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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Tower Automotive, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the 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 the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
TOWER AUTOMOTIVE, INC.
27175 HAGGERTY ROAD
NOVI, MICHIGAN 48377-3626
August 24, 2004
To Our Stockholders:
You are cordially invited to attend a Special Meeting of our Stockholders
to be held on September 20, 2004, at 2:00 p.m. local time, at 27175 Haggerty
Road, Novi, Michigan 48317-3626. The purpose of the Special Meeting is to ratify
and approve the issuance of $125 million principal amount of our 5.75%
Convertible Senior Debentures due 2024 (the "Debentures") and the related shares
of our Common Stock issuable upon conversion or repurchase of the Debentures.
Each $1,000 principal amount of Debentures is convertible into 231.0002
shares of our Common Stock. The Debentures provide that we have the right to
deliver, in lieu of shares of our Common Stock, cash or a combination of cash
and shares of our Common Stock. However, we may not issue more than 19,705,187
shares of our Common Stock upon the conversion or repurchase of Debentures
unless and until we have obtained stockholder approval for the issuance of the
Debentures and the Common Stock issuable upon conversion or repurchase. New York
Stock Exchange rules require us to obtain stockholder approval for the issuance
of Common Stock or securities convertible into Common Stock under certain
circumstances if the issuance amounts to 20% or more of our Common Stock
outstanding before the issuance. At the Special Meeting, we will ask you to
consider and vote on the issuance of the Debentures and Common Stock so that we
have the ability to issue more than 19,705,187 shares of our Common Stock upon
conversion or repurchase of the Debentures.
The official Notice of Meeting, Proxy Statement and Proxy are included
with this letter. The proposal listed in the Notice of Meeting is more fully
described in the Proxy Statement.
Our Board of Directors has determined that providing the ability to issue
shares of Common Stock in lieu of paying all or a portion of the Debenture
conversion price in cash is in the Company's and your best interest. Our Board
unanimously recommends that you vote FOR the proposal at the Special Meeting.
Whether or not you plan to attend the Special Meeting in person, and
regardless of the number of shares you own, please complete, sign, date and
return the enclosed card promptly in the enclosed envelope. This will ensure
that your shares are voted as you wish and that a quorum will be present.
Sincerely,
/s/ S. A. Johnson
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S. A. Johnson
Chairman of the Board
TOWER AUTOMOTIVE, INC.
NOTICE OF
SPECIAL MEETING OF STOCKHOLDERS
TIME: 2:00 p.m. local time, September 20, 2004.
PLACE: 27175 Haggerty Road, Novi, Michigan 48377-3626.
PROPOSALS: (1) To ratify and approve the issuance of $125 million principal
amount of our 5.75% Convertible Senior Debentures due 2024 and
the related shares of Common Stock issuable upon conversion or
repurchase of the Debentures; and
(2) To transact such other business as may properly be brought
before the meeting, and any or all adjournments or
postponements thereof.
RECORD DATE: Only holders of record at the close of business on August 19, 2004,
are entitled to notice of and to vote on all proposals presented at
the meeting and at any adjournments or postponements thereof. A
list of such holders will be available prior to the meeting at our
corporate office, located at 27175 Haggerty Road, Novi, Michigan
48377-3626, for examination by any stockholder for any purpose
germane to the meeting.
By Order of the Board of Directors,
/s/ James Mallak
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James Mallak
Secretary
Dated: August 24, 2004
YOUR VOTE IS IMPORTANT!
TO VOTE YOUR SHARES, PLEASE COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY
CARD.
TOWER AUTOMOTIVE, INC.
27175 HAGGERTY ROAD
NOVI, MICHIGAN 48377-3626
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PROXY STATEMENT
AUGUST 24, 2004
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SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD
SEPTEMBER 20, 2004
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INTRODUCTORY STATEMENT
Tower Automotive, Inc., is a Delaware corporation with its principal
executive offices located at 27175 Haggerty Road, Novi, Michigan 48377-3626.
This Proxy Statement is being furnished to our stockholders in connection with
the solicitation by our Board of Directors of proxies to be voted at the Special
Meeting of Stockholders of Tower Automotive, Inc., to be held on September 20,
2004, at 2:00 p.m. at our offices located at 27175 Haggerty Road, Novi, Michigan
48377-3626, or at any adjournment or postponement thereof (the "Special
Meeting").
When used in this Proxy Statement, the terms "Tower Automotive," "we,"
"our," and "us" refer to Tower Automotive, Inc. and its subsidiaries, unless
otherwise specified.
This Proxy Statement and the accompanying proxy are first being mailed to
our stockholders on or about August 24, 2004. Copies of our Annual Report on
Form 10-K for the fiscal year ended December 31, 2003, and our Quarterly Report
on Form 10-Q for the fiscal quarter ended June 30, sections of which are
incorporated herein by reference, and our Current Reports on Form 8-K, filed in
2004, are available upon request.
Stockholders will have no rights of appraisal or dissenter's rights in
connection with the proposal to be considered at the special meeting.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL.
THE SPECIAL MEETING
WHEN AND WHERE WILL THE SPECIAL MEETING BE HELD?
The Special Meeting will be held on September 20, 2004, at 2:00 p.m., at the
offices of Tower Automotive, Inc., 27175 Haggerty Road, Novi, Michigan
48377-3626.
HOW CAN I PARTICIPATE IN THE SPECIAL MEETING?
You may participate in the Special Meeting by either completing, signing and
returning the enclosed proxy card and/or attending the Special Meeting in
person.
WHAT WILL BE VOTED UPON?
At the Special Meeting, you will be asked to consider and vote upon the
following proposals:
- The ratification and approval of the issuance of the Debentures and
the related shares of Common Stock issuable upon conversion or
repurchase of the Debentures; and
- Any other business as may properly come before the Special Meeting
and any and all adjournments and postponements thereof.
WHO IS ENTITLED TO VOTE?
Only holders of record as of the close of business on August 19, 2004 (the
"record date") are entitled to receive notice of and to vote at the Special
Meeting and any adjournments or postponements thereof. Each share of Common
Stock is entitled to one vote.
WHAT CONSTITUTES A QUORUM?
The presence at the Special Meeting, in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding on the record date will
constitute a quorum, permitting business to be conducted at the Special Meeting.
On August 19, 2004, approximately 58,162,819 shares of our Common Stock were
issued and outstanding.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and return it to
us, it will be voted as you direct. If you attend the Special Meeting, you may
deliver your completed proxy card in person or vote in person at the Special
Meeting.
WHAT VOTE IS REQUIRED TO RATIFY AND APPROVE THE ISSUANCE OF THE DEBENTURES AND
THE RELATED SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OR REPURCHASE OF
THESE DEBENTURES?
The ratification and approval of the issuance and sale of the Debentures and the
related shares of Common Stock issuable upon conversion or repurchase of the
Debentures will require the affirmative vote, either in person or by proxy, of
shares representing at least a majority of the votes cast at the Special
Meeting. A majority of our outstanding shares must be voted at the meeting.
Under Delaware law, abstentions are treated as present and entitled to vote and
therefore have the effect of a vote against the matter. A broker non-vote on a
matter is considered not entitled to vote on that matter and therefore is not
counted in determining whether a matter requiring approval of a majority of the
shares present and entitled to vote has been approved.
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CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy card, you may change your vote at
any time before the proxy is exercised by filing with the Secretary of Tower
Automotive either a notice of revocation or a duly executed proxy bearing a date
later than the date on the prior proxy you submitted. The powers of the proxy
holders to vote your proxy will be suspended if you attend the Special Meeting
in person and request to change your vote or vote in person, although attendance
at the Special Meeting will not by itself revoke a previously granted proxy.
HOW DOES DISCRETIONARY VOTING AUTHORITY APPLY?
If you sign and return your proxy card, but do not make any selections, you give
discretionary authority to the persons named as proxy holders on the proxy card,
S.A. Johnson and Kathleen Ligocki, to vote on the proposals and any other
matters that may arise at the Special Meeting.
WHO BEARS THE COST OF SOLICITATION OF PROXIES?
We bear the cost of preparing, printing and mailing this Proxy Statement and any
other material furnished to stockholders in connection with the solicitation of
proxies for the Special Meeting.
WHAT IS THE BOARD'S RECOMMENDATION?
Unless you give other instructions on your proxy card, the proxy holders will
vote in accordance with the recommendations of the Board of Directors. The Board
recommends a vote FOR the ratification and approval of the issuance and sale of
the Debentures and the related shares of Common Stock issuable upon conversion
or repurchase of the Debentures.
3
PROPOSAL I - RATIFICATION AND APPROVAL OF ISSUANCE AND SALE OF
DEBENTURES AND RELATED SHARES OF COMMON STOCK
WHAT IS THE TITLE AND AMOUNT OF THE SECURITIES FOR WHICH TOWER AUTOMOTIVE IS
SEEKING STOCKHOLDER APPROVAL AND RATIFICATION?
We are seeking stockholder approval and ratification for the issuance of $125
million principal amount of 5.75% Convertible Senior Debentures due May 15,
2024, which we refer to throughout this proxy statement as the Debentures. We
issued $125 million of our Debentures on May 24, 2004 in a private placement to
accredited investors. In addition, we are seeking approval of the issuance of
shares of Common Stock issuable upon conversion or repurchase of the Debentures.
The conversion of all of the Debentures would result in the issuance of
28,875,025 shares of our Common Stock if we elect and are permitted to pay the
conversion price solely using shares of our Common Stock. The number of shares
of Common Stock issuable upon repurchase of the Debentures will depend on the
average closing sale price of our Common Stock for the 20 consecutive trading
days ending on the third business day prior to the applicable repurchase date or
date of determination.
WHY IS TOWER AUTOMOTIVE SEEKING STOCKHOLDER RATIFICATION AND APPROVAL FOR THE
ISSUANCE OF THE DEBENTURES AND COMMON STOCK?
We are seeking stockholder ratification and approval for the issuance of the
Debentures and the related shares of Common Stock in accordance with the rules
of the New York Stock Exchange. New York Stock Exchange rules require us to
obtain stockholder approval for the issuance of Common Stock or securities
convertible into Common Stock under certain circumstances if the issuance
amounts to 20% or more of our Common Stock outstanding before the issuance.
We may not issue more than 19,705,187 shares of our Common Stock upon conversion
or repurchase of the Debentures unless and until we have obtained stockholder
approval for the issuance of the Debentures and the Common Stock issuable upon
conversion or repurchase. If we do not obtain stockholder approval, the
Debentures will remain outstanding. However, in circumstances where we would
otherwise be required to issue in excess of 19,705,187 shares of our Common
Stock, we will be required to pay cash in respect of all or a portion of
converted or repurchased Debentures to ensure that the aggregate shares issued
do not exceed 19,705,187 shares.
In addition, if we do not obtain stockholder approval for the proposal, our
earnings per share will be negatively impacted if the market price of our Common
Stock increases from the initial Debenture conversion price of $4.33 per share.
This impact is caused by the accounting treatment of the conversion option,
which is accounted for as a separate derivative instrument. The conversion
option associated with the Debentures is treated as a cash-settled written call
option, separate from the debt component of the Debentures, which is accounted
for separately as a derivative instrument. If we receive stockholder approval
for our proposal and we issue stock upon conversion or repurchase of the
Debentures, we will not be required to record the change in the fair value of
the conversion option. This, in turn, would eliminate the potential impact on
our earnings.
WHAT HAPPENS IF THIS PROPOSAL IS APPROVED?
If the proposal is approved, we will have the flexibility upon conversion or
repurchase of our Debentures to issue more than 19,705,187 shares of our Common
Stock, instead of a combination of Common Stock and cash. The ability to issue
shares of Common Stock and no cash upon conversion or repurchase of the
Debentures will eliminate a significant potential cash drain on our company,
will strengthen our balance sheet and will improve our liquidity. In addition,
we believe that having the flexibility to issue all stock upon conversion or
repurchase of the Debentures will allow us to engage in future financings with
greater certainty and on better terms and conditions.
If we receive stockholder approval for our proposal, we will not be required to
record the change in the fair value of the conversion option, which would
eliminate the potential impact on our earnings per share.
4
WHAT IF THIS PROPOSAL IS NOT APPROVED?
If we do not obtain stockholder approval, the Debentures will remain
outstanding. However, if all the Debentures are converted, or if the holders
require us to repurchase all the Debentures, we could issue no more than
19,705,187 shares of our Common Stock and would be required to pay cash for the
remainder of the conversion price, if any. At an assumed closing price of $3.21
per share (based on the last reported sale price of our Common Stock on August
2, 2004), the total amount of the cash payable on conversion of all of the
Debentures would be approximately $29.4 million if we issued 19,705,187 shares
of our Common Stock. If the price of our Common Stock increases, the amount of
cash payable upon conversion or repurchase of the Debentures increases. For
example, at an assumed closing price of $10.00 per share of Common Stock, the
total cash payable upon conversion of all of the Debentures would increase by
approximately $62.3 million to approximately $91.7 million.
Although we do not believe it is likely that a significant amount of the
Debentures will be converted in the near future, if the proposal is not approved
and if a significant amount of Debentures are submitted for conversion or
repurchase could significantly reduce our available cash, or we may not have
enough cash on hand to make any necessary cash payments to the Debenture
holders. If we do not have sufficient liquidity or capital resources to make the
cash payment, we may have to raise the cash through financing transactions in
the form of additional debt or equity issuances. There can be no assurance that
we will be able to access the capital markets to issue such additional debt or
equity. If we cannot access the capital markets or are otherwise unable to
complete a financing transaction, we may be unable to make the cash payment and
we will be in default under the terms of the Debentures.
WHY ARE WE ISSUING THE DEBENTURES AND HOW WILL WE USE THE NET PROCEEDS FROM THE
SALE OF THE DEBENTURES?
The net proceeds from the sale of Debentures were approximately $121 million. We
used the net proceeds from this offering, together with a portion of the
borrowings under our new senior credit facility, to repay the outstanding
indebtedness under our prior senior credit facility.
WHAT ARE THE SIGNIFICANT TERMS OF THE DEBENTURES?
The Debentures mature on May 15, 2024, unless earlier converted, redeemed or
repurchased. The interest rate on the Debentures is 5.75% per annum, payable
semi-annually in arrears in cash on May 15 and November 15 of each year,
commencing on November 15, 2004. There is no sinking fund.
Debentures are convertible into shares of our Common Stock at a conversion rate
of 231.0002 shares per $1,000 principal amount of Debentures, subject to
adjustment upon certain events, under certain specified circumstances.
On or after May 20, 2011, we may redeem the Debentures, in whole or in part, at
any time, for cash at a redemption price equal to 100% of the principal amount,
plus any accrued and unpaid interest.
Holders of Debentures may require us to repurchase some or all of that holder's
Debentures on May 15, 2011, May 15, 2014, or May 15, 2019 at a repurchase price
equal to 100% of the principal amount, plus any accrued and unpaid interest to
the repurchase date.
The Debentures are general unsecured senior obligations and rank equally with
any of our present and future senior debt. The Debentures rank senior to any of
our subordinated debt and will effectively be subordinated to any of our secured
debt.
We have agreed to file a shelf registration under the Securities Act of 1933, as
amended, covering resales of the Debentures and the shares of common stock
issuable upon conversion of the Debentures.
WHAT EFFECT, IF ANY, DOES THE ISSUANCE HAVE UPON THE RIGHTS OF EXISTING SECURITY
HOLDERS?
The conversion of Debentures into our Common Stock, or the repurchase of
Debentures by means of the issuance of our Common Stock, will dilute the
ownership interest of our stockholders. The holders of Common Stock have no
preemptive rights to purchase additional shares of Common Stock.
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HAVE ANY DIRECTORS OR EXECUTIVE OFFICERS PURCHASED, OR WILL ANY DIRECTORS OR
EXECUTIVE OFFICERS PURCHASE, THE DEBENTURES?
As of the date of this proxy statement, none of our directors or executive
officers have purchased any Debentures.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL AND
RATIFICATION OF THE ISSUANCE AND SALE OF THE DEBENTURES AND THE RELATED SHARES
OF COMMON STOCK ISSUABLE UPON CONVERSION OR REPURCHASE OF THE DEBENTURES.
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CERTAIN EFFECTS OF THE PROPOSAL AND THE CONVERSION OR REPURCHASE
OF THE DEBENTURES
The issuance of shares of Common Stock upon conversion of all of the
Debentures will dilute the ownership percentage of our stockholders. If we do
not obtain stockholder approval for the proposal, we may issue up to 19,705,187
shares of Common Stock upon conversion or repurchase of the Debentures which
equals 20% (assuming that all outstanding Debentures are converted and that the
conversion rate has not been adjusted) of the total number of shares of our
Common Stock outstanding on April 30, 2004.
If the proposal is approved and the conversion price is paid entirely with
Common Stock, upon conversion of all of the Debentures, the ownership interest
of our stockholders would be diluted by a total of 28,875,025 shares of Common
Stock which equals 49.75% (assuming that all outstanding Debentures are
converted and that the conversion rate has not been adjusted) of the total
number of shares of our Common Stock outstanding on April 30, 2004.
The number of shares of Common Stock issuable upon repurchase of the
Debentures will depend on the average closing sale price of our Common Stock for
the 20 consecutive trading days ending on the third business day prior to the
applicable repurchase date or date of determination specified in the Debenture.
If the proposal is approved, the number of shares to be issued upon repurchase
of the Debentures could exceed 19,705,187 shares, depending on the market price
of our Common Stock at that time.
If the proposal is approved, the potential of the issuance of the
additional shares may have a depressive effect on the market price of our Common
Stock.
The number of shares of Common Stock issuable upon conversion of the
Debentures will also affect our earnings per share. The actual effect of the
conversion of the Debentures on our earnings per share will depend on the level
of our earnings in future periods, the market price of our common stock, whether
we elect to pay the cash payment component of the Debentures with Common Stock
or with cash, and the number of holders who convert their Debentures.
If we do not obtain stockholder approval for the proposal, our earnings
per share will be negatively impacted if the market price of our Common Stock
increases from the initial market price of our stock at the time of issuance of
the Debentures. This impact is caused by the accounting treatment of the
conversion option, which is accounted for as a separate derivative instrument.
The conversion option associated with the Debentures is treated as a
cash-settled written call option, separate from the debt component of the
Debentures, which is accounted for separately as a derivative instrument. If we
receive stockholder approval for our proposal and we issue stock upon conversion
or repurchase of the Debentures, we would no longer be required to record the
change in the fair value of the conversion option which would eliminate the
impact on our earnings per share.
The following table illustrates how the value of the conversion option
changes as the market price of our Common Stock changes.
CHANGE IN STOCK PRICE FROM CHANGE IN EARNINGS
MARKET PRICE OF STOCK AT TIME CORRESPONDING STOCK PER SHARE
OF ISSUANCE OF DEBENTURES (%) PRICE ($) (AFTER TAX) ($)
----------------------------- ------------------- ------------------
25% Increase $4.16 $(0.06)
50% Increase $5.00 $(0.13)
75% Increase $5.83 $(0.20)
100% Increase $6.66 $(0.28)
25% Decrease $2.50 $ 0.06
50% Decrease $1.67 $ 0.10
75% Decrease $0.83 $ 0.13
7
As illustrated above, as the market price of our Common Stock moves away
from the initial conversion price of the Debentures, the value attributed to the
conversion option and the corresponding impact to our earnings increases. An
increase in the stock price above $3.33 would result in a negative impact to our
earnings per share. Correspondingly, a decrease in the stock price below $3.33
would result in a positive impact to our earnings per share.
If we receive stockholder approval for our proposal we will not be
required to record the change in the fair value of the conversion option which
would eliminate the impact to our earnings per share.
Also, based upon the guidance of EITF 00-27, we will not be required to
record a beneficial conversion feature in relation to the debentures. The
initial conversion price per $1,000 principal amount of the debentures is $4.33
per share in comparison to the closing price of our common stock of $3.33 per
share on May 17, 2004, the date of pricing of the debentures. The initial
conversion price only is required to be adjusted to prevent dilution to the
debenture holder for standard anti-dilution events such as stock splits, stock
dividends, etc. We are not required to adjust the initial conversion price for
any future triggering events. Accordingly, the nature of the debentures do not
require us to record a beneficial conversion feature.
USE OF PROCEEDS
We will receive no additional consideration for the issuance of our Common
Stock upon conversion of the Debentures.
The net proceeds from the sale of Debentures were approximately $121
million. We used the net proceeds from this offering, together with a portion of
the borrowings under our new senior credit facility, to repay outstanding
indebtedness under our former senior credit facility.
WHERE YOU CAN FIND ADDITIONAL INFORMATION REGARDING THE DEBENTURES
A more detailed description of the terms of the Debentures can be found by
reviewing the form of Debenture that was filed as an exhibit to our Current
Report on Form 8-K/A, dated May 25, 2004, as amended. The Indenture pursuant to
which the Debentures were issued can be found as an exhibit to that same report.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of Tower Automotive, Inc. consists of
200,000,000 shares of common stock, $0.01 par value per share, of which
58,162,819 shares were issued and outstanding as of August 19, 2004, and
5,000,000 shares of preferred stock, $1.00 par value per share, of which no
shares are issued or outstanding. The following description of our capital stock
and certain provisions of our amended and restated certificate of incorporation
and by-laws is a summary of all material terms of our capital stock and is
qualified in its entirety by the provisions of the amended and restated
certificate of incorporation and by-laws, copies of which have been filed with
the SEC and are available for inspection. See "Where you can find more
information."
Common stock
Holders of our common stock are entitled to one vote for each share held
on all matters submitted to a vote of stockholders, including the election of
directors. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election if they choose to do so. The amended and restated
certificate of incorporation does not provide for cumulative voting for the
election of directors. Holders of common stock are entitled to receive ratably
such dividends, if any, as may be declared from time to time by our board of
directors out of funds legally available therefor, and are entitled to receive,
pro rata, all assets of Tower Automotive available for distribution to such
holders upon liquidation. Holders of common stock have no preemptive,
subscription or redemption rights. All outstanding shares of our common stock,
are fully paid and nonassessable. As of July 31, 2004, our common stock was held
of record by approximately 2,600 stockholders.
8
As of August 19, 2004, we had reserved for issuance:
- 2,451,165 shares of common stock issuable upon the exercise of
options outstanding under our stock incentive plans;
- 8,424,908 shares issuable upon conversion of our 6-3/4% Trust
Convertible Preferred Securities.
Preferred stock
Pursuant to our amended and restated certificate of incorporation, we are
authorized to issue "blank check" preferred stock, which may be issued from time
to time in one or more series upon authorization by our board of directors. The
board of directors, without further approval of the stockholders, is authorized
to fix the dividend rights and terms, conversion rights, voting rights,
redemption rights and terms, liquidation preferences, and any other rights,
preferences, privileges and restrictions applicable to each series of the
preferred stock. The issuance of preferred stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes could, among
other things, adversely affect the voting power of the holders of common stock
and, under certain circumstances, make it more difficult for a third party to
gain control of us, discourage bids for our common stock at a premium or
otherwise adversely affect the market price of the common stock.
Anti-takeover effects of our certificate of incorporation and bylaws
Some provisions of our certificate of incorporation and bylaws may be
deemed to have an anti-takeover effect and may delay or prevent a tender offer
or takeover attempt that a stockholder might consider to be in its best
interest, including those attempts that might result in a premium over the
market price for the shares held by stockholders.
These provisions include:
Board vacancies
Our certificate of incorporation authorizes the board of directors to fill
vacant directorships or increase the size of the board of directors, which may
deter a stockholder from removing incumbent directors and simultaneously gaining
control of the board of directors by filling the vacancies created by this
removal with its own nominees.
Cumulative voting
Our certificate of incorporation does not authorize our stockholders the
right to cumulative voting in the election of directors. As a result,
stockholders may not aggregate their votes for a single director.
Special meeting of stockholders
Our certificate of incorporation provides that special meetings of our
stockholders may be called only by the chairman of the board of directors, the
president and chief executive officer, any member of the board of directors or
holders of at least 25% of the shares entitled to vote generally in the election
of directors.
Authorized but unissued shares
Our authorized but unissued shares of common stock and preferred stock are
available for future issuance without stockholder approval. These additional
shares may be utilized for a variety of corporate purposes, including future
public offerings to raise additional capital, corporate acquisitions and
employee benefit plans. The existence of authorized but unissued shares of
common stock and preferred stock could render more difficult or discourage an
attempt to obtain control of a majority of our common stock by means of a proxy
contest, tender offer, merger or otherwise.
9
Section 203 of Delaware General Corporation law
We are subject to the "business combination" statute of the Delaware
General Corporation Law. In general, such statute prohibits a publicly held
Delaware corporation from engaging in various "business combination"
transactions with any "interested stockholder" for a period of three years after
the date of the transaction in which the person became an "interested
stockholder," unless:
- the transaction is approved by the board of directors prior to the
date the interested stockholder obtained such status,
- upon consummation of the transaction which resulted in the
stockholder becoming an "interested stockholder," the "interested
stockholder" owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding specified shares, or
- on or subsequent to such date the "business combination" is approved
by the board of directors and authorized at an annual or special
meeting of the stockholders by the affirmative vote of at least
66-2/3% of the outstanding voting stock which is not owned by the
"interested stockholder."
A "business combination" includes mergers, asset sales and other
transactions resulting in financial benefit to a stockholder. An "interested
stockholder" is a person who, together with affiliates and associates, owns (or
within three years, did own) 15% or more of a corporation's voting stock. The
statute could prohibit or delay mergers or other takeover or change in control
attempts with respect to us and, accordingly, may discourage attempts to acquire
us.
Transfer agent
Equiserve Trust Company, N.A. is the transfer agent for our common stock.
Indemnification of directors and officers
Our certificate of incorporation provides that each person who was or is
made a party or is threatened to be made a party to or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director or
officer of Tower Automotive or is or was serving at the request of Tower
Automotive as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan, whether the basis of such proceeding
is alleged action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by Tower Automotive to the fullest
extent authorized by Section 145 of the General Corporation Laws of the State of
Delaware, or the "Delaware Statute," as the same exists or may thereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits Tower Automotive to provide broader indemnification rights
than permitted prior thereto), against all expense, liability and loss
(including attorney's fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such
indemnitee in connection therewith and such indemnification shall continue as to
an indemnitee who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that except as otherwise provided in the
certificate of incorporation, with respect to proceedings to enforce rights to
indemnification, Tower Automotive shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the board of directors of
Tower Automotive.
The right to indemnification conferred in our certificate of incorporation
is a contract right and includes the right to have Tower Automotive pay the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Delaware Statute requires, an
advancement of expenses incurred by an indemnitee in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to Tower Automotive of
an undertaking, by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses. If a claim under the certificate of
incorporation is not paid in full by Tower Automotive within sixty days after a
written claim has been received by
10
Tower Automotive, except in the case of a claim for an advancement of expenses,
in which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against Tower Automotive to recover the unpaid
amount of the claim.
Our certificate of incorporation provides that, to the fullest extent
permitted by the Delaware Statute, no director of the corporation shall be
liable to the corporation or its stockholders for monetary damages for a breach
of fiduciary duty as a director.
OTHER BUSINESS
At the date of this Proxy Statement, we have no knowledge of any business
other than that described above that will be presented at the Special Meeting.
If any other business should properly be brought before the Special Meeting and
any adjournments or postponements of the meeting, the Proxies will be voted in
the discretion of the proxy holders.
OWNERSHIP OF TOWER AUTOMOTIVE COMMON STOCK
Unless otherwise noted, the following table sets forth certain information
regarding ownership of common stock as of July 31, 2004, by (i) the beneficial
owners of more than 5% of our common stock, (ii) each director, the former Chief
Executive Officer, the Chief Executive Officer and the four most highly
compensated executive officers who were serving as executive officers as of
December 31, 2003, and (iii) all of our directors and executive officers as a
group. To our knowledge, 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.
BENEFICIAL OWNERSHIP OF
COMMON STOCK(1)
-----------------------------
DIRECTORS, OFFICERS AND NUMBER OF PERCENT OF
5% STOCKHOLDERS SHARES CLASS
--------------------------------------------------------------- --------- ----------
Kathleen Ligocki............................................... 180,000 *
Tom G. Pitser(2) .............................................. 194,127 *
Jim Arnold(3) ................................................. 36,108 *
Kathy Johnston(2) ............................................. 138,133 *
Antonio Zarate(2) ............................................. 47,484 *
Anthony G. Fernandes........................................... 58,403 *
Juergen M. Geissinger(2) ...................................... 32,676 *
Ali Jenab(2) .................................................. 22,813 *
S. A. Johnson(2) .............................................. 351,247 *
F. Joseph Loughrey(2) ......................................... 92,361 *
James R. Lozelle(2) ........................................... 313,429 *
Georgia Nelson(2) ............................................. 76,336 *
Enrique Zambrano(2) ........................................... 71,289 *
Dugald Campbell(4) ............................................ 931,570 1.6%
Barclays Global Investors NA(5) ............................... 3,640,555 6.3%
Citadel Limited Partnership(6)................................. 4,182,900 7.2%
Citigroup Inc. (7)............................................. 5,156,934 8.2%
Dimensional Fund Advisors, Inc. (8) ........................... 3,830,000 6.6%
FMR Corp(9) ................................................... 5,678,700 9.8%
Morgan Stanley(10)............................................. 6,829,558 11.6%
State of Wisconsin Investment Board(11) ....................... 2,425,000 4.2%
Strong Capital Management, Inc.(12) ........................... 3,088,845 5.3%
All Directors and executive officers as a group (20 persons)... 2,918,292 5.0%
--------------------------
* Less than one percent.
11
(1) The number of shares includes shares that may be purchased under options
that are exercisable in 60 days. The percent of class is calculated based
on the number of shares outstanding plus such option shares.
(2) Includes the following number of shares issuable as deferred compensation
for the following individuals: Mr. Pitser - 4,885; Mr. Arnold - 36,108;
Ms. Johnston - 26,124; Mr. Zarate - 17,484; Mr. Fernandes - 58,403; Dr.
Geissinger - 25,037; Mr. Jenab - 18,777; Mr. Johnson - 35,637; Mr.
Loughrey - 27,361; Mr. Lozelle - 1,946; Ms. Nelson - 76,336; Mr. Zambrano
- 62,591; and Mr. Campbell - 454,890.
(3) Mr. Arnold's employment with the Company terminated as of December 31,
2003.
(4) Mr. Campbell resigned as our CEO on August 18, 2003. Includes 256,861
shares held in trusts, of which Mr. Campbell or his wife are the trustees.
Mr. Campbell disclaims beneficial ownership of the shares held in trust.
(5) Barclays Global Investors, NA, a bank filing on behalf of itself and its
bank, broker-dealer and investment adviser affiliates reported as of
February 13, 2004, sole voting and dispositive power with respect to
3,439,579 shares of Common Stock. We have been unable to identify the
natural person or group of natural persons of this stockholder that have
investment and voting control over our securities. The address for
Barclays Global Investors, NA is 45 Fremont Street, San Francisco,
California 94105.
(6) Citadel Limited Partnership reported as of May 25, 2004, shared voting and
shared dispositive power with respect to 4,182,900 shares of Common Stock.
The Schedule 13G filed by Citadel Limited Partnership includes group
members with shared voting and shared dispositive power, and the only
natural person identified in that group was Kenneth Griffin. The address
for the Partnership is 131 S. Dearborn Street, 32nd Floor, Chicago,
Illinois 60603.
(7) Citigroup Inc. is a reporting company under the Securities Exchange Act of
1934, as amended. The address for Citigroup Inc. is 399 Park Avenue, New
York, New York 10043.
(8) Dimensional Fund Advisors, Inc. reported as of February 6, 2004, sole
voting and dispositive power with respect to 3,830,000 shares of Common
Stock. Dimensional Fund Advisors Inc., is an investment advisor registered
under the Investment Advisors Act of 1940, and disclosed that it furnishes
investment advice to four investment companies registered under the
Investment Company Act of 1940, and serves as investment manager to
certain other commingled group trusts and separate accounts. We have been
unable to identify the natural person or group of natural persons of this
stockholder that have investment and voting control over our securities.
The address for Dimensional Fund Advisors, Inc. is 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401.
(9) FMR Corp. reported as of March 10, 2004, sole dispositive power with
respect to 5,678,700 shares of Common Stock. FMR Corp. is the parent
company of Fidelity Management & Research Company, an investment adviser
registered under the Investment Advisers Act of 1940, which advises
various investment companies registered under the Investment Company Act
of 1940. We have been unable to identify the natural person or group of
natural persons of this stockholder that have investment and voting
control over our securities. The address for FMR Corp is 82 Devonshire
Street, Boston, Massachusetts 02109.
(10) Morgan Stanley is a reporting company under the Securities Exchange Act of
1934, as amended. The address for Morgan Stanley is 1585 Broadway, New
York, New York 10036.
(11) The State of Wisconsin Investment Board reported as of February 16, 2004,
sole voting and dispositive power with respect to 2,425,000 shares of
Common Stock. We have been unable to identify the natural person or group
of natural persons of this stockholder that have investment and voting
control over our securities. The address of the Board is P.O. Box 7842,
Madison, Wisconsin 53707.
(12) Strong Capital Management, Inc. and Richard S. Strong jointly reported as
of February 16, 2004, shared voting and shared dispositive power with
respect to 3,088,845 shares of Common Stock. Strong Capital Management,
Inc. is an investment adviser registered under the Investment Advisers Act
of 1940. The address of Strong Capital Management, Inc. is 100 Heritage
Reserve, Menominee Falls, Wisconsin 53051.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 2005 ANNUAL MEETING
Stockholders wishing to submit proposals on matters appropriate for
stockholder action to be presented at our 2005 annual meeting of stockholders
may do so in accordance with Rule 14a-8 promulgated under the Exchange Act. For
such proposals to be included in Tower Automotive's proxy materials relating to
our 2005 annual meeting of stockholders, all applicable requirements of Rule
14a-8 must be satisfied and such proposals must be received by us at our
principal executive offices at 27175 Haggerty Road, Novi, Michigan 48377-3626 no
later than December 17, 2004.
For any proposal that is not submitted for inclusion in next year's Proxy
Statement, but is instead sought to be presented directly at the 2005 Annual
Meeting, SEC rules permit management to vote proxies in its discretion if we:
(1) receive notice of the proposal before the close of business on March 2,
2005, and advise stockholders in the 2005 Proxy Statement about the nature of
the matter and how management intends to vote on such matter, or (2) do
12
not receive notice of the proposal prior to the close of business on March 2,
2005. Notices of intention to present proposals at the 2005 Annual Meeting
should be addressed to James Mallak, Secretary, at our principal executive
offices at 27175 Haggerty Road, Novi, Michigan 48377-3626.
As of July 30, 2004, no proposals to be presented at the 2005 Annual
Meeting had been received by us.
Under our Bylaws, no business may be brought before an annual meeting
unless it is specified in the notice of the meeting or as otherwise brought
before the meeting by or at the direction of the Board or by a stockholder
entitled to vote who has delivered written notice to us (containing certain
information specified in the Bylaws about the stockholder and the proposed
action) not less than thirty (30) days prior to the date of the originally
scheduled meeting. If less than forty (40) days' advance notice of the meeting
is given, the notice must be received by us not later than the close of business
on the tenth day following the date on which the notice of the scheduled meeting
was first mailed to our stockholders.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following information is incorporated by reference from Tower
Automotive's Annual Report on Form 10-K for the year ended December 31, 2003
(File No. 1-12733): Financial Statements and Supplementary Data at pages 39 to
89; our Selected Financial Data at pages 15 to 16; Management's Discussion and
Analysis of Financial Condition and Results of Operations at pages 16 to 38;
Quantitative and Qualitative Disclosures About Market Risk at pages 30 to 31;
and Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure at page 90. The following information is incorporated by reference
from Tower Automotive's Quarterly Report on Form 10-Q for the quarter ended June
30, 2004 (File No. 1-12733): Financial Statements and Notes to Condensed
Consolidated Financial Statements at pages 2 to 17; Management's Discussion and
Analysis of Financial Condition and Results of Operations at pages 18 to 21; and
Market Risk at page 21. Tower Automotive's Annual Report on Form 10-K for the
year ended December 31, 2003 and Quarterly Report on Form 10-Q for the quarter
ended June 30, 2004, are available upon request addressed to Tower Automotive,
Inc., Attn: Investor Relations, 27175 Haggerty Road, Novi, Michigan 48377-3626.
Our Securities and Exchange Commission filings are also available to the public
at the Security and Exchange Commission's internet site at "http://www.sec.gov."
ADDITIONAL INFORMATION
This solicitation is being made by us. We will bear all expenses in
connection with this solicitation. We 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
our transfer agent for their reasonable out-of-pocket expenses in forwarding
such materials.
Deloitte & Touche LLP, independent auditors, audited our consolidated
balance sheets as of December 31, 2003 and 2002 and the related consolidated
statements of operations, stockholders' investment, and cash flows for the years
then ended. Representatives of Deloitte & Touche LLP are not expected to attend
the Special Meeting.
We will furnish without charge to each person whose Proxy is being
solicited, upon the written request of any such person, a copy of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2003, and our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. Requests for
copies of our Annual Report on Form 10-K or Quarterly Report on Form 10-Q should
be directed to: Tower Automotive, Inc., Attn: Investor Relations, 27175 Haggerty
Road, Novi, Michigan 48377-3626.
13
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,
/s/ James Mallak
---------------------------
James Mallak
Secretary
August 24, 2004
14
TOWER AUTOMOTIVE, INC.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8024
EDISON, NJ 68818-8024
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
--------------------------------------------------------------------------------
/X/ PLEASE MARK 1887
VOTES AS IN
THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE PROPOSAL STATED BELOW.
The Board of Directors recommends a vote FOR Proposal 1.
1. To ratify and approve the issuance of $125 million principal amount of our
5.75% Convertible Senior Debentures maturing on May 15, 2024, unless FOR AGAINST ABSTAIN
earlier converted, redeemed or repurchased, and the related shares of
Common Stock issuable upon conversion or repurchase of the Debentures. / / / / / /
2. To transact such other business as may properly come before the meeting or
any adjournment thereof.
PLEASE COMPLETE, INDICATE YOUR VOTE, DATE AND SIGN THIS PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHETHER OR
NOT YOU PLAN TO ATTEND THE SPECIAL MEETING ON SEPTEMBER 20,
2004. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY VOTE IN
PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR
PROXY.
Please sign exactly as name or names appear hereon. For more
than one owner as shown to the left, each should sign. When
signing in a fiduciary or representative capacity, please give
full title. If this proxy is submitted by a corporation, it
should be executed in the full corporate name by a duly
authorized officer; if a partnership, please sign in
partnership name by an authorized person.
Signature: ___________________________Date: ___________, 2004 Signature:_______________________________Date: __________, 2004
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
--------------------------------------------------------------------------------
TOWER AUTOMOTIVE, INC. PROXY
27175 HAGGERTY ROAD
NOVI, MICHIGAN 48377-3626
--------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE SPECIAL
MEETING ON SEPTEMBER 20, 2004.
The undersigned hereby appoints S.A. Johnson and Kathleen Ligocki or any
one or more of them, attorneys with full power of substitution to each
for and in the name of the undersigned, with all powers the undersigned
would possess if personally present to vote the Common Stock of the
undersigned in Tower Automotive, Inc. at the Special Meeting of
Stockholders to be held on September 20, 2004, at 2:00 p.m. local time,
at the corporate headquarters of Tower Automotive, Inc., 27175 Haggerty
Road, Novi, Michigan 48377-3626, or at any adjournment thereof, upon the
matters described in the accompanying Notice of Special Meeting of
Stockholders and Proxy Statement for the Special Meeting of Stockholders,
receipt of which is hereby acknowledged, and upon any other business that
may properly come before the Special Meeting of Stockholders or any
adjournment thereof. Said proxies are directed to vote on the matters
described in the Special Meeting of Stockholders and Proxy Statement for
the Special Meeting of Stockholders as follows, and otherwise in their
discretion upon such other business as may properly come before the
Special Meeting of Stockholders or any adjournment thereof.
Our Board of Directors has determined that providing the Company with the
ability to issue more than 19,705,187 shares of Common Stock upon
conversion or repurchase of the Debentures is in the Company's and your
best interest. Our Board unanimously recommends that you vote FOR the
proposal at the special meeting.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING, PLEASE INDICATE YOUR VOTE, SIGN AND DATE THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE
SPECIAL MEETING AND PREFER TO VOTE YOUR SHARES IN PERSON, YOU WILL BE
ABLE TO DO SO.
See reverse for voting instructions.