10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2000

OR

  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to                   

Commission file number: 1-11592

HAYES LEMMERZ INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE	13-3384636
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification No.)

15300 CENTENNIAL DRIVE

NORTHVILLE, MICHIGAN 48167

(Address of Principal Executive Offices)(Zip Code)

Registrant’s telephone number, including area code: (734) 737-5000

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes       No 

     The number of shares of common stock outstanding as of December 15, 2000, was 28,455,495 shares.

TABLE OF CONTENTS

Amended & Restated Credit Agreement

Severance Agreement

Financial Data Schedule

HAYES LEMMERZ INTERNATIONAL, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

			Page
PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Statements of Operations		3
		Consolidated Balance Sheets		4
		Consolidated Statements of Cash Flows		5
		Notes to Consolidated Financial Statements		6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		17
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings		18
	Item 2.	Changes in Securities and Use of Proceeds		18
	Item 3.	Defaults upon Senior Securities		18
	Item 4.	Submission of Matters to a Vote of Security Holders		18
	Item 5.	Other Information		18
	Item 6.	Exhibits and Reports on Form 8-K		18
SIGNATURES				19

      UNLESS OTHERWISE INDICATED, REFERENCES TO THE “COMPANY” MEAN HAYES LEMMERZ INTERNATIONAL, INC., AND ITS SUBSIDIARIES AND REFERENCE TO A FISCAL YEAR MEANS THE COMPANY’S YEAR ENDED JANUARY 31 OF THE FOLLOWING YEAR (E.G., FISCAL 2000 MEANS THE PERIOD BEGINNING FEBRUARY 1, 2000, AND ENDING JANUARY 31, 2001). THIS REPORT CONTAINS 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) COMPETITIVE PRESSURE IN THE COMPANY’S INDUSTRY INCREASES SIGNIFICANTLY; (2) GENERAL ECONOMIC CONDITIONS ARE LESS FAVORABLE THAN EXPECTED; (3) THE COMPANY’S DEPENDENCE ON THE AUTOMOTIVE INDUSTRY (WHICH HAS HISTORICALLY BEEN CYCLICAL); (4) CHANGES IN THE FINANCIAL MARKETS AFFECTING THE COMPANY’S FINANCIAL STRUCTURE AND THE COMPANY’S COST OF CAPITAL AND BORROWED MONEY; AND (5) THE UNCERTAINTIES INHERENT IN INTERNATIONAL OPERATIONS AND FOREIGN CURRENCY FLUCTUATIONS. THE COMPANY HAS NO DUTY UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 TO UPDATE THE FORWARD LOOKING STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-Q AND THE COMPANY DOES NOT INTEND TO PROVIDE SUCH UPDATES.

2

Item 1.  Financial Statements

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidated Statements Of Operations

(Millions of dollars, except share amounts)

(Unaudited)

		Three Months Ended						Nine Months Ended
		October 31,						October 31,
		2000			1999			2000			1999
Net sales		$	558.3		$	598.5		$	1,695.9		$	1,730.8
Cost of goods sold			485.1			493.1			1,436.4			1,425.2
	Gross profit		73.2			105.4			259.5			305.6
Marketing, general and administration			28.3			21.8			76.8			70.7
Engineering and product development			3.6			4.4			13.0			15.6
Amortization of intangibles			7.0			8.2			21.3			22.0
Other (income) expense			73.6			(2.0	)		68.7			(6.8	)
Equity in earnings of unconsolidated subsidiaries			(0.2	)		(0.3	)		(0.7	)		(0.6	)
	Earnings (loss) from operations		(39.1	)		73.3			80.4			204.7
Interest expense, net			41.6			37.5			120.4			115.5
	Earnings (loss) before taxes on income and minority interest		(80.7	)		35.8			(40.0	)		89.2
Income tax (benefit) provision			(33.9	)		15.5			(16.8	)		38.4
	Earnings (loss) before minority interest		(46.8	)		20.3			(23.2	)		50.8
Minority interest			0.7			0.4			2.1			1.3
	Net income (loss)	$	(47.5	)	$	19.9		$	(25.3	)	$	49.5
Per share information:
Basic net income (loss) per share		$	(1.63	)	$	0.66		$	(0.85	)	$	1.63
Basic average shares outstanding (in thousands)			29,189			30,337			29,965			30,333
Diluted net income (loss) per share		$	(1.62	)	$	0.63		$	(0.84	)	$	1.55
Diluted average shares outstanding (in thousands)			29,237			31,678			30,089			31,880

See accompanying notes to consolidated financial statements.

3

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Millions of Dollars)

			October 31,			January 31,
			2000			2000
			(Unaudited)
Assets
Current assets:
	Cash and cash equivalents		$	23.6		$	25.9
	Receivables (less allowance of $8.0 million at October  31, 2000 and $6.3 million at January 31, 2000)			240.5			188.7
	Inventory			201.2			175.6
	Prepaid expenses and other			16.9			9.4
		Total current assets		482.2			399.6
Property, plant and equipment, net				1,108.6			1,178.4
Goodwill and other assets				1,183.1			1,198.8
		Total assets	$	2,773.9		$	2,776.8
Liabilities and Stockholders’ Equity
Current liabilities:
	Bank borrowings		$	85.4		$	73.6
	Current portion of long-term debt			72.5			69.6
	Accounts payable and accrued liabilities			446.6			583.9
		Total current liabilities		604.5			727.1
Long-term debt				1,600.9			1,384.6
Pension and other long-term liabilities				290.3			316.3
Deferred income taxes				94.4			115.6
Minority interest				10.1			14.3
		Total liabilities		2,600.2			2,557.9
Commitments and Contingencies
Stockholders’ equity:
	Preferred stock, 25,000,000 shares authorized, none issued or outstanding			—			—
	Common stock, par value $0.01 per share:
		Voting — authorized 99,000,000 shares; issued and outstanding, 25,806,469 at October 31, 2000 and 27,705,019 at January 31, 2000		0.3			0.3
		Nonvoting — authorized 5,000,000 shares; issued and outstanding, 2,649,026 at October 31, 2000 and January 31, 2000		—			—
	Additional paid in capital			237.1			237.1
	Retained earnings			32.7			58.0
	Common Stock in treasury at cost, 1,901,450 shares			(26.3	)		—
	Accumulated other comprehensive loss			(70.1	)		(76.5	)
		Total stockholders’ equity		173.7			218.9
		Total liabilities and stockholders’ equity	$	2,773.9		$	2,776.8

See accompanying notes to consolidated financial statements.

4

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of Dollars)

(Unaudited)

				Nine Months Ended
				October 31,
				2000			1999
Cash flows from operating activities:
Net income (loss)				$	(25.3	)	$	49.5
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
	Depreciation and tooling amortization				90.8			79.8
	Amortization of intangibles				21.3			22.0
	Amortization of deferred financing fees				4.8			4.9
	Decrease in deferred taxes				(14.4	)		(2.0	)
	Increase in minority interest				3.9			1.3
	Impairment of long-lived assets and restructuring charges				75.6			—
	Equity in earnings of subsidiaries				(0.7	)		(0.6	)
	Gain on disposal of assets/business				—			(8.0	)
	Changes in operating assets and liabilities that increase (decrease) cash flows:
		Receivables			(49.9	)		(112.8	)
		Inventories			(31.1	)		(0.6	)
		Prepaid expenses and other			(7.9	)		3.2
		Accounts payable and accrued liabilities			(116.1	)		6.1
		Other long-term liabilities			(9.5	)		(6.2	)
		Cash provided by (used for) operating activities			(58.5	)		36.6
Cash flows from investing activities:
	Acquisition of property, plant and equipment				(123.8	)		(136.1	)
	Tooling expenditures				(1.9	)		(9.2	)
	Purchase of businesses, net of cash received				(6.4	)		(630.1	)
	Increased investment in majority-owned subsidiary				(7.3	)		—
	Proceeds from disposal of assets/business				—			40.0
	Other, net				(15.6	)		(13.6	)
			Cash used for investing activities		(155.0	)		(749.0	)
Cash flows from financing activities:
	Increase in bank borrowings and revolver				250.7			630.3
	Proceeds (payments) from accounts receivable securitization				(17.2	)		99.4
	Purchase of treasury stock				(26.3	)		—
	Stock options exercised				—			0.2
	Fees paid to issue long term debt				—			(15.2	)
			Cash provided by financing activities		207.2			714.7
Effect of exchange rate changes on cash and cash equivalents					4.0			(3.0	)
	Decrease in cash and cash equivalents				(2.3	)		(0.7	)
Cash and cash equivalents at beginning of year					25.9			51.3
Cash and cash equivalents at end of period				$	23.6		$	50.6
Supplemental data:
	Cash paid for interest			$	110.5		$	83.9
	Cash paid for income taxes			$	10.9		$	12.5

See accompanying notes to consolidated financial statements.

5

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Three and Nine Months Ended October 31, 2000 and 1999

(Unaudited)

(Millions of Dollars Unless Otherwise Stated)

(1)  Basis of Presentation

      The accompanying consolidated financial statements have been prepared by management and in the opinion of management, contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position of the Company as of October 31, 2000, and January 31, 2000, and the results of its operations for the three and nine months ended October 31, 2000, and 1999 and cash flows for the nine months ended October 31, 2000, and 1999. The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2000. Results for interim periods are not necessarily indicative of those to be expected for the year.

(2)  Summary of New Accounting Pronouncements

      In June 1998, June 1999 and June 2000, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities”, SFAS 137, “Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133” and SFAS 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities an amendment of FASB Statement No. 133”. These Statements establish accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. These Statements require that changes in the derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met.

      Special accounting for qualifying hedges allows a derivative’s gains and losses to offset related results on the hedged item in the income statement, and requires that a company must formally document, designate, and assess the effectiveness of transactions that receive hedge accounting. This accounting is effective for fiscal years beginning after June 15, 2000. The Company will adopt this standard in its fiscal year 2001 and does not, at this time, anticipate a material impact on the Company’s financial position or results of operations when adopted.

(3)  Inventories

      The major classes of inventory are as follows:

		October 31,		January 31,
		2000		2000
Raw Materials		$	68.4	$	62.3
Work-in-process			60.4		55.9
Finished goods			72.4		57.4
	Total	$	201.2	$	175.6

6

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Three and Nine Months Ended October 31, 2000 and 1999

(Unaudited)

(Millions of Dollars Unless Otherwise Stated)

(4)  Property, plant and equipment

      The major classes of property, plant and equipment are as follows:

		October 31,			January 31,
		2000			2000
Land		$	29.8		$	30.1
Buildings			260.3			265.5
Machinery and equipment			1,117.6			1,151.6
			1,407.7			1,447.2
Accumulated depreciation			(299.1	)		(268.8	)
	Net property, plant and equipment	$	1,108.6		$	1,178.4

(5)  Earnings per share

      SFAS No. 128, “Earnings per Share” (“EPS”), requires two calculations of earnings per share to be disclosed, basic EPS and diluted EPS. Basic EPS is computed using only the weighted average shares outstanding, while diluted EPS is computed considering the dilutive effect of options and warrants.

      Shares outstanding for the three and nine months ended October 31, 2000 and 1999, were as follows:

		Three Months				Nine Months
		Ended				Ended
		2000		1999		2000		1999
Basic weighted average shares outstanding			29,189		30,337		29,965		30,333
Dilutive effect of options and warrants			48		1,341		124		1,547
	Diluted weighted average shares outstanding		29,237		31,678		30,089		31,880

(6)  Comprehensive Income (Loss)

      SFAS No. 130, “Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive income. Comprehensive income is defined as all changes in a Company’s net assets except changes resulting from transactions with shareholders. It differs from net income in that certain items currently recorded to equity would be a part of comprehensive income.

      The components of comprehensive income (loss) for the nine months ended October 31, 2000 and 1999 are as follows:

		Oct. 31,			Oct. 31,
		2000			1999
Net Income (loss)		$	(25.3	)	$	49.5
Cumulative translation adjustments			6.4			(48.6	)
	Total comprehensive income (loss)	$	(18.9	)	$	0.9

(7)  Commitments and Contingencies

      The Company is party to various litigation. Management believes that the outcome of these lawsuits will not have a material adverse effect on the consolidated operations or financial condition of the Company.

7

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Three and Nine Months Ended October 31, 2000 and 1999

(Unaudited)

(Millions of Dollars Unless Otherwise Stated)

(8)  Segment Reporting

      The Company is organized based primarily on markets served and products produced. Under this organization structure, the Company’s operating segments have been aggregated into three reportable segments: Automotive Wheels, Cast Components and Other. The Other category includes Commercial Highway products, the corporate office and elimination of intercompany activities, none of which meet the requirements of being classified as an operating segment.

      The following table represents revenues and other financial information by business segment for the nine months ended October 31:

		Revenue				Net Income (Loss)					Total Assets
		2000		1999		2000			1999		2000		1999
Automotive Wheels		$	1,057.5	$	1,012.6	$	9.8		$	32.9	$	1,445.2	$	1,553.9
Cast Components			505.1		539.4		(1.0	)		11.2		966.4		950.3
Other			133.3		178.8		(34.1	)		5.4		362.3		327.8
	Total	$	1,695.9	$	1,730.8	$	(25.3	)	$	49.5	$	2,773.9	$	2,832.0

(9)  Reclassifications

      Certain prior period amounts have been reclassified to conform to the current year presentation.

(10)  Guarantor and Nonguarantor Financial Statements

      The Company’s senior subordinated notes are guaranteed by certain of the Company’s domestic subsidiaries. Certain other domestic subsidiaries and the foreign subsidiaries (the “Non-Guarantor Subsidiaries”) do not guarantee the senior subordinated notes.

      The following condensed consolidating financial information presents:

      (1)  Condensed consolidating financial statements as of October 31, 2000, and January 31, 2000, and for the nine-month periods ended October 31, 2000, and 1999, of (a) Hayes Lemmerz International, Inc., the parent, (b) the guarantor subsidiaries, (c) the nonguarantor subsidiaries and (d) the Company on a consolidated basis, and

      (2)  Elimination entries necessary to consolidate Hayes Lemmerz International, Inc., the parent, with the guarantor and nonguarantor subsidiaries.

      Investments in foreign subsidiaries are accounted for by the parent on the equity method (domestic subsidiaries are accounted for by the parent on the cost method) for purposes of the consolidating presentation. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

8

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Three and Nine Months Ended October 31, 2000 and 1999

(Unaudited)

(Millions of Dollars Unless Otherwise Stated)

(10)  Guarantor and Nonguarantor Financial Statements — (Continued)

Condensed Consolidating Statements of Operations

For the Nine Months Ended October 31, 2000

						Guarantor			Nonguarantor					Consolidated
			Parent			Subsidiaries			Subsidiaries		Eliminations			Total
Net sales			$	248.4		$	515.8		$	948.4	$	(16.7	)	$	1,695.9
Cost of goods sold				205.0			455.0			793.1		(16.7	)		1,436.4
	Gross profit			43.4			60.8			155.3		—			259.5
Marketing, general and Administration				8.9			18.9			49.0		—			76.8
Engineering and product development				1.2			5.8			6.0		—			13.0
Amortization of intangibles				0.8			6.1			14.4		—			21.3
Equity in earnings of unconsolidated subsidiaries				(0.4	)		(0.3	)		—		—			(0.7	)
Other income (expense), net				2.0			57.2			9.5		—			68.7
	Earnings (loss) from operations			30.9			(26.9	)		76.4		—			80.4
Interest expense, net				21.8			42.6			56.0		—			120.4
Earnings (loss) before taxes on income, and minority interest				9.1			(69.5	)		20.4		—			(40.0	)
Income tax (benefit) provision				(0.1	)		(25.1	)		8.4		—			(16.8	)
		Earnings (loss) before minority interest		9.2			(44.4	)		12.0		—			(23.2	)
Minority interest				—			—			2.1		—			2.1
Net income (loss)			$	9.2		$	(44.4	)	$	9.9	$	—		$	(25.3	)

Condensed Consolidating Statements of Operations

For the Nine Months Ended October 31, 1999

						Guarantor			Nonguarantor						Consolidated
			Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net sales			$	261.6		$	555.1		$	916.5		$	(2.4	)	$	1,730.8
Cost of goods sold				220.4			465.5			741.7			(2.4	)		1,425.2
	Gross profit			41.2			89.6			174.8			—			305.6
Marketing, general and Administration				4.0			17.5			49.2			—			70.7
Engineering and product development				3.3			5.0			7.3			—			15.6
Amortization of intangibles				1.1			6.1			14.8			—			22.0
Equity in earnings of unconsolidated subsidiaries				(0.3	)		—			(0.3	)		—			(0.6	)
Other income, net				(3.6	)		(1.6	)		(1.6	)		—			(6.8	)
	Earnings from operations			36.7			62.6			105.4			—			204.7
Interest expense, net				20.8			41.9			52.8			—			115.5
	Earnings before taxes on income, and minority interest			15.9			20.7			52.6			—			89.2
Income tax provision				8.3			9.7			20.4			—			38.4
		Earnings before minority interest		7.6			11.0			32.2			—			50.8
Minority interest				—			0.2			1.1			—			1.3
Net income			$	7.6		$	10.8		$	31.1		$	—		$	49.5

9

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Three and Nine Months Ended October 31, 2000 and 1999

(Unaudited)

(Millions of Dollars Unless Otherwise Stated)

(10)  Guarantor and Nonguarantor Financial Statements — (Continued)

Condensed Consolidating Balance Sheet

October 31, 2000

					Guarantor		Nonguarantor						Consolidated
		Parent			Subsidiaries		Subsidiaries			Eliminations			Total
Cash and cash equivalents		$	7.0		$	0.2	$	16.4		$	—		$	23.6
Receivables			49.8			7.8		182.9			—			240.5
Inventories			33.9			51.9		115.4			—			201.2
Prepaid expenses and other			2.9			7.4		17.3			(10.7	)		16.9
	Total current assets		93.6			67.3		332.0			(10.7	)		482.2
Net property, plant and equipment			155.9			279.9		672.8			—			1,108.6
Goodwill and other assets			1,498.0			301.9		652.7			(1,269.5	)		1,183.1
	Total assets	$	1,747.5		$	649.1	$	1,657.5		$	(1,280.2	)	$	2,773.9
Bank borrowings		$	0.0		$	—	$	85.4		$	—		$	85.4
Current portion of long-term debt			59.3			—		13.2			—			72.5
Accounts payable and accrued liabilities			97.6			73.1		280.5			(4.6	)		446.6
	Total current liabilities		156.9			73.1		379.1			(4.6	)		604.5
Long-term debt, net of current portion			1,504.5			—		96.4			—			1,600.9
Deferred income taxes			18.4			8.2		67.8			—			94.4
Pension and other long-term liabilities			76.8			51.8		161.7			—			290.3
Minority interest			—			—		10.1			—			10.1
Parent loans			(241.9	)		327.0		(75.6	)		(9.5	)		—
	Total liabilities		1,514.7			460.1		639.5			(14.1	)		2,600.2
Common stock			0.3			—		—			—			0.3
Additional paid-in capital			251.9			108.7		1,012.6			(1,136.1	)		237.1
Retained earnings (accumulated deficit)			(51.8	)		80.3		134.2			(130.0	)		32.7
Common stock in treasury			(26.3	)		—		—			—			(26.3	)
Accumulated other comprehensive income (loss)			58.7			—		(128.8	)		—			(70.1	)
	Total stockholders’ equity		232.8			189.0		1,018.0			(1,266.1	)		173.7
	Total liabilities and stockholder’s equity	$	1,747.5		$	649.1	$	1,657.5		$	(1,280.2	)	$	2,773.9

10

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Three and Nine Months Ended October 31, 2000 and 1999

(Unaudited)

(Millions of Dollars Unless Otherwise Stated)

(10)  Guarantor and Nonguarantor Financial Statements — (Continued)

Condensed Consolidating Balance Sheet

January 31, 2000

					Guarantor		Nonguarantor						Consolidated
		Parent			Subsidiaries		Subsidiaries			Eliminations			Total
Cash and cash equivalents		$	6.8		$	0.1	$	19.0		$	—		$	25.9
Receivables			34.1			4.2		150.4			—			188.7
Inventories			38.0			46.1		91.5			—			175.6
Prepaid expenses and other			0.9			4.0		21.9			(17.4	)		9.4
	Total current assets		79.8			54.4		282.8			(17.4	)		399.6
Net property, plant and equipment			158.3			339.1		681.0			—			1,178.4
Goodwill and other assets			1,464.0			304.8		694.3			(1,264.3	)		1,198.8
	Total assets	$	1,702.1		$	698.3	$	1,658.1		$	(1,281.7	)	$	2,776.8
Bank borrowings		$	—		$	—	$	73.6		$	—		$	73.6
Current portion of long-term debt			57.9			—		11.7			—			69.6
Accounts payable and accrued liabilities			126.9			154.1		326.1			(23.2	)		583.9
	Total current liabilities		184.8			154.1		411.4			(23.2	)		727.1
Long-term debt, net of current portion			1,289.2			—		95.4			—			1,384.6
Deferred income taxes			18.5			28.5		68.6			—			115.6
Pension and other long-term liabilities			80.3			57.1		181.4			(2.5	)		316.3
Minority interest			—			—		14.3			—			14.3
Parent loans			(61.9	)		225.2		(166.7	)		3.4			—
	Total liabilities		1,510.9			464.9		604.4			(22.3	)		2,557.9
Common stock			0.3			—		—			—			0.3
Additional paid-in capital			251.9			108.7		1,005.9			(1,129.4	)		237.1
Retained earnings (accumulated deficit)			(61.1	)		124.7		124.4			(130.0	)		58.0
Accumulated other comprehensive Income (loss)			0.1			—		(76.6	)		—			(76.5	)
	Total stockholders’ equity		191.2			233.4		1,053.7			(1,259.4	)		218.9
	Total liabilities and stockholder’s equity	$	1,702.1		$	698.3	$	1,658.1		$	(1,281.7	)	$	2,776.8

11

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Three and Nine Months Ended October 31, 2000 and 1999

(Unaudited)

(Millions of Dollars Unless Otherwise Stated)

(10)  Guarantor and Nonguarantor Financial Statements — (Continued)

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended October 31, 2000

						Guarantor			Nonguarantor					Consolidated
			Parent			Subsidiaries			Subsidiaries			Eliminations		Total
Cash flows provided by (used in) operating activities			$	(0.9	)	$	(75.0	)	$	17.4		$	—	$	(58.5	)
Cash flows from investing activities:
	Acquisition of property, plant and equipment			(8.5	)		(18.3	)		(97.0	)		—		(123.8	)
	Acquisition of tooling			—			—			(1.9	)		—		(1.9	)
	Purchase of businesses, net of cash			—			—			(6.4	)		—		(6.4	)
	Increased investment in majority-owned subsidiary			—			—			(7.3	)		—		(7.3	)
	Other, net			29.5			(8.5	)		(36.6	)		—		(15.6	)
		Cash provided by (used in) investing activities		21.0			(26.8	)		(149.2	)		—		(155.0	)
Cash flows from financing activities:
	Net change in bank borrowings and revolver			216.7			—			34.0			—		250.7
	Proceeds (payments) from accounts receivable securitization			(17.2	)		—			—			—		(17.2	)
	Purchase of treasury stock			(26.3	)		—			—			—		(26.3	)
		Cash provided by financing activities		173.2			—			34.0			—		207.2
Increase (decrease) in parent loans and advances				(193.1	)		101.9			91.2			—		—
Effect of exchange rates of cash and cash equivalents				—			—			4.0			—		4.0
		Net increase (decrease) in cash and cash equivalents		0.2			0.1			(2.6	)		—		(2.3	)
Cash and cash equivalents at beginning of period				6.8			0.1			19.0			—		25.9
Cash and cash equivalents at end of period			$	7.0		$	0.2		$	16.4		$	—	$	23.6

12

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Three and Nine Months Ended October 31, 2000 and 1999

(Unaudited)

(Millions of Dollars Unless Otherwise Stated)

(10)  Guarantor and Nonguarantor Financial Statements — (Continued)

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended October 31, 1999

						Guarantor			Nonguarantor					Consolidated
			Parent			Subsidiaries			Subsidiaries			Eliminations		Total
Cash flows provided by (used in) operating activities			$	(80.2	)	$	(29.1	)	$	145.9		$	—	$	36.6
Cash flows from investing activities:
	Acquisition of property, plant and equipment			(24.1	)		(36.8	)		(75.2	)		—		(136.1	)
	Acquisition of tooling			(9.2	)		—			—			—		(9.2	)
	Purchase of businesses, net of cash			(615.0	)		(0.5	)		(14.6	)		—		(630.1	)
	Proceeds from disposal of assets/business			—			2.6			37.4			—		40.0
	Other, net			21.3			(9.8	)		(25.1	)		—		(13.6	)
		Cash used in investing activities		(627.0	)		(44.5	)		(77.5	)		—		(749.0	)
Cash flows from financing activities:
	Net change in bank borrowings and revolver			570.1			—			60.2			—		630.3
	Fees paid to issue long term debt			(15.2	)		—			—			—		(15.2	)
	Stock options exercised			0.2			—			—			—		0.2
	Net proceeds from accounts receivable securitization			99.4			—			—			—		99.4
		Cash provided by financing activities		654.5			—			60.2			—		714.7
Increase (decrease) in parent loans and advances				56.1			73.6			(129.7	)		—		—
Effect of exchange rates of cash and cash equivalents				—			—			(3.0	)		—		(3.0	)
		Net increase (decrease) in cash and cash equivalents		3.4			—			(4.1	)		—		(0.7	)
Cash and cash equivalents at beginning of period				23.3			0.1			27.9			—		51.3
Cash and cash equivalents at end of period			$	26.7		$	0.1		$	23.8		$	—	$	50.6

13

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Three Months Ended October 31, 2000 Compared to Three Months Ended October 31, 1999

Net Sales

      The Company’s net sales for the third quarter of fiscal 2000 were $558.3 million, a decrease of 6.7% as compared to net sales of $598.5 million for the third quarter of fiscal 1999. Significant reductions in heavy truck production and softening in OEM light vehicle volumes in the United States have resulted in lower sales in the North American Commercial Highway, North American Cast Components and North American Wheel Groups. Increased sales in the European Wheel Groups were offset by the Euro weakening against the Dollar in the third quarter of fiscal 2000 as compared to the third quarter of fiscal 1999.

Gross Profit

      The Company’s gross profit for the third quarter of fiscal 2000 decreased to $73.2 million or 13.1% of net sales as compared to $105.4 million or 17.6% of net sales for the third quarter of fiscal 1999. The Company’s third quarter gross profit margin was negatively impacted by the reduction in the North American heavy truck and OEM sales and production inefficiencies related to the volatile heavy truck and OEM production environment. In addition, gross margin was negatively impacted by the write off of $5.0 million in excess and obsolete inventories pursuant to capacity reductions and softening market conditions.

Marketing, General and Administrative

      Marketing, general and administrative expenses were $28.3 million or 5.1% of net sales for the third quarter of fiscal 2000 as compared to $21.8 million or 3.6% of net sales for the third quarter of fiscal 1999. Marketing, general and administrative expenses for the third quarter of fiscal 2000 were negatively impacted by the write off of $7.2 million principally associated with cancelled transactions, and an increase in the allowance for doubtful accounts and severance costs due to market conditions.

Engineering and Product Development

      Engineering and product development costs were $3.6 million or 0.6% of net sales for the third quarter of fiscal 2000 as compared to $4.4 million or 0.7% of net sales for the third quarter of fiscal 1999. This improvement principally reflects the timing associated with recovery of engineering and development costs from our customers.

Other (Income) Expense

      Pursuant to its acquisition strategy in prior periods, the Company has been in the process of integrating operations as well as evaluating capacity, technology and personnel needs. In response to continued softening in the heavy truck and light vehicle markets, the Company accelerated this process and approved restructuring plans in the third quarter of fiscal 2000. In addition to the items discussed in Gross Profit and Marketing, General and Administrative categories above, impairment and restructuring charges totaling $75.6 million were recorded in the third quarter of fiscal 2000.

      Of the $75.6 million, $63.8 million was attributable to impairment of long-lived assets, principally excess and obsolete machinery and equipment which the Company intends to dispose of in the near future. Impairment was measured based on the estimated net proceeds from the disposal of such equipment.

      Restructuring charges consist of $6.7 million for severance benefits and $0.9 million for future lease costs of closed office facilities. These costs are all related primarily to 387 administrative and operations employees impacted by restructuring programs in Europe. There were no payments made in the third quarter of fiscal 2000.

14

      In addition, Other (Income) Expense includes $4.2 million for the write down of the Company’s investment in a joint venture in Venezuela and certain contractual agreements that have no future value.

Interest Expense

      Interest expense was $41.6 million for the third quarter of fiscal 2000 compared to $37.5 million for the same period of fiscal 1999. This increase was due primarily to the increase in interest rates and borrowings.

Nine Months Ended October 31, 2000 Compared to Nine Months Ended October 31, 1999

Net Sales

      The Company’s net sales for the first nine months of fiscal 2000 were $1,695.9 million, a decrease of 2.0%, as compared to net sales of $1,730.8 million for the first nine months of fiscal 1999. This decrease was due to higher sales in the North American and European Wheel Groups offset by lower sales in the North American Commercial Highway and North American Components Groups due to softening marketing conditions and the weakening of the Euro against the Dollar by approximately 12%.

Gross Profit

      The Company’s gross profit for the first nine months of fiscal 2000 decreased to $259.5 million or 15.3% of net sales as compared to $305.6 million or 17.7% of net sales for the first nine months of fiscal 1999. This decrease reflects the reduction in the North American heavy truck and OEM sales and production inefficiencies related to the volatile heavy truck and OEM production environment. In addition, gross margin was negatively impacted by the write off of $5.0 million in excess and obsolete inventories in the third quarter of fiscal 2000 pursuant to capacity reductions and softening market conditions.

Marketing, General and Administrative

      Marketing, general and administrative expenses were $76.8 million or 4.5% of net sales for the first nine months of fiscal 2000 compared to $70.7 million or 4.1% of net sales for the same period of fiscal 1999. The increase in marketing, general and administrative expenses was attributable to $7.2 million in write offs in the third quarter of fiscal 2000 principally related to cancelled transactions, and an increase in the allowance for doubtful accounts and severance costs due to market conditions.

Engineering and Product Development

      Engineering and product development costs were $13.0 million or 0.8% of net sales for the first nine months of fiscal 2000 as compared to $15.6 million or 0.9% of net sales for the first nine months of fiscal 1999.

Other (Income) Expense

      Pursuant to its acquisition strategy in prior periods, the Company has been in the process of integrating operations as well as evaluating capacity, technology and personnel needs. In response to continued softening in the heavy truck and light vehicle markets, the Company accelerated this process and approved restructuring plans in the third quarter of fiscal 2000. In addition to the items discussed in Gross Profit and Marketing, General and Administrative categories above, impairment and restructuring charges totaling $75.6 million were recorded in the third quarter of fiscal 2000.

      Of the $75.6 million, $63.8 million was attributable to impairment of long-lived assets, principally excess and obsolete machinery and equipment which the Company intends to dispose of in the near future. Impairment was measured based on the estimated net proceeds from the disposal of such equipment.

      Restructuring charges consist of $6.7 million for severance benefits and $0.9 million for future lease costs of closed office facilities. These costs are all related primarily to 387 administrative and operations employees impacted by restructuring programs in Europe. There were no payments made in the third quarter of fiscal 2000.

15

      In addition, Other (Income) Expense includes $4.2 million for the write down of the Company’s investment in a joint venture in Venezuela and certain contractual agreements that have no future value.

Interest Expense

      Interest expense was $120.4 million for the first nine months of fiscal 2000 compared to $115.5 million for the same period of fiscal 1999. This increase was due primarily to the increase in interest rates and borrowings.

Financial Condition, Liquidity and Capital Resources

      The Company’s operations used $58.5 million in cash in the first nine months of fiscal 2000, an increase of $95.1 million over the same period of fiscal 1999. This increase was due primarily to the timing of payments to suppliers and higher inventories.

      Capital expenditures for the first nine months of fiscal 2000 were $123.8 million. These expenditures were primarily for additional machinery and equipment to improve productivity and reduce costs, to meet demand for new vehicle platforms and to meet expected requirements for the Company’s products. The Company anticipates capital expenditures for fiscal 2000 will be less than $170.0 million.

      On February 3, 1999, the Company entered into a third amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with Canadian Imperial Bank of Commerce (“CIBC”) and Merrill Lynch Capital Corporation (“Merrill Lynch”), as managing agents. Pursuant to the Third Amended and Restated Credit Agreement, a syndicate of lenders agreed to lend to the Company up to $450 million in the form of a senior secured term loan facility and up to $650 million in the form of a senior secured revolving credit facility. Such term loan and revolving facilities are guaranteed by the Company and all of its existing and future material domestic subsidiaries. Such term loan and revolving facilities are secured by a first priority lien on substantially all of the properties and assets of the Company and its material domestic subsidiaries, now owned or later acquired, including a pledge of all of the shares of certain 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. As of October 31, 2000 there was $399 million outstanding under the term loan facility and $386 million available under the revolving facility.

      On December 8, 2000, the Company reached agreement with its senior lenders to amend the Third Amended and Restated Credit Agreement. Pursuant to such agreement, financial covenants regarding the leverage ratio, the interest coverage ratio and the fixed charge coverage ratio were modified and a ratio of senior indebtedness to earnings before interest, taxes, depreciation and amortization was added. In addition, an annual limit on capital expenditures was added, the stock repurchase authority was deleted and a cumulative limit on acquisitions was deleted. The text of the amendment agreement is filed as an exhibit to this Form 10-Q and is incorporated herein by reference.

      In April 1998, the Company entered into a three year agreement pursuant to which the Company and certain of its subsidiaries sold, and will continue to sell on an ongoing basis, a portion of their accounts receivables to a special purpose entity (“Funding Co.”), which is wholly owned by the Company. Accordingly, the Company and such subsidiaries, irrevocably and without recourse, transferred and will transfer substantially all of their U.S. dollar denominated trade accounts receivable to Funding Co. Funding Co. then sold and will sell such trade accounts receivable to an independent issuer of receivable-backed commercial paper. The Company has collection and administrative responsibilities with respect to all the receivables which are sold. Receivables sold at October 31, 2000 total $145.8 million.

      During the second quarter, the Board of Directors approved the repurchase of up to an aggregate of $30 million of the Company’s outstanding common stock. Through October 31, 2000, the Company repurchased approximately 1.9 million shares of its common stock for an aggregate purchase price of approximately $26.3 million.

      At October 31, 2000, management believes that the Company was in compliance with the various covenants under the agreements pursuant to which it has or may borrow money. Management expects that the Company will remain in compliance with these covenants, as modified by the December 8, 2000 amendment

16

to the Third Amended and Restated Credit Agreement, in all material respects through the period ending October 31, 2001.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

      For the period ended October 31, 2000, the Company did not experience any material change in market risk exposures affecting the quantitative and qualitative disclosures as presented in the Company’s Annual Report on Form 10-K for the year ended January 31, 2000.

17

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

      None

Item 2.  Changes in Securities and Use of Proceeds

      None

Item 3.  Defaults Upon Senior Securities

      None

Item 4.  Submission of Matters to a Vote of Security Holders

      The Company held its Annual Meeting of Stockholders on August 3, 2000. The results of the matters submitted to a vote of the Company’s stockholders at the Annual Meeting were reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2000 and are incorporated herein by reference.

Item 5.  Other Information

      None

Item 6. Exhibits and Reports on Form 8-K

      (a)  Exhibits

Exhibit Number		Description
	10.30	Amendment No. 2 to the Third Amended and Restated Credit Agreement dated as of December 8, 2000, 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, Credit Suisse First Boston, as Syndication 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.
	10.31	Severance Agreements, each dated June 15, 2000, between the Company and certain of its officers.
	27	Financial Data Schedule

      (b)  Reports on Form 8-K

      None

18

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HAYES LEMMERZ INTERNATIONAL, INC.

By:  /s/ WILLIAM D. SHOVERS

William D. Shovers

Vice President — Finance; Chief Financial Officer

December 15, 2000

19

EXHIBIT INDEX

			Sequentially
Exhibit			Numbered
Number		Description	Page
	10.30	Amendment No. 2 to the Third Amended and Restated Credit Agreement dated as of December 8, 2000, 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, Credit Suisse First Boston, as Syndication 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.
	10.31	Severance Agreements, each dated June 15, 2000, between the Company and certain of its officers.
	27	Financial Data Schedule

20 EX-10.30 2 k59133ex10-30.txt AMENDED & RESTATED CREDIT AGREEMENT 1 EXHIBIT 10.30 AMENDMENT NO. 2 AMENDMENT NO. 2, dated as of December 8, 2000 (this "Amendment"), to the THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 3, 1999, as amended by Consent and Amendment No. 1, dated as of July 12, 2000 (the "Agreement"), among HAYES LEMMERZ INTERNATIONAL, INC., a Delaware corporation (the "Borrower"), the several lenders from time to time parties to such Agreement (the "Lenders"), CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian-chartered bank acting through its New York Agency, as administrative agent for the Lenders thereunder and co-lead arranger (in such capacity, the "Administrative Agent"), CREDIT SUISSE FIRST BOSTON, as syndication agent for the Lenders thereunder and co-lead arranger, MERRILL LYNCH CAPITAL CORPORATION, a Delaware corporation, as co-documentation agent for the Lenders thereunder and DRESDNER BANK AG, as co-documentation agent and European Swing Line Administrator for the Lenders. W I T N E S S E T H : WHEREAS, the Borrower has requested, and upon this Amendment becoming effective the Lenders shall have agreed, that certain provisions of the Agreement be amended in the manner provided for in this Amendment; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows: SECTION I. DEFINED TERMS 1.1. Definitions. Unless otherwise defined herein, capitalized terms are used herein as defined in the Agreement. SECTION II. AMENDMENTS 2.1. Amendment to Subsection 1.1. Subsection 1.1 of the Agreement is hereby amended by inserting, in proper alphabetical order therein, the following new definition: "Senior Leverage Ratio": as of the end of each fiscal quarter of the Borrower, with respect to the Borrower and its Subsidiaries on a consolidated basis, the ratio of (a) Total Indebtedness on such date (provided that, for purposes of this definition, Total Indebtedness shall include Indebtedness described in clause (g) of the definition of such term only to the extent that the aggregate Dollar Equivalent Amount thereof exceeds $250,0000,000) minus the aggregate principal amount of the Senior Subordinated Notes outstanding on such date to (b) EBITDA for the twelve month period ending on such date. 2.2. Amendment to Subsection 1.1. Subsection 1.1 of the Agreement is hereby amended by (i) deleting therefrom the existing definition of "Capital Expenditure" and (ii) inserting, in lieu thereof, the following new definition of "Capital Expenditure": "Capital Expenditure": any expenditure, other than pursuant to subsection 8.9, in respect of the purchase or other acquisition of fixed or capital assets, or the purchase or other acquisition of equipment, inventory (other than the purchase or other acquisition of 2 2 raw materials and other goods in the ordinary course of business), receivables, intellectual property and other assets related thereto. 2.3. Amendment to Subsection 5.2. Subsection 5.2 of the Agreement is hereby amended by (i) deleting "January 31, 1998" where it appears therein and inserting, in lieu thereof, "July 31, 2000" and (ii) inserting at the end of the first sentence thereof, before the period mark, the following: "provided, however, that no Material Adverse Effect shall be deemed to have occurred based in whole or in part on any development or event reflected in or contemplated by the Borrower's financial and other information and projections, dated November 29, 2000 that were delivered to the Lenders on or about November 29, 2000. 2.4. Amendment to Subsection 8.1(a). Subsection 8.1(a) of the Agreement is hereby amended by (i) deleting therefrom the table of Leverage Ratios and (ii) inserting, in lieu thereof, the following table of Leverage Ratios: Fiscal Quarter Leverage Ratio -------------- -------------- 1999 1st 5.50 to 1.00 2nd 5.50 to 1.00 3rd 5.25 to 1.00 4th 5.25 to 1.00 2000 1st 5.00 to 1.00 2nd 5.00 to 1.00 3rd 4.75 to 1.00 4th 5.25 to 1.00 2001 1st 5.50 to 1.00 2nd 5.50 to 1.00 3rd 5.50 to 1.00 4th 5.25 to 1.00 2002 1st 5.25 to 1.00 2nd 5.25 to 1.00 3rd 5.15 to 1.00 4th 4.85 to 1.00 2003 1st 4.75 to 1.00 2nd 4.65 to 1.00 3rd 4.35 to 1.00 4th 4.10 to 1.00 3 3 Fiscal Quarter Leverage Ratio -------------- -------------- 2004 1st 3.90 to 1.00 2nd 3.90 to 1.00 3rd 3.75 to 1.00 4th 3.50 to 1.00 2.5. Amendment to Subsection 8.1(b). Subsection 8.1(b) of the Agreement is hereby amended by (i) deleting therefrom the table of Interest Coverage Ratios and (ii) inserting, in lieu thereof, the following table of Interest Coverage Ratios: Fiscal Quarter Interest Coverage Ratio -------------- ----------------------- 1999 1st 2.00 to 1.00 2nd 2.00 to 1.00 3rd 2.00 to 1.00 4th 2.00 to 1.00 2000 1st 2.00 to 1.00 2nd 2.00 to 1.00 3rd 2.25 to 1.00 4th 2.00 to 1.00 2001 1st 1.85 to 1.00 2nd 1.85 to 1.00 3rd 1.85 to 1.00 4th 1.85 to 1.00 2002 1st 1.90 to 1.00 2nd 1.90 to 1.00 3rd 1.95 to 1.00 4th 2.00 to 1.00 2003 1st 2.10 to 1.00 2nd 2.20 to 1.00 3rd 2.25 to 1.00 4th 2.25 to 1.00 2004 1st 2.50 to 1.00 2nd 2.50 to 1.00 3rd 2.50 to 1.00 4th 2.50 to 1.00 4 4 2.6. Amendment to Subsection 8.1(c). Subsection 8.1(c) of the Agreement is hereby amended by (i) deleting therefrom the table of Fixed Charge Coverage Ratios and (ii) inserting, in lieu thereof, the following table of Fixed Charge Coverage Ratios: Fiscal Quarter Fixed Charge Coverage Ratio -------------- --------------------------- 1999 1st 1.00 to 1.00 2nd 1.00 to 1.00 3rd 1.00 to 1.00 4th 1.00 to 1.00 2000 1st 1.00 to 1.00 2nd 1.00 to 1.00 3rd 1.05 to 1.00 4th .85 to 1.00 2001 1st .75 to 1.00 2nd .75 to 1.00 3rd .75 to 1.00 4th .80 to 1.00 2002 1st .80 to 1.00 2nd .80 to 1.00 3rd .80 to 1.00 4th .80 to 1.00 2003 1st .85 to 1.00 2nd .85 to 1.00 3rd .90 to 1.00 4th .90 to 1.00 2004 1st 1.00 to 1.00 2nd 1.00 to 1.00 3rd 1.00 to 1.00 4th 1.00 to 1.00 Amendment to Subsection 8.1. Subsection 8.1 of the Agreement is hereby amended by inserting therein the following new subsection (d): (d) Senior Leverage Ratio. Permit the Senior Leverage Ratio as of the end of any fiscal quarter of the Borrower to be greater than 3.00 to 1.00. 2.7. Amendment to Subsection 8.2(k). Subsection 8.2(k) of the Agreement is hereby amended by (i) deleting "Dollar" from the first line thereof and (ii) adding after "$400,000,000" the following: 5 5 "(or in the case of any Indebtedness issued in a currency other than Dollars, the Dollar Equivalent Amount thereof as determined by the Administrative Agent on the date of issuance)" 2.8. Amendment to Subsection 8.8. Subsection 8.8 of the Agreement is hereby amended by (i) deleting "Reserved" and (ii) inserting, in lieu thereof, the following: 8.8. Limitation on Capital Expenditures. Make any Capital Expenditure except for expenditures in the ordinary course of business not exceeding, in the aggregate for the Borrower and its Subsidiaries during any of the test periods set forth below, the amount set forth opposite such test period set forth below: Test Period Amount ----------- -------------- February 1, 2000 - January 31, 2001 $170,000,000 February 1, 2001 - January 31, 2002 170,000,000 February 1, 2002 - January 31, 2003 175,000,000 February 1, 2003 - January 31, 2004 190,000,000 February 1, 2004 - January 31, 2005 190,000,000 2.9. Amendment to Subsection 8.9(e). Subsection 8.9(e) of the Agreement is hereby amended by (i) deleting such subsection in its entirety and (ii) inserting, in lieu thereof, the following: "(e) (Reserved)" 2.10. Amendment to Schedule B. Schedule B of the Agreement is hereby amended by (i) deleting in its entirety the table of Applicable Margins and Applicable Commitment Fee Rates and (ii) inserting, in lieu thereof, the following table of Applicable Margins and Applicable Commitment Fee Rates:

APPLICABLE MARGIN APPLICABLE BASE RATE COMMITMENT LEVERAGE RATIO LIBOR SPREAD SPREAD FEE RATE - -------------- ------------ --------- ----------- Greater than or equal to 5.250 to 1 3.25% 1.75% .50% Less than 5.250 to 1 but greater than or equal to 4.750 to 1 2.75% 1.25% .50% Less than 4.750 to 1 but greater than or equal to 4.250 to 1 2.50% 1.00% .425% Less than 4.250 to 1 but greater than or equal to 3.750 to 1 2.25% .75% .375% Less than 3.750 to 1 but greater than or equal to 3.250 to 1 1.75% .25% .30% Less than 3.250 to 1 1.25% --- .30%

2.11. Acknowledgment. The Lenders and the Borrower hereby acknowledge and agree that, from and after the Effective Date (as defined below), Section 2.1 of the Consent 6 6 and Amendment No. 1, dated as of July 12, 2000, shall be deemed to be deleted in its entirety and shall have no further force or effect. SECTION III. MISCELLANEOUS 3.1. Conditions to Effectiveness of Amendment. This Amendment will become effective (as of the date first set forth above) on the date (the "Effective Date") upon which the Administrative Agent shall have received (a) counterparts hereof, duly executed and delivered by the Borrower, each Guarantor and the Majority Lenders and (b) for the account of each Lender which shall have executed and delivered a counterpart hereof to the Administrative Agent prior to 5:00 P.M., New York City time, on December 8, 2000, a fee in an amount equal to .20% of the sum of such Lender's Revolving Credit Commitment and Term Loans outstanding on such date. 3.2. Representations and Warranties. The Borrower represents and warrants to each Lender that as of the date hereof and after giving effect to this Amendment (a) the representations and warranties made by the Loan Parties in the Loan Documents are true and correct in all material respects (except to the extent that such representations and warranties are expressly stated to relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date) and (b) no Default or Event of Default has occurred and is continuing as of the date hereof; provided, that each reference to the Agreement therein shall be deemed to be a reference to the Agreement after giving effect to this Amendment. 3.3. Continuing Effect. Except as expressly waived or amended hereby, the Agreement shall continue to be and shall remain infull force and effect in accordance with its terms. 3.4. Counterparts. This Amendment may be executed by the parties hereto in any number of separate counterparts (which may include counterparts delivered by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Any executed counterpart delivered by facsimile transmission shall be effective for all purposes hereof. 3.5. Payment of Expenses. The Borrower agrees to pay and reimburse the Administrative Agent for all of its out-of-pocket costs and reasonable expenses incurred in connection with this Amendment, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent. 3.6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. [SIGNATURE LINES OMITTED] EX-10.31 3 k59133ex10-31.txt SEVERANCE AGREEMENT 1 EXHIBIT 10.31 SEVERANCE AGREEMENT THIS AGREEMENT, dated as of June 15, 2000 (the "Effective Date"), is made by and between Hayes Lemmerz International, Inc., a Delaware corporation (the "Company"), and [INSERT NAME] (the "Executive"). WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continued employment of key management personnel; and WHEREAS, the Board recognizes that the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows: 1. Defined Terms. The definitions of certain capitalized terms used in this Agreement are provided in the last Section hereof. 2. Term of Agreement. The Term of this Agreement shall commence on the Effective Date hereof and shall continue in effect through the third anniversary thereof; provided, however, that commencing on the first anniversary of the Effective Date and each anniversary thereafter (each such date a "Renewal Date"), the Term shall automatically be extended for one additional year unless, on or prior to such Renewal Date, the Company or the Executive shall have given notice not to extend the Term; and further provided, however, that if a Change in Control shall have occurred during the Term, the Term shall expire no earlier than twenty-four (24) months beyond the month in which such Change in Control occurred. 3. Immediate Effect of Change in Control. Promptly following a Change in Control, the Executive shall be entitled to the immediate payment of all unpaid compensation amounts (including the pro rata bonus payment for the current fiscal year under any bonus plan for which he is eligible ("Pro-rata Bonus") and all unpaid bonuses with respect to any prior fiscal year) with respect to the Executive's employment. For purposes of this Section 3, Pro-rata Bonus shall be an amount equal to the product of (1) the product of (x) the 2 Executive's base salary as in effect immediately prior to the Change in Control and (y) the greater of (A) the Executive's normative bonus percentage for the fiscal year in which the Change in Control occurs and (B) the Executive's estimated bonus percentage calculated in good faith by the Company's Finance Department determined by projecting performance through the end of the fiscal year in which the Change in Control occurs and (2) a fraction, the numerator of which is the number of days in the fiscal year in which the Change in Control occurs through the date of the Change in Control, and the denominator of which is 365. The Pro-rata Bonus paid shall be subtracted from the amount otherwise due the Executive as a bonus for the fiscal year in which the Change in Control occurs, but such Pro-rata Bonus becomes a vested benefit upon a Change in Control and in no event shall the Executive have to repay all or any portion of the Pro-rata Bonus. 4. Company's Covenants Summarized. In order to induce the Executive to remain in the employ of the Company, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments and the other payments and benefits described herein. Except as provided in Section 9.1 hereof, no Severance Payments shall be payable under this Agreement unless there shall have been (or, under the terms of the second sentence of Section 6.1 hereof, there shall be deemed to have been) a termination of the Executive's employment with the Company on or following a Change in Control and during the Term. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. 5. Compensation Other Than Severance Payments. 5.1 Following a Change in Control and during the Term, during any period that the Executive fails to perform the Executive's full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive's full salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement (other than the Company's short- or long-term disability plan, as applicable, to the extent such benefits would be duplicative and their nonpayment would not prejudice Executive's future entitlement to benefits) maintained by the Company during such period, until the Executive's employment is terminated by the Company for Disability. 5.2 If the Executive's employment shall be terminated for any reason on or following a Change in Control and during the Term, the Company shall pay the Executive's full salary to the Executive through the Date of Termination at the rate in effect immediately prior to the Date of Termination or, if higher, the rate in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of the Company's compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as 2 3 in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason (including all unpaid bonuses with respect to any prior fiscal year). In addition, if the Executive's employment is terminated on or following a Change in Control and during the Term, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then the Company shall pay Executive an amount equal to the product of (1) the product of (x) the Executive's base salary as in effect immediately prior to the Date of Termination, or, if higher, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason (the greater of such amounts, the "Base Salary") and (y) the Executive's normative bonus percentage for the year in which the Date of Termination occurs, or if higher, the normative bonus percentage for the fiscal year in which the Change in Control occurs or the normative bonus percentage in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason (the greatest of such percentages, the "Bonus Percentage") and (2) a fraction, the numerator of which is the number of days in the fiscal year in which the Date of Termination occurs through the date of the Date of Termination, and the denominator of which is 365; it being understood that, if the Date of Termination is in the same fiscal year as the Change in Control, the Pro-rata Bonus calculated pursuant to Section 3 shall be subtracted from the amount payable pursuant to this sentence of Section 5.2 but shall not reduce the amount payable below zero. 5.3 If the Executive's employment shall be terminated for any reason on or following a Change in Control and during the Term, the Company shall pay to the Executive the Executive's normal post-termination compensation and benefits as such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Company's retirement, insurance and other compensation or benefit plans, programs and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason. 6. Severance Payments. 6.1 If the Executive's employment is terminated on or following a Change in Control and during the Term, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 ("Severance Payments") and Section 6.2, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof or otherwise (except as provided herein). For purposes of this Agreement, the Executive's employment shall be deemed to have been terminated following a Change in Control by the Company without Cause or by the Executive with Good Reason, if (i) the Executive's employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control ever occurs) and such termination was at the request or direction of a Person who enters into an agreement with the Company the consummation of which would constitute a Change in Control, (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control ever occurs) and the circumstance or event which 3 4 constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Executive's employment is terminated by the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control (whether or not a Change in Control ever occurs). (A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive (whether pursuant to any employment agreement, plan, policy or otherwise), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to [three] [two] [one and one half](1) times the sum of (i) the Base Salary and (ii) the product of (x) the Base Salary and (y) the Bonus Percentage. (B) For the twenty-four (24) month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a different method (after taking into account the effect of such method on the calculation of "parachute payments" pursuant to Section 6.2 hereof), such health insurance benefits shall be provided through a third-party insurer. Benefits otherwise receivable by the Executive pursuant to this Section 6.1 (B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive by another Employer of the Executive during the twenty-four (24) month period following the Executive's termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason. (C) For purposes of COBRA health benefit continuation under section 4980B of the Code, the cessation of benefits pursuant to Section 6.1(B) shall be treated as though such cessation is the "qualifying event" under section 4980B(f)(3) of the Code for purposes of determining the period of coverage. (D) The Company shall pay to the Executive a lump sum amount equal to one hundred thousand dollars ($100,000). - -------- (1) Three times for CEO, two times for his direct reports, one and one-half times for others. 4 5 (E) The Company shall, at its sole expense as incurred, provide Executive with "key executive level" outplacement services at a cost of no more than fifteen percent (15%) of the sum of (1) Base Salary and (2) the Bonus Percentage multiplied by Base Salary. 6.2 (A) Whether or not the Executive becomes entitled to the Severance Payments, if any of the payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) (all such payments and benefits, excluding the Gross-Up Payment, being hereinafter referred to as the "Total Payments") will be subject to the Excise Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income and employment taxes and any penalties, interest or fees incurred by the Executive as a result of any payment under Section 6.2 being made later than five business days prior to the due date of the excise tax with respect to which it is paid and any Excise Tax upon the Gross-Up Payment, shall be equal to the Total Payments. (B) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments shall be treated as "parachute payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to the Executive and selected by the accounting firm which was, immediately prior to the Change in Control, the Company's independent auditor (the "Auditor"), such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the meaning of section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of the Base Amount allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence or the Executive's place of business, whichever is higher, on the Date of Termination (or if there is not yet a Date of Termination, then the date on which the Gross-Up Payment is calculated for purposes of this Section 6.2), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. (C) In the event that the Excise Tax is finally determined to be less than the amount taken into account hereunder in calculating the Gross-Up Payment, the 5 6 Executive shall repay to the Company, within five (5) business days following the time that the amount of such reduction in the Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (including that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income and employment taxes imposed on the Gross-Up Payment being repaid by the Executive), to the extent that such repayment results in a reduction in the Excise Tax and a dollar-for-dollar reduction in the Executive's taxable income and wages for purposes of federal, state and local income and employment taxes, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event any portion of the amount to be repaid to the Company has been paid to any tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to Executive, and interest payable to the Company shall not exceed the interest received or credited to Executive by such tax authority. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder in calculating the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (including any interest, penalties or additions payable by the Executive with respect to such excess and the Gross-Up Payment attributable to the Excise Tax and federal, state, and local income and employment taxes imposed on the Gross-Up Payment being made to the Executive) within five (5) business days following the time that the amount of such excess is finally determined. The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments. 6.3 The payments provided in subsections (A), of Section 6.1 hereof and in Section 6.2 hereof shall be made not later than the fifth day following the Date of Termination (or if there is no Date of Termination, then the date on which the Gross-up Payment is calculated for purposes of Section 6.2 hereof); provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company or, in the case of payments under Section 6.2 hereof, in accordance with Section 6.2 hereof, of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at 120% of the rate provided in section 1274(b)(2)(B) of the Code). 6.4 The Company also shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Executive's employment, in seeking in good faith to obtain or enforce any 6 7 benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder. Such payments shall be made within five (5) business days after delivery of the Executive's written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require. 7. Termination Procedures and Compensation During Dispute. 7.1 Notice of Termination. After a Change in Control and during the Term, any purported termination of the Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 11 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive's counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. 7.2 Date of Termination. "Date of Termination," with respect to any purported termination of the Executive's employment after a Change in Control and during the Term, shall mean (i) if the Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive's duties during such thirty (30) day period), and (ii) if the Executive's employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days, respectively, from the date such Notice of Termination is given). 7.3 Dispute Concerning Termination. If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 7.3), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the earlier of (i) the date prior to the date on which the Term ends or (ii) the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of an arbitrator or a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be 7 8 extended by a notice of dispute only if such notice is given in good faith and the party providing notice pursues the resolution of such dispute with reasonable diligence. 7.4 Compensation During Dispute. If a purported termination occurs on or following a Change in Control and during the Term and the Date of Termination is extended in accordance with Section 7.3 hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given or, if higher, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason (including, but not limited to, Base Salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given, until the Date of Termination, as determined in accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other amounts due under this Agreement (other than those due under the first sentence of Section 5.2 hereof) and shall not be offset against or reduce any other amounts due under this Agreement. 8. No Mitigation. The Company agrees that, if the Executive's employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to this Agreement. Further, the amount of any payment or benefit provided for in this Agreement (other than Section 6.1(B) hereof) shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise. 9. Successors; Binding Agreement; Prior Agreement. 9.1 This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree in writing to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. The Company will require any ultimate parent entity, as defined in [16 C.F.R. 8801,1(a)(3)], of any Person who acquires 90% of the outstanding shares of common stock of the Company or the outstanding voting securities of the Company entitled to vote generally in the election of directors (including through a merger in which the Company does not survive or as a result of which the Company becomes a subsidiary of another Person or a consolidation involving the Company and another Person) to assume and agree in writing to perform as a joint and several obligor of the Company (including any successor to the Company), this Agreement in the same manner and to the same extent as the Company. Failure of the Company to obtain such assumption and agreement in writing from a successor or its parent as described in the preceding sentences after notice and a reasonable cure period (not to exceed ten days from the date such notice is received) shall be a breach of this Agreement and shall entitle the Executive to compensation 8 9 from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive's employment for Good Reason after a Change in Control, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. 9.2 This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate. 9.3 The Company and the Executive were parties to a Severance Agreement dated as of [November 6, 1995] (the "Prior Agreement"), which is no longer in effect. In consideration of the Company entering into this Agreement, the Executive acknowledges that the Prior Agreement is no longer in effect and hereby releases the Company and its directors, officers, stockholders and their respective affiliates from any and all liabilities or obligations arising under the Prior Agreement. 10. Insurance and Indemnification. From and after a Change in Control, including after the termination of Executive's employment, the Company shall indemnify, defend and hold the Executive harmless from and against any and all expenses, liabilities, damages, costs, judgments, penalties, fines and amounts paid in settlement, incurred in good faith by Executive in connection with any proceeding involving Executive by reason of Executive's being or having been an officer, director, employee or agent of the Company (or any affiliate of the Company) to the fullest extent permitted by law, whether or not Executive is, or is threatened to be made, a party to any threatened, pending, or completed proceeding, and whether or not Executive is successful in such proceeding. In addition, upon receipt from Executive of (i) a written request for an advancement of reasonable expenses which Executive reasonably believes will be subject to indemnification hereunder and (ii) a written undertaking by Executive to repay any such amounts if it shall ultimately be determined that the Executive is not entitled to indemnification under this Agreement or otherwise, the Company shall advance such expenses to Executive or pay such expenses for Executive, all in advance of the final disposition of any such matter. From and after a Change in Control, including after the termination of Executive's employment hereunder, Executive shall have coverage under a director's and officer's liability insurance policy in amounts no less than, and on terms no less favorable than those, provided to senior executive officers of the Company from time to time. 11. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the Executive, to the address inserted below the Executive's signature on the final page hereof and, if to the Company, to the address 9 10 set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt: To the Company: 15300 Centennial Drive Northville, Michigan 48167 Attention: Vice President -- Human Resources and Administration 12. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the terms and conditions of the Executive's employment with the Company only in the event that the Executive's employment with the Company is terminated on or following a Change in Control, by (i) the Company other than for Cause or (ii) the Executive other than for Good Reason. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 5, 6, 7 and 10 hereof) shall survive such expiration. 13. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 14. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 15. Settlement of Disputes. All claims by the Executive for benefits under this Agreement shall be directed to the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a 10 11 decision of the Board within sixty (60) days after notification by the Board that the Executive's claim has been denied. The Executive shall be entitled to pursue legal action, including, without limitation, filing a complaint in court of appropriate jurisdiction. 16. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below: (A) "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act. (B) "Auditor" shall have the meaning set forth in Section 6.2 hereof. (C) "Base Amount" shall have the meaning set forth in section 280G(b)(3) of the Code. (D) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. (E) "Board" shall mean the Board of Directors of the Company. (F) "Cause" for termination by the Company of the Executive's employment shall mean (i) the willful and continued failure by the Executive to substantially perform the Executive's duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) that has not been cured within 30 days after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive's part shall be deemed "willful" unless done, or omitted to be done, by the Executive in bad faith and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Company establishes to the Board by clear and convincing evidence that Cause exists. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. (G) A "Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (I) any Person, other than Joseph Littlejohn & Levy Fund II, L.P. (or any affiliate thereof), TSG Capital Fund II, L.P. (or any affiliate 11 12 thereof), Canadian Imperial Bank of Commerce (or any affiliate thereof), is or becomes the Beneficial Owner of more than fifty percent of either (i) the then-outstanding common stock of the Company ("Outstanding Common Stock") or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Outstanding Voting Securities"); or (II) the following individuals ("Incumbent Board Members") cease for any reason to constitute a majority of the number of directors then serving: individuals who, as of the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or (III) there is consummated a merger, consolidation or reorganization of the Company or any direct or indirect subsidiary of the Company with any other entity ("Transaction"), unless each of the following events occurs in connection with such merger, consolidation or reorganization: (a) the Persons who are Beneficial Owners of the Outstanding Common Stock and the Persons who are Beneficial Owners of the Outstanding Voting Securities, immediately before such Transaction, are, immediately following and after giving effect to such Transaction (as a result of the ownership of securities of the Company immediately prior to the Transaction, other than securities of the Company issued in connection with the Transaction), Beneficial Owners of more than 50% of the then-outstanding securities and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity) resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns the Company or all or substantially all of the Company's assets either 12 13 directly or through one or more subsidiaries), respectively; (b) at least a majority of the members of the board of directors of the entity resulting from the Transaction were Incumbent Board Members at the time of the execution of the initial agreement, or of the action of the Board, providing for the Transaction; and (c) immediately following and after giving effect to such Transaction, the stockholder parties to the Amended and Restated Stockholders Agreement dated as of June 30, 1997 among the Company and certain of its stockholders are, in the aggregate, the Beneficial Owners of a greater amount of the then-outstanding securities and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity) resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries), than any other Person; or (IV) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale, assignment, lease or other disposition of all or substantially all of the Company's assets. (H) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. (I) "Company" shall mean Hayes Lemmerz International, Inc. and, except in determining under Section 15(G) hereof whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise. (J) "Date of Termination" shall have the meaning set forth in Section 7.2 hereof. 13 14 (K) "Disability" shall be deemed the reason for the termination by the Company of the Executive's employment, if, as a result of the Executive's incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive's duties with the Company for a period of six (6) consecutive months, the Company shall have given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executive's duties. (L) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (M) "Excise Tax" shall mean any excise tax imposed under section 4999 of the Code or any similar state or local tax or any interest or penalties incurred by Executive with respect to such excise tax. (N) "Executive" shall mean the individual named in the first paragraph of this Agreement. (O) "Good Reason" for termination by the Executive of the Executive's employment shall mean the occurrence (without the Executive's express written consent) after any Change in Control and during the Term, or prior to a Change in Control under the circumstances described in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof (treating all references in paragraphs (I) through (VI) below to a "Change in Control" as references to a "Potential Change in Control"), of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (I), (IV), (V) or (VI) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (I) the assignment to the Executive of any duties materially inconsistent with the Executive's status as an executive officer of the Company or a material diminution in the nature or status of the Executive's responsibilities from those in effect immediately prior to the Change in Control other than any such material diminution primarily attributable to the fact that the Company may no longer be a public company; (II) a reduction by the Company in the Executive's annual base salary as in effect on the date hereof or as the same may be increased from time to time; (III) a reduction in the Executive's normative bonus percentage or any change in the method for applying the normative bonus percentage to determine the Executive's bonus which would materially reduce the amount of the Executive's bonus: 14 15 (IV) the relocation of the Executive's principal place of employment to a location more than 60 miles from the Executive's principal place of employment immediately prior to the Change in Control or the Company's requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company's business; (V) the failure by the Company to pay to the Executive any portion of the Executive's current compensation, or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due; (VI) the failure by the Company to continue to provide the Executive with benefits which are not materially less favorable in the aggregate than those enjoyed by the Executive under any of the Company's pension, savings, life insurance, medical, health and accident, or disability plans in which the Executive was participating immediately prior to the Change in Control, the taking of any other action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect at the time of the Change in Control; or (VII) any purported termination of the Executive's employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 7.1 hereof; for purposes of this Agreement, no such purported termination shall be effective. The Executive's right to terminate the Executive's employment for Good Reason shall not be affected by the Executive's incapacity due to physical or mental illness. The Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. For purposes of any determination regarding the existence of Good Reason, any claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that Good Reason does not exist. (P) "Gross-Up Payment" shall have the meaning set forth in Section 6.2 hereof. 15 16 (Q) "Notice of Termination" shall have the meaning set forth in Section 7.1 hereof. (R) "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) including a "group" within the meaning of Section 13(d)(3) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. (S) "Potential Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (I) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (II) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; or (III) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (T) "Retirement" shall be deemed the reason for the termination by the Executive of the Executive's employment if such employment is terminated in accordance with the Company's retirement policy, including early retirement, generally applicable to its salaried employees. (U) "Severance Payments" shall have the meaning set forth in Section 6.1 hereof. (V) "Tax Counsel" shall have the meaning set forth in Section 6.2 hereof. (W) "Term" shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein). (X) "Total Payments" shall mean those payments so described in Section 6.2 hereof. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. HAYES LEMMERZ INTERNATIONAL, INC. 16 17 By: -------------------------------------------- Name: Title: -------------------------------------------- [EXECUTIVE] Address: ---------------------- ---------------------- ---------------------- (Please print carefully) 17 EX-27 4 k59133ex27.txt FINANCIAL DATA SCHEDULE

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EX-10.30

   1


                                                                   EXHIBIT 10.30


                                 AMENDMENT NO. 2


                  AMENDMENT NO. 2, dated as of December 8, 2000 (this
"Amendment"), to the THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
February 3, 1999, as amended by Consent and Amendment No. 1, dated as of July
12, 2000 (the "Agreement"), among HAYES LEMMERZ INTERNATIONAL, INC., a Delaware
corporation (the "Borrower"), the several lenders from time to time parties to
such Agreement (the "Lenders"), CANADIAN IMPERIAL BANK OF COMMERCE, a
Canadian-chartered bank acting through its New York Agency, as administrative
agent for the Lenders thereunder and co-lead arranger (in such capacity, the
"Administrative Agent"), CREDIT SUISSE FIRST BOSTON, as syndication agent for
the Lenders thereunder and co-lead arranger, MERRILL LYNCH CAPITAL CORPORATION,
a Delaware corporation, as co-documentation agent for the Lenders thereunder and
DRESDNER BANK AG, as co-documentation agent and European Swing Line
Administrator for the Lenders.



                              W I T N E S S E T H :

                  WHEREAS, the Borrower has requested, and upon this Amendment
becoming effective the Lenders shall have agreed, that certain provisions of the
Agreement be amended in the manner provided for in this Amendment;

                  NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:

                            SECTION I. DEFINED TERMS

                  1.1. Definitions. Unless otherwise defined herein, capitalized
terms are used herein as defined in the Agreement.

                             SECTION II. AMENDMENTS

                  2.1. Amendment to Subsection 1.1. Subsection 1.1 of the
Agreement is hereby amended by inserting, in proper alphabetical order therein,
the following new definition:

                  "Senior Leverage Ratio": as of the end of each fiscal quarter
         of the Borrower, with respect to the Borrower and its Subsidiaries on a
         consolidated basis, the ratio of (a) Total Indebtedness on such date
         (provided that, for purposes of this definition, Total Indebtedness
         shall include Indebtedness described in clause (g) of the definition of
         such term only to the extent that the aggregate Dollar Equivalent
         Amount thereof exceeds $250,0000,000) minus the aggregate principal
         amount of the Senior Subordinated Notes outstanding on such date to (b)
         EBITDA for the twelve month period ending on such date.

                  2.2. Amendment to Subsection 1.1. Subsection 1.1 of the
Agreement is hereby amended by (i) deleting therefrom the existing definition of
"Capital Expenditure" and (ii) inserting, in lieu thereof, the following new
definition of "Capital Expenditure":

                  "Capital Expenditure": any expenditure, other than pursuant to
         subsection 8.9, in respect of the purchase or other acquisition of
         fixed or capital assets, or the purchase or other acquisition of
         equipment, inventory (other than the purchase or other acquisition of







   2

                                                                               2



         raw materials and other goods in the ordinary course of business),
         receivables, intellectual property and other assets related thereto.

                  2.3. Amendment to Subsection 5.2. Subsection 5.2 of the
Agreement is hereby amended by (i) deleting "January 31, 1998" where it appears
therein and inserting, in lieu thereof, "July 31, 2000" and (ii) inserting at
the end of the first sentence thereof, before the period mark, the following:

                  "provided, however, that no Material Adverse Effect shall be
                  deemed to have occurred based in whole or in part on any
                  development or event reflected in or contemplated by the
                  Borrower's financial and other information and projections,
                  dated November 29, 2000 that were delivered to the Lenders on
                  or about November 29, 2000.

                  2.4. Amendment to Subsection 8.1(a). Subsection 8.1(a) of the
Agreement is hereby amended by (i) deleting therefrom the table of Leverage
Ratios and (ii) inserting, in lieu thereof, the following table of Leverage
Ratios:

                  Fiscal Quarter                              Leverage Ratio
                  --------------                              --------------
                  1999                   1st                  5.50 to 1.00
                                         2nd                  5.50 to 1.00
                                         3rd                  5.25 to 1.00
                                         4th                  5.25 to 1.00

                  2000                   1st                  5.00 to 1.00
                                         2nd                  5.00 to 1.00
                                         3rd                  4.75 to 1.00
                                         4th                  5.25 to 1.00

                  2001                   1st                  5.50 to 1.00
                                         2nd                  5.50 to 1.00
                                         3rd                  5.50 to 1.00
                                         4th                  5.25 to 1.00

                  2002                   1st                  5.25 to 1.00
                                         2nd                  5.25 to 1.00
                                         3rd                  5.15 to 1.00
                                         4th                  4.85 to 1.00

                  2003                   1st                  4.75 to 1.00
                                         2nd                  4.65 to 1.00
                                         3rd                  4.35 to 1.00
                                         4th                  4.10 to 1.00



   3
                                                                               3

                  Fiscal Quarter                              Leverage Ratio
                  --------------                              --------------

                  2004                   1st                  3.90 to 1.00
                                         2nd                  3.90 to 1.00
                                         3rd                  3.75 to 1.00
                                         4th                  3.50 to 1.00

                  2.5. Amendment to Subsection 8.1(b). Subsection 8.1(b) of the
Agreement is hereby amended by (i) deleting therefrom the table of Interest
Coverage Ratios and (ii) inserting, in lieu thereof, the following table of
Interest Coverage Ratios:

                  Fiscal Quarter                        Interest Coverage Ratio
                  --------------                        -----------------------

                  1999                   1st                  2.00 to 1.00
                                         2nd                  2.00 to 1.00
                                         3rd                  2.00 to 1.00
                                         4th                  2.00 to 1.00

                  2000                   1st                  2.00 to 1.00
                                         2nd                  2.00 to 1.00
                                         3rd                  2.25 to 1.00
                                         4th                  2.00 to 1.00

                  2001                   1st                  1.85 to 1.00
                                         2nd                  1.85 to 1.00
                                         3rd                  1.85 to 1.00
                                         4th                  1.85 to 1.00

                  2002                   1st                  1.90 to 1.00
                                         2nd                  1.90 to 1.00
                                         3rd                  1.95 to 1.00
                                         4th                  2.00 to 1.00

                  2003                   1st                  2.10 to 1.00
                                         2nd                  2.20 to 1.00
                                         3rd                  2.25 to 1.00
                                         4th                  2.25 to 1.00

                  2004                   1st                  2.50 to 1.00
                                         2nd                  2.50 to 1.00
                                         3rd                  2.50 to 1.00
                                         4th                  2.50 to 1.00





   4
                                                                               4


                  2.6. Amendment to Subsection 8.1(c). Subsection 8.1(c) of the
Agreement is hereby amended by (i) deleting therefrom the table of Fixed Charge
Coverage Ratios and (ii) inserting, in lieu thereof, the following table of
Fixed Charge Coverage Ratios:

                  Fiscal Quarter                     Fixed Charge Coverage Ratio
                  --------------                     ---------------------------

                  1999                   1st                  1.00 to 1.00
                                         2nd                  1.00 to 1.00
                                         3rd                  1.00 to 1.00
                                         4th                  1.00 to 1.00

                  2000                   1st                  1.00 to 1.00
                                         2nd                  1.00 to 1.00
                                         3rd                  1.05 to 1.00
                                         4th                   .85 to 1.00

                  2001                   1st                   .75 to 1.00
                                         2nd                   .75 to 1.00
                                         3rd                   .75 to 1.00
                                         4th                   .80 to 1.00

                  2002                   1st                   .80 to 1.00
                                         2nd                   .80 to 1.00
                                         3rd                   .80 to 1.00
                                         4th                   .80 to 1.00

                  2003                   1st                   .85 to 1.00
                                         2nd                   .85 to 1.00
                                         3rd                   .90 to 1.00
                                         4th                   .90 to 1.00

                  2004                   1st                  1.00 to 1.00
                                         2nd                  1.00 to 1.00
                                         3rd                  1.00 to 1.00
                                         4th                  1.00 to 1.00



Amendment to Subsection 8.1. Subsection 8.1 of the Agreement is hereby amended
by inserting therein the following new subsection (d):

                  (d) Senior Leverage Ratio. Permit the Senior Leverage Ratio as
            of the end of any fiscal quarter of the Borrower to be greater than
            3.00 to 1.00.

                  2.7. Amendment to Subsection 8.2(k). Subsection 8.2(k) of the
Agreement is hereby amended by (i) deleting "Dollar" from the first line thereof
and (ii) adding after "$400,000,000" the following:





   5
                                                                               5



                  "(or in the case of any Indebtedness issued in a currency
                  other than Dollars, the Dollar Equivalent Amount thereof as
                  determined by the Administrative Agent on the date of
                  issuance)"

                  2.8. Amendment to Subsection 8.8. Subsection 8.8 of the
Agreement is hereby amended by (i) deleting "Reserved" and (ii) inserting, in
lieu thereof, the following:

                  8.8. Limitation on Capital Expenditures. Make any Capital
         Expenditure except for expenditures in the ordinary course of business
         not exceeding, in the aggregate for the Borrower and its Subsidiaries
         during any of the test periods set forth below, the amount set forth
         opposite such test period set forth below:

              Test Period                                     Amount
              -----------                                 --------------

         February 1, 2000 - January 31, 2001                $170,000,000
         February 1, 2001 - January 31, 2002                 170,000,000
         February 1, 2002 - January 31, 2003                 175,000,000
         February 1, 2003 - January 31, 2004                 190,000,000
         February 1, 2004 - January 31, 2005                 190,000,000

                  2.9. Amendment to Subsection 8.9(e). Subsection 8.9(e) of the
Agreement is hereby amended by (i) deleting such subsection in its entirety and
(ii) inserting, in lieu thereof, the following:

                  "(e) (Reserved)"

                  2.10. Amendment to Schedule B. Schedule B of the Agreement is
hereby amended by (i) deleting in its entirety the table of Applicable Margins
and Applicable Commitment Fee Rates and (ii) inserting, in lieu thereof, the
following table of Applicable Margins and Applicable Commitment Fee Rates:



                                                                   APPLICABLE MARGIN
                                                                                                 APPLICABLE
                                                                                 BASE RATE       COMMITMENT
LEVERAGE RATIO                                                LIBOR SPREAD        SPREAD          FEE RATE
- --------------                                                ------------       ---------      -----------
                                                                                        
Greater than or equal to 5.250 to 1                              3.25%            1.75%            .50%
Less than 5.250 to 1 but greater than or equal to 4.750
to 1                                                             2.75%            1.25%            .50%
Less than 4.750 to 1 but greater than or equal to 4.250
to 1                                                             2.50%            1.00%           .425%
Less than 4.250 to 1 but greater than or equal to 3.750
to 1                                                             2.25%             .75%           .375%
Less than 3.750 to 1 but greater than or equal to 3.250
to 1                                                             1.75%             .25%            .30%
Less than 3.250 to 1                                             1.25%              ---            .30%



                  2.11. Acknowledgment. The Lenders and the Borrower hereby
acknowledge and agree that, from and after the Effective Date (as defined
below), Section 2.1 of the Consent





   6
                                                                               6


and Amendment No. 1, dated as of July 12, 2000, shall be deemed to be deleted in
its entirety and shall have no further force or effect.

                           SECTION III. MISCELLANEOUS

                  3.1. Conditions to Effectiveness of Amendment. This Amendment
will become effective (as of the date first set forth above) on the date (the
"Effective Date") upon which the Administrative Agent shall have received (a)
counterparts hereof, duly executed and delivered by the Borrower, each Guarantor
and the Majority Lenders and (b) for the account of each Lender which shall have
executed and delivered a counterpart hereof to the Administrative Agent prior to
5:00 P.M., New York City time, on December 8, 2000, a fee in an amount equal to
 .20% of the sum of such Lender's Revolving Credit Commitment and Term Loans
outstanding on such date.

                  3.2. Representations and Warranties. The Borrower represents
and warrants to each Lender that as of the date hereof and after giving effect
to this Amendment (a) the representations and warranties made by the Loan
Parties in the Loan Documents are true and correct in all material respects
(except to the extent that such representations and warranties are expressly
stated to relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on and as
of such earlier date) and (b) no Default or Event of Default has occurred and is
continuing as of the date hereof; provided, that each reference to the Agreement
therein shall be deemed to be a reference to the Agreement after giving effect
to this Amendment.

                  3.3. Continuing Effect. Except as expressly waived or amended
hereby, the Agreement shall continue to be and shall remain infull force and
effect in accordance with its terms.

                  3.4. Counterparts. This Amendment may be executed by the
parties hereto in any number of separate counterparts (which may include
counterparts delivered by facsimile transmission), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Any
executed counterpart delivered by facsimile transmission shall be effective for
all purposes hereof.

                  3.5. Payment of Expenses. The Borrower agrees to pay and
reimburse the Administrative Agent for all of its out-of-pocket costs and
reasonable expenses incurred in connection with this Amendment, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

                  3.6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                            [SIGNATURE LINES OMITTED]

EX-10.31

   1
                                                                   EXHIBIT 10.31


                               SEVERANCE AGREEMENT


                  THIS AGREEMENT, dated as of June 15, 2000 (the "Effective
Date"), is made by and between Hayes Lemmerz International, Inc., a Delaware
corporation (the "Company"), and [INSERT NAME] (the "Executive").

                  WHEREAS, the Company considers it essential to the best
interests of its stockholders to foster the continued employment of key
management personnel; and

                  WHEREAS, the Board recognizes that the possibility of a Change
in Control exists and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders;
and

                  WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control;

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Company and the Executive hereby agree as
follows:

                  1. Defined Terms. The definitions of certain capitalized terms
used in this Agreement are provided in the last Section hereof.

                  2. Term of Agreement. The Term of this Agreement shall
commence on the Effective Date hereof and shall continue in effect through the
third anniversary thereof; provided, however, that commencing on the first
anniversary of the Effective Date and each anniversary thereafter (each such
date a "Renewal Date"), the Term shall automatically be extended for one
additional year unless, on or prior to such Renewal Date, the Company or the
Executive shall have given notice not to extend the Term; and further provided,
however, that if a Change in Control shall have occurred during the Term, the
Term shall expire no earlier than twenty-four (24) months beyond the month in
which such Change in Control occurred.

                  3. Immediate Effect of Change in Control. Promptly following a
Change in Control, the Executive shall be entitled to the immediate payment of
all unpaid compensation amounts (including the pro rata bonus payment for the
current fiscal year under any bonus plan for which he is eligible ("Pro-rata
Bonus") and all unpaid bonuses with respect to any prior fiscal year) with
respect to the Executive's employment. For purposes of this Section 3, Pro-rata
Bonus shall be an amount equal to the product of (1) the product of (x) the



   2



Executive's base salary as in effect immediately prior to the Change in Control
and (y) the greater of (A) the Executive's normative bonus percentage for the
fiscal year in which the Change in Control occurs and (B) the Executive's
estimated bonus percentage calculated in good faith by the Company's Finance
Department determined by projecting performance through the end of the fiscal
year in which the Change in Control occurs and (2) a fraction, the numerator of
which is the number of days in the fiscal year in which the Change in Control
occurs through the date of the Change in Control, and the denominator of which
is 365. The Pro-rata Bonus paid shall be subtracted from the amount otherwise
due the Executive as a bonus for the fiscal year in which the Change in Control
occurs, but such Pro-rata Bonus becomes a vested benefit upon a Change in
Control and in no event shall the Executive have to repay all or any portion of
the Pro-rata Bonus.

                  4. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments and the
other payments and benefits described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this Agreement unless there
shall have been (or, under the terms of the second sentence of Section 6.1
hereof, there shall be deemed to have been) a termination of the Executive's
employment with the Company on or following a Change in Control and during the
Term. This Agreement shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in writing between the
Executive and the Company, the Executive shall not have any right to be retained
in the employ of the Company.

                  5.  Compensation Other Than Severance Payments.


                  5.1 Following a Change in Control and during the Term, during
any period that the Executive fails to perform the Executive's full-time duties
with the Company as a result of incapacity due to physical or mental illness,
the Company shall pay the Executive's full salary to the Executive at the rate
in effect at the commencement of any such period, together with all compensation
and benefits payable to the Executive under the terms of any compensation or
benefit plan, program or arrangement (other than the Company's short- or
long-term disability plan, as applicable, to the extent such benefits would be
duplicative and their nonpayment would not prejudice Executive's future
entitlement to benefits) maintained by the Company during such period, until the
Executive's employment is terminated by the Company for Disability.

                  5.2 If the Executive's employment shall be terminated for any
reason on or following a Change in Control and during the Term, the Company
shall pay the Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Date of Termination
or, if higher, the rate in effect immediately prior to the first occurrence of
an event or circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive through the Date of
Termination under the terms of the Company's compensation and benefit plans,
programs or arrangements as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive, as




                                       2


   3


in effect immediately prior to the first occurrence of an event or circumstance
constituting Good Reason (including all unpaid bonuses with respect to any prior
fiscal year). In addition, if the Executive's employment is terminated on or
following a Change in Control and during the Term, other than (A) by the Company
for Cause, (B) by reason of death or Disability, or (C) by the Executive without
Good Reason, then the Company shall pay Executive an amount equal to the product
of (1) the product of (x) the Executive's base salary as in effect immediately
prior to the Date of Termination, or, if higher, as in effect immediately prior
to the first occurrence of an event or circumstance constituting Good Reason
(the greater of such amounts, the "Base Salary") and (y) the Executive's
normative bonus percentage for the year in which the Date of Termination occurs,
or if higher, the normative bonus percentage for the fiscal year in which the
Change in Control occurs or the normative bonus percentage in effect immediately
prior to the first occurrence of an event or circumstance constituting Good
Reason (the greatest of such percentages, the "Bonus Percentage") and (2) a
fraction, the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the date of the Date of
Termination, and the denominator of which is 365; it being understood that, if
the Date of Termination is in the same fiscal year as the Change in Control, the
Pro-rata Bonus calculated pursuant to Section 3 shall be subtracted from the
amount payable pursuant to this sentence of Section 5.2 but shall not reduce the
amount payable below zero.

                  5.3 If the Executive's employment shall be terminated for any
reason on or following a Change in Control and during the Term, the Company
shall pay to the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of Termination or, if
more favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good Reason.

                  6.  Severance Payments.


                  6.1 If the Executive's employment is terminated on or
following a Change in Control and during the Term, other than (A) by the Company
for Cause, (B) by reason of death or Disability, or (C) by the Executive without
Good Reason, then the Company shall pay the Executive the amounts, and provide
the Executive the benefits, described in this Section 6.1 ("Severance Payments")
and Section 6.2, in addition to any payments and benefits to which the Executive
is entitled under Section 5 hereof or otherwise (except as provided herein). For
purposes of this Agreement, the Executive's employment shall be deemed to have
been terminated following a Change in Control by the Company without Cause or by
the Executive with Good Reason, if (i) the Executive's employment is terminated
by the Company without Cause prior to a Change in Control (whether or not a
Change in Control ever occurs) and such termination was at the request or
direction of a Person who enters into an agreement with the Company the
consummation of which would constitute a Change in Control, (ii) the Executive
terminates his employment for Good Reason prior to a Change in Control (whether
or not a Change in Control ever occurs) and the circumstance or event which







                                       3




   4





constitutes Good Reason occurs at the request or direction of such Person, or
(iii) the Executive's employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or the circumstance or
event which constitutes Good Reason is otherwise in connection with or in
anticipation of a Change in Control (whether or not a Change in Control ever
occurs).

                  (A) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive (whether pursuant to any employment
agreement, plan, policy or otherwise), the Company shall pay to the Executive a
lump sum severance payment, in cash, equal to [three] [two] [one and one
half](1) times the sum of (i) the Base Salary and (ii) the product of (x) the
Base Salary and (y) the Bonus Percentage.

                  (B) For the twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to provide the
Executive and his dependents life, disability, accident and health insurance
benefits substantially similar to those provided to the Executive and his
dependents immediately prior to the Date of Termination or, if more favorable to
the Executive, those provided to the Executive and his dependents immediately
prior to the first occurrence of an event or circumstance constituting Good
Reason, at no greater cost to the Executive than the cost to the Executive
immediately prior to such date or occurrence; provided, however, that, unless
the Executive consents to a different method (after taking into account the
effect of such method on the calculation of "parachute payments" pursuant to
Section 6.2 hereof), such health insurance benefits shall be provided through a
third-party insurer. Benefits otherwise receivable by the Executive pursuant to
this Section 6.1 (B) shall be reduced to the extent benefits of the same type
are received by or made available to the Executive by another Employer of the
Executive during the twenty-four (24) month period following the Executive's
termination of employment (and any such benefits received by or made available
to the Executive shall be reported to the Company by the Executive); provided,
however, that the Company shall reimburse the Executive for the excess, if any,
of the cost of such benefits to the Executive over such cost immediately prior
to the Date of Termination or, if more favorable to the Executive, the first
occurrence of an event or circumstance constituting Good Reason.

                  (C) For purposes of COBRA health benefit continuation under
section 4980B of the Code, the cessation of benefits pursuant to Section 6.1(B)
shall be treated as though such cessation is the "qualifying event" under
section 4980B(f)(3) of the Code for purposes of determining the period of
coverage.

                  (D) The Company shall pay to the Executive a lump sum amount
equal to one hundred thousand dollars ($100,000).

- --------
(1)      Three times for CEO, two times for his direct reports, one and one-half
         times for others.




                                       4





   5




                 (E) The Company shall, at its sole expense as incurred,
provide Executive with "key executive level" outplacement services at a cost of
no more than fifteen percent (15%) of the sum of (1) Base Salary and (2) the
Bonus Percentage multiplied by Base Salary.

                  6.2 (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the payments or benefits received or to be
received by the Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
Person whose actions result in a Change in Control or any Person affiliated with
the Company or such Person) (all such payments and benefits, excluding the
Gross-Up Payment, being hereinafter referred to as the "Total Payments") will be
subject to the Excise Tax, the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and any penalties, interest
or fees incurred by the Executive as a result of any payment under Section 6.2
being made later than five business days prior to the due date of the excise tax
with respect to which it is paid and any Excise Tax upon the Gross-Up Payment,
shall be equal to the Total Payments.

                       (B) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as "parachute payments" (within
the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax
counsel ("Tax Counsel") reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the
Company's independent auditor (the "Auditor"), such payments or benefits (in
whole or in part) do not constitute parachute payments, including by reason of
section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within
the meaning of section 280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of
the Base Amount allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence or the Executive's place of business,
whichever is higher, on the Date of Termination (or if there is not yet a Date
of Termination, then the date on which the Gross-Up Payment is calculated for
purposes of this Section 6.2), net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.

                       (C) In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder in
calculating the Gross-Up Payment, the




                                       5





   6




Executive shall repay to the Company, within five (5) business days following
the time that the amount of such reduction in the Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to such reduction
(including that portion of the Gross-Up Payment attributable to the Excise Tax
and federal, state and local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent that such repayment
results in a reduction in the Excise Tax and a dollar-for-dollar reduction in
the Executive's taxable income and wages for purposes of federal, state and
local income and employment taxes, plus interest on the amount of such repayment
at 120% of the rate provided in section 1274(b)(2)(B) of the Code.
Notwithstanding the foregoing, in the event any portion of the amount to be
repaid to the Company has been paid to any tax authority, repayment thereof
shall not be required until actual refund or credit of such portion has been
made to Executive, and interest payable to the Company shall not exceed the
interest received or credited to Executive by such tax authority. In the event
that the Excise Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (including any interest, penalties or additions payable
by the Executive with respect to such excess and the Gross-Up Payment
attributable to the Excise Tax and federal, state, and local income and
employment taxes imposed on the Gross-Up Payment being made to the Executive)
within five (5) business days following the time that the amount of such excess
is finally determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for Excise Tax with
respect to the Total Payments.

                  6.3 The payments provided in subsections (A), of Section 6.1
hereof and in Section 6.2 hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date of Termination, then
the date on which the Gross-up Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such payments cannot be
finally determined on or before such day, the Company shall pay to the Executive
on such day an estimate, as determined in good faith by the Company or, in the
case of payments under Section 6.2 hereof, in accordance with Section 6.2
hereof, of the minimum amount of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments (together with interest on
the unpaid remainder (or on all such payments to the extent the Company fails to
make such payments when due) at 120% of the rate provided in section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but
in no event later than the thirtieth (30th) day after the Date of Termination.
In the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan by
the Company to the Executive, payable on the fifth (5th) business day after
demand by the Company (together with interest at 120% of the rate provided in
section 1274(b)(2)(B) of the Code).

                  6.4 The Company also shall pay to the Executive all legal fees
and expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive's employment, in seeking
in good faith to obtain or enforce any





                                       6




   7






benefit or right provided by this Agreement or in connection with any tax audit
or proceeding to the extent attributable to the application of section 4999 of
the Code to any payment or benefit provided hereunder. Such payments shall be
made within five (5) business days after delivery of the Executive's written
requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.

                  7.  Termination Procedures and Compensation During Dispute.


                  7.1 Notice of Termination. After a Change in Control and
during the Term, any purported termination of the Executive's employment (other
than by reason of death) shall be communicated by written Notice of Termination
from one party hereto to the other party hereto in accordance with Section 11
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted by the affirmative vote
of not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of considering
such termination (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive was
guilty of conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.

                  7.2 Date of Termination. "Date of Termination," with respect
to any purported termination of the Executive's employment after a Change in
Control and during the Term, shall mean (i) if the Executive's employment is
terminated for Disability, thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty (30) day period), and
(ii) if the Executive's employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a termination by
the Company, shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty (60) days, respectively,
from the date such Notice of Termination is given).

                  7.3 Dispute Concerning Termination. If within fifteen (15)
days after any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the earlier of (i) the date prior to the date on which the Term ends or
(ii) the date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of an
arbitrator or a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that the Date of Termination shall be







                                       7




   8



extended by a notice of dispute only if such notice is given in good faith and
the party providing notice pursues the resolution of such dispute with
reasonable diligence.

                  7.4 Compensation During Dispute. If a purported termination
occurs on or following a Change in Control and during the Term and the Date of
Termination is extended in accordance with Section 7.3 hereof, the Company shall
continue to pay the Executive the full compensation in effect when the notice
giving rise to the dispute was given or, if higher, as in effect immediately
prior to the first occurrence of an event or circumstance constituting Good
Reason (including, but not limited to, Base Salary) and continue the Executive
as a participant in all compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise to the dispute was
given, until the Date of Termination, as determined in accordance with Section
7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other
amounts due under this Agreement (other than those due under the first sentence
of Section 5.2 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement.

                  8. No Mitigation. The Company agrees that, if the Executive's
employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Company pursuant to this Agreement. Further, the
amount of any payment or benefit provided for in this Agreement (other than
Section 6.1(B) hereof) shall not be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

                  9.  Successors; Binding Agreement; Prior Agreement.


                  9.1 This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. In addition to any
obligations imposed by law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree in writing to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. The Company will
require any ultimate parent entity, as defined in [16 C.F.R. 8801,1(a)(3)], of
any Person who acquires 90% of the outstanding shares of common stock of the
Company or the outstanding voting securities of the Company entitled to vote
generally in the election of directors (including through a merger in which the
Company does not survive or as a result of which the Company becomes a
subsidiary of another Person or a consolidation involving the Company and
another Person) to assume and agree in writing to perform as a joint and several
obligor of the Company (including any successor to the Company), this Agreement
in the same manner and to the same extent as the Company. Failure of the Company
to obtain such assumption and agreement in writing from a successor or its
parent as described in the preceding sentences after notice and a reasonable
cure period (not to exceed ten days from the date such notice is received) shall
be a breach of this Agreement and shall entitle the Executive to compensation







                                       8




   9


from the Company in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.

                  9.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.

                  9.3 The Company and the Executive were parties to a Severance
Agreement dated as of [November 6, 1995] (the "Prior Agreement"), which is no
longer in effect. In consideration of the Company entering into this Agreement,
the Executive acknowledges that the Prior Agreement is no longer in effect and
hereby releases the Company and its directors, officers, stockholders and their
respective affiliates from any and all liabilities or obligations arising under
the Prior Agreement.

                  10. Insurance and Indemnification. From and after a Change in
Control, including after the termination of Executive's employment, the Company
shall indemnify, defend and hold the Executive harmless from and against any and
all expenses, liabilities, damages, costs, judgments, penalties, fines and
amounts paid in settlement, incurred in good faith by Executive in connection
with any proceeding involving Executive by reason of Executive's being or having
been an officer, director, employee or agent of the Company (or any affiliate of
the Company) to the fullest extent permitted by law, whether or not Executive
is, or is threatened to be made, a party to any threatened, pending, or
completed proceeding, and whether or not Executive is successful in such
proceeding. In addition, upon receipt from Executive of (i) a written request
for an advancement of reasonable expenses which Executive reasonably believes
will be subject to indemnification hereunder and (ii) a written undertaking by
Executive to repay any such amounts if it shall ultimately be determined that
the Executive is not entitled to indemnification under this Agreement or
otherwise, the Company shall advance such expenses to Executive or pay such
expenses for Executive, all in advance of the final disposition of any such
matter. From and after a Change in Control, including after the termination of
Executive's employment hereunder, Executive shall have coverage under a
director's and officer's liability insurance policy in amounts no less than, and
on terms no less favorable than those, provided to senior executive officers of
the Company from time to time.

                  11. Notices. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed, if
to the Executive, to the address inserted below the Executive's signature on the
final page hereof and, if to the Company, to the address






                                       9




   10





set forth below, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt:

                        To the Company:

                        15300 Centennial Drive
                        Northville, Michigan 48167
                        Attention: Vice President -- Human
                                   Resources and Administration

                  12. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or of any lack of compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. This Agreement supersedes any
other agreements or representations, oral or otherwise, express or implied, with
respect to the terms and conditions of the Executive's employment with the
Company only in the event that the Executive's employment with the Company is
terminated on or following a Change in Control, by (i) the Company other than
for Cause or (ii) the Executive other than for Good Reason. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Delaware. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The obligations of the
Company and the Executive under this Agreement which by their nature may require
either partial or total performance after the expiration of the Term (including,
without limitation, those under Sections 5, 6, 7 and 10 hereof) shall survive
such expiration.

                  13. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

                  14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                  15. Settlement of Disputes. All claims by the Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a







                                       10




   11




decision of the Board within sixty (60) days after notification by the Board
that the Executive's claim has been denied. The Executive shall be entitled to
pursue legal action, including, without limitation, filing a complaint in court
of appropriate jurisdiction.

                  16. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated below:

                  (A) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.

                  (B) "Auditor" shall have the meaning set forth in Section 6.2
hereof.

                  (C) "Base Amount" shall have the meaning set forth in section
280G(b)(3) of the Code.

                  (D) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.

                  (E) "Board" shall mean the Board of Directors of the Company.

                  (F) "Cause" for termination by the Company of the Executive's
employment shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof)
that has not been cured within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board, which demand
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or (ii) the
willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive in bad faith and (y) in the event
of a dispute concerning the application of this provision, no claim by the
Company that Cause exists shall be given effect unless the Company establishes
to the Board by clear and convincing evidence that Cause exists. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or upon the instructions of the Chief Executive Officer or based
upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company.

                  (G) A "Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:

                                    (I) any Person, other than Joseph Littlejohn
                  & Levy Fund II, L.P. (or any affiliate thereof), TSG Capital
                  Fund II, L.P. (or any affiliate






                                       11


   12

                  thereof), Canadian Imperial Bank of Commerce (or any affiliate
                  thereof), is or becomes the Beneficial Owner of more than
                  fifty percent of either (i) the then-outstanding common stock
                  of the Company ("Outstanding Common Stock") or (ii) the
                  combined voting power of the then-outstanding voting
                  securities of the Company entitled to vote generally in the
                  election of directors ("Outstanding Voting Securities"); or

                                    (II) the following individuals ("Incumbent
                  Board Members") cease for any reason to constitute a majority
                  of the number of directors then serving: individuals who, as
                  of the date hereof, constitute the Board and any new director
                  (other than a director whose initial assumption of office is
                  in connection with an actual or threatened election contest,
                  including but not limited to a consent solicitation, relating
                  to the election of directors of the Company) whose appointment
                  or election by the Board or nomination for election by the
                  Company's stockholders was approved or recommended by a vote
                  of at least a majority of the directors then still in office
                  who either were directors on the date hereof or whose
                  appointment, election or nomination for election was
                  previously so approved or recommended; or

                                    (III) there is consummated a merger,
                  consolidation or reorganization of the Company or any direct
                  or indirect subsidiary of the Company with any other entity
                  ("Transaction"), unless each of the following events occurs in
                  connection with such merger, consolidation or reorganization:

                                       (a) the Persons who are Beneficial Owners
                                           of the Outstanding Common Stock and
                                           the Persons who are Beneficial Owners
                                           of the Outstanding Voting Securities,
                                           immediately before such Transaction,
                                           are, immediately following and after
                                           giving effect to such Transaction (as
                                           a result of the ownership of
                                           securities of the Company immediately
                                           prior to the Transaction, other than
                                           securities of the Company issued in
                                           connection with the Transaction),
                                           Beneficial Owners of more than 50% of
                                           the then-outstanding securities and
                                           the combined voting power of the
                                           then-outstanding voting securities
                                           entitled to vote generally in the
                                           election of directors of the
                                           corporation (or in the election of a
                                           comparable governing body of any
                                           other type of entity) resulting from
                                           such Transaction (including, without
                                           limitation, an entity which as a
                                           result of such Transaction owns the
                                           Company or all or substantially all
                                           of the Company's assets either





                                       12



   13

                                         directly or through one or more
                                         subsidiaries), respectively;

                                  (b)    at least a majority of the
                                         members of the board of
                                         directors of the entity
                                         resulting from the
                                         Transaction were Incumbent
                                         Board Members at the time
                                         of the execution of the
                                         initial agreement, or of
                                         the action of the Board,
                                         providing for the
                                         Transaction; and

                                  (c)    immediately following and after giving
                                         effect to such Transaction, the
                                         stockholder parties to the Amended and
                                         Restated Stockholders Agreement dated
                                         as of June 30, 1997 among the Company
                                         and certain of its stockholders are,
                                         in the aggregate, the Beneficial
                                         Owners of a greater amount of the
                                         then-outstanding securities and the
                                         combined voting power of the
                                         then-outstanding securities entitled
                                         to vote generally in the election of
                                         directors of the corporation (or in
                                         the election of a comparable governing
                                         body of any other type of entity)
                                         resulting from such Transaction
                                         (including, without limitation, an
                                         entity which as a result of such
                                         Transaction owns the Company or all or
                                         substantially all of the Company's
                                         assets either directly or through one
                                         or more subsidiaries), than any other
                                         Person; or

                            (IV) the stockholders of the Company approve a plan
                  of complete liquidation or dissolution of the Company or there
                  is consummated an agreement for the sale, assignment, lease or
                  other disposition of all or substantially all of the Company's
                  assets.

                  (H) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

                  (I) "Company" shall mean Hayes Lemmerz International, Inc.
and, except in determining under Section 15(G) hereof whether or not any Change
in Control of the Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

                  (J) "Date of Termination" shall have the meaning set forth in
Section 7.2 hereof.








                                       13



   14






                  (K) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment, if, as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the Executive's duties with
the Company for a period of six (6) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability, and, within thirty
(30) days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.

                  (L) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.

                  (M) "Excise Tax" shall mean any excise tax imposed under
section 4999 of the Code or any similar state or local tax or any interest or
penalties incurred by Executive with respect to such excise tax.

                  (N) "Executive" shall mean the individual named in the first
paragraph of this Agreement.

                  (O) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) after any Change in Control and during the Term, or
prior to a Change in Control under the circumstances described in clauses (ii)
and (iii) of the second sentence of Section 6.1 hereof (treating all references
in paragraphs (I) through (VI) below to a "Change in Control" as references to a
"Potential Change in Control"), of any one of the following acts by the Company,
or failures by the Company to act, unless, in the case of any act or failure to
act described in paragraph (I), (IV), (V) or (VI) below, such act or failure to
act is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:

                                    (I) the assignment to the Executive of any
                  duties materially inconsistent with the Executive's status as
                  an executive officer of the Company or a material diminution
                  in the nature or status of the Executive's responsibilities
                  from those in effect immediately prior to the Change in
                  Control other than any such material diminution primarily
                  attributable to the fact that the Company may no longer be a
                  public company;

                                    (II) a reduction by the Company in the
                  Executive's annual base salary as in effect on the date hereof
                  or as the same may be increased from time to time;

                                    (III) a reduction in the Executive's
                  normative bonus percentage or any change in the method for
                  applying the normative bonus percentage to determine the
                  Executive's bonus which would materially reduce the amount of
                  the Executive's bonus:




                                       14




   15


                                    (IV) the relocation of the Executive's
                  principal place of employment to a location more than 60 miles
                  from the Executive's principal place of employment immediately
                  prior to the Change in Control or the Company's requiring the
                  Executive to be based anywhere other than such principal place
                  of employment (or permitted relocation thereof) except for
                  required travel on the Company's business;

                                    (V) the failure by the Company to pay to the
                  Executive any portion of the Executive's current compensation,
                  or to pay to the Executive any portion of an installment of
                  deferred compensation under any deferred compensation program
                  of the Company, within seven (7) days of the date such
                  compensation is due;

                                    (VI) the failure by the Company to continue
                  to provide the Executive with benefits which are not
                  materially less favorable in the aggregate than those enjoyed
                  by the Executive under any of the Company's pension, savings,
                  life insurance, medical, health and accident, or disability
                  plans in which the Executive was participating immediately
                  prior to the Change in Control, the taking of any other action
                  by the Company which would directly or indirectly materially
                  reduce any of such benefits or deprive the Executive of any
                  material fringe benefit enjoyed by the Executive at the time
                  of the Change in Control, or the failure by the Company to
                  provide the Executive with the number of paid vacation days to
                  which the Executive is entitled on the basis of years of
                  service with the Company in accordance with the Company's
                  normal vacation policy in effect at the time of the Change in
                  Control; or

                                    (VII) any purported termination of the
                  Executive's employment which is not effected pursuant to a
                  Notice of Termination satisfying the requirements of Section
                  7.1 hereof; for purposes of this Agreement, no such purported
                  termination shall be effective.

                  The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or failure
to act constituting Good Reason hereunder.

                  For purposes of any determination regarding the existence of
Good Reason, any claim by the Executive that Good Reason exists shall be
presumed to be correct unless the Company establishes to the Board by clear and
convincing evidence that Good Reason does not exist.

                  (P) "Gross-Up Payment" shall have the meaning set forth in
Section 6.2 hereof.






                                       15





   16






                  (Q) "Notice of Termination" shall have the meaning set forth
in Section 7.1 hereof.

                  (R) "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) including
a "group" within the meaning of Section 13(d)(3) thereof, except that such term
shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

                  (S) "Potential Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

                                    (I) the Company enters into an agreement,
                  the consummation of which would result in the occurrence of a
                  Change in Control;

                                    (II) the Company or any Person publicly
                  announces an intention to take or to consider taking actions
                  which, if consummated, would constitute a Change in Control;
                  or

                                    (III) the Board adopts a resolution to the
                  effect that, for purposes of this Agreement, a Potential
                  Change in Control has occurred.

                  (T) "Retirement" shall be deemed the reason for the
termination by the Executive of the Executive's employment if such employment is
terminated in accordance with the Company's retirement policy, including early
retirement, generally applicable to its salaried employees.

                  (U) "Severance Payments" shall have the meaning set forth in
Section 6.1 hereof.

                  (V) "Tax Counsel" shall have the meaning set forth in Section
6.2 hereof.

                  (W) "Term" shall mean the period of time described in Section
2 hereof (including any extension, continuation or termination described
therein).

                  (X) "Total Payments" shall mean those payments so described in
Section 6.2 hereof.

                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.

                                 HAYES LEMMERZ INTERNATIONAL, INC.




                                       16



   17





                                By:
                                    --------------------------------------------
                                    Name:
                                    Title:



                                    --------------------------------------------
                                    [EXECUTIVE]

                                    Address:


                                    ----------------------


                                    ----------------------


                                    ----------------------
                                    (Please print carefully)








                                       17

EX-27

 

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