Form Of Stockholders Agreement (1/21/98)

Exhibit 10.7


FORM OF
STOCKHOLDER'S AGREEMENT


This Stockholder's Agreement (this "Agreement") is entered into as of ______________ by and among ACCURIDE CORPORATION, a Delaware corporation (the "Company"), __________________ (the "Purchaser") and HUBCAP ACQUISITION L.L.C. ("Acquisition") (being hereinafter collectively referred to as the "Parties").


RECITALS


Pursuant to the terms of the 1998 Stock Purchase and Option Plan for Employees of Accuride Corporation and Subsidiaries, as the same may be amended from time to time (the "Equity Plan"), the Company is making shares of its common stock ("Common Stock") available for purchase by certain employees and is granting options to purchase Common Stock to certain employees. This Agreement is one of several agreements ("Other Purchasers' Agreements") which have been, or which in the future will be, entered into between the Company and other individuals who are or will be employees of the Company or one of its Subsidiaries (collectively, the "Other Purchasers"). In addition, the Company has entered into agreements (the "Investors' Agreements") with certain institutional investors and other purchasers (collectively, the "Investors") pursuant to which the Investors purchased or will purchase shares of Common Stock. For purposes of this Agreement, "Subsidiary," with respect to any entity, shall mean any corporation (or other entity) in an unbroken chain of entities beginning with such corporation (or entity) if each of the entities, or group of commonly controlled entities, other than the last entity in the unbroken chain, then owns stock (or other equity interest) possessing 50% or more of the total combined voting power of all classes of equity in one of the other entities in such chain; "Affiliate" shall mean, with respect to any Person, a Person directly or indirectly controlling, controlled by, or under common control with, such Person, and with respect to the Company, also any entity designated by the Board of Directors of the Company in which the Company or one of its Affiliates has an interest, and, with respect to Kohlberg Kravis Roberts & Co., L.P. ("KKR"), also any Affiliate of any partner of KKR; "Person" shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature; and "control" shall have the meaning given such term under Rule 405 of the Securities Act of 1933 (the "Securities Act").


Pursuant to the terms of the Equity Plan, the Company has agreed to sell to the Purchaser, and the Purchaser desires to purchase ________ shares of Common Stock (the "Purchase Stock") at a price per share of $5,000.00. The purchase of the Purchase Stock will be made on ______________ (the "Purchase Date") and following the contemplated stock dividend which will result in Acquisition's effective cost per share of Common Stock equaling $5,000.00 (the "Stock Dividend"), unless the Company shall notify the Purchaser that the Purchase Date has been extended, in which case the Purchase Date shall be the date specified in such notice. On the


Purchase Date, the Company also will grant to the Purchaser an option or options (the "Options") to purchase _______ shares of Common Stock at an exercise price of $5,000.00 per share, pursuant to the terms of the Equity Plan and the "Non- Qualified Stock Option Agreement" of even date herewith by and between the Company and the Purchaser. The Options may be granted as Time Options or Performance Options (each as defined in the Non-Qualified Stock Option Agreement). The term "Stock" as used in this Agreement shall include all shares of Purchase Stock of the Company purchased by the Purchaser pursuant to this Agreement and all shares of Common Stock issued to the Purchaser by the Company upon exercise of the Options and of any other stock options held by the Purchaser and any other Common Stock otherwise acquired by the Purchaser at any time when this Agreement is in effect. The term "Options" as used in this Agreement shall include all Options granted to the Purchaser pursuant to this Agreement and any other stock options to purchase Common Stock granted to the Purchaser by the Company and held by the Purchaser at any time when this Agreement is in effect.


AGREEMENT


To implement the foregoing and in consideration of the mutual agreements contained herein, the Parties agree as follows:


1. PURCHASE OF STOCK; ISSUANCE OF OPTIONS.


(a) On the Purchase Date, subject to the Stock Dividend, the Purchaser hereby subscribes for and shall purchase, and the Company will sell to the Purchaser, the Purchase Stock at a purchase price of $5,000.00 per share (the "Initial Price Per Share") subject to the terms and conditions hereinafter set forth and contained in the Equity Plan. The Company shall have no obligation to sell any Purchase Stock to any person who (i) is a resident or citizen of a state or other jurisdiction in which the sale of the Purchase Stock to him would constitute a violation of the securities or "blue sky" laws of such jurisdiction (provided that the Company shall take all reasonable ministerial actions under such laws to avoid any such violation) or (ii) is not an employee of the Company or one of its Subsidiaries on the Purchase Date.


(b) The Purchaser shall pay to the Company on the Purchase Date $_________, in cash or a certified bank check or checks payable to the order of the Company and a note payable to the Company in the principal amount of $________ in consideration of the Purchase Stock; provided, that with the consent of the Company, the Purchaser may deliver another form of payment for the Purchase Stock. On the Purchase Date, in consideration of receipt of the Initial Price Per Share, the Company will deliver to the Purchaser a certificate, registered in the Purchaser's name, for the Purchase Stock.


(c) Upon and as of the Purchase Date, the Company shall issue to the Purchaser Options to purchase ______________ shares of Common Stock subject to the terms and conditions hereinafter set forth and contained in the Equity Plan and the Non-Qualified Stock


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Option Agreement, and the Parties shall execute and deliver to each other copies of the Non-Qualified Stock Option Agreement concurrently with the issuance of the Options.


2. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES.


(a) The Purchaser hereby represents and warrants that he is acquiring the Purchase Stock for investment for his own account and not with a view to, or for resale in connection with, the distribution or other disposition thereof. The Purchaser agrees and acknowledges that he will not, directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of any shares of Stock (any such act sometimes referred to herein as a "Transfer," whether voluntary or involuntary) unless such Transfer complies with the terms and conditions of this Agreement and (i) the Transfer is pursuant to an effective registration statement under the Securities Act of 1933, as amended, or the rules and regulations in effect thereunder (the "Securities Act") or (ii) (A) counsel for the Purchaser (which counsel shall be acceptable to the Company) shall have furnished the Company with an opinion, satisfactory in form and substance to the Company, that no such registration is required because of the availability of an exemption from registration under the Securities Act and (B) if the Purchaser is a citizen or resident of any country other than the United States, or the Purchaser desires to effect any Transfer in any such country, counsel for the Purchaser (which counsel shall be acceptable to the Company) shall have furnished the Company with an opinion or other advice satisfactory in form and substance to the Company to the effect that such Transfer will comply with the securities laws of such jurisdiction. Notwithstanding the foregoing, the Company acknowledges and agrees that any of the following Transfers are deemed to be in compliance with this Agreement and no opinion of counsel is required in connection therewith: (w) a pledge of Purchase Stock to the Company to secure a loan or guaranty made by the Company in connection with the Purchaser's acquisition of Purchase Stock, (x) a Transfer made pursuant to Section 5, 6, 8 or 9 hereof, (y) a Transfer upon the death of the Purchaser to his executors, administrators, testamentary trustees, legatees or beneficiaries (the "Purchaser's Estate") or a Transfer to the executors, administrators, testamentary trustees, legatees or beneficiaries of a person who has become a holder of Stock in accordance with the terms of this Agreement, provided that it is expressly understood that any such transferee shall be bound by the provisions of this Agreement and (z) a Transfer made after the Purchase Date in compliance with the federal securities laws to a trust or custodianship the beneficiaries of which may include only the Purchaser, his spouse or his lineal descendants (which term shall include adoptive as well as biological descendants) (the "Purchaser's Trust") or a Transfer made after the third anniversary of the Purchase Date to such a trust by a person who has become a holder of Stock in accordance with the terms of this Agreement, provided that such Transfer is made expressly subject to this Agreement and that the transferee agrees in writing to be bound by the terms and conditions hereof.


(b) The certificate (or certificates) representing the Stock shall bear the following legend:


"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS


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SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE STOCKHOLDER'S
AGREEMENT DATED AS OF ______________ BY AND AMONG ACCURIDE
CORPORATION (THE "COMPANY"), THE PURCHASER NAMED ON THE FACE HEREOF
AND HUBCAP ACQUISITION L.L.C. (A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY). EXCEPT AS OTHERWISE PROVIDED IN SUCH
AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF (I) THE
COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR
THE HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE
ACT OR THE RULES AND REGULATIONS IN EFFECT THEREUNDER, AND IN
COMPLIANCE WITH APPLICABLE PROVISIONS OF STATE SECURITIES LAWS, AND
(II) IF THE HOLDER IS A CITIZEN OR RESIDENT OF ANY COUNTRY OTHER THAN
THE UNITED STATES, OR THE HOLDER DESIRES TO EFFECT ANY SUCH
TRANSACTION IN ANY SUCH COUNTRY, THE COMPANY HAS BEEN FURNISHED WITH A
SATISFACTORY OPINION OR OTHER ADVICE OF COUNSEL FOR THE HOLDER THAT
SUCH TRANSACTION WILL NOT VIOLATE THE LAWS OF SUCH COUNTRY."


(c) The Purchaser acknowledges that he has been advised that (i) the Stock has not been registered under the Securities Act, (ii) the Stock must be held indefinitely and the Purchaser must continue to bear the economic risk of the investment in the Stock unless it is subsequently registered under the Securities Act or an exemption from registration is available, (iii) it is not anticipated that there will be any public market for the Stock, (iv) an exemption from registration under Rule 144 promulgated under the Securities Act is not currently available with respect to the sales of any securities of the Company, and the Company has made no covenant to make such an exemption available (except as provided in Section 11(b) hereof), (v) when and if shares of Stock may be disposed of without registration in reliance on Rule 144, such disposition can be made only in limited amounts in accordance with the terms and conditions of such Rule, (vi) if the Rule 144 exemption is not available, public sale without registration will require compliance with some other exemption under the Securities Act, (vii) a


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restrictive legend in the form heretofore set forth shall be placed on the certificates representing the Stock, and (viii) a notation shall be made in the appropriate records of the Company indicating that the Stock is subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a stock transfer agent, appropriate stop transfer restrictions will be issued to such transfer agent with respect to the Stock.


(d) If any shares of Stock are to be disposed of in accordance with Rule 144 under the Securities Act or otherwise, the Purchaser shall promptly notify the Company of such intended disposition and shall deliver to the Company at or prior to the time of such disposition such documentation as the Company may reasonably request in connection with such sale, and, in the case of a disposition pursuant to Rule 144, shall deliver to the Company an executed copy of any notice on Form 144 required to be filed with the Securities and Exchange Commission.


(e) The Purchaser agrees that, if any shares of the Common Stock (or securities convertible into or exchangeable for Common Stock) of the Company are offered to the public pursuant to an effective registration statement under the Securities Act, the Purchaser will not effect any public sale or distribution of any shares of Stock not covered by such registration statement within 7 days prior to, or within 180 days after, the effective date of such registration statement, unless otherwise agreed to in writing by the Company.


(f) The Purchaser represents and warrants that (i) he has received and reviewed a Private Placement Memorandum, including all amendments and supplements thereto (the "Private Placement Memorandum") relating to the Stock and the documents referred to therein, certain of which documents set forth the rights, preferences and restrictions relating to the Stock and (ii) he has been given the opportunity to obtain any additional information or documents and to ask questions and receive answers about such documents, the Company and its Subsidiaries and the business and prospects of the Company and its Subsidiaries which he deems necessary to evaluate the merits and risks related to his investment in the Stock and he has relied solely on such information.


(g) The Purchaser further represents and warrants that (i) his financial condition is such that he can afford to bear the economic risk of holding the Stock for an indefinite period of time and has adequate means for providing for his current needs and personal contingencies, (ii) he can afford to suffer a complete loss of his investment in the Stock, (iii) all information which he has provided to the Company concerning himself and his financial position is correct and complete as of the date of this Agreement, (iv) he understands and has taken cognizance of all risk factors related to the purchase of the Stock, including those set forth in the Private Placement Memorandum referred to above, and (v) his knowledge and experience in financial and business matters are such that he is capable of evaluating the merits and risks of his purchase of the Stock as contemplated by this Agreement.


3. RESTRICTION ON TRANSFER.


(a) Except for Transfers permitted by clauses (w), (x), (y), and (z) of Section 2(a) or pursuant to Section 12, the Purchaser agrees that he will not transfer, sell, assign, pledge,


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hypothecate or otherwise dispose of any shares of Stock at any time prior to the fifth anniversary of the Purchase Date. No Transfer of any such shares in violation hereof shall be made or recorded on the books of the Company and any such Transfer shall be void and of no effect.


(b) Any attempt to Transfer any shares of Stock not in compliance with this Agreement shall be null and void and neither the Company nor any transfer agent shall give any effect in the Company's stock records to such attempted Transfer.


4. RIGHT OF FIRST REFUSAL.


(a) If, at any time after the fifth anniversary of the Purchase Date and prior to a Public Offering (as defined below), the Purchaser receives a bona fide offer to purchase any or all of his shares of Stock (an "Offer") from a third party (an "Offeror") which the Purchaser wishes to accept, the Purchaser shall cause such Offer to be reduced to writing and shall notify the Company in writing of his wish to accept such Offer. The Purchaser's notice shall contain an irrevocable offer to sell such shares of Stock to the Company, (in the manner set forth below) at a purchase price equal to the price contained in, and on the same terms and conditions of, such Offer, and shall be accompanied by a true copy of such Offer (which shall identify the Offeror thereof). At any time within 45 days after the date of the receipt by the Company of the Purchaser's notice described above, the Company shall have the right and option to purchase, or to arrange for a third party to purchase, all of the shares of Stock covered by the Offer either (i) at the same price and on the same terms and conditions as the Offer or (ii) if the Offer includes any consideration other than cash, then at the sole option of the Company, at the equivalent all cash price, determined in good faith by the Company's Board of Directors, by delivering a certified bank check or checks in the appropriate amount to the Purchaser at the principal office of the Company against delivery of certificates or other instruments representing the shares of Stock so purchased, appropriately endorsed by the Purchaser. If at the end of such 45 day period, the Company has not tendered the purchase price for such shares in the manner set forth above, the Purchaser may during the succeeding 30 day period sell not less than all of the shares of Stock covered by the Offer to the Offeror at a price and on terms no less favorable to the Purchaser than those contained in the Offer. No sale may be made to any Offeror unless such Offeror agrees in writing with the Company to be bound by the provisions of this Section 4 in connection with any resale by the Offeror. Promptly after any such sale to an Offeror, the Purchaser shall notify the Company of the consummation thereof and shall furnish such evidence of the completion and time of completion of such sale and of the terms thereof as may reasonably be requested by the Company. If, at the end of the 30 day period following the expiration of the 45 day period during which the Company may elect to purchase the Stock, the Purchaser has not completed the sale of such shares of Stock as aforesaid, all the restrictions on sale, transfer and assignment contained in this Agreement shall again be in effect with respect to such shares of Stock.


(b) If, at any time after the fifth anniversary of the Purchase Date and after the first Public Offering, the Purchaser receives an Offer, the provisions of subsection (a) above shall continue to apply but "5 day(s)" shall be substituted for "45 day(s)" and "2 day(s)" shall be substituted for "30 day(s)" in each instance, respectively, where such term occurs therein.


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5. THE PURCHASER'S RESALE OF STOCK TO THE COMPANY AND SURRENDER OF OPTIONS
UPON THE PURCHASER'S DEATH OR DISABILITY.


(a) Except as otherwise provided herein, if on or prior to the later of the first Public Offering and the fifth anniversary of the Purchase Date, (i) (A) the Purchaser is still in the employ of the Company or any Subsidiary of the Company or (B) the Purchaser has retired from the Company or any Subsidiary of the Company at age 65 or over (or such other age as may be approved by the Board of Directors of the Company) after having been employed by the Company or any of its Subsidiaries for at least three years after the Purchase Date (a "Permitted Retirement") and (ii) the Purchaser either dies or suffers a "Permanent Disability" (as defined below) (each, a "Put Event"), then the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be, shall have the right, for six months following the date of death or Permanent Disability, (X) to sell to the Company, and the Company shall be required to purchase, on one occasion, all or any portion of the shares of Stock then held by the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be, at the "Section 5 Repurchase Price" (as determined in accordance with Section 7) and (Y) to require the Company to pay to the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be, an amount equal to the "Option Excess Price" (determined on the basis of the Section 5 Repurchase Price as provided in Section 10) with respect to the termination of all or any portion of the outstanding exercisable Options then held by the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be. The Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be, shall send written notice to the Company of its intention to sell shares of Stock and/or to terminate Options in exchange for the payment referred to in the preceding sentence (the "Redemption Notice"). The completion of the purchase shall take place at the principal office of the Company on the tenth business day after the giving of the Redemption Notice. The Section 5 Repurchase Price and any payment with respect to Options as described above shall be paid by delivery to the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be, of a certified bank check or checks in the appropriate amount payable to the order of the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be, against delivery of certificates or other instruments representing the Stock so purchased and appropriate documents canceling the Options so terminated, appropriately endorsed or executed by the Purchaser, the Purchaser's Estate or the Purchaser's Trust, or his or its duly authorized representative. For purposes of this Agreement, the Purchaser shall be deemed to have suffered a "Permanent Disability" if the Purchaser is unable to engage in the activities required by employment by reason of any medically determined physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as reasonably determined by the Board of Directors of the Company in good faith and in its discretion.


(b) Notwithstanding anything in Section 5(a) to the contrary and subject to Section 13, if there exists and is continuing a default or an event of default on the part of the Company or any Subsidiary of the Company under any loan, guarantee or other agreement under which the Company or any Subsidiary of the Company has borrowed money, or such repurchase would result in a default or an event of default on the part of the Company or any Subsidiary of the


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Company under any such agreement, or if a repurchase would not be permitted under Section 170 of the General Corporation Law of the State of Delaware or would otherwise violate the General Corporation Law of the State of Delaware (each such occurrence being an "Event"), the Company shall not be obligated to repurchase any of the Stock or to make payment of the Option Excess Price in exchange for termination of any Options held by the Purchaser, the Purchaser's Estate ...