our sole discretion, commence one or more additional exchange offers to those old note holders who did not exchange their old notes for new notes in the exchange offer on terms which may differ from those contained in the registration agreement. We may use this prospectus, as it may be amended or supplemented from time to time, in connection with additional exchange offers. These additional exchange offers will take place from time to time until all outstanding old notes have been exchanged for new notes pursuant to the terms and conditions contained in this prospectus. PROCEDURES FOR TENDERING OLD NOTES The tender toWhen an old note holder tenders, and we accept, the Company of Old Notes by a Holder thereof as set forth below and the acceptance thereof by the Companyold notes, this will constitute a binding agreement between the tendering Holderus and the Company uponthat holder subject to the terms and subject to the conditions set forth in this Prospectusprospectus and in the accompanying Letterletter of Transmittal.transmittal. Except as set forth below, a Holder (which term, for purposes of the Exchange Offer, includes any participantto tender in the Book-Entry Transfer Facility (as defined herein) system whose name appears onexchange offer, a security position listing as the Holder of such Old Notes) who wishes to tender Old Notes for exchange pursuant to the Exchange Offerholder must transmit either: - a Letter of Transmittal, properly completed and duly executed includingletter of transmittal, and all other documents required by such Letterthe letter of Transmittal or (intransmittal, to The Bank of New York, the case of a book-entry transfer) an Agent's Message (as defined herein) in lieu of such Letter of Transmittal to the Exchange Agentexchange agent, at the address set forth below under "-- Exchange Agent"agent" on or prior to the Expiration Date.expiration date; or - if the old notes are tendered pursuant to the book-entry procedures set forth below, the tendering old note holder may transmit an agent's message to the exchange agent instead of the letter of transmittal on or prior to the expiration date. 30 34 In addition, either (i)- the exchange agent must receive the certificates for such Old Notesthe old notes and the letter of transmittal; or - the exchange agent must be received by the Exchange Agent along with the Letter of Transmittal, (ii)receive, prior to July 16, 1999, a timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Old Notes, if such procedure is available,the old notes into the Exchange Agent'sexchange agent's account at DTC (as defined herein) (the 20 24 "Book-Entry Transfer Facility") pursuantThe Depository Trust Company according to the procedure for book-entry transfer described below, must be received by the Exchange Agent prior to the Expiration Date along with the Letterletter of Transmittaltransmittal and agent's message; or an Agent's Message in lieu of a Letter of Transmittal, or (iii)- the Holderholder must comply with the guaranteed delivery procedures described below. The term "Agent's Message""agent's message" means a message, transmitted by the Book-Entry Transfer Facility to The Depository Trust Company and received by the Exchange Agentexchange agent and forming a part of a Book-Entry Confirmation,the book-entry confirmation, which states that the Book-Entry Transfer FacilityThe Depository Trust Company has received an express acknowledgment from the tendering Participantparticipant (as defined herein), which acknowledgment stateshere) that such Participantthe participant has received and agrees to be bound by the letter of transmittal and make the representations and warranties contained in, the Letter of Transmittal and that the Companywe may enforce such Letterthe letter of Transmittaltransmittal against such Participant. THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY.that participant. The method of delivery of old notes, letters of transmittal or agent's messages and all other required documents is at the election and risk of the holders. If delivery is by mail, we recommend registered mail, properly insured, with return receipt requested. In all cases, you should allow sufficient time to assure timely delivery. Do not send letters of transmittal or old notes to us. Signatures on a Letterletter of Transmittaltransmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the Old Notesold notes surrendered for exchange pursuant thereto are tendered (i)either by a Holderregistered holder of the Old Notesold notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the Letterletter of Transmittaltransmittal or (ii) for the account of an Eligible Institution (as defined herein). In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be byeligible institution. An eligible institution is a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or by a commercial bank or trust company having an office or correspondent in the United StatesStates. If signatures on a letter of transmittal or by such other Eligible Institution withina notice of withdrawal are required to be guaranteed, the meaning of Rule 17(A)(d)-15 of the Exchange Act (collectively, "Eligible Institutions").guarantor must be an eligible institution. If Old Notesold notes are registered in the name of a person other than a signer of the Letterletter of Transmittal,transmittal, the Old Notesold notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Companywe may determine in itsour sole discretion, duly executed by the registered Holderholder with the signature thereon guaranteed by an Eligible Institution.eligible institution. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of Old Notesold notes tendered for exchange will be determined by the Companyus in itsour sole discretion, whichdiscretion. Our determination shallwill be final and binding. The Company reservesWe reserve the absolute right to reject any and all tenders of any particular Old Noteold notes not properly tendered or to not accept any particular Old Noteold notes which acceptance might, in theour judgment or that of the Company or itsour counsel, be unlawful. The CompanyWe also reservesreserve the absolute right to waive any defects or irregularities or conditions of the Exchange Offerexchange offer as to any particular Old Noteold notes either before or after the Expiration Dateexpiration date (including the right to waive the ineligibility of any Holderholder who seeks to tender Old Notesold notes in the Exchange Offer)exchange offer). TheOur interpretation of the terms and conditions of the Exchange Offerexchange offer as to any particular Old Noteold notes either before or after the Expiration Dateexpiration date (including the Letterletter of Transmittaltransmittal and the instructions thereto) by the Company shallwill be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notesold notes for exchange must be cured within such reasonable period of time as the Company shallwe will determine. Neither we, the Company, the Exchange Agentexchange agent nor any other person shall be under any duty to give notification of any defect or irregularity with respect to any tender of Old Notesold notes for exchange, nor shall any of themus incur any liability for failure to give such notification. If a Letter of Transmittal is signed by a person or persons other than the registered Holderholder or Holdersholders of Old Notes, such Old Notesold notes signs the letter of transmittal, those old notes must be endorsed or accompanied by appropriate powers of attorney, in 31 35 either case signed exactly as the name or names of the registered Holderholder or Holdersholders that appear on the Old Notes.old notes. If a Letter of Transmittal or any Old Notes or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity suchsign the letter of transmittal or any old notes, those persons should so indicate when signing, and unless waived by the Company,must submit proper evidence satisfactory to the Companyus of theirsuch persons' authority to so act must be submitted with the Letter of Transmittal. 21 25unless we waive this requirement. By tendering, each Holder will representholder represents to the Companyus that, among other things, the New Notesnew notes acquired pursuant toin the Exchange Offerexchange offer are being obtained in the ordinary course of business of the person receiving such New Notes,the new notes, whether or not suchthat person is the Holder,holder, and that neither the Holderholder nor any suchthe other person has anany arrangement or understanding with any person to participate in the distribution of the new notes. In the case of a holder that is not a broker-dealer, each such New Notes andholder, by tendering, will also represent to us that neitherhe is not engaged in, or intends to engage in, a distribution of the Holder nornew notes. If any suchholder or any other person is an "affiliate,"affiliate of ours, as that term is defined under Rule 405 ofunder the Securities Act, of the Company. If any Holder is an affiliate of the Company,or is engaged in or intends to engage in or has anyan arrangement or understanding with any person to participate in thea distribution of the New Notesnew notes to be acquired pursuant toin the Exchange Offer, such Holders (i) could notexchange offer, that holder or any other person cannot rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives New Notesnew notes for its own account pursuant toin exchange for old notes, where those old notes were acquired by the Exchange Offerbroker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes.those new notes. See "Plan of Distribution." The Letterletter of Transmittaltransmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter"underwriter within the meaning of the Securities Act. ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Companyexchange offer, we will accept, promptly after the Expiration Date,expiration date, all Old Notesold notes properly tendered and will issue the New Notesnew notes promptly after acceptance of the Old Notes and cause the New Notes to be authenticated by the Trustee.old notes. See "-- Certain Conditions to the Exchange Offer" below.exchange offer." For purposes of the Exchange Offer, the Companyexchange offer, we shall be deemed to have accepted properly tendered Old Notesold notes for exchange when, as and if the Company haswe have given oral (promptly confirmed in writing) or written notice thereofof the acceptance to the Exchange Agent.exchange agent, with written confirmation of any oral notice to be given promptly thereafter. For each Old June Note or Old July Noteold note accepted for exchange, the Holder of such Old Noteold note holder will receive a New June Note or New July Note, as the case may be,new note having a principal amount at maturity equal to that of the surrendered Old Note.old note. Interest on the New June Notesnew notes will accrue from (A)- the later of (i)of: - the last interest payment date on which interest was paid on the Old June Notesold notes surrendered in exchange therefor, or (ii)- if the Old June Notesold notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B)- if no interest has been paid on the Old June Notes,old notes, from June 30, 1997. Interest onDecember 7, 1998. If the New July Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Old July Notes surrendered in exchange therefor or, (ii) if the Old July Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Old July Notes, from July 22, 1997. Pursuant to the Registration Rights Agreements, if (i) a Registration Statement or Shelf Registration Statementoffer is not filed within 60 days afterconsummated by August 17, 1999, the (A) June Issue Date with respect to the Old June Notes or (B) July Issue Date with respect to the Old July Notes, (ii) a Registration Statement or Shelf Registration Statement is not declared effective within 120 days after the (A) June Issue Date with respect to the Old June Notes or (B) July Issue Date with respect to the Old July Notes, or (iii) either (A) the Company has not exchanged the (a) New June Notes for all Old June Notes or (b) New July Notes for all Old July Notes, validly tendered in accordance with the terms of the Exchange Offer on or prior to 150 days after the (A) June Issue Date with respect to the Old June Notes or (B) July Issue Date with respect to the Old July Notes or (B) the Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective at any time prior to the termination of the Effectiveness Period (subject to certain exceptions); (each of such events referred to in clauses (i) through (iii) above is a "Registration Default"), the sole remedy available to Holders of the Old June Notes or Old July Notes, as the case may be, will be the assessment of Additional Interest as follows: the per annum interest rate on such Old Notesthe old notes will increase by 50 basis points, and the per annum interest rate will increase by an 22 26 additional 25 basis points for each subsequent 90-day period during whichuntil the Registration Default remains uncured,exchange offer is completed, up to a maximum additional interest rate of 200 basis points per annum in excess of the 98 1/8%4%. Payments of interest, rate. All Additional Interestif any, on old notes in exchange for which new notes were issued will be payablemade to Holdersthe persons who, at the close of such Old Notes in cashbusiness on each JanuaryJune 15 and Julyor 32 36 December 15 commencing withnext preceding the first suchinterest payment date, occurringare registered holders of the old notes if the record date occurs prior to the exchange, or are registered holders of the new notes if the record date occurs on or after any such Additional Interest commences to accrue, until such Registration Default is cured. After the date of the exchange, even if notes are cancelled after the record date and on which such Registration Default is cured,or before the interest rate on such Old Notes will revert to the interest rate originally borne by such Old Notes.payment date. In all cases, issuance of New Notesnew notes for Old Notesold notes that are accepted for exchange pursuant to the Exchange Offerexchange offer will be made only after the exchange agent timely receipt by the Exchange Agent ofreceives either certificates for such Old Notesold notes or a timely Book-Entry Confirmationbook-entry confirmation of such Old Notesthose old notes into the Exchange Agent'sexchange agent's account at the Book-Entry Transfer Facility, the Letter of TransmittalThe Depository Trust Company, a properly completed and duly executed or an Agent's Message in lieu thereofletter of transmittal and all other required documents.documents or, in the case of a book-entry confirmation, an agent's message. If any tendered Old Notes are not accepted for any reason set forth in the terms and conditions of the Exchange Offerexchange offer we do not accept any tendered old notes or if Old Notesold notes are submitted for ana greater principal amount or quantity greater than the Holder desiresholder desired to exchange, suchwe will return those unaccepted or non-exchanged Old Notes will be returnedold notes without expense to the tendering Holder thereofholder (or, in the case of Old Notesold notes tendered by book-entry transfer into the Exchange Agent'sexchange agent's account at the Book-Entry Transfer FacilityThe Depository Trust Company pursuant to the book-entry procedures described below, such non-exchanged Old Notesold notes will be credited to an account maintained with such Book-Entry Transfer Facility)The Depository Trust Company) as promptly as practicable after the expiration or termination of the Exchange Offer.exchange offer. BOOK-ENTRY TRANSFER The Exchange Agentexchange agent will make a request to establish an account for the establishment of accounts with respect to the Old Notesold notes at the Book-Entry Transfer FacilityThe Depository Trust Company for purposes of the Exchange Offerexchange offer within two business days after the date of this Prospectus unless an Exchange Agent already has established an account with the Book-Entry Transfer Facility suitable for the Exchange Offer,prospectus, and any financial institution that is a Participantparticipant in the Book-Entry Transfer Facility's systemThe Depository Trust Company's systems may make book-entry delivery of Old Notesold notes by causing the Book-Entry Transfer FacilityThe Depository Trust Company to transfer such Old Notesold notes into the Exchange Agent'sexchange agent's account at the Book-Entry Transfer FacilityThe Depository Trust Company in accordance with such Book-Entry Transfer Facility'sThe Depository Trust Company's procedures for transfer. ALTHOUGH DELIVERY OF OLD NOTES MAY BE EFFECTED THROUGH BOOK-ENTRY TRANSFER AT THE BOOK-ENTRY TRANSFER FACILITY, THE LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), WITH ANY REQUIRED SIGNATURE GUARANTEES OR AN AGENT'S MESSAGE IN LIEU THEREOF AND ANY OTHER REQUIRED DOCUMENTS, MUST, IN ANY CASE, BE TRANSMITTED TO AND RECEIVED BY THE EXCHANGE AGENT AT THE ADDRESS SET FORTH BELOW UNDER "EXCHANGE AGENT" ON OR PRIOR TO THE EXPIRATION DATE OR THE GUARANTEED DELIVERY PROCEDURES DESCRIBED BELOW MUST BE COMPLIED WITH.However, although delivery of old notes may be effected through book-entry transfer at The Depository Trust Company, the letter of transmittal or facsimile thereof, with any required signature guarantees, or an agent's message in lieu of a letter of transmittal and any other required documents must, in any case, be transmitted to and received by the exchange agent at one of the addresses set forth below under "-- Exchange agent" on or prior to the expiration date or the guaranteed delivery procedures described below must be complied with. GUARANTEED DELIVERY PROCEDURES If a Holderregistered holder of the Old Notesold notes desires to tender such Old Noteshis old notes and the Old Notesold notes are not immediately available, or time will not permit such Holder's Old Notesthat holder's old notes or other required documents to reach the Exchange Agentexchange agent before the Expiration Date,expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if (i)if: - the tender is made through an Eligible Institution, (ii)eligible institution; - prior to the Expiration Date,expiration date, the Exchange Agent receivedexchange agent receives from such Eligible Institution the Noticeeligible institution a properly completed and duly executed letter of Guaranteed Delivery,transmittal, or a facsimile thereof, and notice of guaranteed delivery, substantially in the form provided by the Company (byus, by telegram, telex, facsimile transmission, mail or hand delivery),delivery, setting forth the name and address of the Holderholder of Old Notesold notes and the amount of Old Notesold notes tendered, stating that the tender is being made thereby and guaranteeing that within five New York Stock Exchange ("NYSE") trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any required signature guarantees, and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent and (iii) the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry 23 27 Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any required signature guarantees, and all other documents required by the Letter of Transmittal, are received by the Exchange Agent within fivethree NYSE trading days after the date of execution of the Noticenotice of Guaranteed Delivery.guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and 33 37 - the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and all other documents required by the letter of transmittal, are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery. WITHDRAWAL RIGHTS Tenders of Old Notesold notes may be withdrawn at any time prior to the Expiration Date.expiration date. For a withdrawal to be effective, a written notice of withdrawal must be received by the Exchange Agentexchange agent at one of the addressaddresses set forth below under "-- Exchange Agent.agent." Any such notice of withdrawal must specify the name of the person having tendered the Old Notesold notes to be withdrawn, identify the Old Notesold notes to be withdrawn, (includingincluding the principal amount inof the case of such Old Notes),old notes, and, (wherewhere certificates for Old Notesold notes have been transmitted)transmitted, specify the name in which such Old Notesthe old notes are registered, if different from that of the withdrawing Holder.holder. If certificates for Old Notesold notes have been delivered or otherwise identified to the Exchange Agentexchange agent, then, prior to the release of suchthe certificates the withdrawing Holderholder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institutioneligible institution unless such Holderthe holder is an Eligible Institution.eligible institution. If Old Notesold notes have been tendered pursuant to the procedure for book-entry transfer described above, the executedany notice of withdrawal guaranteed by an Eligible Institution, unless such Holder is an Eligible Institution, must specify the name and number of the account at the Book-Entry Transfer FacilityThe Depository Trust Company to be credited with the withdrawn Old Notesold notes and otherwise comply with the procedures of such facility. AllThe Depository Trust Company's procedures. We will determine all questions as to the validity, form and eligibility, (includingincluding time of receipt)receipt, of suchthe notices, will be determined by the Company, whoseand our determination shall be final and binding on all parties. Any Old Notesold notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer.exchange offer. Any Old Notesold notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the Holder thereoftheir holder without cost to such Holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures described above, such Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility for the Old Notes)holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer.exchange offer. In the case of old notes tendered by book-entry transfer into the exchange agent's account at The Depository Trust Company pursuant to the book-entry transfer procedures described above, those old notes will be credited to an account maintained with The Depository Trust Company for the old notes. Properly withdrawn Old Notesold notes may be retendered by following one of the procedures described under "-- Procedures for Tendering Old Notes"tendering old notes" above at any time on or prior to the Expiration Date. CERTAINexpiration date. CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other provision of the Exchange Offer, the Companyexchange offer, we shall not be required to accept for exchange, or to issue New Notesnew notes in exchange for, the Old Notes andany old notes. We may terminate or amend the Exchange Offer,exchange offer, if at any time before the acceptance of such Old Notesold notes for exchange or the exchange of the New Notesnew notes for such Old Notes,old notes, any of the following events shall occur: (a) there shall be threatened, instituted or pendingoccur, which in our reasonable judgment in any case, and regardless of the circumstances (including any action by us) giving rise to any event described below, makes it inadvisable to proceed with the exchange offer and/or proceeding before,with any acceptance for exchange or with any injunction, order or decree shall have been issued by,exchange: - if any court, or governmental agency or other governmental regulatory or administrative agency or commission, (i)threatens, institutes or issues any action, injunction, or order of decree seeking to restrain or prohibit the making or consummation of the Exchange Offerexchange offer or any other transaction contemplated by the Exchange Offer,exchange offer, or assessing or seeking any damages as a result thereof, or (ii) resultingof the exchange offer, which results in a material delay in theour ability of the Company to accept for exchange or exchange some or all of the Old Notesold notes pursuant to the Exchange Offer,exchange offer; - if any government or governmental authority, agency or court, domestic or foreign, takes, proposes to take or threatens to take any statute, rule, regulation, orderaction, or injunction shall be sought, proposed, introduced, enacted, promulgatedseeks, proposes, introduces, enacts, 34 38 promulgates or deemeddeems applicable to the Exchange Offerexchange offer or any of the transactions contemplated by the Exchange Offer byexchange offer any governmentstatute, rule, regulation, order or governmental authority, domestic or foreign, or any action shall have been taken, proposed or threatened, by any government, governmental authority, agency or court, domestic or foreign,injunction that in the soleour reasonable judgment of the Company might directly or indirectly result in any of the consequences referred to in clauses (i) or (ii) above, or which in the soleour reasonable judgment of the Company, might result in thenew notes holders of New Notes having obligations with respect to resales and transfers of New Notes which arenew notes greater than those described in the Commission's interpretation of the Commission 24 28 referred to on the cover page of this Prospectus,prospectus, or would otherwise make it inadvisable to proceed with the Exchange Offer; (b) there shall have occurred (i)exchange offer; - if any general suspension of or general limitation on prices for, or trading in, securities on any national securities exchange or in the over-the-counter market (ii)occurs; - if any limitation by any governmental agency or authority which may adversely affect theour ability of the issuer to complete the transactions contemplated by the Exchange Offer, (iii)exchange offer occurs; - if a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or any limitation by any governmental agency or authority which adversely affects the extension of credit or (iv)occurs; - if a commencement of a war, armed hostilities or other similar international calamity directly or indirectly involving the United States, or, in the case of any of the foregoing existing at the time of the commencement of the Exchange Offer,exchange offer, a material acceleration or worsening thereof;thereof occurs; or (c)- if any change (or any development involving a prospective change) shall have occurredoccurs or beis threatened in the business,our and our subsidiaries' businesses, properties, assets, liabilities, financial condition, operations, results of operations or prospects of the Company and its subsidiaries taken as a whole that, in theour reasonable judgment, of the Company, is or may be adverse to the Company,us, or the Company shall havewe become aware of facts that, in theour reasonable judgment, of the Company, have or may have adverse significance with respect to the value of the Old Notesold notes or the New Notes; which, in the reasonable judgment of the Company in any case, and regardless of the circumstances (including any action by the Company) giving rise to any such condition, makes it inadvisable to proceed with the Exchange Offer and/or with such acceptance or exchange or with such exchange.new notes. The foregoingabove conditions are for theour sole benefit of the Company and we may be asserted by the Companyassert them regardless of the circumstances giving rise to any such conditionof these conditions or we may be waived by the Companywaive them in whole or in part at any time and from time to time in itsour sole discretion. TheOur failure by the Company at any time to exercise any of the foregoingabove rights shall not be deemed a waiver of any such rightof these rights and each such rightof these rights shall be deemed an ongoing right which may be asserted at any time and from time to time. In addition, the Companywe will not accept for exchange any Old Notesold notes tendered, and no New Notesnew notes will be issued in exchange for any such Old Notes,old notes, if at such time any stop order shall be threatened or in effect with respect to the Registration Statementregistration statement of which this Prospectusprospectus constitutes a part or the qualification of the Indenture under the Trust Indenture Act of 1939, as amended (the "TIA").1939. 35 39 EXCHANGE AGENT The Bank of New York has been appointed as the Exchange Agent in respect of the Notesexchange agent for the Exchange Offer.exchange offer. All executed Lettersletters of Transmittal in respect of the Notestransmittal and agent's messages should be directed to the Exchange Agentexchange agent at one of the addressaddresses set forth below. Questions and requests for assistance, requests for additional copies of this Prospectusprospectus or of the Letterletter of Transmittal in respect of the Notestransmittal or agent's message and requests for Noticesnotices of Guaranteed Deliveryguaranteed delivery should be directed to the Exchange Agentexchange agent addressed as follows: Delivery To:DELIVERY TO: THE BANK OF NEW YORK, EXCHANGE AGENT BY MAIL: BY OVERNIGHT COURIER OR HAND: The Bank of New York The Bank of New York as Exchange Agent
By Hand and Overnight By Registered or Certified By Facsimile: Courier: Mail: (212) 815-6339 101 Barclay Street 101 Barclay Street, 7E Confirm by Telephone: Corporate Trust Services101 Barclay Street New York, New York 10286 (212) 815-2742Corporate Trust Services Window Attention: Reorganization Section Ground Level SectionNew York, New York New York 10286 Attention: Reorganization Section -- 7E BY FACSIMILE (FOR ELIGIBLE INSTITUTIONS ONLY): (212) 815-4699 CONFIRM BY TELEPHONE: (212) 815-6335
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. 25 29DELIVERY OF THE LETTER OF TRANSMITTAL. FEES AND EXPENSES The CompanyWe will not make any payment to brokers, dealers, or others soliciting acceptances of the Exchange Offer except for reimbursement of mailing expenses. Theexchange offer. We will pay the estimated cash expenses to be incurred in connection with the Exchange Offer will be paid by the Company andexchange offer, which are estimated in the aggregate to be $ .$100,000. TRANSFER TAXES Holders who tender their Old Notesold notes for exchange will not be obligated to pay any transfer taxes in connection therewith, except that Holdersholders who instruct the Companyus to register New Notesnew notes in the name of, or request that Old Notesold notes not tendered or not accepted in the Exchange Offerexchange offer be returned to, a person other than the registered tendering Holderholder, will be responsible for the payment of any applicable transfer tax thereon. CONSEQUENCES OF FAILUREEXCHANGING OR FAILING TO EXCHANGE OLD NOTES Holders of Old Notesold notes who do not exchange their Old Notesold notes for New Notes pursuant tonew notes in the Exchange Offerexchange offer will continue to be subject to the provisions in the Indenture governing such Old Notes regarding transfer and exchange of such Old Notesthe old notes and the restrictions on transfer of such Old Notesold notes as set forth in the legend on the Old Notes and as described inold notes because the Offering Memorandum pursuant to which such Old Note wasold notes were issued as a consequence of the issuance of such Old Notes pursuant tounder exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Old Notesold notes may not be offered or sold, unless registered under the Securities Act, except pursuant tounder an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. The Company doesWe do not currently anticipate that itwe will take any action to register the Old Notesold notes under the Securities Act. See "Description of the Notes -- Registration rights." Based on interpretations by the staff of the 36 40 Commission, as set forth in no-action letters issued to third parties, the Company believeswe believe that New Notesnew notes issued in the exchange of Old Notes pursuant to the Exchange Offeroffer in exchange for old notes may be offered for resale, resold or otherwise transferred by Holdersholders thereof (other than any such Holderholder which is an "affiliate"affiliate of the Companyours within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notesthe new notes are acquired in the ordinary course of such Holders'the holders' business and such Holders, other than brokers-dealers, are not engaged in, do not intend to engage in, andthe holders have no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of such New Notes. The Company, however, doesnew notes. However, we do not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offerexchange offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offerexchange offer as in such other circumstances. Each holder, other than a broker-dealer, must acknowledge that it is not engaged in, and does not intend to engage in, a distribution of new notes and has no arrangement or understanding to participate in a distribution of new notes. If any Holderholder is an affiliate of ours, is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the New Notesnew notes to be acquired pursuant to the Exchange Offer, such Holder (i)exchange offer, that holder could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives New Notesnew notes for its own account in exchange for Old Notes must acknowledge that such Old Notesold notes, where the old notes were acquired by suchthe broker-dealer as a result of market makingmarket-making activities or other trading activities, andmust acknowledge that it will deliver a prospectus in connection with any resale of such New Notes.new notes. See the section of this prospectus entitled "Plan of Distribution." ToIn addition, to comply with thestate securities laws, of certain jurisdictions, itthe new notes may not be necessary to qualifyoffered or sold in any state unless they have been registered or qualified for sale in that state or register thereunderan exemption from registration or qualification is available and is complied with. The offer and sale of the New Notes priornew notes to offeringqualified institutional buyers (as that term is defined under Rule 144A of the Securities Act) is generally exempt from registration or selling such New Notes. The Company has agreed, pursuant to the Registration Rights Agreement and subject to certain specified limitations therein, to use its best efforts to register or qualify the New Notes held by broker-dealers for offer or salequalification under the state securities or blue sky laws of such jurisdictions as any such holder of such New Notes reasonably requests in writing. Unless the Company is so requested, the Company doeslaws. We currently do not intend to register or qualify the sale of the New Notesnew notes in any such jurisdictions. 26state where an exemption from registration or qualification is required and not available. 37 3041 DESCRIPTION OF THE NOTES The Old June Notesold notes were, issued, and the New June Notesnew notes will be, issued pursuant to anby us under the Indenture dated as of June 30, 1997December 14, 1998 (the "June Indenture""Indenture"), among the Company,ourselves, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The Old July Notes were issued, and the New July Notes will be issued, pursuant to an Indenture, dated as of July 22, 1997 (the "July Indenture," and together with the June Indenture, the "Indentures"), among the Company, the Guarantors and the Trustee. The terms of the Notesnotes include those terms stated in the Indenture governing such Notes and those terms made part of the IndenturesIndenture by reference to the TIA,Trust Indenture Act of 1939 (the "TIA") as in effect on the date of the Indenture governing such Notes.Indenture. The Notesnew notes are subjectidentical in all material respects to all suchthe terms and holders of the Notes are referredold notes, except for certain transfer restrictions and registration rights relating to the Indenture governing such Notesold notes and except that, if the Securities Actexchange offer is not consummated by August 17, 1999, the interest rate on the old notes will increase by 50 basis points, and by an additional 25 basis points for each subsequent 90-day period until the exchange offer is completed, up to a statementmaximum additional interest rate of them.200 basis points per annum in excess of 8 1/4%. See "-- Registration rights." The following description is a summary of the material terms and provisions of the Notes. This summaryIndenture. It does not purport to be a complete descriptioninclude all of the Notes and is subjectprovisions of the Indenture. We urge you to read the Indenture because it defines your rights as holders of these notes. We have filed copies of this Indenture as an exhibit to the detailed provisions of, and qualified in its entirety by reference to, the Notes and the Indentures (including the definitions contained therein).registration statement which includes this prospectus. A copy of the IndenturesIndenture may be obtained from us or the Company by any holder or prospective investor upon request. Definitions relating toInitial Purchasers. You can find definitions of certain capitalized terms are set forthused in the following summary under "-- Certain Definitions" and throughout this description. Capitalized terms that are used but not otherwise defined herein have the meanings assigned to them in the IndenturesIndenture and such definitions are incorporated herein by reference. GENERAL The June Notesold notes are, and the July Notesnew notes will be, limited in aggregate principal amount to $250,000,000 and $150,000,000, respectively. The Notes will be generalour unsecured obligations, of the Company, subordinatedranking subordinate in right of payment to all of our Senior Indebtedness ofIndebtedness. The old notes are, and the Company and senior in right of payment to any current or future subordinated indebtedness of the Company. The Notesnew notes will be, unconditionally guaranteed (the "Guarantees") on a senior subordinated basis, as to payment of principal, premium, if any, and interest, jointly and severally by the Guarantors (together with each other Restricted Subsidiary which guarantees payment of the Notes pursuant to the covenant described under "Limitation on Creation of Subsidiaries").Domestic Restricted Subsidiaries. MATURITY, INTEREST AND PRINCIPAL The Notesnew notes will be treated as a continuation of the old notes, which are limited in aggregate principal amount to $250 million. The new notes will mature on JulyDecember 15, 2007.2008. The Notesnew notes will bear interest at a rate of 98 1/8%4% per annum from the date of original issuance until maturity. Interest isand will be payable semiannually in arrears on JanuaryJune 15 and JulyDecember 15, commencing JanuaryJune 15, 1998,1999. We will make interest payments to holders of record of the Notespersons who are registered holders at the close of business on theJune 1 and December 1 immediately preceding January 1 and July 1, respectively. OPTIONALthe applicable interest payment date. The interest rate on the old notes is subject to increase under certain circumstances described under "-- Registration rights." REDEMPTION The NotesOptional redemption. Except as described below, the new notes are not redeemable before December 15, 2003. On one or more occasions after that date, the new notes will be redeemable at theour option, of the Company, in whole or in part, at any time on or after July 15, 2002 at the following redemption prices (expressed as a percentage of principal amount), together, in each case, with accrued and unpaid interest to the redemption date,amount,) if redeemed during the twelve-month period beginning on JulyDecember 15 of each year listed below:
YEAR PERCENTAGE ---- ---------- 2002........................................................ 104.563% 2003........................................................ 103.042 2004........................................................ 101.521 20052003.................................................. 104.125% 2004.................................................. 102.750 2005.................................................. 101.375 2006 and thereafter.........................................thereafter................................... 100.000
Notwithstanding38 42 In addition, we must pay all accrued and unpaid interest on the foregoing, the Company may redeem in the aggregate up to 35% of the original principal amount of the June Notes and/notes redeemed. Optional redemption upon equity offerings. On one or July Notes at any time and from time to timemore occasions prior to JulyDecember 15, 2000 at a redemption price equal to 109.125% of2001, we may use the aggregate principal amount so redeemed, plus accrued interest to the redemption date, out of the Net Cash Proceedsnet cash proceeds of one or more Equity Offerings, where with respectequity offerings to the June Notes, the proceedsredeem up to the Company of any such Equity Offering are at least $35.0 million; 27 31 provided, that at least (i) $162.5 million35% of the principal amount of the June Notes originallynew notes issued and (ii) $97.5 millionunder the Indenture at a redemption price of 108.25% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided that: - at least 65% of the July Notes originallyaggregate principal amount of notes issued asunder the case may be,Indenture remains outstanding immediately after the occurrence of any suchredemption; and - we make this redemption and that any such redemption occurs withinnot more than 60 days followingafter the closingconsummation of any such Equity Offering.an equity offering. SELECTION AND NOTICE OF REDEMPTION In the event of redemption of fewerthat we choose to redeem less than all of the June Notes and/or July Notes, asnew notes, selection of the case maynew notes for redemption will be made by the Trustee shall selecteither: - in compliance with the requirements of the principal national securities exchange, if any, on which the notes are listed; or - on a pro rata basis, by lot or inby such other mannermethod as itthe Trustee shall deem fair and equitable the Notes to be redeemed. The Notesappropriate. Notice of redemption will be redeemable in whole or in part uponmailed by first-class mail at least 30 but not less than 30 nor more than 60 days prior written notice, mailed by first class mailbefore the redemption date to a holder's last address as it shall appear on the register maintained by the Registrareach holder of the Notes.new notes to be redeemed at its registered address. On and after anythe redemption date, interest will cease to accrue on the Notesnotes or portions thereof called for redemption unless the Company shallwe fail to redeem any such Note.note. SUBORDINATION The payment of all indebtedness represented by the Notesnew notes is to the extent and in the manner provided in the Indenture, subordinatesubordinated in right of payment to the prior indefeasible payment and satisfaction in full in cash of all of our existing and future Senior Indebtedness of the Company.Indebtedness. At April 30, 1997, on a pro forma basis after giving effect to the Lemmerz Transactions,1999, the principal amount of our outstanding Senior Indebtedness, of the Company, on a consolidated basis, would have beenwas approximately $322.7$714.2 million. InHolders of Senior Indebtedness will be entitled to receive payment in full in cash of all amounts due on or in respect of all of our Senior Indebtedness before the holders of notes will be entitled to receive any payment with respect to the notes in the event of any distribution to our creditors: - in a bankruptcy, reorganization, insolvency, receivership or bankruptcy casesimilar proceeding relating to us or proceeding,our property; - in a liquidation or any receivership, liquidation, arrangement, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets, whether voluntary or involuntary, or any liquidation, dissolution or other winding-up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or any generalour company; - in an assignment for the benefit of creditorscreditors; or other- in any marshalling of assets or liabilities of the Company (except in connection with the merger or consolidation of the Company or its liquidation or dissolution following the transfer of substantially all of its assets, upon the terms and conditions permitted under the circumstances described under "-- Merger, Consolidation or Sale of Assets")Issuers (all of the foregoing referred to herein individually as a "Bankruptcy Proceeding" and collectively as "Bankruptcy Proceedings"), the holders of Senior Indebtedness of the Company will be entitled to receive payment and satisfaction in full in cash of all amounts due on or in respect of all Senior Indebtedness of the Company before the holders of the Notes are entitled to receive or retain any payment or distribution of any kind on account of the Notes. In the event that, notwithstanding the foregoing, the Trustee or any holder of Notes receives any payment or distribution of assets of the Company of any kind, whether in cash, property or securities, including, without limitation, by way of set-off or otherwise, in respect of the Notes before all Senior Indebtedness of the Company is paid and satisfied in full in cash, then such payment or distribution will be held by the recipient in trust for the benefit of holders of Senior Indebtedness and will be immediately paid over or delivered to the holders of Senior Indebtedness or their representative or representatives to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution, or provision therefor, to or for the holders of Senior Indebtedness. By reason. As a result of such subordination, in the event of liquidation or insolvency, creditorsany Bankruptcy Proceeding, holders of the Companynotes may recover less ratably than our creditors who are holders of Senior Indebtedness may recover more, ratably, than other creditors of the Company, and creditors of the Company who are not holders of Senior Indebtedness or of the Notes may recover more, ratably, than the holders of the Notes.Indebtedness. No payment or distribution of any assets or securities of the Company or any Restricted Subsidiary of any kind or character (including, without limitation, cash, property and any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Notes by the Company) may be made by or on behalf of the Company or any Restricted Subsidiary, including, without limitation, by way of set-off or otherwise, for or on account of the Notes, or for or on account of the purchase, redemption, defeasance or other acquisition of the Notes, and neither the Trustee nor any holder or owner of any Notes shall take or receive from the Company or any Restricted Subsidiary, directly or indirectly in any manner, payment in respect of all or any portion of the Notesnotes following the delivery by the representative of the holders of Designated Senior Indebtedness under or in respect of the Amended Credit Agreement, for so long as there shall exist any Designated Senior Indebtedness underif it exists, or in 28 32 respect of the Amended Credit Agreement, and thereafter,if it does not, the holders of other Designated Senior Indebtedness (in either such case, the "Representative") to the Trustee of written notice of (i) the occurrence of(1) a Payment Default on Designated Senior Indebtedness or (ii) the occurrence of(2) a Non-Payment Event of Default on Designated Senior Indebtedness and the acceleration of the maturity of Designated Senior Indebtedness in accordance with its terms and in any such event,Indebtedness. Any such prohibition shall continue until suchthe Payment 39 43 Default is cured, waived in writing or ceases to exist or such acceleration has been rescinded or otherwise cured. At such time as the prohibition set forth in the preceding sentence shall no longer be in effect, subject to the provisions of the following paragraph, the Company shall resume making any and all required payments in respect of the Notes, including any missed payments. Upon the occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness, no payment or distribution of any assets or securities of the Company of any kind or character (including, without limitation, cash, property and any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Notes by the Company) may be made by or on behalf of the Company, including, without limitation, by way of set-off or otherwise, for or on account of the Notes, or for or on account of the purchase, redemption, defeasance or other acquisition of Notes, and neither the Trustee nor any holder or owner of any Notes shall take or receive from the Company, directly or indirectly in any manner, payment in respect of all or any portion of the Notes for a period (a "Payment Blockage Period") commencingbeginning on the date of receipt by the Trustee ofreceives written notice from the Representative of suchthe Non-Payment Event of Default unless and until (subject to any blockage of payments that may then be in effect under the preceding paragraph) the earliest of (x)(a) more than 179 days shall have elapsed since receipt of such written notice by the Trustee (y) suchreceived the notice, (b) the Non-Payment Event of Default shall havehas been cured or waived in writing or shall have ceased to exist or such Designated Senior Indebtedness shall havehas been paid in full or (z) such(c) the Payment Blockage Period shall havehas been terminated by written notice to the CompanyIssuers or the Trustee from the Representative, after which, in the case of clause (x), (y) or (z), the Company shall resume making any and all required payments in respect of the Notes, including any missed payments. Notwithstanding any other provision of the Indentures, in no event shall aRepresentative. No Payment Blockage Period commenced in accordance with the provisions of the Indentures described in this paragraphcan extend beyond 179 days from the date of the receipt by the Trustee ofreceives the notice referred to above (the "Initial Blockage Period"). Any number of additional Payment Blockage Periods may be commenced during the Initial Blockage Period; provided however, that no such additional Payment Blockage Period shallcan extend beyond the Initial Blockage Period. After the expiration of the Initial Blockage Period, no Payment Blockage Period may be commenced until at least 180 consecutive days have elapsed from the last day ofafter the Initial Blockage Period. Notwithstanding any other provision of the Indentures, noNo event of default with respect to Designated Senior Indebtedness (other than a Payment Default) which existed or was continuing on the date of the commencementfirst day of any Payment Blockage Period initiated by the Representative shall be, or be made,can serve as the basis for the commencement of a second Payment Blockage Period initiated by the Representative, whether or not within the Initial Blockage Period, unless such event of default shall havehas been cured or waived for a period of not less thanat least 90 consecutive days. Each Guarantee will, to the extent set forth in the Indentures,Indenture, be subordinate in right of payment to the prior indefeasible payment and satisfaction in full in cash of all Senior Indebtedness of the respective Guarantor, including obligations of such Guarantor with respect to the Amended Credit Agreement (including any guarantee thereof), and will be subject to the rights of holders of Designated Senior Indebtedness of such Guarantor to initiate blockage periods, upon terms substantially comparable to the subordination of the Notesnotes to all Senior Indebtedness of the Company.Issuers. If the CompanyIssuers or any Guarantor fails to make any payment on the Notesnotes or any Guarantee as the case may be, when due or within any applicable grace period, whether or not on account of payment blockage provisions, such failure would constitute an Event of Default under the Indenture governing such Notes and would enable the holders of such Notes to accelerate the maturity thereof.Indenture. See "-- Events"Events of Default." ABy accepting these notes, each holder of Notes by his acceptance of Notes agrees to be bound by such provisions and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to 29 33 effectuate the subordination provided for in the Indenture and appoints the Trustee his attorney-in-fact for such purpose. CERTAIN COVENANTS The IndenturesIndenture will contain, among others, the following covenants. Except as otherwise specified, all of the covenants described below will appear in both Indentures.the Indenture. Limitation on Additional Indebtedness The Companyadditional indebtedness. We will not, and will not permit any of our Restricted Subsidiary of the CompanySubsidiaries to, directly or indirectly, incur (as defined) any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness. Notwithstanding the foregoing, the Companywe and itsour Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), if (i)if: - after giving effect to the incurrence of such Indebtedness and the receipt and application of the proceeds thereof, the Company'sour Fixed Charge Coverage Ratio (determined on a pro forma basis for the last four of our fiscal quarters of the Company for which financial statements are available at the date of determination in accordance with the further provisions of this paragraph) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 19991; and 2.25 to 1 if the Indebtedness is incurred thereafter and (ii)40 44 - no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of such Indebtedness. For purposes of computing the Fixed Charge Coverage Ratio, (A)Ratio: - if the Indebtedness which is the subject of a determination under this provision is Acquired Indebtedness, or Indebtedness incurred in connection with the simultaneous acquisition (by way of merger, consolidation or otherwise) of any Person, business, property or assets (an "Acquisition"), then such ratio shall be determined by giving effect to (on a pro forma basis, as if the transaction had occurred at the beginning of the four-quarter period used to make such calculation) to both the incurrence or assumption of such Acquired Indebtedness or such other Indebtedness and the inclusion in the Company'sour EBITDA of the EBITDA of the acquired Person, business, property or assets, (B)assets; - if any Indebtedness outstanding or to be incurred (x)incurred: (a) bears a floating rate of interest, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account on a pro forma basis any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term as at the date of determination in excess of 12 months), (y); (b) bears, at theour option or that of the Company or a Restricted Subsidiary, a fixed or floating rate of interest, the interest expense on such Indebtedness shall be computed by applying, at theour option or that of the Company or such Restricted Subsidiary, either a fixed or floating raterate; and (z)(c) was incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period, (C) for any quarter prior to July 2, 1996 included in the calculation of such ratio, such calculation shall be made on a pro forma basis, giving effect to the acquisition by the Company of Motor Wheel, the issuance of the Notes, the incurrence of Indebtedness under the Credit Agreement and the use of the net proceeds therefrom as if the same had occurred at the beginning of the four-quarter period used to make such calculation, (D)period; - for any quarter included in the calculation of such ratio prior to the date that any Asset Sale was consummated, or that any Indebtedness was incurred, or that any Acquisition was effected, by the Companyus or any of itsour Subsidiaries, such calculation shall be made on a pro forma basis, giving effect to each Asset Sale, incurrence of Indebtedness or Acquisition, as the case may be, and the use of any proceeds therefrom, as if the same had occurred at the beginning of the four quarter period used to make such calculationcalculation; and (E)- the Fixed Charge Coverage Ratio shall not take into account Permitted Indebtedness that is incurred at the same time as Indebtedness under this paragraph.section. Limitation on Foreign Indebtedness The Companyforeign indebtedness. We will not permit any Restricted Subsidiary of the Companyours which is not a Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness set forth in clauses (i)(1) through (x)(10) and (xii)(12) of the definition thereof unless (i) the Indebtedness is incurred, denominated and payable in the local currencies of the jurisdictions of the operations 30 34 of the Restricted Subsidiary incurring such Indebtedness or of the business or the location of assets being acquired with the proceeds of such Indebtedness; provided, however, that any Indebtedness permitted to be incurred in a Western European currency pursuant to this clause (i) may be incurred in any Western European currency; provided, further, that any Restricted Subsidiary whose operations are located in Mexico can also incur Indebtedness denominated and payable in U.S. dollars, (ii)unless: - after giving effect to the incurrence of such Indebtedness and the receipt of the application of the proceeds thereof, (A)thereof; (1) if, as a result of the incurrence of such Indebtedness such Restricted Subsidiary will become subject to any restriction or limitation on the payment of dividends or the making of other distributions, (I)(a) the ratio of Foreign EBITDA to Foreign Interest Expense (determined on a pro forma basis for the last four fiscal quarters for which financial statements are available at the date of determination) is greater than 3.02.5 to 11; and (II)41 45 (b) the ratio of the Company'sour Adjusted EBITDA to Consolidated Fixed Charges (determined on a pro forma basis for the last four of our fiscal quarters of the Company for which financial statements are available at the date of determination) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 19991; and 2.25 to 1 if the Indebtedness is incurred thereafter and (B)(2) in any other case, the Company'sour Fixed Charge Coverage Ratio (determined on a pro forma basis for the last four of our fiscal quarters of the Company for which financial statements are available at the date of determination) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 19991; and 2.25 to 1 if the Indebtedness is incurred thereafter, and (iii)- no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of such Indebtedness. In the event that any Indebtedness incurred pursuant to clause (ii)(B)(1)(b) of the foregoing paragraphsection is proposed to be amended, modified or otherwise supplemented such that the payment of dividends or the making of other distributions becomes subject in any manner to any restriction or limitation, the Companywe will not permit the Restricted Subsidiary to so amend, modify or supplement such Indebtedness unless such Indebtedness could be incurred pursuant to the terms of clause (ii)(A)(1)(a) of the foregoing paragraph.section. All calculations required under the prior two paragraphs hereof shall be made in a manner consistent with the calculations required under the covenant described under "Limitation on Additional Indebtedness.additional indebtedness." Limitation on Restricted Payments The Companyrestricted payments. We will not make, and will not permit any of itsour Restricted Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless: (a)- no Default or Event of Default shall have occurred and be continuing at the time of or immediately after giving effect to suchthat Restricted Payment; (b)- immediately after giving pro forma effect to suchthat Restricted Payment, the Companywe could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the covenant set forth under "Limitation on Additional Indebtedness"; and (c)- immediately after giving effect to suchthat Restricted Payment, the aggregate of all Restricted Payments declared or made after July 2, 1996 does not exceed the sum ofof: (1) $5.0 million plus (2) 50% of the Company'sour Consolidated Net Income (or in the event that such Consolidated Net Income shall be a deficit, minus 100% of such deficit) after July 2, 1996, plus (3) 100% of the aggregate Net Cash Proceeds from the issue or sale, after July 2, 1996, of our Capital Stock (other than Disqualified Capital Stock or our Capital Stock of the Company issued to any Subsidiary of the Company) of the Companyours) or any Indebtedness or other securities of the Companyours convertible into or exercisable or exchangeable for our Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be. For purposes of determining under this clause (c)(3) the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value.market. The provisions of this covenant shall not prohibit (i)prohibit: - the payment of any distribution within 60 days after the date of declaration thereof, if at such date of declaration such payment would comply with the provisions of the Indenture, (ii)Indenture; - the retirement of any shares of our Capital Stock of the Company or Indebtedness which is subordinated in right of payment to the Notesnotes by conversion into, or by or in exchange for, shares of Capital 31 35 Stock (other than Disqualified Capital Stock), or out of, the Net Cash Proceeds of the 42 46 substantially concurrent sale (other than to a Subsidiary of the Company)ours) of other shares of our Capital Stock of the Company (other than Disqualified Capital Stock), (iii); - the redemption, repayment or retirement of Indebtedness of the Companyours subordinated in right of payment to the Notesnotes in exchange for, by conversion into, or out of the Net Cash Proceeds of, a substantially concurrent sale or incurrence of our Indebtedness (other than any Indebtedness owed to a Subsidiary) of the Company that is contractually subordinated in right of payment to the Notesnotes to at least the same extent as the Indebtedness being redeemed, repaid or retired, (iv)retired; - the retirement of any shares of Disqualified Capital Stock by conversion into, or by exchange for, shares of Disqualified Capital Stock, or out of the Net Cash Proceeds of the substantially concurrent issuance or sale (other than to a Subsidiary of the Company)ours) of other shares of Disqualified Capital Stock, or (v)Stock; - the making of Investments in Unrestricted Subsidiaries and joint ventures, provided that the Net Investment therein made since July 2, 1996 shall not exceed an aggregate of $25 million and (vi)$60 million; or - the making of Investments funded with the transfer of excess fixed assets no longer necessary in the conduct of theour business of the Company and itsour Subsidiaries in an aggregate amount not to exceed $15$40 million; provided, however, that in calculating the aggregate amount of Restricted Payments made subsequent to July 2, 1996, the amount of Net Investments made pursuant to clauses (v)(5) and (vi)(6) shall be included in the calculation. Not later than the date of making any Restricted Payment, the Companywe shall deliver to the Trustee an Officers' Certificate stating that suchthis Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant "Limitation on Restricted Payments"restricted payments" were computed, which calculations may be based upon the Company'sour latest available financial statements, and that no Default or Event of Default exists and is continuing and no Default or Event of Default will occur immediately after giving effect to any Restricted Payments. Limitation on Other Senior Subordinated Debt The Companyother senior subordinated debt. We will not, and will not permit any of itsour Restricted Subsidiaries to, directly or indirectly, incur, contingently or otherwise, any Indebtedness (other than the Notesnotes and the Guarantees, as the case may be) that is both (i)both: - subordinate in right of payment to any of our Senior Indebtedness or that of the Company or itsour Restricted Subsidiaries, as the case may be,be; and (ii)- senior in right of payment to the Notesnotes and the Guarantees, as the case may be. For purposes of this covenant, IndebtednessIndebted ness is deemed to be senior in right of payment to the Notesnotes and the Guarantees, as the case may be, if it is not explicitly subordinate in right of payment to Senior Indebtedness at least to the same extent as the Notesnotes and the Guarantees, as the case may be, are subordinate to Senior Indebtedness. Limitations on Liens The Companyliens. We will not, and will not permit any of itsour Restricted Subsidiaries to create, incur or otherwise cause or suffer to exist or become effective any Liens of any kind upon any Property of the Companyour Property or any Restricted Subsidiary, now owned or hereafter acquired which secures Indebtedness pari passu with or subordinated to the Notes unless (i)notes unless: - if sucha Lien secures Indebtedness which is pari passu with the Notes,notes, then the Notesnotes are secured on an equal and ratable basis with the obligations so secured until sucha time aswhen such obligation is no longer secured by a LienLien; or (ii)43 47 - if sucha Lien secures Indebtedness which is subordinated to the Notes, any suchthis Lien shall be subordinated to the Lien granted to the Holders of the Notesnotes in the same collateral as that securing suchthis Lien to the same extent as suchthe subordinated Indebtedness is subordinated to the Notes.notes. Limitation on Transactionstransactions with Affiliates The Companyaffiliates. We will not, and will not permit any of itsour Restricted Subsidiaries to, 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 Companywe or any of itsour Restricted Subsidiaries own a minority interest) or holder of 10% or more of the Company'sour Common Stock (an "Affiliate Transaction") or extend, renew, waive or otherwise modify the terms of any Affiliate Transaction entered into prior to the dateIssue Date unless: (1) the respective Notes were originally issued 32 36 unless (i) such Affiliate Transaction is between or among the Companyus and its Wholly Ownedour Wholly-Owned Subsidiaries; or (ii)(2) the terms of suchthe Affiliate Transaction are fair and reasonable to the Companyus or suchour Restricted Subsidiary, as the case may be, and the terms of suchthe Affiliate Transaction are at least as favorable as the terms which could be obtained by the Companyus or suchthe Restricted Subsidiary, as the case may be, in a comparable transaction made on an arm's-length basis between unaffiliated parties. In any Affiliate Transaction involving an amount or having a value in excess of $2 million which is not permitted under clause (i)(1) above, the Companywe must obtain a resolution of the board of directors certifying that suchthe Affiliate Transaction complies with clause (ii)(2) above. In transactions with a value in excess of $10$25 million which are not permitted under clause (i)(1) above, the Companywe or suchthe Restricted Subsidiary must obtain a written opinion as to the fairness of such a transaction from an independent investment banking firm. The foregoing provisions will not apply to (i)to: - any Restricted Payment that is not prohibited by the provisions described under "Limitations on Restricted Payments" contained herein, (ii)herein; - reasonable and customary fees paid by the Companyus or itsour Restricted Subsidiaries to their respective directorsdirectors; or (iii)- customary investment banking, underwriting, placement agentAgent or financial advisor fees paid in connection with services rendered to the Companyus or itsour Subsidiaries. Limitation on Creationcreation of Subsidiaries The Companysubsidiaries. We shall not create or acquire, nor permit any of itsour Restricted Subsidiaries to create or acquire, any Subsidiary other than (i)than: - a Restricted Subsidiary existing as of the date of the Indenture, (ii)Indenture; - a Restricted Subsidiary conducting a business similar or reasonably related to theour business and that of the Company and itsour Subsidiaries as conducted on the date the respective Notes were originally issued,Issue Date; or (iii)- an Unrestricted Subsidiary; provided, however, that each Restricted Subsidiary which is a Domestic Subsidiary acquired or created pursuant to clause (ii)(2) shall have executed a guarantee,Guarantee, satisfactory in form and substance to the Trustee (and with suchthe documentation relating thereto as the Trustee shall require, including, without limitation, a supplement or amendment to the IndenturesIndenture and opinions of counsel as to the enforceability of such guarantee)the Guarantee), pursuant to which suchthat Restricted Subsidiary shall become a Guarantor. 44 48 Neither the Companywe nor any of the Guarantors will transfer any assets to a Domestic Restricted Subsidiary which is not a Guarantor unless suchthat Restricted Subsidiary simultaneously with suchthe transfer executes a guaranteeGuarantee satisfactory in form and substance to the Trustee (together with the documentation referred to in the preceding sentence) pursuant to which suchthat Restricted Subsidiary shall become a Guarantor. See "-- General." Limitation on Certain Asset Sales The Companycertain asset sales. We will not, and will not permit any of itsour Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Companyunless: - we or itsour Restricted Subsidiaries, as the case may be, receives consideration at the time of suchthe sale or other disposition at least equal to the fair market value thereof (as determined in good faith by the Company'sour board of directors, and evidenced by a board resolution); (ii)- not less than 75% of the consideration received by the Companyus or itsour Subsidiaries, as the case may be, is in the form of cash or Temporary Cash Investments other than in the case where the Companywe or a Restricted Subsidiary is exchanging assets held by the Companyus or suchthat Restricted Subsidiary for assets held by another Person,Person; provided that any Investment received in suchany exchange would be permitted under clause (b) below; and (iii)- the Asset Sale Proceeds received by the Companyus or suchthe Restricted Subsidiary are applied (a) first,applied: (1) to the extent the Company elects,we elect, or isare required, to prepay, repay or purchase any then existingthen-existing Senior Indebtedness of the Companyours or any Restricted Subsidiary within 180 days following the receipt of the Asset Sale Proceeds from any Asset Sale,Sale; provided that any such repayment shall result in a permanent reduction of the commitments, if any, thereunder in an amount equal to the principal amount so repaid; (b) second,(2) to repurchase 11%Existing Notes within 270 days following the receipt of the Asset Sale Proceeds from any Asset Sale, tendered pursuant to the offer to repurchase required under the terms of the 11% Notes Indenture; (c) third, with respectExisting Indentures, to the July Notes, toextent such repurchase the June Notes within 270 days following the receipt of the Asset Sale Proceeds from any Asset Sale, tendered pursuantis required prior to the offer to repurchase requirednotes under the terms of the JuneExisting Indentures; (d) fourth,(3) to the extent of the balance of Asset Sale Proceeds after application as described in clauses (a), and (b) and, with respect to the July Notes, (c) above, to the extent the Company elects, 33 37we elect, to an investment in assets used or useful in businesses similar or reasonably related to theour business or that of the Company or Restricted Subsidiary as conducted on the date the respective Notes were originally issuedIssue Date (either directly or indirectly through the purchase of Capital Stock or other securities of a Person holding such assets),; provided that suchthis investment occurs or the Companywe or a Restricted Subsidiary entersenter into contractual commitments to make suchthis investment, subject only to customary conditions (other than the obtaining of financing), on or prior to the 181st day following receipt of suchthe Asset Sale Proceeds (the "Reinvestment Date") and Asset Sale Proceeds contractually committed are so applied within 270 days following the receipt of suchthe Asset Sale Proceeds; and (e) fifth,(4) if on the Reinvestment Date with respect to any Asset Sale, the Available Asset Sale Proceeds exceed $10$25 million, the Companywe shall apply an amount equal to suchthe Available Asset Sale Proceeds to an offer to repurchase the notes and any of our other senior subordinated securities then outstanding (other than the Existing Notes that were the subject of an offer to purchase pursuant to clause (b) above), pro rata, at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase (an "Excess Proceeds Offer"). If an Excess Proceeds Offer is not fully subscribed, the Companywe may retain the portion of the Available Asset Sale Proceeds not required to repurchase Notes.notes. 45 49 If the Company iswe are required to make an Excess Proceeds Offer, the Companywe shall mail, within 30 days following the Reinvestment Date, a notice to the Holders stating, among other things: (1)- that suchthe Holders have the right to require the Companyus to apply the Available Asset Sale Proceeds to repurchase suchthese notes and any of our other senior subordinated securities then outstanding (other than the Existing Notes that were the subject of an offer to purchase pursuant to clause (b) above), pro rata, at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase; (2)- the purchase date, which shall be no earlier than 30 days and not later than 60 days from the date such notice is mailed; and (3)- the instructions, determined by the Company,us, that each Holder must follow in order to have such Notestheir notes repurchased. Limitation on Common Stockcommon stock of Subsidiaries The Companysubsidiaries. We will not (i)not: - sell, pledge, hypothecate or otherwise convey or dispose of any Common Stock of a Restricted Subsidiary (other than under or in respect of the Amended Credit Agreement or under the terms of any Designated Senior Indebtedness and other than pledges of the Capital Stock of Restricted Subsidiaries that are not Guarantors securing Indebtedness of such Restricted Subsidiaries that are not Guarantors); or (ii)- permit any of itsour Subsidiaries to issue any Common Stock, other than to the Companyus or a Wholly OwnedWholly-Owned Subsidiary of the Company.ours. The foregoing restrictions shall not apply to an Asset Sale made in compliance with "Limitation on Certain Asset Sales." Payments for Consentconsent. Neither the Companywe nor any of itsour Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of any Notesnotes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the IndenturesIndenture or the Notesnotes unless such consideration is offered to be paid or agreed to be paid to all holders of the June Notes or July Notes, as the case may be,notes which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.Agreement. CHANGE OF CONTROL OFFER Within 20 days of the occurrence of a Change of Control, the Companywe shall notify the Trustee in writing of suchthis occurrence and shall make an offer to purchase (the "Change of Control Offer") the outstanding Notesnotes at a purchase price equal to 101% of the principal amount thereof plus any accrued and unpaid interest thereon to the Change of Control Payment Date (as hereinafter defined) (such purchase price being hereinafter referred to as the "Change of Control Purchase Price") in accordance with the procedures set forth in this covenant. Within 20 days of the occurrence of a Change of Control, the Companywe also shall (i)shall: - cause a notice of the Change of Control Offer to be sent at least once to the Dow Jones News Service or similar business news service in the United StatesStates; and (ii)46 50 - send by first-class mail, postage prepaid, to the Trustee and to each 34 38 holder of the Notes,notes, at the address appearing in the register maintained by the Registrar of the Notes,notes, a notice stating: (1)- that the Change of Control Offer is being made pursuant to this covenant and that all Notesnotes tendered will be accepted for payment, and otherwise subject to the terms and conditions set forth therein; (2)- the Change of Control Purchase Price and the purchase date (which shall be a Business Day no earlier than 20 business days from the date such notice is mailed (the "Change of Control Payment Date")); (3)- that any Notenote not tendered will continue to accrue interest; (4)- that, unless the Company defaultswe default in the payment of the Change of Control Purchase Price, any Notesnotes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5)- that holders accepting the offer to have their Notesnotes purchased pursuant to a Change of Control Offer will be required to surrender the Notesnotes to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Change of Control Payment Date; (6)- that holders will be entitled to withdraw their acceptance if the Paying Agent receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Notes delivered for purchase, and a statement that such holder is withdrawing his election to have such Notesnotes purchased; (7)- that holders whose Notesnotes are being purchased only in part will be issued new Notesnotes equal in principal amount to the unpurchased portion of the Notes surrendered,notes surrendered; provided that each Notenote purchased and each such new Notenote issued shall be in an original principal amount in denominations of $1,000 and integral multiples thereof; (8)- any other procedures that a holder must follow to accept a Change of Control Offer or effect withdrawal of such acceptance; and (9)- the name and address of the Paying Agent. On the Change of Control Payment Date, the Companywe shall, to the extent lawful, (i)lawful: (1) accept for payment Notesnotes or portions thereof tendered pursuant to the Change of Control Offer, (ii)Offer; (2) deposit with the Paying Agent money sufficient to pay the purchase price of all Notesnotes or portions thereof so tenderedtendered; and (iii)(3) deliver or cause to be delivered to the Trustee Notesnotes so accepted together with an Officers' Certificate stating the Notesnotes or portions thereof tendered to the Company.us. The Paying Agent shall promptly mail to each holder of Notesnotes so accepted payment in an amount equal to the purchase price for such Notes,notes, and the Companywe shall execute and issue, and the Trustee shall promptly authenticate and mail to suchthat holder, a new Notenote equal in principal amount to any unpurchased portion of the Notesnotes surrendered; provided that each such new Notenote shall be issued in an original principal amount in denominations of $1,000 and integral multiples thereof. The Indentures requireIndenture requires that if the Amended Credit Agreement or the New Credit Facility is in effect, or any amounts are owing thereunder or in respect thereof, at the time of the occurrence of a 47 51 Change of Control, prior to the mailing of the notice to holders described in the preceding paragraph, but in any event within 30 days following any Change of Control, the Company covenants to (i)we covenant to: - repay in full all obligations under or in respect of the Amended Credit Agreement or offer to repay in full all obligations under or in respect of the Amended Credit Agreement and repay the obligations under or in respect of the Amended Credit Agreement of each lender who has accepted such offeroffer; or (ii)- obtain the requisite consent under the Amended Credit Agreement to permit the repurchase of the Notesnotes as described above. The CompanyWe must first comply with the covenant described in the preceding sentenceclause (1) before itwe shall be required to purchase Notesnotes in the event of a Change of Control; provided that the Company'sour failure to comply with the covenant described in the preceding sentence 35 39 constitutes an Event of Default described in clause (iii)(3) under "Events of Default" below if not cured within 60 days after the notice required by such clause. As a result of the foregoing, a holder of the Notesnotes may not be able to compel the Companyus to purchase the Notesnotes unless the Company iswe are able at the time to refinance all of the obligations under or in respect of the Amended Credit Agreement or obtain requisite consents under the Amended Credit Agreement. Failure by the CompanyOur failure to make a Change of Control Offer when required by the IndenturesIndenture constitutes a default under the IndenturesIndenture and, if not cured within 60 days after notice, constitutes an Event of Default. The IndenturesIndenture will provide that, (A)that: - if the Companywe or any Subsidiary thereof hasof our Subsidiaries have issued any outstanding (i)outstanding: (1) Indebtedness that is subordinated in right of payment to the Notesnotes; or (ii)(2) Preferred Stock, and the Companywe or suchthat Subsidiary is required to make a Change of Control Offer or to make a distribution with respect to such subordinated Indebtedness or Preferred Stock in the event of a change of control, the Companywe shall not consummate any such offer or distribution with respect to such subordinated Indebtedness or Preferred Stock until such time as the Companywe shall have paid the Change of Control Purchase Price in full to the holders of Notesnotes that have accepted the Company'sour Change of Control Offer and shall otherwise have consummated the Change of Control Offer made to holders of the Notesnotes; and (B) the Company- we will not issue Indebtedness that is subordinated in right of payment to the Notesnotes or Preferred Stock with change of control provisions requiring the payment of such Indebtedness or Preferred Stock prior to the payment of the Notesnotes in the event of a Change in Control under the Indentures.Indenture. In the event that a Change of Control occurs and the holders of Notesnotes exercise their right to require the Companyus to purchase Notes,notes, if such purchase constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act at that time, the Companywe will comply with the requirements of Rule 14e-1 as then in effect with respect to such repurchase. MERGER, CONSOLIDATION OR SALE OF ASSETS The CompanyWe will not and will not permit any Guarantor to consolidate with, merge with or into, or transfer all or substantially all of its assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions), to any Person unless: (i) the Company(1) we or the Guarantor, as the case may be, shall be the continuing Person, or the Person (if other than the Companyus or the Guarantor) formed by suchthe consolidation or into which the Companywe or the Guarantor, as the case may be, is merged, or to which theour properties and assets or that of the Company or the Guarantor, as the case may be, are transferred shall be a corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia and shall 48 52 expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of theour obligations or those of the Company or the Guarantor, as the case may be, under the Notesnotes and the Indentures,Indenture, and the obligations under the IndenturesIndenture shall remain in full force and effect; (ii)(2) immediately before and immediately after giving effect to suchthis transaction, no Default or Event of Default shall have occurred and be continuing; and (iii)(3) immediately after giving effect to suchthis transaction on a pro forma basis the Companywe or such Person could incur at least $1.00 additional Indebtedness (other than Permitted Indebtedness) under the covenant set forth under "Limitation on Additional Indebtedness," provided that a Person that is a Guarantor may merge into the Companyour company or another Person that is a Guarantor without complying with this clause (iii)(3). In connection with any consolidation, merger or transfer of assets contemplated by this provision, the Companywe shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and the supplemental indenture in respect thereto comply with this provision and that all conditions precedent herein provided for relating to such transaction or transactions have been complied with. GUARANTEES The Notesnotes will be guaranteed on a senior subordinated basis by the Guarantors. All payments pursuant to the Guarantees by the Guarantors are subordinated in right of payment to the prior payment in full of all Senior Indebtedness of the Guarantor, to the same extent and in the same manner that all payments pursuant 36 40 to the Notesnotes are subordinated in right of payment to the prior payment in full of all of our Senior Indebtedness of the Company.Indebtedness. The obligations of each Guarantor are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor (including, without limitation, any guaranteesGuarantees of Senior Indebtedness) and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under the Indentures,Indenture, result in the obligations of such Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each Guarantor that makes a payment or distribution under a Guarantee shall be entitled to a contribution from each other Guarantor in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor. A Guarantor shall be released from all of its obligations under its Guarantee if all or substantially all of its assets are directly or indirectly sold or all of its Capital Stock is directly or indirectly sold, in all such cases in a transaction in compliance with the covenant described under "Limitation on Certain Asset Sales," or the Guarantor merges with or into or consolidates with, or transfers all or substantially all of its assets to, the Company or another Guarantor in a transaction in compliance with "Merger, Consolidation or Sale of Assets," and such Guarantor has delivered to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent herein provided for relating to such transaction have been complied with. EVENTS OF DEFAULT The following events are defined in the IndenturesIndenture as "Events of Default": (i)(1) default in payment of any principal of, or premium, if any, on the June Notes or July Notes, as the case may be; (ii)notes; (2) default for 30 days in payment of any interest on the June Notesnotes; 49 53 (3) our default or July Notes, as the case may be; (iii) default by the Company orthat of any Guarantor in the observance or performance of any other covenant (i) in the June Notesnotes or the June Indenture (ii) or the July Notes or the July Indenture, as the case may be, for 60 days after written notice from the Trustee or the holders of not less than 25% in aggregate principal amount of such Notesthe notes then outstanding; (iv)(4) default in the payment at final maturity of principal in an aggregate amount of $10,000,000 or more with respect to any Indebtedness of the Companyours or that of any of our Restricted Subsidiary thereofSubsidiaries, which default shall not be cured, waived or postponed pursuant to an agreementAgreement with the holders of such Indebtedness within 60 days after written notice, or the acceleration of any such Indebtedness aggregating $10,000,000 or more which acceleration shall not be rescinded or annulled within 20 days after written notice as provided in the Indenture; (v)(5) any final judgment or judgments which can no longer be appealed for the payment of money in excess of $10,000,000 shall be rendered against the Companyus or any of our Restricted Subsidiary thereof,Subsidiaries, and shall not be discharged for any period of 60 consecutive days during which a stay of enforcement shall not be in effect; and (vi)(6) certain events involving our bankruptcy, insolvency or reorganization or that of the Company or any of our Restricted Subsidiary thereof.Subsidiaries. The Indenture provides that the Trustee may withhold notice to the holders of the Notesnotes of any default (except in payment of principal or premium, if any, or interest on the Notes)notes) if the Trustee considers it to be in the best interest of the holders of the Notesnotes to do so. The IndenturesIndenture will provide that if an Event of Default (other than an Event of Default resulting from certain events of bankruptcy, insolvency or reorganization of the Company)reorganization) shall have occurred and be continuing, then the Trustee or the holders of not less than 25% in aggregate principal amount of the June Notes or the 37 41 July Notes, as the case may be,notes then outstanding may declare to be immediately due and payable the entire principal amount of all such Notesthe notes then outstanding plus accrued interest to the date of acceleration and (i)and: (1) such amounts shall become immediately due and payablepayable; or (ii)(2) if there are any amounts outstanding under or in respect of the Amended Credit Agreement, such amounts shall become due and payable upon the first to occur of an acceleration of amounts outstanding under or in respect of the Amended Credit Agreement or five business days after receipt by the Companyus and the Representative of the holders of Senior Indebtedness under or in respect of the Amended Credit Agreement of notice of the acceleration of the Notes;notes; provided, however, that after such acceleration but before a judgment or decree based on acceleration is obtained by the Trustee, the holders of a majority in aggregate principal amount of such outstanding Notesnotes may, under certain circumstances, rescind and annul such acceleration if all Events of Default, other than nonpayment of accelerated principal, premium or interest, have been cured or waived as provided in the Indenture governing such Notes.Indenture. In case an Event of Default resulting from certain events of our bankruptcy, insolvency or reorganization of the Company shall occur, the principal, premium and interest amount with respect to all of the Notesnotes shall be due and payable immediately without any declaration or other act on the part of the Trustee or the holders of the Notes.notes. The holders of a majority in principal amount of the June Notes or the July Notes, as the case may be,notes then outstanding shall have the right to waive any existing default or compliance with any provision of such Notesthe Indenture or the Indenture governing such Notesnotes and to direct the time, method and place of conducting any proceedingProceeding for any remedy available to the Trustee, subject to certain limitations specified in suchthe Indenture. No holder of any Notenote will have any right to institute any proceeding with respect to the IndenturesIndenture or for any remedy thereunder, unless suchthe holder shall have previously given to the Trustee written notice of a continuing Event of Default and unless also the holders of at least 25% in aggregate principal amount of the outstanding June Notes or July Notes, as the case may be,notes shall have made a written request and offered 50 54 reasonable indemnity to the Trustee to institute sucha proceeding as a trustee, and unless the Trustee shall not have received from the holders of a majority in aggregate principal amount of suchthe outstanding Notesnotes a direction inconsistent with suchthis request and shall have failed to institute suchthe proceeding within 60 days. However, suchthese limitations do not apply to a suit instituted on such Noteany note on or after the respective due dates expressed in such Note.that note. DEFEASANCE AND COVENANT DEFEASANCE The Indentures provide the CompanyIndenture provides we may elect either (a)either: (1) to defease and be discharged from any and all obligations with respect to the Notesnotes (except for the obligations to register the transfer or exchange of such Notes,notes, to replace temporary or mutilated, destroyed, lost or stolen Notes,notes, to maintain an office or agencyAgency in respect of the Notesnotes and to hold monies for payment in trust) ("defeasance"); or (b)(2) to be released from their obligations with respect to the Notesnotes under certain covenants contained in the IndenturesIndenture and described above under "-- Certain Covenants" ("covenant defeasance"),; upon the deposit with the Trustee (or other qualifying trustee), in trust for such purpose, of money and/or U.S. Government Obligations which through the payment of principal and interest in accordance with their terms will provide money, in an amount sufficient to pay the principal of, premium, if any, and interest on the Notes,notes, on the scheduled due dates therefor or on a selected date of redemption in accordance with the terms of the Indentures. Such aIndenture. A trust may only be established if, among other things, the Company haswe have delivered to the Trustee an Opinion of Counsel (as specified in the Indentures) (i)Indenture): (a) to the effect that neither the trust nor the Trustee will be required to register as an investment company under the Investment Company Act of 1940, as amended,amended; and (ii)(b) to the effect that holders of the Notesnotes or persons in their positions will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred which in the case of discharge only, must be based upon a private ruling concerning the Notes,notes, a published ruling of the Internal Revenue Service or a change in applicable federal tax law. 38 42 MODIFICATION OF INDENTURE From time to time, the Company,we, the Guarantors and the Trustee may, without the consent of holders of the Notes,notes, amend the IndenturesIndenture or the Notesnotes or supplement the IndenturesIndenture for certain specified purposes, including providing for uncertificated Notesnotes in addition to certificated Notes,notes, and curing any ambiguity, defect or inconsistency, or making any other change that does not materially and adversely affect the rights of any holder. The Indentures containIndenture contains provisions permitting the Company,us, the Guarantors and the Trustee, with the consent of holders of at least a majority in principal amount of the outstanding Notes governed by such Indenture,notes, to modify or supplement suchthe Indenture or such Notes,the notes, except that no such modification shall, without the consent of each holder affected thereby, (i)thereby: - reduce the amount of such Notesnotes whose holders must consent to an amendment, supplement, or waiver to suchthe Indenture or such Notes, (ii)the notes; - reduce the rate of or change the time for payment of interest on any such Note, (iii)note; - reduce the principal of or premium on or change the stated maturity of any such Note, (iv)note; 51 55 - make any such Notenote payable in money other than that stated in such Notethe note or change the place of payment from New York, New York, (v)York; - change the amount or time of any payment required by such Notesthe notes or reduce the premium payable upon any redemption of such Notes,notes, or change the time before which no such redemption may be made, (vi)made; - waive a default on the payment of the principal of, interest on, or redemption payment with respect to any such Note,note; or (vii)- take any other action otherwise prohibited by suchthe Indenture to be taken without the consent of each holder affected thereby. REPORTS TO HOLDERS So long as the Company iswe are subject to the periodic reporting requirements of the Exchange Act, itwe will continue to furnish the information required thereby to the Commission and to the holders of the Notes.notes. The Indentures provideIndenture provides that even if the Company iswe are entitled under the Exchange Act not to furnish such information to the Commission or to the holders of the Notes, theynotes, we will nonetheless continue to furnish such information to the Commission and holders of the Notes.notes. COMPLIANCE CERTIFICATE The CompanyWe will deliver to the Trustee on or before 100 days after the end of the Company'sour fiscal year and on or before 50 days after the end of each of the first, second and third fiscal quarters in each year an Officers' Certificate stating whether or not the signers know of any Default or Event of Default that has occurred. If they do, the certificate will describe the Default or Event of Default and its status. THE TRUSTEE The Trustee under the IndenturesIndenture will be the Registrar and Paying Agent with regard to the Notes.notes. The Indentures provideIndenture provides that, except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the Indentures.Indenture. During the existence of an Event of Default, the Trustee will exercise such rights and powers vested in it under the IndenturesIndenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs. TRANSFER AND EXCHANGE Holders of the Notesnotes may transfer or exchange Notesnotes in accordance with the Indenture governing such Notes.Indenture. The Registrar under such Indenture may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and to pay any taxes and fees required by law or permitted by suchthe Indenture. The Registrar is not required to transfer or exchange any Notenote selected for redemption. Also, the Registrar is not required to transfer or exchange any Notenote for a period of 15 days before selection of the Notesnotes to be redeemed. The registered holder of a Notenote may be treated as the owner of it for all purposes. 39 43 REGISTRATION RIGHTS Holders of New Notes are not generally entitled to any registration rights with respect to such New Notes. Pursuant to the Registration Rights Agreement, dated as of June 30, 1997, by and among the Company, the Guarantors and the Initial Purchasers of the Old June Notes and the Registration Rights Agreement, dated as of July 22, 1997, by and among the Company, the Guarantors and the Initial Purchasers of the Old July Notes (collectively, the "Registration Rights Agreements"). Holders of Old Notes are entitled to certain registration rights. Under the Registration Rights Agreements, the Company agreed, for the benefit of the Holders of the Old Notes, that it will, at its cost, (i) within 60 days after the date such Notes were first issued, file a Registration Statement with the Commission with respect to the Exchange Offer, and (ii) within 120 days after the date such Notes were first issued, use its best efforts to cause the Registration Statement to be declared effective under the Securities Act. The registration statement of which this Prospectus is a part constitutes the Registration Statement. In the event that applicable interpretations of the staff of the Commission do not permit the Company to effect an Exchange Offer, or if for any other reason the Exchange Offer is not consummated within 150 days of the date such Notes were first issued, the Company will, at its own expense, (a) as promptly as practicable, file a Shelf Registration Statement, (b) use its best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act and (c) use its best efforts to keep effective the Shelf Registration Statement until two years after its effective date (subject to extension in certain circumstances), or such shorter period ending when all Old Notes covered by the Shelf Registration Statement have been sold thereunder (the "Effectiveness Period"). The Company will, in the event of the Shelf Registration Statement, provide to each Holder of the Old Notes copies of the prospectus which is a part of the Shelf Registration Statement, notify each such Holder when the Shelf Registration Statement for the Old Notes has become effective and take certain other actions as are required to permit unrestricted resales of the Old Notes. A Holder of the Old Notes that sells such Old Notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreements which are applicable to such a holder (including certain indemnification rights and obligations). In the event of a Registration Default under and as defined in the Registration Rights Agreements, the sole remedy available to Holders of the Old Notes will be the assessment of additional interest as follows: the per annum interest rate on the Old Notes will increase by 50 basis points; and the per annum interest rate will increase by an additional 25 basis points for each subsequent 90-day period during which the Registration Default remains uncured, up to a maximum additional interest rate of 200 basis points per annum in excess of 9 1/8% ("Additional Interest"). All Additional Interest will be payable to Holders of the Old Notes in cash on each January 15 and July 15, commencing with the first such date occurring after any such Additional Interest commences to accrue, until such Registration Default is cured. After the date on which such Registration Default is cured, the interest rate on the Old Notes will refer to the interest rate originally borne by the Old Notes. The summary herein of certain provisions of the Registration Rights Agreements does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which is filed as an exhibit to the Registration Statement of which this Prospectus is a part. CERTAIN DEFINITIONS Unless otherwise provided, setSet forth below is a summary of certain of the defined terms used in the covenants contained in both Indentures.the Indenture. Reference is made to the June Indenture and the July Indenture, respectively, for the full definition of all such terms as well as any other capitalized terms used herein for which no definition is provided. "9 1/8% Notes" under the July Indenture means the June Notes. 40our 9 1/8% Senior Subordinated Notes due 2007. 52 4456 "9 1/8% Notes Indenture" under the July IndentureIndentures" means the Indentures, dated as of June Indenture,30, 1997 and July 15, 1997, among us, the Guarantors and The Bank of New York, as Trustee, as such indentureindentures may be amended, modified or supplemented from time to time. "11% Notes" under the July Indenture means theour 11% Notes.Senior Subordinated Notes due 2006. "11% Notes Indenture" under the July Indenture means the Indenture, dated as of July 2, 1996, among the Company,us, the Guarantors and Comerica Bank, as Trustee, as such indenture may be amended, modified or supplemented from time to time. "Acquired Indebtedness" means Indebtedness of a Person (including an Unrestricted Subsidiary) existing at the time such Person becomes a Restricted Subsidiary or is merged or consolidated with or into the Companyus or a Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person. "Adjusted EBITDA" means, for any Person, for any period, the EBITDA of such Person, plus any amounts excluded from the calculation of the Consolidated Net Income of such Person pursuant to clause (b)(2) of the definition thereof. "Adjusted Net Assets" of a Guarantor at any date shall mean the lesser of the amount by which (x)which: (1) the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities (including, without limitation, any guarantees of Senior Indebtedness)), but excluding liabilities under the Guarantee, of such Guarantor at such datedate; and (y)(2) the present fair salable value of the assets of such Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Guarantor on its debts (after giving effect to all other fixed and contingent liabilities (including, without limitation, any guarantees of Senior Indebtedness) and after giving effect to any collection from any Subsidiary of such Guarantor in respect of the obligations of such Subsidiary under the Guarantee), excluding Indebtedness in respect of the Guarantee, as they become absolute and matured. "Affiliate" of any specified Person means any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. "Amended Credit Agreement" means the Second Amended and Restated Credit Agreement, dated as of June 30, 1997,12, 1998, among the Company,us, CIBC, as administrative agent, Merrill Capital, as documentation agent and the lenders from time to time parties thereto as such agreement may be amended, modified or supplemented from time to time or deferred, renewed, extended, refunded, refinanced, restructured or replaced from time to time in whole or in part (whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the Second Amended and Restated Credit Agreement or other credit agreements or otherwise). "Argosy" means CIBC WG Argosy Merchant Fund 2, L.L.C.53 57 "Asset Sale" means the sale, transfer or other disposition in any single transaction or series of related transactions of (a)of: (1) any Capital Stock of or other equity interest in any Restricted Subsidiary of the Company, (b)ours; (2) all or substantially all of theour assets of the Company or that of any of our Restricted Subsidiary thereof, (c)Subsidiaries: (3) real propertyproperty; or (d)(4) all or substantially all of the assets of any business owned by the Companyus or any of our Restricted Subsidiary thereof,Subsidiaries, or a division, line of business or comparable business segment of the Companyours or any of our Restricted Subsidiary thereof;Subsidiaries; provided that Asset Sales shall not include (i)include: (1) sales, leases, conveyances, transfers or other dispositions to the Companyus or to a Restricted Subsidiary or to any other Person if after giving effect to such sale, lease, conveyance, transfer or other disposition such other Person becomes a Restricted Subsidiary, (ii)Subsidiary; or (2) leases, conveyances or other transfers by the Companyus or a Restricted Subsidiary of Property to any Person as an Investment in such Person provided that the Companywe or such Restricted Subsidiary receives consideration at the time of such lease, conveyance or other transfer at least equal to the fair market value of such Property and such Investment is included in clause (v)(5) of the second paragraph of "Limitation on Restricted Payments" contained herein. 41 45 "Asset Sale Proceeds" means, with respect to any Asset Sale, (i)Sale: (1) cash received by the Companyus or any Restricted Subsidiary from such Asset Sale (including cash received as consideration for the assumption of liabilities incurred in connection with or in anticipation of such Asset Sale),; after (a)- provision for all income or other taxes measured by or resulting from such Asset Sale, (b)Sale; - payment of all brokerage commissions, underwriting and other fees and expenses related to such Asset Sale, (c)Sale; - provision for minority interest holders in any Restricted Subsidiary as a result of such Asset SaleSale; and (d)- deduction of appropriate amounts to be provided by the Companyus or a Restricted Subsidiary as a reserve, in accordance with GAAP, against any liabilities associated with the assets sold or disposed of in such Asset Sale and retained by the Companyus or a Restricted Subsidiary after such Asset Sale, including, without limitation, pension and other post employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with the assets sold or disposed of in such Asset Sale,Sale; and (ii)(2) promissory notes and other non-cash consideration received by the Companyus or any Restricted Subsidiary from such Asset Sale or other disposition upon the liquidation or conversion of such notes or non-cash consideration into cash. "Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction means, as at the time of determination, the present value of the notes (discounted according to GAAP at the cost of indebtedness implied in the lease) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease Back Transaction (including any period for which such lease has been extended). "Available Asset Sale Proceeds" means, with respect to any Asset Sale, the aggregate Asset Sale Proceeds from such Asset Sale that have not been applied in accordance with clause (iii)(3)(a), (iii)(3)(b), (iii)54 58 (3)(c) (with respect to the July Notes) or (iii)(3)(d), and that have not been the basis for an Excess Proceeds Offer in accordance with clause (iii)(3)(e), of the first paragraph of "Certain Covenants"Covenants -- Limitation on Certain Asset Sales." "Capital Stock" means, with respect to any Person, any and all shares or other equivalents (however designated) of capital stock, partnership interests or any other participation, right or other interest in the nature of an equity interest in such Person or any option, warrant or other security convertible into any of the foregoing. "Capitalized Lease Obligations" means indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, and the amount of such indebtedness shall be the capitalized amount of such obligations determined in accordance with GAAP. A "Change of Control" of the Companyour company will be deemed to have occurred at such time as (i)(1) any Person (including a Person's Affiliates and associates), other than a Permitted Holder, becomes the beneficial owner (as defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of 50% or more of the total voting power of the Company'sour Common Stock, (ii)Stock; (2) any Person (including a Person's Affiliates and associates), other than a Permitted Holder, becomes the beneficial owner of more than 30% of the total voting power of the Company'sour Common Stock and either (A) the Permitted Holders beneficially own, in the aggregate, a lesser percentage of the total voting power of theour Common Stock of the Company than such other Person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of theour Board of Directors of the Company or (B) JLL is the beneficial owner of less than 20% of the total voting power of the Company's Common Stock, (iii)Directors. (3) there shall be consummated any consolidation or merger of the Companyour company in which the Company iswe are not the continuing or surviving corporation or pursuant to which theour Common Stock of the Company would be converted into cash, securities or other property, other than a merger or consolidation of theour Company in which the holders of theour Common Stock of the Company outstanding immediately prior to the consolidation or merger hold, directly or indirectly, at least a majority of the Common Stock of the surviving corporation immediately after suchany consolidation or merger,merger; or (iv)(4) during any period of two consecutive years, individuals who at the beginning of such period constituted theour Board of Directors of the Company (together with any new directors whose election by suchour Board of Directors or whose nomination for election by theour shareholders of the Company has been approved by 66 2/662/3% of the directors then still in office who either were directors at the beginning of such 42 46 period or whose election or recommendation for election was previously so approved) cease to constitute a majority of theour Board of Directors of the Company.Directors. "Chase" means Chase Equity Associates, L.P. "Common Stock" of any Person means all Capital Stock of such Person that is generally entitled to (i)to: (1) vote in the election of directors of such PersonPerson; or (ii)(2) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management and policies of such Person. 55 59 "Consolidated Fixed Charges" means, with respect to any Person, the sum of a Person's (i)Person's: (1) Consolidated Interest Expense,Expense; plus (ii)(2) the product of (x)of: (a) the aggregate amount of all dividends paid on our Disqualified Capital Stock of the Company or on each series of preferred stock of each Subsidiary of such Person (other than dividends paid or payable in additional shares of preferred stock or to the Companyus or any of itsour Wholly-Owned Subsidiaries), times (y)(b) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective combined federal, state and local tax rate of such Person (expressed as a decimal), in each case, for such four-quarter period. "Consolidated Interest Expense" means, with respect to any Person, for any period, and without duplication,(a) the aggregate amount of interest which, in conformity with GAAP, would be set forth opposite the caption "interest expense" or any like caption on an income statement for such Person and its Subsidiaries on a consolidated basis (including, but not limited to, (i)to: (1) imputed interest included in Capitalized Lease Obligations, (ii)Obligations; (2) all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (iii)financing; (3) net payments made in connection with Interest Rate Agreements, (iv)Agreements; (4) the interest portion of any deferred payment obligation, (v)obligation; (5) amortization of discount or premium, if any,any; and (vi)(6) all other non-cash interest expense (other than interest amortized to cost of sales)) plus, without duplication, (b) all net capitalized interest for such period and all interest paid under any guarantee of Indebtedness (including a guarantee of principal, interest or any combination thereof) of any Person,Person; and minus (i) net payments received in connection with Interest Rate Agreements and (ii) amortization of deferred financing costs and expenses. "Consolidated Net Income" means, with respect to any Person, for any period, the aggregate of the net income (before preferred stock dividends, if any) of such Person and its Subsidiaries for such period, on a consolidated basis determined in accordance with GAAP; provided, however, that there shall be excluded from Consolidated Net Income (a)Income: (1) the net income of any Person which under GAAP is not consolidated with the Person in question other than the amount of dividends or distributions paid to the Person in question or the Subsidiary, (b)Subsidiary; (2) the net income of any Subsidiary of the Person in question, other than a Domestic Subsidiary, that is subject to any restriction or limitation on the payment of dividends or the making of other distributions (other than pursuant to the Notes or the Indenture) to the extent of such restriction or limitation (provided that if any such restriction or limitation by its terms takes effect upon the occurrence of a default or an event of default, such exclusion shall become effective only upon the occurrence and during the continuance of such default or event of default), (c); (3) the net income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition, (d)acquisition; 56 60 (4) any net gain or loss resulting from a sale of Property by the Person in question or any of its Subsidiaries other than in the ordinary course of business, (e)business; (5) extraordinary gains and losses, (f)losses; (6) non-recurring gains, non-cash non-recurring losses and charges (including restructuring charges and costs) and, in theour case, of the Company, cash restructuring charges for any period prior to July 31, 1998, (g)1998; (7) any amounts received by the Companyus or a Restricted Subsidiary which are used to offset Investments pursuant to the terms of clause (ii)(2) of the definition of "Net Investments"; and (h)(8) in the case of clauses (d)(4), (e)(5) and (f)(6), the associated tax effects during such period. "Designated Senior Indebtedness," as to the Companyus or any Guarantor, as the case may be, means any Senior Indebtedness (a)Indebtedness: (1) under or in respect of the Amended Credit Agreement,Agreement; or (b)(2)(a) which at the time of determination exceeds $25 million in aggregate principal amount (or accreted value in the case of Indebtedness issued at a discount) outstanding or available under a committed facility,facility; and (i)(b) which is specifically designated in the instrument evidencing such Senior Indebtedness as "Designated Senior 43 47 Indebtedness" by such PersonPerson; and (ii)(c) as to which the Trustee has been given written notice of such designation. "Disqualified Capital Stock" means any of our Capital Stock or one of the Company or aour Restricted Subsidiary thereofSubsidiaries which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the maturity date of the Notes, for cash or securities constituting Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock shall be deemed to include any Preferred Stock of aours of one of our Restricted Subsidiary of the Company or the Company,Subsidiaries, under which, by agreement or otherwise, suchthe Restricted Subsidiary or the Company iswe are obligated to pay current dividends or distributions in cash during the period prior to the maturity date of the Notes; provided, however, that our Preferred Stock or that of the Company or any Restricted Subsidiary thereof that is issued with the benefit of provisions requiring a change of control offer to be made for such Preferred Stock in the event of a change of control of the Companyour company or Restricted Subsidiary, which provisions have substantially the same effect as the provisions of the Indenture described under "Change of Control," shall not be deemed to be Disqualified Capital Stock solely by virtue of such provisions and, provided, further, that Capital Stock owned by the Companyus or any Restricted Subsidiary shall not constitute Disqualified Capital Stock. "Domestic" with respect to any Person shall mean a Person whose jurisdiction of incorporation or formation is the United States, any state thereof or the District of Columbia. "Domestic Restricted Subsidiary" means any Restricted Subsidiary of a Person whose jurisdiction of incorporation or formation is the United States, any state thereof or the District of Columbia. "EBITDA" means, for any Person, for any period, an amount equal to (a) the sum of (i)of: (1) Consolidated Net Income for such period,period; plus (ii)(2) the provision for taxes for such period based on income or profits to the extent such income or profits were included in computing Consolidated Net Income and any provision for taxes utilized in computing net loss under clause (i) hereof,(1) hereof; plus (iii)57 61 (3) Consolidated Interest Expense for such period,period; plus (iv)(4) depreciation for such period,period; plus (v)(5) amortization for such period (including the amortization of deferred financing costs and expenses),; plus (vi)(6) any other non-cash items (including minority interests) reducing Consolidated Net Income for such period,period; plus (vii)(7) non-recurring losses and charges (including restructuring charges and costs) whether cash or non-cash for such period to the extent not included in the calculation of Consolidated Net Income,Income; minus (viii)(8) all non-cash items increasing Consolidated Net Income for such period, all for such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP,GAAP; except that with respect to the Companyus each of the foregoing items shall be determined on a consolidated basis with respect to the Companyus and itsour Restricted Subsidiaries only. "Equity Offering" means an offering by the Companyus of shares of itsour common stock (however designated and whether voting or non-voting) and any and all rights, warrants or options to acquire suchour common stock. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Indenture" under the June IndentureIndentures" means the 9 1/8% Notes Indentures and the 11% Notes Indenture, dated as of July 2, 1996, among the Company, the Guarantors and Comerica Bank, as Trustee, asor any such indenture may be amended, modified or supplemented from time to time.indenture. "Existing Notes" under the June Indenture means the 9 1/8% Notes and the 11% Notes.Notes, or any such notes. "Fixed Charge Coverage Ratio" of any Person means, with respect to any determination date, the ratio of (i)of: (1) EBITDA for such Person's prior four full fiscal quarters for which financial results have been reported immediately preceding the determination date to (ii)(2) Consolidated Fixed Charges of such Person. "Foreign EBITDA" means, for any period, the aggregate of the EBITDA of each of the Company'sour Restricted Subsidiaries which are not Guarantors. "Foreign Interest Expense" means, for any period, the aggregate of the Consolidated Interest Expense of each of the Company'sour Restricted Subsidiaries which are not Guarantors. 44 48 "GAAP" means generally accepted accounting principles consistently applied as in effect in the United States from time to time. "Guarantor" means each of our material Domestic Restricted Subsidiaries. "incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such personPerson (and "incurrence," "incurred," "incurrable,"incurable," and "incurring" shall have meanings correlative to the foregoing); provided that a change in GAAP that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an incurrence of such Indebtedness. "Indebtedness" means (without duplication), with respect to any Person, any indebtedness at any time outstanding, secured or unsecured, contingent or otherwise, which is for borrowed money 58 62 (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments or representing the balance deferred and unpaid of the purchase price of any property (excluding, without limitation, any balances that constitute accounts payable or trade payables, and other accrued liabilities arising in the ordinary course of business) if and to the extent any of the foregoing indebtedness would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, and shall also include, to the extent not otherwise included, (i)included: (1) any Capitalized Lease Obligations, (ii)Obligations; (2) obligations of others secured by a lien to which the property or assets owned or held by such Person is subject, whether or not the obligation or obligations secured thereby shall have been assumed, (iii)assumed; (3) guarantees of obligations of other Persons which would be included within this definition for such other Persons (whether or not such items would appear upon the balance sheet of the guarantor)Guarantor), (iv)excluding guarantees of Indebtedness incurred by a Person to acquire or finance real estate assets which are then leased to us or a Restricted Subsidiary on an operating lease basis in a "synthetic lease" transaction; (4) all obligations for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction, (v)transaction; (5) in theour case, of the Company, Disqualified Capital Stock and, in the case of any Restricted Subsidiary, Preferred Stock, (vi)Stock; (6) obligations of any such Person under any Interest Rate Agreement (if and to the extent such Interest Rate Agreement obligations would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP); and (vii)(7) Attributable Indebtedness. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation,obligation; provided (i)(1) that the amount outstanding at any time of any Indebtedness issued with original issue discount is the principal amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAPGAAP; and (ii)(2) that Indebtedness shall not include any liability for federal, state, local or other taxes. Notwithstanding any other provision of the foregoing definition, any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business shall not be deemed to be "Indebtedness" of the Companyours or of any Restricted Subsidiaries for purposes of this definition. Furthermore, guarantees of (or obligations with respect to letters of credit supporting) Indebtedness and Liens securing Indebtedness otherwise included in the determination of such amount shall not also be included. "Interest Rate Agreement" means, for any Person, any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement designed to protect the party indicated therein against fluctuations in interest rates. "Investments" means, directly or indirectly, any advance, account receivable, loan or capital contribution to (by means of transfers of property to others, payments for property or services for the account or use of others or otherwise), the purchase of any stock, bonds, notes, debentures, 59 63 partnership or joint venture interests or other securities of, the acquisition, by purchase or otherwise, of all or substantially all of the business or assets or stock or other evidence of beneficial ownership of, any Person. Investments shall exclude extensions of trade credit on commercially reasonable terms in accordance with normal trade practices. "Issue Date" means the date the Notes governed by such Indenturenotes are first issued by the Companyus and authenticated by the Trustee under suchthe Indenture. "JLL" means Joseph, Littlejohn & Levy Fund II, L.P. 45 49Levy. "Lien" means with respect to any Property of any Person, any mortgage or deed of trust, pledge, hypothecation, deposit arrangement, security interest, lien, charge, encumbrance, preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property or assets (including without limitation, any Capitalized Lease Obligation, conditional sales, or other title retention agreement having substantially the same economic effect as any of the foregoing). "Net Cash Proceeds" means (a)means: (1) in the case of any sale of our Capital Stock, by the Company, the aggregate net cash proceeds received by the Company,us, after payment of expenses, commissions, underwriting discounts and the like incurred in connection therewith, (b)therewith; (2) in the case of any exchange, exercise, conversion or surrender of outstanding securities of any kind for or into shares of our Capital Stock of the Company which is not Disqualified Capital Stock, the net cash proceeds received from the sale of such outstanding securities so exchanged, exercised, converted or surrendered (plus any additional amount required to be paid in cash by the holder to the Companyus upon such exchange, exercise, conversion or surrender, less any and all payments made to the holders, e.g., on account of fractional shares and less all expenses incurred by the Companyus in connection therewith); and (c)(3) in the case of any issuance of any Indebtedness by the Companyus or any Restricted Subsidiary, the aggregate net cash proceeds received by such Person after payment of expenses, commissions, underwriting discounts and the like incurred in connection therewith. "Net Investment" means the excess of (i)of: (1) the aggregate amount of all Investments in Unrestricted Subsidiaries or joint ventures made by the Companyus or any Restricted Subsidiary on or after the Original Issue Date (in the case of an Investment made other than in cash, the amount shall be the fair market value of such Investment as determined in good faith by theour board of directors of the Company or such Restricted Subsidiary) over (ii)(2) the sum of (A)of: (a) the aggregate amount returned in cash on or with respect to such Investments whether through interest payments, principal payments, dividends or other distributions or paymentspayments; and (B)(b) the Net Cash Proceeds received by the Companyus or any Restricted Subsidiary or joint venture from the disposition of all or any portion of such Investments (other than to a Subsidiary of the Company)ours); provided, however, that with respect to all Investments made in any Unrestricted Subsidiary or joint venture the sum of clauses (A)(a) and (B)(b) above with respect to such Investments shall not exceed the aggregate amount of all such Investments made in such Unrestricted Subsidiary. "Nomura" means Nomura Holding America, Inc. 60 64 "Non-Payment Event of Default" means any event (other than a Payment Default) the occurrence of which entitles one or more Persons to accelerate the maturity of any Designated Senior Indebtedness. "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chief Executive Officer, the President or any Vice President, and the Chief Financial Officer or any Treasurer of such Person that shall comply with applicable provisions of suchthe Indenture. "Original Issue Date" means (i) July 2, 1997, under the June Indenture and (ii) July 16, 1997, under the July Indenture.December 14, 1998. "Payment Default" means any default, whether or not any requirement for the giving of notice, the lapse of time or both, or any other condition to such default becoming an Event of Default has occurred, in the payment of principal of (or premium, if any) or interest on or any other amount payable in connection with Designated Senior Indebtedness. "Permitted Holders" means (i)means: (1) JLL or any other fund controlled by Joseph Littlejohn & Levy, (ii) TSG, (iii) Argosy, (iv) NomuraLevy; (2) TSG; (3) Argosy; (4) Nomura; and (v)(5) Chase. "Permitted Indebtedness" means: (i)(1) Indebtedness of the Companyours or any of our Domestic Restricted SubsidiarySubsidiaries arising under or in respect of the Amended Credit Agreement in an aggregate amount (the "Permitted Credit Agreement Amount") not to exceed (A) $740,500,000, under the June Indenture and $590,500,000, under the July Indenture (which givesexceed: (a) $550,000,000 (after giving effect to the concurrent repayment of amounts outstanding under the Amended Credit Agreement on the date the relevent Notes were first issued),Issue Date) less (B)(b) any mandatory prepayments actually made thereunder (to the extent, in the case of payments of revolving credit Indebtedness, that 46 50 the corresponding commitments have been permanently reduced) or scheduled payments actually made thereunder, in each case, after consummation of the Lemmerz Acquisition; (ii)thereunder; (2) Indebtedness under the Notesnotes and the Guarantees; (iii)(3) Indebtedness not covered by any other clause of this definition which is outstanding on the Issue Date; (iv)(4) Indebtedness incurred to finance the working capital requirements of the Western European operations of the Company's Restricted Subsidiaries pursuant to commitments outstanding on the Issue Date in an aggregate amount not to exceed $10 million (or, to the extent non-U.S. dollar denominated, the U.S. dollar equivalent thereof); (v)(5) Indebtedness of Autokola not to exceed $35 million in principal amount in the aggregate which is incurred after the date the relevent Notes were first issued as a result of it becoming a Subsidiary of the Company; (vi)aggregate; (6) Indebtedness of the Companyours to any Domestic Restricted Subsidiary which is a Wholly OwnedWholly-Owned Subsidiary and Indebtedness of any Restricted Subsidiary to the Companyus or another Restricted Subsidiary provided that in the case of Indebtedness of a Domestic Restricted Subsidiary such Indebtedness is owed to another Domestic Restricted Subsidiary; (vii)(7) Purchase Money Indebtedness and Capitalized Lease Obligations incurred to acquire property in the ordinary course of business which Indebtedness and Capitalized Lease 61 65 Obligations do not in the aggregate exceed 5% of the Company'sour consolidated total assets as of the Company'sour most recent quarterly balance sheet; (viii)(8) Interest Rate Agreements; (ix)(9) additional Indebtedness of the Companyours and itsour Restricted Subsidiaries not to exceed $50 million in aggregate principal amount outstanding at any time; (x)(10) Refinancing Indebtedness; (xi)(11) Indebtedness incurred in accordance with the covenant described under "Limitation on Foreign Indebtedness"; and (xii)(12) Indebtedness of the Companyours or itsour Subsidiaries which is denominated in a currency other than U.S. dollars, provided thatthat: (a) the U.S. dollar equivalent thereof on the date of incurrence (together with the U.S. dollar equivalent on such date of all other Indebtedness incurred under this clause (xii)(12)) shall not exceed $80 million,million; and (b) on the last Business Day of each month, the sum of (1)(i) the U.S. dollar equivalent of all Indebtedness outstanding under this clause (xii),(12); and (2)(ii) the outstanding principal amount of Indebtedness under the Amended Credit Agreement, including reimbursement obligations in respect of letters of credit (in each case after giving effect to any currency hedging arrangements applicable thereto to which the Companywe or a Subsidiary of the Companyours is a party), shall not exceed the Permitted Credit Agreement Amount. "Permitted Investments" means, for any Person, Investments made on or after the date of the Indenture consisting of: (i)(1) Investments by the Company,us, or by a Restricted Subsidiary thereof, in the Companyus or a Restricted Subsidiary; (ii)(2) Temporary Cash Investments; (iii)(3) Investments by the Company,us, or by aone of our Restricted Subsidiary thereof,Subsidiaries, in a Person, if as a result of such InvestmentInvestment: (a) such Person becomes a Restricted Subsidiary of the Companyours; or (b) such Person is merged, consolidated or amalgamated with or into or transfers or conveys substantially all of its assets to, or is liquidated into, the Companyus or a Restricted Subsidiary; 47 51 (iv)(4) reasonable and customary loans made to employees not to exceed $1 million in the aggregate at any one time outstanding; (v)(5) an Investment that is made by the Companyus or aone of our Restricted Subsidiary thereofSubsidiaries in the form of any stock, bonds, notes, debentures, partnership or joint venture interests or other securities that are issued by a third party to the Companyus or to a Restricted SubsidiarySubsidiaries of ours solely as partial consideration for the consummation of an Asset Sale; (vi)(6) Investments in Unrestricted Subsidiaries and joint ventures permitted under subclause (v)(5) under the covenant described under "Limitation on Restricted Payments"; (vii)62 66 (7) Investments received in connection with the bankruptcy or reorganization of Persons having obligations in favor of the Companyus or itsour Subsidiaries (which obligations were incurred in the ordinary course), in settlement of such obligations; and (viii)(8) Investment paid for in our Common Stock of the Company.Stock. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government (including any agency or political subdivision thereof). "Preferred Stock" means any Capital Stock of a Person, however designated, which entitles the holder thereof to a preference with respect to dividends, distributions or liquidation proceeds of such Person over the holders of other Capital Stock issued by such Person. "Property" of any Person means all types of real, personal tangible, intangible or mixed property owned by such Person whether or not included in the most recent consolidated balance sheet of such Person and its Subsidiaries under GAAP. "Purchase Money Indebtedness" means any Indebtedness incurred in the ordinary course of business by a Person to finance the cost (including the cost of construction) of an item of property, the principal amount of which Indebtedness does not exceed the sum of (i)of: (1) 100% of such costcost; and (ii)(2) reasonable fees and expenses of such Person incurred in connection therewith. "Refinancing Indebtedness" means Indebtedness that refunds, refinances or extends any of our Indebtedness or that of the Company or itsour Subsidiaries outstanding on the Issue Date or other Indebtedness permitted to be incurred by the Companyus or itsour Restricted Subsidiaries pursuant to the terms of the Indenture, but only to the extent that (i)that: (1) the Refinancing Indebtedness is subordinated to the Notesnotes to at least the same extent as the Indebtedness being refunded, refinanced or extended, if at all, (ii)all; (2) the Refinancing Indebtedness is scheduled to mature eithereither: (a) no earlier than the Indebtedness being refunded, refinanced or extended,extended; or (b) after the maturity date of the Notes, (iii)notes; (3) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of the Notesnotes has a weighted average life to maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the weighted average life to maturity of the portion of the Indebtedness being refunded, refinanced or extended that is scheduled to mature on or prior to the maturity date of the Notes, (iv)notes; (4) such Refinancing Indebtedness is in an aggregate principal amount that is equal to or less than the sum ofof: (a) the aggregate principal amount then outstanding under the Indebtedness being refunded, refinanced or extended,extended; (b) the amount of accrued and unpaid interest, if any, and any necessary premiums (including the amount of any premium reasonably determined by the Companyus or the applicable Restricted Subsidiary as necessary to accomplish such refunding, refinancing or extension) on such Indebtedness being refunded, refinanced or extendedextended; and (c) the amount of customary fees, expenses and costs related to the incurrence of such Refinancing Indebtedness, (v)Indebtedness; 63 67 (5) such Refinancing Indebtedness is incurred by the same Person that initially incurred the Indebtedness being refunded refinanced or extended, except that the Companywe may incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of any Wholly OwnedWholly-Owned Subsidiary of the Company;ours; provided, however, that any non-Domestic Restricted Subsidiary may incur Refinancing Indebtedness to refund, refinance or extend our Indebtedness of the Company arising under or in respect of the Amended Credit Agreement in an aggregate amount not to exceed $20 million outstanding at any time; and, provided, further, that with respect to such Refinancing Indebtedness referred to in the previous provision, clauses (ii)(2) and (iii)(3) shall not applyapply; and (vi)(6) if such Indebtedness 48 52 was incurred pursuant to the covenant described under "Limitation on Foreign Indebtedness" and does not contain any restriction or limitation on the payment of dividends or the making of other distributions then the Refinancing Indebtedness shall not contain any such limitation or restriction. "Restricted Payment" means any of the following: (i)(1) the declaration or payment of any dividend or any other distribution or payment on our Capital Stock or that of the Company or any of our Restricted Subsidiary of the CompanySubsidiaries or any payment made to the direct or indirect holders (in their capacities as such) of our Capital Stock or that of the Company or any of our Restricted Subsidiary of the Company (other than (x)Subsidiaries, other than: (a) dividends or distributions payable solely in Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to purchase Capital Stock (other than Disqualified Capital Stock),; and (y)(b) in the case of our Restricted Subsidiaries, of the Company, dividends or distributions payable to the Companyus or to a Wholly-Owned Subsidiary of the Company), (ii)ours; (2) the purchase, redemption or other acquisition or retirement for value of any of our Capital Stock or that of the Company or any of itsour Restricted Subsidiaries (other than Capital Stock owned by the Companyus or a Wholly Owned Subsidiaryone of the Company,our Wholly-Owned Subsidiaries, excluding Disqualified Capital Stock), (iii); (3) the purchase, defeasance, repurchase, redemption or other acquisition or retirement for value, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment of, or the making of any principal payment on, any Indebtedness which is subordinated in right of payment to the Notesnotes other than subordinated Indebtedness acquired in anticipation of satisfying a scheduled sinking fund obligation, principal installment or final maturity (in each case due within one year of the date of acquisition), (iv); (4) the making of any Investment or guarantee of any Investment in any Person other than a Permitted Investment, (v)Investment; (5) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary on the basis of the Net Investment by the Company thereinus therein; and (vi)(6) forgiveness of any Indebtedness of an Affiliate of the Companyours to the Companyus or a Restricted Subsidiary. For purposes of determining the amount expended for Restricted Payments, cash distributed or invested shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value determined in good faith by theour board of directors of the Company.directors. "Restricted Subsidiary" means a Subsidiary of the Companyours other than an Unrestricted Subsidiary. TheOur Board of Directors of the Company may designate any Unrestricted Subsidiary or any Person that is to become a Subsidiary as a Restricted Subsidiary if immediately after giving effect to such action (and treating any Acquired Indebtedness as having been incurred at the time of such action), the Companywe could have incurred at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the "Limitation on Additional Indebtedness" covenant. 64 68 "Sale and Lease-Back Transaction" means any arrangement with any Person providing for the leasing by the Companyus or any Restricted Subsidiary of the Companyours of any real or tangible personal Property, which propertyProperty has been or is to be sold or transferred by the Companyus or sucha Restricted Subsidiary of ours to suchthat Person in contemplation of such leasing. "Senior Indebtedness" means the principal of and premium, if any, and interest (including, without limitation, interest accruing or that would have accrued but for the filing of a bankruptcy, reorganization or other insolvency proceeding whether or not such interest constitutes an allowable claim in such proceeding) on, and any and all other fees, charges, expense reimbursement obligations, indemnities and other amounts due pursuant to the terms of all agreements, documents and instruments providing for, creating, securing, guaranteeing or evidencing or otherwise entered into in connection with (a)with: (1) all of our obligations, whether outstanding on the date the relevent Notes were first issuedIssue Date or thereafter incurred, of the Company owed to lenders under or in respect of the Amended Credit Agreement, (b)Agreement; (2) all obligations of the Companyour obligations with respect to any Interest Rate Agreement, (c)Agreement; (3) all obligations of the Companyour obligations to reimburse any bank or other person in respect of amounts paid under letters of credit, acceptances or other similar instruments, (d)instruments; (4) all of our other Indebtedness of the Company which does not provide that it is to rank pari passu with or subordinate to the Notesnotes; and (e)(5) all deferrals,deferrals. renewals, extensions, refundings, refinancings and restructurings of, and amendments, modifications and supplements to, any of the Senior Indebtedness described above. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness will not include (i) Indebtedness of the Companyinclude: (1) our indebtedness to any of its Subsidiaries, (ii) (A)our Subsidiaries; (2) Indebtedness represented by the Notes, andnotes, the guarantees thereof under the June Indenture and (B) Indebtedness represented by the11% Notes, the 11%9 1/8% Notes and, in each case, the guarantees thereof, under the July Indenture, (iii) anyGuarantees thereof; (3) Indebtedness which by the express terms of 49 53 the agreement or instrument creating, evidencing or governing the same is junior or subordinate in right of payment to any item of Senior Indebtedness, (iv)Indebtedness; (4) any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business,business; or (v)(5) Indebtedness incurred in violation of the Indenture. "Subsidiary" of any specified Person means any corporation, partnership, joint venture, association or other business entity, whether now existing or hereafter organized or acquired, (i)acquired: (1) in the case of a corporation, of which more than 50% of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, officers or trustees thereof is held by such first-named Person or any of its Subsidiaries; or (ii)(2) in the case of a partnership, joint venture, association or other business entity, with respect to which such first-named Person or any of its Subsidiaries has the power to direct or cause the direction of the management and policies of such entity by contract or otherwise or if in accordance with GAAP such entity is consolidated with the first-named Person for financial statement purposes. 65 69 "Temporary Cash Investments" means (i)means: (1) Investments in marketable, direct obligations issued or guaranteed by the United States of America, or of any governmental agencyAgency or political subdivision thereof, maturing within 365 days of the date of purchase; (ii) Investments(2) in demand deposits or certificates of deposit issued by a bank organized under the laws of the United States of America or any state thereof or the District of Columbia, in each case having capital, surplus and undivided profits totaling more than $500,000,000 and rated at least A by Standard & Poor's Corporation and A-2 by Moody's Investors Service, Inc., maturing within 365 days of purchase; (iii)(3) Investments in commercial paper, maturing not more than 180 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company)ours) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any Investment therein is made of P-1 (or higher) according to Moody's Investors Service, Inc. or A-1 (or higher) according to Standard & Poor's Corporation; (iv)(4) in the case of any non-Domestic Restricted Subsidiary, Investments: (a) in direct obligations of the sovereign nation (or any agency thereof) in which such non-Domestic Restricted Subsidiary is organized and is conducting business or in obligations fully and unconditionally guaranteed by such sovereign nation (or any agency thereof); or (b) of the type and maturity described in clauses (i)(1) through (iii)(3) above of foreign obligors, which Investments or obligors (of the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies; or (v)(5) Investments not exceeding 365 days in duration in money market funds that invest substantially all of such funds' assets in the Investments described in the preceding clauses (i)(1) and (iv)(4). "TSG" means TSG Capital Fund II, L.P. "Unrestricted Subsidiary" means (a)means: (1) any Subsidiary of an Unrestricted SubsidiarySubsidiary; and (b)(2) any Subsidiary of the Companyours which is classified after the Issue Date as an Unrestricted Subsidiary by a resolution adopted by theour Board of Directors of the Company;Directors; provided that a Subsidiary organized or acquired after the Issue Date may be so classified as an Unrestricted Subsidiary only if such classification is in compliance with the covenant set forth under "Limitation on Restricted Payments." TheWe shall give the Trustee shall be given prompt notice by the Company of each resolution adopted by theour board of directors of the Company under this provision, together with a copy of each such resolution adopted. "Western Europe" means, with respect to any jurisdictional matter, any of the twelve current member states of the European Community and Switzerland, Norway, Sweden, Finland, Austria and the Czech Republic (and "Western European" shall have a meaning correlative to the foregoing). "Wholly Owned"Wholly-Owned Subsidiary" means any Restricted Subsidiary all of the outstanding voting securities (other than directors' qualifying shares or similar requirements of law in respect of non-Domestic Subsidiaries and other than shares of Lemmerz representing not more than .01% of the voting securities thereof) of which are owned,we own, directly or indirectly,indirectly. 66 70 REGISTRATION RIGHTS Holders of the new notes are not entitled to any registration rights with respect to the new notes. We entered into a registration agreement with the Initial Purchasers for the benefit of the holders of the old notes, pursuant to which we agreed that we will, at our cost, by July 18, 1999, use our best efforts to cause a registration statement to be declared effective under the Securities Act relating to the exchange of old notes for registered notes. The registration statement of which this prospectus is a part constitutes the registration statement for purposes of the Registration Agreement. Upon the registration statement being declared effective, we will offer the new notes in exchange for surrender of the old notes. We will keep the exchange offer open for not less than 30 days (or longer if required by applicable law) after the date notice of the exchange offer is mailed to the holders of the old notes. For each old note surrendered to us pursuant to the exchange offer, the holder of that old note will receive a new note having a principal amount equal to that of the surrendered old note. Under existing Commission interpretations, the new notes would in general be freely transferable under the exchange offer without further registration under the Securities Act; provided, however, that in the case of broker-dealers, a prospectus meeting the requirements of the Securities Act be delivered as required. We have agreed for a period of 180 days after consummation of the exchange offer to make available a prospectus meeting the requirements of the Securities Act to any broker-dealer in connection with any resale of any such new notes acquired as described below. A broker-dealer which delivers such a prospectus to purchasers in connection with such resales will be subject to certain of the civil liability provisions under the Securities Act and will be bound by the Company.provisions of the Registration Agreement (including certain indemnification rights and obligations). In the event that applicable interpretations of the staff of the Commission do not permit us to effect an exchange offer, or if for any other reason the exchange offer is not consummated by August 17, 1999, we will, at our cost, (a) as promptly as practicable, file a shelf registration statement with respect to the resale of the old notes (the "shelf registration statement") covering resales of the old notes, (b) use our best efforts to cause the shelf registration statement to be declared effective under the Securities Act, and (c) use our best efforts to keep effective the shelf registration statement until two years after its effective date. We will, in the event of the shelf registration statement, provide to each holder of the old notes copies of the prospectus, which is part of the shelf registration statement, notify each holder when the shelf registration statement for the old notes has become effective and take other actions required to permit unrestricted sales of the old notes. A holder of old notes who sells old notes pursuant to the shelf registration statement generally would be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration agreement which are applicable to such a holder (including certain indemnification obligations). If by August 18, 1999, neither the exchange offer is consummated nor the shelf registration statement is declared effective, the rate per annum at which the old notes bear interest will increase by 50 basis points from and including such date, and the rate per annum will increase by an additional 25 basis points for each subsequent 90-day period until but excluding the earlier of (a) the consummation of the exchange offer and (b) the effective date of a shelf registration statement; however, the interest rate per annum shall not increase more than 200 basis points in excess of 8 1/4%. The summary herein of certain provisions of the registration agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the registration agreement, a copy of which we have filed as an exhibit to the registration statement of which this prospectus constitutes a part. 67 54 BOOK-ENTRY, DELIVERY AND FORM The Old Notes were offered and sold71 DESCRIPTION OF OUR CREDIT FACILITY In connection with the CMI acquisition, we entered into the amended credit agreement, under which a syndicate of lenders agreed to Qualified Institutional Buyers in reliance on Rule 144A ("Rule 144A Notes"). Old Notes also were offered and sold in offshore transactions in reliance on Regulation S ("Regulation S Notes"). Rule 144A Notes were initially issuedlend to us up to $1.1 billion in the form of two global notesa $450 million senior secured term loan facility, which we will refer to as the term loan facility, a portion of which is permitted to be denominated in registered, global form without interest coupons (collectively,Deutschemarks or euro units, and a $650 million senior secured revolving credit facility, which we will refer to as the "Restricted Global Note").revolving credit facility. We will refer to the term loan facility and the revolving credit facility together as the loans. Use of Proceeds Maturities. The Restricted Global Noteterm loan facility was depositedmade available to us and our subsidiaries upon the consummation of the CMI acquisition to finance the payment of the purchase price. The revolving credit facility was also made available upon the consummation of the CMI acquisition (including through the making of revolving loans and the issuance of letters of credit) for our general corporate purposes and those of our subsidiaries. The term loan facility will mature on February 15, 2005, and will amortize in quarterly installments. The revolving credit facility will mature on February 15, 2005. The amended credit agreement requires us to reduce the amount outstanding under the revolving credit facility to $300 million during a 30-day period each year. Prepayments; Reduction of Commitments. Loans under the term loan facility are required to be prepaid with the Trustee as custodian for the Depositary Trust Company ("DTC"), in New York, New York, and registered(i) 75% of excess cash flow (reducing to 50% in the nameevent our leverage ratio is less than 3.0 to 1), (ii) 100% of DTCthe net cash proceeds of all non-ordinary-course asset sales or other dispositions of property by us and our subsidiaries (including insurance and condemnation proceeds), subject to limited exceptions, and (iii) 100% of the net proceeds of issuances of the debt obligations of us and our subsidiaries, subject to limited exceptions. Mandatory prepayments and commitment reductions are first allocated to the term loan facility and second to commitments under the revolving credit facility. Within the term loan facility, prepayments are applied pro rata to the remaining amortization payments under this facility, provided, however, that in the event term loans denominated in Deutschemarks or euro units are outstanding at the time of any prepayment, mandatory prepayments shall be applied first to prepay the term loans denominated in dollars. Voluntary prepayments are permitted, in whole or in part, at our option, without premium or penalty, subject to reimbursement of the lenders' redeployment costs in the case of prepayment of certain borrowings which bear interest at the eurocurrency rate other than on the last day of the relevant interest period. All voluntary prepayments under the term loan facility are applied pro rata to the remaining amortization payments under the term loan facility. Interest. The interest rates under the loans are, at our option, based upon either an adjusted eurocurrency rate or the rate which is equal to the highest of (a) the CIBC prime rate, which is the rate of interest most recently announced by Canadian Imperial Bank of Commerce as its nominee,base rate; (b) the federal funds rate plus 1/2 of 1%; and (c) the base certificate of deposit rate plus 1% ("ABR"), in each case plus an applicable margin based on leverage ratio from time to time in effect. The applicable margin for ABR loans ranges from 0% to 1.0%. The applicable margin for loans at the eurocurrency rate is from 1.25% to 2.50%. We may elect interest periods of 1, 2, 3 or 6 months for loans at the eurocurrency rate. Calculation of interest is computed on the basis of actual number of days elapsed in a year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR loans based on the prime rate) and interest is payable at the end of each interest period and, in any event, at least every three months. Collateral and Guarantees. The loans are guaranteed by us and all of our existing and future domestic subsidiaries. The loans are secured by a first priority lien in substantially all of our properties and assets and those of our domestic subsidiaries, now owned or acquired later, including a 68 72 pledge of all of the shares of our respective existing and future domestic subsidiaries and 65% of the shares of certain of our existing and future foreign subsidiaries. Covenants. The amended credit agreement contains covenants restricting our ability and that of our subsidiaries to, an accountamong others: - declare dividends or redeem or repurchase capital stock; - prepay, redeem or purchase debt; - incur liens and engage in sale-leaseback transactions; - make loans and investments; - issue more debt; - amend or otherwise alter debt and other material agreements; - make capital expenditures; - engage in mergers, acquisitions and asset sales; - engage in transactions with affiliates; and - alter the business we conduct. We must also make certain customary indemnifications of the managing agents and the lenders and will also be required to comply with financial covenants with respect to (a) a maximum leverage ratio, (b) a minimum interest coverage ratio and (c) a minimum fixed charge coverage ratio. We are also required to satisfy certain customary affirmative covenants. Events of Default. Events of default under the amended credit agreement include but are not limited to: - our failure to pay principal or interest when due; - our material breach of any covenant, representation or warranty contained in the loan documents; - customary cross-default provisions; - events of bankruptcy, our insolvency or dissolution of our or that of our subsidiaries; - the existence of certain judgments against us, our subsidiaries or their assets; - certain adverse events under ERISA plans or those of our subsidiaries; - the actual or asserted invalidity of our security documents or guarantees or hose of our subsidiaries; and - a change of control of our company. 69 73 IMPORTANT UNITED STATES FEDERAL TAX CONSIDERATIONS The following is a general discussion of important United States federal income tax consequences of the acquisition, ownership and disposition of the notes. This discussion is based on the Code, and regulations, rulings and judicial decisions as of the date hereof, all of which may be repealed, revoked or modified so as to result in United States federal income tax consequences different from those described below. These changes could be applied retroactively in a manner that could adversely affect holders of the notes. In addition, the authorities on which this discussion is based are subject to various interpretations. It is therefore possible that the consequences of the acquisition, ownership and disposition of the notes may differ from the treatment described below. This discussion applies only to purchasers of the old notes in the original offering at the first price at which a substantial amount of the old notes were sold and does not address other purchasers, including purchasers of notes with market discount or acquisition premium. In addition, the tax treatment of a directholder of the notes may vary depending upon the particular situation of the holder. This discussion is limited to investors who will hold the notes as capital assets and does not deal with holders that may be subject to special tax rules (including, but not limited to, insurance companies, tax-exempt organizations, financial institutions, dealers or indirect participanttraders in securities or currencies, U.S. holders whose functional currency is not the U.S. dollar, certain U.S. expatriates or holders who will hold the notes as a hedge against currency risks or as part of a straddle, synthetic security, conversion transaction or other integrated investment comprised of the notes and one or more other investments). This discussion is for general information only and does not address all aspects of United States federal income taxation that may be relevant to holders of the notes in light of their particular circumstances, and it does not address any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. Holders should consult their own tax advisors as to the particular tax consequences to them of acquiring, holding or disposing of the notes. EXCHANGE OF OLD NOTES FOR NEW NOTES The exchange of an old note for a new note should not constitute a taxable exchange. The holder will have the same tax basis and holding period in the new note as it did in the old note at the time of such exchange. U.S. HOLDERS For purposes of this discussion, a "U.S. Holder" of a note is a holder who for United States federal income tax purposes is: - an individual that is a citizen or resident of the United States (including certain former citizens and former longtime residents), - a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, - an estate the income of which is subject to United States federal income taxation regardless of its source, or - a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. Notwithstanding the preceding sentence, to the extent provided in United States Treasury regulations, certain trusts in existence on August 20, 1996, and treated as United States persons prior to such 70 74 date, that elect to continue to be treated as United States persons also will be U.S. Holders. A "Non-U.S. Holder" is a holder that is not a U.S. Holder. Interest. Stated interest on a note will generally be taxable to a U.S. Holder as ordinary income from domestic sources at the time it is paid or accrued in accordance with the U.S. Holder's method of accounting for income tax purposes. Our failure to consummate the exchange offer or to file or cause to be declared effective the Shelf Registration Statement as described below. Regulation Sunder "Description of the Notes were-- Registration rights" will cause additional interest to accrue on the old notes in the manner described in the old notes. In the unlikely event that the interest rate on the old notes is increased, then the increased interest may be treated as original issue discount, includable by a U.S. Holder in income as such interest accrues, in advance of receipt of any cash payment and regardless of the method of income tax accounting employed by the Holder. Even though the notes may be redeemed prior to their stated maturity at our or the holder's option upon certain circumstances or automatically upon the occurrence of certain events, we believe that none of these redemption rights or obligations are more likely than not to occur, and, thus, under applicable Treasury regulations, none of these redemption rights or obligations will affect the manner of including original issue discount, if any, in income. Disposition of notes. Upon the sale, retirement at maturity or other taxable disposition of a note (collectively, a "disposition"), a U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount realized by the holder (except to the extent such amount is attributable to accrued interest, which will be treated as ordinary interest income) and the holder's adjusted tax basis in the note. This capital gain or loss will be long-term capital gain or loss if the U.S. Holder's holding period for the note exceeds one year at the time of the disposition. NON-U.S. HOLDERS Interest. Interest that we pay to a Non-U.S. Holder will not be subject to United States federal income or withholding tax if the interest is not effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Holder and, among other things, the Non-U.S. Holder: - does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock; - is not a controlled foreign corporation for United States federal income tax purposes and to which we are a related person and - certifies to us, our paying agent or the person who would otherwise be required to withhold United States tax, on Form W-8 or W-9 or substantially similar form signed under penalties of perjury, that the holder is not a United States person and provides the holder's name and address (the "Certification Requirement"). In the case of interest on a note that is not "effectively connected with the conduct of a trade or business within the United States" and does not satisfy the three requirements of the preceding sentence, the Non-U.S. Holder's interest on a note would generally be subject to United States withholding tax at a flat rate of 30% (or a lower applicable treaty rate). If a Non-U.S. Holder's interest on a note is "effectively connected with the conduct of a trade or business within the United States," then the Non-U.S. Holder will be subject to United States federal income tax on such interest income in essentially the same manner as a U.S. Holder and, in the case of a Non-U.S. Holder that is a foreign corporation, may also be subject to the branch profits tax. 71 75 Gain on Disposition. A Non-U.S. Holder generally will not be subject to United States federal income tax with respect to gain recognized on a sale, redemption or other disposition of a note unless: - the gain is effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Holder or - in the case of a Non-U.S. Holder who is a nonresident alien individual and holds the note as a capital asset, such holder is present in the United States for 183 or more days in the taxable year and certain other requirements are met. INFORMATION REPORTING AND BACKUP WITHHOLDING We will, when required, report to the holders of the notes and the Internal Revenue Service the amount of any interest paid on the notes in each calendar year and the amount of tax withheld, if any, with respect to these payments. Certain non-corporate U.S. Holders may be subject to backup withholding at a rate of 31% on payments of principal, premium and interest on, and the proceeds of the disposition of, the notes. In general backup withholding will be imposed only if the U.S. Holder: - fails to furnish its taxpayer identification number, which, for an individual, would be his or her Social Security number, - furnishes an incorrect TIN, - is notified by the IRS that it has failed to report payments of interest or dividends or - under certain circumstances, fails to certify, under penalty of perjury, that it has furnished a correct TIN and has been notified by the IRS that it is subject to backup withholding tax for failure to report interest or dividend payments. In addition, payments of principal and interest to U.S. Holders will generally be subject to information reporting. U.S. Holders should consult their own tax advisors regarding their qualification for exemption from backup withholding and the procedure for obtaining such an exemption, if applicable. In the case of payments of interest to Non-U.S. Holders, the general 31% backup withholding tax and certain information reporting will not apply to those payments with respect to which either the Certification Requirement has been satisfied or an exemption has otherwise been established, provided that neither we nor our payment agent has actual knowledge that the holder is a United States person or that the conditions of any other exemption are not in fact satisfied. Information reporting and backup withholding requirements will apply to the gross proceeds paid to a Non-U.S. Holder on the disposition of the notes by or through a United States office of a United States or foreign broker, unless the holder certifies to the broker under penalties of perjury as to its name, address and status as a foreign person or the holder otherwise establishes an exemption. Information reporting requirements, but not backup withholding, will also apply to a payment of the proceeds of a disposition of the notes by or through a foreign office of a United States broker or foreign brokers with certain types of relationships to the United States unless such broker has documentary evidence in its file that the holder of the notes is not a United States person and such broker has no actual knowledge to the contrary, or the holder establishes an exception. Neither information reporting nor backup withholding generally will apply to a payment of the proceeds of a disposition of the notes by or through a foreign office of a foreign broker not subject to the preceding sentence. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be credited toward a Holder's United States federal income tax liability, if any. To the extent that the amounts withheld exceed a Holder's tax liability, the excess may be refunded 72 76 to the Holder provided the required information is furnished to the IRS, and the Holder files a United States tax return claiming a refund of excess withholding. RECENTLY ISSUED TREASURY REGULATIONS The United States Treasury Department has promulgated new regulations regarding the withholding and information reporting rules discussed above. In general, the new regulations do not significantly alter the substantive withholding and information reporting requirements but rather unify current certification procedures and forms and clarify reliance standards. The new regulations require, however, that a foreign person furnish its taxpayer identification number in certain circumstances to claim a reduction in United States federal withholding tax and new rules are provided for foreign persons that hold debt instruments through a foreign intermediary. In particular, in the case of payments to foreign partnerships (other than payments to foreign partnerships that qualify as "withholding foreign partnerships" within the meaning of the new regulations and payments to foreign partnerships that are effectively connected with the foreign partnership's conduct of a trade or business in the United States), the partners of such partnerships will be required to provide the certification discussed above in order to establish an exemption from backup withholding tax and information reporting requirements. Moreover, a payor may rely on a certification provided by a Non-U.S. Holder only if such payor does not have actual knowledge or a reason to know that any information or certification stated in such certificate is unreliable. The new regulations are generally effective for payments made after December 31, 1999, subject to certain transition rules. NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE IMPACT, IF ANY, OF THE NEW REGULATIONS. THE FEDERAL TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. PROSPECTIVE U.S. HOLDERS AND NON-U.S. HOLDERS OF THE NOTES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE INCOME AND OTHER TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER UNITED STATES FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE EFFECTS OF CHANGES IN SUCH LAWS. 73 77 BOOK ENTRY: DELIVERY AND FORM Except as set forth below, the notes will initially be issued in the form of one global noteor more registered notes in registered, global form without interest coupons (the "Regulation S Global Note," and, together with the Restricted Global Note, the(each a "Global Notes"Note"). The Regulation S Global Note was registered in the name of a nominee of DTC for credit to the accounts of Euroclear System ("Euroclear") and Cedel Bank, S.A. ("CEDEL") and deposited with the Trustee as custodian for DTC. New Notes exchanged for Old Notes through the Book-Entry Transfer Facility may be represented by one or more Global Notes (the "New Global Notes"). One New Global Note will be issued with respect to each $200 million aggregate principal amount of the New Notes. The New Global NotesEach global note will be deposited with, or on the datebehalf of, the closing of the Exchange Offer (the "Closing Date") with the Trustee, as custodian of DTC and pursuant to a FAST Balance Certificate Agreement between the Trustee and DTCThe Depository Trust Company (DTC) and registered in the name of Cede & Co., as nominee of DTC, (such nominee being referred to herein as the "Global Note Holder"). New Notes exchanged for Old Notes which areor will remain in the formcustody of registered definitive certificates (the "Certificated Notes") will be issued in the form of Certificated Notes. Such Certificated Notes may, unlessTrustee pursuant to the New Global Notes have previously been exchanged for Certificated Notes, be exchanged for an interest inFAST Balance Certificate Agreement between DTC and the New Global Notes representing the principal amount of New Notes being transferred. Except as set forth below, the New Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the New Global Notes may not be exchanged for New Notes in certificated form except in the limited circumstances described below. See "-- Exchange of Book-Entry Notes for Certificated Notes." DEPOSITORY PROCEDURESTrustee. DTC has advised the Companyus that DTC is - a limited purposelimited-purpose trust company organized under the laws of the State of New York, - a member of the Federal Reserve System, - a "clearing corporation" within the meaning of the Uniform Commercial Code, as amended, and - a "Clearing Agency" registered pursuant to Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations (collectively, the "Participants") and to facilitatefacilitates the clearance and settlement of securities transactions in those securities between Participants through electronic book-entry changes into the accounts of its Participants.Participants, thereby eliminating the need for physical transfer and delivery of certificates. The Participants include securities brokers and dealers (including the Initial Purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants") that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants").indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. TheWe expect, pursuant to procedures established by DTC, that (a) upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Initial Purchasers with an interest in the Global Note and (b) ownership interestof the notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records ofParticipants), the Participants and the Indirect Participants. The laws of some states require that certain persons take physical delivery in definitive form of securities they own and that they own.security interest in negotiable instruments can only be perfected by delivery of certificates representing the instruments. Consequently, the ability to transfer notes or to pledge the notes as collateral will be limited to an extent. So long as DTC or its nominee is the registered sole owner of a Global Note, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the notes represented by the Global Note for all purposes under the Indenture, Except as provided below, owners of beneficial interests in a New Global Note will not be entitled to have notes represented by such persons mayGlobal Note registered in their names, will not receive or be limitedentitled to that extent. Because DTC can act only on behalfreceive physical delivery of Participants, which in turn act on behalfcertificated securities and will not be considered the owners or Holders thereof under the Indenture for any purpose, including with respect to giving of Indirect Participants and certain banks,any directions, instruction or approval to the Trustee thereunder. As a result, the ability of a person having a beneficial interestsinterest in notes represented by a New Global Note to pledge or transfer such interestsinterest to persons or entitiesentitles that do not participate in the DTCDTC's system or to otherwise take actions inaction with respect ofto such interests,interest, may be affectedeffected by thea lack of a physical certificate evidencing such interests. 51interest. Accordingly, each holder owning a beneficial interest in a Global Note must rely on the procedures of DTC and, if a holder is not a Participant or an Indirect Participant, on the procedures of the Participant through which that holder owns its interest, to exercise any rights of a holder of notes under the Indenture or such Global Note. The Issuers understand that under existing industry 74 55 EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE NEW GLOBAL NOTES WILL NOT HAVE NEW NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF NEW NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.78 practice, in the event the Issuers request any action of holders of notes or a holder that is an owner of a beneficial interest in a Global Note desires to take any action that DTC, as the holder of the Global Note, is entitled to take, DTC would authorize the Participants to take action and the Participant would authorize holders owning through that Participant as to take action or to would otherwise act upon the instruction of these holders. Neither we nor the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of notes by DTC, or for maintaining, supervising or reviewing any records of DTC relating to these notes. Payments inwith respect ofto the principal of, (and premium, if any),any, and interest on any notes represented by a New Global Note registered in the name of DTC or its nominee on the applicable record date will be payable by the Trustee to or at the direction of DTC or its nominee in its capacity as the registered holder of the Global Note representing the notes under the Indenture. Under the terms of the Indenture, the CompanyIssuers and the Trustee willmay treat the persons in whose names the New Notes,notes, including the New Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neithernone of the Company,Issuers, the Initial Purchasers, the Trustee nor any agentAgent of the CompanyIssuers, the Initial Purchasers or the Trustee has or will have any responsibility or liability for (i) any aspect or accuracythe payment amounts to beneficial owners of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interestsinterest in the New Global Notes, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the New Global Notes, or (ii) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. DTC has advised the Company that its current practice, upon receipt of any payment in respect of securities such as the New NotesNote (including principal, premium, if any, and interest)interests), isor to immediately credit the accounts of the relevant Participantsparticipants with the payment, on the payment date, in amounts proportionate to their respective holdings in principal amount of beneficial interestsinterest in the relevant security such as the New Global NotesNote as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of New Notesinterests in the Global Note will be governed by standing instructions and customary practicespractice and will not be the responsibility of the Participants or the Indirect Participants and the DTC. CERTIFICATED SECURITIES If: - DTC notifies us in writing that it is no longer willing or able to act as a depositary or DTC ceases to be registered as a clearing agency under the Exchange Act and we are unable to locate a qualified successor within 90 days, - we, at our option, notify the Trustee in writing that we elect to cause the issuance of notes in definitive form under the Indenture or - upon the Company.occurrence of certain other events, then, upon surrender by DTC of its Global Notes, Certificated Securities will be issued to each person that DTC identifies as the beneficial owner of the notes represented by the Global Notes. Upon any such issuance, the Trustee is required to register Certificated Securities in the name of these persons (or the nominee of any thereof) and cause the same to be delivered thereto. Neither the Companywe nor the Trustee willshall be liable for any delay by DTC or any of its ParticipantsParticipant or Indirect Participant in identifying the beneficial owners of the New Notes,related notes and the Company and the Trusteeeach beneficial owner may conclusively rely on, and willshall be protected in relying on, instructions from DTC or its nominee as the registered owner of the New Notes for all purposes. Except for trades in the New Notes involving only Euroclear and CEDEL participants, interests in the New Global Notes will trade in DTC's Same-Day Funds Settlement System and secondary market trading activity in such interests will therefore settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its Participants. Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between accountholders in Euroclear and CEDEL will be effected in the ordinary way in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions applicable to the New Notes described herein, cross-market transfers between the accountholders in DTC, on the one hand, and directly or indirectly through Euroclear or CEDEL accountholders, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or CEDEL, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or CEDEL, as the case may be, by the counterpart in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or CEDEL, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant New Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day fund settlement applicable to DTC. Euroclear accountholders and CEDEL accountholders may not deliver instructions directly to the depositories for Euroclear or CEDEL. Because of time zone differences, the securities account of a Euroclear or CEDEL accountholders purchasing an interest in a New Global Note from accountholders in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or CEDEL participant, during the securities settlement processing day (which must be a business day for Euroclear or CEDEL) immediately following the settlement date of DTC. Cash received in Euroclear or CEDEL as a result of sales of interests in a New Global Note by or through an Euroclear or CEDEL accountholder to a Participant in DTC will be received 52 56 with value on the settlement date of DTC but will be available in the relevant Euroclear or CEDEL cash account only as of the business day for Euroclear or CEDEL following DTC's settlement date. DTC has advised the Company that it will take any action permitted to be taken by a holder of New Notes only at the direction of one or more Participants to whose account with DTC interests in the New Global Notes are credited and only in respect of such portion of the aggregate principal amount of the New Notes as to which such Participant or Participants has or have given such direction. However, if any of the events described under "-- Exchange of Book Entry Notes for Certificated Notes" occur, DTC reserves the right to exchange the New Global Notes for New Notes in certificated form, and to distribute such New Notes to its Participants. The information in this section concerning DTC, Euroclear and CEDEL and their book-entry systems has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof. Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in the New Global Notes among accountholders in DTC, it is under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Initial Purchasers or the Trustee nor any agent of the Company or Trustee will have any responsibility for the performance by DTC or their respective accountholders, Indirect Participants or accountholders of their respective obligations under the rules and procedures governing their operations. Exchange of Book-Entry Notes for Certificated Notes A New Global Note is exchangeable for definitive New Notes in registered certificated form if (i) DTC (x) notifies the Company that it is unwilling or unable to continue as depositary for the New Global Note and the Company thereupon fails to appoint a successor depositary or (y) has ceased to be a clearing agency registered under the Exchange Act, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the New Notes in certificated form or (iii) there shall have occurred and be continuing a Default or an Event of Defaultpurposes (including with respect to the New Notes. In all cases, certificated New Notes delivered in exchange for any New Global Note or beneficial interests therein will be registered inregistration and delivery, and the names, and issued in any approved denominations, requested by or on behalfrespective principal amounts, of the depositary (in accordance with its customary procedures). 53 57 DESCRIPTION OF OTHER INDEBTEDNESS The following summary description of certain indebtedness of the Company (other than the Notes) does not purportnotes to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the 11% Indenture and the Amended Credit Agreement, copies of which are filed as exhibits to the Registration Statement of which this Prospectus is a part. AMENDED CREDIT AGREEMENT Pursuant to the Amended Credit Agreement (the "Amended Credit Agreement"), among the Company and the Managing Agents (as defined therein), the Managing Agents and a syndicate of lenders (the "Lenders") have agreed to lend to the Company up to $590.5 million in the form of a senior secured loan facility, such aggregate amount to be allocated among (i) a Tranche A-1 Term Loan Facility in an aggregate principal amount of $103.0 million (the "Tranche A-1 Facility"), (ii) a Tranche A-2 Term Loan Facility in an aggregate principal amount of $100 million (the "Tranche A-2 Facility"), (iii) a Tranche B Term Loan Facility in an aggregate principal amount of $64.9 million (the "Tranche B Facility"), (iv) a Tranche C Term Loan Facility in an aggregate principal amount of $52.6 million (the "Tranche C Facility") (collectively, the "Term Loan Facilities"), and (v) up to $270 million in the form of a senior secured revolving credit facility (the "Revolving Credit Facility," and, together with the Term Loan Facilities, the "Loans")issued). The following terms and descriptions of the Loans are based upon the terms set forth in the Amended Credit Agreement and related documents. Use of Proceeds; Maturity. The Tranche A-2 Facility was made available to the Company and its subsidiaries at the time of the Lemmerz Acquisition. The entire Tranche A-2 Facility was drawn in a single borrowing on July 1, 1997. Upon the consummation of the Lemmerz Acquisition (such date is referred to herein as the "Effective Time"), the Tranche A-1, B and C Term Loan Facilities were deemed to constitute continuations of the term loan facilities provided for in the existing Credit Agreement. The Revolving Credit Facility is available (including through the making of revolving loans and the issuance of letters of credit) for general corporate purposes of the Company and its subsidiaries. The Term Loan Facilities have maturity schedules as follows: (i) the Tranche A-1 and A-2 Facilities will mature on the sixth anniversary of the Effective Time, and will amortize in quarterly installments; (ii) the Tranche B Facility will mature on the seventh anniversary of the Effective Time, and will amortize in quarterly installments; and (iii) the Tranche C Facility will mature on the eighth anniversary of the Effective Time, and will amortize in quarterly installments. The Revolving Credit Facility will mature on the sixth anniversary of the Effective Time. The Amended Credit Agreement requires the Company to reduce the amount outstanding under the Revolving Credit Facility to $150 million during any consecutive thirty day period during each fiscal year. Prepayments; Reduction of Commitments. Loans under the Term Loan Facilities are required to be prepaid with (i) 75% of excess cash flow, (ii) 100% of the net cash proceeds of all non-ordinary-course asset sales or other dispositions of the property by the Company and its subsidiaries (including insurance and condemnation proceeds), subject to limited exceptions, and (iii) 100% of the net proceeds of issuances of debt obligations of the Company and its subsidiaries, subject to limited exceptions. Such mandatory prepayments and commitment reductions are first allocated pro rata among the Term Loan Facilities and second to commitments under the Revolving Credit Facility. Within the Term Loan Facilities such prepayments will be applied, with certain exceptions, pro rata to the remaining amortization payments under each such facility. Voluntary prepayments are permitted, in whole or in part, at the option of the Company, in minimum principal amounts to be agreed upon, without premium or penalty, subject to reimbursement of the Lenders' redeployment costs in the case of prepayment of eurocurrency borrowings ("Eurocurrency Loans") other than on the last day of the relevant interest period. All Term Loan voluntary prepayments under the Term Loan Facilities are allocated pro rata among the Term Loan Facilities and, within each such Term Loan Facility, applied, with certain exceptions, pro rata to the remaining amortization payment under such Term Loan Facility. Interest. The interest rates under the Loans will, at the option of the Company, be based upon either an adjusted eurocurrency rate (the "Eurocurrency Rate") or the rate which is equal to the highest of CIBC's prime rate, the federal funds rate plus 1/2 of 1% and the base certificate of deposit rate plus 1% ("ABR") in 5475 58 each case plus an applicable margin based on the leverage ratio from time to time in effect. The applicable margin for ABR Loans ranges from 0% to 1.25%. For Revolving Credit and Tranche A-1 and A-2 Eurocurrency Loans the applicable margin ranges from 0.75% to 2.25%. For Tranche B Eurocurrency Loans the applicable margin ranges from 2.25% to 2.75% and for Tranche C Loans from 2.50% to 3.00%. Following the first anniversary of the Effective Time, the spreads above the Adjusted LIBOR and ABR set forth above will decrease in increments to be agreed upon if the Company satisfies performance tests to be agreed upon and no event of default under the Amended Credit Agreement exists. The Company may elect interest periods of 1, 2, 3 or 6 months for Eurocurrency Loans. Calculation of interest is calculated on the basis of actual number of days elapsed in a year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR loans based on the Prime Rate) and interest is payable at the end of each interest period and, in any event, at least every 3 months. Collateral and Guarantees. The Loans are guaranteed by the Company and certain of its existing and future domestic subsidiaries. The Loans are secured by a first priority lien in substantially all of the properties and assets of the Company and such respective domestic subsidiaries, now owned or acquired later, including a pledge of all of the shares of the Company's existing and future domestic subsidiaries and 65% of the shares of certain of the Company's existing and future foreign subsidiaries. Covenants. The Amended Credit Agreement contains covenants restricting the ability of the Company and its subsidiaries to, among others, (i) declare dividends or redeem or repurchase capital stock, (ii) prepay, redeem or purchase debt, (iii) incur liens and engage in sale-leaseback transactions, (iv) make loans and investments, (v) issue more debt, (vi) amend or otherwise alter debt and other material agreements, (vii) make capital expenditures, (viii) engage in mergers, acquisitions and asset sales, (ix) engage in transactions with affiliates and (x) alter the business it conducts. The Company must also make certain customary indemnifications of the Managing Agents and their respective agents and is required to comply with financial covenants with respect to (i) a maximum leverage ratio, (ii) a minimum interest coverage ratio and (iii) a minimum fixed charge coverage ratio. The Company is also required to make certain customary affirmative covenants. Events of Default. Events of default under the Amended Credit Agreement include but are not limited to (i) the Company's failure to pay principal or interest when due, (ii) the Company's material breach of any covenant, representation or warranty contained in the loan documents, (iii) customary cross-default provisions, (iv) events of bankruptcy, insolvency or dissolution of the Company or its subsidiaries, (v) the levy of certain judgments against the Company, its subsidiaries, or their assets, (vi) certain adverse events under ERISA plans of the Company or its subsidiaries, (vii) the actual or asserted invalidity of security documents or guarantees of the Company or its subsidiaries and (viii) a change of control of the Company. The preceding discussion of certain of the provisions of the Amended Credit Agreement is not intended to be exhaustive and is qualified in its entirety by reference to the provisions of the Amended Credit Agreement. 11% NOTES In July 1996, Hayes issued the 11% Notes, comprising $250.0 million aggregate principal amount of 11% Senior Subordinated Notes due 2006, in a public offering as part of the Motor Wheel Transactions. The 11% Notes are general unsecured obligations of the Company, are subordinated in right of payment to Senior Indebtedness of the Company and senior in right of payment to any current or future subordinated indebtedness of the Company. The 11% Notes are unconditionally guaranteed, on a senior subordinated basis, as to the payment of principal, premium, if any, and interest, jointly and severally by the Company's material Domestic Subsidiaries. Interest on the 11% Notes is payable in arrears on January 15 and July 15. The indenture governing the 11% Notes (the "11% Notes Indenture") limits, among other things: (i) the incurrence of additional domestic and foreign indebtedness, with certain exceptions; (ii) the making of any Restricted Payment (as defined in the 11% Notes Indenture); (iii) the incurrence of other senior subordinated debt; (iv) the create of certain liens; (v) entering into transactions with affiliates; (vi) the creation of subsidiaries; (vii) the sale of assets; (viii) the issuance of common stock of subsidiaries; and (ix) the merger, consolidation or sale of substantially all of the assets of the Company. The 11% Notes Indenture also provides 55 59 that a holder of the 11% Notes may, under certain circumstances, have the right to require that the Company repurchase such holder's 11% Notes upon a change of control. The 11% Notes mature on July 15, 2006 and may not be redeemed prior to July 15, 2001, provided, however, that the Company may, at any time and from time to time prior to July 15, 1999, redeem up to 35% of the aggregate principal amount of the 11% Notes at a price equal to 110% of the aggregate principal amount so redeemed, plus accrued and unpaid interest to the date of redemption, with the Net Cash Proceeds (as defined in the 11% Notes Indenture) of one or more Equity Offerings (as defined in the 11% Notes Indenture) where the proceeds to the Company of any such Equity Offering at least $35.0 million. On or after July 15, 2001, the Company may, at its option, redeem the 11% Notes, in whole or in part, on at least 30 days' notice but not more than 60 days' notice to each holder of the 11% Notes to be redeemed at the prices set forth below, together with accrued and unpaid interest to the redemption date, if redeemed during the twelve-month period beginning on July 15 of each year listed below:
Year Percentage ---- ---------- 2001.............................. 105.500% 2002.............................. 103.667 2003.............................. 101.833 2004 and thereafter............... 100.000
The preceding discussion of the provisions of the 11% Notes and the 11% Notes Indenture is not intended to be exhaustive and is qualified in its entirety by reference to the 11% Notes and the 11% Notes Indenture. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of certain U.S. federal income tax considerations associated with the exchange of Old Notes for New Notes and the ownership and disposition of the New Notes by holders who acquire the New Notes pursuant to the Exchange Offer and who will hold the New Notes as "capital assets" (generally, property held for investment). The summary is based upon current laws, regulations, rulings and judicial decisions all of which are subject to change, possibly with retroactive effect. The discussion below does not address all aspects of U.S. federal income taxation that may be relevant to particular holders in the context of their specific investment circumstances or certain types of holders subject to special treatment under such laws (for example, financial institutions and tax-exempt organizations). In addition, the discussion does not address any aspect of state, local or foreign taxation. For purposes of this discussion, a "U.S. Holder" is an individual who is a citizen or resident of the United States, a corporation, a partnership or other entity created under the laws of the United States or any political subdivision thereof, an estate that is subject to U.S. federal income taxation without regard to the source of income, or a trust whose administration is subject to the primary supervision of a United States court and which has one or more United States fiduciaries who have the authority to control all substantial decisions of the trust. The term "non-U.S. Holder" means a beneficial owner of the New Notes who is not a U.S. Holder. PROSPECTIVE HOLDERS OF THE NEW NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OF OLD NOTES FOR NEW NOTES AND THE OWNERSHIP AND DISPOSITION OF THE NEW NOTES AS WELL AS THE APPLICATION OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAW. EXCHANGE OF NOTES The exchange of Old Notes for New Notes pursuant to the Exchange Offer will not be treated as an exchange or other taxable event for U.S. federal income tax purposes because, under United States Treasury regulations, the New Notes will not be considered to differ materially in kind or extent from the Old Notes. Rather, the New Notes received by a holder will be treated as a continuation of the Old Notes in the hands of such holder. As a result, there will be no U.S. federal income tax consequences to holders who exchange Old 56 60 Notes for New Notes pursuant to the Exchange Offer and any such holder will have the same tax basis and holding period in the New Notes as it had in the Old Notes immediately before the exchange. U.S. HOLDERS Interest payable on the New Notes will be includible in the income of a U.S. Holder in accordance with such holder's regular method of accounting. If a New Note is redeemed, sold or otherwise disposed of, a U.S. Holder generally will recognize gain or loss equal to the difference between the amount realized on the sale or other disposition of such New Note (to the extent such amount does not represent accrued but unpaid interest) and such holder's tax basis in the New Note. Subject to the market discount rules discussed below, such gain or loss will be capital gain or loss and will be long-term if the holder has a holding period for the New Note (which would include the holding period of the Old Notes) of more than one year at the time of the disposition. In certain circumstances, U.S. Holders that are individuals may be entitled to preferential treatment for net long-term capital gains, including, as a result of recently enacted legislation, in the case of a capital asset that has been held for more than 18 months at the time of the disposition. Under the market discount rules of the Internal Revenue Code of 1986, as amended (the "Code"), a holder (other than a holder who made the election described below) who purchased an Old Note with "market discount" (generally defined as the amount by which the stated redemption price at maturity of the Old Note exceeds the holder's purchase price) will be required to treat any gain recognized on the redemption, sale or other disposition of the New Note received in the exchange as ordinary income to the extent of the market discount that accrued during the holding period of such New Note (which would include the holding period of the Old Note). A holder who has elected under applicable Code provisions to include market discount in income as such discount accrues will not, however, be required to treat any gain recognized as ordinary income under these rules. Holders should consult their tax advisors as to the portion of any gain that would be taxable as ordinary income under these provisions. NON-U.S. HOLDERS An investment in the New Notes by a non-U.S. Holder generally will not give rise to any U.S. federal income tax consequences, unless the interest received or any gain recognized on the sale, redemption or other disposition of the New Notes by such holder is treated as effectively connected with the conduct by such holder of a trade or business in the United States, or, in the case of gains derived by an individual such individual is present in the United States for 183 days or more and certain other requirements are met, and certain identification requirements are met.79 PLAN OF DISTRIBUTION Each broker-dealer who holds Old Notesthat receives new notes for its own account as a result of market making activities or other trading activities and who receives New Notes in exchange for Old Notes pursuant to the Exchange Offer may be a statutory underwriter andexchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes.new notes. This Prospectus,prospectus, as it may be amended or supplementalsupplemented from time to time, may be used by a broker-dealer in connection with resales of New Notesnew notes received in exchange for Old Notesold notes where such Old Notesold notes were acquired as a result of market makingmarket-making activities or other trading activities. The Company acknowledges and each Holder, other than a broker-dealer, must acknowledge that it is not engaged in, does not intend to engage in, and has no arrangement or understanding with any person to participate in a distribution of New Notes. The Company hasIssuers have agreed that for a period of 180 days after the Expiration Date, itexpiration date, the issuers will make this Prospectus,prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. The CompanyWe will not receive any proceeds from any sale of New Notesany new notes by broker-dealers. New Notesnotes received by broker-dealers for their own accountaccounts pursuant to the Exchange Offerexchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notesnew notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may 57 61 be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such New Notes.new notes. Any broker-dealer that resells New Notesnew notes that were received by it for its own account pursuant to the Exchange Offerexchange offer and any broker or dealer that participates in a distribution of such New Notesnew notes may be deemed to be an "underwriter"underwriter within the meaning of the Securities Act and any profit on any such resale of New Notesnew notes and any commissions or concessions received by any suchof these persons may be deemed to be underwriting compensation under the Securities Act. The Letterletter of Transmittaltransmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter"underwriter within the meaning of the Securities Act. For a period of 180 days after the Expiration Date, the Companyexpiration date, we will promptly send additional copies of this Prospectusthe prospectus and any amendment or supplement to this Prospectusprospectus to any broker-dealer that requests such documentsit in the Letterletter of Transmittal. The Company hastransmittal. We have agreed to pay all expenses incident to the Exchange Offerexchange offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Notesnotes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. Following consummation of the exchange offer, we may, in our sole discretion, commence one or more additional exchange offers to holders of old notes who did not exchange their old notes for new notes in the exchange offer on terms which may differ from those contained in the Registration Agreement. We may use this prospectus, as it may be amended or supplemented from time to time, in connection with any additional exchange offers. Additional exchange offers will take place from time to time until all outstanding old notes have been exchanged for new notes pursuant to the terms and conditions contained in this prospectus. LEGAL MATTERS TheCertain legal matters with respect to the validity of the issuance of the New Notesnew notes will be passed upon for the Companyus and our subsidiaries by Skadden, Arps, Slate, Meagher & Flom LLP.Patrick B. Carey, Esq., general counsel of our company. EXPERTS The consolidatedOur financial statements of Hayes Wheels International, Inc. and subsidiariesschedules as of January 31, 19971999 and 19961998 and for each of the years in the three-year period ended January 31, 19971999 have been incorporated by reference herein and in the registration statement in reliance upon the reportreports of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein and in the registration statement, and upon the authority of suchsaid firm as experts in accounting and auditing. 76 80 The consolidated financial statements of Lemmerz Holding GmbH and subsidiariesCMI as of DecemberMay 31, 19961998 and 19951997 and for each of the years in the two-yearthree-year period ended DecemberMay 31, 19961998 have been incorporated by reference herein and in the registration statement in reliance upon the reportreports of KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft,Ciulla, Smith & Dale LLP, independent certified public accountants, incorporated by reference herein and in the registration statement, and upon the authority of suchsaid firm as experts in accounting and auditing. The77 81 INDEX TO FINANCIAL STATEMENTS
PAGE ---- CMI Consolidated Balance Sheet as of November 30, 1998...... F-2 CMI Consolidated Income Statement for the three and six-month periods ended November 30, 1998 and 1997........ F-3 CMI Consolidated Statements of Cash Flows for the six-month periods ended November 30, 1998 and 1997.................. F-4 Notes to CMI Consolidated Financial Statements.............. F-5
F-1 82 CMI INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED AND SUBJECT TO YEAR END ADJUSTMENTS)
NOVEMBER 30, MAY 31, 1998 1998 ------------ ------- ASSETS Current Assets: Cash...................................................... $ 7,226,548 $ 20,427,822 Accounts receivable -- Trade.............................. 84,604,284 80,065,873 -- Tooling............................ -- 81,353 Net investment in direct financing lease.................. 1,800,000 1,800,000 Inventories -- Production................................. 50,999,025 51,791,542 -- Tooling..................................... 21,345,570 21,199,896 Prepaid expenses.......................................... 2,252,528 2,485,362 Prepaid and refundable taxes.............................. 67,454 -- Deferred income taxes..................................... 3,601,120 3,719,300 ------------ ------------ Total Current Assets.................................... 171,896,529 181,571,148 ------------ ------------ Property, Plant and Equipment -- at cost: Land and improvements..................................... 5,122,253 5,122,253 Buildings and improvements................................ 65,772,534 65,372,548 Machinery and equipment................................... 158,986,893 157,759,883 Office furniture and equipment............................ 18,256,126 17,817,209 Transportation equipment.................................. 4,644,981 4,548,839 Tooling for customer production........................... 110,563,052 109,338,695 ------------ ------------ 363,345,839 359,959,427 Less: accumulated depreciation............................ 182,113,216 163,278,367 ------------ ------------ Total Property, Plant and Equipment -- net.............. 181,232,623 196,681,060 ------------ ------------ Other Assets: Goodwill -- net of accumulated amortization............... 2,574,992 2,674,994 Investments............................................... 25,529,474 23,012,701 Cash surrender value and other assets..................... 7,750,117 7,885,965 ------------ ------------ Total Other Assets 35,854,583 33,573,660 ------------ ------------ Total Assets.......................................... $388,983,735 $411,825,868 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable $20,286,000 $ 20,286,000 Capital lease obligations................................. -- 113,297 Accounts payable.......................................... 48,001,695 41,007,467 Accrued liabilities....................................... 22,985,036 29,491,219 Income and other taxes payable............................ -- 1,503,611 Deferred revenue.......................................... 1,885,860 2,186,046 ------------ ------------ Total Current Liabilities............................... 93,158,591 94,587,640 ------------ ------------ Long-Term Liabilities -- net of current portion: Notes payable............................................. 119,642,000 147,428,000 Deferred income taxes..................................... 4,431,350 4,430,300 ------------ ------------ Total Long-Term Liabilities............................. 124,073,350 151,858,300 ------------ ------------ Total Liabilities..................................... 217,231,941 246,445,940 ------------ ------------ Stockholders' Equity: Common stock.............................................. 486,415 486,554 Retained earnings......................................... 171,265,379 164,893,374 ------------ ------------ Total Stockholders' Equity.............................. 171,751,794 165,379,928 ------------ ------------ Total Liabilities and Stockholders' Equity............ $388,983,735 $411,825,868 ============ ============
See accountants' review report and notes to the financial statements. F-2 83 CMI INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT (UNAUDITED AND SUBJECT TO YEAR END ADJUSTMENTS)
THREE MONTHS ENDED SIX MONTHS ENDED NOVEMBER 30, NOVEMBER 30, ----------------------------- ---------------------------- 1998 1997 1998 1997 ---- ---- ---- ---- Net Sales........................ $141,077,071 $ 146,008,417 $271,020,805 $275,033,597 Cost of goods sold............... 110,653,563 117,195,344 220,887,170 226,702,228 ------------ ------------- ------------ ------------ Gross Profit................... 30,423,508 28,813,073 50,133,635 48,331,369 Selling, general and administration................. 12,531,178 11,260,675 23,445,597 21,475,453 Engineering and product development.................... 3,585,701 3,460,260 7,185,634 7,047,471 ------------ ------------- ------------ ------------ Income from Operations......... 14,306,629 14,092,138 19,502,404 19,808,445 Equity in net income (loss) of unconsolidated affiliates...... (2,669,062) (1,597,385) (5,661,019) (3,070,405) Other income (expense)........... 318,880 196,987 279,465 (173,240) Interest expense -- net.......... (1,788,137) (1,794,734) (3,603,602) (3,586,468) ------------ ------------- ------------ ------------ Net Income Before Taxes........ 10,168,310 10,897,006 10,517,248 12,978,332 Income taxes..................... 3,896,000 4,037,000 4,098,000 4,773,000 ------------ ------------- ------------ ------------ Net Income..................... $ 6,272,310 $ 6,860,006 $ 6,419,248 $ 8,205,332 ============ ============= ============ ============
See accountants' review report and notes to the financial statements. F-3 84 CMI INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED AND SUBJECT TO YEAR END ADJUSTMENTS)
SIX MONTHS ENDED NOVEMBER 30, ---------------------------- 1998 1997 ---- ---- Cash Flows From Operating Activities: Net income................................................ $ 6,419,248 $ 8,205,332 Depreciation.............................................. 9,225,366 8,753,795 Amortization.............................................. 9,839,101 10,323,571 Change in deferred taxes.................................. 119,230 165,402 Gain on sale of assets.................................... -- (469,507) Equity in loss of unconsolidated affiliates............... 5,661,305 3,035,288 Change in operating assets and liabilities other than cash: Accounts receivable -- trade........................... (4,538,411) (2,393,126) Inventories -- production.............................. 792,517 (4,820,190) Prepaid expenses....................................... 232,834 (138,738) Income and other taxes payable......................... (1,571,065) (1,431,380) Accounts payable....................................... 6,994,228 (2,486,400) Accrued liabilities.................................... (6,506,183) 2,941,280 Deferred revenue....................................... (300,186) 336,320 Other..................................................... 135,848 (312,806) ------------ ------------ Net Cash Provided By Operations........................ 26,503,832 21,708,841 ------------ ------------ Cash Flows From Investing Activities: Purchase of property, plant and equipment................. (2,291,671) (14,877,724) Purchase of tooling for customer production............... (1,224,357) (6,492,173) Proceeds from sale of assets.............................. -- 1,337,476 Change in investment in unconsolidated affiliates......... (8,178,078) (5,303,541) Net change in tooling produced for customers.............. (64,321) (1,837,081) Other..................................................... -- 596,559 ------------ ------------ Cash Used In Investing Activities...................... (11,758,427) (26,576,484) ------------ ------------ Cash Flows From Financing Activities: Proceeds from sale of Company stock....................... -- 208,155 Repurchase of Company stock............................... (47,382) (320,338) Repayment of long-term debt............................... (13,286,000) (10,286,000) Net borrowings (repayments) under line of credit agreements............................................. (14,500,000) 7,500,000 Repayment of capital lease obligations.................... (113,297) (210,635) ------------ ------------ Cash Used In Financing Activities...................... (27,946,679) (3,108,818) ------------ ------------ Net Decrease In Cash........................................ (13,201,274) (7,976,461) Cash -- beginning of period................................. 20,427,822 13,033,150 ------------ ------------ Cash -- end of period................................ $ 7,226,548 $ 5,056,689 ============ ============
See accountants' review report and notes to the financial statements. F-4 85 CMI INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (MILLIONS OF DOLLARS, UNLESS OTHERWISE STATED) (1) BASIS OF PRESENTATION In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of MWC Holdings, Inc. at Decembernormal recurring adjustments) necessary to present its financial position as of November 30, 1998 and the results of its operations and cash flows for the six months ended November 30, 1998 and 1997. The statements should be read in conjunction with the consolidated financial statements and footnotes included in the Company's Financial Statement package for the year ended May 31, 1995 and 1994, and1998. The results of operations for eachthe six months ended November 30, 1998 are not necessarily indicative of the three yearsresults to be expected for the full year. (2) INVENTORIES The major classes of inventory are as follows:
NOVEMBER 30, MAY 31, 1998 1998 ------------ ------- Raw materials....................................... $ 5.0 $ 7.1 Work-in-process and finished goods.................. 18.2 17.6 Supplies and tools.................................. 27.8 27.1 ----- ----- Total production inventories...................... 51.0 51.8 Tooling inventory................................... 21.3 21.2 ----- ----- Total inventories................................. $72.3 $73.0 ===== =====
(3) MERGER AGREEMENT On November 19, 1998, the Company signed a Merger Agreement with Hayes Lemmerz International (Hayes). Under the terms of the agreement the Company has agreed to enter into a business combination with Hayes where each outstanding share of the Company's stock shall be canceled in exchange for the period ended December 31, 1995right to receive merger considerations. Pending necessary approvals, the business combination is expected to be completed on February 1, 1999. F-5 86 ====================================================== We have been incorporated by reference herein and have been audited by Ernst & Young LLP, independent auditors,not authorized any dealer, salesperson or other person to give any information or represent anything to you other than the information contained in this prospectus. You must not rely on unauthorized information or representations. This prospectus does not offer to sell or ask for offers to buy any of the securities in any jurisdiction where it is unlawful, where the person making the offer is not qualified to do so, or to any person who cannot legally be offered the securities. The information in this prospectus is current as set forth in their report and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 58 62 ====================================================== NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITATION.June 11, 1999. ------------------------ TABLE OF CONTENTS
PAGE ---- Where You Can Find Additional Information........................ i Incorporation of Certain Documents by Reference........................... 2 Available Information................. 2Reference.......................... i Prospectus Summary.................... 4Summary................... 1 Risk Factors.......................... 15Factors......................... 14 Forward-Looking Statements........... 20 Use of Proceeds...................... 20 Pro Forma Capitalization............. 21 Hayes Selected Historical Financial Information........................ 22 CMI Selected Historical Financial Information........................ 23 Unaudited Pro Forma Combined Financial Data..................... 24 The Exchange Offer.................... 20Offer................... 30 Description of the Notes.............. 27Notes............. 38 Description of Other Indebtedness..... 54 CertainOur Credit Facility... 68 Important United States Federal Income Tax Considerations...................... 56Considerations..................... 70 Book Entry; Delivery and Form........ 74 Plan of Distribution.................. 57Distribution................. 76 Legal Matters......................... 58 Experts............................... 58Matters........................ 76 Experts.............................. 76 Index of Financial Statements of CMI................................ F-1
UNTIL (90 DAYS AFTER THE DATE OF THIS PROSPECTUS) DEALERS AFFECTING TRANSACTIONS IN THE NEW NOTES, WHETHER OR NOT PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS OBLIGATION IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. ====================================================== ======================================================$250,000,000 HAYES WHEELSLEMMERZ INTERNATIONAL, INC. [HAYES WHEELS INTERNATIONAL, INC. LOGO] $250,000,000 98 1/8%4% SERIES B SENIOR SUBORDINATED NOTES DUE 2007 $150,000,000 9 1/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2007 ------------------------2008 PROSPECTUS ------------------------ , 1997JUNE 11, 1999 ====================================================== 6387 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.OFFICERS Each of the Registrants has by-law or code of regulation provisions providing that the Registrants shall indemnify their directors, officers, employees or agents to the fullest extent permitted by law. Set forth below are descriptions of the laws of the applicable states of incorporation of the Registrants. These descriptions are intended only as summaries and are qualified in their entirety by reference to the applicable laws. (a) State of Delaware for Hayes WheelsLemmerz International, Inc., Hayes WheelsLemmerz International -- California, Inc., Hayes WheelsLemmerz International -- Georgia, Inc., Hayes WheelsLemmerz International -- Indiana, Inc., Hayes WheelsLemmerz International -- Mexico, Inc., and MWC AcquisitionHL Ohio Sub, Inc. Section 145 of the Delaware General Corporation Law ("DGCL"of the State of Delaware (the "DGCL") empowers a Delaware corporation to indemnify any person who was or is a party or witness or is threatened to be made a party to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of thesuch corporation), by reasonsreason of the fact that he or she is or was aan officer, director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Depending on the character of the proceeding, a corporation may indemnify against expenses, costs and fees (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the person indemnified acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation's best interests, of the corporation, and, with respect to anyfor criminal action or proceeding,proceedings, had no reasonable cause to believe his or her conduct was unlawful. If the person indemnified is not wholly successful in such action, suit or proceeding, but is successful, on the merits or otherwise, in one or more but less than all claims, issues or matters in such proceeding, he or she may be indemnified against expenses actually and reasonably incurred in connection with each successfully resolved claim, issue or matter. In the case of an action or suit by or in the right of the corporation, no indemnification may be made inwith respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery, or the court in which such action or suit wasis brought, shall determine that despite the adjudication of liability, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 145 provides that, to the extent a director, officer, employee or agent of a corporation has been successful in the defense of any action, suit or proceeding referred to above or in the defense of any claim, issue or manner therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. The Company's By-Laws provide for indemnification by the Company of its directors and officers to the fullest extent permitted by the DGCL. The Company has purchased insurance on behalf of the present and former directors and officers of the Company and its subsidiaries against liabilities asserted against or incurred by them in such capacity or arising out of their status as such. The Company has entered into indemnification agreements with each of its directors pursuant to which the Company has agreedgreed to indemnify such individuals to the fullest extent permitted under Delaware law. (b) State of Michigan for Hayes WheelsLemmerz International -- Michigan, Inc. The Michigan Business Corporation Act, as amended (the "MBCA"), provides that a Michigan corporation, such as Hayes WheelsLemmerz International -- Michigan, Inc., may indemnify a director, II-1 88 officer, employee or agent of the corporation against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) involving the person indemnified by reason of the fact that the person indemnified is or II-1 64 was a director, officer, employee or agent of the corporation, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interest of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The MBCA also provides that in derivative actions, a corporation may indemnify a director, officer, employee or agent of the corporation against expenses actually and reasonably incurred by the person indemnified to the extent that the person indemnified is successful on the merits or otherwise in any such action, suit or proceeding or in the defense of any claim, issue or matter therein. Under the MBCA, no indemnification shall be made with respect to any claim, issue or matter as to which the person indemnified shall have been adjudged to be liable to the corporation unless and only to the extent that the court shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, the person indemnified is fairly and reasonably entitled to indemnifyindemnity for such expenses which the court shall deem proper. The MBCA also generally permits the advancement of reasonable expenses and empowers the corporation to purchase and maintain directors' and officers' insurance. (c) State of Ohio for Motor Wheel CorporationHayes Lemmerz International -- Ohio, Inc. The Ohio Revised Code provides that a Companycompany shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee of the company or agent of such company, or is or was serving at the request of the company as a director, trustee, officer, employee or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust or other enterprise. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Exhibits:
EXHIBIT NO DESCRIPTION - ---------- ----------- 1.1 Purchase Agreement, dated as of December 7, 1998, among the Company, as Issuer, certain subsidiaries of the Company, as Guarantors, and CIBC Oppenheimer Corp., Credit Suisse First Boston Corporation, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the Initial Purchasers.* 3.1 Certificate of Incorporation of the Company and Certificate of Correction thereof. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on July 12, 1996 (File No. 1-11592).) 3.2 Amended and Restated By-laws of the Company. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on July 12, 1996.) 4.1 Indenture, dated as of December 14, 1998, among the Company, as Issuer, certain subsidiaries of the Company, as Guarantors, and The Bank of New York, a New York banking corporation, as Trustee. (Incorporated by reference to Exhibit 4.11 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on February 18, 1999.)
II-2 6589
EXHIBIT NO DESCRIPTION - ---------- ----------- 4.2 Registration Rights Agreement, dated as of December 14, 1998, among the Company, as Issuer, certain subsidiaries of the Company, as Guarantors, and CIBC Oppenheimer Corp., Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the Initial Purchasers. (Incorporated by reference to Exhibit 4.12 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on February 18, 1999.) 4.3 Third Amended and Restated Credit Agreement, dated as of February 3, 1999, among the Company, as Borrower, the several banks and other financial institutions from time to time Parties thereto, as Lenders, Canadian Imperial Bank of Commerce, as Administrative Agent and Co-Lead Arranger, Merrill Lynch Capital Corporation, as Co-Documentation Agent, and Dresdner Bank AG, as Co-Documentation Agent and European Swing Line Administrator. (Incorporated by reference to Exhibit 10.29 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on February 18, 1999.) 5.1 Opinion of Patrick B. Carey, Esq. 12.1 Statement regarding the computation of ratio of earnings to fixed charges for the Company. (Incorporated by reference to Exhibit 12.1 to the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission on April 30, 1999.) 21.1 Subsidiaries of the Company. (Incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission on April 30, 1999.) 23.1 Consent of Patrick B. Carey, Esq. (contained in Exhibit 5.1). 23.2 Consent of KPMG LLP. 23.3 Consent of Ciulla, Smith & Dale LLP. 24.1 Powers of attorney.* 25.1 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York as Trustee under the Indenture relating to the Company's 8 1/4% Senior Subordinated Notes due 2008.* 99.1 Letter of Transmittal. 99.2 Notice of Guaranteed Delivery. 99.3 Letter to Brokers, Dealers, Commercial Bankers, Trust Companies and Other Nominees. 99.4 Letter to Clients. 99.5 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9
- ------------------------- * Previously filed. ITEM 21. EXHIBITS.22. UNDERTAKINGS (a) The following exhibitsundersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are filed as part ofbeing made, a post-effective amendment to this Registration Statement: EXHIBIT NO. DESCRIPTION - ----------- ----------- 1.1 Purchase Agreement, dated June 19, 1997,registration statement; (i) To include any prospectus required by and among the Company, the Subsidiary Guarantors and CIBC Wood Gundy Securities Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc., Morgan Stanley & Co. Inc. and Salomon Brothers Inc. 1.2 Purchase Agreement, dated July 16, 1997 by and among the Company, the Subsidiary Guarantors, CIBC Wood Gundy Securities Corp. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. **2.1 Agreement and Plan of Merger, dated as of March 28, 1996, by and between the Company and MWC Holdings, Inc. (incorporated by reference to Exhibit 2Section 10(a)(3) of the Company's Current Report on Form 8-K, dated March 28, 1996). **2.2 Purchase Agreement amongSecurities Act of 1993; II-3 90 (ii) To reflect in the Company, Cromodora Wheels S.p.A., Lemmerz Holding GmbH andprospectus any facts or events arising after the Shareholders of Lemmerz Holding Gmbh, dated as of June 6, 1997 (incorporated by reference to Exhibit 2effective date of the Company's Current Report on Form 8-K, dated June 6, 1997). **4.1 Indenture betweenregistration statement (or the Company,most recent post-effective amendment thereof) which, individually or in the Guarantorsaggregate, represents a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and The Bankany deviation from the low or high end of New York, as Trustee, relating to the June Notes includingestimated maximum offering range may be reflected in the form of Note therein (incorporated by referenceprospectus filed with the Commission pursuant to Exhibit 4.1 of the Company's Current Report on Form 8-K, dated June 30, 1997). 4.2 Indenture between the Company, the Guarantors and The Bank of New York, as Trustee, relating to the July Notes including the form of Note therein. 4.3 Registration Rights Agreement, dated as of June 30, 1997, by and among the Company, the Guarantors and the Initial Purchasers. 4.4 Registration Rights Agreement, dated as of July 22, 1997, by and among the Company, the Guarantors and the Initial Purchasers. **4.5 Form of June Notes (included in Exhibit 4.1). 4.6 Form of July Notes (included in Exhibit 4.2). **4.7 Indenture between the Company and Comerica Bank, as Trustee, relating to the 11% Notes (incorporated by reference to Exhibit 4.2 of the Company's Form S-3, File No. 333-03813. +5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality of the securities being registered hereby. **10.1 Amended and Restated Credit Agreement among the Company and the Lenders thereunder, dated as of June 30, 1997 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, dated June 30, 1997). 12.1 Ratio of Earnings to Fixed Charges. 23.1 Consent of KPMG Peat Marwick LLP. 23.2 Consent of KPMG Deutsche Treuhand -- Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. 23.3 Consent of Ernst & Young LLP. +23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1). 24 Powers of Attorney (includedRule 424 (b) if, in the signature pages toaggregate, the changes in volume and price represent no more that 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Statement). 25.1 Form T-1 Statement of Eligibility of TrusteeFee" table in the effective registration statement; (iii) To include any material information with respect to the June Notes. 25.2 Form T-1 Statementplan of Eligibility of Trustee with respectdistribution not previously disclosed in the registration statement or any material change to such information in the July Notes. +99.1 Form of Letter of Transmittal. +99.2 Form of Notice of Guaranteed Delivery. +99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. +99.4 Form of Letter to Clients. - ------------------------- ** Previously filed. + To be filed by an amendment to this Registration Statement. II-3 66 ITEM 22. UNDERTAKINGS. The undersigned registrants hereby undertake that,registration statement; (2) That, for purposesthe purpose of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statementsuch post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes: Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrantRegistrant pursuant to the foregoing provisions, or otherwise, the registrants haveRegistrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrantRegistrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrantRegistrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. The undersigned registrants hereby undertake to file an application for the purposes of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the TIA in accordance with the rules and regulation prescribed by the Commission under Section 305(b)(2) of the TIA. II-4 6791 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997.June 11, 1999. HAYES WHEELSLEMMERZ INTERNATIONAL, INC. By: /s/ DANIEL M. SANDBERGWILLIAM D. SHOVERS ------------------------------------ Daniel M. Sandberg Vice President and General Counsel POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises.Vice President-Finance Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - ---------------------------------------------------* Chairman of the Board Presidentof June 11, 1999 - ------------------------------------------------ Directors; Chief Executive Officer Ranko Cucuz and ChiefDirector (Principal Executive Officer August 25, 1997Officer) /s/ WILLIAM D. SHOVERS Vice President -- Finance and June 11, 1999 - ------------------------------------------------ Chief Financial - --------------------------------------------------- Officer and Principal William D. Shovers * Corporate Controller and Chief June 11, 1999 - ------------------------------------------------ Accounting Officer August 25, 1997 /s/ CLEVELAND A. CHRISTOPHED. N. Vermilya * Director June 11, 1999 - --------------------------------------------------------------------------------------------------- Cleveland A. Christophe * Director August 25, 1997 /s/ TIMOTHY J. CLARKJune 11, 1999 - --------------------------------------------------- Timothy J. Clark------------------------------------------------ Anthony Grillo * Director August 25, 1997 /s/ ANDREW R. HEYERJune 11, 1999 - --------------------------------------------------------------------------------------------------- Andrew R. Heyer * Director August 25, 1997 /s/ PETER A. JOSEPHJune 11, 1999 - --------------------------------------------------- Peter A. Joseph Director August 25, 1997------------------------------------------------ Horst Kukwa-Lemmerz
II-5 6892
SIGNATURE TITLE DATE --------- ----- ---- /s/ HORST KUKWA-LEMMERZ* Director June 11, 1999 - --------------------------------------------------- Horst Kukwa-Lemmerz Director August 25, 1997 /s/ PAUL S. LEVY - --------------------------------------------------------------------------------------------------- Paul S. Levy * Director August 25, 1997 /s/ WIENAND MEILICKEJune 11, 1999 - --------------------------------------------------------------------------------------------------- Jeffrey Lightcap * Director June 11, 1999 - ------------------------------------------------ Wienand Meilicke * Director August 25, 1997 /s/ JOHN S. RODEWIGJune 11, 1999 - --------------------------------------------------------------------------------------------------- John S. Rodewig * Director August 25, 1997 /s/ DAVID Y. YINGJune 11, 1999 - --------------------------------------------------------------------------------------------------- Ray Witt * Director June 11, 1999 - ------------------------------------------------ David Y. Ying Director August 25, 1997*By: /s/ PATRICK B. CAREY ----------------------------------------- Patrick B. Carey Attorney-in-Fact
II-6 6993 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997.June 11, 1999. HAYES WHEELSLEMMERZ INTERNATIONAL -- CALIFORNIA, INC. By: /s/ DANIEL M. SANDBERGWILLIAM D. SHOVERS ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ * Director June 11, 1999 - --------------------------------------------------------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS Director June 11, 1999 - --------------------------------------------------------------------------------------------------- William D. Shovers * Director August 25, 1997 /s/ RONALD L. KOLAKOWSKIJune 11, 1999 - --------------------------------------------------------------------------------------------------- Ronald L. Kolakowski Director August 25, 1997*By: /s/ PATRICK B. CAREY ----------------------------------------- Patrick B. Carey Attorney-in-Fact
II-7 7094 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997.June 11, 1999. HAYES WHEELSLEMMERZ INTERNATIONAL -- GEORGIA, INC. By: /s/ DANIEL M. SANDBERGWILLIAM D. SHOVERS ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ * Director June 11, 1999 - --------------------------------------------------------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS Director June 11, 1999 - --------------------------------------------------------------------------------------------------- William D. Shovers * Director August 25, 1997 /s/ RONALD L. KOLAKOWSKIJune 11, 1999 - --------------------------------------------------------------------------------------------------- Ronald L. Kolakowski Director August 25, 1997*By: /s/ PATRICK B. CAREY ----------------------------------------- Patrick B. Carey Attorney-in-Fact
II-8 7195 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997.June 11, 1999. HAYES WHEELSLEMMERZ INTERNATIONAL -- INDIANA, INC. By: /s/ DANIEL M. SANDBERGWILLIAM D. SHOVERS ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ * Director June 11, 1999 - --------------------------------------------------------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS Director June 11, 1999 - --------------------------------------------------------------------------------------------------- William D. Shovers * Director August 25, 1997 /s/ RONALD L. KOLAKOWSKIJune 11, 1999 - --------------------------------------------------------------------------------------------------- Ronald L. Kolakowski Director August 25, 1997*By: /s/ PATRICK B. CAREY ----------------------------------------- Patrick B. Carey Attorney-in-Fact
II-9 7296 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997.June 11, 1999. HAYES WHEELSLEMMERZ INTERNATIONAL -- MEXICO, INC. By: /s/ DANIEL M. SANDBERGWILLIAM D. SHOVERS ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ * Director June 11, 1999 - --------------------------------------------------------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS Director June 11, 1999 - --------------------------------------------------------------------------------------------------- William D. Shovers * Director August 25, 1997June 11, 1999 - ------------------------------------------------ Ronald L. Kolakowski *By: /s/ DANIEL M. SANDBERG - --------------------------------------------------- Daniel M. Sandberg Director August 25, 1997PATRICK B. CAREY ----------------------------------------- Patrick B. Carey Attorney-in-Fact
II-10 7397 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997.June 11, 1999. HAYES WHEELSLEMMERZ INTERNATIONAL -- MICHIGAN, INC. By: /s/ DANIEL M. SANDBERGWILLIAM D. SHOVERS ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ * Director June 11, 1999 - --------------------------------------------------------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS Director June 11, 1999 - --------------------------------------------------------------------------------------------------- William D. Shovers * Director August 25, 1997 /s/ RONALD L. KOLAKOWSKIJune 11, 1999 - --------------------------------------------------------------------------------------------------- Ronald L. Kolakowski Director August 25, 1997*By: /s/ PATRICK B. CAREY ----------------------------------------- Patrick B. Carey Attorney-in-Fact
II-11 7498 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. MOTOR WHEEL CORPORATIONJune 11, 1999. HAYES LEMMERZ INTERNATIONAL -- OHIO, INC. By: /s/ DANIEL M. SANDBERGWILLIAM D. SHOVERS ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ * Director June 11, 1999 - --------------------------------------------------------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS Director June 11, 1999 - --------------------------------------------------------------------------------------------------- William D. Shovers * Director August 25, 1997June 11, 1999 - ------------------------------------------------ Ronald L. Kolakowski *By: /s/ DANIEL M. SANDBERG - --------------------------------------------------- Daniel M. Sandberg Director August 25, 1997PATRICK B. CAREY ----------------------------------------- Patrick B. Carey Attorney-in-Fact
II-12 7599 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. MWC ACQUISITIONJune 11, 1999. HL OHIO SUB, INC. By: /s/ DANIEL M. SANDBERGWILLIAM D. SHOVERS ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ * Director June 11, 1999 - --------------------------------------------------------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS Director June 11, 1999 - --------------------------------------------------------------------------------------------------- William D. Shovers * Director August 25, 1997June 11, 1999 - ------------------------------------------------ Ronald L. Kolakowski *By: /s/ DANIEL M. SANDBERG - --------------------------------------------------- Daniel M. Sandberg Director August 25, 1997PATRICK B. CAREY ----------------------------------------- Patrick B. Carey Attorney-in-Fact
II-13 76100 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 1.1 Purchase Agreement, dated June 19, 1997, by and among the Company, the Subsidiary Guarantors and CIBC Wood Gundy Securities Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc., Morgan Stanley & Co. Inc. and Salomon Brothers Inc. 1.2 Purchase Agreement, dated July 16, 1997 by and among the Company, the Subsidiary Guarantors, CIBC Wood Gundy Securities Corp. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. **2.1 Agreement and Plan of Merger, dated as of March 28, 1996, by and between the Company and MWC Holdings, Inc. (incorporated by reference to Exhibit 2 of the Company's Current Report on Form 8-K, dated March 28, 1996). **2.2 Purchase Agreement among the Company, Cromodora Wheels S.p.A., Lemmerz Holding GmbH and the Shareholders of Lemmerz Holding Gmbh, dated as of June 6, 1997 (incorporated by reference to Exhibit 2 of the Company's Current Report on Form 8-K, dated June 6, 1997). **4.1 Indenture between the Company, the Guarantors and The Bank of New York, as Trustee, relating to the June Notes including the form of Note therein (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, dated June 30, 1997). 4.2 Indenture between the Company, the Guarantors and The Bank of New York, as Trustee, relating to the July Notes including the form of Note therein. 4.3 Registration Rights Agreement, dated as of June 30, 1997, by and among the Company, the Guarantors and the Initial Purchasers. 4.4 Registration Rights Agreement, dated as of July 22, 1997, by and among the Company, the Guarantors and the Initial Purchasers. **4.5 Form of June Notes (included in Exhibit 4.1). 4.6 Form of July Notes (included in Exhibit 4.2). **4.7 Indenture between the Company and Comerica Bank, as Trustee, relating to the 11% Notes (incorporated by reference to Exhibit 4.2 of the Company's Form S-3, File No. 333-03813. +5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality of the securities being registered hereby. **10.1 Amended and Restated Credit Agreement among the Company and the Lenders thereunder, dated as of June 30, 1997 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, dated June 30, 1997). 12.1 Ratio of Earnings to Fixed Charges. 23.1 Consent of KPMG Peat Marwick LLP. 23.2 Consent of KPMG Deutsche Treuhand -- Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. 23.3 Consent of Ernst & Young LLP. +23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1). 24 Powers of Attorney (included in the signature pages to the Registration Statement). 25.1 Form T-1 Statement of Eligibility of Trustee with respect to the June Notes. 25.2 Form T-1 Statement of Eligibility of Trustee with respect to the July Notes. +99.1 Form of Letter of Transmittal. +99.2 Form of Notice of Guaranteed Delivery. 77
EXHIBIT NO.NO DESCRIPTION - ---------- ----------- 1.1 Purchase Agreement, dated as of December 7, 1998, among the Company, as Issuer, certain subsidiaries of the Company, as Guarantors, and CIBC Oppenheimer Corp., Credit Suisse First Boston Corporation, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the Initial Purchasers.* 3.1 Certificate of Incorporation of the Company and Certificate of Correction thereof. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on July 12, 1996 (File No. 1-11592).) 3.2 Amended and Restated By-laws of the Company. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on July 12, 1996.) 4.1 Indenture, dated as of December 14, 1998, among the Company, as Issuer, certain subsidiaries of the Company, as Guarantors, and The Bank of New York, a New York banking corporation, as Trustee. (Incorporated by reference to Exhibit 4.11 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on February 18, 1999.) 4.2 Registration Rights Agreement, dated as of December 14, 1998, among the Company, as Issuer, certain subsidiaries of the Company, as Guarantors, and CIBC Oppenheimer Corp., Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the Initial Purchasers. (Incorporated by reference to Exhibit 4.12 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on February 18, 1999.) 4.3 Third Amended and Restated Credit Agreement, dated as of February 3, 1999, among the Company, as Borrower, the several banks and other financial institutions from time to time Parties thereto, as Lenders, Canadian Imperial Bank of Commerce, as Administrative Agent and Co-Lead Arranger, Merrill Lynch Capital Corporation, as Co-Documentation Agent, and Dresdner Bank AG, as Co-Documentation Agent and European Swing Line Administrator. (Incorporated by reference to Exhibit 10.29 to the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on February 18, 1999.) 5.1 Opinion of Patrick B. Carey, Esq. 12.1 Statement regarding the computation of ratio of earnings to fixed charges for the Company. (Incorporated by reference to Exhibit 12.1 to the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission on April 30, 1999.) 21.1 Subsidiaries of the Company. (Incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission on April 30, 1999.) 23.1 Consent of Patrick B. Carey, Esq. (contained in Exhibit 5.1). 23.2 Consent of KPMG LLP. 23.3 Consent of Ciulla, Smith & Dale LLP. 24.1 Powers of attorney.*
101
EXHIBIT NO DESCRIPTION - ---------- ----------- +99.325.1 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York as Trustee under the Indenture relating to the Company's 8 1/4% Senior Subordinated Notes due 2008.* 99.1 Letter of Transmittal. 99.2 Notice of Guaranteed Delivery. 99.3 Letter to Brokers, Dealers, Commercial Banks,Bankers, Trust Companies and Other Nominees. +99.499.4 Letter to Clients. 99.5 Guidelines for Certification of Taxpayer Identification Number on Substitute Form of Lett to Clients.W-9
- ------------------------- *** Previously filed. + To be filed by an amendment to this Registration Statement.