EXCEL INDUSTRIES INC, S-3, 1994-02-18

EXCEL INDUSTRIES INC
S-3, 1994-02-18
MOTOR VEHICLE PARTS & ACCESSORIES

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 18, 1994

REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EXCEL INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
INDIANA 35-1551685
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.)
1120 N. MAIN STREET
P.O. BOX 3118
ELKHART, INDIANA 46515-3118
(219) 264-2131
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JAMES J. LOHMAN,
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
EXCEL INDUSTRIES, INC.
1120 N. MAIN STREET
P.O. BOX 3118
ELKHART, INDIANA 46515-3118
(219) 264-2131
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
PHILIP L. MCCOOL, ESQ. JOHN M. RINTAMAKI, ESQ. JON R. LIND, ESQ.
SOMMER & BARNARD, PC FORD MOTOR COMPANY MCDERMOTT, WILL & EMERY
4000 BANK ONE TOWER THE AMERICAN ROAD, 227 WEST MONROE STREET
INDIANAPOLIS, INDIANA DEARBORN, MICHIGAN 48121- CHICAGO, ILLINOIS 60606-
46244-0363 1899 5906
(317) 630-4000 (313) 322-3000 (312) 372-2000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ ]

CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OR
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, No par value...... 2,937,128(1) $18.1875(2) $53,419,015(2) $18,420.35
- ------------------------------------------------------------------------------------------
</TABLE>
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(1) Includes 380,000 shares issuable upon exercise of the Underwriters' over-
allotment option.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 on the basis of
the average of the high and low prices of the Common Shares reported on the
American Stock Exchange on February 15, 1994.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
Dated February 18, 1994
LOGO

2,557,128 SHARES

EXCEL INDUSTRIES, INC.

COMMON SHARES

-----------

The Common Shares offered hereby are being offered by Ford Motor Company and
Ford Motor Company Fund. See "Principal and Selling Shareholders." The
Company will not receive any of the proceeds from the sale of Common Shares
by the Selling Shareholders.

-----------

The Common Shares are listed on the American Stock Exchange under the symbol
EXC. On February 17, 1994, the last reported sale price for the Common Shares
on the American Stock Exchange was $18.25 per share. See "Dividends and
Price Range of Common Shares."

-----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS (1) SHAREHOLDERS (2)
- -------------------------------------------------------
<S> <C> <C> <C>
PER SHARE $ $ $
TOTAL (3) $ $ $
- -------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) The Company and Ford Motor Company have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting."

(2) Before deduction of expenses payable by the Selling Shareholders estimated
at $250,000.

(3) The Company has granted the several Underwriters a 30-day option to
purchase up to an additional 380,000 Common Shares to cover over-
allotments, if any. The Company will receive the net proceeds from the sale
of such Common Shares if they are sold. If all such shares are purchased,
total Price to Public, Underwriting Discounts and Commissions, Proceeds to
Selling Shareholders and Proceeds to Company will be $ ,
$ , $ and $ , respectively.

-----------

The Common Shares are being offered by the several Underwriters named herein
when, as and if received and accepted by them, subject to their right to reject
orders in whole or in part and subject to certain other conditions. It is
expected that the delivery of the shares will be made in New York, New York on
or about , 1994.

-----------

DEAN WITTER REYNOLDS INC.

GOLDMAN, SACHS & CO.

J.P. MORGAN SECURITIES INC.

, 1994
<PAGE>

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE, IN THE OVER-THE-
COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR SINCE THE DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................. 3
The Company........................ 5
Background of Offering............. 5
Use of Proceeds.................... 6
Capitalization..................... 7
Dividends and Price Range of Common
Shares............................ 8
Selected Consolidated Financial
Information....................... 9
Management's Discussion and
Analysis of Results of Operations
and Financial Condition........... 10
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Business.............................................................. 13
Principal and Selling Shareholders.................................... 19
Description of Capital Shares......................................... 21
Underwriting.......................................................... 23
Legal Matters......................................................... 24
Experts............................................................... 24
Available Information................................................. 24
Index to Consolidated Financial Statements............................ F-1
</TABLE>

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

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1992, its Quarterly Reports on Form 10-Q for the quarters ended March 31,
June 30 and September 30, 1993, respectively, Amendment No. 1 to Form 10-Q for
each such quarter and its Current Report on Form 8-K dated February 18, 1994
have been filed by the Company with the Securities and Exchange Commission
("Commission") pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act") and are incorporated herein by reference. All documents filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act after the date of this Prospectus and prior to the termination
of the offering made hereby shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date such documents were
filed. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. The Company
will provide without charge to each person, including any beneficial owner, to
whom a copy of this Prospectus is delivered, upon the written or oral request
of such person, a copy of any and all of the documents incorporated by
reference herein (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference in such documents). Requests for
such copies should be directed to the Secretary, Excel Industries, Inc., 1120
North Main Street, P.O. Box 3118, Elkhart, Indiana 46515-3118, telephone number
(219) 264-2131.

2
<PAGE>

MODULAR AUTOMOTIVE WINDOWS
The Company designs, engineers and manufactures plastic framed modular windows
using PVC injection molding and reaction injection molding. These products are
supplied for use on a wide variety of models including Ford's Taurus/Sable,
Explorer and Escort vehicles, Mazda's MX6, Chrysler's New Yorker and LHS and
certain other vehicles.

CONVENTIONAL AUTO AND HEAVY TRUCK WINDOWS
The Company also produces windows framed with steel, aluminum and rubber.
Including fixed, push out, sliding and ventilator products for light vehicles,
these parts are made for Ford, General Motors, Chrysler and Nissan. Customers
for heavy truck ventilators include Peterbilt, Kenworth, Freightliner,
Navistar, Mack and Volvo GM Heavy Truck Corp.

WINDOW REGULATOR SYSTEMS
The Company is a major supplier of manual and electrical window regulators,
which control the raising and lowering of movable windows. These mechanisms are
offered in a wide variety of designs for front and rear side windows and
tailgate windows.

MASS TRANSIT WINDOWS
The Company is the leading source of window assemblies for intra and intercity
buses in the United States and Canada, providing a wide range of sliding,
transom and fixed sash designs. These windows must meet special DOT standards
for safety and are also designed to ease passenger use and to minimize
maintenance under long, hard service.

RECREATIONAL VEHICLE WINDOWS
The Company makes single-slide, center-slide, T-slide, louvered and stationary
windows for recreational vehicles built by Fleetwood, Winnebago, Holiday
Rambler and others. Framed with extruded aluminum, these windows have
independent sliding screens, removable storm windows and special safety
features.

RV AND MILITARY DOOR SYSTEMS
Besides windows, the Company makes doors for recreational vehicles that are
ruggedly constructed yet provide an automotive look and feel. The Company also
manufactures the ballistic doors for the Hummer tactical military vehicle made
by AM General.

INJECTION MOLDED THERMOPLASTIC PARTS
The Company's Nyloncraft division molds a wide assortment of thermoplastic
parts for automotive, truck, marine and power tool manufacturers. Made from
nylons, polyesters and other engineered plastics, these parts include door
handles and latches, carburetor bodies, heating/air conditioning components,
decorative engine covers and many other products.
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more
detailed information and financial statements, including the notes thereto,
appearing elsewhere in this Prospectus.

THE COMPANY

The Company is the leading independent designer, manufacturer and supplier of
window systems to the combined automobile, light truck and van, bus, heavy
truck and recreational vehicle markets in North America. The Company's window
systems include various types of automotive windshields; rear, vent, quarter,
push out and sliding windows; and window regulator systems, latches, door
frames and related components. The Company also manufactures door systems for
military and recreational vehicles and injection molded thermoplastic products
and other products primarily for sale to the automotive industry. The Company's
products are sold to major North American transportation original equipment
manufacturers ("OEMs"), including Ford, Chrysler, General Motors, AutoAlliance
International, Inc. ("AAI") (a joint venture between Ford and Mazda),
Mitsubishi, Nissan, Fleetwood, Winnebago, Navistar, Paccar (Peterbilt and
Kenworth trucks) and the manufacturers of virtually all of the intra and
intercity buses in the United States and Canada.

The Company's strategy is to continually strive for world class status as a
manufacturer by producing high quality products at competitive prices; focusing
on technically innovative, value-added products; providing comprehensive
product design and engineering services to OEMs, especially in the early stages
of their product planning processes; ensuring reliable, timely delivery of its
products; and pursuing strategic alliances and acquisitions, as appropriate.
The Company has received quality awards from Ford, Chrysler, Nissan and other
OEMs at its key manufacturing plants and has become a long-term preferred
supplier to several key customers. The Company believes that its cost
competitiveness, quality excellence and design and engineering capabilities
obtained in the automotive supply markets enable it to compete effectively in
non-automotive markets as well.

The Company has achieved significant growth by capitalizing on trends in the
automotive industry, including single sourcing and consolidation of suppliers,
which favor technically innovative, high quality, reliable suppliers. The
Company pioneered the development and use of modular, plastic framed windows
employing reaction injection molding ("RIM") which have provided OEMs with
light, aerodynamically designed and easy-to-install modules. The Company
believes it currently produces and sells more RIM windows than any other North
American manufacturer. Through new product development and strategic
acquisitions, the Company's net sales have grown from $92.2 million in 1985 to
$515.7 million in 1993, resulting in a compound annual growth rate of 24% over
such period.

Net sales to Ford, Chrysler and General Motors in 1993 represented
approximately 72%, 11% and 4%, respectively, of the Company's net sales for the
year.

THE OFFERING

<TABLE>
<S> <C>
Common Shares Offered by the Sell- 2,557,128 shares
ing Shareholders..................
Common Shares to be Outstanding af- 10,577,936 (1)(2)
ter the Offering..................
American Stock Exchange Symbol..... EXC
Use of Proceeds.................... The Company will not receive any proceeds
of the sale of Common Shares by the Selling
Shareholders. If the Underwriters' over-
allotment option is exercised, the Company
will use the proceeds from such exercise
for general corporate purposes. See "Use of
Proceeds."
</TABLE>
- --------
(1) Does not include 19,250 Common Shares issuable upon exercise of outstanding
options or 2,270,319 Common Shares (assuming the Underwriters' over-
allotment option is not exercised) issuable upon conversion of certain
convertible subordinated notes. See "Capitalization" and Notes 7 and 12 to
the Company's Consolidated Financial Statements.
(2) Assumes no exercise of the Underwriters' over-allotment option to purchase
380,000 Common Shares.

3
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

INCOME STATEMENT DATA:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1989 1990 1991 1992 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales...................... $277,114 $281,369 $352,268 $426,873 $515,681
Gross profit................... 41,100 36,342 31,210 43,615 51,738
Selling, administrative and
engineering expenses.......... 22,819 23,336 25,205 28,262 30,054
Restructuring charge (1)....... -- -- -- 4,500 --
Income before income taxes and
cumulative effect of changes
in accounting................. 13,100 8,768 273 6,011 20,225
Income before cumulative effect
of changes in accounting...... 7,622 5,208 151 3,577 12,440
Cumulative effect of adoption
of SFAS 106 and 109........... -- -- -- 3,195 --
Net income..................... 7,622 5,208 151 382 12,440
Net income (loss) per share:
Before cumulative effect of
changes in accounting:
Primary.................... 1.18 .80 .02 .47 1.23
Fully diluted.............. 1.18 .80 .02 .47 1.15
Cumulative effect of adoption
of SFAS 106 and 109:
Primary.................... -- -- -- (.42) --
Fully diluted.............. -- -- -- (.42) --
Net income:
Primary.................... 1.18 .80 .02 .05 1.23
Fully diluted.............. 1.18 .80 .02 .05 1.15
Cash dividends per share....... .40 .40 .24 .24 .30
Average shares outstanding..... 6,439 6,459 6,488 7,553 10,122
</TABLE>

BALANCE SHEET DATA:
<TABLE>
<CAPTION>
DECEMBER 31,
1993
------------
<S> <C>
Working capital.................................................. $ 94,761
Total assets..................................................... 229,316
Short-term debt (includes current portion of long-term debt)..... 1,553
Long-term debt (less current portion)............................ 35,094
Shareholders' equity............................................. 106,436
Book value per share............................................. 10.07
Long-term debt to total capitalization (2)....................... 25%
</TABLE>
- --------
(1) In 1992, the Company provided a reserve of $4,500 for restructuring costs.
The charge was equivalent to $2,900, or 34 cents per share, after taxes.
This charge represented estimated costs to downsize its Aurora, Ontario,
Canada plant and relocate production of certain light truck and van windows
to other manufacturing plants of the Company. See Note 4 to the Company's
Consolidated Financial Statements.
(2) Total capitalization consists of long-term debt (less current portion) and
shareholders' equity.

4
<PAGE>

THE COMPANY

The Company is the leading independent designer, manufacturer and supplier of
window systems to the combined automobile, light truck and van, bus, heavy
truck and recreational vehicle markets in North America. The Company's window
systems include various types of automotive windshields; rear, vent, quarter,
push out and sliding windows; and window regulator systems, latches, door
frames and related components. The Company also manufactures door systems for
military and recreational vehicles and injection molded thermoplastic products
and other products primarily for sale to the automotive industry. The Company's
products are sold to major North American transportation OEMs, including Ford,
Chrysler, General Motors, AAI, Mitsubishi, Nissan, Fleetwood, Winnebago,
Navistar, Paccar (Peterbilt and Kenworth trucks) and the manufacturers of
virtually all of the intra and intercity buses in the United States and Canada.

The Company has achieved significant growth by capitalizing on trends in the
automotive industry, including single sourcing and consolidation of suppliers,
which favor technically innovative, high quality, reliable suppliers. The
Company pioneered the development and use of RIM windows which have provided
OEMs with light, aerodynamically designed and easy-to-install modules. RIM
windows were first introduced by the Company in 1985 and accounted for $179
million of the Company's net sales in 1993. The Company believes it currently
produces and sells more RIM windows than any other North American manufacturer.
Through new product development and strategic acquisitions, the Company's net
sales have grown from $92.2 million in 1985 to $515.7 million in 1993,
resulting in a compound annual growth rate of 24% over such period. In 1993,
the average dollar content of the Company's products per car and light truck
built in North America was approximately $35, nine times higher than in 1985.

Net sales to Ford, Chrysler and General Motors in 1993 represented
approximately 72%, 11% and 4%, respectively, of the Company's net sales for the
year.

The Company was incorporated under the laws of the State of Indiana in 1935
as the successor to a Delaware corporation formed in 1928. The principal
executive offices of the Company are located at 1120 North Main Street,
Elkhart, Indiana, telephone (219) 264-2131. All references to the "Company"
herein refer to Excel Industries, Inc. and its subsidiaries unless otherwise
indicated by the context.

BACKGROUND OF OFFERING

In 1986, Ford Motor Company ("Ford") purchased approximately 40%
(subsequently diluted to approximately 24% as a result of the Company's public
offerings of Common Shares in 1992 and 1993) of the Common Shares of the
Company (the "Ford Shares"), paid the Company $19.3 million in cash, sold its
modular window manufacturing subsidiary to the Company and entered into a
purchase and supply agreement (the "Supply Agreement") with the Company.
Pursuant to the Supply Agreement, Ford agreed to purchase from the Company at
least 70% of the requirements by dollar volume of Ford and Ford Motor Company
of Canada, Limited ("Ford Canada") for modular framed glass parts using RIM and
polyvinyl chloride ("PVC") technology starting with the 1990 model year and
extending through the 1994 model year (the agreement was subsequently extended
through the 1998 model year after which it is currently scheduled to expire).
See "Business--Business Strategy--Strategic Alliances." The combined
transaction provided Ford with access to the new technologies used in the
Company's products and, in turn, provided the Company with a reliable market
for its automotive framed glass products and a growth opportunity for the RIM
modular window technology which the Company had developed.

5
<PAGE>

Ford's equity relationship with the Company was governed by the terms and
provisions of the Stock Purchase Agreement between Ford and the Company dated
August 19, 1986 (the "Ford Stock Purchase Agreement") and a Shareholders
Agreement among Ford, the Company and certain officers and directors of the
Company dated October 7, 1986 (the "Shareholders Agreement"), both of which
will terminate (except for certain indemnification provisions in the Ford Stock
Purchase Agreement) effective as of the closing of the sale of the Common
Shares offered hereby. The Supply Agreement is independent of the other two
agreements and will continue in effect until it expires in accordance with its
terms.

Under the Ford Stock Purchase Agreement and the Shareholders Agreement: (i)
Ford was granted certain rights to purchase additional Common Shares from the
Company in the event of a new issuance of Common Shares by the Company or in
the event a third party acquired an amount of outstanding Common Shares greater
than the amount owned by Ford; (ii) Ford was granted certain registration
rights with respect to the Ford Shares; (iii) the parties to the Shareholders
Agreement agreed to vote their Common Shares for the slate of directors
proposed by the Board of Directors of the Company so long as at least two of
the nominees were proposed by Ford and for approval of certain major corporate
transactions, such as a merger, provided the Board of Directors had previously
approved the transaction; (iv) the By-Laws of the Company were amended to
contain supermajority voting requirements for the approval of certain major
corporate transactions; and (v) Ford was prohibited, with certain exceptions,
from owning in excess of 40.16% of the Common Shares issued and outstanding.
The two Ford designees presently serving as directors of the Company in
accordance with the foregoing provisions will resign effective as of the
closing of the sale of the Common Shares offered hereby.

On January 11, 1994, Ford donated 1,047,201 of the Ford Shares to the Ford
Motor Company Fund, a charitable organization incorporated under the laws of
the state of Michigan as a nonprofit corporation (the "Ford Fund"). In
connection therewith, Ford assigned certain of its rights under the Ford Stock
Purchase Agreement and the Shareholders Agreement with respect to the donated
shares to the Ford Fund, and the Ford Fund assumed certain of Ford's
obligations under such agreements with respect to the donated shares. On
January 13, 1994, Ford and the Ford Fund determined to sell the Ford Shares and
notified the Company of the exercise of their registration rights with regard
thereto. The Company has been advised by Ford that its disposition of the Ford
Shares constitutes no more than a redeployment of Ford's resources. Neither the
Company nor Ford believes that the sale of the Ford Shares will affect their
customer-supplier relationship.

USE OF PROCEEDS

The Company will not receive any proceeds of the Offering if the over-
allotment option granted to the Underwriters is not exercised. If the over-
allotment option is exercised in full at an assumed public offering price equal
to the last reported sale price of the Common Shares on the American Stock
Exchange on February 17, 1994, the net proceeds to the Company are estimated to
be $6,573,000. The Company intends to use such net proceeds for general
corporate purposes.

6
<PAGE>

CAPITALIZATION

The following table sets forth the short-term indebtedness and capitalization
of the Company at December 31, 1993. The Company will not receive any proceeds
from the sale of the Common Shares offered hereby unless the Underwriter's
over-allotment option is exercised.

<TABLE>
<CAPTION>
DECEMBER 31,
1993
------------
(AMOUNTS IN
THOUSANDS)
<S> <C> <C>
Short-term debt:
Line of credit............................................... $ --
Current portion of long-term debt............................ 1,553
--------
Total short-term debt.................................... $ 1,553
========
Long-term debt:
10% Convertible Subordinated Notes (1)....................... $ 30,000
Industrial revenue bonds..................................... 4,119
Capital lease obligations.................................... 975
--------
Total long-term debt (less current portion).............. 35,094
Shareholders' equity:
Preferred shares--no par value:
1,000,000 shares authorized, none issued................... --
Common shares--no par value:
20,000,000 shares authorized, 10,574,550 issued............ 87,537
Retained earnings............................................ 19,615
Unrecognized pension actuarial losses, net of tax............ (716)
--------
Total shareholders' equity............................... 106,436
--------
Total capitalization (2)................................. $141,530
========
</TABLE>
- --------
(1) In January 1990, the Company issued and sold $30 million of 10% Convertible
Subordinated Notes due December 1, 2000 (the "Convertible Notes"). The
principal balance of the Convertible Notes may be converted, at the option
of the holders, into 2,270,319 Common Shares at a price of $13.214 per
share.
(2) Total capitalization consists of long-term debt (less current portion) and
shareholders' equity.

7
<PAGE>

DIVIDENDS AND PRICE RANGE OF COMMON SHARES

The Common Shares are traded on the American Stock Exchange under the symbol
EXC. The following table sets forth for the fiscal periods indicated the high
and low sale prices of the Common Shares, as reported by the American Stock
Exchange, and dividends declared per share.

<TABLE>
<CAPTION>
SHARE PRICES DIVIDENDS
--------------- DECLARED
HIGH LOW PER SHARE
------- ------- ---------
<S> <C> <C> <C>
Fiscal Year Ended December 31, 1992:
1st Quarter.................................... $12.875 $ 7.250 $.06
2nd Quarter.................................... 12.875 10.750 .06
3rd Quarter.................................... 14.750 12.125 .06
4th Quarter.................................... 17.750 10.750 .06
Fiscal Year Ended December 31, 1993:
1st Quarter.................................... 18.250 13.875 .06
2nd Quarter.................................... 19.625 15.500 .08
3rd Quarter.................................... 21.000 16.375 .08
4th Quarter.................................... 19.875 15.750 .08
Fiscal Year Ended December 31, 1994:
1st Quarter (through February 17, 1994)........ 19.250 16.250 .08
</TABLE>

On February 17, 1994, the last reported sale price for Common Shares on the
American Stock Exchange was $18.25 per share. As of February 15, 1994, there
were 502 holders of record of the Common Shares.

The Company has paid cash dividends every quarter since becoming a public
company in April 1984. The Company intends to continue to pay quarterly cash
dividends on its Common Shares, but the payment of dividends and the amount and
timing of such dividends will depend upon the Company's earnings, capital
requirements, financial condition and other factors deemed relevant by the
Company's Board of Directors.

8
<PAGE>

SELECTED CONSOLIDATED FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following table presents selected consolidated financial data of the
Company as of and for the five fiscal years ended December 31, 1993. The
selected consolidated financial data have been derived from audited
consolidated financial statements of the Company. Such selected consolidated
financial data should be read in conjunction with "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and the Consolidated
Financial Statements of the Company and the notes thereto included elsewhere
herein. The comparability of the results for the periods presented is
significantly affected by certain events, as described in "Management's
Discussion and Analysis of Results of Operations and Financial Condition--
General."

<TABLE>
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1989 1990 1991 1992 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales.................. $277,114 $281,369 $352,268 $426,873 $515,681
Cost of goods sold......... 236,014 245,027 321,058 383,258 463,943
Gross profit............... 41,100 36,342 31,210 43,615 51,738
Selling, administrative and
engineering expenses...... 22,819 23,336 25,205 28,262 30,054
Restructuring charge (1)... -- -- -- 4,500 --
Other income (expense),
net....................... 289 1,208 (216) 713 2,015
Interest expense........... 5,470 5,446 5,516 5,555 3,474
Income before income taxes
and cumulative effect of
changes in accounting..... 13,100 8,768 273 6,011 20,225
Income tax provision....... 5,478 3,560 122 2,434 7,785
Income before cumulative
effect of changes in
accounting................ 7,622 5,208 151 3,577 12,440
Cumulative effect of adop-
tion of SFAS 106 and 109.. -- -- -- 3,195 --
Net income................. 7,622 5,208 151 382 12,440
Net income (loss) per
share:
Before cumulative effect
of changes in
accounting:
Primary................ 1.18 .80 .02 .47 1.23
Fully diluted.......... 1.18 .80 .02 .47 1.15
Cumulative effect of
adoption of SFAS 106 and
109:
Primary................ -- -- -- (.42) --
Fully diluted.......... -- -- -- (.42)
Net income:
Primary................ 1.18 .80 .02 .05 1.23
Fully diluted.......... 1.18 .80 .02 .05 1.15
Cash dividends per share... .40 .40 .24 .24 .30
Average shares outstanding. 6,439 6,459 6,488 7,553 10,122
BALANCE SHEET DATA:
<CAPTION>
DECEMBER 31,
------------------------------------------------
1989 1990 1991 1992 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Working capital............ $ 43,753 $ 44,203 $ 42,517 $ 60,331 94,761
Property, plant and equip-
ment...................... 40,886 50,305 48,445 42,064 49,746
Total assets............... 125,885 155,724 150,645 182,096 229,316
Short-term debt (includes
current portion of
long-term debt)........... 3,607 4,247 4,025 1,561 1,553
Long-term debt (less cur-
rent portion)............. 41,196 50,728 46,743 34,592 35,094
Shareholders' equity....... 46,552 49,326 48,181 67,030 106,436
Book value per share....... 7.22 7.63 7.41 7.83 10.07
Long-term debt to total
capitalization............ 47% 51% 49% 34% 25%
</TABLE>
- --------
(1) In 1992, the Company provided a reserve of $4,500 for restructuring costs.
See Note 4 to the Company's Consolidated Financial Statements.

9
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

GENERAL

The Company was founded in 1928 and became a public company in April 1984.
Since 1984, the Company has expanded sales internally and through several
strategic acquisitions designed to complement the Company's businesses. In
January 1986, the Company acquired Irvin Industries Inc.'s wing ventilator
window business operated in Jacksonville, Florida. Later in 1986, the Company
consummated a private placement of Common Shares to Ford in exchange for cash,
a long-term supply contract and a Ford subsidiary engaged in the manufacture
and sale of modular window systems. See "Background of Offering." In 1988, the
Company acquired Nyloncraft, Inc. which manufactures injection molded
thermoplastic products primarily for the automotive industry. In 1990, the
Company acquired the window regulator business operated by Hoover Universal,
Inc., a subsidiary of Johnson Controls, Inc., which the Company now operates
under the name "Excel Systems." The comparability of the Company's results on a
period-to-period basis is significantly affected by such acquisitions.

RESULTS OF OPERATIONS

1993 Compared to 1992

Sales for the year ended December 31, 1993 totaled a record $515.7 million,
an increase of $88.8 million, or 21%, over the preceding year. This increase in
sales resulted from generally more favorable economic conditions in North
America as total light vehicle production increased 12% and light vehicle
production of Ford in North America increased 15%. Specifically, sales of new
programs, including Ford/Nissan mini-vans, Ford F-Series and Ranger trucks,
Chrysler LH sedans and Dodge trucks, helped account for improved sales volume.

Gross profit totaled $51.7 million, or 10.0% of sales, as compared with $43.6
million, or 10.2% of sales, for the prior year. Gross profit in dollars
improved with the improved level of sales. Gross profit as a percent of sales
declined due to a change in product mix and start-up costs related to new
programs.

Selling, administrative and engineering expenses totaled $30.1 million for
1993, an increase of 6%, or $1.8 million, from 1992. The increase reflected,
among other items, an increase in engineering personnel costs, amounts for
outside consultants and an increase in the provision for incentive
compensation. As a percent of sales, selling, administrative and engineering
expenses declined to 5.8% in 1993 as compared to 6.6% in 1992.

Interest costs of $3.5 million for 1993 compared to the $5.6 million incurred
in 1992. The decline in interest expense reflected the reduction in interest
and the prepayment penalty incurred in 1992 related to the Senior Notes which
were retired in 1992.

Other income in 1993 totaled $2.0 million, an increase of $1.3 million from
1992. Other income in 1993 included $1.9 million of interest income arising
from the investment of proceeds of the Company's Common Share offerings in
March 1993 and June 1992.

The income tax provision was 38.5% of pre-tax income in 1993, down from 40.5%
in the preceding year. The 1993 percentage reflected the impact of certain tax
credits and lower effective state tax rates.

In 1992, the Company provided a reserve of $4.5 million for restructuring
costs. This charge represented estimated costs to downsize its Aurora, Ontario,
Canada plant and relocate production of certain light truck and van windows to
other manufacturing plants of the Company. During 1993, a total of $1.0 million
in costs were incurred to relocate a portion of the production. The remaining
production is expected to be relocated during 1994. The remaining reserve will
be used to cover the cost of severance, the relocation of production and
equipment writedowns expected in the future.

10
<PAGE>

1992 Compared to 1991

Sales for the year ended December 31, 1992 totaled $426.9 million, an
increase of $74.6 million, or 21%, over the preceding year. This increase in
sales resulted from generally more favorable economic conditions in North
America as total light vehicle production increased 9% and light vehicle
production of Ford in North America increased 16%. Specifically, sales of new
programs, including Ford/Nissan mini-van and Ford Econoline full-size van, and
increased production of Ford Taurus/Sable sedans helped account for improved
sales volume.

Gross profit totaled $43.6 million, or 10.2% of sales, as compared with $31.2
million, or 8.9% of sales, for the prior year. The improved level of
profitability, both in dollars and as a percent of sales, resulted from higher
sales, better utilization of facilities and continued implementation of cost
reduction programs.

Selling, administrative and engineering expenses totaled $28.3 million for
1992, an increase of 12%, or $3.1 million, from 1991. The increase reflected,
among other items, a provision for incentive compensation of $1.4 million. As a
percent of sales, selling, administrative and engineering expenses declined to
6.6% in 1992 as compared to 7.2% in 1991.

Interest costs of $5.6 million for 1992 were comparable to the $5.5 million
incurred in 1991. The Company completed a public offering of Common Shares in
June 1992, raising nearly $21 million, a portion of which was used for the
prepayment of its 11.25% Guaranteed Senior Notes. Prepayment of the notes
required a premium of $1.3 million, which premium was charged to interest
expense and offset, in part, reductions in interest resulting from the decline
in the overall levels of borrowings.

Other income increased $0.9 million in 1992 due to income on short-term cash
investments resulting, in part, from proceeds of the Company's Common Share
offering in June 1992.

In the fourth quarter of 1992, a reserve of $4.5 million was recorded for
restructuring costs. This charge represents estimated costs to downsize the
Company's Ontario, Canada facility and relocate production of certain light and
heavy truck windows to other manufacturing plants of the Company.

The income tax provision was 40.5% of pre-tax income in 1992, down from 44.7%
in the preceding year. The 1991 percentage was unusually high due to losses for
which no tax benefit was available.

The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
109, "Accounting for Income Taxes," effective January 1, 1992. This standard
requires the recognition of future tax benefits attributable to temporary
differences between the financial reporting basis and tax basis of assets and
liabilities to the extent that realization of such benefits is more likely than
not.

The Company has recognized the future tax benefits of postretirement benefit
obligations, the restructuring reserve and other recorded obligations and tax
loss carryforwards since management has determined, based on the Company's
history of prior operating earnings and future expectations, that operating
income of the Company will more than likely be sufficient to fully offset these
expenses when deductible for tax purposes.

In 1992, the Company recorded $3.2 million as the cumulative effect of the
adoption of SFAS No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," and SFAS No. 109. The Company previously accounted for
its postretirement benefit costs other than pensions on a pay-as-you-go basis.
The ongoing annual costs resulting from the adoption of SFAS No. 106 will
approximate $1.3 million.

LIQUIDITY AND CAPITAL RESOURCES

Working capital totaled $94.8 million as of December 31, 1993, and the
current ratio was 2.40 to 1. Cash and marketable securities totaled $46.6
million as of December 31, 1993.

In 1993, cash flow from operations totaled $10.2 million, and a public
offering of Common Shares in March 1993 raised an additional $30.3 million.
Cash expenditures for capital equipment amounted to $18.1

11
<PAGE>

million, and dividends totaled $3.2 million. In addition, payments of long-term
debt totaled $2.0 million. Overall, cash and marketable securities increased
$19.0 million in 1993.

Long-term debt totaled $35.1 million as of December 31, 1993, or 25% of total
capitalization. Included in this amount is $30 million of Convertible Notes
issued in January 1990 to affiliates of CIGNA Corporation and Textron, Inc. The
principal balance of each Convertible Note is convertible, at the option of the
holder, into Common Shares at a current price of $13.214 per share.

Capital expenditures for 1994 are budgeted at $17.9 million. The Company's
cash balances, operating cash flows and short-term lines of credit are expected
to be adequate for anticipated operating requirements in 1994.

The Company has entered into its second consecutive multi-year supply
agreement with Ford (the "1994 Supply Agreement") which requires the absorption
of the effects of inflation and requires specified price reductions or
productivity offsets to price reductions. The Company believes that this type
of agreement is typical in the automotive supply business, and the Company's
ability to maintain gross margins at or near their present levels will be
dependent on its ability to substantially offset the effects of this and other
such agreements through productivity improvements, cost reduction programs and
implementation of value analysis/value engineering programs, which reduce part
weight and system costs to the customer.

A chemical cleaning compound, trichloroethylene ("TCE"), has been found in
the soil and groundwater on the Company's property in Elkhart, Indiana, and, in
1981, TCE was found in a well field of the City of Elkhart in close proximity
to the Company's facility. The Company has been named as one of nine
potentially responsible parties ("PRPs") in the contamination of this site. The
United States Environmental Protection Agency ("EPA") and the Indiana
Department of Environmental Management ("IDEM") have conducted a preliminary
investigation and evaluation of the site and have undertaken temporary remedial
action in the nature of air-stripping towers. In early 1992, the EPA issued a
Unilateral Order under Section 106 of the Comprehensive Environmental Response,
Compensation and Liability Act which required the Company and other PRPs to
undertake remedial work. The Company and the other PRPs have reached an
agreement regarding the funding of groundwater monitoring and the operation of
the air-strippers as required by the Unilateral Order. The Company was required
to install and operate a soil vapor extraction system to remove TCE from the
Company's property. As of February 1, 1994, the Company has installed and is
operating the equipment pursuant to the Unilateral Order. In addition, the EPA
and IDEM have asserted a claim for reimbursement of their investigatory costs
and the costs of installing and operating the air-strippers on the municipal
well field (the "EPA Costs"). On February 22, 1993, the United States filed a
lawsuit in the United States District Court for the Northern District of
Indiana against eight of the PRPs, including the Company. On July 20, 1993,
IDEM joined in the lawsuit. The lawsuit seeks recovery of the costs of
enforcement, prejudgment interest and an amount in excess of $6.8 million,
which represents costs incurred to date by the EPA and IDEM, and a declaration
that the eight defendant PRPs are liable for any future costs incurred by the
EPA and IDEM in connection with the site.

The Company does not believe the annual cost to the Company of monitoring
groundwater and operating the soil vapor extraction system and the air-
strippers will be material. Each of the PRPs, including the Company, is jointly
and severally liable for the entire amount of the EPA Costs. Certain PRPs,
including the Company, are currently attempting to negotiate an agreed upon
allocation of such liability. The Company believes that adequate provisions
have been recorded for its costs and its anticipated share of EPA Costs and
that its cash on hand, unused lines of credit or cash from operations are
sufficient to fund any required expenditures.

The EPA has also named the Company as a PRP for costs at three other disposal
sites. It has also asked the Company for information about contamination at
other sites. The Company believes it either has no liability as a responsible
party or that adequate provisions have been recorded for any costs to be
incurred.

INFLATION

The impact of inflation on operating results for the years 1993, 1992 and
1991 was not significant. Raw material costs during these periods have
increased; however, use of LIFO inventory methods by the Company has minimized
any impact from inflation. The majority of the Company's property, plant and
equipment is of recent purchase, and depreciation charges are based on
historical cost.

12
<PAGE>

BUSINESS

GENERAL

The Company is the leading independent designer, manufacturer and supplier of
window systems to the combined automobile, light truck and van, bus, heavy
truck and recreational vehicle markets in North America. The Company's window
systems include various types of automotive windshields; rear, vent, quarter,
push out and sliding windows; and window regulator systems, latches, door
frames and related components. The Company also manufactures door systems for
military and recreational vehicles and injection molded thermoplastic products
and other products primarily for sale to the automotive industry. The Company's
products are sold to major North American transportation OEMs, including Ford,
Chrysler, General Motors, AAI, Mitsubishi, Nissan, Fleetwood, Winnebago,
Navistar, Paccar (Peterbilt and Kenworth trucks) and the manufacturers of
virtually all of the intra and intercity buses in the United States and Canada.

BUSINESS STRATEGY

The Company's business objective is to expand profitably its position as the
leading independent supplier of window systems to the combined automotive,
light truck and van, bus, heavy truck and recreational vehicle markets in North
America. It also intends to broaden its product offerings to these markets, as
well as expand its capabilities to complementary markets. Continued focus on
achieving recognition as a world class manufacturer is a key component of this
strategy. The Company continually strives for world class status through
technical innovation, quality excellence, cost competitiveness and strategic
alliances and acquisitions.

Technical Innovation. The Company's most significant innovative achievement
has been the development of RIM modular windows in the mid-1980s. This value-
added product resulted from a long internal development effort and accounted
for 35% of net sales in 1993. In recent years, as automotive OEMs increasingly
shifted design, innovation, quality and product improvement responsibility to
their suppliers, the Company increased its research, engineering and
development expenditures (from $2.7 million in 1989 to $7.9 million in 1993),
including the addition of an advanced design group and Company-wide computer-
aided design capability. The Company has also added more sophisticated program
management and complex manufacturing information systems. The Company's
capabilities now include prototype and product development, specification
testing and manufacturing engineering assistance. This has resulted in
increased opportunities for the Company to participate earlier in the product
planning process and to add value by furnishing engineering and design services
and providing a broader range of parts required for vehicle assembly.

Quality Excellence. The Company emphasizes a continuous improvement
philosophy to its employees on all facets of operations including product
quality. As a result of its commitment to quality, the Company has achieved Q1
and Pentastar quality ratings at its key manufacturing plants from Ford and
Chrysler, respectively, and has received quality awards from Fleetwood (a
recreational vehicle OEM), Nissan and other OEMs. At the corporate technical
center, engineers examine the Company's and its competitors' products to
evaluate alternative designs, suggest marketing opportunities and solve
potential production problems, all of which serve to improve and maintain the
Company's stringent quality standards.

Competitive Cost. The Company strives to achieve a competitive cost to its
customers through its emphasis on quality excellence and its involvement in the
early stages of product development. The Company is a highly reliable and
timely supplier able to meet its customers' demanding delivery requirements,
while constantly focusing on reducing OEM inventory levels.

Strategic Alliances. In 1986, Ford purchased 40% (which, as a result of the
Company's public offerings in 1992 and 1993, has been diluted to 24%) of the
Common Shares of the Company, paid the Company $19.3 million in cash, sold its
modular window manufacturing subsidiary to the Company and entered into the
Supply Agreement with the Company. Pursuant to the Supply Agreement, Ford
agreed to purchase from the Company at least 70% of the requirements by dollar
volume of Ford and Ford Canada for modular

13
<PAGE>

framed glass parts using RIM and PVC technology, commencing with the 1990 model
year. Ford's purchase obligations are contingent upon the Company being
competitive as to technology, quality, service, price and delivery. The Supply
Agreement, which is currently scheduled to expire at the end of the 1998 model
year, has been complemented by the 1994 Supply Agreement, which extends through
the 1998 calendar year and which provides for Ford to purchase 100% of its
requirements for those parts currently supplied by the Company (including parts
other than modular windows), subject to specified annual price reductions.
Since 1990, the Company has and is continuing to supply at least 70% of Ford's
requirements for modular framed glass, which have predominately been modular
windows using RIM technology. The Company works closely with Ford during the
development and production by Ford of new products utilizing parts supplied by
the Company, and net sales to Ford have increased from $26.7 million in 1985 to
$373.1 million in 1993.

The Company also benefits from an exclusive purchase and supply agreement
with H.S. Die & Engineering of Grand Rapids, Michigan. H.S. Die supplies the
molds (i.e., tooling) to the Company necessary to manufacture modular windows.
Working closely with OEMs and H.S. Die, the Company is able to move rapidly
from design to finished tooling for modular windows. As a result of this
alliance, preproduction lead-times on new programs have been decreased by more
than a year, which was demonstrated in Ford's development of the recently
introduced Mustang model.

Another strategic alliance links the Company with Schade KG, a modular and
conventional window and door systems supplier located in Plettenberg, Germany.
Pursuant to a Reciprocal Technology License and Cooperative Venture Agreement,
both companies have cooperated in developing new business proposals. Schade
helped the Company develop technical capabilities in PVC modular windows. The
Company produces PVC windows for the Chrysler New Yorker at its Kentucky
manufacturing facility and has been sourced to supply PVC windows for certain
1995 Mitsubishi and Nissan models. In addition, technology acquired from the
Company's alliance with Schade has enabled the Company to supply door frames
for General Motors's 1994 Saturn Coupe.

In 1992, the Company formed a joint venture with Pollone S.A., a Brazilian
automotive parts supplier, for the purpose of supplying encapsulated window
assemblies to South American automakers. Located near Sao Paulo, Brazil, the
joint venture, Pollexco, is owned 49% by the Company and 51% by Pollone, S.A.
Production of products for Autolatina, a joint venture between Ford and
Volkswagen, began in late 1993.

Strategic Acquisitions. In acquisitions, the Company seeks processes,
products or markets which complement the Company's existing businesses. The
Company added high volume conventional window capacity to its product line as a
result of a 1986 acquisition from Irvin Industries. In the mid-1980s, Ford--
initially the Company's only RIM window customer--started its own subsidiary to
manufacture RIM windows in Fulton, Kentucky. The transactions between Ford and
the Company in 1986 included the sale to the Company of Ford's RIM window
subsidiary and manufacturing facility. In 1988, the Company acquired
Nyloncraft, Inc., which manufactures injection molded thermoplastic products
primarily for the automotive industry. Nyloncraft also supplies plastic
components to six of the Company's manufacturing facilities. In 1990, the
Company acquired the window regulator business operated by Hoover Universal,
Inc., a subsidiary of Johnson Controls, Inc. The Company's technical
capabilities, in particular the corporate technical center, have enabled it to
redesign several products, reduce operating expenses and improve overall
operations in the newly-acquired window regulator business.

MARKET DESCRIPTION AND INDUSTRY FACTORS

Automotive Market

General. The overall market for new cars and light trucks in North America is
large and cyclical, with average annual growth of 1% to 2%. However,
considerable growth or decline routinely occurs within specific product
segments or model lines. In particular, light truck sales have grown rapidly
over the last 15 years as compared to the demand for cars. This growth in light
truck demand primarily reflects the increased

14
<PAGE>

use of mini-vans and sport utility vehicles. The Company believes it will
continue to be well-positioned as a supplier of window systems to OEMs in this
higher growth market segment.

Changing Supplier Policies. Several developments have substantially altered
the competitive environment for automotive suppliers, including consolidation
among suppliers and increased outsourcing of key components by OEMs. During the
1980s, Ford, Chrysler and General Motors began to reduce their supplier base,
focusing on long-term sole-source contracts with more capable suppliers.
Increasingly, the criteria for selection include not only cost, quality and
responsiveness, but also certain full-service capabilities including design,
engineering and project management support. OEMs now have rigorous programs for
evaluating and rating suppliers which encompass quality, cost control,
reliability of delivery, new technology implementation, engineering competence,
continuous improvement programs and overall management. Under these programs,
each facility operated by a supplier is evaluated independently. The suppliers
who obtain superior ratings are favorably considered for new business; those
who do not may continue their existing contracts, but normally do not receive
additional business. As a result, these new supplier policies have sharply
reduced the number of component suppliers. In the 1990s, OEM supply agreements
have incorporated productivity provisions which specify annual price reductions
which may be offset by product improvements, manufacturing improvements and/or
various other mutually agreed upon methods.

Transplants. Over the last ten years, Japanese manufactured vehicles have
gained an increasing share of the North American market. In addition, a growing
percentage of such vehicles are being made at North American operations of
Japanese manufacturers ("Transplants"). Transplants receive component parts
from a variety of sources including suppliers in Japan, Japanese suppliers who
establish U.S. facilities and existing U.S. component suppliers. Because of the
current market share of the Transplants, supplying them is an attractive
opportunity. To date, the Company has been selected to supply window systems
for certain Nissan, Mazda and Mitsubishi models manufactured in North America.
The Company has also been selected to supply fixed vent windows for the new BMW
model scheduled to be built in South Carolina in 1995.

Non-Automotive Market

The market for heavy trucks in North America is cyclical, and the Company
believes it is well positioned to take advantage of supply opportunities which
arise as aging fleets are replaced with new models. The availability of
federally funded programs and the price of gasoline and diesel fuel are factors
which affect the demand for intracity buses purchased for municipal mass
transit systems. The market for recreational vehicles is influenced
significantly by the strength of the economy and the level of consumer
discretionary spending. Recent growth trends in the sale of recreational
vehicles have been positive.

PRODUCTS

The Company designs, engineers, manufactures and supplies plastic and metal
framed window assemblies, manual and power glass regulator systems and
injection molded thermoplastic products principally for North American car,
light truck and van, heavy truck, bus, military and recreational vehicle OEMs.
The Company does not manufacture or sell primary glass.

Modular Window Systems. The Company's modular, plastic framed windows are
value-added parts because clips, weatherstripping and bright trim are attached
during the molding process. The module-manufacturing processes used by the
Company give the OEM designers great flexibility in window shape, sealing and
aerodynamics. The module supplied to the OEM also lowers its parts inventory,
reduces part weight and reduces assembly efforts. The Company produces modular
windshields and rear windows, as well as fixed quarter, sliding and push out
modular windows.

The Company utilizes RIM technology and also PVC injection molding technology
to manufacture modular windows. In RIM technology, liquids are mixed and fed
into a mold that holds glass, framing and fastening components. The mixture
polymerizes, and the completed module is removed, trimmed, cleaned,

15
<PAGE>

inspected and packed for shipment. In PVC injection molding, solid plastic
subjected to high temperature and pressure flows in liquid form into the mold
where it reverts without chemical reaction to a solid.

Conventional Windows. The Company also produces conventionally framed window
assemblies utilizing painted cold-rolled steel, stainless steel, rubber and/or
aluminum. The glass or plastic glazed window assemblies supplied for mass
transit systems have durable aluminum frames and non-leak weatherstripping. The
Company supplies a wide variety of conventional windows to car, light truck and
heavy truck OEMs, including pivoting wing ventilator windows, fixed and movable
quarter windows and swing-out and sliding windows. The Company's flush-mount
recreational vehicle windows seal tightly and feature independent sliding
screens, removable storm windows and an anti-theft locking mechanism.

Window Regulator Systems. The Company supplies manual and electrically
powered versions of regulators (the mechanisms for lifting and lowering
windows) for front and rear side windows and tailgate windows. The Company
stresses safety, weight, glass stability, window system integration, parts
reduction and enhanced vehicle design flexibility in its window regulators.

Injection Molded Thermoplastic Products. The Company's Nyloncraft division
manufactures injection molded inside and outside door handles, door latch
components, fan shrouds, airspring pistons, window crank handles and a variety
of other custom engineered products. The Company molds parts from nylons,
polyesters, acetal and other engineered thermoplastic materials.

Door Systems. The Company designs and manufactures preassembled doors for
Class A motorhomes and ballistic door/window systems for the Hummer tactical
military vehicle. The Company's preassembled door systems improve the OEMs'
installation productivity and assist in design flexibility.

CUSTOMERS AND MARKETING

The Company supplies its products primarily to Ford, Chrysler and General
Motors. Historical sales of the Company by customer group are set forth below.
The loss of Ford, Chrysler or General Motors as a customer would have a
material adverse effect on the Company.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
1991 1992 1993
------------------------ ------------------------ ------------------------
NET AS A PERCENT OF NET AS A PERCENT OF NET AS A PERCENT OF
SALES TOTAL NET SALES SALES TOTAL NET SALES SALES TOTAL NET SALES
-------- --------------- -------- --------------- -------- ---------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Ford.................... $243,577 69% $310,579 73% $373,116 72%
Chrysler................ 27,279 8 36,944 9 56,445 11
General Motors.......... 26,254 8 18,973 4 20,109 4
Other................... 55,158 15 60,377 14 66,011 13
-------- --- -------- --- -------- ---
Total Net Sales..... $352,268 100% $426,873 100% $515,681 100%
======== === ======== === ======== ===
</TABLE>

Sales of the Company's products to OEMs are made directly by the Company's
sales and engineering personnel located at the Company's offices in the Detroit
area and Elkhart, Indiana. Through these sales and engineering offices, the
Company services its OEM customers and manages its continuing programs of
product design improvement and development.

The Company's customers award contracts that normally cover parts to be
supplied for a particular vehicle model. Such contracts typically extend over
the life of the model, which is generally four to seven years. The primary risk
to the Company is that an OEM will produce fewer units of a model than
anticipated. In addition, the Company competes for new business to supply parts
for successor models and therefore runs the risk that the OEM will not select
the Company to produce parts on a successor model. In order to reduce its
reliance on any one model, the Company produces parts for a broad cross-section
of both new and more

16
<PAGE>

mature models. The Company has been chosen as a supplier on a variety of
generally successful car, light truck and van models. The following table
presents a summary of the 1994 and 1995 models for which the Company is
producing or will produce component parts.

<TABLE>
<CAPTION>
COMPANY 1994/1995 MODELS
------- ----------------
<S> <C>
Ford..................... Escort, Explorer, Taurus, Sable, Aerostar,
Windstar, Ranger, Continental, Cougar, Mark
VIII, Bronco, Thunderbird, Town Car, Econoline,
Crown Victoria, Grand Marquis, Mustang, Probe,
Villager, F-Series Truck
Chrysler................. LHS, LeBaron, Fifth Avenue, Imperial, Cherokee,
Wrangler, Comanche, Voyager, Avenger, Sebring,
Concorde, Intrepid, Vision, New Yorker, Dakota,
Ram Truck, Ram Van/Wagon, Talon
General Motors........... Cavalier, Sunbird, Vandura Van, APV Mini-Van, S-
10 Truck, Saturn Coupe, Saturn Station Wagon
Nissan................... Quest, Sentra GS, Nissan Truck
Mazda.................... MX6
Mitsubishi............... Eclipse
</TABLE>

Based on its ability to service its OEM customers' needs effectively, the
Company believes it will be able to maintain its position on most existing
models, while also expanding into new models as further consolidation in the
OEM supplier base occurs. The Company believes that the presence of Transplants
represents an attractive growth opportunity over the next decade. The Company
is currently supplying products for Mazda, Nissan and Mitsubishi models. The
Company believes that it is favorably positioned to increase its business with
the Transplants because of the Company's reputation for technical innovation,
quality excellence, reliability and competitive cost.

In the non-automotive markets, the Company sells various types of
conventional window systems to North American OEMs of medium and heavy trucks,
recreational vehicles and buses. The Company is the dominant supplier of wing
ventilator windows for medium and heavy trucks manufactured in the United
States and Canada. The Company's customers include Navistar, Freightliner,
Volvo GM Heavy Truck Corp., Mack Truck, Paccar (Kenworth and Peterbilt models)
and Ford. The Company supplies aluminum framed window systems to Fleetwood and
Winnebago, the leading recreational vehicle OEMs in North America, as well as a
number of other recreational vehicle manufacturers. The Company is the dominant
supplier of metal framed window systems to intra and intercity bus OEMs.

The Company also manufactures preassembled doors for certain recreational
vehicle OEMs and door systems for the Hummer tactical military vehicle.

The Company maintains separate sales and engineering groups at its corporate
offices in Elkhart, Indiana to service these non-automotive markets. The
Company has received "Supplier of the Year" and "Master of Quality" awards from
Fleetwood and Freightliner, respectively, as well as recognition for quality
and delivery accomplishments from other non-automotive OEMs. The Company
believes that its cost competitiveness, quality excellence and design and
engineering capabilities obtained in the automotive supply markets enable it to
compete effectively in non-automotive markets as well.

COMPETITION

The Company operates in a highly competitive environment in each of its
markets. The number of the Company's competitors in the automotive markets is
expected to decrease due to the supplier consolidation resulting from changing
OEM policies. The Company's major competitors include Donnelly Corporation,
Libbey-Owens-Ford Co., Guardian Industries, Dura, Inc., Rockwell International,
Hehr International, OEM internal operations and a large number of smaller
operations.

17
<PAGE>

The Company principally competes for new business both at the beginning of
the development of new models and upon the redesign of existing models by its
major customers. New model development generally begins two to four years prior
to the marketing of such models to the public. Once a producer has been
designated to supply parts to a new program, an OEM will generally continue to
purchase those parts from the designated producer for the life of the program.
Competitive factors in the market for the Company's products include product
quality, design and engineering competence, customer service, product mix, new
product innovation, cost and timely delivery. The Company believes that its
business strategy allows it to compete effectively in the markets for its
products.

The Company believes that it is well-positioned to succeed in this highly
competitive supplier environment. The Company's size, emphasis on quality,
customer service orientation, manufacturing expertise and technological
leadership all contribute to the Company's success in the transportation supply
industry.

RESEARCH, ENGINEERING AND DEVELOPMENT

The Company expended approximately $5.2 million, $5.5 million and $7.9
million on research, engineering and development during 1991, 1992 and 1993,
respectively. These increased expenditures have improved significantly the
Company's capacity to provide complete engineering and design services to
support its product lines. The Company also has a corporate technical center in
Elkhart, Indiana for basic research and development, as well as a large
engineering and design staff in the Detroit area which works closely with
automotive OEMs during all phases of new product development and production.

FOREIGN OPERATIONS

In addition to its domestic facilities described below, the Company owns a
manufacturing facility in Aurora, Ontario, Canada and leases a manufacturing
facility in Juarez, Mexico. The financial information concerning the Canadian
operations of the Company is set forth in Notes 10 and 11 to the Company's
Consolidated Financial Statements included elsewhere herein.

EMPLOYEES

The Company employs a total of approximately 3,500 persons, of whom
approximately 20% are covered by collective bargaining agreements. The Company
believes its relationship with its employees is good.

ENVIRONMENTAL MATTERS

The Company believes it is in substantial compliance with federal, state,
local and foreign laws regarding discharge of materials into the environment
and does not anticipate any material adverse effect on its future earnings,
capital expenditures or competitive position as a result of compliance with
such laws.

For a discussion of potential environmental liabilities, see "Management's
Discussion and Analysis of Results of Operations and Financial Condition--
Liquidity and Capital Resources" and Note 8 to the Company's Consolidated
Financial Statements included elsewhere herein.

18
<PAGE>

PRINCIPAL AND SELLING SHAREHOLDERS
Set forth below is certain information concerning (i) the only persons known
to the Company, as of February 15, 1994 and as adjusted for the sale of the
Common Shares offered hereby (assuming no exercise of the Underwriters' over-
allotment option), to beneficially own 5% or more of the outstanding Common
Shares and (ii) each Selling Shareholder. The percentages set forth for the
Convertible Note Holders in the columns entitled "Percent of Class" are
calculated by dividing the number of Common Shares listed for each Convertible
Note Holder in the "Number of Shares" columns by the sum of (i) 10,577,936
Common Shares outstanding on February 15, 1994 and (ii) the number of Common
Shares which the particular Convertible Note Holder has a right to acquire. The
percentages therefore represent the maximum percentage of outstanding Common
Shares that a particular Convertible Note Holder would own if only that
Convertible Note Holder, and no other, had converted the Convertible Notes held
by it. The percentages set forth for Common Shareholders are calculated
assuming no conversion of any of the Convertible Notes. Accordingly, all of the
percentages in the Percent of Class columns, including in particular the
percentages applicable to shareholders which do not hold any Convertible Notes,
are higher than they would be if some or all of the outstanding Convertible
Notes of the Company had been converted.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING SHARES AFTER OFFERING
----------------------- TO BE -----------------------
NAME AND ADDRESS OF NUMBER OF PERCENT SOLD IN NUMBER OF PERCENT
BENEFICIAL OWNER SHARES OF CLASS OFFERING SHARES OF CLASS
------------------- ------------ ------------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
COMMON SHAREHOLDERS
Ford Motor Company
(1).................. 1,509,927 14.3% 1,509,927 0 0.0%
The American Road
P.O. Box 1899
Dearborn, Michigan
48121
Ford Motor Company
Fund (2)............. 1,047,201 9.9% 1,047,201 0 0.0%
The American Road
P.O. Box 1899
Dearborn, Michigan
48121
J.P. Morgan & Co. In-
corporated (3)....... 1,210,000 11.4% 0 1,210,000 11.4%
23 Wall Street
New York, New York
10015
CONVERTIBLE NOTE HOLDERS
CIGNA Corporation (4). 820,238 7.2% 0 820,238 7.2%
One Liberty Place
Philadelphia, Pennsyl-
vania 19101
CIGNA Mezzanine Part-
ners II, L.P. (5).... 693,308 6.2% 0 693,308 6.2%
900 Cottage Grove Road
Bloomfield, Connecti-
cut 06002
Textron Investment
Management Company,
Inc. (6)............. 756,773 6.7% 0 756,773 6.7%
40 Westminster Street
Providence, Rhode Is-
land 02903
</TABLE>
- --------
(1) Ford Motor Company has sole voting and investment power over the shares
listed, although the Shareholders Agreement contains certain provisions
with respect to the voting of Common Shares owned by the parties to the
Shareholders Agreement. See "Background of Offering."
(2) In a Schedule 13D dated January 20, 1994 and delivered to the Company, the
Ford Fund disclosed that it had acquired from Ford beneficial ownership of
1,047,201 Common Shares. The Ford Fund has the sole power to vote and to
dispose of all such shares, although it has assumed certain obligations of
Ford under the Shareholders Agreement with respect to the shares acquired
by the Ford Fund from Ford. See "Background of Offering."

19
<PAGE>

(3) In a Schedule 13G dated December 31, 1993 and delivered to the Company,
J.P. Morgan & Co. Incorporated ("Morgan") disclosed that it and its
subsidiaries had acquired beneficial ownership of 1,210,000 Common Shares.
Morgan and/or its subsidiaries have the sole power to dispose of all such
shares and sole power to vote 881,400 of such shares.
(4) Represents Common Shares which may be acquired on conversion of the
Convertible Notes of the Company owned by Connecticut General Life
Insurance Company (703,060 shares) and Life Insurance Company of North
America (117,178 shares), two subsidiaries of CIGNA Corporation
(collectively "CIGNA"). CIGNA will have sole voting and investment power
over any shares acquired upon conversion of such Convertible Notes.
(5) Represents Common Shares which may be acquired on conversion of Convertible
Notes owned by CIGNA Mezzanine Partners II, L.P. ("CMP"). CIGNA is the
ultimate parent of the general partner of CMP. CMP will have sole voting
and investment power over any shares acquired upon conversion of such
Convertible Notes.
(6) Represents Common Shares which may be acquired on conversion of Convertible
Notes owned by The Paul Revere Life Insurance Company (227,032 shares), The
Paul Revere Protective Life Insurance Company (90,812 shares), Balboa
Insurance Company (60,542 shares) and the Textron Collective Inv. Trust
Fund B (378,387 shares), all of which are affiliates of Textron, Inc., the
parent company of Textron Investment Management Company, Inc. ("TIMC").
TIMC is an investment adviser and will have sole voting and investment
power over any shares acquired upon conversion of such Convertible Notes.

20
<PAGE>

DESCRIPTION OF CAPITAL SHARES

The Company's authorized capital stock consists of 20,000,000 Common Shares,
no par value, and 1,000,000 preferred shares, no par value.

COMMON SHARES

Holders of Common Shares are entitled to receive such dividends as the Board
of Directors may declare out of funds legally available therefor. See
"Dividends and Price Range of Common Shares." Holders of Common Shares are
entitled to one vote per share on each matter submitted to the shareholders of
the Company. Cumulative voting for election of directors is not permitted;
consequently, the holders of more than 50% of the Common Shares can elect all
of the directors of the Company. Upon a liquidation of the Company, after
payment or provision for payment of all of the Company's obligations and
payments, if any, to holders of preferred shares, the holders of the Common
Shares share ratably in the remaining assets of the Company. The holders of
Common Shares are not entitled to preemptive rights.

The outstanding Common Shares of the Company are, and the Common Shares
offered hereby will be, fully paid and nonassessable.

Redemption Rights

The holders of Common Shares, except "Controlling Persons" (as defined
below), have a right of redemption of their shares under certain circumstances
pursuant to Article VII, Section 2 of the Company's Articles of Incorporation.
A Controlling Person is defined as any person who acquires a 40% ownership
interest in the Company and has acquired any portion of such interest in a
hostile tender offer (i.e., a tender offer not approved by the Company's Board
of Directors). In the event that (i) any person becomes a Controlling Person;
(ii) any Controlling Person makes a further hostile tender offer or otherwise
acquires an additional ownership interest in the Company; or (iii) a
Controlling Person causes or permits the Board of Directors or management of
the Company to merge or consolidate the Company with or sell the Company's
assets to another corporation which is or will be controlled by the Controlling
Person, every holder of Common Shares, other than the Controlling Person or a
transferee of the Controlling Person, shall have the right, and the Company
shall be obligated, to redeem his shares. The redemption price would be the
greater of (i) the highest price or cash value paid by the Controlling Person
in acquiring any of its shares at any time; (ii) the highest price of the
Common Shares reported on the American Stock Exchange during the 18 months
prior to one of the events which triggers the redemption right; or (iii) book
value based on the latest annual report with quarterly adjustments. The right
of redemption provided by Article VII, Section 2 of the Articles of
Incorporation of the Company may not be amended, altered or repealed except on
the affirmative vote of 85% of the outstanding Common Shares of the Company,
but no amendment, alteration or repeal shall in any manner adversely affect any
rights of redemption then in existence.

Indiana Statutes

In the event any person acquires 10% of the Company's Common Shares (an
"Interested Shareholder"), then, for a period of five years after such
acquisition, the Indiana Business Corporation Law (the "BCL") prohibits certain
business combinations between the Company and such Interested Shareholder
unless prior to the acquisition of such Common Shares by the Interested
Shareholder, the Board of Directors of the Company approves of such acquisition
of Common Shares or approves of such business combination. After such five-year
period, only the following three types of business combinations between the
Company and such an Interested Shareholder are permitted: (i) a business
combination approved by the Board of Directors of the Company before the
acquisition of Common Shares by the Interested Shareholder, (ii) a business
combination approved by holders of a majority of the Common Shares not owned by
the Interested Shareholder, and (iii) a business combination in which the
shareholders receive a price for their Common Shares at least equal to a
formula price based on the highest price per Common Share paid by the
Interested

21
<PAGE>

Shareholder. In addition, certain accretions of voting power may result in an
acquiring shareholder losing the right to vote the Common Shares acquired
unless such voting power is approved by a majority of the disinterested Common
Shares and, if authorized by an appropriate provision of the Company's articles
of incorporation or by-laws adopted prior to the time the person becomes an
Interested Shareholder, may permit the redemption of the acquiring
shareholder's Common Shares. The Company has not adopted such redemption
provisions.

The provisions of the BCL discussed above do not apply with respect to the
acquisition of the Company's Convertible Notes or the acquisition of Common
Shares upon conversion of the Convertible Notes.

REGISTRATION RIGHTS

Ford and the Ford Fund have exercised their right to require the Company to
use its good faith reasonable efforts to register the Ford Shares for sale
under the Securities Act. The holders of the Convertible Notes have the right
to require the Company to register the Common Shares which may be acquired upon
conversion of the Convertible Notes (the "Conversion Shares"). In addition, the
holders of the Convertible Notes have the right to require the Company to
register the Conversion Shares rather than any Common Shares proposed to be
registered by the Company (except with respect to Common Shares proposed to be
registered by the Company pursuant to a request from Ford or the Ford Fund) and
have the right, under certain circumstances, to require the Company to register
the Conversion Shares in addition to any Common Shares proposed to be
registered by the Company. The holders of the Convertible Notes have elected
not to exercise their registration rights with respect to this offering. Any
exercise of such rights may adversely affect the Company's future ability to
raise capital in the public markets.

PREFERRED SHARES

The Board of Directors in its discretion may from time to time issue
preferred shares in series and is authorized to determine the designations,
relative rights, preferences, qualifications, limitations and restrictions
(other than voting rights) of any series, without further action or approval by
the shareholders of the Company. Holders of preferred shares are entitled to
one vote per share on each matter submitted to shareholders of the Company. No
preferred shares are outstanding and the Company has no present plans for
issuing any preferred shares.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Company's Common Shares is Chemical
Bank, New York, New York.

22
<PAGE>

UNDERWRITING

The Underwriters named below, for whom Dean Witter Reynolds Inc., Goldman,
Sachs & Co. and J.P. Morgan Securities Inc. are acting as representatives (the
"Representatives"), have severally agreed, subject to the terms and conditions
of the Underwriting Agreement, to purchase from the Selling Shareholders the
number of Common Shares set forth opposite their respective names:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS COMMON SHARES
------------ -------------
<S> <C>
Dean Witter Reynolds Inc...................................
Goldman, Sachs & Co. ......................................
J.P. Morgan Securities Inc. ...............................
---------
Total.................................................. 2,557,128
=========
</TABLE>

The Underwriters are committed to purchase all of the Common Shares, if any
Common Shares are purchased.

The Selling Shareholders and the Company have been advised by the
Underwriters that the Underwriters propose to offer the Common Shares directly
to the public at the public offering price set forth on the cover page of this
Prospectus and to certain dealers (who may include Underwriters) at the public
offering price less a concession not to exceed $ per share. Such dealers may
reallow a concession not to exceed $ per share in sales to other dealers.
After the initial public offering, the public offering price and concessions
and reallowances to dealers may be changed by the Underwriters.

The Company and Ford have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933
(the "Securities Act"), or to contribute to payments that the Underwriters may
be required to make in respect thereof.

The Company has granted the Underwriters an option, exercisable within 30
days from the date of this Prospectus, to purchase from the Company up to an
additional 380,000 Common Shares at the same price

23
<PAGE>

per share as the 2,557,128 Common Shares offered hereby, less underwriting
discounts and commissions. The Underwriters may exercise the option only for
the purpose of covering over-allotments, if any, made in connection with the
distribution of the Common Shares to the public.

The Company has agreed that, until 120 days after the date of this
Prospectus, it will not, without the prior written consent of the
Representatives, sell, offer to sell, issue, distribute, contract to sell or
otherwise dispose of, directly or indirectly, any Common Shares or any options,
rights or warrants with respect to any Common Shares or register for sale under
the Securities Act, any Common Shares except for Common Shares offered hereby
and except pursuant to the exercise of any currently outstanding rights,
warrants or options of the Company described in this Prospectus, or upon
conversion of the Company's outstanding Convertible Notes; provided that the
Company may grant options or Common Shares under its 1994 Stock Compensation
Plan and may sell Common Shares pursuant to its Employee Stock Purchase Plan,
as such Plans are in effect on the date hereof. Further, all directors and
officers of the Company have agreed not to offer, sell, contract or offer to
sell, or otherwise dispose of, directly or indirectly, any Common Shares for a
period of 120 days after the date hereof without the prior written consent of
the Representatives.

LEGAL MATTERS

The validity of the issuance of the Common Shares being offered hereby will
be passed upon for the Company by Sommer & Barnard, PC, Indianapolis, Indiana,
counsel for the Company. James K. Sommer, a director of the Company, is a
member of Sommer & Barnard. Mr. Sommer owns 3,501 Common Shares. Certain legal
matters in connection with sale of the Ford Shares will be passed upon for the
Selling Shareholders by John M. Rintamaki, Esq., Secretary, Ford. Certain legal
matters in connection with the issuance of the Common Shares will be passed
upon for the Underwriters by McDermott, Will & Emery, Chicago, Illinois.

EXPERTS

The financial statements as of December 31, 1993 and 1992 and for each of the
three years in the period ended December 31, 1993 included in this Prospectus
have been so included in reliance on the report of Price Waterhouse,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports, proxy statements and other
information with the Commission. Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the following Regional Offices of the Commission:
7 World Trade Center, 13th Floor, New York, New York 10048 and Suite 1400, 500
West Madison, Northwestern Atrium, Chicago, Illinois 60606. Copies of such
material can also be obtained from the Public Reference Section of the
Commission, Room 1024, at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. Such reports, proxy statements and other
information concerning the Company can also be inspected at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10006. This
Prospectus constitutes a part of a registration statement on Form S-3 (together
with all amendments and exhibits, the "Registration Statement") filed with the
Commission under the Securities Act with respect to this offering. This
Prospectus does not contain all of the information included in the Registration
Statement. Reference is made to the Registration Statement for further
information with respect to the Company and the Common Shares being offered
hereby.

24
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants......................................... F-2
Consolidated Balance Sheet at December 31, 1993 and 1992.................. F-3
Consolidated Statement of Income for the three years ended December 31,
1993..................................................................... F-4
Consolidated Statement of Shareholders' Equity for the three years ended
December 31, 1993........................................................ F-5
Consolidated Statement of Cash Flows for the three years ended December
31, 1993................................................................. F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Shareholders of
Excel Industries, Inc.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of shareholders' equity and of cash flows
present fairly, in all material respects, the financial position of Excel
Industries, Inc. and its subsidiaries at December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1993, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

As discussed in the notes to consolidated financial statements, effective
January 1, 1992, the Company changed its method of accounting for
postretirement health care benefits by adopting, on an immediate recognition
basis, Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." The Company also
changed its method of accounting for income taxes, effective January 1, 1992,
by adopting Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."

PRICE WATERHOUSE
South Bend, Indiana
February 17, 1994

F-2
<PAGE>

EXCEL INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEET

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
ASSETS 1993 1992
------ -------- --------
<S> <C> <C>
Current assets:
Cash and short-term investments............................... $ 6,767 $ 27,510
Marketable securities......................................... 39,786 --
Accounts receivable--trade, less allowances of $725........... 23,485 16,222
- --related party................................................. 47,168 43,342
Customer tooling to be billed................................. 9,161 5,887
Inventories................................................... 29,867 26,746
Prepaid expenses.............................................. 6,113 4,764
-------- --------
Total current assets...................................... 162,347 124,471
-------- --------
Property, plant and equipment:
Land.......................................................... 937 939
Buildings and improvements.................................... 21,902 21,135
Machinery and equipment....................................... 80,680 71,021
Accumulated depreciation...................................... (53,773) (51,031)
-------- --------
49,746 42,064
-------- --------
Goodwill, net of accumulated amortization of $2,356 and $2,010,
respectively................................................... 7,050 7,397
Deferred income taxes and other assets.......................... 10,173 8,164
-------- --------
$229,316 $182,096
======== ========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable--trade....................................... $ 37,283 $ 28,460
--related party........................................ 9,700 13,601
Accrued liabilities:
Salaries and wages.......................................... 5,712 3,983
Income taxes................................................ 1,208 2,132
Other....................................................... 12,130 14,403
Current installments on long-term debt........................ 1,553 1,561
-------- --------
Total current liabilities................................. 67,586 64,140
-------- --------
Long-term debt.................................................. 35,094 34,592
Other long-term liabilities, primarily employee benefits........ 20,200 16,334
Commitments and contingent liabilities.......................... -- --
Shareholders' equity:
Preferred shares--no par value, 1,000 shares authorized, none
issued....................................................... -- --
Common shares--no par value, 20,000 shares authorized; 10,575
and 8,558, respectively, issued and outstanding.............. 87,537 57,282
Retained earnings............................................. 19,615 10,346
Unrecognized pension actuarial losses, net of tax............. (716) (598)
-------- --------
Total shareholders' equity................................ 106,436 67,030
-------- --------
$229,316 $182,096
======== ========
</TABLE>

The accompanying notes are an integral part of this statement.

F-3
<PAGE>

EXCEL INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF INCOME

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Net sales......................................... $515,681 $426,873 $352,268
Costs and expenses:
Cost of goods sold.............................. 463,943 383,258 321,058
Selling, administrative and engineering ex-
penses......................................... 30,054 28,262 25,205
Restructuring charge............................ -- 4,500 --
Interest expense................................ 3,474 5,555 5,516
Other (income) expense, net..................... (2,015) (713) 216
-------- -------- --------
Total costs and expenses.................... 495,456 420,862 351,995
-------- -------- --------
Income before income taxes and cumulative effect
of changes
in accounting.................................... 20,225 6,011 273
Income tax provision.............................. 7,785 2,434 122
-------- -------- --------
Income before cumulative effect of changes in ac-
counting......................................... 12,440 3,577 151
Cumulative effect of adoption of SFAS 106 and 109. -- 3,195 --
-------- -------- --------
Net income.................................. $ 12,440 $ 382 $ 151
======== ======== ========
Net income (loss) per share:
Before cumulative effect of changes in account-
ing:
Primary....................................... $ 1.23 $ .47 $ .02
Fully diluted................................. 1.15 .47 .02
Cumulative effect of adoption of SFAS 106 and
109:
Primary....................................... -- (.42) --
Fully diluted................................. -- (.42) --
Net income:
Primary....................................... 1.23 .05 .02
Fully diluted................................. 1.15 .05 .02
Cash dividends per share.......................... .30 .24 .24
</TABLE>

The accompanying notes are an integral part of this statement.

F-4
<PAGE>

EXCEL INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON UNRECOGNIZED
SHARES PENSION CUMULATIVE
ISSUED AND COMMON RETAINED ACTUARIAL TRANSLATION
OUTSTANDING SHARES EARNINGS LOSSES ADJUSTMENT TOTAL
----------- ------- -------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1990................... 6,466 $35,949 $13,298 $(592) $671 $ 49,326
Net income.............. 151 151
Dividends............... (1,558) (1,558)
Stock options exercised. 17 84 84
Shares issued under em-
ployee stock purchase
plan................... 19 160 160
Unrecognized pension ac-
tuarial losses, net of
tax.................... (12) (12)
Effect of exchange rate
changes................ 30 30
------ ------- ------- ----- ---- --------
Balance at December 31,
1991................... 6,502 36,193 11,891 (604) 701 48,181
------ ------- ------- ----- ---- --------
Net income.............. 382 382
Dividends............... (1,927) (1,927)
Share offering.......... 2,013 20,759 20,759
Stock options exercised. 29 200 200
Shares issued under em-
ployee stock purchase
plan................... 14 130 130
Unrecognized pension ac-
tuarial losses, net of
tax.................... 6 6
Effect of exchange rate
changes................ (701) (701)
------ ------- ------- ----- ---- --------
Balance at December 31,
1992................... 8,558 57,282 10,346 (598) -- 67,030
------ ------- ------- ----- ---- --------
Net income.............. 12,440 12,440
Dividends............... (3,171) (3,171)
Share offering.......... 2,000 30,019 30,019
Stock options exercised. 8 51 51
Shares issued under em-
ployee stock purchase
plan................... 9 185 185
Unrecognized pension ac-
tuarial losses, net of
tax.................... (118) (118)
------ ------- ------- ----- ---- --------
Balance at December 31,
1993................... 10,575 $87,537 $19,615 $(716) $ -- $106,436
====== ======= ======= ===== ==== ========
</TABLE>

The accompanying notes are an integral part of this statement.

F-5
<PAGE>

EXCEL INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1993 1992 1991
-------- -------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income...................................... $ 12,440 $ 382 $ 151
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................. 10,145 10,082 10,637
Deferred income taxes......................... 548 (3,837) (2,207)
Cumulative effect of changes in accounting.... -- 3,195 --
Other......................................... 3,443 2,661 939
Changes in current assets and liabilities:
Accounts receivable and prepaid expenses.... (13,418) (17,169) 1,176
Inventories and customer tooling............ (6,395) 6,774 4,286
Accounts payable and accrued liabilities.... 3,454 19,067 849
-------- -------- -------
Total adjustments......................... (2,223) 20,773 15,680
-------- -------- -------
Net cash provided by operating activities. 10,217 21,155 15,831
-------- -------- -------
Cash flows from investing activities:
Purchase of property, plant and equipment....... (18,104) (4,687) (9,670)
Investment in marketable securities, net........ (39,786) -- --
Other........................................... (648) 461 3,810
-------- -------- -------
Net cash used for investing activities.... (58,538) (4,226) (5,860)
-------- -------- -------
Cash flows from financing activities:
Issuance of common shares....................... 30,255 21,089 244
Payments of long-term debt...................... (2,001) (14,615) (4,207)
Dividends....................................... (3,171) (1,927) (1,558)
Issuance of long-term debt...................... 2,495 -- --
-------- -------- -------
Net cash provided by (used for) financing
activities............................... 27,578 4,547 (5,521)
-------- -------- -------
Net change in cash and short-term investments..... (20,743) 21,476 4,450
Cash and short-term investments at beginning of
period........................................... 27,510 6,034 1,584
-------- -------- -------
Cash and short-term investments at end of period.. $ 6,767 $ 27,510 $ 6,034
======== ======== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest........................................ $ 2,781 $ 6,081 $ 5,634
Income taxes, net of refunds.................... 7,996 6,602 281
======== ======== =======
</TABLE>

The accompanying notes are an integral part of this statement.

F-6
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

Excel Industries, Inc. (Company) is engaged in the manufacture and sale of a
broad line of window assemblies, manual and electric window regulators, upper
door frames and injection molded thermoplastic parts. The Company's products
are used in the manufacture of automobiles, heavy and light trucks, buses and
recreational vehicles.

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany transactions,
profits and balances are eliminated.

Net income per share

Primary net income per share is computed using the weighted average number of
shares outstanding during the period. Shares used to compute primary net income
per share were 10,122,000 for 1993, 7,553,000 for 1992 and 6,488,000 for 1991.

Fully diluted earnings per share assumes, when dilutive, the conversion of
the 10% convertible subordinated notes which were issued on January 2, 1990.

Stock dividends and splits are given retroactive effect in computing the
weighted average number of shares outstanding during the period.

Short-term investments and marketable securities

Short-term investments amounting to $5,771,000 at December 31, 1993 consist
of investments generally in money market funds.

Marketable securities consist of U.S. Government securities, tax-free
municipal securities and municipal fund par value preferred shares with
maturities generally longer than 90 days.

Such investments are carried at cost which approximates market.

Other income includes interest income of $1,916,000 in 1993, $1,010,000 in
1992 and $674,000 in 1991.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined
using the last-in, first-out (LIFO) method for domestic inventories and the
first-in, first-out (FIFO) method for Canadian inventories.

Properties

Plant and equipment are carried at cost and include expenditures for new
facilities and those which substantially increase the useful lives of existing
plant and equipment.

Depreciation

The Company provides for depreciation of plant and equipment using methods
and rates designed to amortize the cost of such equipment over its useful life.
Depreciation is computed principally on accelerated

F-7
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
methods for new plant and equipment and the straight-line method for used
equipment. The estimated useful lives range from 10 to 40 years for buildings
and improvements and 2 to 20 years for machinery and equipment.

Goodwill

The excess of purchase price over the fair value of net assets of acquired
businesses (goodwill) is amortized on a straight-line basis over 20 to 40
years.

Income taxes

Deferred income taxes are provided using the liability method in accordance
with Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting
for Income Taxes."

3. RESEARCH, ENGINEERING AND DEVELOPMENT

Research, engineering and development expenditures charged to operations
approximated $7,913,000 in 1993, $5,518,000 in 1992 and $5,200,000 in 1991.

4. RESTRUCTURING CHARGE

In the fourth quarter of 1992, the Company provided a reserve of $4,500,000
for restructuring costs. The charge was equivalent to $2,900,000, or 34 cents
per share, after taxes. This charge represented estimated costs to downsize its
Aurora, Ontario, Canada plant and relocate production of certain light truck
and van windows to other manufacturing plants of the Company. A total of
$1,010,000 was incurred in 1993 to transfer a portion of the planned
production.

5. INVENTORIES

Inventories consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1993 1992
------- -------
(000 OMITTED)
<S> <C> <C>
Raw materials........................................... $17,948 $15,302
Work in process and finished goods...................... 12,378 11,699
LIFO reserve............................................ (459) (255)
------- -------
$29,867 $26,746
======= =======
</TABLE>

6. PENSION AND OTHER EMPLOYEE BENEFIT PLANS

Pension and profit sharing plans

The Company and its subsidiaries provide retirement benefits to substantially
all employees through various pension, savings and profit sharing plans.
Defined benefit plans provide pension benefits that are based on the employee's
final average salary for salaried employees and stated amounts for each year of
credited service for hourly employees. Contributions and costs for the
Company's various other benefit plans are generally determined based on the
employee's annual salary. Total expense relating to the Company's various
retirement plans aggregated $2,199,000 in 1993, $2,102,000 in 1992 and
$1,712,000 in 1991.

F-8
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Components of net pension expense for all defined benefit pension plans are
as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1993 1992 1991
------- ------- -------
(000 OMITTED)
<S> <C> <C> <C>
Service cost................................... $ 1,319 $ 1,312 $ 1,243
Interest cost.................................. 1,344 1,245 1,137
Actual return on assets........................ (617) (1,242) (1,139)
Net amortization and deferral.................. (582) 190 222
------- ------- -------
Net defined benefit pension expense............ $ 1,464 $ 1,505 $ 1,463
======= ======= =======
</TABLE>

The funded status of defined benefit pension plans is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1993 1992
------- --------
(000 OMITTED)
<S> <C> <C>
Plan assets at fair value.............................. $15,844 $14,868
Projected benefit obligations.......................... 20,421 17,869
------- --------
(4,577) (3,001)
Unrecognized costs..................................... 1,862 472
------- --------
Net accrued pension costs.............................. $(2,715) $(2,529)
======= ========
Actuarial present value of:
Vested benefit obligations........................... $15,644 $13,853
======= ========
Accumulated benefit obligations...................... $16,655 $14,815
======= ========
Major assumptions:
Discount rate........................................ 7.5% 8%
Rate of increase in compensation..................... 5% 5% to 8%
Expected rate of return on plan assets............... 8% 8%
</TABLE>

It is generally the Company's policy to fund the ERISA minimum contribution
requirement. Plan assets are invested primarily in corporate equity securities
and bonds and insurance annuity contracts.

Supplemental and other postretirement benefits

In addition to providing pension benefits, the Company provides certain
health care benefits to substantially all active employees and postretirement
health care benefits to management employees. The Company is primarily self-
insured for such benefits and prior to 1992 followed the practice of expensing
such benefits on a pay-as-you-go basis.

In 1992, the Company adopted the provisions of SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." The Company
elected to immediately recognize the Accumulated Postretirement Benefit
Obligation (APBO) as of January 1, 1992 in the amount of $6,447,000
(approximately $4,000,000 after-tax, or 61 cents per share).

F-9
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Summary information on the Company's plan is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1993 1992
------ ------
(000 OMITTED)
<S> <C> <C>
Retirees................................................... $1,504 $1,060
Retirement-eligible actives................................ 968 1,245
Other active participants.................................. 6,077 5,402
Unrecognized gain.......................................... 407 --
------ ------
Accrued liability.......................................... $8,956 $7,707
====== ======
</TABLE>

Accrued postretirement benefit cost

The Company plans to continue the policy of funding these benefits on a pay-
as-you-go basis. The components of net periodic postretirement benefit cost are
as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------
1993 1992
------ ------
(000 OMITTED)
<S> <C> <C>
Service costs, benefits attributed to employee service
during the year.......................................... $ 821 $ 750
Interest cost on accumulated postretirement benefit obli-
gation................................................... 578 510
------ ------
Net periodic postretirement benefit cost.................. $1,399 $1,260
====== ======
</TABLE>

The discount rate used in determining the APBO was 7.75% in 1993 and 8% in
1992. The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 10.25% declining by 1% per year to a rate
of 6.25%. An increase of 1% in the health care cost trend rate would increase
the accrued postretirement benefit cost at December 31, 1993 by $2,066,000 and
the 1993 annual expense by $384,000.

7. LONG-TERM DEBT

Following is a summary of long-term debt of the Company:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1993 1992
------- -------
(000 OMITTED)
<S> <C> <C>
10% convertible subordinated notes...................... $30,000 $30,000
Industrial revenue bonds................................ 5,383 4,533
Capital lease obligations............................... 1,264 1,620
------- -------
36,647 36,153
Current portion......................................... (1,553) (1,561)
------- -------
$35,094 $34,592
======= =======
</TABLE>

During 1992, the Company prepaid the balance owing on its guaranteed senior
notes and was subject to a prepayment premium of approximately $1,300,000. Such
amount is included in the accompanying income statement in interest expense.

The convertible notes are due on December 1, 2000 and require aggregate
prepayments of $8,000,000 in 1996, $7,000,000 in 1997, $6,000,000 in 1998,
$5,000,000 in 1999 and $4,000,000 in 2000. The holders of the notes have the
option to convert their notes at any time into common shares of the Company at
a current

F-10
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
conversion price of $13.214 per share. The notes are subject to prepayment at
the option of the Company if the market value of the Company's common shares
equals or exceeds 150% of the conversion price for a specified period. The note
agreements provide for maintaining a current ratio of 1.5 to 1, restrict the
amount of additional borrowings and limit the amount of dividends that can be
paid. Currently the Company has available for payment of dividends $19,615,000
of retained earnings.

The industrial revenue bonds bear interest at rates of interest tied to
short-term Treasury rates. Certain plant and equipment purchased with the
proceeds of the bonds collateralize these obligations.

The Company had available unused lines of credit of approximately $6,300,000
at December 31, 1993.

Long-term debt maturities are $1,553,000 in 1994, $1,358,000 in 1995,
$9,557,000 in 1996, $8,072,000 in 1997, $6,580,000 in 1998 and $9,527,000
thereafter.

8. CONTINGENCIES

A chemical cleaning compound, trichloroethylene (TCE), has been found in the
soil and groundwater on the Company's property in Elkhart, Indiana, and, in
1981, TCE was found in a well field of the City of Elkhart in close proximity
to the Company's facility. The Company has been named as one of nine
potentially responsible parties (PRPs) in the contamination of this site.

The United States Environmental Protection Agency (EPA) and the Indiana
Department of Environmental Management (IDEM) have conducted a preliminary
investigation and evaluation of the site and have undertaken temporary remedial
action in the nature of air-stripping towers.

In early 1992, the EPA issued a Unilateral Order under Section 106 of the
Comprehensive Environmental Response, Compensation and Liability Act which
required the Company and other PRPs to undertake remedial work. The Company and
the other PRPs have reached an agreement regarding the funding of groundwater
monitoring and the operation of the air-strippers as required by the Unilateral
Order. The Company was required to install and operate a soil vapor extraction
system to remove TCE from the Company's property. As of February 1, 1994, the
Company has installed and is operating the equipment pursuant to the Unilateral
Order. In addition, the EPA and IDEM have asserted a claim for reimbursement of
their investigatory costs and the costs of installing and operating the air-
strippers on the municipal well field (the EPA Costs). On February 22, 1993,
the United States filed a lawsuit in the United States District Court for the
Northern District of Indiana against eight of the PRPs, including the Company.
On July 20, 1993, IDEM joined in the lawsuit. The lawsuit seeks recovery of the
costs of enforcement, prejudgment interest and an amount in excess of $6.8
million, which represents costs incurred to date by the EPA and IDEM, and a
declaration that the eight defendant PRPs are liable for any future costs
incurred by the EPA and IDEM in connection with the site.

There are claims and pending legal proceedings against the Company and its
subsidiaries with respect to taxes, workers' compensation, warranties and other
matters arising out of the ordinary conduct of the business. The ultimate
result of these claims and proceedings at December 31, 1993 is not
determinable, but, in the opinion of management, adequate provision for
anticipated costs has been made or insurance coverage exists to cover such
costs.

F-11
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. LEASES

The Company leases certain of its manufacturing facilities, sales offices,
transportation and other equipment. Total rental expense for all leases was
approximately $3,416,000 in 1993, $2,998,000 in 1992 and $2,123,000 in 1991.
Future minimum lease payments under noncancellable operating leases are
$1,341,000 in 1994, $1,055,000 in 1995, $826,000 in 1996, $753,000 in 1997 and
$143,000 in 1998.

10. INCOME TAXES

Effective January 1, 1992, the Company adopted SFAS No. 109, "Accounting for
Income Taxes." This statement mandates the liability approach for computing
deferred income taxes similar to SFAS No. 96 previously followed by the
Company. The cumulative effect of the change was to increase first quarter 1992
earnings by $800,000 (12 cents per share). The change had no impact on the 1992
income tax provision. Prior year financial statements have not been restated.

Pre-tax income (loss) reported by U.S. and foreign subsidiaries was as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1993 1992 1991
------- ------- -------
(000 OMITTED)
<S> <C> <C> <C>
United States................................... $17,933 $ 8,688 $ 1,835
Foreign......................................... 2,292 (2,677) (1,562)
------- ------- -------
$20,225 $ 6,011 $ 273
======= ======= =======
</TABLE>

The provision (benefit) for income taxes is summarized below:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1993 1992 1991
------- -------- --------
(000 OMITTED)
<S> <C> <C> <C>
Current:
U.S. federal............................... $6,049 $ 5,007 $ 1,615
Foreign.................................... 465 38 --
State...................................... 645 1,226 714
------- -------- --------
7,159 6,271 2,329
------- -------- --------
Deferred:
U.S. federal............................... (317) (1,922) (1,388)
Foreign.................................... 941 (1,256) (685)
State...................................... 2 (659) (134)
------- -------- --------
626 (3,837) (2,207)
------- -------- --------
$7,785 $ 2,434 $ 122
======= ======== ========
</TABLE>

F-12
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Deferred income taxes are provided for the temporary differences between the
financial reporting basis and tax basis of the Company's assets and
liabilities. At December 31, 1993, current deferred income tax assets of
$2,886,000 are classified as prepaid expenses, long-term U.S. deferred income
tax assets of $6,094,000 are classified as other assets and $627,000 of long-
term foreign deferred income tax liabilities are classified as other long-term
liabilities. Deferred income taxes are comprised of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1993 1992
------- -------
(000 OMITTED)
<S> <C> <C>
Gross deferred tax liabilities:
Property, plant and equipment.......................... $ 2,257 $ 2,571
Inventories............................................ 436 308
Other.................................................. 680 564
------- -------
3,373 3,443
------- -------
Gross deferred tax assets:
Postretirement benefit obligations..................... 6,296 5,046
Restructuring reserve.................................. 1,103 1,655
Other accrued liabilities.............................. 3,708 4,210
Loss carryforwards..................................... 619 1,453
------- -------
11,726 12,364
------- -------
Net deferred tax assets.................................. $ 8,353 $ 8,921
======= =======
</TABLE>

The provision for income taxes computed by applying the federal statutory
rate to income before income taxes is reconciled to the recorded provision as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
---------------------
1993 1992 1991
------ ------ -----
(000 OMITTED)
<S> <C> <C> <C>
Tax at United States statutory rate................ $7,079 $2,044 $ 93
State income taxes, net of federal benefit......... 421 374 383
Canadian rate differential on income (losses)...... 344 (134) (154)
Other.............................................. (59) 150 (200)
------ ------ -----
$7,785 $2,434 $ 122
====== ====== =====
</TABLE>

Provision has been made for U.S. and Canadian taxes on undistributed earnings
of the Company's Canadian subsidiary.

The Company possesses approximately $10,570,000 of U.S. state income tax loss
carryforwards. U.S. state loss carryforwards expire to the extent of $1,002,000
in the year 2005, $4,758,000 in 2006 and $4,810,000 in 2007.

11. SEGMENT INFORMATION AND MAJOR CUSTOMERS

The Company operates in predominately one industry segment: the design,
engineering and manufacture of certain components sold to manufacturers in the
ground transportation industry.

The Company, through its subsidiaries, operates primarily in two countries:
the United States and Canada. The Company's Canadian subsidiary had net sales
of $36,074,000 in 1993, $29,421,000 in 1992 and $21,735,000 in 1991. Total
assets of the Canadian subsidiary were approximately $9,416,000 and $12,538,000
at December 31, 1993 and 1992, respectively. Intercompany sales were
insignificant.

F-13
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Sales to three major customers, Ford Motor Company, Chrysler Corporation and
General Motors Corporation, were approximately 72%, 11% and 4%, respectively,
of the Company's net sales in 1993 as compared to 73%, 9% and 4% in 1992 and
69%, 8% and 8% in 1991. Accounts receivable from General Motors Corporation and
Chrysler Corporation approximated 68% of trade accounts receivable at December
31, 1993 and 48% at December 31, 1992. Amounts due from Ford Motor Company are
classified as "accounts receivable, related party" in the Company's balance
sheet at December 31, 1993 and December 31, 1992. Sales to customers outside of
the United States and Canada were not significant.

12. COMMON SHARES

The Company has an incentive stock option plan covering key employees which
was approved by shareholders in 1984. The plan provides that options may be
granted at not less than fair market value and if not exercised, expire 10
years from the date of grant. At December 31, 1993, there were reserved 48,590
shares for the granting of options and options outstanding for 19,250 shares at
an average exercise price of $6.59. During 1993, options for 7,875 shares were
exercised at an average exercise price of $6.44. There were no options granted
nor did any options expire during 1993.

The Company has an employee stock purchase plan and has reserved 353,717
common shares for this purpose. The plan allows eligible employees to authorize
payroll withholdings which are used to purchase common shares from the Company
at ninety percent (90%) of the closing price of the common shares on the date
of purchase. Through December 31, 1993, 96,296 common shares had been issued
under the plan.

The Company has reserved 2,270,319 common shares for possible future issuance
in connection with its $30,000,000 convertible notes issued on January 2, 1990.

13. RELATED PARTY TRANSACTIONS

Ford Motor Company owned 24% of the Company's common shares at December 31,
1993, 30% at December 31, 1992 and 40% at December 31, 1991. On January 11,
1994, Ford Motor Company donated 1,047,201 of the Company's common shares to
the Ford Motor Company Fund. On January 13, 1994, Ford Motor Company and the
Ford Motor Company Fund announced their intention to dispose of their combined
24% ownership in the Company through a secondary public offering. Ford
officials stated that the disposition of common shares would not impact the
customer-supplier relationship between Ford and the Company. Significant
related party transactions are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1993 1992 1991
-------- -------- --------
(000 OMITTED)
<S> <C> <C> <C>
Product sales.................................. $373,000 $311,000 $244,000
Product purchases.............................. 124,000 77,000 58,000
</TABLE>

F-14
<PAGE>

EXCEL INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

14. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following table sets forth in summary form the quarterly results of
operations for the years ended December 31, 1993 and 1992.

<TABLE>
<CAPTION>
1993
------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
(000 OMITTED EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C>
Net sales............................ $127,340 $138,875 $114,888 $134,578
Gross profit......................... 14,295 16,044 10,015 11,384
Net income........................... 3,422 4,491 1,650 2,877
Net income per share:
Primary............................ $ .39 $ .43 $ .16 $ .27
Fully diluted...................... .35 .38 .16 .26
<CAPTION>
1992
------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales............................ $ 98,432 $113,038 $102,516 $112,887
Gross profit......................... 10,258 12,603 9,635 11,119
Income (loss) before changes in
accounting.......................... 1,295 2,445 657 (820)
Cumulative effect of adoption of SFAS
Nos. 106 and 109.................... (3,195) -- -- --
Net income (loss).................... (1,900) 2,445 657 (820)
Net income (loss) per share before
changes in accounting:
Primary............................ $ .20 $ .37 $ .08 $ (.10)
Fully diluted...................... .20 .33 .08 (.10)
Cumulative effect of changes in
accounting:
Primary............................ (.49) -- -- --
Fully diluted...................... (.49) -- -- --
Net income (loss):
Primary............................ (.29) .37 .08 (.10)
Fully diluted...................... (.29) .33 .08 (.10)
</TABLE>

F-15
<PAGE>

EXCEL INDUSTRIES, INC.

LOGO

2,557,128
COMMON SHARES

PROSPECTUS

DEAN WITTER REYNOLDS INC.

GOLDMAN, SACHS & CO.

J.P. MORGAN SECURITIES INC.

, 1994
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following are the actual or estimated expenses in connection with the
issuance and distribution of the Common Stock being registered. The Selling
Shareholders will pay all of such expenses unless the Underwriters' over-
allotment option is exercised, in which event the Selling Shareholders and the
Company will pay such expenses pro rata based upon the number of shares sold by
each of them.

<TABLE>
<S> <C>
Registration Fee................................................ $ 18,420
Printing of Registration Statement and Prospectus............... 110,000
Accounting Fees and Expenses.................................... 30,000
Legal Fees...................................................... 50,000
American Stock Exchange Fees.................................... 7,700
NASD Filing Fee................................................. 5,842
Blue Sky fees and expenses...................................... 12,000
Miscellaneous................................................... 16,038
--------
Total....................................................... $250,000
========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

A. The Company is an Indiana corporation. Indiana Code Chapter 23-1-37
provides:

Chapter 37. Indemnification of Directors, Officers, Employees, and Agents.

Sec. 1. As used in this chapter, "corporation" includes any domestic or
foreign predecessor entity of a corporation in a merger or other transaction in
which the predecessor's existence ceased upon consummation of the transaction.

Sec. 2. As used in this chapter, "director" means an individual who is or was
a director of a corporation or an individual who, while a director of a
corporation, is or was serving at the corporation's request as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, limited liability company, joint venture, trust,
employee benefit plan, or other enterprise, whether for profit or not. A
director is considered to be serving an employee benefit plan at the
corporation's request if the director's duties to the corporation also impose
duties on, or otherwise involve services by, the director to the plan or to
participants in or beneficiaries of the plan. "Director" includes, unless the
context requires otherwise, the estate or personal representative of a
director.

Sec. 3. As used in this chapter, "expenses" include counsel fees.

Sec. 4. As used in this chapter, "liability" means the obligation to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to an employee benefit plan), or reasonable expenses incurred with
respect to a proceeding.

Sec. 5. As used in this chapter, "official capacity" means:

(1) when used with respect to a director, the office of director in a
corporation; and

(2) when used with respect to an individual other than a director, as
contemplated in section 13 of this chapter, the office in a corporation
held by the officer or the employment or agency relationship undertaken by
the employee or agent on behalf of the corporation.

"Official capacity" does not include service for any other foreign or
domestic corporation or any partnership, limited liability company, joint
venture, trust, employee benefit plan, or other enterprise, whether for profit
or not.

Sec. 6. As used in this Chapter, "party" includes an individual who was, is,
or is threatened to be made a named defendant or respondent in a proceeding.

II-1
<PAGE>

Sec. 7. As used in this chapter, "proceeding" means any threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal.

Sec. 8. (a) A corporation may indemnify an individual made a party to a
proceeding because the individual is or was a director against liability
incurred in the proceeding if:

(1) the individual's conduct was in good faith; and

(2) the individual reasonably believed:

(A) in the case of conduct in the individual's official capacity with
the corporation, that the individual's conduct was in its best
interests; and

(B) in all other cases, that the individual's conduct was at least
not opposed to its best interests; and

(3) in the case of any criminal proceeding, the individual either:

(A) had reasonable cause to believe the individual's conduct was
lawful; or

(B) had no reasonable cause to believe the individual's conduct was
unlawful.

(b) A director's conduct with respect to an employee benefit plan for a
purpose the director reasonably believed to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subsection (a)(2)(B).

(c) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.

Sec. 9. Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which the director was a party because the
director is or was a director of the corporation against reasonable expenses
incurred by the director in connection with the proceeding.

Sec. 10. (a) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of final
disposition of the proceeding if:

(1) the director furnishes the corporation a written affirmation of the
director's good faith belief that the director has met the standard of
conduct described in section 8 of this chapter;

(2) the director furnishes the corporation a written undertaking,
executed personally or on the director's behalf, to repay the advance if it
is ultimately determined that the director did not meet the standard of
conduct; and

(3) a determination is made that the facts then known to those making the
determination would not preclude indemnification under this chapter.

(b) The undertaking required by subsection (a)(2) must be an unlimited
general obligation of the director but need not be secured and may be accepted
without reference to financial ability to make repayment.

(c) Determinations and authorizations of payments under this section shall be
made in the manner specified in section 12 of this chapter.

Sec. 11. Unless a corporation's articles of incorporation provide otherwise,
a director of the corporation who is a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to

II-2
<PAGE>

another court of competent jurisdiction. On receipt of an application, the
court after giving any notice the court considers necessary may order
indemnification if it determines:

(1) the director is entitled to mandatory indemnification under section 9
of this chapter, in which case the court shall also order the corporation
to pay the director's reasonable expenses incurred to obtain court-ordered
indemnification; or

(2) the director is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not the director met the
standard of conduct set forth in section 8 of this chapter.

Sec. 12. (a) A corporation may not indemnify a director under section 8 of
this chapter unless authorized in the specific case after a determination has
been made that indemnification of the director is permissible in the
circumstances because the director has met the standard of conduct set forth in
section 8 of this chapter.

(b) The determination shall be made by any one (1) of the following
procedures:

(1) By the board of directors by majority vote of a quorum consisting of
directors not at the time parties to the proceeding.

(2) If a quorum cannot be obtained under subdivision (1), by majority
vote of a committee duly designated by the board of directors (in which
designation directors who are parties may participate), consisting solely
of two (2) or more directors not at the time parties to the proceeding.

(3) by special legal counsel:

(A) Selected by the board of directors or its committee in the manner
prescribed in subdivision (1) or (2); or

(B) If a quorum of the board of directors cannot be obtained under
subdivision (1) and a committee cannot be designated under subdivision
(2), selected by majority vote of the full board of directors (in which
selection directors who are parties may participate).

(4) By the shareholders, but shares owned by or voted under the control
of directors who are at the time parties to the proceeding may not be voted
on the determination.

(c) Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection
(b)(3) to select counsel.

Sec. 13. Unless a corporation's articles of incorporation provide otherwise:

(1) An officer of the corporation, whether or not a director, is entitled
to mandatory indemnification under section 9 of this chapter, and is
entitled to apply for court-ordered indemnification under section 11 of
this chapter, in each case to the same extent as a director;

(2) The corporation may indemnify and advance expenses under this chapter
to an officer, employee, or agent of the corporation, whether or not a
director, to the same extent as to a director; and

(3) A corporation may also indemnify and advance expenses to an officer,
employee, or agent, whether or not a director, to the extent, consistent
with public policy, that may be provided by its articles of incorporation,
bylaws, general or specific action of its board of directors, or contract.

Sec. 14. A corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trust, employee, or agent of another foreign or domestic
corporation, partnership, limited liability company, joint venture, trust
employee benefit plan, or other enterprise, against liability asserted against
or incurred by the individual in that capacity or arising from the individual's
status as a director, officer, employee, or agent, whether or not the
corporation would have power to indemnify the individual against the same
liability under section 8 or 9 of this chapter.

II-3
<PAGE>

The:

(1) Corporation may purchase insurance under this section from; and

(2) Insurance purchased under this section may be reinsured in whole or in
part by;

an insurer that is owned or otherwise affiliated with the corporation, whether
the insurer does or does not do business with other persons.

Sec. 15. (a) The indemnification and advance for expenses provided for or
authorized by this chapter does not exclude any other rights to indemnification
and advance for expenses that a person may have under:

(1) A corporation's articles of incorporation or bylaws;

(2) A resolution of the board of directors or of the Shareholders;

(3) Any other authorization, whenever adopted, after notice, by a
majority vote of all the voting Common Shares then issued and outstanding.

(b) If the articles of incorporation, bylaws, resolutions of the board of
directors or of the Shareholders, or other duly adopted authorization of
indemnification or advance for expenses limit indemnification or advance for
expenses, indemnification and advance for expenses are valid only to the extent
consistent with the articles, bylaws, resolution of the board of directors or
of the Shareholders, or other duly adopted authorization of indemnification or
advance for expenses.

(c) This chapter does not limit a corporation's power to pay or reimburse
expenses incurred by a director, officer, employee, or agent in connection with
the person's appearance as a witness in a proceeding at a time when the person
has not been made a named defendant or respondent to the proceeding.

B. Article XII, Section 6 of the Company's Articles of Incorporation
provides:

Section 6. Limitation of Liability and Indemnification of Officers and
Directors. No officer or director of the Corporation shall be liable to the
Corporation for any loss or damage suffered by it on account of any action
taken or omitted to be taken by him as a director, officer or employee of the
Corporation in good faith if such person:

(i) exercised or used the same degree of care and skill as a prudent man
would have exercised or used under the circumstances in the conduct of his
own affairs; or

(ii) took or omitted to take such action in reliance upon the advice of
counsel for the Corporation or upon statements made or information
furnished by officers or employees of the Corporation which he had
reasonable grounds to believe, or upon a financial statement of the
Corporation prepared by an officer or employee of the Corporation in charge
of its accounts, or a public accountant or firm of public accountants; or

(iii) in good faith considered the assets to be of their book value or
followed what he believed to be sound accounting and business practice.

The Corporation shall indemnify any person against whom there is instituted
or threatened any claim, action, suit or proceeding, whether civil or criminal,
by reason of the fact that he, his testator or intestate is or was a director,
member of an executive committee or officer of the Corporation, or of any
corporation which he served as such at the request of the Corporation, against
any and all liability, reasonable expenses and costs of any nature (excluding
only accounts paid in settlement and including without limitation any and all
attorneys' fees, judgments, fines, penalties and court costs) actually incurred
by him in connection with the defense of such claim, action, suit or
proceeding, or in connection with any appeal therein, except in relation to
matters as to which it shall be finally adjudged in such action, suit or
proceeding that such person, his testator or intestate is liable for gross
negligence or willful misconduct in the performance of his duties. The
Corporation may also reimburse to any such person any amount paid in settlement
of any such claim, action, suit or proceeding, if it shall be found by a
majority of a committee composed of the directors not

II-4
<PAGE>

involved in the matter in controversy (whether or not a quorum) that it is in
the interests of the Corporation that such settlement be made and that such
person, his testator or intestate was not guilty of gross negligence or willful
misconduct.

If several claims, issues or matters of action are involved, any such person
may be entitled to indemnification as to some matters even though he is not so
entitled as to others. The Corporation may advance expenses to, or where
appropriate may at its expense undertake the defense of, any such person upon
receipt of an undertaking by or on behalf of such person to repay such expenses
if it should ultimately be determined that he is not entitled to
indemnification under this Article.

The provisions of this Section shall be in addition to and not in limitation
of any other right of indemnification and reimbursement or limitations of
liability to which any director, member of an executive committee or officer
may be entitled as a matter of law. The provisions of this Section shall apply
whether or not at the time of reimbursement the person reimbursed is then a
director, member of an executive committee or officer of the Corporation.
Notwithstanding any repeal of this Section or other amendment thereof, its
provisions shall be binding upon the Corporation (subject only to the
exceptions hereinabove set forth) as to all actions, suits or proceedings and
expenses connected therewith, judgments and settlements thereof, as above
provided, arising out of matters which occur during or are referable to the
period prior to any such repeal or amendment of this Section.

By vote of the Board of Directors, the Corporation may assent to the adoption
of a by-law or charter provision, having substantially the provisions of this
Section, by any subsidiary, whether or not wholly owned.

C. The Company has obtained a directors' and officers' liability and
corporation reimbursement policy which (subject to certain limits and
deductibles) (i) insures officers and directors of the Company against loss
arising from certain claims made against them by reason of their being such
directors or officers, and (ii) insures the Company against loss which it may
be required or permitted to pay as indemnification due its directors or
officers for certain claims.

ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
1 Form of Underwriting Agreement*
4.1 A specimen of the certificate representing the common
stock of the Company was filed as Exhibit 4.1 to the
Company's Amendment No. 1 to the Registration Statement on
Form S-1 filed on April 3, 1984 (Reg. No. 2-89521) and is
incorporated herein by reference
4.2 Article VI, Section 3-5, Article VII and Article XII, Sec-
tion 1 of the Articles of Incorporation of the Company
were filed as part of Exhibit 3.1 to the Registration
Statement on Form S-1 filed on February 27, 1987 (Reg. No.
33-12282) and are incorporated herein by reference
4.3 The Code of By-Laws of the Company as amended effective
April 29, 1992 was filed as Exhibit 4.3 to the Company's
Registration Statement on Form S-2 (Reg. No. 33-47706)
filed on May 6, 1992, and is incorporated herein by refer-
ence
5 Opinion and Consent of Sommer & Barnard, PC
23.1 Consent of Sommer & Barnard, PC (included in Exhibit 5)
23.2 Consent of Independent Accountants
24 Power of Attorney
</TABLE>
- --------
*to be filed by amendment

II-5
<PAGE>

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1) For the purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(2) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions
described in Item 15, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.

(3) For the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as a
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.

(4) For the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-6
<PAGE>

SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF ELKHART, STATE OF INDIANA, ON THE 17TH DAY OF
FEBRUARY, 1994.

Excel Industries, Inc.
/s/ James J. Lohman

By: _________________________________
James J. Lohman
Chief Executive Officer and
Chairman of the Board

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS JAMES J. LOHMAN AND JOSEPH A. ROBINSON, AND EACH
OF THEM, HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT WITH FULL POWER OF
SUBSTITUTION FOR HIM IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL CAPACITIES TO
SIGN ANY AND ALL AMENDMENTS (INCLUDING PRE-EFFECTIVE AND POST EFFECTIVE
AMENDMENTS) TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME WITH ALL
EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH WITH THE
SECURITIES AND EXCHANGE COMMISSION, GRANTS UNTO SAID ATTORNEYS-IN-FACT AND
AGENTS FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING
REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY AS TO
ALL INTENTS AND PURPOSES AS HE MIGHT OR COULD DO IN PERSON, AND HEREBY RATIFIES
AND CONFIRMS ALL THAT SAID ATTORNEYS-IN-FACT AND AGENTS OR THEIR OR HIS
SUBSTITUTE OR SUBSTITUTES MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATES INDICATED.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ James J. Lohman
- ------------------------------------
James J. Lohman Chief Executive Officer and February 17, 1994
Chairman of the Board
Principal Executive Officer
/s/ Joseph A. Robinson
- ------------------------------------
Joseph A. Robinson Secretary, Treasurer, Chief February 17, 1994
Financial Officer and
Director Principal
Financial Officer and
Principal Accounting
Officer
/s/ James O. Futterknecht, Jr.
- ------------------------------------
James O. Futterknecht, Jr. Director February 17, 1994
/s/ Roger E. Maugh
- ------------------------------------
Roger E. Maugh Director February 17, 1994
/s/ John G. Keane
- ------------------------------------
John G. Keane Director February 17, 1994
/s/ James K. Sommer
- ------------------------------------
James K. Sommer Director February 17, 1994
/s/ Ralph R. Whitney, Jr.
- ------------------------------------
Ralph R. Whitney, Jr. Director February 17, 1994
/s/ Robert R. Reilly
- ------------------------------------
Robert R. Reilly Director February 17, 1994
</TABLE>

II-7
<PAGE>

INDEX TO EXHIBITS FILED
TO REGISTRATION STATEMENT ON
FORM S-3 OF EXCEL INDUSTRIES, INC.

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
1 Form of Underwriting Agreement*
4.1 A specimen of the certificate representing the common
stock of the Company was filed as Exhibit 4.1 to the
Company's Amendment No. 1 to the Registration State-
ment on Form S-1 filed on April 3, 1984 (Reg. No. 2-
89521) and is incorporated herein by reference
4.2 Article VI, Section 3-5, Article VII and Article XII,
Section 1 of the Articles of Incorporation of the
Company were filed as part of Exhibit 3.1 to the Reg-
istration Statement on Form S-1 filed on February 27,
1987 (Reg. No. 33-12282) and are incorporated herein
by reference
4.3 The Code of By-Laws of the Company as amended effec-
tive April 29, 1992 was filed as Exhibit 4.3 to the
Company's Registration Statement on Form S-2 (Reg.
No. 33-47706) filed on May 6, 1992, and is incorpo-
rated herein by reference
5 Opinion and Consent of Sommer & Barnard, PC..........
23.1 Consent of Sommer & Barnard, PC (included in Exhibit
5)
23.2 Consent of Independent Accountants...................
24 Power of Attorney (included on signature page of this
Registration Statement)
</TABLE>
- --------
*to be filed by amendment

1
<PAGE>

GRAPHIC MATERIAL CROSS-REFERENCE PAGE

PHOTO OF MODULAR WINDOWS APPEARS ON PAGE 2A.

PHOTO OF CONVENTIONAL WINDOWS APPEARS ON PAGE 2A.

PHOTO OF WINDOW REGULATORS APPEARS ON PAGE 2A.

PHOTO OF MASS TRANSIT WINDOWS APPEARS ON PAGE 2A.

PHOTO OF RV WINDOWS APPEARS ON PAGE 2B.

PHOTO OF VEHICLE DOOR SYSTEMS APPEARS ON PAGE 2B.

PHOTO OF INJECTION MOLDED PARTS APPEARS ON PAGE 2B.

COMPANY LOGO APPEARS ON PAGE 2A.

<PAGE>

February 18, 1994

Board of Directors
Excel Industries, Inc.
1120 North Main Street
Elkhart, Indiana 46514

RE: Registration Statement on Form S-3 of
Excel Industries, Inc.

Gentlemen:

We have acted as counsel to Excel Industries, Inc. ("Excel") in connection
with the preparation and filing with the Securities and Exchange Commission of
the Registration Statement on Form S-3 (the "Registration Statement") which
covers the registration under the Securities Act of 1933 of 2,937,128 shares of
Excel's common stock, no par value (the "Registered Shares") of which 2,557,128
shares are being sold by certain selling shareholders and 380,000 are being sold
by Excel.

In that capacity, and for purposes of giving the opinion set forth in this
letter, we have examined and reviewed the following documents and materials:

1. A copy of Excel's Articles of Incorporation, and all amendments
thereto;

2. A copy of the Code of By-Laws of Excel;

3. The Registration Statement together with all exhibits;

4. The Underwriting Agreement among Excel, the selling shareholders, and
the Underwriters referenced in the Registration Statement, the form of which is
being filed today as Exhibit 1 to the Registration Statement (the "Underwriting
Agreement");

5. Minutes of the meetings and written consent resolutions of Excel's
Board of Directors; and
<PAGE>

Board of Directors
Excel Industries, Inc.
February 18, 1994
Page 2

6. Such other instruments, documents, statements and records of Excel as
we deemed relevant and necessary to examine and rely upon for the purpose of
this opinion.

Further, we have made and relied upon the following assumptions:

1. That the originals of all documents and instruments submitted to us,
including those described above, are authentic;

2. That all copies of documents and instruments submitted to us,
including those described above, conform in all material respects to the
originals of such documents;

3. That all signatures on documents and instruments the originals or
copies of which were submitted to us, including those described above, are
genuine;

4. That all natural persons signing documents, the originals or copies of
which were submitted to us, including those described above, had the legal
capacity to so sign;

5. That all documents and instruments, the originals or copies of which
were submitted to us, including those described above, will have been duly and
properly authorized, executed and delivered and be valid, binding and
enforceable, at the time any Registered Shares are sold; and

6. That all statements, representations, understandings and warranties in
the documents and instruments, the originals or copies of which were submitted
to us, including those described above, are now (and will be at the time any
Registered Shares are sold) true, accurate and complete in all respects.

In rendering the opinion set forth below, we have not passed upon and do
not purport to pass upon any "doing business", "blue sky" or securities laws of
any jurisdiction. Nor do we express any opinion regarding law other than the
corporate law of the State of Indiana and the federal law of the United States.

Based on the documents, matters and assumptions described above, and such
other matters as we deem appropriate, we hereby advise you that we are of the
opinion that, when sold and delivered in accordance with the proposed
Underwriting Agreement, the Registered Shares will be duly authorized, validly
issued, fully paid and non-assessable.
<PAGE>

Board of Directors
Excel Industries, Inc.
February 18, 1994
Page 3

We hereby consent to the reference to our name in the Registration
Statement under the caption "Legal Matters" and further consent to the inclusion
of this opinion as Exhibit 5 to the Registration Statement.

SOMMER & BARNARD, PC

By:___________________________
James K. Sommer

JKS/gkw
Enclosures

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated February 17, 1994
relating to the financial statements of Excel Industries, Inc., which appears
in such Prospectus. We also consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on Form S-3 of our
report dated February 18, 1993, which appears on page 19 of the 1992 Annual
Report to Shareholders of Excel Industries, Inc., which is incorporated by
reference in Excel Industries Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1992. We also consent to the application of such report to
the Financial Statement Schedules for the three years ended December 31, 1992
listed under Item 14(a)(2) of the Excel Industries, Inc. Annual Report on Form
10-K for the year ended December 31, 1992 when such schedules are read in
conjunction with the financial statements referred to in our report. The audits
referred to in such report also included these Financial Statement Schedules.
We also consent to the references to us under the heading "Experts" and
"Selected Consolidated Financial Information" in such Prospectus. However, it
should be noted that Price Waterhouse has not prepared or certified such
"Selected Consolidated Financial Information."

PRICE WATERHOUSE
South Bend, Indiana
February 17, 1994