SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ X ] Preliminary proxy statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-b(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
TOWER AUTOMOTIVE, INC.
(Name of registrant as specified in its charter)
TOWER AUTOMOTIVE, INC.
(Name of person(s) filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(l)(1)(ii), 14a-6(i)(l), or 14a-6(i)(2)
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:________
(2) Aggregate number of securities to which transaction applies:___________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:____________________________________
(4) Proposed maximum aggregate value of transaction:_______________________
(5) Total fee paid:________________________________________________________
[ ] Fee previously paid with preliminary materials.
[ ] Check box if any part of fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and date of its filing.
(1) Amount previously paid:________________________________________________
(2) Form, schedule, or registration statement no.:_________________________
(3) Filing party:__________________________________________________________
(4) Date filed:____________________________________________________________
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TOWER AUTOMOTIVE, INC.
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TIME: 1:00 p.m. eastern time, May 20, 1997.
PLACE: Tower Automotive, Inc., 6303 28th Street S.E., Grand Rapids,
Michigan.
ITEMS OF (1) Election of directors;
BUSINESS: (2) Approval of the amendment to the Company's Amended and
Restated Certificate of Incorporation to increase the
authorized Common Stock from 30,000,000 to 200,000,000
shares;
(3) Approval of the amendment to the Company's 1994 Key Employee
Stock Option Plan to increase the shares available for
issuance from 500,000 to 1,500,000 shares;
(4) Ratification of Arthur Andersen LLP as independent public
accountants of the Company; and
any other business that properly comes before the meeting.
RECORD DATE: Holders of record at the close of business on March 24, 1997
are entitled to notice of and to vote on all matters
presented at the meeting and at any adjournments or
postponements thereof. A list of such holders will be
available prior to the meeting at the Company's corporate
office for examination by any such holder for any purpose
germane to the meeting.
By Order of the Board of Directors
James N. DeBoer
Secretary
Dated: April __, 1997
IMPORTANT
YOU CAN HELP US PREPARE FOR THE MEETING AND ELIMINATE EXTRA EXPENSE WHETHER YOU
HAVE A FEW SHARES OR MANY - IF YOU WILL COMPLETE AND RETURN THE ENCLOSED PROXY
PROMPTLY. YOUR PROMPT REPLY WILL ELIMINATE EXTRA EXPENSE IN SOLICITING YOUR
PROXY.
<PAGE>
Tower Automotive, Inc. Preliminary Proxy Statement
4508 IDS Center dated 3-11-97.
Minneapolis, Minnesota 55402 Definitive Proxy materials
_______________________ intended to be released on
or about April 4, 1997.
PROXY STATEMENT
-----------------------
Annual Meeting of Stockholders
May 20, 1997
------------------------
This Proxy Statement and accompanying Proxy are being furnished to the
holders of Common Stock, par value $.01 per share, (the "Common Stock") of Tower
Automotive, Inc. (the "Company") in connection with the solicitation of Proxies
on behalf of the Board of Directors of the Company (the "Board of Directors")
for the Annual Meeting of Stockholders (the "Annual Meeting") to be held on May
20, 1997 at 1:00 p.m. eastern time at Tower Automotive, Inc., 6303 28th Street
S.E., in Grand Rapids, Michigan, and at any adjournments and postponements
thereof. These Proxy materials are being mailed on or about April __, 1997 to
holders of record on March 24, 1997 of the Common Stock.
When you sign and return the enclosed Proxy and if no direction is
indicated, such proxy will be voted FOR the slate of directors described herein,
FOR the proposals set forth in Items 2, 3 and 4 in the Notice of Meeting, and,
as to any other business as may properly be brought before the Annual Meeting
and any adjournments or postponements thereof, in the discretion of the Proxy
holders.
Returning your completed Proxy will not prevent you from voting in person
at the Annual Meeting should you be present and wish to do so. In addition, you
may revoke your Proxy any time before it is voted by written notice to the
Secretary of the Company prior to the Annual Meeting or by submission of a
later-dated Proxy or by the withdrawal of your Proxy and voting in person at the
Annual Meeting.
On March 24, 1997, there were ___________ shares of Common Stock
outstanding. Each outstanding share of Common Stock entitles the holder thereof
to one vote per share. The presence in person or by Proxy of 51% of such shares
shall constitute a quorum. Under Delaware law, abstentions are treated as
present and entitled to vote and therefore have the effect of a vote against a
matter. A broker non-vote on a matter is considered not entitled to vote on that
matter and thus is not counted in determining whether a matter requiring
approval of a majority of the shares present and entitled to vote has been
approved.
ELECTION OF DIRECTORS
The Board of Directors is currently comprised of ten directors. The Board
of Directors has nominated and recommends the election of each of the ten
nominees set forth below as a director of the Company to serve until the next
annual meeting of stockholders or until their successors are duly elected and
qualified. The Board of Directors expects all nominees named below to be
available for election. In case any nominee is not available, the Proxy holders
may vote for a substitute unless the Board of Directors reduces the number of
directors.
Directors will be elected at the Annual Meeting by a plurality of the votes
cast at the meeting by the holders of shares represented in person or by Proxy.
There is no right to cumulative voting as to any matter, including the election
of directors.
The Board of Directors recommends a vote "FOR" the election of the nominees
to the Board of Directors.
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The following sets forth information as to each nominee for election at the
Annual Meeting, including age as of March 24, 1997, principal occupation and
employment for a minimum of the past five years, directorships in other publicly
held companies and period of service as a director of the Company.
S.A. (Tony) Johnson, 56, has served as Chairman and a Director of the
Company since April 1993. Mr. Johnson is the founder, Chief Executive Officer
and President of Hidden Creek Industries ("Hidden Creek"), a private industrial
management company based in Minneapolis which has provided certain management
and other services to the Company. Mr. Johnson is also the Managing Partner of
J2R Partners ("J2R"). Prior to forming Hidden Creek, Mr. Johnson served from
1985 to 1989 as Chief Operating Officer of Pentair, Inc., a diversified
industrial company. From 1981 to 1985, Mr. Johnson was President and Chief
Executive Officer of Onan Corp., a diversified manufacturer of electrical
generating equipment and engines for commercial, defense and industrial markets.
Mr. Johnson currently serves as Chairman and a director of Dura Automotive
Systems, Inc., a manufacturer of mechanical assemblies and integrated systems
for the automotive industry, and served as Chairman and a director of Automotive
Industries Holding, Inc., a supplier of automotive interior trim components,
from May 1990 until its sale to Lear Corporation in August 1995.
Adrian Vander Starre, 64, has served as Vice Chairman and a Director of the
Company since April 1993. Mr. Vander Starre served as President, Chief Executive
Officer and a director of R.J. Tower Corporation from 1978 to 1993. Mr. Vander
Starre originally joined R.J. Tower Corporation in 1965 as Controller and later
served as Treasurer from 1974 to 1978. Mr. Vander Starre has entered into a
consulting agreement with the Company under which he performs such duties as may
be assigned by the Board of Directors.
Dugald K. Campbell, 50, has served as President, Chief Executive Officer
and a Director of the Company since December 1993. From 1991 to 1993, Mr.
Campbell served as a consultant to Hidden Creek. From 1988 to 1991, he served as
Vice President and General Manager of the Sensor Systems Division of Siemens
Automotive, a manufacturer of engine management systems and components. From
1972 to 1988, Mr. Campbell held various executive, engineering and marketing
positions with Allied Automotive, a manufacturer of vehicle systems and
components and a subsidiary of Allied Signal Corporation.
James R. Lozelle, 51, has served as Executive Vice President for the Tower
Automotive Technical Centers, with responsibility for advanced product
development and customer service, and a Director of the Company since the
acquisition of Edgewood Tool and Manufacturing Company ("Edgewood") in May 1994.
Mr. Lozelle served as President of Edgewood from 1982 until it was acquired by
the Company. Mr. Lozelle joined Edgewood in 1970 and served as Vice President
from 1971 to 1982. Mr. Lozelle is chairman of the Near Zero Stamping research
project of the Autobody Consortium.
Scott D. Rued, 40, has served as Vice President, Corporate Development and
a Director of the Company since April 1993. Mr. Rued served as Vice President,
Chief Financial Officer and a director of Automotive Industries Holding, Inc.
from April 1990 until its sale to Lear Corporation in August 1995. Mr. Rued, a
partner of J2R, has also served as Executive Vice President and Chief Financial
Officer of Hidden Creek since January 1994 and served as its Vice President -
Finance and Corporate Development from June 1989 through 1993. Mr. Rued is also
a director of The Rottlund Company, Inc., a corporation engaged in the
development and sale of residential real estate.
W.H. Clement, 69, has served as a Director of the Company since April 1993.
Mr. Clement currently serves as a consultant to Hidden Creek. From 1975 until
May 1994, Mr. Clement served as Chief Executive Officer or as President of
Automotive Industries Holding, Inc. or its predecessor. Mr. Clement is a partner
of J2R and is also a director of Dura Automotive Systems, Inc. and F&M National
Corp., a bank holding company.
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Eric J. Rosen, 35, has served as a Director of the Company since April
1993. Mr. Rosen is Managing Director of Onex Investment Corp., a wholly owned
subsidiary of Onex Corporation, a diversified industrial corporation, and served
as a Vice President of Onex Investment Corp. from 1989 to February 1994. Prior
thereto, Mr. Rosen worked in the merchant banking group at Kidder, Peabody & Co.
Incorporated from 1987 to 1989. Mr. Rosen is also a director of Dura Automotive
Systems, Inc.
Matthew O. Diggs, Jr., 64, has served as a Director of the Company since
November 1994. Mr. Diggs is Chairman and the General Partner of The Diggs Group,
an investment company founded in 1990. Previously, Mr. Diggs served as President
and Chief Executive Officer of the Copeland Corporation for thirteen years. Mr.
Diggs is also a director of Scotsman Industries, Inc., a manufacturer and
marketer of commercial equipment to the world-wide food service industry, and
BankOne, Dayton, N.A., a bank holding company.
F.J. (Joe) Loughrey, 47, has served as a Director of the Company since
November 1994. Mr. Loughrey joined Cummins Engine Company, Inc. in 1974 and has
served as Executive Vice President and Group Vice President - Industrial and
Chief Technical Officer since April 1996. Prior thereto, Mr. Loughrey served as
Group Vice President - Worldwide Operations and Technology from 1990 to 1995.
Kim B. Clark, 47, has served as a Director of the Company since December
1995. Mr. Clark has served as Dean of the Graduate School of Business
Administration at Harvard University in Cambridge, Massachusetts since September
1995. From 1978 to September 1995, Dean Clark served as a professor of business
administration at Harvard Business School.
There are no family relationships between any of the foregoing persons.
Board and Committee Meetings
The Board of Directors held four meetings (exclusive of committee meetings)
during the preceding fiscal year. The Board of Directors has established the
following committees, the functions and current members of which are noted
below. During 1996, each director attended at least 75% of the meetings of the
Board of Directors and any committees on which such director served.
Executive Committee. The Executive Committee of the Board of Directors (the
"Executive Committee") consists of Messrs. Johnson (Chairman), Campbell, Lozelle
and Rued. The Executive Committee has all the power and authority vested in or
retained by the Board of Directors and may exercise such power and authority in
such manner as it shall deem for the best interest of the Company in all cases
in which specific direction shall not have been given by the Board of Directors
and subject to any specific limitations imposed by law or a resolution of the
Board of Directors. The Executive Committee met eight times during the preceding
fiscal year.
Audit Committee. The Audit Committee of the Board of Directors (the "Audit
Committee") consists of Messrs. Clark, Diggs and Loughrey. The Audit Committee
is responsible for reviewing, as it shall deem appropriate, and recommending to
the Board of Directors, internal accounting and financial controls for the
Company and accounting principles and auditing practices and procedures to be
employed in the preparation and review of the Company's financial statements.
The Audit Committee is also responsible for recommending to the Board of
Directors independent public accountants to audit the annual financial
statements of the Company. The Audit Committee met twice during the preceding
fiscal year.
Compensation Committee. The Compensation Committee of the Board of
Directors (the "Compensation Committee") consists of Messrs. Vander Starre
(Chairman), Clement, Diggs and Loughrey. During the last fiscal year, the
Compensation Committee had all the power and authority of the Board of Directors
with respect to salaries, compensation and benefits of directors, executive
officers and key employees of the Company and grants all options under the 1994
Key Employee Stock Option Plan (the "Stock Option Plan") to purchase Common
Stock of the Company. The Compensation Committee met four times during the
preceding fiscal year.
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Nominating Committee. The Company does not have a nominating committee.
However, the functions of the Nominating Committee are performed by the
Compensation Committee.
Compensation of Directors
Directors who are not employees of the Company or any of its affiliates
each receive an annual fee of $14,400 for serving as a director of the Company.
In addition, each non-employee director receives $1,000 for each Board of
Directors meeting attended, $500 for each committee meeting attended and
reimbursement of out of pocket expenses incurred to attend such meetings.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities to file reports
of securities ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than ten
percent beneficial owners also are required by rules promulgated by the SEC to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Company, or written representations that no Form 5 filings were required, the
Company believes that during the period from January 1, 1996 through December
31, 1996 all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with.
AUTHORIZED COMMON STOCK AMENDMENT
The Company's Amended and Restated Certificate of Incorporation currently
authorizes the Company to issue no more than 35,000,000 shares of capital stock,
of which 30,000,000 shares are authorized to be Common Stock. As of the record
date for the Annual Meeting, there were ___________ shares of Common Stock
issued and outstanding and ___ shares of Common Stock reserved for issuance
under the Company's stock plans. Therefore, as of such date only ___________
shares of Common Stock remained available for future issuances. The Board of
Directors of the Company has unanimously approved recommending that the
stockholders vote to amend the Amended and Restated Certificate of Incorporation
to increase the authorized number of shares of Common Stock from 30,000,000 to
200,000,000 shares (the "Authorized Common Stock Amendment") as set forth on
Exhibit A attached hereto.
The Board of Directors believes it desirable to increase the authorized
number of shares of Common Stock in order to provide the Company with adequate
flexibility in corporate planning and strategies. The availability of additional
Common Stock for issuance could be used in connection with a number of purposes,
including corporate financings, future acquisitions, and other corporate
purposes such as the issuance of stock dividends and stock options. There are
currently no agreements or understandings regarding the issuance of any of the
additional shares of Common Stock that would be available if the Amended and
Restated Certificate of Incorporation is so amended. Such additional authorized
shares may be issued for such purposes and for such consideration as the Board
of Directors may determine without further stockholder approval, unless such
action is required by applicable law or the rules of any stock exchange on which
the Company's securities may be listed.
The additional shares of Common Stock for which authorization is sought
would be part of the existing class of common stock, and, to the extent issued,
would have the same rights and privileges as the shares of Common Stock
presently outstanding. Ownership of shares of the Company's Common Stock confers
no preemptive rights.
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The increase in the authorized but unissued shares of Common Stock which
would result from adoption of the Authorized Common Stock Amendment proposed
herein could have a potential anti-takeover effect with respect to the Company,
although management is not presenting the proposal for that reason and does not
presently anticipate using the increased authorized shares for such a purpose.
The potential anti-takeover effect of the proposed Authorized Common Stock
Amendment arises because it would enable the Company to issue additional shares
of Common Stock up to the total authorized number with the effect that the
stockholdings and related voting rights of then existing stockholders would be
diluted to an extent proportionate to the number of additional shares issued.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock of the Company is required for approval of the proposed
amendment. Unless otherwise directed by a stockholder's proxy, the persons named
as proxy voters in the accompanying proxy will vote FOR the amendment.
The Board of Directors recommends a vote "FOR" the approval of the
Authorized Common Stock Amendment to the Amended and Restated Certificate of
Incorporation set forth on Exhibit A attached hereto.
PROPOSED AMENDMENT TO THE COMPANY'S
1994 KEY EMPLOYEE STOCK OPTION PLAN
In 1994, the Board of Directors adopted, and the stockholders approved, the
Tower Automotive, Inc. 1994 Key Employee Stock Option Plan (the "Plan"). The
Plan provides for the grant of options to employees of the Company or any
subsidiary who are determined to be key employees. A total of 500,000 shares
were reserved for issuance under the Plan. As of March __, 1997, _____ shares
were available for issuance under the Plan. The purpose of the Plan is to
compensate employees of the Company and its subsidiaries, to provide those
employees with a significant additional incentive to promote the financial
success of the Company and its subsidiaries and to provide an incentive which
may be used to induce able persons to enter into or remain in the employment of
the Company and its subsidiaries.
On February 25, 1997, the Board of Directors approved an amendment to the
Plan, subject to stockholder approval, to make an additional 1,000,000 shares
available for issuance under the Plan. The Board adopted this amendment to
ensure that key employees will continue to be able to acquire Company stock
under the Plan. The Board believes that the availability of an opportunity to
purchase Company stock is important to attract and retain key personnel and that
stock ownership provides an important long-term incentive to manage the affairs
of the Company in the best interests of its stockholders.
At the Annual Meeting, the Company's stockholders are being requested to
consider and approve this amendment. The following paragraphs summarize the
principle features of the Plan, as amended.
Description of the Plan
The Plan is administered by a committee of the Board of Directors (the
"Committee") which is required to consist of not less than two nonmanagement
members of the Board. The Committee determines the employees of the Company and
its subsidiaries who are to be granted options, the number of shares subject to
each option, and such other matters as are specified in the Plan.
Options granted under the Plan may be incentive stock options ("ISOs") as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or non-ISOs, as identified by the Committee. The primary distinctions
between ISOs and non-ISOs are set forth under the caption " Federal Income Tax
Consequences" below. Each option is evidenced by written agreement containing
such terms and conditions as may be established by the Committee. Nothing
contained in the Plan or any agreement executed pursuant to the
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Plan confers upon any participant the right to continue in the employ of the
Company or obligates the Company to retain the participant in its employ for any
period.
Each option agreement provides for the under of shares to which it
pertains. The option price, set forth in each option agreement, must equal the
"fair market value" of the shares on the date the option is granted, except that
the option price of any ISO granted to an employee who owns more than 10 percent
of the Company's Common Stock must be 110 percent of the fair market value of
the Common Stock. The closing sale price of the Company's Common Stock on the
New York Stock Exchange on March __, 1997, was $____ per share.
Options may be exercised in one or more installments, upon the happening of
certain events, upon the passage of a specified period of time or upon the
fulfillment of a condition, in each case as the Committee may decide when the
option is granted. Options may be exercised only during the holder's employment
by the Company or a subsidiary, except that under certain circumstances an
option may be exercised for up to three months after termination of the option
holder's employment. The Committee in its sole discretion may permit any option
to be exercised after the option holder's termination and accelerate the date on
which an option may be exercised. Under the Plan, no option granted to holders
subject to Section 16 of the Securities Exchange Act of 1934, as amended, may be
exercised earlier than six months after the date of grant, except in the event
of the death or disability of such option holder.
Options may be exercised by written notice to the Company, and the purchase
price payable upon exercise must be paid by the option holder at the time of
delivery of the shares. Payment of the exercise price may be made in cash or by
check, or, at the written request of the option holder and upon satisfaction of
any applicable holding periods, the Committee may permit payment by delivery by
the option holder, or retention by the Company, of Common Stock or by the
delivery of a combination of cash and Common Stock. The right to deliver Company
Common Stock in payment of the exercise price may be limited or denied in any
option agreement.
The Plan provides that the Board may at any time suspend or terminate the
Plan or make amendments to it as it deems advisable, provided that any changes
are made in compliance with Rule 16b-3 of the Exchange Act and Section 422 of
the Code. No termination or amendment of the Plan may, without the consent of
the holder of any option prior to the termination or adoption of the amendment,
materially or adversely affect the rights of such holder under such option. No
ISOs may be granted under the Plan after August 10, 2004.
Federal Income Tax Consequences
The following is a brief summary of the principal federal income tax
consequences to participants upon the grant and exercise of options granted
under the Plan and is based on the current provisions of the Code, treasury
regulations, rulings, administrative pronouncements and court interpretations in
effect as of the date hereof.
The grant of options under the Plan will not result in the recognition of
income to recipients. The exercise of options that are not designated as ISOs,
however, will result in ordinary income recognition at the time of exercise. The
amount of ordinary income will be the difference between the fair market value
of the shares at the time the option is exercised and the option price. The
Company will be entitled to a deduction equal to the amount of an optionee's
ordinary income. Tax consequences to optionees of non-ISOs arise again at the
time shares are sold. If the shares have been held for more than one year prior
to sale, a gain or loss will be treated as long-term capital gain or loss.
Otherwise, the gain or loss will be treated as short-term capital gain or loss.
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The tax treatment of ISOs is somewhat different. In general, recipients of
ISOs do not recognize taxable income at the time of grant or at the time of
exercise. Further, if the shares acquired as a result of the exercise of an ISO
are disposed of more than two years after the date the option was granted and
more than one year after the date the option was exercised, the entire gain, if
any, realized upon disposition is entitled to capital gain treatment. As a
result, no deduction will be allowable to the Company in connection with either
the grant nor the exercise of an ISO, except in the case of a "disqualifying
disposition." A disqualifying disposition occurs if an optionee disposes of
shares acquired pursuant to the exercise of an ISO before the expiration of one
year after the date of exercise or two years after the date of grant. As a
result of disqualifying disposition, an optionee will, in general, recognize
ordinary income equal to the lesser of (a) the sale price of the shares sold
minus the option price, or (b) the fair market value of the shares at the time
of exercise minus the option price. The Company will be entitled to a deduction
equal to the amount of the optionee's ordinary income.
The rules governing the tax treatment of options and stock acquired upon
the exercise of options are technical; accordingly, the above description is
necessarily general in nature and does not purport to be complete. Also, the tax
consequences under applicable state and local income tax laws may not be the
same as under the federal income tax laws.
The affirmative vote of a majority of the Company's outstanding Common
Stock represented and voted at the Annual Meeting is required to approve the
adoption of the amendment to the Plan. While broker nonvotes will not be treated
as votes cast on the approval of this Plan, shares voted as abstentions will be
counted as votes cast. Since a majority of the votes cast is required for
approval, the sum of any negative votes and abstentions will necessitate
offsetting affirmative votes to assure approval. Please note that the
accompanying proxy will be voted FOR the approval of the adoption of the
amendment to the Plan, if no contrary direction is made on the card.
The Board of Directors recommends a vote "FOR" the approval of the adoption
of the amendment to the Plan.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
appointed Arthur Andersen LLP as independent public accountants, to audit the
consolidated financial statements of the Company for the year ending December
31, 1997 and to perform other appropriate services as directed by the Company's
management and the Board of Directors.
A proposal will be presented at the meeting to ratify the appointment of
Arthur Andersen LLP as the Company's independent public accountants. It is
expected that a representative of Arthur Andersen LLP will be present at the
Annual Meeting to respond to appropriate questions or to make a statement if he
or she so desires. If the stockholders do not ratify this appointment by the
affirmative vote of a majority of the shares represented in person or by Proxy
at the meeting, other independent public accountants will be considered by the
Board of Directors upon recommendation of the Audit Committee.
The Board of Directors recommends a vote "FOR" ratification of the
appointment of Arthur Andersen LLP as the Company's independent public
accountants.
OTHER BUSINESS
At the date of this Proxy Statement, the Company has no knowledge of any
business other than that described above that will be presented at the Annual
Meeting. If any other business should properly be brought before the Annual
Meeting and any adjournments or postponements thereof, the Proxies will be voted
in the discretion of the Proxy holders.
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SECURITY OWNERSHIP
Unless otherwise noted, the following table sets forth certain information
with respect to the outstanding shares of Common Stock of the Company
beneficially owned by each director and nominee for director of the Company, the
chief executive officer and the four other most highly compensated executive
officers, and the directors and executive officers as a group and all beneficial
owners of more than 5% of the Common Stock of the Company is furnished as of
February 14, 1997.
Beneficial Ownership of
Common Stock
Directors, Officers Number of Percent of
and 5% Stockholders Shares Class
Onex U.S. Investments, Inc. (1)(8).............. 3,119,620 21.8%
S.A. Johnson (2)(8)............................. 659,182 4.6%
Adrian Vander Starre (3)(8)..................... 19,351 *
Dugald K. Campbell (4)(8)....................... 226,276 1.6%
James R. Lozelle (5)(8)......................... 314,492 2.1%
Anthony A. Barone............................... 9,700 *
Luigi Candusso.................................. 12,750 *
Michael W. Doherty (8).......................... 158,020 1.1%
Ronald E. Gavalis (8)........................... 71,444 *
Scott D. Rued (6)(8)............................ 590,836 4.1%
Paul D. Rysenga................................. 7,150 *
W.H. Clement (7)(8)............................. 696,926 4.9%
Eric J. Rosen (1)............................... 10,000 *
Matthew O. Diggs, Jr. (9)....................... 8,500 *
Kim B. Clark.................................... 2,500 *
F.J. Loughrey................................... 4,500 *
Dresdner Bank AG (10)........................... 1,002,800 7.0%
First Union Corpoation (11)..................... 765,204 5.3%
Chancellor Entities (12)........................ 717,400 5.0%
All Directors and Officers as a group
(15 persons).................................. 1,644,623 11.2%
_________________________
* Less than one percent.
(1) The record holder of such shares listed in the table as owned by Onex U.S.
Investments, Inc. ("Onex") is ONEX DHC LLC, an affiliate of Onex ("Onex
DHC"). Onex has shared voting power of 3,119,620, shares (see footnote (8))
and sole dispositive power over 1,486,778 shares. Mr. Rosen is Managing
Director of Onex Investment Corp. and disclaims beneficial ownership of all
shares of Common Stock owned by Onex. Onex DHC and Onex Investment Corp.
are both wholly owned subsidiaries of Onex Corporation. The address for
Onex, Onex DHC and Mr. Rosen is c/o Onex Investment Corp., 712 Fifth
Avenue, 40th Floor, New York, New York 10019.
(2) Includes shares owned by J2R, of which Mr. Johnson is Managing Partner, and
82,700 shares owned by Mr. Johnson.
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(3) Includes 19,351 shares held in an irrevocable trust for the benefit of Mr.
Vander Starre's children, as to all of which Mr. Vander Starre's children
are the trustees. Mr. Vander Starre disclaims beneficial ownership of the
shares held in trust.
(4) Includes 3,195 shares owned by Mr. Campbell's wife, 350 shares owned by Mr.
Campbell's child and 74,805 shares held in an annuity trust, of which Mr.
Campbell is the trustee and 15,000 shares issuable upon the exercise of
currently exercisable options held by Mr. Campbell. Mr. Campbell disclaims
beneficial ownership of the shares held by his wife, his child and in
trust.
(5) Includes 266,600 shares of Common Stock issuable upon the conversion of
Convertible Notes and 44,578 shares issuable upon the exercise of currently
exercisable options held by Mr. Lozelle.
(6) Includes shares owned by J2R, of which Mr. Rued is a partner, and 14,354
shares owned by Mr. Rued. Mr. Rued disclaims beneficial ownership of the
shares owned by J2R.
(7) Includes shares owned by J2R, of which Mr. Clement is a partner, 89,744
shares owned by Mr. Clement and an aggregate of 30,700 shares held in
trusts for the benefit of Mr. Clement's grandchildren, as to all of which
trusts Mr. Clement is the sole trustee. Mr. Clement disclaims beneficial
ownership of those shares owned by J2R and the shares held in trust in
which he does not have a pecuniary interest.
(8) Onex, J2R, Messrs. Johnson, Vander Starre, Campbell, Lozelle, Doherty,
Gavalis, Rued, Clement and certain of the Company's other existing
stockholders have entered into agreements pursuant to which such
stockholders agreed to vote their shares of the Company's voting stock in
the same manner as Onex votes its shares on all matters presented to the
Company's stockholders for a vote and, to the extent permitted by law,
granted to Onex a proxy to effectuate such agreement.
(9) Includes 6,000 shares owned by EJJM Partnership, of which Mr. Diggs is the
General Partner and 2,500 shares issuable upon the exercise of currently
exercisable options held by Mr. Diggs. Mr. Diggs disclaims beneficial
ownership of the shares owned by EJJM Partnership in which he does not have
a pecuniary interest.
(10) Dresdner Bank AG (Dresdner) reported as of December 31, 1996 sole voting
power with respect to 897,800 shares of Common Stock and sole dispositive
power with respect to 1,002,800 shares of Common Stock. RCM Capital
Management, L.L.C. ("RCM Capital"), a wholly owned subsidiary of Dresdner,
RCM Limited L.P., as the Managing Agent of RCM Capital, and RCM General
Corporation, as the General Partner of RCM Limited L.P., also reported
beneficial ownership of such shares. The address for Dresdner is Jurgen -
Ponto - Platz 1, 60301 Frankfurt, Germany and the address for the other
entities is Four Embarcadero Center, Suite 2900, San Francisco, California
94111.
(11) First Union Corporation reported as of December 31, 1996 sole voting and
dispositive power with respect to 765,204 shares of Common Stock, which
represented approximately 5.4% of the outstanding Common Stock at that
time. The address for First Union Corporation is One First Union Center,
Charlotte, North Carolina 28288.
(12) Chancellor LGT Asset Management, Inc. ("Chancellor Asset") and Chancellor
LGT Trust Company ("Chancellor Trust"), as investment advisors for various
fiduciary accounts, and LGT Asset Management, Inc. ("Asset Management") as
the holding company for Chancellor Asset, reported as of December 31, 1996
the sole power to vote and dispose of an aggregate of 717,400 shares of
Common Stock, which represented approximately 5.4% of the outstanding
Common Stock at that time. The address for Chancellor asset and Chancellor
Trust is 1166 Avenue of the Americas, New York, New York 10036 and the
address for Asset Management is 50 California Street, San Francisco,
California 94111.
9
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the Company's chief executive officer's and
the four other most highly compensated executive officers' (the "named executive
officers") compensation packages for the years ended December 31, 1996, 1995 and
1994. Other than the Stock Option Plan, the Company does not maintain any
long-term compensation plans.
<TABLE>
Long-Term
Annual Compensation Compensation
________________________________________ __________
Other Annual Options All Other
Name and Salary Bonus Compensation Granted Compensation
Principal Position Year ($)(1) ($)(1) ($) (#) ($)(2)
<S> <C> <C> <C> <C> <C> <C>
Dugald K. Campbell 1996 $275,984 $400,000 - 20,000 $12,518
President and Chief 1995 253,255 195,000 - 20,000 12,079
Executive Officer 1994 215,000 135,000 89,094(3) - 15,264
James R. Lozelle 1996 200,704 200,000 - 15,000 12,898
Executive Vice 1995 200,308 109,000 - 13,000 10,756
President(4) 1994 142,940 50,000 - - 7,147
Anthony A. Barone 1996 152,234 145,000 60,178(6) 10,000 11,743
Vice President and 1995 92,234 69,000 27,782(6) 8,000 418
Chief Financial Officer(5)
Paul D. Rysenga 1996 163,139 130,000 - 15,000 11,479
Vice President(7) 1995 145,308 138,000 - 12,000 11,188
1994 62,500 70,000 - - 4,063
Luigi Candusso 1996 156,053 135,000 - 15,000 13,190
Vice President(8) 1995 109,175 74,000 59,863(9) 8,000 727
_________________________________
</TABLE>
(1) Includes amounts deferred by employees under the Company's 401(k) employee
savings plan, pursuant to Section 401(k) of the Internal Revenue Code.
(2) The amounts disclosed in this column include: (a) amounts contributed by
the Company to the Company's 401(k) employees savings plan and profit
sharing plan, and (b) dollar value of premiums paid by the Company for term
life insurance on behalf of the named executive officers as follows:
<TABLE>
1996 1995 1994
<S> <C> <C> <C>
D.K. Campbell (a) $12,500 $11,317 $15,000
(b) 18 762 264
J.R. Lozelle (a) 12,000 10,733 7,147
(b) 898 23 -
A.A. Barone (a) 11,388 - -
(b) 355 418 -
P.D. Rysenga (a) 11,450 9,887 3,125
(b) 29 1,301 938
L. Candusso (a) 12,838 - -
(b) 352 727 -
</TABLE>
10
<PAGE>
(3) Includes $78,827 for reimbursement of relocation costs.
(4) Mr. Lozelle became an employee of the Company on May 4, 1994.
(5) Mr. Barone became an employee of the Company on May 15, 1995.
(6) Includes $21,141 for reimbursement of relocation costs in 1995 and $45,553
for reimbursement of such costs in 1996.
(7) Mr. Rysenga became an employee of the Company on June 29, 1994.
(8) Mr. Candusso became an employee of the Company on April 15, 1995.
(9) Includes $54,734 for reimbursement of relocation costs.
The tables below disclose, for the named executive officers, information
regarding stock options granted during, or held at the end of, 1996 pursuant to
the Stock Option Plan.
<TABLE>
Option Grant Table
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
% of Total Annual Rates of
Options Stock Price Appreciation
Options Granted to Exercise for Option Terms(2)
Granted Employees in Price Expiration _______________________
Name (#)(1) Fiscal Year (Per share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
D.K. Campbell 20,000 14.4% $15.125 2/20/06 $190,241 $482,107
J.R. Lozelle 15,000 10.8% 15.125 2/20/06 142,680 361,580
A.A. Barone 10,000 7.2% 15.125 2/20/06 95,120 241,054
P.D. Rysenga 15,000 10.8% 15.125 2/20/06 142,680 361,580
L. Candusso 15,000 10.8% 15.125 2/20/06 142,680 361,850
</TABLE>
(1) These options vest ratably over four years commencing one year from the
date of grant.
(2) Amounts reflect certain assumed rates of appreciation set forth in the
SEC's executive compensation disclosure rules. Actual gains, if any, on
stock option exercises depend on future performance of the Company's Common
Stock and overall stock market conditions. No assurances can be made that
the amounts reflected in these columns will be achieved.
11
<PAGE>
<TABLE>
Option Exercises and Year-End Value Table
Aggregated Option Exercises in Last Fiscal
Year and Year-End Option Values
Year-End (#) Year-End ($)
Shares Acquired Value Exercisable/ Exercisable
Name on Exercise(#) Realized($)(1) Unexercisable Unexercisable(2)
<S> <C> <C> <C> <C>
D.K. Campbell - - 5,000/35,000 $116,250/$348,750
J.R. Lozelle - - 3,250/24,750 $75,563/$226,688
A.A. Barone - - 2,000/16,000 $42,500/$127,500
P.D. Rysenga 3,000 $66,000 -- /24,000 $ -- /$209,250
L. Candusso - - 2,000/21,000 $45,000/$135,000
</TABLE>
- - -----------------------
(1) Aggregate market value of shares acquired at time of exercise, less
aggregate exercise price paid by the employee to the Company.
(2) Values are based on the difference between the closing bid price of the
Company's Common Stock on December 31, 1996 ($31.25) and the exercise
prices of the options.
Compensation Committee Interlocks and Insider Participation
The members of the Company's Compensation Committee are Messrs. Vander
Starre, Clement, Diggs and Loughrey. See "Certain Relationships and Related
Transactions" for certain information concerning Onex.
Compensation Committee Report on Executive Compensation
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
The following has been submitted by the Compensation Committee:
General Executive Officer Compensation Policies
The Compensation Committee, which was established in connection with the
Company's initial public offering of Common Stock in August 1994, is responsible
for developing and recommending the Company's executive compensation policies to
the Board of Directors. The Compensation Committee believes that executive
compensation should be related to the value created for the Company's
stockholders. The executive officer compensation program has been designed to
attract and retain highly qualified and motivated employees and to reward
superior performance. The executive compensation program consists of three
components: (1) base salary; (2) annual cash bonus; and (3) long-term equity
incentives.
Base Salary
The base salaries of the executive officers are based upon market and
competitive factors. This includes a comparison of the salaries for similar
positions at comparable companies. Increases in base salaries are based upon the
performance of the executive officers as compared to pre- established goals.
12
<PAGE>
Annual Cash Bonus
The annual cash bonus for the executive officers is based in part on the
overall financial performance of the Company and in part on the performance of
the executive officer. The financial performance of the Company is measured by
revenue and operating income growth and actual performance against budgeted
performance. The performance of the executive officer is measured against
pre-established goals determined prior to the beginning of the year.
Long-Term Equity Incentives
The long-term equity incentives consist of awards under the Stock Option
Plan administered by the Compensation Committee. Pursuant to the terms of the
Stock Option Plan, options are granted at an exercise price equal to the
Company's Common Stock price on the date the options are granted. The
Compensation Committee believes the Stock Option Plan aligns management's
long-term interests with stockholder interests, as the ultimate compensation is
based upon the Company's stock performance. The Compensation Committee also
believes the Stock Option Plan is a cost effective method of providing key
management with long-term compensation. The Compensation Committee approves the
employees who participate in the Stock Option Plan based upon recommendations by
the Chairman of the Board of Directors and the Chief Executive Officer. The
Compensation Committee determines the terms and conditions of the options based
upon individual performance, responsibility and tenure with the Company. The
Compensation Committee may also, based on the recommendation of the Board of
Directors, approve the issuance of stock option agreements not in connection
with the Stock Option Plan.
Chief Executive Officer Compensation
The 1996 base salary of Dugald K. Campbell, the Company's Chief Executive
Officer ("CEO"), $275,984, was based upon market and competitive factors. The
CEO's annual cash bonus is determined in part based on the financial performance
of the Company and in part on the performance of the CEO. The financial
performance of the Company is measured by increases in revenues and operating
income against budgeted amounts. The performance of the CEO is measured against
pre-established goals and against the Company's long-term strategy. The CEO also
participates in the Stock Option Plan described above.
The foregoing report has been approved by all members of the Compensation
Committee.
Compensation Committee:
Adrian Vander Starre, Chairman
W.H. Clement
Matthew O. Diggs, Jr.
F.J. Loughrey
13
<PAGE>
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total stockholder
return since the Common Stock became publicly traded on August 12, 1994 with the
Nasdaq National Market Index and with the OEM Automotive Supplier Composite
Index. The OEM Automotive Supplier Composite Index consists of the following:
A.O. Smith Corporation, Amcast Industrial Corporation, Bailey Corporation,
Bestop, Inc., BorgWarner Automotive, Breed Technologies, Citation Corporation,
Collins & Aikman, Control Devices, Dana Corporation, Donnelly Corporation,
Douglas & Lomanson Company, Dura Automotive Systems, Inc., Excel Industries,
Inc., Gentex Corporation, Harvard Industries, Inc., Hayes Wheels International,
Inc., Intermet Corporation, Lear Corporation, Magna International, Inc.,
MascoTech, Inc., Masland Corporation, Simpson Industries, Inc., Standard
Products Company, STRATTEC Security, Superior Industries International, Tower
Automotive, Inc. and Walbro Corporation. The comparison is based on the
assumption that $100.00 was invested on August 12, 1994 in each of the Common
Stock, the Nasdaq National Market Index and OEM Automotive Supplier Composite
Index with dividends reinvested.
COMPARISON OF TOTAL RETURN
AMONG NASDAQ NATIONAL MARKET INDEX,
OEM AUTOMOTIVE SUPPLIER COMPOSITE INDEX
AND TOWER AUTOMOTIVE, INC.
300
271.7 (TWER)
250
200
152.2 (TWER) 177.3 (Nasdaq)
150 144.5 (Nasdaq)
103.3 (Nasdaq) 124.7 (OEM Suppliers)
100 94.2 (OEM Suppliers) 96.0 (OEM Suppliers)
78.3 (TWER)
50
0
Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996
<TABLE>
Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996
<S> <C> <C> <C>
TWER 78.3 152.2 271.7
Nasdaq 103.3 144.5 177.3
OEM Suppliers 94.2 96.0 124.7
</TABLE>
14
<PAGE>
EMPLOYMENT AND OTHER COMPENSATORY AGREEMENTS
In April 1993, R.J. Tower Corporation and Mr. Vander Starre entered into an
Employment and Consulting Agreement. Upon his resignation as President and Chief
Executive Officer of the Company effective December 31, 1993, Mr. Vander Starre
began serving as a consultant to the Company, performing duties of the kind and
nature as when he served as Chief Executive Officer of the Company and such
other duties as may be assigned by the Board of Directors. Pursuant to the terms
of the Employment and Consulting Agreement, Mr. Vander Starre will provide such
consulting services for a period of four years from December 31, 1993 for an
annual consulting fee of $150,000.
In May 1994, the Company and Mr. Lozelle entered into an Employment
Agreement in connection with the acquisition of Edgewood. The Employment
Agreement provides that Mr. Lozelle shall serve as an Executive Vice President
of the Company until May 4, 1999 or his earlier resignation, death, disability
or termination. The Employment Agreement also provides that Mr. Lozelle will
receive an annual base salary of $200,000 plus annual bonus of up to 30% of his
annual base salary for attaining goals developed by the Company's Board of
Directors and Mr. Lozelle. Upon his resignation or termination for certain
specified reasons, Mr. Lozelle will be entitled to receive all salary, bonus and
fringe benefits for the remaining term of the Employment Agreement, but in no
event longer than one year. In May 1994, Mr. Lozelle and the Company also
entered into a Stock Option Agreement pursuant to which Mr. Lozelle was granted
an option to purchase 102,984 shares of Common Stock at an exercise price of
$6.55 per share. The option vests and becomes exercisable with respect to
one-third of the shares covered on each of May 4, 1996, 1997 and 1998; provided
that Mr. Lozelle is still employed by the Company on each such date. The
agreement also provides for acceleration of the unvested portion of the option
upon a sale of the Company, subject to certain conditions, or in the event of
death, disability, termination without cause or resignation for certain reasons.
The option is non-transferable except pursuant to applicable laws of descent and
distribution.
Messrs. Johnson and Rued provide to the Company strategic direction,
management and financial services with an annual allocation of salary costs of
$200,000 and $100,000, respectively, and will be eligible for performance -
based bonuses of up to 50% of their base salaries.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company, Onex, J2R and Messrs. Johnson, Rued and Clement and certain
other investors are parties to an Investor Stockholders Agreement pursuant to
which each party has agreed to vote his or its shares in the same manner that
Onex votes its shares of Common Stock. Messrs. Campbell, Lozelle and Doherty
have each granted Onex a proxy to vote his shares.
The Company, Onex and certain stockholders including J2R, Messrs. Johnson,
Rued, Clement and Lozelle and the former stockholders of Edgewood, including Mr.
Lozelle's brother, are parties to a registration agreement pursuant to which the
Company has granted certain of its stockholders rights to register shares of the
Company's Common Stock.
The Company leases its Romulus, Michigan manufacturing facility from 8900
Inkster Associates, a partnership of which Mr. Lozelle holds a 46.7% partnership
interest. The lease expires February 28, 1999. The expense under this lease was
$475,000 for the year ended December 31, 1996. The Company believes the terms of
the lease agreement are no less favorable than could have been obtained pursuant
to transactions with unaffiliated parties.
15
<PAGE>
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 1998 ANNUAL MEETING
Proposals of Stockholders intended to be presented at the Annual Meeting in
1998 must be received by the secretary of Tower Automotive, Inc., 6303 28th
Street S.E., Grand Rapids, Michigan, 49546, not later than November __, 1997 to
be considered for inclusion in the Company's 1998 Proxy materials. As of March
24, 1997, no proposals to be presented at the 1997 Annual Meeting had been
received by the Company.
ADDITIONAL INFORMATION
This solicitation is being made by the Company. All expenses of the Company
in connection with this solicitation will be borne by the Company. The Company
will request brokerage firms, nominees, custodians and fiduciaries to forward
Proxy materials to the beneficial owners of shares held of record by such
persons and will reimburse such persons and the Company's transfer agent for
their reasonable out-of-pocket expenses in forwarding such materials.
The Company will furnish without charge to each person whose Proxy is being
solicited, upon the written request of any such person, a copy of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, as filed
with the SEC, including the financial statements. Requests for copies of such
Annual Report on Form 10-K should be directed to: Tower Automotive, Inc., 4508
IDS Center, Minneapolis, MN 55402.
Please complete the enclosed Proxy and mail it in the enclosed postage-paid
envelope as soon as possible.
By order of the Board of Directors,
James N. DeBoer, Secretary
April __, 1997
16
<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
The first sentence of Section 1 of Article Four of the Amended and Restated
Certificate of Incorporation is hereby deleted in full and amended to read in
its entirety as follows:
Section 1. The total number of shares of capital stock which the
corporation has authority to issue is 205,000,000 shares consisting of:
A. 5,000,000 shares of Preferred Stock, par value $1.00 per share, having
such designations, rights, terms, preferences and limitations as the
Board of Directors may determine (the "Undesignated Preferred"); and
B. 200,000,000 shares of Common Stock, par value $.01 per share (the
"Common Stock").
17
<PAGE>
