SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 4)
TOWER AUTOMOTIVE, INC.
(Name of Subject Company and Person Filing)
OPTIONS TO PURCHASE COMMON STOCK,
PAR VALUE $.01 PER SHARE, HAVING AN EXERCISE PRICE OF $17.125 OR MORE
(Title of Class of Securities)
891707101
(CUSIP Number of Class of Securities)
Anthony A. Barone
Chief Financial Officer
5211 Cascade Road, SE
Grand Rapids, Michigan 49546
(616) 802-1600
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and communications on Behalf of
the Person(s) Filing Statement)
With a copy to:
Michael G. Wooldridge
Varnum, Riddering, Schmidt & HowlettLLP
333 Bridge Street, NW
Grand Rapids, Michigan 49504
(616) 336-6000
CALCULATION OF FILING FEE
-------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
$6,219,151.70 $1,243.83
*Calculated solely for purposes of determining the filing fee. This amount
assumes that options to purchase 1,743,000 shares of common stock of the company
having an aggregate value of $6,219,151.70, will be exchanged in response to
this offer. The aggregate value of the options was calculated based on the
Black-Scholes Option Pricing Model. The amount of the filing fee, calculated in
accordance with Rule 0-11(b) of the Securities Exchange Act of 1934, as amended,
equals 1/50 of 1 percent of the value of the transaction.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount previously paid: $1,200.39 Filing party: Tower Automotive, Inc.
Form or registration no.: Schedule TO Date filed: July 25, 2001
[ ]Check the box if the filing relates solely to preliminary communications made
before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third party tender offer subject to Rule 14d-1.
[ ] going-private transaction subject to Rule 13e-3.
[ X ] issuer tender offer subject to Rule 13e-4.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer. [ ]
INTRODUCTORY STATEMENT
This Amendment No. 4 amends and supplements the Tender Offer Statement on
Schedule TO, filed with the Securities Exchange Commission on July 25, 2001, as
amended by Amendment No. 1 filed on July 26, 2001, Amendment No. 2 filed on
August 27, 2001, and Amendment No. 3 filed on September 5, 2001 (the "Schedule
TO"), relating to the offer by Tower Automotive, Inc., a Delaware corporation
(the "Company"), to certain of its active employees to exchange all options to
purchase shares of common stock, par value $.01 per share, of the Company (the
"Common Stock") having an exercise price equal to or greater than $17.125 per
share, which are outstanding under the Tower Automotive, Inc. 1994 Key Colleague
Stock Option Plan and the Tower Automotive, Inc. Long Term Incentive Plan
(collectively, the "Plans") for restricted shares of Common Stock that will be
issued under one or more of the Plans, upon the terms and subject to the
conditions described in the Offer to Exchange dated July 25, 2001, and the
related Letter of Transmittal.
This Amendment No. 4 extends the offer to exchange to certain employees and
certain consultants of the Company, as described below. The Long Term Incentive
Plan permits the Company to grant options to its consultants. The Company
previously granted options to purchase its common stock to a select number of
consultants. The Company has elected to extend the purchase offer to (i) those
optionees that are employees of Hidden Creek Industries, Inc. who are not also
directors of the Company and (ii) a former consultant of the Company who is now
an employee of the Company (hereinafter collectively referred to as "New
Offerees"). There are four persons among the New Offerees; they collectively
hold options to purchase 55,000 shares of the Company's common stock, with an
average exercise price of $ 17.125. The offer to purchase, letter of
transmittal, and letter and memorandum to holders that have been sent to these
New Offerees are attached as Exhibits 8, 9, and 10, respectively. These items
are identical to those sent to the original offerees, except that Exhibits 8, 9,
and 10 incorporate the revisions effected by Amendments Nos. 2 and 3 to the
Schedule TO and include minor revisions to account for the fact that not all of
the New Offerees are employees of the Company. These amended items are only
being sent to New Offerees.
ITEM 12. EXHIBITS
(a) (1) Offer to Purchase, dated July 25, 2001.*
(2) Form of Letter of Transmittal.*
(3) Form of Letter and Memorandum to Holders.*
(4) Tower Automotive, Inc. Annual Report on Form 10-K for
the year ended December 31, 2000, incorporated herein by
reference.*
(5) Tower Automotive, Inc. Quarterly Report on Form 10-Q for
the quarter ended March 31, 2001, incorporated herein by
reference.*
(6) Tower Automotive, Inc. Quarterly Report on Form 10-Q/A
for the quarter ended June 30, 2001, incorporated herein by
reference.*
(7) Supplement, dated August 27, 2001, to Offer to Exchange,
dated July 25, 2001.*
(8) Offer to Purchase, dated September 11, 2001 (sent to New
Offerees).
(9) Amended Form of Letter of Transmittal (sent to New
Offerees).
(10) Amended Form of Letter and Memorandum to Holders (sent
to New Offerees).
(b) Not applicable.
(d) (1.1) Tower Automotive, Inc. 1994 Key Colleague Stock Option
Plan, incorporated by reference to Exhibit 10.18 to Tower
Automotive Inc.'s Registration Statement on Form S-1 (33-80320).*
(1.2) Form of Tower Automotive, Inc.'s Long-Term Incentive
Plan, incorporated by reference to Exhibit No. 4 to Tower
Automotive, Inc.'s Registration Statement on Form S-8
(333-59664).*
(2.1) Form of Restricted Share Grant Agreement for Awards
pursuant to Tower Automotive, Inc.'s Long-Term Incentive Plan.*
(g) Not applicable.
(h) Not applicable.
----------------------------
*Previously filed.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule TO is true, complete, and
correct.
TOWER AUTOMOTIVE, INC.
By: /s/ Anthony A. Barone
--------------------------------------
Anthony A. Barone
Chief Financial Officer
Dated: September 11, 2001
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
A8 - Amended Offer to Purchase, dated September 11, 2001.
A9 - Amended Letter of Transmittal.
A10 - Amended form of Letter and Memorandum to Holders.
TOWER AUTOMOTIVE, INC.
OFFER TO PURCHASE OUTSTANDING OPTIONS WITH AN EXERCISE PRICE OF $17.125
OR MORE IN EXCHANGE FOR SHARES OF ITS COMMON STOCK
---------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, EASTERN
TIME, ON SEPTEMBER 14, 2001, UNLESS THE OFFER IS EXTENDED.
----------------
Tower Automotive, Inc., a Delaware corporation, hereby offers to purchase
all outstanding options to purchase shares of our common stock, $.01 par value
per share, that were issued to certain of our colleagues and consultants under
the 1994 Key Colleague Stock Option Plan or the Long-Term Incentive Plan (the
"plans") and that have an exercise price of $17.125 per share or more (the
"options"). The purchase price of each option tendered will be paid in common
stock, which will be issued as "restricted stock" under the terms of the
Long-Term Incentive Plan (the "LTI plan").
As restricted stock, these shares will be subject to forfeiture and other
restrictions until they vest under the terms of each award agreement between
each tendering optionholder and us. The number of shares of restricted stock
that each optionholder will receive has been calculated in the manner described
below. Also, included in your personalized transmitted letter is a table which
sets forth your options and the respective number of shares of restricted stock
that would be issued for each option grant. The shares of restricted stock will
be issued under the terms and subject to the conditions in this offer to
purchase and in the related letter of transmittal. We refer to this amount
payable to optionholders as the "purchase price." See Section 6. We refer to
this offer to purchase and the related cover letter and letter of transmittal,
together with any amendments or supplements, as the "offer."
All options properly tendered and not thereafter validly withdrawn will be
purchased at the applicable purchase price, subject to the terms and the
conditions of the offer. You may tender all or any portion of your options;
however, if you tender only a portion of your options, all options of the same
grant (i.e., having the same grant date and exercise price) must be tendered.
You are not required to tender any of your options.
The restricted stock issued in exchange for tendered options will be issued
under the LTI plan. Regardless of the current vesting schedule of your options,
the restricted stock you receive for tendered options will vest on the third
anniversary of the date of grant of the restricted stock, assuming you meet the
requirements for vesting specified in the restricted share grant agreement. As a
result, you may receive restricted stock with a new vesting schedule in exchange
for options that have already vested. See Section 9.
NEITHER THE COMPANY, THE ENTERPRISE LEADERSHIP TEAM, NOR THE BOARD OF
DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER OR REFRAIN
FROM TENDERING YOUR OPTIONS FOR PURCHASE. YOU MUST MAKE YOUR OWN DECISION
WHETHER TO TENDER OPTIONS. WE HAVE BEEN ADVISED THAT MOST OF THE MEMBERS OF OUR
ENTERPRISE LEADERSHIP TEAM THAT HAVE OPTIONS ELIGIBLE FOR TENDER INTEND TO
TENDER OPTIONS PURSUANT TO THIS OFFER. NON-EMPLOYEE DIRECTORS AND NON-COLLEAGUES
(INCLUDING FORMER COLLEAGUES) ARE NOT ELIGIBLE TO PARTICIPATE IN THE OFFER,
EXCEPT FOR CERTAIN CONSULTANTS (WHO ARE NOT ALSO DIRECTORS OF THE COMPANY) WHO
WERE ISSUED OPTIONS PURSUANT TO THE LTI PLAN.
Shares of our common stock are listed and traded on The New York Stock
Exchange under the symbol "TWR." As of September 10, 2001, the closing price of
our common stock, as reported on the NYSE, was $11.20 per share. We urge you to
obtain current market quotations for our common stock. See Section 8.
You should direct questions or requests for assistance or for additional
copies of this offer to purchase or the letter of transmittal to Richard S.
Burgess, Tower Automotive, Inc., 5211 Cascade Road, SE, Grand Rapids, Michigan
(telephone: (616) 802-1605).
September 11, 2001
IMPORTANT INFORMATION
Any optionholder desiring to tender his or her options for purchase should
complete and sign the letter of transmittal, or a facsimile thereof, in
accordance with the instructions in the letter of transmittal, and mail or
otherwise deliver it and any other required documents, including the option
agreement(s) that evidence the options to be surrendered, to us at our address
set forth on the transmittal letter.
This offer is not being made to, nor will any tender of options be accepted
from or on behalf of, optionholders in any jurisdiction in which the making of
this offer or the acceptance of any tender of options would not be in compliance
with the laws of such jurisdiction. However, we may, at our discretion, take
such action as we may deem necessary for us to make this offer to optionholders
in such jurisdiction.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO
WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS PURSUANT TO THE
OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE
MAKES ANY RECOMMENDATION OR GIVES ANY INFORMATION OR REPRESENTATION, YOU MUST
NOT RELY UPON THAT RECOMMENDATION, INFORMATION OR AUTHORIZATION AS HAVING BEEN
AUTHORIZED BY US.
TABLE OF CONTENTS
Summary Term Sheet.............................................................1
Forward-Looking Statements.....................................................6
Introduction...................................................................6
The Offer......................................................................8
1. Number of Options; Expiration Date....................................8
2. Purpose of the Offer..................................................8
3. Procedures for Tendering Options......................................9
4. Withdrawal Rights....................................................10
5. Acceptance of Tendered Options and Payment...........................11
6. Value of Options and Restricted Stock................................11
7. Conditions of the Offer..............................................11
8. Price Range of the Common Stock......................................13
9. Source and Amount of Consideration; Terms of the Restricted Stock....14
10. Certain Information About Us.........................................15
11. Interests of Directors and Officers; Transactions and Arrangements
Concerning the Options...............................................16
12. Status of Options Acquired by us in the Offer........................18
13. Certain Legal Matters; Regulatory Approvals..........................18
14. Certain Federal Income Tax Consequences..............................18
15. Extension of Offer; Termination; Amendment...........................20
16. Accounting Consequences of the Offer ................................20
17. Fees and Expenses....................................................20
18. Additional Information...............................................21
19. Miscellaneous........................................................21
i
SUMMARY TERM SHEET
The following questions and answers are intended to highlight the key
features of the offer. To understand the offer fully and for a more complete
description of the terms of the offer, you should read carefully this entire
offer to purchase, your customized offer letter, and the letter of transmittal.
We have included page references parenthetically to direct you to a more
complete description of the topics in this summary.
1. WHY ARE WE MAKING THE OFFER?
In the time since certain stock options were issued, there has been a
significant decline in the overall stock market, and the value of our stock has
been negatively impacted by a variety of market, industry and business dynamics.
Therefore, we believe that many of our outstanding options are not achieving the
purpose for which they were intended. The options that we are offering to
purchase have exercise prices of $17.125 and greater, while the closing price of
our common stock on July 24, 2001, as reported on the NYSE, was $13.75 per
share. Accordingly, due in large part to market conditions that are beyond the
control of our colleagues and other optionholders, many of our outstanding
options have exercise prices that are significantly higher than the prevailing
market price of our common stock. We believe that making this offer to exchange
these outstanding options for restricted stock (1) increases optionholders'
proprietary stake in the enterprise, (2) creates a stronger incentive to promote
our growth and success, and (3) encourages our key colleagues and consultants to
continue their employment or other relationship with us. (Page 8).
In addition, the total number of shares already approved by shareholders
for allocation to the LTI Plan is nearing depletion. This means that we would
need to obtain additional shareholder approval to make future grants.
Shareholders could potentially react negatively to the request for additional
shares, since additional shares would add to the "overhang" (the amount of
shares allocated to colleague incentives as a percentage of total common shares
outstanding). The exchange offer will bring shares back into the LTI Plan for
future awards.
Each of these objectives is intended to ultimately benefit our
shareholders.
2. WILL THIS OFFER BE MADE AGAIN IN THE FUTURE?
The intent is for this to be a one-time event.
3. WHAT SECURITIES ARE WE OFFERING TO PURCHASE?
We are offering to purchase all outstanding stock options issued to our
colleagues and certain consultants having an exercise price of $17.125 per share
or more pursuant to the 1994 Key Colleague Stock Option Plan or the Long-Term
Incentive Plan, the "plans." (Page 8)
4. WHO IS ENTITLED TO PARTICPATE IN THE OFFER?
Only current colleagues of the Company and certain consultants to the
Company (who are not also directors of the Company) who hold options at an
exercise price of $17.125 or more may exchange their options for shares of
restricted stock under the terms of this offer. Former colleagues and
non-colleague directors are not eligible to participate, unless they are
included in the group of consultant offerees.
1
5. HOW MUCH WILL WE PAY YOU FOR YOUR OPTIONS?
We will pay for the options with shares of our common stock. All shares of
our common stock issued to optionholders in this offer will be "restricted
stock." Accordingly, these shares will be subject to forfeiture and restrictions
on transfer until the restrictions lapse (at which time the shares "vest") under
the terms of a new restricted share grant agreement. If you tender all of your
options, you will receive the total number of shares of restricted stock listed
in the table included in your transmittal letter. If you tender less than all of
your options, you will receive a portion of the total number of shares, equal to
the value of the portion of your options that you tender. (Page 11)
The restricted stock value was arrived at by using the average closing
price over the twenty-two day trading period ended July 18, 2001.
The amount of restricted stock you will receive was determined based on 90%
of the value of your options. We retained Towers Perrin Inc., an executive
compensation consultant, to help us calculate the value of the options. (Page
11). Towers-Perrin valued the options using the "Black Scholes Option Pricing
Model" which is widely used in U.S. Securities and Exchange Commission
reporting, company proxy statements and compensation programs.
6. DO YOU HAVE TO TENDER ALL OF YOUR OPTIONS?
No, you may tender any portion of your options or none at all. If you
tender less than all of your options (a "partial tender"), you must indicate in
the letter of transmittal those options that are included in your tender. If you
tender less than all of your options, all options of the same grant (i.e., that
have the same grant date and exercise price) must be tendered.
7. WHEN WILL YOU RECEIVE PAYMENT FOR YOUR PURCHASED OPTIONS?
Assuming the conditions to the offer are satisfied, we will exchange the
shares of restricted stock for the tendered options promptly following the
expiration date of the offer. After the expiration date of the offer, we will
forward a restricted share grant agreement to you. You must sign this restricted
share grant agreement and return it to us. Upon our receipt of your agreement,
we will credit the restricted stock to you in a bookkeeping account. (Page 11)
8. WHEN DO YOU VEST IN THE RESTRICTED STOCK?
As long as you are employed by the Company or one of its subsidiaries or,
for optionholders that are currently employed by consultants to the Company, by
that consultant, the restricted stock you receive will vest, in full, three
years from the date of grant. Unless the Company elects to extend the offer, the
date of grant of your restricted stock would be September 17, 2001. Accordingly,
your shares of restricted stock would vest on September 17, 2004. Also, in the
event of a change of control of the Company, as defined in the restricted share
grant agreement, all of your shares of restricted stock would vest. Even if your
options currently are vested, the restricted stock you receive will be subject
to this three year vesting requirement. (Page 13)
9. UNDER WHAT CIRCUMSTANCES WILL YOU FORFEIT THE RESTRICTED STOCK YOU RECEIVE
IN THIS TENDER OFFER?
In general, you will forfeit the restricted stock received in this offer if
you cease to be employed by us or a subsidiary or, for optionholders that are
currently employed by consultants to the Company, by that consultant, before the
date the restricted stock vests. You will not forfeit your restricted stock, and
all
2
of your restricted stock will vest, if you leave such employment because of
"retirement" or "disability" (both as defined in the LTI plan), or upon your
death. (Page 13)
10. WHAT ARE THE OTHER RESTRICTIONS ON THE RESTRICTED STOCK?
The restrictions on the stock you will receive in this offer are contained
in the restricted share grant agreement. Restricted stock generally may not be
sold, transferred, assigned, pledged, or otherwise encumbered or disposed until
the stock vests. (Page 13)
You will not receive a stock certificate for the restricted stock until
after the restricted stock has vested. Until then, the restricted stock will be
credited to you in a bookkeeping account. Once the restricted stock has vested,
the stock will no longer be subject to forfeiture and will be free of the terms,
conditions and restrictions contained in the restricted share grant agreement.
You will then receive a certificate for the corresponding number of shares of
common stock. (Page 13)
11. ARE YOU ENTITLED TO EXERCISE ANY RIGHTS OF OWNERSHIP OF RESTRICTED STOCK
WHILE THE STOCK IS SUBJECT TO A RESTRICTION OR SIMILAR CONDITION?
Yes, you will have dividend, voting and other stockholder rights with
respect to any restricted stock you receive in the offer as of the date we issue
the restricted stock to your account. In addition, we will deliver to you, by
mail or otherwise, all notices of meetings, proxy statements, proxies and other
materials distributed to our stockholders. (Page 13)
12. WHAT IS THE SOURCE OF THE COMMON STOCK THAT WILL BE USED TO PAY YOU FOR
YOUR OPTIONS?
The restricted stock to be offered to optionholders will be issued under
the LTI plan and will be drawn from the pool of common stock currently
authorized for issuance under that plan. All options purchased by us in the
tender offer will be cancelled, thereby permitting the issuance of the
restricted stock and providing additional stock for future awards under that
plan. (Page 13)
13. WHEN DOES THE OFFER EXPIRE? CAN THE COMPANY EXTEND THE OFFER, AND IF SO,
HOW WILL YOU BE NOTIFIED?
The offer expires on Friday, September 14, 2001, at 12:00 midnight.,
Eastern Time, unless it is extended by us. We may extend the offer at any time
but we cannot assure you that the offer will be extended or, if extended, for
how long. (Page 8). If the offer is extended, we will make a public announcement
of the extension no later than 9:00 a.m., Eastern Time, on Monday, September 17,
2001. (Page 18) Otherwise, you will not receive any notification of the
expiration of this offer.
14. HOW DO YOU TENDER YOUR OPTIONS?
If you decide to tender your options, you must deliver to us a properly
completed and signed letter of transmittal, the option agreement(s) evidencing
your options and any other documents required by the letter of transmittal, at
the address set forth on the letter of transmittal, before 12:00 midnight,
Eastern Time, on September 14, 2001. (Page 9)
3
15. DURING WHAT PERIOD OF TIME CAN YOU WITHDRAW PREVIOUSLY TENDERED OPTIONS?
You may withdraw your tendered options at any time before 12:00 midnight,
Eastern Time, on Friday, September 14, 2001. If the offer is extended beyond
that time, you may withdraw your tendered options at any time until the
expiration of the offer. To withdraw tendered options you must deliver a written
notice of withdrawal, or facsimile thereof, with the required information to us
while you still have the right to withdraw the tendered options. Once withdrawn,
you may retender options only by again following the delivery procedures
described above. In addition, you will also have the right to withdraw your
tendered options after September 19, 2001, unless those options have been
accepted by us by that time. (Page 10)
16. IS OUR BOARD OF DIRECTORS AND ENTERPRISE LEADERSHIP TEAM RECOMMENDING THIS
OFFER?
Neither the Enterprise Leadership Team nor our Board of Directors makes any
recommendation as to whether you should tender or refrain from tendering your
options. You must make your own decision whether to tender options.
We have been advised that most of the members of our leadership team that
have options eligible for tender intend to tender options pursuant to the offer,
although each member of the Enterprise Leadership Team will have the same
opportunity to either tender options or retain options following the same
process and time as all other eligible optionholders. Non-employee directors and
non-colleagues (including former colleagues) are not eligible to participate in
the offer, unless they are included within the group of consultant offerees.
(Page 15)
17. WILL YOU HAVE TO PAY TAXES IF WE PURCHASE YOUR OPTIONS IN THE OFFER?
There are no immediate tax consequences of receiving restricted stock in
exchange for your options, unless you make an election under Section 83(b) of
the Internal Revenue Code (whereby you pay taxes upon being granted the
restricted shares). Upon vesting in the restricted stock and lapse of the terms,
conditions and restrictions that apply to the restricted stock, you will be
required to recognize additional income in an amount equal to the fair market
value of the restricted stock, determined on the date the shares are no longer
restricted. The Company will generally be allowed a business expense deduction
for the amount of any taxable income recognized by you at the time such income
is recognized. (Page 16)
Certain consequences to holders of "incentive stock options" who do not
tender these options in the offer are discussed in the offer to purchase. (Page
17). You should consult with your own tax adviser to determine the tax
consequences of participating in the offer.
18. WHAT IF I AM A COLLEAGUE BASED OUTSIDE OF THE UNITED STATES OR A NATIONAL
OF ANOTHER COUNTRY BASED IN THE UNITED STATES?
Colleagues based outside of the United States and colleagues based in the
United States who are nationals of another country are eligible to participate
in this offer. IF YOU ARE A COLLEAGUE AND YOU EITHER ARE BASED OUTSIDE OF THE
UNITED STATES, OR ARE A NATIONAL OF ANOTHER COUNTRY AND ARE BASED IN THE UNITED
STATES, YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISOR TO DETERMINE THE TAX,
SOCIAL CONTRIBUTION AND EXCHANGE CONTROL CONSEQUENCES OF THIS TRANSACTION UNDER
THE LAWS OF THE COUNTRY IN WHICH YOU LIVE AND WORK OR OF WHICH YOU ARE A
NATIONAL.
4
FOR EXAMPLE, UNDER THE LAWS OF CERTAIN COUNTRIES, YOUR ACCEPTANCE OF THIS OFFER
TO EXCHANGE MAY RESULT IN YOUR IMMEDIATE RECOGNITION OF TAXABLE INCOME.
19. IS THE BLACK-SCHOLES VALUE USED IN CALCULATING THE PRESENT VALUE OF
ELIGIBLE OPTIONS THE SAME AS THE BLACK-SCHOLES VALUE USED IN CALCULATING
THE VALUE OF OPTIONS IN OUR ANNUAL REPORT?
No. The Black-Scholes value appearing in our Annual Report is based on the
full option term of ten years and an exercise price equal to the fair market
value of our common stock at the date of grant. The Black-Scholes value used in
calculating the present value of eligible options in this offer to exchange
takes into account the current fair market value of our common stock, which is
significantly below the exercise price of eligible options, as well as the
remaining option term. Therefore, the Black-Scholes value used in calculating
the present value of eligible options is less than the Black-Scholes value used
in our annual report.
20. WHO SHOULD YOU CONTACT IF YOU HAVE QUESTIONS ABOUT THE OFFER?
For additional information or assistance, you may contact:
Richard Burgess... or Roberta Bixhorn
Tower Automotive, Inc. Tower Automotive, Inc.
5211 Cascade Road, SE 5211 Cascade Road, S.E.
Grand Rapids, Michigan 49546 Grand Rapids, Michigan 49546
Telephone: (616) 802-1605 Telephone: (616) 802-1596
5
FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, included in this
offer to purchase are, or may be deemed to be, forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this offer to
purchase, the words "anticipate," believe," "estimate," "expect," "intends," and
similar expressions, as they relate to the Company, are intended to identify
forward-looking statements. Such forward-looking statements are based on the
beliefs of the Company's management as well as on assumptions made by and
information currently available to the Company at the time such statements were
made. Various economic and competitive factors could cause actual results to
differ materially from those discussed in such forward-looking statements,
including factors which are outside the control of the Company, such as risks
relating to: (i) the degree to which the Company is leverages; (ii) the
Company's reliance on major customers and selected models; (iii) the cyclicality
and seasonality of the automotive market; (iv) the failure to realize the
benefits of recent acquisitions and joint ventures; (v) obtaining new business
on new and redesigned models; (vi) the Company's ability to continue to
implement its acquisition strategy; and (vii) the highly competitive nature of
the automotive supply industry. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on behalf of the
Company are expressly qualified in their entirety by such cautionary statements.
The safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 protects companies from liability for
their forward-looking statements if they comply with the requirements of the
Securities Exchange Act of 1934, as amended (the "Act"). The Act does not
provide this protection for tender offers. Therefore, to the extent this offer
to purchase includes forward-looking statements, the safe harbor provided by the
Act is not available to the Company for any such forward-looking statements.
INTRODUCTION
Tower Automotive, Inc., a Delaware corporation, hereby offers to purchase
outstanding options to purchase shares of our common stock, $.01 par value per
share, that were issued to (i) key colleagues under the 1994 Key Colleague Stock
Option Plan or the Long-Term Incentive Plan (the "plans") or (ii) certain
persons who were consultants to the Company and who are now either employees of
Hidden Creek Industries, Inc. (and not also directors of the Company) or
employees of the Company, and which options have an exercise price of $17.125
per share or more (the "options"). The purchase price of each option tendered
will be paid in common stock, which will be issued as "restricted stock" under
the terms of the Long-Term Incentive Plan (the "LTI plan"). As restricted stock,
these shares will be subject to forfeiture and other restrictions until they
vest under the terms of a new restricted share grant agreement between each
tendering optionholder and us. See Section 9. Our offer is made upon the terms
and subject to the conditions set forth herein and in the related letter of
transmittal. We refer to this offer to purchase, the related cover letter and
customized letter of transmittal, together with any amendments or supplements,
as the "offer."
We are offering to purchase all of the outstanding options with an exercise
price of $17.125 per share or more. All options properly tendered and not
validly withdrawn will be purchased at the purchase price, subject to the terms
and the conditions of the offer. You may tender all, any portion of your options
that have the same grant date and exercise price, or none at all. However, if
you elect to make a partial tender, all options having the same grant date and
exercise price as the options surrendered, must be tendered to us. Your
customized transmittal letter sets forth the number of shares of restricted
stock you will receive for each option you choose to tender. To tender less than
all of your options, you must indicate the options ("option shares") that you
wish to tender. If you tender all of your options, you will receive the total
number of shares of restricted stock set forth in the table in your transmittal
letter. If you
6
tender less than all of your options, you will receive a portion of the total
number of shares of restricted stock set forth in the table in your transmittal
letter, equal to the value of the number of option shares you tender. See
Section 6.
The restricted stock issued in exchange for tendered options will be issued
under the LTI plan. Regardless of the current vesting schedule of your options,
the restricted stock you receive for tendered options will vest on the third
anniversary of the "grant date," assuming you meet the requirements for vesting
specified in the restricted share grant agreement. Unless the offer is extended
by us, the grant date will be September 17, 2001. As a result, you may receive
restricted stock with a new vesting schedule in exchange for options that have
already vested. See Section 9.
NEITHER THE COMPANY, THE ENTERPRISE LEADERSHIP TEAM, NOR THE BOARD OF DIRECTORS
MAKES ANY RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM
TENDERING YOUR OPTIONS FOR PURCHASE. YOU MUST MAKE YOUR OWN DECISION WHETHER TO
TENDER OPTIONS. WE HAVE BEEN ADVISED THAT MOST OF THE MEMBERS OF OUR ENTERPRISE
LEADERSHIP TEAM INTEND TO TENDER OPTIONS PURSUANT TO THIS OFFER. NON-EMPLOYEE
DIRECTORS AND NON-COLLEAGUES (INCLUDING FORMER COLLEAGUES) ARE NOT ELIGIBLE TO
PARTICIPATE IN THE OFFER, UNLESS THEY ARE INCLUDED WITHIN THE GROUP OF
CONSULTANT OFFEREES.
As of the date of this offer, we had issued and outstanding options to
purchase 3,511,120 shares of common stock issued under the plans, of which
options to purchase 1,688,000 shares of common stock issued to our colleagues
have an exercise price of $17.125 or more. The options we are offering to
purchase represent approximately 48% of the stock options issued and
outstanding, under those plans, as of the date of this offer.
Our common stock is listed and principally traded on The New York Stock
Exchange under the symbol "TWR." On September 10, 2001, the last reported sale
price of our common stock was $11.20 per share. YOU ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR OUR COMMON STOCK.
All options accepted in response to this offer will be cancelled.
7
THE OFFER
1. NUMBER OF OPTIONS; EXPIRATION DATE.
Upon the terms and subject to the conditions of the offer, we will purchase
from eligible optionholders all options to purchase shares of our common stock,
vested or unvested, that have an exercise price of $17.125 per share or more and
that are properly tendered (and not validly withdrawn in accordance with Section
4) prior to the Expiration Date (as defined below). Subject to certain
limitations, we will accept partial tenders of options. See Section 5. The term
"Expiration Date" means 12:00 midnight, Eastern Time, on September 14, 2001,
unless and until we, in our sole discretion, extend the period of time during
which the offer will remain open, in which event the term "Expiration Date" will
refer to the latest time and date at which the offer, as extended, expires. See
Section 15 for a description of our right to extend, delay, terminate or amend
the offer.
If your options are properly tendered and accepted for purchase, you will
be entitled to receive an amount payable in shares of common stock. All shares
of our common stock paid to optionholders under this offer will be restricted
stock. Those shares will be subject to vesting, as set forth in a new restricted
share grant agreement between you and us. See Section 9. If you tender all of
your options, you will receive the total number of shares of restricted stock
set forth in the table in your personalized transmittal letter. If you tender
less than all of your options, you will receive a portion of those shares, equal
to the value of the option shares you tender. If we decide to take any of the
following actions, we will publish a notice or otherwise inform you of the
action:
- Increase or decrease what we will give you in exchange for your
options, or
- Increase or decrease the number or type of options eligible to be
exchanged in the offer.
If the offer is scheduled to expire within ten (10) business days from the
date we notify you of such an increase or decrease, we will also extend the
offer for a period of at least ten (10) business days after the date the notice
is published or otherwise provided to you.
For purposes of the offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, Eastern Time.
2. PURPOSE OF THE OFFER.
We believe that many of our outstanding options are not achieving the
purpose for which they were intended. The options that we are offering to
purchase have exercise prices ranging from $17.125 to $25.75 per share while the
closing price of our common stock on July 24, 2001, as reported on the NYSE, was
$13.75 per share. Accordingly, many of our outstanding options have exercise
prices that are significantly higher than the prevailing market price of our
common stock. We believe that making this offer to exchange these outstanding
options for restricted stock, (1) increases our colleagues' proprietary stake in
the enterprise, (2) creates a stronger incentive to promote our growth and
success, and (3) encourages our key colleagues to continue their employment with
us. Each of these objectives is intended to inure to the ultimate benefit of our
stockholders.
We consistently evaluate strategic opportunities that may arise, including
acquisitions, joint ventures, the restructuring of our operations, as well as
the sale of certain of our assets. Subject to the foregoing, and except as
otherwise disclosed in this offer or in our filings with the Securities and
Exchange Commission, we presently have no plans or commitments that relate to or
would result in:
8
(a) The acquisition by any person of any of our securities from us or in a
tender offer, or the disposition of any of our securities;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving us or any of our subsidiaries;
(c) A sale or transfer of a material amount of our or our subsidiaries'
assets;
(d) Any significant change in our present Board of Directors or Enterprise
Leadership team;
(e) Any material change in our indebtedness or capitalization;
(f) Except for the possible transfer or relocation of certain of our
Milwaukee press operations, the results of which are not expected to have a
material impact on our financial condition or results of operations, any other
material change in our corporate structure or business;
(g) Any change in our Amended and Restated Certificate of Incorporation or
Amended and Restated Bylaws, or any actions which may impede the acquisition of
control of us by any person;
(h) A class of equity securities being delisted from a national securities
exchange;
(i) A class of our equity securities becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934
("Securities Exchange Act"); or
(j) The suspension of our obligation to file reports pursuant to Section
15(d) of the Securities Exchange Act.
Neither the Company, the Enterprise Leadership Team nor the Board of
Directors makes any recommendation as to whether you should tender your options,
nor have we authorized any person to make any such recommendation. You are urged
to evaluate carefully all information in this offer and to consult your own
investment and tax advisers. You must make your own decision whether to tender
your options.
3. PROCEDURES FOR TENDERING OPTIONS.
Proper Tender of Options. To validly tender your options in response to
this offer, you must, in accordance with the letter of transmittal, properly
complete, sign and deliver to us the letter of transmittal, or facsimile
thereof, and any other required documentation, including the option agreement(s)
evidencing your options, to our address listed on the transmittal letter prior
to the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING LETTERS OF TRANSMITTAL,
OPTION AGREEMENT(s), AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING OPTIONHOLDER. IF DELIVERY IS BY MAIL, WE RECOMMEND THAT
YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND PROPERLY INSURE YOUR
PACKAGE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY
DELIVERY.
If you wish to make a partial tender of your options, you must indicate in
the letter of transmittal the options listed in the table included in your
transmittal letter ("option shares") that will be included in your tender. All
options that have the same exercise price and grant date as the options
surrendered must,
9
however, be tendered to us. In other words, you may not tender only a portion of
your option shares that are subject to the same grant.
Determination of Validity; Rejection of Options; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to form of documents and
the validity, form, eligibility (including time of receipt) and acceptance of
any tender of options will be determined by us, in our sole discretion. Our
determination will be final and binding. We reserve the right to reject any or
all tenders of options that we determine are not in appropriate form or the
acceptance for payment of or payment for which may be unlawful. We also reserve
the right to waive any of the conditions of the offer or any defect or
irregularity in any tender with respect to any particular options or any
particular optionholder. No tender of options will be deemed to have been
properly made until all defects or irregularities have been cured by the
tendering optionholder or waived by us. Neither we nor any other person will be
obligated to give notice of any defects or irregularities in tenders, nor will
anyone incur any liability for failure to give any such notice.
Our Acceptance Constitutes an Agreement. Your tender of options in response
to the procedures described above will constitute your acceptance of the terms
and conditions of the offer. OUR ACCEPTANCE FOR PURCHASE OF YOUR OPTIONS
TENDERED BY YOU PURSUANT TO THE OFFER WILL CONSTITUTE A BINDING AGREEMENT
BETWEEN YOU AND US UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER.
Lost, Stolen, Destroyed or Mutilated Option Agreements Evidencing the
Tendered Options. If your option agreement(s) evidencing the options to be
tendered has been lost, stolen, destroyed or mutilated, you must complete the
box captioned "Lost, Stolen, Destroyed or Mutilated Agreements" on the letter of
transmittal, indicating the number of options subject to the lost, stolen,
destroyed or mutilated option agreement(s). You must then contact us for the
steps that must be taken to replace the option agreement(s) evidencing the
options to be tendered. To avoid delay, you should contact immediately Richard
S. Burgess, at (616) 802-1605.
4. WITHDRAWAL RIGHTS.
You may only withdraw your tendered options in accordance with the
provisions of this Section 4. You may withdraw your tendered options at any time
before 12:00 midnight, Eastern Time, on September 14, 2001. If the offer is
extended by us beyond that time, you may withdraw your tendered options at any
time until the expiration of the offer. Also, if we do not accept the options
offered for tender on or before September 19, 2001, you will have the right to
withdraw your options after that date.
To withdraw tendered options you must deliver a written notice of
withdrawal, or facsimile thereof, with the required information to us while you
still have the right to withdraw the tendered options. The notice of withdrawal
must specify the name of the optionholder who tendered the option to be
withdrawn, the grant date, the exercise price and the options to be withdrawn.
Although you may withdraw some or all of your tendered options, you may not
withdraw only a portion of the options that are subject to the same grant (i.e.,
those options having the same grant date and exercise price). Except as
described in the following sentence, the notice of withdrawal must be executed
by the optionholder who tendered the options to be withdrawn. If the signature
is by a trustee, executor, administrator, guardian, attorney-in-fact, or another
person acting in a fiduciary or representative capacity, signor's full title and
proper evidence of that authority to act in such capacity must be indicated on
the notice of withdrawal. Withdrawals may not be rescinded, and any options
withdrawn will thereafter be deemed not properly tendered for purposes of the
offer unless such withdrawn options are properly retendered prior to the
Expiration Date by following the procedures described Section 3.
10
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by us, in our sole discretion; all
determinations will be final and binding.
5. ACCEPTANCE OF TENDERED OPTIONS AND PAYMENT.
Upon the terms and subject to the conditions of this offer and as promptly
as practicable following the Expiration Date, we will accept for payment and pay
for (and thereby purchase) options properly tendered and not validly withdrawn
prior to the Expiration Date. If your options are properly tendered and are
accepted for payment, you will receive a restricted share grant agreement
promptly after the Expiration Date. You must properly execute and return this
restricted share grant agreement to us. Upon our receipt of the executed
restricted share grant agreement, we will issue the restricted stock to your
account.
If you tender all of your options, the agreement will be for the total
number of shares of restricted stock set forth in the table included in your
personalized transmittal letter. If you tender less than your total number of
options (a "partial tender"), your restricted share grant agreement will be for
a portion of the total number of shares set forth in that table, equal to the
value of the option shares tendered. Again, for a partial tender, you must
tender all of the option shares that are subject to the same grant.
6. VALUE OF OPTIONS AND RESTRICTED STOCK.
We retained Towers Perrin, Inc., an executive compensation consultant, to
help us calculate the value of the options and the restricted stock to be issued
in exchange for the options. For purposes of determining the value of the
options, we have valued options based on differences in exercise price and
expiration date. All options with the same exercise price and expiration date
are treated the same. For each option tendered and accepted for payment, you
will receive shares of restricted stock equal in value to 90% of the value of
that option.
The value of each option has been determined using the "Black-Scholes"
option pricing model adapted for use in valuing executive stock options. The
value of the options was calculated as of July 18, 2001, based upon the
following assumptions utilized in that model: The average market price of the
Company's common stock during the 22 trading days ended July 18, 2001; exercise
at the end of the remaining term of the option; weighted three year stock price
volatility of 46.8%; a dividend yield of 0%, and a risk-free interest rate of
5.68%.
We have valued the shares of restricted stock to be issued in exchange for
the options based upon the average closing price of our stock, as reported on
the NYSE, for each of the twenty-two (22) trading days ended July 18, 2001. The
average price is $10.086 per share. Accordingly, we have valued all shares of
restricted stock at $10.086 per share.
For purposes of the offer, we will be deemed to have accepted for payment
options that are validly tendered and not properly withdrawn as, if and when we
give oral or written notice to the optionholders of our acceptance for payment
of such options, which may be by press release.
7. CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the offer, we will not be required
to accept any eligible options tendered for purchase, and we may terminate or
amend the offer, or postpone our acceptance and cancellation of any options
tendered for exchange, in each case, subject to Rule 13e-4(f)(5) under the
Securities Exchange Act, if at any time on or after July 25, 2001 and prior to
the expiration date (September 14, 2001 unless the offer is further extended)
any of the following events has occurred, or has
11
been determined by us to have occurred and, in our reasonable judgment in any
such case and regardless of the circumstances giving rise thereto, including any
action or omission to act by us, the occurrence of such event or events makes it
inadvisable for us to proceed with the offer or with such acceptance and
cancellation of options tendered for exchange:
(a) There shall have been threatened or instituted or be pending any
action or proceeding by any governmental, regulatory or administrative
agency or authority that directly or indirectly challenges the making
of the offer, the acquisition of some or all of the tendered options
pursuant to the offer, or the issuance of restricted stock or
otherwise relates in any manner to the offer, or that, in our
reasonable judgment, could materially and adversely affect our
business, condition, income, operations or prospects or materially
impair the contemplated benefits of the offer to us;
(b) There shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order
or injunction threatened, proposed, sought, promulgated, enacted,
entered, amended, enforced or deemed to be eligible to the offer or
us, by any court or any authority, agency or tribunal that, in our
reasonable judgment, would or might directly or indirectly:
(1) Make the acceptance for exchange of, or issuance of
restricted stock for, some or all of the tendered options illegal or
otherwise restrict or prohibit consummation of the offer or that
otherwise relates in any manner to the offer;
(2) Delay or restrict our ability, or render us unable, to accept
for exchange, or issue restricted stock for, some or all of the
tendered options;
(3) Materially impair the contemplated benefits of the offer to
us; or
(4) Materially and adversely affect our business, condition,
income, operations or prospects or materially impair the contemplated
benefits of the offer to us;
(c) There shall have occurred:
(1) Any general suspension of trading in, or limitation on prices
for, securities on any national securities exchange or in the
over-the-counter market;
(2) The declaration of a banking moratorium any suspension of
payments in respect of banks in the United States,
(3) Any decline in either the Dow Jones Industrial Average, the
New York Stock Exchange or the Standard and Poor's Index of 500
Companies by an amount in excess of 10% measured during any time
period after the close of business on July 25, 2001;
(d) A tender or exchange offer with respect to some or all of our common
stock, or a merger or acquisition proposal for us, shall have been
proposed, announced or made by another person or entity or shall have
been publicly disclosed, or we shall have learned that:
(1) Any person, entity or "group" within the meaning of Section
13(d)(3) of the Securities Exchange Act, shall have acquired or
proposed to acquire beneficial ownership of more than 5% of the
outstanding shares of our common stock, or any new
12
group shall have been formed that beneficially owns more than 5% of
the outstanding shares of our common stock, other than any such
person, entity or group that has filed a Schedule 13D or Schedule 13G
with the SEC before July 25, 2001;
(2) Any such person, entity or group that has filed a Schedule
13D or Schedule 13G with the SEC before July 25, 2001 shall have
acquired or proposed to acquire beneficial ownership of an additional
2% or more of the outstanding share of our common stock; or
(3) Any person, entity or group shall have filed a Notification
and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 or made a public announcement reflecting an intent to acquire
us or any of our subsidiaries; or
(e) Any change or changes shall have occurred in our business, condition
(financial or otherwise), assets, income, operations, prospects or
stock ownership that, in our reasonable judgment, is or may be
material to us or may materially impair the contemplated benefits of
the offer to us.
The conditions to the offer are for our benefit. We may assert
them in our discretion regardless of the circumstances giving rise to
them prior to the expiration date (September 14, 2001 unless the offer
is further extended). We may waive them, in whole or in part, at any
time and from time to time prior to the expiration date, in our
discretion, whether or not we waive any other condition to the offer.
Our failure at any time to exercise any of these rights will not be
deemed a waiver of any such rights. The waiver of any of these rights
with respect to particular facts and circumstances will not be deemed
a waiver with respect to any other facts and circumstances. Any
determination we make concerning the events described in this Section
7 will be final and binding upon all persons.
8. PRICE RANGE OF THE COMMON STOCK.
Our common stock is traded on the New York Stock Exchange. The following
table sets forth, for the quarters indicated, the high and low trading prices
per share of our common stock.
High Low
2001 Quarter Ended
September 30, 2001 (through July 24, 2001) $14.29 $13.71
June 30, 2001 11.21 8.70
March 31, 2001 11.65 8.50
2000 Quarter Ended
December 31, 2000 $11.00 $7.125
September 30, 2000 13.5625 9.125
June 30, 2000 17.625 11.625
March 31, 2000 17.50 11.625
1999 Quarter Ended
December 31, 1999 $20.625 $13.50
September 30, 1999 28.25 17.8125
June 30, 1999 26.125 17.625
March 31, 1999 26.50 17.00
13
As of September 10, 2001, the closing price of our common stock, as
reported on the NYSE, was $11.20 per share.
YOU ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON STOCK.
9. SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF THE RESTRICTED STOCK.
Consideration. Assuming we purchase all of our outstanding options eligible
optionholders in response to the offer, the total amount of restricted stock we
will issue to optionholders will be approximately 616,612 shares.
Terms of Restricted Stock. The restricted stock will be issued under the
LTI plan. Our statements concerning the LTI Plan and the restricted stock are
merely summaries and do not purport to be complete. The statements are subject
to, and are qualified in their entirety by reference to, all provisions of the
LTI Plan and the restricted share grant agreement between you and us. The form
of restricted share grant agreement is attached to this offer as Exhibit A.
The shares of restricted stock you receive in exchange for tendered options
accepted for payment will be subject to forfeiture and other restrictions until
the shares vest. These restrictions include prohibitions against sale,
assignment, transfer, exchange, pledge, hypothecation or other encumbrance,
other than by will or the laws of descent and distribution. The shares of
restricted stock will vest on the third anniversary of the grant date, assuming
you are still employed by us or one of our subsidiaries or, for optionholders
that are currently consultants to the Company, by that consultant, on that date.
Prior to vesting, your restricted stock will be subject to forfeiture if you
cease to be employed by us or, if applicable to certain optionees, Hidden Creek
Industries, Inc., for any reason other than "retirement" or "disability" (both
as defined in the LTI Plan) or death.
All unvested restricted stock awards will vest upon a "change of control."
Under the restricted share grant agreement, a "change of control" occurs if: (a)
a person or group of persons acquires 20% or more of our outstanding common
stock; (b) there is a change of a majority of our board of directors, unless a
majority of the directors in office at the grant date of your restricted stock
award were nominated or appointed with the approval of a majority of those
directors or their approved successors; (c) there is a merger or consolidation
under which the Company, in effect, is not the surviving entity; (d) more than
50% of the assets or earning power of the Company is disposed of; or (e) the
Company liquidates, dissolves, or is reorganized in a manner that results in a
change in control.
You will not receive a stock certificate for the restricted stock until
after the restricted stock vests. Until then, the restricted stock will be held
in our custody. Your award of restricted stock will be evidenced by the
restricted share grant agreement between you and us. On the vesting date, if you
are still employed by us or, if applicable to certain optionees, Hidden Creek
Industries, Inc., you will receive a certificate representing the number of
shares of common stock set forth in your restricted share grant agreement.
You will have dividend, voting and other stockholder rights (subject to the
transfer and forfeiture restrictions discussed above) with respect to all shares
of restricted stock you receive in the offer as of the date we issue the
restricted stock to your account. We will deliver to you, by mail or otherwise,
all notices of meetings, proxy statements, proxies and other materials
distributed to our stockholders.
14
10. CERTAIN INFORMATION ABOUT US.
GENERAL
We are a leading global designer and producer of structural components and
assemblies used by every major automotive original equipment manufacturer, or
"OEM," in the world. Our customers include Ford, DaimlerChrysler, General
Motors, Saturn, Honda, Toyota, Nissan, Auto Alliance, Fiat, BMW, and Volkswagen,
as well as a number of heavy truck OEMs. We currently employ more than 13,000
colleagues in 52 locations worldwide.
Based on revenues, we believe we are the largest independent global
supplier of structural components and assemblies to the automotive market. Our
principal products include:
- Lower vehicle structures--full frames, engine cradles, floor pan
components, cross members, and other large stampings;
- Body structures and assemblies--body pillars, roof rails, side sills,
parcel shelves, intrusion beams, and fuel filler assemblies;
- Suspension components, modules and systems--chassis and suspension
modules, control arms, suspension links, track bars, spring and shock
towers, and trailing axles; and
- Class A surfaces and modules--body sides, pick-up box sides, door
panels, and fenders.
Many of our products are critical to the structural integrity of the
vehicle. Increasingly, we are using our products in combination with products
manufactured by other suppliers to produce assemblies and modules consisting of
multiple component parts. As a result of our design, engineering and program
management capabilities, we are able to offer our customers fully integrated
modules and assemblies for substantial portions of a vehicle. We have
strengthened our relationships with OEMs as the ability to deliver complete
assemblies and modules reduces our customers' production and inventory
management costs.
15
CERTAIN FINANCIAL INFORMATION
Set forth below is our selected summary historical consolidated financial
information. The historical financial information has been derived from our
consolidated financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 2000, our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2001, and our Quarterly Report on Form 10-Q/A for the
quarter ended June 30, 2001. The information presented below should be read in
conjunction with our consolidated financial statements and notes thereto.
(Dollars in thousands, except per share amounts)
Years ended December 31, Six Months ended June 30,
2000 1999 2001 2000
Income Statement Data:
Revenues $2,531,953 $2,170,003 $1,270,783 $1,366,384
Cost of sales 2,160,359 1,823,103 1,106,251 1,140,291
Selling, general and administrative expense 137,003 105,950 70,319 68,087
Amortization expense 21,517 15,803 12,208 10,217
Operating income 71,748 225,147 82,005 147,789
Interest expense, net 64,711 37,981 39,843 26,731
Provision for income taxes 2,619 74,866 16,472 48,424
Net income 13,434 117,088 29,533 76,416
Other Data:
Basic earnings per share $ .29 $ 2.50 $ .67 $ 1.62
Diluted earnings per share $ .28 $ 2.10 $ .63 $ 1.32
Ratio of earnings to fixed charges (1) (2) 3.3x 1.4x 3.5x
Book value per share $ 14.71 $ 15.51 $ 16.32 $ 17.09
Balance Sheet Data:
Current assets $ 636,677 $ 558,056 $ 646,949 $ 620,321
Noncurrent assets 2,256,070 1,994,494 2,311,117 2,195,190
Working capital 64,003 126,940 (133,800) 176,875
Total assets 2,892,747 2,552,550 2,958,066 2,815,511
Current liabilities 572,674 431,116 780,749 443,446
Noncurrent liabilities 1,361,228 1,135,549 1,194,967 1,302,656
Long-term debt 1,141,900 921,221 974,907 1,065,921
Stockholders' investment 700,095 727,135 723,600 810,659
(1) Calculated by dividing earnings by total fixed charges. Earnings
consist of net income plus income taxes and fixed charges, excluding capitalized
interest. Fixed charges consist of interest expense, whether expensed or
capitalized, amortization of debt expense and a portion of rental expense that
can be demonstrated to be representative of the interest factor in the
particular case.
(2) Due to the restructuring and asset impairment charge of $141.3 million,
earnings were inadequate to cover fixed charges by $23.3 million. Excluding the
restructuring and asset impairment charge, the ratio of earnings to fixed
charges would have been 2.1x for the year ended December 31, 2000.
11. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING THE OPTIONS.
Listed below is our directors and executive officers as of July 25, 2001,
and for the executive officers, the number of options that may be tendered by
that person in response to this offer. As of the date of this offer, our
directors and executive officers as a group (18 persons) beneficially own an
16
aggregate of 1,916,116 shares of our common stock, representing approximately
4.4% of the total number of issued and outstanding shares as of such date. For
more information with respect to beneficial ownership by our directors and
executive officers of our common stock, please refer to our definitive proxy
statement, filed with the SEC on April 20, 2001.
Number of Options Held that Percentage of Total
Directors are Eligible for Tender Options Eligible for Tender
--------- ----------------------- ---------------------------
S. A. Johnson -0- -0-
Dugald K. Campbell 255,000 15.1
Kim B. Clark -0- -0-
Jurgen M. Geissinger -0- -0-
Ali Jenab -0- -0-
F. J. Loughrey -0- -0-
James R. Lozelle -0- -0-
Georgia Nelson -0- -0-
Scott D. Rued -0- -0-
Enrique Zambrano -0- -0-
Leadership Team Members
James W. Arnold 15,000 .8
Anthony A. Barone 110,000 6.5
Richard S. Burgess 85,000 5.0
Dugald K. Campbell 255,000 15.1
Kathy J. Johnston -0- -0-
David D. Krohn -0- -0-
Roland J. Loup -0- -0-
Tom G. Pitser 120,000 7.1
Antonio R. Zarate -0- -0-
Based upon our records and upon information provided to us by our directors
and executive officers, neither we nor, to the best of our knowledge, any of our
directors or executive officers has effected any transactions in the options or
our common stock during the 60 days prior to the date hereof except for (1) the
sale of 60,000 shares, at $13.90 per share by Mr. Lozelle on July 23, 2001, and
(2) the exercise of an option by Mr. Barone to purchase 5,000 shares of stock at
$7.5625 per share and the concurrent sale of 5000 shares on July 23, 2001, at
$14.00 per share.
We have been advised that most of the members of our key leadership team,
that have eligible options to tender, intend to tender options pursuant to this
offer. Non-employee directors (as well as non-colleagues and former colleagues,
excluding certain consultants) are not eligible to participate in the offer.
Except for outstanding options to purchase common stock and restricted
stock awards granted from time to time to certain of our key colleagues and
non-employee directors pursuant to the plans, and except as set forth in this
offer to purchase, neither we nor, to our knowledge, any of our directors or
executive officers, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
offer with respect to any of our securities (including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies, consents or authorizations).
17
12. STATUS OF OPTIONS ACQUIRED BY US IN THE OFFER.
Options we acquire in response to the offer will be canceled and returned
to the pool of options available for issuance under the LTI plan, including the
shares of restricted stock to be issued under the terms of this offer. Such
options will be available for future awards to eligible participants under that
plan without further stockholder action (except as required by applicable law or
the rules of the NYSE or any other securities exchange on which our common stock
is then listed).
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
We are not aware of any license or regulatory permit that appears to be
material to our business that might be adversely affected by our acquisition of
options and payment of restricted stock as contemplated by this offer or of any
approval or other action by any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, that would be required for
the acquisition or ownership of our options or restricted stock as contemplated
in this offer. Should any such approval or other action be required, we
presently contemplate that such approval or other action will be sought. We are
unable to predict whether we may determine that we are required to delay the
acceptance for payment of or payment for options tendered pursuant to the offer
pending the outcome of any such matter. There can be no assurance that any such
approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to our business. Our
obligation under the offer to accept for payment and pay for options with
restricted stock is subject to certain conditions. See Section 7.
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a general summary of the material federal income tax
consequences of the sale of options pursuant to the offer. This discussion is
based on the Internal Revenue Code of 1986, as amended (the "Code"), its
legislative history, Treasury Regulations thereunder and administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change (possibly on a retroactive basis). This summary does not
discuss all the tax consequences that may be relevant to you in light of your
particular circumstances, and it is not intended to be applicable in all
respects to all categories of stockholders.
YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISER WITH RESPECT TO THE FEDERAL, STATE
AND LOCAL CONSEQUENCES OF PARTICIPATING IN THE OFFER, AS WELL AS ANY TAX
CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.
General. There are no immediate tax consequences of receiving restricted
stock in exchange for your options, unless you make an election under Section
83(b) of the Internal Revenue Code. Upon vesting of the restricted stock and
lapse of the terms, conditions and restrictions that apply to the restricted
stock, you will be required to recognize income in an amount equal to the fair
market value of the restricted stock, determined on the date the shares are no
longer restricted.
The Section 83(b) election must be made and filed with the Internal Revenue
Service within 30 days following the grant date. If you make a Section 83(b)
election, you will be required to recognize taxable income at the time of the
exchange in an amount equal to the fair market value of the restricted stock on
that date. If the restricted stock is subsequently forfeited, you are not
entitled to a deduction for the loss. However, having made the filings, if you
hold the restricted stock until after the shares vest and subsequently sell the
shares of common stock issued upon vesting, the gain will be taxed as capital
gain as opposed to ordinary income.
18
We will generally be allowed a business expense deduction for the amount of
any taxable income which is recognized by you at the time such income is
recognized. Section 162(m) of the Internal Revenue Code, however, may limit the
deduction that can be claimed by us in certain circumstances.
At the time you recognize ordinary income, either upon vesting or if you
make an election under Section 83(b) of the Code upon grant, we will have a
withholding tax obligation, much like the obligation that arises when we pay
your salary or bonus. This ordinary income will be reflected on your year-end
W-2. If you make a Section 83(b) election, you must pay us the amount of the
withholding taxes. In order to facilitate the payment of this withholding tax
obligation for shares not subject to an election under Section 83(b), we may
deduct from any payment otherwise due by us an amount equal to any taxes
required to be withheld by law with respect to such delivery or require payment
to us in an amount sufficient to provide for any taxes so required to be
withheld. By participating in this exchange and signing the Restricted Share
Grant Agreement, you will authorize us to take the above actions to pay
withholding taxes.
Incentive Stock Options. Certain of the options subject to this offer are
intended to qualify as "incentive stock options." In order for a holder of
incentive stock options to receive certain favorable tax treatment with respect
to shares of common stock obtained through the exercise of those options,
several requirements must be satisfied. One of these requirements is that the
stock subject to the incentive stock option be held by the optionholder,
following exercise of the option, for at least two years after the date the
option was granted or, if later, one year after the option is exercised (the
"holding period").
If you satisfy the incentive stock option requirements, you will not be
taxed at the time you exercise such an option. Moreover, if you satisfy the
holding period requirement, the entire gain, if any, realized upon disposition
will be treated, for federal tax purposes, as capital gain.
This offer will impact the holding period requirement of any incentive
stock options you now hold, that are eligible for tender, even if you do not
participate in this offer. If the holder of an incentive stock option does not
tender the incentive stock option in response to this offer, the holding period
for that option will begin on the date of this offer. This is because the offer
is treated as the grant of a new incentive stock option for purposes of the
holding period requirement. Therefore, in order to be eligible for favorable tax
treatment, a holder of an incentive stock option, that are eligible for tender,
must hold any stock purchased on exercise of such an option for at least two
years after the date of this offer or, if later, one year after the option is
exercised.
If you are an eligible optionholder and you are either based outside of the
United States, or are a national of another country and are based in the United
States, you should consult with your own tax advisor to determine the tax,
social contribution, and exchange control consequences of this transaction under
the laws of the country in which you live and work or of which you are a
national. For example, under the laws of certain countries, your acceptance of
this offer may result in your immediate recognition of taxable income.
You are urged to consult your own tax advisor with respect to the federal,
state, local and foreign consequences of participating in the offer, as well as
any tax consequences arising under the laws of any other taxing jurisdiction.
19
15. EXTENSION OF OFFER; TERMINATION; AMENDMENT.
We may, in our sole discretion, at any time and from time to time, extend
the period of time during which the offer is open and thereby delay acceptance
for payment of and payment for any options by giving oral or written notice of
such extension to the optionholders and making a public announcement thereof.
We also expressly reserve the right, in our reasonable judgment, to
terminate the offer and not accept for payment or pay for any options previously
accepted for payment or paid for or, subject to applicable law, to postpone
payment for options by giving oral or written notice of such termination or
postponement to the optionholders and making a public announcement thereof. Our
reservation of the right to delay payment for options which we have accepted for
payment is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which
requires that we must pay the consideration offered or return the options
tendered promptly after termination or withdrawal of the tender offer.
Amendments to the offer may be made at any time and from time to time by
public announcement of the amendment. In the case of an extension, the amendment
must be issued no later than 9:00 a.m., Eastern Time, on the next business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the offer will be disseminated promptly to
optionholders in a manner reasonably designated to inform optionholders of such
change. Without limiting the manner in which we may choose to make a public
announcement, except as required by applicable law, we shall have no obligation
to publish, advertise or otherwise communicate any such public announcement
other than by making a press release.
As long as we comply with applicable laws, we may amend the offer to
purchase in any way, including decreasing or increasing the consideration offer
to optionholders for decreasing or increasing the number of options to be
surrendered and canceled in the offer.
If we materially change the terms of the offer or the information
concerning the offer, or if we waive a material condition of the offer, we will
extend the offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3)
promulgated under the Securities Exchange Act. These rules require that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information.
16. ACCOUNTING CONSEQUENCES OF THE OFFER.
Neither the shares of restricted stock issued in exchange to this offer nor
the eligible options that are not tendered in this offer will be treated for
financial reporting purposes as variable rewards. However, we will record a
non-cash compensation expense ratably over the vesting period of the restricted
stock.
17. FEES AND EXPENSES.
We will not pay any fees or commissions to any broker, dealer, or other
person for soliciting tenders of options pursuant to this offer.
20
18. ADDITIONAL INFORMATION.
We are subject to the informational filing requirements of the Exchange Act
and, in accordance therewith, are obligated to file reports and other
information with the SEC relating to our business, financial condition and other
matters. Information, as of particular dates, concerning our directors and
officers, their remuneration, options granted to them, the principal holders of
our securities and any material interest of such persons in transactions with us
is required to be disclosed in proxy statements distributed to our stockholders
and filed with the SEC.
These reports, proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the SEC at:
- 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549;
- 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and
- 7 World Trade Center, New York, New York 10048.
Copies of such material may also be obtained by mail, upon payment of the
SEC's customary charges, from the Public Reference Section of the SEC at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC also
maintains a Web site on the World Wide Web at http://www.sec.gov that contains
reports, proxy statements and other information regarding registrants that file
electronically with the SEC. These reports, proxy statements and other
information concerning us also can be inspected at the offices of The New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
We urge you to review the following materials which we have filed with the
SEC prior to making a decision on whether to tender your options. The SEC file
number for our documents is 1-12733.
(a) Annual Report on Form 10-K for the year ended December 31, 2000;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31,
2001;
(c) Quarterly Report on Form 10-Q/A for the quarter ended June 30,
2001; and
(d) Current Reports on Form 8-K filed with the SEC since December 31,
2000.
19. MISCELLANEOUS.
We are not aware of any jurisdiction where the making of the offer is not
in compliance with applicable law. If we become aware of any jurisdiction where
the making of the offer is not in compliance with any valid applicable law, we
will make a good faith effort to comply with such law. If, after such good faith
effort, we cannot comply with such law, the offer will not be made to (nor will
tenders be accepted from or on behalf of) the holders of options residing in
such jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Securities Exchange Act, we have filed with the SEC a Tender Offer Statement on
Schedule TO which contains additional information with respect to the offer.
This Schedule TO, including the exhibits and any amendments thereto, may be
examined, and copies may be obtained, at the same places and in the same manner
as is set forth in Section 17 with respect to information concerning us.
21
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO
WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS PURSUANT TO THE
OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE
MAKES ANY RECOMMENDATION OR GIVES ANY INFORMATION OR REPRESENTATION, YOU MUST
NOT RELY UPON THAT RECOMMENDATION, INFORMATION OR AUTHORIZATION AS HAVING BEEN
AUTHORIZED BY US.
TOWER AUTOMOTIVE, INC.
September 11, 2001
22
LETTER OF TRANSMITTAL
TO TENDER OPTIONS TO PURCHASE SHARES OF COMMON STOCK
WITH AN EXERCISE PRICE OF $17.125 OR MORE
OF
TOWER AUTOMOTIVE, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED JULY 25, 2001
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON FRIDAY, SEPTEMBER 14, 2001,
UNLESS THE OFFER IS EXTENDED.
TO:
Richard Burgess
Tower Automotive, Inc.
5211 Cascade Road, SE
Grand Rapids, Michigan 49546
Telephone: 616-802-1600
Facsimile: 616-802-1599
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
================================================================================
I tender the following of my options that are listed in the table below (the
"options") (Please check the appropriate box):
[ ] All of my options, or
[ ] A partial tender of the following options, as identified below:
(See Instructions 2 and 3 and complete table below only if you are not
tendering all of your options.)
Option Shares to
Number of Number of be Tendered
Grant Exercise Shares Subject Value of Restricted
Date(1) Price to Option Option Shares Shares Issuable Yes No
================================================================================
(1) You must tender all of your option shares for a particular option grant.
YOUR OPTION AGREEMENT(S) EVIDENCING OPTIONS TO BE TENDERED MUST BE FORWARDED
WITH THIS LETTER OF TRANSMITTAL.
TO TOWER AUTOMOTIVE, INC.
You, the undersigned, hereby tender to Tower Automotive, Inc., a Delaware
corporation, the options to purchase shares of common stock of Tower Automotive
described above pursuant to our offer to purchase such options for restricted
stock, as that term is defined in the offer to purchase ("Offer to Purchase"),
upon the terms and
1
subject to the conditions set forth in the Offer to Purchase, receipt of which
is hereby acknowledged, and in this letter of transmittal (which together
constitute the "Offer").
Subject to, and effective upon, acceptance for payment of the options
tendered in accordance with the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
such extension or amendment), you hereby sell, assign and transfer to, or upon
the order of, us all right, title and interest in and to all the options that
are being tendered. You acknowledge that we have advised you to consult with
your own legal, financial and accounting advisers as to the consequences of
participating or not participating in the Offer. You agree that this letter of
transmittal is an amendment to your option agreement(s).
You hereby represent and warrant that you have full power and authority to
tender the options tendered hereby and that, when and to the extent the same are
accepted for purchase by us, such options will be free and clear of all security
interests, liens, restrictions, charges, encumbrances, conditional sales
agreements or other obligations relating to the sale or transfer thereof, and
the same will not be subject to any adverse claims. You will, upon request,
execute and deliver any additional documents deemed by us to be necessary or
desirable to complete the purchase of the options tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive your death or incapacity, and any obligation of
you hereunder shall be binding upon your heirs, personal representatives,
successors and assigns. Except as stated in the Offer, this tender is
irrevocable.
By execution of this letter, you understand that tenders of options
pursuant to the procedure described in Section 3 of the Offer to Purchase and in
the instructions will constitute your acceptance of the terms and conditions of
the Offer. Our acceptance for purchase of options tendered pursuant to the Offer
will constitute a binding agreement between you and us upon the terms and
subject to the conditions of the Offer. You acknowledge that the restricted
stock that you will receive is subject to forfeiture and other restrictions,
including without limitation, restrictions on sale, transfer, assignment, pledge
or other encumbrances or dispositions, until such time as the restricted stock
shall vest and the restrictions shall lapse in the manner set forth in the new
restricted share grant agreement between you and us. That agreement will be
forwarded to you upon completion of the offer. You agree to execute the new
restricted share grant agreement and promptly return it to us at the address
above.
The name(s) and address(es) of the registered holder(s) appear above
exactly as they appear on the agreement(s) representing options tendered hereby.
You have indicated whether you are tendering all of your options or less than
all of your options (a "partial tender"). If you wish to complete a partial
tender, you have identified in the above table these options to be tendered. You
understand that you are not required to tender any of your options in this
offer. You also understand that if you make a partial tender, all options of the
same class (i.e., that have the same exercise price and grant date) must be
tendered to the Company. You understand further that all options properly
tendered prior to the Expiration Date (as defined in the Offer to Purchase) and
not properly withdrawn will be purchased, upon the terms and subject to the
conditions of the Offer.
YOU UNDERSTAND THAT THE PUBLIC TRADING PRICE OF THE COMMON STOCK WILL VARY FROM
TIME TO TIME AFTER THE OFFER EXPIRES AT 12:00 MIDNIGHT, EASTERN TIME, ON THE
EXPIRATION DATE, SUCH THAT THE PUBLIC TRADING PRICE OF THE COMMON STOCK COULD AT
SOME TIME IN THE FUTURE EXCEED THE EXERCISE PRICE OF THE OPTIONS. BY TENDERING
THE OPTIONS, YOU AGREE TO HOLD US HARMLESS FOR ANY ACTUAL OR PERCEIVED LOSS AS A
RESULT OF THE VARIANCE IN THE PUBLIC TRADING PRICE OF COMMON STOCK FROM TIME TO
TIME AFTER EXPIRATION OF THE OFFER.
You recognize that, under certain circumstances set forth in the Offer to
Purchase, we may terminate or amend the Offer or may postpone the acceptance for
purchase of, or payment for, options tendered. In any such event, you understand
that the options delivered herewith but not accepted for purchase will be
returned to you at the address indicated above.
THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS OF OPTIONS BE ACCEPTED FROM OR
ON BEHALF OF) HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE OF
THE OFFER WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.
2
All capitalized terms used herein but not defined shall have the meaning
ascribed to them in the Offer to Purchase.
You have agreed to all of the terms of the Offer.
Must be signed by the holder(s) exactly as name(s) appear(s) on the option
agreement evidencing the options to be tendered. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
another person acting in a fiduciary or representative capacity, please set
forth the signer's full title and include with this letter of transmittal proper
evidence of the authority of such person to act in such capacity.
================================================================================
SIGNATURE OF OWNER(S)
--------------------------------------------------
--------------------------------------------------
(Signature(s) of Holder(s) or Authorized Signatory)
Date: _________, 2001
Name(s): Telephone No. (with area code):
--------------- ----------------
(Please Print)
Tax ID/Social Security No.:
----------------
Capacity:
-------------------------------------------
Address:
--------------------------------------------
(Please include ZIP code)
LOST, STOLEN, DESTROYED OR MUTILATED AGREEMENTS:
[ ] Check here if any of the agreements representing your options have been
lost, stolen, destroyed or mutilated. See Instruction 7. Number of options
represented by lost, stolen, destroyed or mutilated agreements:
3
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Delivery of Letter of Transmittal and Option Agreements. All option
agreements evidencing options to be tendered, as well as a properly completed
and duly executed letter of transmittal (or facsimile thereof), and any other
documents required by this letter of transmittal, must be received by Tower
Automotive, Inc. at our address set forth on the front cover of this letter of
transmittal on or prior to 12:00 midnight, Eastern Time, on the Expiration Date
(as defined in the Offer to Purchase).
THE METHOD BY WHICH YOU DELIVER YOUR DOCUMENTS, INCLUDING OPTION AGREEMENTS, THE
LETTER OF TRANSMITTAL, AND ANY OTHER REQUIRED DOCUMENTS, IS AT YOUR OPTION AND
RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY US. IF
YOU ELECT TO DELIVER YOUR DOCUMENTS BY MAIL, WE RECOMMEND THAT YOU USE
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND THAT YOU PROPERLY INSURE THE
DOCUMENTS. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY
DELIVERY.
Tenders of options made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. If the Offer is extended by us beyond that time,
you may withdraw your tendered options at any time until the expiration of the
Offer. In addition, unless we accept your tendered options for purchase before
12:00 midnight, Eastern Time, on or before September 19, 2001, you may withdraw
your tendered options at any time after that date. To withdraw tendered options
you must deliver a written notice of withdrawal, or facsimile thereof, with the
required information to us while you still have the right to withdraw the
tendered options. Withdrawals may not be rescinded and any options withdrawn
will thereafter be deemed not properly tendered for purposes of the Offer unless
such withdrawn options are properly retendered prior to the Expiration Date by
following the procedures described above.
We will not accept any alternative, conditional or contingent tenders. All
tendering optionholders, by execution of this Letter of Transmittal (or a
facsimile of it), waive any right to receive any notice of the acceptance of
their tender.
2. Inadequate Space. If the space provided herein is inadequate, the
information requested by the first table in this letter of transmittal regarding
which options are to be tendered in a partial tender of options should be
provided on a separate schedule attached hereto.
3. Partial Tenders. If you tender less than all of your options, you must
complete the table on page one of this letter of transmittal. You may tender
all, none, or any portion of your options; however, all option shares of the
same option agreement must be tendered.
4. Signatures. If this letter of transmittal is signed by the holder(s) of
the options, the signature(s) must correspond with the name(s) as written on the
face of the option agreement(s) without alteration, enlargement or any change
whatsoever. If any of the options to be tendered are held of record by two or
more persons, all such persons must sign this letter of transmittal.
If this letter of transmittal is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, or other person acting in a fiduciary
or representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to us of the authority of such person so to act
must be submitted with this letter of transmittal.
4
5. Requests For Assistance Or Additional Copies. Any questions or requests
for assistance, as well as requests for additional copies of the Offer to
Purchase or this letter of transmittal may be directed to Richard Burgess, at
the address and telephone number given on the front cover of this letter of
transmittal. Copies will be furnished promptly at our expense.
6. Irregularities. All questions as to the number of options to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of options
will be determined by us in our sole discretion, which determinations shall be
final and binding on all parties. We reserve the absolute right to reject any or
all tenders of options we determine not to be in proper form or the acceptance
of which or payment of restricted stock for which may, in the opinion of our
counsel, be unlawful. We also reserve the absolute right to waive any of the
conditions of the Offer and any defect or irregularity in the tender of any
particular options, and our interpretation of the terms of the Offer (including
these instructions) will be final and binding on all parties. No tender of
options will be deemed to be properly made until all defects and irregularities
have been cured or waived. Unless waived, any defects or irregularities in
connection with tenders must be cured within such time as we shall determine.
Neither we nor any other person is or will be obligated to give notice of any
defects or irregularities in tenders and no person will incur any liability for
failure to give any such notice.
7. Lost, Stolen, Destroyed Or Mutilated Option Agreements Evidencing
Options. If option agreements evidencing options to be tendered have been lost,
stolen, destroyed or mutilated, you must check the box captioned "Lost, Stolen,
Destroyed or Mutilated Option Agreements" on the letter of transmittal,
indicating the number of options subject to the lost, stolen, destroyed or
mutilated option agreement(s). You must then contact us to ascertain the steps
that must be taken in order to replace the option agreements evidencing options.
In order to avoid delay, you should contact us immediately.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF) TOGETHER
WITH ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY US, ON OR PRIOR TO 12:00
MIDNIGHT, EASTERN TIME, ON THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE).
8. Important Tax Information. You should refer to Section 14 of the Offer
to Purchase which contains important tax information.
::ODMA\PCDOCS\GRR\611492\2
5
September , 2001
--------
First Name - Last Name
Address
City, State - Postal Code
Dear First Name:
Tower Automotive, Inc. is offering to purchase all of our outstanding
options with an exercise price of $17.125 or more (the "options") that were
issued under the 1994 Key Colleague Stock Option Plan or the Long-Term Incentive
Plan (the "plans"). In exchange for the options, we will issue optionholders
"restricted stock" that will be subject to certain restrictions until the shares
vest. This offer is made pursuant to the terms and conditions set forth in the
accompanying offer to purchase and letter of transmittal (the "offer").
You may tender all, a portion or none of your options; however, all option
shares subject to the same option agreement (i.e., having the same exercise
price and grant date) must be tendered if any are to be tendered. Your
outstanding options eligible for purchase in the offer are listed in the table
included in your personalized transmittal letter, which is included with this
letter. The option values shown in that table are based on 90% of each option's
value under the Black-Scholes stock option valuation model. These values will be
applied to all outstanding options tendered, regardless of vesting status. If
you tender all of your options and your options are accepted for purchase, you
will receive the number of shares of restricted stock set forth in that table.
If your tender is for less than all of your options and your options are
accepted for purchase, you will receive a portion of the total number of shares
set forth in that table, equal to the value of the option shares you tender.
The award of restricted stock will be subject to the terms of the plan and
a new restricted share grant agreement between you and us. If we accept your
options for purchase, we will forward the new restricted share grant agreement
to you promptly after expiration of the offer. The restricted stock you will
receive will vest on the third anniversary of the grant date. Unless the offer
is extended by us, the grant date will be September 17, 2001.
There are no immediate tax consequences of receiving restricted stock in
exchange for your options, unless you make an election under Section 83(b) of
the Internal Revenue Code. A more detailed discussion of the tax consequences
occurring when the restricted stock vests, and of the Section 83(b) election, is
contained in Section 14 of the offer to purchase.
If you decide to tender your options pursuant to the offer, please
complete, sign and return the letter of transmittal, along with the option
agreement(s) evidencing your options, to:
Tower Automotive, Inc.
5211 Cascade Road, SE
Grand Rapids, Michigan 49546
Attn: Richard Burgess
prior to the expiration of the offer.
1
PLEASE NOTE THAT YOUR PARTICIPATION IN THE OFFER IS COMPLETELY VOLUNTARY.
We neither require nor request that you tender your options in the offer.
Furthermore, we suggest that before you make your decision, you consult with
your own legal, financial and accounting advisers as to the consequences of
tendering your options in the offer.
If you have any questions concerning the offer, please contact Richard
Burgess at 616-802-1600.
Very truly yours,
Dugald K. Campbell
Chief Executive Officer
2
EXHIBIT A
RESTRICTED SHARE GRANT AGREEMENT
AGREEMENT made as of this _____ day of _______________, by TOWER
AUTOMOTIVE, INC., a Delaware corporation (the "Company"), and (the "Grantee").
-----------------------------
RECITALS
The Tower Automotive, Inc. Long-Term Incentive Plan authorizes the award of
shares of restricted stock to key colleagues and certain consultants of the
Company upon such terms and conditions as may be determined by the Committee or
the Board of Directors.
The Committee has approved a grant of restricted shares to the Grantee upon
the terms and conditions set forth in this Agreement. The Company and the
Grantee desire to confirm in this Agreement the terms, conditions, and
restrictions applicable to the grant of restricted stock.
NOW, THEREFORE, intending to be bound, the parties agree as follows:
1. DEFINITIONS
1.1 "Board" means the Board of Directors of the Company. -----
1.2 "Change in Control" means an occurrence of a nature with respect to
the Company that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange
Act. Without limiting the inclusiveness of the definition in the
preceding sentence, a Change in Control shall be deemed to have
occurred as of the first day that any one or more of the following
conditions is satisfied:
(a) Any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing twenty
percent (20%) or more of the combined voting power of the
Company's then outstanding securities; or
(b) At any time a majority of the Board of Directors of the Company
is comprised of other than Continuing Directors (for purposes of
this section, the term Continuing Director means a director who
was either (i) first elected or appointed as a director prior to
the Effective Date of this Agreement; or (ii) subsequently
elected or appointed as a director if such director was nominated
or appointed by at least a majority of the then Continuing
Directors); or
(c) Any of the following occur:
(i) Any merger or consolidation of the Company, other than a
merger or consolidation in which the voting securities of
the Company immediately prior to the merger or consolidation
continue to represent (either by remaining outstanding or
being converted into securities of the surviving entity)
fifty percent (50%) or more of the combined voting power of
the Company or surviving entity immediately after the merger
of consolidation with another entity;
1
(ii) Any sale, exchange, lease, mortgage, pledge, transfer, or
other disposition (in a single transaction or a series of
related transactions) of assets or earning power aggregating
more than fifty percent (50%) of the assets or earning power
of the Company on a consolidated basis;
(iii)Any liquidation or dissolution of the Company;
(iv) Any reorganization, reverse stock split, or recapitalization
of the Company which would result in a Change in Control; or
(v) Any transaction or series of related transactions having,
directly or indirectly, the same effect as any of the
foregoing; or any agreement, contract, or other arrangement
providing for any of the foregoing.
1.3 "Committee" means the Committee appointed by the Board to administer
the Plan.
1.4 "Common Stock" means the common stock of the Company, par value $.01
per share.
1.5 "Company" means Tower Automotive, Inc., a Delaware corporation, its
successors and assigns.
1.6 "Effective Date of this Agreement" means September 17, 2001.
1.7 "Plan" means the Tower Automotive, Inc. Long-Term Incentive Plan.
1.8 "Restricted Share" means a Share which is subject to the restriction
on sale, pledge or other transfer imposed by Section 3.1.
1.9 "Reverted Shares" means Shares which have reverted to the Company
pursuant to Section 5.2.
1.10 "Shares" means the shares of Common Stock awarded, issued and
delivered to the Grantee under this Agreement. If, as a result of a
stock split, stock dividend, combination of stock, or any other change
or exchange of securities, by reclassification, reorganization,
recapitalization or otherwise, the Shares shall be increased or
decreased, or changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or another
corporation, the term "Shares" shall mean and include the shares of
stock or other securities issued with respect to the Shares.
1.11 "Vested Share" means a Share which is no longer a Restricted Share.
2. GRANT AND ACCEPTANCE OF AWARD; TAX ELECTION
2.1 Grant. The Company confirms the award to the Grantee of _______ shares
of Common Stock (the "Shares") as restricted stock, upon the terms, restrictions
and conditions of this Agreement and the Plan. The award of Shares shall be
effective as of the Effective Date of this Agreement. The Company agrees to
issue and deliver to the Grantee a certificate representing the Shares promptly
after the Restricted Shares become Vested Shares under the terms of this
Agreement.
2.2 Acceptance. The Grantee accepts this award of Shares and agrees to hold
them subject to the terms, restrictions and conditions of this Agreement.
2
2.3 Tax Election. The Grantee may elect to be taxed in 2001 on the fair
market value of the Shares awarded by signing an election to be so taxed under
Section 83(b) of the Internal Revenue Code, and filing such election with the
Internal Revenue Service within thirty (30) days after the Effective Date of
this Agreement. If the Grantee chooses not to make such an election, the Grantee
will be taxed on the fair market value of the Shares in the year in which the
restrictions lapse.
3. RESTRICTIONS ON TRANSFER OF SHARES; LAPSE OF RESTRICTIONS
3.1 Transfer Prohibition. The Grantee shall not sell, pledge or otherwise
assign or transfer any Share or any interest in any Share while such Share is a
Restricted Share.
3.2 Restricted Shares. Every Share shall be a Restricted Share until the
restrictions lapse as provided in Section 5.1.
3.3 Securities Law Compliance. The Grantee shall not sell or transfer any
Share or any interest in any Share, whether such Share is or is not a Restricted
Share, unless either (a) the Company shall consent in writing to such transfer,
or (b) the Company shall have received an opinion of counsel satisfactory to the
Company to the effect that such transfer will not violate the registration
requirements imposed by the Securities Act of 1933 or any other provision of law
which the Company shall desire such opinion to cover.
3.4 Stop Transfer Instructions. The Company shall have the right to issue
instructions to the transfer agent for the shares of the Company, prohibiting
transfer of any Shares except in accordance with the requirements of this
Agreement.
3.5 Certificate for Vested Shares. At the time a Restricted Share becomes a
Vested Share, the Grantee shall be entitled to receive from the Company a
certificate representing such Vested Shares, bearing a legend, if the Company
shall deem such a legend to be appropriate, only to the effect that the transfer
of such Shares is prohibited if it would violate the Securities Act of 1933.
Unless and until the Restricted Shares become Vested Shares, the Shares shall be
held by the Company, in custody or in book entry form, unless otherwise directed
by the Company.
3.6 Rights of Stockholder. Except for the restrictions imposed in this
Article 3 and unless the Shares have reverted to the Company pursuant to Section
5.2, the Grantee shall have all the rights of a stockholder with respect to the
Restricted Shares, including the right to vote and to receive the dividends
declared and paid thereon.
4. ACQUISITION WARRANTIES
In order to induce the Company to issue and deliver the Shares on the terms
of this Agreement, the Grantee warrants to and agrees with the Company as
follows:
4.1 No Participating Interest. The Grantee is acquiring the Shares for the
Grantee's own account, and has not made any arrangement to convey any interest
in the Shares to any person, other than to transfer Reverted Shares to the
Company pursuant to Section 5.3.
4.2 Ability to Evaluate. Because of the Grantee's knowledge and experience
in financial and business matters, the Grantee is capable of evaluating the
merits and risks of acquiring the Shares under the arrangements prescribed by
this Agreement.
3
4.3 Familiarity with Company. The Grantee is familiar with the business,
financial condition, earnings and prospects of the Company, and confirms that
the Company has not made any representation regarding the foregoing matters or
the merits of this Agreement.
4.4 All Questions Answered. The Grantee understands all of the terms of
this Agreement and the consequences to the Grantee of any actions which may be
taken under this Agreement. The Grantee confirms there are no questions relating
to any such matters which have not been answered to the Grantee's complete
satisfaction.
5. VESTING AND REVERSION
5.1 One Hundred Percent Vesting. All Shares issued hereunder which have not
previously reverted to the Company shall become Vested Shares
(a) At the third anniversary of the Effective Date of this Agreement;
(b) Upon a Change in Control;
(c) Upon the Grantee's death; or
(d) Upon the Grantee's Disability or Retirement, as such terms are
defined in the Plan,
whichever of the foregoing is first to occur.
5.2 Reversion. All Shares which have not become Vested Shares shall
automatically revert to the Company at any time the Grantee shall no longer be
employed by Hidden Creek Industries, Inc. or a subsidiary (or, if currently
employed by the Company, the Company or any of its subsidiaries) for any reason
whatsoever, including involuntary termination without the consent of the
Grantee. No compensation shall be payable to the Grantee for shares which revert
to the Company.
5.3 Effect of Reversion. Upon reversion of any Shares (a) absolute
ownership thereof shall automatically revert to the Company at that time, (b)
such Shares shall be deemed to be "Reverted Shares" for purposes of this
Agreement, (c) all the Grantee's rights and interests in the Reverted Shares
shall cease at that time, and (d) the Grantee shall be obligated immediately to
surrender to the Company the certificates representing the Reverted Shares, but
the failure to do so shall not impair the immediate effect of clauses (a), (b)
and (c) above.
6. GENERAL PROVISIONS
6.1 No Right to Employment. This Agreement is not an employment contract.
Neither the Plan nor this Agreement or anything else changes the at will
employment status of the Grantee.
6.2 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be valid and enforceable, but if any
provision of this Agreement shall be held to be prohibited or unenforceable
under applicable law (a) such provision shall be deemed amended to accomplish
the objectives of the provision as originally written to the fullest extent
permitted by law, and (b) all other provisions of this Agreement shall remain in
full force and effect.
4
6.3 Captions. The captions used in this Agreement are for convenience only,
do not constitute a part of this Agreement and all of the provisions of this
Agreement shall be enforced and construed as if no captions had been used.
6.4 Complete Agreement. This Agreement contains the complete agreement
between the parties relating in any way to the subject matter of this Agreement
and supersedes any prior understandings, agreements or representations, written
or oral, which may have related to such subject matter in any way.
6.5 Notices.
(a) Procedures Required. Each communication given or delivered under
this Agreement must be in writing and may be given by personal delivery or
by certified mail. A written communication shall be deemed to have been
given on the date it shall be delivered to the address required by this
Agreement.
(b) Communications to the Company. Communications to the Company shall
be addressed to it at the principal corporate headquarters and marked to
the attention of the Company's president.
(c) Communications to the Grantee. Every communication to the Grantee
shall be addressed to the Grantee at the address given immediately below
the Grantee's signature to this Agreement, or to such other address as the
Grantee shall specify to the Company.
6.6 Assignment. This Agreement is not assignable by the Grantee during the
Grantee's lifetime. This Agreement shall be binding upon and inure to the
benefit of (a) the successors and assigns of the Company, and (b) any person to
whom the Grantee's rights under this Agreement may pass by reason of the
Grantee's death.
6.7 Amendment. This Agreement may be amended, modified or terminated only
by written agreement between the Company and the Grantee.
6.8 Waiver. No delay or omission in exercising any right hereunder shall
operate as a waiver of such right or of any other right hereunder. A waiver upon
any one occasion shall not be construed as a bar or waiver of any right or
remedy on any other occasion. All of the rights and remedies of the parties
hereto, whether evidenced hereby or granted by law, shall be cumulative.
5
6.9 Choice of Law. This Agreement shall be deemed to be a contract made
under the laws of the State of Michigan and for all purposes shall be construed
in accordance with and governed by the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GRANTEE TOWER AUTOMOTIVE, INC.
By
------------------------------------ -------------------------------------
Its
----------------------------------
Address:
------------------------------------
------------------------------------
6