<PAGE>
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:
[ ] Preliminary proxy statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-b(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
TOWER AUTOMOTIVE SYSTEMS, INC.
(Name of registrant as specified in its charter)
TOWER AUTOMOTIVE SYSTEMS, INC.
(Name of person(s) filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[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: __________________________________________________________
<PAGE>
TOWER AUTOMOTIVE, INC.
4508 IDS CENTER
MINNEAPOLIS, MN 55402
April 3, 1998
To Our Stockholders:
You are cordially invited to attend the Company's 1998 Annual Meeting of
Stockholders which will be held on May 19, 1998, at 1:00 p.m. central time, at
Tower Automotive, Inc., 3533 North 27th Street, Milwaukee, Wisconsin.
The official Notice of Meeting, Proxy Statement and Proxy are included with
this letter. The matters listed in the Notice of Meeting are more fully
described in the Proxy Statement.
It is important that your shares be represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please mark, sign
and date the enclosed Proxy and return it promptly in the enclosed envelope to
ensure that your shares will be represented. If you do attend the Annual
Meeting, you may, of course, withdraw your Proxy should you wish to vote in
person.
Sincerely,
[LOGO]
S. A. Johnson
CHAIRMAN OF THE BOARD
<PAGE>
TOWER AUTOMOTIVE, INC.
------------------
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
------------------------
<TABLE>
<S> <C>
TIME: 1:00 p.m. central time, May 19, 1998.
PLACE: Tower Automotive, Inc., 3533 North 27th Street, Milwaukee, Wisconsin.
ITEMS OF (1) Election of directors;
BUSINESS: (2) 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 23, 1998 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.
</TABLE>
By Order of the Board of Directors,
[LOGO]
James N. DeBoer
SECRETARY
Dated: April 3, 1998
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.
4508 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
------------------------
PROXY STATEMENT
------------------------
1998 ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1998
------------------------
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
19, 1998 at 1:00 p.m. central time at Tower Automotive, Inc., 3533 North 27th
Street in Milwaukee, Wisconsin, and at any adjournments and postponements
thereof. These Proxy materials are being mailed on or about April 3, 1998 to
holders of record on March 23, 1998 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 proposal set forth in Item 2 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 23, 1998, there were 23,064,087 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 eleven directors. The Board
of Directors has nominated and recommends the election of each of the eleven
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. All of the nominees are incumbent directors of the Company,
previously elected by the Company's stockholders, except for Mr. Zambrano, who
was appointed to the Board in December of 1997. 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.
<PAGE>
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.
Accordingly, the eleven individuals who receive the greatest number of votes
cast by stockholders would be elected as directors of the Company. 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.
The following sets forth information as to each nominee for election at the
Annual Meeting, including age as of March 23, 1998, 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, 57, 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"), an investment partnership that participated in the
acquisition of R.J. Tower Corporation. 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 VANDERSTARRE, 65, has served as Vice Chairman and a Director of the
Company since April 1993. Mr. VanderStarre served as President, Chief Executive
Officer and a director of R.J. Tower Corporation from 1978 to 1993. Mr.
VanderStarre originally joined R.J. Tower Corporation in 1965 as Controller and
later served as Treasurer from 1974 to 1978.
DUGALD K. CAMPBELL, 51, 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 AlliedSignal, Inc.
JAMES R. LOZELLE, 52, has served as Executive Vice President for the
Company, with responsibility for the Company's operations in Milwaukee,
Wisconsin and Roanoke, Virginia since April 1997. From the acquisition of
Edgewood Tool and Manufacturing Company ("Edgewood") in May 1994 until March
1997, Mr. Lozelle served at the Tower Automotive Technical Centers, with
responsibility for advanced product development and customer service. Mr.
Lozelle has served as a Director of the Company since 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.
2
<PAGE>
SCOTT D. RUED, 41, 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, 70, 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.
ERIC J. ROSEN, 36, 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., 65, 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, 48, 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 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, 48, 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. Since 1978, Dean Clark has served as a professor of business
administration at Harvard Business School. Dean Clark is also a director of
Guidant Corp., a manufacturer of medical implants, and Fleet Financial, a
financial services company.
ENRIQUE ZAMBRANO, 42, has served as a Director of the Company since December
1997. Mr. Zambrano has served as Chief Executive Officer and a director of
Proeza, S.A. de C.V. since 1988.
There are no family relationships between any of the foregoing persons or
any of the Company's executive officers.
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
3
<PAGE>
current members of which are noted below. During 1997, 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 six times during the preceding
fiscal year.
AUDIT COMMITTEE. The Audit Committee of the Board of Directors (the "Audit
Committee") consists of Messrs. Rosen (Chairman), 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. VanderStarre
(Chairman), Clement, Diggs and Loughrey. During the last fiscal year, the
Compensation Committee made recommendations to the Board of Directors with
respect to salaries, compensation and benefits of directors and executive
officers of the Company and made recommendations as to the grant of 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.
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 $18,000 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
4
<PAGE>
from January 1, 1997 through December 31, 1997 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with, except that Messrs. Johnson, Rued and
Clement each filed one late Section 16(a) report covering one transaction.
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, 1998, 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.
5
<PAGE>
SECURITY OWNERSHIP
Unless otherwise noted, the following table sets forth certain information
regarding ownership of the Common Stock as of March 1, 1998 by (i) the
beneficial owners of more than 5% of the Common Stock of the Company, (ii) each
Director and named executive officer of the Company and (iii) all Directors and
executive officers of the Company as a group. To the knowledge of the Company,
each of such stockholders has sole voting and investment power as to the shares
shown unless otherwise noted. Beneficial ownership of the Common Stock listed in
the table has been determined in accordance with the applicable rules and
regulations promulgated under the Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF
COMMON STOCK
--------------------------
DIRECTORS, OFFICERS NUMBER OF PERCENT OF
AND 5% STOCKHOLDERS SHARES CLASS
- --------------------------------------------------------------------- ----------- -------------
<S> <C> <C>
S.A. Johnson(1)...................................................... 380,960 1.7%
Adrian VanderStarre(2)............................................... 9,675 *
Dugald K. Campbell(3)................................................ 241,060 1.0%
James R. Lozelle(4).................................................. 353,827 1.5%
Anthony A. Barone.................................................... 9,801 *
Luigi Candusso....................................................... 14,500 *
Ronald E. Gavalis.................................................... 78,444 *
Tommy G. Pitser...................................................... 6,731 *
Scott D. Rued(5)..................................................... 380,121 1.6%
Paul D. Rysenga...................................................... 17,650 *
W.H. Clement(6)...................................................... 451,954 2.0%
Eric J. Rosen(7)..................................................... 9,000 *
Matthew O. Diggs, Jr.(8)............................................. 14,300 *
Kim B. Clark......................................................... 8,300 *
F.J. Loughrey........................................................ 10,300 *
Enrique Zambrano..................................................... -- --
Dresdner RCM Global Investors LLC(9)................................. 1,443,800 6.3%
The Capital Group Companies, Inc.(10)................................ 1,364,500 5.9%
All Directors and Officers as a group (16 persons)................... 1,247,457 5.3%
</TABLE>
- ------------------------
* Less than one percent.
(1) Includes 373,260 shares owned by J2R, of which Mr. Johnson is Managing
Partner.
(2) Includes 9,675 shares held in an irrevocable trust for the benefit of Mr.
VanderStarre's children, as to all of which Mr. VanderStarre's children are
the trustees. Mr. VanderStarre disclaims beneficial ownership of the shares
held in trust.
(3) Includes: (i) 3,195 shares owned by Mr. Campbell's wife; (ii) 73,745 shares
held in an annuity trust, of which Mr. Campbell is the trustee; and (iii)
30,000 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 and in trust.
6
<PAGE>
(4) Includes 206,600 shares of Common Stock issuable upon the conversion of
Convertible Notes and 123,984 shares issuable upon the exercise of currently
exercisable options held by Mr. Lozelle.
(5) Includes 373,260 shares owned by J2R, of which Mr. Rued is a partner, and
6,861 shares held in a foundation, of which Mr. Rued is trustee. Mr. Rued
disclaims beneficial ownership of the shares owned by J2R and in the
foundation in which he does not have a pecuniary interest.
(6) Includes 373,260 shares owned by J2R, of which Mr. Clement is a partner,
47,994 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 trusts in
which he does not have a pecuniary interest.
(7) Onex Corporation ("Onex") has shared voting power of 685,000, shares and
sole dispositive power over 500,000 shares. Mr. Rosen is Managing Director
of Onex Investment Corp. and disclaims beneficial ownership of all shares of
Common Stock owned by Onex. The record holder of such shares owned by Onex
is OMI Quebec FCI LLC, an affiliate of Onex.
(8) Includes 6,000 shares owned by EJJM Partnership, of which Mr. Diggs is the
General Partner and 8,300 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.
(9) Dresdner RCM Global Investors LLC ("Dresdner RCM") reported as of December
31, 1997 sole voting power with respect to 1,282,300 shares of Common Stock,
sole dispositive power with respect to 1,443,800 shares of Common Stock and
shared dispositive power with respect to 9,000 shares of Common Stock. 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 such entities is Four
Embarcadero Center, Suite 2900, San Francisco, California 94111. Dresdner
Bank AG also reported beneficial ownership of 1,443,800 shares of Common
Stock as a result of its being the parent corporation of Dresdner RCM. The
address for Dresdner Bank AG is Jurgen-Ponto-Platz 1, 60301 Frankfurt,
Germany.
(10) The Capital Group Companies, Inc. and its subsidiary, Capital Research and
Management Company, reported as of December 31, 1997 sole dispositive power
with respect to 1,364,500 shares of Common Stock, which represented
approximately 6.0% of the outstanding Common Stock at that time. The address
for such entities is 333 South Hope Street, Los Angeles, California 90071.
7
<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, 1997, 1996 and
1995. Other than the Stock Option Plan, the Company does not maintain any
long-term compensation plans.
<TABLE>
<CAPTION>
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.................. 1997 $ 386,250 $ 585,000 $ -- 20,000 $ 12,450
President and Chief 1996 275,984 400,000 -- 20,000 12,518
Executive Officer 1995 253,255 195,000 -- 20,000 12,079
James R. Lozelle.................... 1997 218,750 225,000 -- 15,000 13,314
Executive Vice President 1996 200,704 200,000 -- 15,000 12,898
1995 200,308 109,000 -- 13,000 10,756
Paul D. Rysenga..................... 1997 175,000 190,000 -- 15,000 12,450
Vice President 1996 163,139 130,000 -- 15,000 11,479
1995 145,308 138,000 -- 12,000 11,188
Luigi Candusso...................... 1997 173,750 185,000 -- 15,000 10,004
Vice President(3) 1996 156,053 135,000 -- 15,000 13,190
1995 109,175 74,000 59,863(4) 8,000 727
Anthony A. Barone................... 1997 165,750 180,000 -- 10,000 10,259
Vice President and 1996 152,234 145,000 60,178(6) 10,000 11,743
Chief Financial Officer(5) 1995 92,234 69,000 27,782(6) 8,000 418
</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.
8
<PAGE>
(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>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C> <C>
D.K. Campbell (a).......................... $ 12,450 $ 12,500 $ 11,317
(b).......................... -- 18 762
J.R. Lozelle (a).......................... 12,450 12,000 10,733
(b).......................... 864 898 23
P.D. Rysenga (a).......................... 12,450 11,450 9,887
(b).......................... -- 29 1,301
L. Candusso (a).......................... 9,651 12,838 --
(b).......................... 353 352 727
A.A. Barone (a).......................... 9,913 11,388 --
(b).......................... 346 355 418
</TABLE>
(3) Mr. Candusso became an employee of the Company on April 15, 1995.
(4) Includes $54,734 for reimbursement of relocation costs.
(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.
The tables below disclose, for the named executive officers, information
regarding stock options granted during, or held at the end of, 1997 pursuant to
the Stock Option Plan.
OPTION GRANT TABLE
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
OPTIONS STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM(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 10.5% $ 37.875 2/25/07 $ 476,388 $ 1,207,260
J.R. Lozelle....................... 15,000 7.8% 37.875 2/25/07 357,291 905,445
P.D. Rysenga....................... 15,000 7.8% 37.875 2/25/07 357,291 905,445
L. Candusso........................ 15,000 7.8% 37.875 2/25/07 357,291 905,445
A.A. Barone........................ 10,000 5.2% 37.875 2/25/07 238,194 603,630
</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
9
<PAGE>
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.
OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
YEAR-END(#) YEAR-END(2)
---------------- ----------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- ------------------- ----------------- ------------- ---------------- ----------------------
<S> <C> <C> <C> <C>
D.K. Campbell...... -- -- 15,000/45,000 $ 475,313/$828,438
J.R. Lozelle....... -- -- 10,250/32,750 $ 322,422/$587,266
P.D. Rysenga....... -- -- 6,750/32,250 $ 203,203/$570,234
L. Candusso........ -- -- 7,750/30,250 $ 234,266/$499,109
A.A. Barone........ 4,000 $ 134,452 2,500/21,500 $ 67,344/$372,156
</TABLE>
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(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, 1997 ($42.06) and the exercise prices
of the options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Messrs.
VanderStarre, Clement, Diggs and Loughrey. As described more fully under the
caption "Employment and Other Compensatory Agreements" below, Mr. VanderStarre
received certain payments for consulting services to the Company during the past
year. As described below under the caption "Certain Relationships and Related
Transactions," Mr. Clement is a party to a registration agreement.
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.
10
<PAGE>
The combination of both cash compensation (salary and performance bonus) and
equity-based compensation are intended to encourage and reward near-term
objectives, such as financial performance, and the Company's long-term goals,
such as continuous improvement in customer and colleague satisfaction, and the
growth and prosperity of the Company and its stakeholders.
SALARY AND BONUS
In general, the base salaries of the Company's executive officers are
established at levels believed to be at or below market rates. Each year, the
committee reviews compensation data from outside recruiters, available survey
information and data from companies of comparable size and performance in
ascertaining comparable salary rates. Subject to Committee approval, the base
salaries are set at or below comparable market rates. To provide performance
incentives and to compensate for the below-peer salary rates, the Company
provides for annual cash awards that are payable if the Company meets or exceeds
certain predetermined goals established and approved by the Board of Directors.
The Company's bonus program is comprised of three principle factors. First,
the Committee establishes a target for each officer expressed as a percentage of
salary. Second, a financial performance factor is determined that creates a
minimum performance requirement and recognition of performance related to
expectations. Third, a team performance factor relating to progress toward
Company goals and an individual leadership initiative are established. The bonus
is payable only if the minimum financial performance, the team performance and
the individual leadership initiative are achieved.
Currently, and for the past fiscal year, the financial performance factor
has been based on achievement of a predetermined goal for return on sales. This
goal for return on sales is approved by the Committee, after taking into
consideration investor expectations, historical Company performance and expected
continuous improvement.
The achievement of team objectives and the personal leadership initiative
(established for each officer and approved by the Committee or Board of
Directors) are based on indicators of progress toward the long-term goals of the
Company, consistent with the Company's approach to values based leadership. The
Committee approves the achievement of team objectives and personal leadership
initiatives based on a determination by the colleague's mentor, or in the case
of the CEO, by the Committee or Board of Directors. To counterbalance the
near-term objectives of financial performance, the team objectives and
individual leadership initiatives are intended to reward and promote the
attainment of long-term objectives. Achievement is based on measures of the
Company goals of customer satisfaction, colleague satisfaction and Company
growth and prosperity. The goal of Company growth and prosperity is primarily
focused on the enhancement of stockholder value, taking into consideration
progress toward obtaining new customers, securing new technology, expanding
global presence, expanding business with existing customers, as well as
improving earnings per share and the market value of the Company's stock.
In addition to the above-referenced objective factors, the Compensation
Committee has the right to adjust bonus payments based upon its evaluation of
the Company's performance relative to the overall economy and specific market
considerations. This discretion is intended to better align potential plan
payout as an indication of overall Company performance.
11
<PAGE>
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 number of shares to be optioned to each
colleague based upon individual performance, responsibility and level of cash
compensation. 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
In 1997, the salary of the Company's Chief Executive Officer was set at
$386,250, based upon the factors described above for establishing the salaries
of the Company's executive officers. The CEO's bonus is determined under the
same criteria used for other executive officers of the Company, except that the
evaluation of whether the predetermined goals and criteria have been satisfied
are determined by the Committee or the Board of Directors. A bonus of $585,000
was earned by Mr. Campbell for 1997 based on the Company and Mr. Campbell
exceeding both the financial performance criteria, Company goals and personal
performance criteria, respectively. Stock options are granted to the CEO under
the same criteria referenced above, as a result of which Mr. Campbell was
granted an option for 20,000 shares of the Company's common stock at an exercise
price equal to the market value on the date of grant.
The foregoing report has been approved by all members of the Compensation
Committee.
Compensation Committee:
Adrian VanderStarre, Chairman
W.H. Clement
Matthew O. Diggs, Jr.
F.J. Loughrey
12
<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, the New York Stock Exchange Index and with the OEM
Automotive Supplier Composite Index. The OEM Automotive Supplier Composite Index
consists of the following: Aeroquip-Vickers, Amcast Industrial Corporation,
Borg-Warner Automotive, Inc., Breed Technologies, Citation Corporation, Collins
& Aikman, Control Devices, Dana Corporation, Donnelly Corporation, Dura
Automotive Systems, Inc., Eaton Corporation, Excel Industries, Inc., Gentex
Corporation, Hayes Wheels International, Inc., Intermet Corporation, ITT
Industries, Johnson Controls, Lear Corporation, Magna International, Inc.,
MascoTech, Inc., Modine Manufacturing, Shiloh, Simpson Industries, Inc.,
Standard Products Company, STRATTEC Security, Superior Industries International,
TRW, and Walbro Corporation. The comparison is based on the assumption that
$100.00 was invested on August 12, 1994 in each of the Common Stocks, the Nasdaq
National Market Index, the Standard & Poor's 500 Index ("S&P 500 Index") and the
OEM Automotive Supplier Composite Index with dividends reinvested. Prior to
February 19, 1997, the Company's stock was traded on the Nasdaq National Market.
The S&P 500 Index has been included in this year's Proxy Statement following the
listing of the Company's stock on the New York Stock Exchange, beginning on
February 19, 1997.
COMPARISON OF TOTAL RETURN
AMONG NASDAQ NATIONAL MARKET INDEX,
STANDARD & POOR'S 500 INDEX,
OEM AUTOMOTIVE SUPPLIER COMPOSITE INDEX
AND TOWER AUTOMOTIVE, INC.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TWER NASDAQ OEM SUPPLIERS S&P 500
<S> <C> <C> <C> <C>
Aug. 12, 1994 100.0 100.0 100.0 100.0
Dec. 31, 1994 78.3 103.3 96.4 99.4
Dec. 31, 1995 152.2 144.5 110.4 133.3
Dec. 31, 1996 271.7 177.3 139.0 160.4
Dec. 31, 1997 365.8 215.6 172.0 210.1
</TABLE>
13
<PAGE>
EMPLOYMENT AND OTHER COMPENSATORY AGREEMENTS
In April 1993, R.J. Tower Corporation ("R.J. Tower") and Mr. VanderStarre
entered into an Employment and Consulting Agreement. Upon his resignation as
President and Chief Executive Officer of R.J. Tower effective December 31, 1993,
Mr. VanderStarre began serving as a consultant to the Company, performing duties
of the kind and nature as when he served as Chief Executive Officer of R.J.
Tower and such other duties as may be assigned by the Board of Directors.
Pursuant to the terms of the Employment and Consulting Agreement, which expired
December 31, 1997, Mr. VanderStarre provided such consulting services 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 and certain stockholders including J2R, Messrs. Johnson,
Rued, Clement and Lozelle, the former stockholders of Edgewood, including Mr.
Lozelle's brother, and MascoTech are parties to a registration agreement
pursuant to which the Company has granted certain rights to register shares of
the Company's Common Stock.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 1999 ANNUAL MEETING
Proposals of Stockholders intended to be presented at the Annual Meeting in
1999 must be received by the secretary of Tower Automotive, Inc., 6303 28th
Street S.E., Grand Rapids, Michigan, 49546, not later than December 4, 1998 to
be considered for inclusion in the Company's 1999 Proxy materials. As of March
23, 1998, no proposals to be presented at the 1998 Annual Meeting had been
received by the Company.
14
<PAGE>
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, 1997, 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,
[LOGO]
James N. DeBoer
SECRETARY
April 3, 1998
15
<PAGE>
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. 1887
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR PROPOSAL 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSAL 2.
FOR WITHHELD
1. Election of Directors (SEE REVERSE) / / / /
FOR AGAINST ABSTAIN
2. To ratify the selection of Arthur
Andersen LLP as the Company's / / / / / /
Independent Public Accountants.
Change of Address/Comments on reverse side. / /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee, guardian, officer,
general partner, etc. please give full title as such.
--------------------------------------
--------------------------------------
SIGNATURES(S) DATE
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
TOWER AUTOMOTIVE, INC.
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MAY 19, 1998 AT 1:00 PM
TOWER AUTOMOTIVE, INC.
3533 NORTH 27TH STREET
MILWAUKEE, WISCONSIN
<PAGE>
TOWER AUTOMOTIVE, INC. PROXY/VOTING INSTRUCTION CARD
- --------------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON MAY 19, 1998.
The undersigned hereby appoints S.A. Johnson and D.K. Campbell, or any of them,
proxies for the undersigned, each with full power of substitution, to attend the
Annual Meeting of Stockholders of Tower Automotive, Inc. to be held on May 19,
1998 at 1:00 p.m., Central Time, and at any adjournments thereof, and to vote as
specified in this Proxy all the shares of stock of the Company which the
undersigned would be entitled to vote if personally present.
Your vote with respect to the election of Directors and the other proposals may
be indicated on the reverse. Nominees for Directors are S.A. Johnson, A.
VanderStarre, D.K. Campbell, K.B. Clark, W.H. Clement, M.O. Diggs, Jr., F.J.
Loughrey, J.R. Lozelle, E.J. Rosen, S.D. Rued, E. Zambrano.
YOUR VOTE IS IMPORTANT! PLEASE SIGN AND DATE ON THE REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
Comments________________________________________________________________________
_______________________________________________________________________________
(IF YOU HAVE WRITTEN IN THE ABOVE SPACE, PLEASE MARK THE "COMMENTS" BOX ON THE
REVERSE OF THIS CARD.)
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
